• London Taxi Company loses invalidity appeal over black cab trademarks
  • Court finds that the shape did not differ significantly from sector norms
  • Decision illustrates “difficulties faced by applicants” for shape marks

The Court of Appeal of England and Wales has backed a High Court of Justice finding that the three-dimensional shapes of particular models of taxi were found to be invalid and therefore not infringed by the manufacturer of the Beardmore, Oxford and Metrocab models of London taxi. One leading industry commentator notes that the decision “is a further example of the difficulties faced by applicants for ‘shape’ trademarks in demonstrating distinctive character”.

As was previously reported on World Trademark Review, in the initial case The London Taxi Corporation Ltd v Frazer-Nash Research Ltd ([2016] EWHC 52 (Ch), January 20 2016), the London Taxi Company (LTC - now named the London EV Company and manufacturer of the Fairway, TXI, TXII and TX4 models of London taxi) owned a 3D European Union trademark, a UK mark and a UK registered design which it claimed the Metrocab model of taxi had infringed. The defendant countering that the marks lacked distinctive character and consisted exclusively of a shape which added substantial value to the goods.

In his decision last year, Justice Arnold defined the average consumer as the average taxi driver, rather than user, and found that the European and UK trademarks would have been perceived by them as “merely a variation of the typical shape of a car”. Therefore, they were held to lack distinctive character. In his analysis, he also noted that none of the claimant’s advertising was specific to the shapes of vehicles and that, at the relevant time, no goods bearing the marks were on the market. Thus they had not acquired distinctiveness. He went on to find that both of the claimant’s marks should be declared invalid in respect of goods in Class 12 “on the ground that they consist exclusively of the shape which gives substantial value to the goods”.

A claim for passing off also failed because it was based on common features of London taxis, with no misrepresentation occurring (“There is no evidence that the shape of the new Metrocab is likely to lead consumers of taxi services to believe that it comes from the same source as LTC's taxis, as opposed to being a licensed London taxi”). The decision was appealed and today the Court of Appeal rendered its judgement.

On the topic of the average consumer, Lord Justice Floyd saw no priori reason for excluding the hirer of a taxi from the class of consumers whose perceptions it is necessary to consider, but added that in this instance it was not necessary to reach a concluded view on this issue as it wouldn’t ultimately have a bearing on the outcome of the appeal.

Addressing the issue of distinctive character, he stated that the court did not consider that the marks departed significantly from the norms of the sector in the manner required by the jurisprudence of the ECJ. Noting that the analysis was not limited to London licensed taxi cabs (observing that even if it did, it would have to include private hire taxis, which can be any model of saloon car), he observed that the norms and customs of the car sector are not difficult to establish (eg having a bonnet, headlights, a front grille, etc). On that analysis, “it is obvious that none of the LTC features is so different to anything which had gone before that it could be described as departing significantly from the norms and customs of the sector”.

As to the question of acquired distinctive character, he agreed that the evidence was not adequate to establish that taxi hirers had come to perceive the shape of the taxi as denoting vehicles associated with LTC and no other manufacturer. He added that, even if the analysis was extended to the hirers of taxis, “it will be hard to interest them, far less educate them, in the topic of whether the shape of the taxi is an indication of a unique trade source” – concluding: “It follows, therefore, that the marks relied on are invalid.”

While not necessary to go further, he did explain how he would have disposed of the remaining issues. On the issue of passing off, for example, he stated that he would have agreed with the previous ruling that there was no evidence that the shape of the new Metrocab was likely to lead consumers of taxi services to believe that it came from the same source as LTC’s taxis, as opposed to being a licensed London taxi: “To my mind, LTC faces the same difficulties in establishing the necessary goodwill for the purposes of a passing off action as it did in relation to showing acquired distinctive character for the purposes of their trademarks. In addition, as I have already said, the design of the new Metrocab is strikingly different to that of LTC’s taxis.”

He therefore dismissed the appeal against the judge’s conclusion that the LTC trademarks were invalid for lack of distinctive character, as well as the claim of passing off. Lord Justice Kitchin agreed.

Today’s ruling is the latest in a series of cases focused on trademark protection for shapes, and follows the recent Court of Appeal decision that saw Nestlé’s appeal seeking to sought to overturn an earlier High Court finding that Nestlé’s three-dimensional (3D) Kit Kat shape trademark had not acquired distinctive character dismissed.

Reacting to today’s decision, Peter Nunn, legal director and head of the automotive group at Mishcon de Reya, observed: “This case is a further example of the difficulties faced by applicants for ‘shape’ trademarks in demonstrating distinctive character, albeit the decision does give some hope that a design which departs significantly from the norms of the sector might be sufficient for ‘inherent’ distinctiveness.”

In this instance, he notes that the features that LTC relied upon to show inherent distinctive character did not depart sufficiently from the basic design features of a car – “they were merely a variant on them”. He concludes: “That might not have been the end of the story if LTC had been able to show that the shape had acquired distinctiveness. However, following its decision earlier this year in relation to the shape of the KitKat bar, the Court of Appeal decided that LTC had not done enough to educate consumers that there is only one manufacturer of taxis of that shape."

The case could yet be appealed to the Supreme Court but illustrates the difficulty in securing and enforcing protection for shapes. It also provides some useful insights on proving acquired distinctiveness.