The Court of Appeal has upheld the decision of Mr Justice Arnold on all grounds in Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd. Hotel Cipriani Venice is therefore successful in its action in trade mark infringement against the Cipriani London restaurant. However, the Court of Appeal would not rule out that the so called "own name" defence to trade mark infringement would never apply to the trading name of a company, even though it would not assist the Cipriani London restaurant in this case.

Business Impact

The Court of Appeal have indicated that the "own name" defence to trade mark infringement may be available where a trade name is used, rather than just being limited to the strict corporate name of a Defendant. However, the "honest practices" proviso must be fulfilled.

Summary

In December 2008, we reported the decision of Mr Justice Arnold in Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd ("CGS"). In an extensive judgement, Mr Justice Arnold found that CGS were infringing Hotel Cipriani Srl's CTM for CIPRIANI by running a restaurant under the name Cipriani London. In doing so, the Judge rejected CGS's arguments that the own name defence could apply to a company's trading name, where it was different from its registered corporate name.

The Court of Appeal, in the lead judgement of Mr Justice Lloyd, has confirmed the interpretation of the "own name" defence on the facts of this case, but has left the door open for others to take the benefit of the defence in relation to a company's trading name, if certain criteria are fulfilled.

The Court of Appeal also affirmed that Hotel Cipriani Srl's CTM was valid, not having been applied for in bad faith under article 51(1)(b) of the CTMR. The court confirmed that this conclusion was consistent with the ECJ decision in Chocoladenfabriken Lindt (C-529/07) which had been decided since Mr Justice Arnold's judgement at first instance in Cipriani.

Background

The facts of the case are set out in our earlier newsflash. Following Mr Justice Arnold's decision, permission to appeal on all points was given to the Defendants.

CTM Rights

The Defendants accepted that it was using an identical mark (Cipriani) for identical services (restaurants) as was covered by the Claimants CIPRIANI CTM. Its only hope of avoiding a finding of trade mark infringement was therefore to succeed either (a) on its argument that the Claimant's CTM was invalid as it had been registered in bad faith under article 51(b) or (b) that the Defendants, CGS, could take advantage of the "own name" defence in article 12(a) of the CTMR.

Bad Faith under article 51(b)

The Court of Appeal confirmed the Judge's findings that at the date the Claimant, Hotel Cipriani Srl, applied to register its CTM in 1996, there was no concurrent goodwill in the UK at least as with CGS, as CGS did not open its restaurant until 2004. Following the factors specified in Lindt, the court could deal with the matter in a straightforward way. Lord Justice Lloyd said "there was neither any use of the mark, nor any apparent right to use the mark, with which the registration was incompatible." The Claimant's registration was therefore valid and infringed, save for the Defendants' arguments on the own name defence.

The "own name" defence

In its appeal the Defendant, CGS, argued that it should be entitled to take the benefit of the own name defence, despite the corporate name of the company (Cipriani (Grosvenor Street) Ltd) not being the same as the trading name (Cipriani London, or Cipriani). Mr Justice Lloyd confirmed that for a corporate entity, the "limited" does not matter, and went on to consider the authorities of Asprey & Garrard [2001] and Premier Luggage [2002].

Lord Justice Lloyd drew a parallel with an individual's name: "in principle, an individual ought to be able to use the defence in relation to an adopted name by which he or she is know for business purposes or generally, for example, an actor's stage name or a writer's nom de plume". On this basis, Lord Justice Lloyd thought that in a similar way, a corporate entity should not be restricted only to reliance on its corporate name, if it can show that it uses a distinct name for trading purposes. However, just as an individual could not justify using a trade name newly adopted which conflicted with a registered trade mark, even if they changed their name by deed poll, nor could a company do so, even if they traded under a changed corporate name. He said "the mischief of a misleading name, whether a corporate name or a trade name, is to be dealt with by reference to the proviso [that use of own name must be in accordance with honest practices], not by a rigid rule that a trade name cannot be an "own name" for this purpose".

Lord Justice Lloyd concluded that the own name defence "may be available in respect of a trading name, as well as the corporate name of a company, but it will depend on (a) what the trading name is that has been adopted, (b) in what circumstances it has been adopted and (c) depending on the relevant circumstances, whether the use is in accordance with honest practices."

In this case, although Mr Justice Lloyd accepted that the Defendants had adopted "Cipriani London" as their "own name", they could not claim that the abbreviation "Cipriani" was also their "own name". Further, the use of Cipriani London (or indeed Cipriani) was not in accordance with honest practices, as that use "took no account of the legitimate interests of the owner of the trade mark". Where the Defendant's use conflicted directly with the Claimant's CTM rights and no reasonable efforts were made to avoid confusion, the Court of Appeal concluded that the "overall circumstances of the case were inconsistent with a finding of honest use".

Passing off – establishing reputation and goodwill from abroad

The Court of Appeal also went on to consider whether the Claimant had established passing off against the Defendant. The Defendants appealed Mr Justice Arnold's finding for the Claimant on passing off, primarily on the grounds that the Claimant had not established goodwill in the UK. Lord Justice Lloyd examined what was needed to prove that a business based abroad which had a reputation also had goodwill in England such that it could claim passing off. He concluded that the Claimant did indeed have goodwill in England in 2004 as it had a substantial reputation in England and a substantial body of customers from England even though located in Italy, due to significant marketing directed towards English customers and also a significant volume of business placed directly from England. The reputation therefore brought in business from England and as such there was goodwill.

In contrast, the Defendants, CGS, could not establish a concurrent goodwill on the part of the Cipriani family members and businesses as they could not show that there was significant business brought into their overseas ventures from England. Finally, Lord Justice Lloyd recognised that reliance on the test of direct bookings from England to an overseas business to establish goodwill of that business in England may be ripe for review in an appropriate case. This was due to the now prevalent practice of businesses having websites which easily enabled bookings to be made directly from anywhere in the world. However, he did not deem Cipriani to be the appropriate case in which to undertake that review.