Following a recent defeat in the Court of Appeal in relation to the validity of its three-dimensional tile mark (J W Spear & Son Ltd, Mattel Inc. and Mattel UK Ltd v Zynga Inc  EWCA Civ 1175), Mattel has suffered yet another blow as its claims for trade mark infringement and passing off against Zynga have been rejected by the High Court and its SCRAMBLE mark declared invalid (J W Spear & Son Ltd, Mattel Inc. and Mattel UK Ltd v Zynga Inc  EWCA Civ 3348).
In March 2012, Mattel, the well-known toy and game manufacturer, and owner of the SCRABBLE mark, issued proceedings in the High Court for passing off and trade mark infringement in respect of Zynga’s online electronic game, "Scramble With Friends".
Mattel contended that Zynga’s Scramble With Friends game (launched in 2012) infringed, amongst others, their Community Trade Mark for the words SCRABBLE and SCRAMBLE. In view of Mattel's substantial goodwill (it was reported in 2010 that 53% of all households in GB owned a Scrabble game), Mattel argued that Zynga’s use of the signsScramble and Scramble With Friends constituted passing off.
In response, Zynga sought to invalidate Mattel's SCRAMBLE mark on the grounds of distinctiveness, descriptiveness, common usage, bad faith and genericism. The bad faith allegation was withdrawn at the time of the closing submissions.
Smith J concluded that the word "Scramble" whether on its own or with the words "With Friends" did not infringe Mattel's trade marks. The Judge also dismissed Mattel's passing off claim, save that he thought Zynga's use of the Scramble With Friends logo (with the letter m appearing on its side) had the propensity to confuse.
Additionally, Smith J declared that Mattel's CTM for SCRAMBLE was invalid as it "accurately describes what is required in the game namely a scramble for words made up by letters in a fixed period of time". Alternatively Smith J said that Scramble is an ordinary English word commonly used in word games.
In reaching his decision, Smith J made the following pertinent points:
In line with the recent Interflora decisions, and in particular the Court of Appeal guidelines for survey use in trade mark infringement cases, Smith J noted that witness evidence obtained through surveys must be of a real value in order to be adduced. Smith J emphasised the difficulty in relying on surveys in passing off and trade mark claims in light of these guidelines, namely that they would need to represent deception or confusion of a substantial number of members of the public. In this case, Mattel had only been granted permission to adduce survey evidence as they had done so before the Interflora cases.
Mattel conducted point of sale and icon consumer surveys which it relied upon as statistically valid surveys and produced an independent expert to design and oversee the conduct of the surveys. The independent expert gave evidence in court; however none of the individuals who were involved in conducting or answering the survey was called as witnesses. Smith J considered the absence of those witnesses fatal to the surveys' evidential worth.
It is also worth noting that the evidence Mattel relied upon from Twitter (in the form of a Civil Evidence Act Notice) was rejected on the basis that "untested evidence taken by third parties who themselves do not give evidence will be given little weight when those statements cover contentious matters".
It would appear that Mattel's conduct in the lead up to the litigation was fatal to its case. It transpired during the hearing that Mattel had known about but taken no action at all in respect of Zynga's four earlier online versions of its game (first launched in 2007), all of which had Scramble in their title. In fact, Mattel had been negotiating with Zynga for a licence to make board game versions of Zynga games (a point the judge found "startling" in the context of the later litigation). It was only when Zynga rebuffed Mattel and instead concluded a deal with Hasbro (a Mattel competitor) that Mattel took action against Zynga.
This is one of those cases where the claimant's prospects of success look reasonable 'on paper', but in the real world, when the alleged infringing use is viewed in context, the reality is somewhat different. Indeed, the Judge remarked on the differences between a traditional board game, such as Scrabble, and an online word game which requires instant action and instant gratification.
It is also interesting that despite Zynga not having relied upon waiver or estoppel defences, Smith J nonetheless concluded that as a matter of evidence, Mattel's "molasses-like speed" in taking action and their lack of a clear explanation for the sudden change in attitude meant that Mattel did not believe Zynga's games were a threat or infringement of Mattel's rights and was therefore fatal in any event. Brand owners should be aware that previous conduct could well come back to haunt them. That said, with Mattel set to appeal, this long running battle between looks set to continue.