Samuel Smith Old Brewery v Philip Lee (t/a Cropton Brewery) [2011] EWHC 1879 (Ch) concerns two breweries, Yorkshire pride, and a lost sense of proportionality. Although Cropton Brewery was found liable for trade mark infringement, notably, Arnold J made no award for damages.

BACKGROUND

Since 1973, Samuel Smith has been the registered proprietor of the following UK trade mark in respect of “beer” in Class 32. Click here to view trade mark.

Cropton Brewery, a rival Yorkshire brewery, produced a bottled beer exclusively for Marks & Spencer plc (M&S), a major retailer in the United Kingdom, which also used a white rose on its label. Click here to view image.

Following the launch of Yorkshire Bitter in October 2007, Samuel Smith’s trade mark attorneys sent a letter to M&S alleging trade mark infringement and passing off. M&S denied the claims but never informed Cropton Brewery of the correspondence.

Cropton Brewery launched Yorkshire Warrior in April 2008, using on its labels the Yorkshire Regiment cap badge, which also included a white rose, with the consent of one Lieutenant Colonel O’Kelly. Click here to view image.

Samuel Smith issued proceedings for trade mark infringement under Article 5(1)(b) of the Trade Marks Directive (89/104/EEC, as replaced) and passing off.

INFRINGEMENT UNDER ARTICLE 5(1)(b)

Cropton Brewery argued that Samuel Smith’s mark had only minimal distinctive character as it represented the county of Yorkshire. However, Arnold J found the Yorkshire rose to be “rather different”, and although the mark was the county’s emblem, that did not prevent it from acquiring a secondary meaning as denoting Samuel Smith’s beers. Given the substantial sales and sums spent on promoting the mark over the last 40 years, Arnold J was satisfied that the mark had acquired a “reasonably strong distinctive character”.

As for likelihood of confusion, in respect of Yorkshire Bitter, the differences between the white rose devices, the identification of “Cropton Brewery” on the front of the label, and the absence of substantial evidence of actual confusion, found against it. As for Yorkshire Warrior, however, Arnold J found there was a likelihood of confusion given the closer similarity between designs and the absence of “Cropton Brewery” from the front of the label.

DEFENCE UNDER ARTICLE 5(1)(b) OF THE DIRECTIVE

Arnold J found that, in respect of Yorkshire Bitter, even if there had been a likelihood of confusion, usage was in accordance with honest practices. The label had been designed by or on behalf of M&S, which should have undertaken trade mark searches, and Cropton Brewery was not aware of Samuel Smith’s trade mark before June 2009. Moreover, there was no evidence of actual confusion and most consumers would perceive the white rose element of the Yorkshire Bitter label as denoting geographical origin.

In respect of Yorkshire Warrior, Cropton Brewery’s use was in accordance with honest practices only until the end of October 2009, when Cropton Brewery was informed by the Ministry of Defence, concerned by the risk of infringement, that Lieutenant Colonel O’Kelly did not have authority to consent to the use of the cap badge.

Before that date, Cropton Brewery had no reason to suppose that Lieutenant Col O’Kelly did not have authority to give consent, or that use of the cap badge might infringe another party’s rights. As Cropton Brewery was a small concern, run by a sole trader, it was reasonable not to conduct a trade mark search. There was no evidence of actual confusion and most consumers would, again, perceive the white rose element as denoting geographical origin.

However, Cropton Brewery had committed the tort of passing off, as its use of the Yorkshire Warrior label gave rise to a misrepresentation, which was damaging to the reputation and goodwill of the mark.

UNJUSTIFIED THREATS DEFENCE

Arnold J held that Cropton Brewery was not a “person aggrieved” and therefore could not rely on the unjustified threat defence in respect of the M&S letter. First, the label had been designed by or on behalf of M&S, second, Cropton Brewery knew nothing of the letter, and third, there was no evidence that the threat had adversely affected Cropton Brewery’s commercial relationship with M&S.

COMMENT

Even though Cropton Brewery was held liable for trade mark infringement in respect of one beer label, no award for damages was made. For Arnold J the costs were “out of all proportion” to what was at stake. It is clear that any party to a similar dispute should carefully consider issues of proportionality of costs and the idea of mediation before issuing proceedings.