In Daimler AG v Sany Group Co Ltd [2009] EWHC 2581 (Ch), Susan Prevezer QC, sitting as a deputy High Court judge, dismissed claims by Daimler AG that its famous three pointed star was infringed by Sany’s use of a three pointed star logo on construction machinery and vehicles.

BACKGROUND

Sany, a China based company that designs, manufactures and sells vehicles, machinery and equipment used primarily for road building, commenced its business in China in 1989 and has expanded internationally since 2003. Its annual sales outside China for 2007 amounted to £110 million. Sany has used its logo since 1995 on promotional materials and products. The word SANY is a transliteration of a Chinese word meaning "three one" which was selected to convey the company's "three pointed mission" to establish a first class enterprise, to cultivate first class people and to make a first class contribution. In August 2006, Sany applied to register its logo as a United Kingdom trade mark in respect of construction equipment and vehicles.

Daimler brought an action for infringement of four UK registered trade marks and two Community Trade Marks in respect of Mercedes’ three pointed star. Daimler also opposed Sany's UK trade mark application. The parties agreed to stay the proceedings pending the outcome of the current dispute.

In May 2009, Geoffrey Hobbs QC, sitting as a deputy High Court judge, refused Daimler's application for summary judgment on its claim for infringement under Section 10(2) of the Trade Marks Act 1994 and Article 9(1)(b) of the Community Trade Mark Regulation (40/94/EC).

Daimler's original claim included a claim under Section 10(3) of the Act (Article 9(1)(c) of the Regulation), complaining of "detriment" to Daimler's mark, and a claim for passing off, both of which Daimler abandoned together with its claim under Section 10(2) and Article 9(1)(b). This left only a claim for infringement under Section 10(3) and Article 9(1)(c) based on "unfair advantage".

Sany counterclaimed for partial revocation of the trade marks, arguing that Daimler had not genuinely used the three pointed star in relation to all goods covered by its registrations for a period of five years following their registration. Daimler conceded that some goods should be deleted from its specifications, but otherwise sought to maintain broad specifications, arguing that it could demonstrate genuine use of the three pointed star in the United Kingdom and Community in the relevant period.

DECISION

Prevezer QC noted that the recent decision in Whirlpool Corporation v Kenwood Ltd [2009] EWCA Civ 753 summarised the law relating to claims for infringement under Article 9(1)(c). Accepting Daimler's submission that the three pointed star had been used since 1921 and that the average consumer knew what it looked like, Prevezer QC acknowledged that the principle of imperfect recollection would play less of a part than in other cases.

However, although the three pointed star was a highly distinctive mark and should earn a correspondingly wide scope of protection, in her view there was no "link" between the Sany logo and the Mercedes’ three pointed star. Accordingly, Daimler did not overcome the first hurdle of establishing that a relevant "link" would be made by the average consumer between the Sany logo and the three pointed star, whether one took the average consumer to be a member of the public or a person in the construction industry with particular experience.

Although Daimler failed at the first hurdle, Prevezer QC expressed a view on the other elements of the claim. She held that the goods sold by Daimler and Sany respectively were highly similar.

There was an issue regarding a photograph of a Sany truck chassis in an online advertisement issued by Sany's former UK distributor, in which the Sany logo appeared on the engine grille in a similar position to the three pointed star on Daimler's truck chassis. However, she accepted the evidence of Sany's Assistant President, that the photograph had been used by the distributor without Sany's authorisation and that Sany had no intention of marketing the truck chassis in Europe.

Sany's own specification of goods in its trade mark application was broad, but Prevezer QC accepted Sany's submissions that the fact of an application in broad terms did not, without more information, define the scope of the threat to use the Sany logo on the market, nor demonstrate that Sany intended to sell truck chassis or cars in the United Kingdom.

Prevezer QC considered it difficult to express a view on "unfair advantage", having determined that there was no link established between the two marks. However, taking into account the Whirlpool principles, she would not have concluded that the calling to mind of the three pointed star would have had the effect of inciting consumer interest in Sany's goods and services by adding allure and prestige to Sany's goods. It would thereby give Sany an unfair advantage, or give rise to a serious risk of an unfair advantage being obtained by Sany.

Upholding Daimler's broad specification of goods, Prevezer QC followed H Young (Operations) Ltd v Medici Ltd (ANIMAL) [2004] FSR 19 in finding that a "fair specification" of goods identified and defined not the particular examples of goods for which there had been genuine use, but the particular categories of goods they should realistically be taken to exemplify and a terminology that accorded with the perceptions of the average consumer of the goods concerned. Prevezer QC concluded that there was genuine use by Daimler of the threepointed star to support these broad specifications.

Accordingly, Daimler's claim for infringement and Sany's claim for partial revocation (taking into account Daimler's concessions) were dismissed.

COMMENT

The decision is the first case on "unfair advantage" since Whirlpool and deals with the extent to which trade mark protection extends to marks with a reputation. It also provides more guidance on how English courts should interpret the concept of “unfair advantage” and shows that claimants must present a strong case in order to succeed.