In a judgment highlighting the inherent risks of litigation, the High Court has dismissed a claim for actionable threats of trade mark infringement against easyGroup Ltd in respect of the use of W3 Ltd's use of "EasyRoommate", as well as dismissing easyGroup's counterclaim claiming passing off and infringement of various trade marks containing the prefix "easy".
The Claimant W3 offered online property-sharing services under the name "EasyRoommate" since 1999. The Defendant, EasyGroup, managed a number of goods and services companies all containing the prefix "easy", including its well-known airline "EasyJet".
EasyGroup first complained about W3's "EasyRoommate" online business in 2003. W3 added a disclaimer to its website that it was not associated with easyGroup and from June 2004, changed its logo to "Flatmateworld – powered by EasyRoommate" but reverted back to "EasyRoommate" from the end of 2006.
In 2007, W3 sought a buyer for its business but found that easyGroup's complaints made it difficult. W3 registered a stylised word mark EASYROOMMATE as a UK trade mark (with no opposition from easyGroup) and used a stylised blue and orange house logo from 2009. EasyGroup continued to complain and in 2015, W3 issued proceedings for groundless threats against easyGroup to end the matter and satisfy investors of W3's rights.
In response, easyGroup counterclaimed for:
- trade mark infringement of several of its trade marks, including EASYJET, EASY and easyHotel, relating to services in classes 35, 36, 39, 42 and 43
- against the EASYROOMMATE word mark and logo; and
- against W3's "equivalent" European marks such as EasyQuarto (Portugal) and EasyKamer (Netherlands); and
- passing off based on goodwill in the "easy" trade marks including EASYJET and EASYEVERYTHING.
W3 then also sought the invalidity of easyGroup's EASY trade mark (in respect of various goods and services, including advertising and temporary accommodation) arguing it was descriptive within the meaning of Article 7(1)(c) of the EU Trade Mark Regulation (the "Regulation").
In summary, Mr Justice Arnold dismissed the threats claim by W3 as well as easyGroup's counterclaims for passing off and trade mark infringement and declared easyGroup's registered word mark for EASY invalid in respect of the relevant services. He declined to declare W3's UK registered mark EASYROOMMATE invalid, although the scope of services would be reduced as per W3's concessions at trial.
Validity of EasyGroup's EASY UK trade mark
The trade mark EASY denoted a characteristic of the services to which it was connected. To overcome that finding, the mark needed to have acquired sufficient distinctiveness in all EU member states where it was descriptive (English speaking member states, including the Netherlands where English was widely spoken).
The evidence showed that easyGroup used several of its trade marks (such as EASYJET and EASYHOTEL) but not EASY alone. There was acquired distinctiveness for "easy" as a prefix to another word with an upper case first letter in white font on an orange background but not "easy" alone, Further, evidence did not suggest that customers shortened easyGroup's trade marks to "Easy". The EASY trade mark was therefore invalidly registered in relation to the relevant services.
Trade Mark Infringement under Article 9(1)(b)
The relevant date for assessing infringement of the EASYJET trade mark was 15 August 2000, approximately when "EasyRoommate" was first used on the website.
The relevant dates for other easyGroup trade marks were their publication dates, eg 18 February 2002 (for easyHotel). However, those marks were found not to have acquired distinctive character through use in relation to advertising or temporary accommodation at those dates.
There was no infringement under Article 9(1)(b) of the Regulation. The "Roommate" aspect was conceptually, visually and aurally different to each of easyGroup's trade marks. EasyGroup's evidence of actual confusion was weak (such as customers commenting on the similarity of the names) and more evidence should have been available if there was a likelihood of confusion.
Trade Mark Infringement under Article 9(1)(c)
Nor was easyGroup successful in its infringement claim under Article 9(1)(c) of the Regulation. It had not established reputation in any marks other than EASYJET at the relevant dates, there was no evidence of detriment to EASYJET's distinctive character or its repute, nor reason to consider that W3 gained an unfair advantage.
EasyGroup also failed in its infringement claim against W3's "easyroommate" logo. Whilst it demonstrated reputation in EASYHOTEL as at June 2009 (when W3 introduced its logo) and the judge considered that a significant proportion of consumers would connect the parties' brands, the claim was rejected as easyGroup did not enter into property services until 2014 with EASYPROPERTY.
It was found that the claim for passing off was unlikely to add anything to the claims for trade mark infringement and so it was dismissed. The judge noted that the relevant dates for assessment were the same as for the trade mark infringement claims because the principle - that assessment should be made as at the commencement date of the conduct complained of - was essentially the same.
Since January 2009, easyGroup had repeatedly written to W3 complaining about "EasyRoommate". In April 2011, easyGroup's solicitors sent a letter before action, followed by draft Particulars of Claim in November 2011. A further letter before action was sent in September 2014. The question was whether this was sufficient to overcome acquiescence arguments.
Despite a gap of four years from the first letter before action until the commencement of proceedings by W3, the judge held that it was. He noted that, if the case turned on the issue, he would have sought an CJEU ruling on this point. However it did not and he decided that easyGroup's actions "amounted to serious, detailed and credible threats of infringement proceedings".
The relevant threats regime pursuant to section 21 of the Trade Marks Act 1994 was that which applied before 1 October 2017. W3 argued that, whilst easyGroup's letters referred only to the provision of services (ie outside of the threats regime), the draft undertakings and particulars of claim went further - also referring to EASYROOMMATE, EASY and any other mark confusingly similar or incorporating the word "easy" for any goods or services.
The judge found that this did not amount to an actionable threat, as a reasonable person with knowledge of all relevant circumstances would consider the letter only to relate to the supply of services under "EasyRoommate".
The conclusion on the threats claim may be regarded as surprising given the previous case law, such as the "No More Tears" case and the Court of Appeal decision in the Best Buy case, which extended the scope of what was to be taken into account when assessing threats.
Taking this judgment at face value, it does raise a question as to whether it may have been safer for easyGroup to have defended the threats claim and not counterclaimed for infringement. However, that comes with the benefit of hindsight and, given the previous case law, easyGroup's decision is understandable. Unfortunately for them, the judgment provides another example of the inherent risks of litigation.