The Court of Appeal has dismissed an appeal against a High Court decision that 3D trade marks for models of London black taxis were invalid for lack of distinctive character.
The appellant, the London Taxi Corporation Limited, was the successor in title to the manufacturer of various models of London taxi (the Fairway, TXI, TXII and TX4) and claimed to be the owner of the goodwill in the shapes of all four models. It was also the owner of EU and UK registered 3D trade marks based on the appearance of its taxi models. The appellant brought proceedings against the respondents Frazer-Nash Research Ltd and Ecotive Ltd alleging trade mark infringement and passing off in respect of Frazer-Nash's new "eco-friendly" Metrocab. The respondents argued that the appellant's marks were invalid.
High Court decision
At first instance the judge concluded that the appellant's marks were invalid for 1) lack of inherent distinctive character, 2) lack of acquired distinctive character and 3) consisting exclusively of a shape which gave substantial value to the goods. The judge also found that the appellant's EU trade mark should be revoked for non-use, and that, even if the appellant's marks had been valid, they would not be infringed by the respondent's Metrocab. Finally, the judge concluded that the appellant failed in its claim for passing off.
Court of Appeal decision
The Court of Appeal agreed that the High Court had been right to find that the appellant's marks were invalid for lack of distinctive character. Several other grounds of appeal were considered, but given the finding of invalidity, the Court of Appeal's conclusions on these points were obiter. The following parts of the judgment are of particular interest.
(i) Average consumer
The issue was whether a member of the public who hires a taxi was to be treated as an "average consumer" of the goods. Such a person was different from an outright purchaser, such as a taxi driver, because he or she did not take complete possession of the goods.
At first instance the judge concluded that the average consumer did not include members of the public who hired taxis, since they were merely users of the service provided by the consumer of the goods. The Court of Appeal disagreed and found that the term average consumer included any class of consumer to whom a guarantee of origin is directed and who would be likely to rely on it. It did not matter whether a user was someone who took complete possession of the goods or someone who merely hired the goods under the control of a third party. Taxi passengers were not therefore excluded from consideration as a relevant class of consumer.
(ii) Inherent distinctive character
The Court of Appeal found that, when considering whether a mark in the shape of a product departed significantly from the norm or customs of the sector, it was necessary to determine what that sector was. In the present case, the sector was not limited to London licensed taxi cabs. Even if the marks had been limited to taxis, this would have had to include private hire taxis, which could be any model of saloon car within reason.
When compared with the basic design features of the car sector, the appellant's marks were no more than a variant on the standard design features of a car. The judge had therefore been right to hold that the marks did not have inherent distinctive character.
(iii) Acquired distinctive character
With regards to acquired distinctive character, it was not enough for a trade mark owner to show that a significant proportion of the relevant class of persons recognise and associate the mark with the trade mark owner's goods. Instead, it must be shown that those persons perceive goods labelled with the mark as originating from a particular business.
The Court of Appeal noted that members of the public are not used to the shape of a product being used as an indicator of origin. Further, although taxi passengers were not necessarily excluded as a class of average consumer, their focus would be on the provider of the taxi services more than on the manufacturer of the vehicle. Although taxi passengers were aware that taxis in the shape of the appellant's marks could be relied on to be licensed London taxis, it was important to distinguish this from what it was necessary to show in relation to acquired distinctive character. The judge had been right to find that there was insufficient evidence to show that relevant consumers would perceive the shape of the appellant's taxis as denoting vehicles associated with the appellant and no other manufacturer.
This case illustrates the difficulties in attempting to obtain and enforce marks in the shape of the goods. The shape in question may not be unique to that particular product, and even in cases such as the iconic London black cab, it will prove difficult for trade mark owners to demonstrate that consumers immediately link the shape of the product with one particular manufacturer. The present case is a good example of the courts attempting to ensure that businesses are not prevented from using shapes which are generic or common to a particular market.