The High Court has dismissed a groundless threats claim made against easyGroup and has rejected easyGroup’s counterclaim for trade mark infringement and passing off.
EasyRoommate, owned by W3 ltd, has been operating as an online accommodation sharing service in the UK and eight other EU member states since 1999. Readers will no doubt be aware of easyGroup's family of brands and its various trade marks for "EASY" plus an additional word (e.g. easyJet, easyHotel etc.).
W3 brought a claim against easyGroup claiming that the frequent complaints it received from easyGroup, dating back to 2003, were groundless threats under section 21 of the Trade Mark Act 1994 (TMA)*. W3 claimed that the threat of proceedings by easyGroup made W3's business unattractive to potential investors.
easyGroup issued a counterclaim for trade mark infringement relating to W3’s use of the EASYROOMMATE word and logo. As a defence to this counterclaim, W3 alleged that easyGroup’s "EASY"(without an additional word) EU trade mark was invalid, citing a lack of distinctiveness under Article 7(1)(c) of the EU Trade Mark Regulation 2007/09 (the "Regulation")*.
Invalidity of the "EASY" trade mark
Arnold J concluded that the "EASY" trade mark registered in ‘advertising’ and ‘temporary accommodation’ services was descriptive of those services (they were "easy to purchase or use") and that easyGroup had not acquired distinctiveness through the use of the mark. Despite building significant distinctiveness around "easy" on its own in relation to air travel, easyGroup had only made very modest use of "easy" in relation to advertising, and no use with regards to temporary accommodation. The "easy" mark was therefore found to be invalid in relation to those services.
Trade mark infringement
As the "EASY" trade mark for ‘advertising’ and ‘temporary accommodation’ was held to be invalid, consequently, W3’s use of EasyRoommate was not an infringement. The court found that the "Roommate" part of W3’s mark was visually, aurally and conceptually different to the other easyGroup marks, and that easyGroup's evidence of actual confusion was limited. With no likelihood of confusion found, this defeated the infringement claim under Article 9(1)(b) of the Regulation (likelihood of confusion).
easyGroup had not established a reputation in any of their marks besides "EASYJET" at the relevant time, and there was no evidence of detriment to the "EASYJET" mark's distinctive character or repute, nor any evidence that W3 had benefitted from any ‘transfer of image’ from "EASYJET" nor gained an unfair advantage. Accordingly, there was found to be no infringement of the "EASY" mark in relation to Article 9(1)(c) of the Regulation (marked with reputation).
W3 objected to the broad undertakings and draft particulars of claim attached to easyGroup’s legal letters because it included not only allegations relating to the "provision of services" (which are permissible) but also sought to prohibit the use of the word "EASY" and "EASYROOMMATE" for any goods or services. W3 claimed that the broad threats that easyGroup made were actionable groundless threats.
Arnold J rejected this argument. A reasonable person would understand the threat solely related to W3’s provision of services and not infer such a broad threat from the undertakings and draft particulars of claim.
Points to note
Although the decision is a blow for easyGroup, it turned heavily on the facts and the evidence at the relevant dates. It also shows the high watermark in proving acquired distinctiveness when it comes to trade marks.
With regard to threats, the decision is a positive one for brand owners. Broad undertakings or draft particulars of claim will not necessarily trigger a claim for groundless threats. However, brand owners must always be mindful of the groundless threats provisions when instigating a complaint. Read our commentary on the latest rules.