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Intellectual Property Enterprise Court (Nicholas Caddick QC) Equisafety Ltd. v Battle Hayward and Bower Ltd and another [2021] EWHC 3296 (IPEC)
This was an action for trade mark infringement and passing off and a counterclaim for a declaration of invalidity under s.47 (1) of the Trade Marks Act 1994. The proceedings came on for trial before Mr Nicholas Caddick QC sitting as a deputy judge of the High Court on 20 Oct 2021. Mr Caddick delivered judgment on 6 Dec 2021 (see Equisafety Ltd. v Battle Hayward & Bower Ltd and another [2021] EWHC 3296 (IPEC) 6 Dec 2021). By para [41] of his judgment, he dismissed the counterclaim. By para [99] he found that the first defendant but not the second was liable for passing off and trade mark infringement.
The Claimant
The claimant is a private company incorporated with limited liability in the name of Equisafety Ltd. ("Equisafety"). Its registered office is at Tarran on the Wirral. Its director and shareholder is Nicola Fletcher ("Ms Fletcher"). According to Mr Caddick, Equisafety designs, manufactures and sells high visibility products which help promote the safety of horses and their riders when on the road. It started to supply those goods under the MERCURY mark in 2015. Equisafety also supplies high visibility rugs for horses and dogs and high visibility leg boots for horses under that mark. Equisafety and Ms Fletcher registered that mark with the Intellectual Property Office for a range of goods in classes 9, 18 and 25 under trade mark number 3405069 with effect from 7 June 2019.
The Defendants
The first defendant, Battle, Hayward and Bower, Limited ("Battle") also makes and sells equestrian products. Since late 2018 or early 2019, its product range has included a mobile phone holder, a gilet and a jacket under the following sign:
The second defendant is Battle's managing director and shareholder, Richard Michael Dewey ("Mr Dewey"). He was sued as a joint tortfeasor.
Procedural History
Ms Fletcher learned of Battle's activities in 2019. By an email dated 6 June 2019 she asked it to stop. The next day she and Equisafety applied to register the trade mark. Battle did not reply to her email or reminders dated 12 and 19 June 2019. Instead, it began to market more products under the above sign. On 30 Oct 2019 Ms Fletcher issued proceedings in the small claims track. In March 2020 the action was transferred to the multitrack and Equisafety was substituted for Ms Fletcher as the claimant. The particulars of claim alleged that the defendants had infringed the trade mark under s.10 (1), (2) and (3) of the Trade Marks Act 1994 and had passed off their goods as and for the claimant's. The defence and counterclaim alleged that Equisafety had registered MERCURY in breach of s.3 (1) (b), (c) and (d) and/or s.3 (6) of the Act. They contended that the word "MERCURY" was devoid of distinctiveness, descriptive and had become customary in the trade. They also argued that the mark had been registered in bad faith.
The Issues
The following issues were set out in para [12] of Mr Caddick's judgment:
"a. Was Equisafety's "Mercury" mark invalid because it was devoid of any distinctive character, contrary to s.3(1)(b) of the Trade Marks Act 1994?
b. Was Equisafety's "Mercury" mark invalid because it was descriptive, contrary to s.3 (1) (c) of the Trade Marks Act 1994?
c. Was Equisafety's "Mercury" mark invalid because the word had become customary, contrary to s.3 (1)(d) of the Trade Marks Act 1994?
d. Was Equisafety's "Mercury" mark invalid because it was registered in bad faith, contrary to s.3(6) of the Trade Marks Act 1994?
e. Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (1) of the Trade Marks Act 1994?
f. Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (2) of the Trade Marks Act 1994?
g. Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (3) of the Trade Marks Act 1994?
h. Does Battle have a defence to the infringement claims by reason of s.11 (2) of the Trade Marks Act 1994?
i. Did Battle's actions constitute passing off?
j. Is Mr Dewey liable as a joint tortfeasor for the actions of Battle?"
b. Was Equisafety's "Mercury" mark invalid because it was descriptive, contrary to s.3 (1) (c) of the Trade Marks Act 1994?
c. Was Equisafety's "Mercury" mark invalid because the word had become customary, contrary to s.3 (1)(d) of the Trade Marks Act 1994?
d. Was Equisafety's "Mercury" mark invalid because it was registered in bad faith, contrary to s.3(6) of the Trade Marks Act 1994?
e. Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (1) of the Trade Marks Act 1994?
f. Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (2) of the Trade Marks Act 1994?
g. Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (3) of the Trade Marks Act 1994?
h. Does Battle have a defence to the infringement claims by reason of s.11 (2) of the Trade Marks Act 1994?
i. Did Battle's actions constitute passing off?
j. Is Mr Dewey liable as a joint tortfeasor for the actions of Battle?"
Issues (a), (b) and (c): Was Equisafety's "Mercury" mark invalid because it was devoid of any distinctive character, descriptive or had become customary contrary to s.3 (1) (b), (c) or (d)?
The learned deputy judge took those first three issues together. S.47 (1) of the Trade Marks Act 1994 provides:
"The registration of a trade mark may be declared invalid on the ground that the trade mark was registered in breach of section 3 or any of the provisions referred to in that section (absolute grounds for refusal of registration).
Where the trade mark was registered in breach of subsection (1) (b), (c) or (d) of that section, it shall not be declared invalid if, in consequence of the use which has been made of it, it has after registration acquired a distinctive character in relation to the goods or services for which it is registered."
"The registration of a trade mark may be declared invalid on the ground that the trade mark was registered in breach of section 3 or any of the provisions referred to in that section (absolute grounds for refusal of registration).
Where the trade mark was registered in breach of subsection (1) (b), (c) or (d) of that section, it shall not be declared invalid if, in consequence of the use which has been made of it, it has after registration acquired a distinctive character in relation to the goods or services for which it is registered."
S.3 (1) further provides:
"The following shall not be registered –
(a) …
(b) trade marks which are devoid of any distinctive character.
(c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services.
(d) trade marks which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade:
Provided that a trade mark shall not be refused registration by virtue of paragraph (b), (c) or (d) above if, before the date of application for registration, it has in fact acquired a distinctive character as a result of the use made of it."
"The following shall not be registered –
(a) …
(b) trade marks which are devoid of any distinctive character.
(c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services.
(d) trade marks which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade:
Provided that a trade mark shall not be refused registration by virtue of paragraph (b), (c) or (d) above if, before the date of application for registration, it has in fact acquired a distinctive character as a result of the use made of it."
Although s.3.1 (b) and (c) are independent grounds of invalidity, Battle's case was that the mark MERCURY was descriptive at least in so far as it was used for goods of a reflective high visibility nature and that to that extent it was not distinctive. Accordingly, the invalidity claims based on s.3 (1) (b) and (c) could be taken together. Both points turned on whether the mark was or was not descriptive of some characteristic of the goods covered by the registration. In support of its contention, Battle relied on the dictionary definitions of mercury, namely "heavy, silver-white… metallic element… used in… reflecting surfaces of mirrors" and a "heavy, silver-coloured metal, liquid at normal temperature". It pointed to the fact that Equisafety's Mercury products are "made of a silver-grey 'mercury' coloured, high-visibility reflective fabric". In Mr Caddick's view, that evidence did not establish that the word MERCURY would be seen by the average consumer as being descriptive of reflective high visibility clothing, let alone as being descriptive of the wider class of goods for which that word had been registered.
The evidence in support of the contention that the word MERCURY had "become customary in the current language or in the bona fide and established practises of the trade to designate goods or services in respect of which registration of that mark is sought" was substantially the same as the evidence used to support the contention that it was descriptive. The learned deputy judge dismissed the s.3 (1) (d) point for substantially the same reason.
Issue (d): Was Equisafety's "Mercury" mark invalid because it was registered in bad faith, contrary to s.3 (6) of the Trade Marks Act 1994?
S.3 (6) of the Trade Marks Act 1994 provides:
The subsection was considered by the Court of Appeal in Sky Ltd and others v Skykick UK Ltd [2021] EWCA Civ 1121. Mr Caddick referred to para [67] of Lord Justice Floyd's judgment in that case:
"3. The concept of bad faith presupposes the existence of a dishonest state of mind or intention, but dishonesty is to be understood in the context of trade mark law, i.e. the course of trade and having regard to the objectives of the law namely the establishment and functioning of the internal market, contributing to the system of undistorted competition in the Union, in which each undertaking must, in order to attract and retain customers by the quality of its goods or services, be able to have registered as trade marks signs which enable the consumer, without any possibility of confusion, to distinguish those goods or services from others which have a different origin: Lindt at [45]; Koton Magazacilik at [45].
4. The concept of bad faith, so understood, relates to a subjective motivation on the part of the trade mark applicant, namely a dishonest intention or other sinister motive. It involves conduct which departs from accepted standards of ethical behaviour or honest commercial and business practices: Hasbro at [41].
5. The date for assessment of bad faith is the time of filing the application: Lindt at [35].
6. It is for the party alleging bad faith to prove it: good faith is presumed until the contrary is proved: Pelikan at [21] and [40].
…
8. Whether the applicant was acting in bad faith must be the subject of an overall assessment, taking into account all the factors relevant to the particular case: Lindt at [37].
9. For that purpose it is necessary to examine the applicant's intention at the time the mark was filed, which is a subjective factor which must be determined by reference to the objective circumstances of the particular case: Lindt at [41] – [42].
10. Even where there exist objective indicia pointing towards bad faith, however, it cannot be excluded that the applicant's objective was in pursuit of a legitimate objective, such as excluding copyists: Lindt at [49].
11. Bad faith can be established even in cases where no third party is specifically targeted, if the applicant's intention was to obtain the mark for purposes other than those falling within the functions of a trade mark: Koton Magazacilik at [46].
12. It is relevant to consider the extent of the reputation enjoyed by the sign at the time when the application was filed: the extent of that reputation may justify the applicant's interest in seeking wider legal protection for its sign: Lindt at [51] to [52]
13. Bad faith cannot be established solely on the basis of the size of the list of goods and services in the application for registration: Psytech at [88], Pelikan at [54]."
4. The concept of bad faith, so understood, relates to a subjective motivation on the part of the trade mark applicant, namely a dishonest intention or other sinister motive. It involves conduct which departs from accepted standards of ethical behaviour or honest commercial and business practices: Hasbro at [41].
5. The date for assessment of bad faith is the time of filing the application: Lindt at [35].
6. It is for the party alleging bad faith to prove it: good faith is presumed until the contrary is proved: Pelikan at [21] and [40].
…
8. Whether the applicant was acting in bad faith must be the subject of an overall assessment, taking into account all the factors relevant to the particular case: Lindt at [37].
9. For that purpose it is necessary to examine the applicant's intention at the time the mark was filed, which is a subjective factor which must be determined by reference to the objective circumstances of the particular case: Lindt at [41] – [42].
10. Even where there exist objective indicia pointing towards bad faith, however, it cannot be excluded that the applicant's objective was in pursuit of a legitimate objective, such as excluding copyists: Lindt at [49].
11. Bad faith can be established even in cases where no third party is specifically targeted, if the applicant's intention was to obtain the mark for purposes other than those falling within the functions of a trade mark: Koton Magazacilik at [46].
12. It is relevant to consider the extent of the reputation enjoyed by the sign at the time when the application was filed: the extent of that reputation may justify the applicant's interest in seeking wider legal protection for its sign: Lindt at [51] to [52]
13. Bad faith cannot be established solely on the basis of the size of the list of goods and services in the application for registration: Psytech at [88], Pelikan at [54]."
Mr Caddick observed that Battle had the burden of proving bad faith. Its counsel had argued that Ms Fletcher had acted in bad faith by applying to register MERCURY in order to bring this action, that the mark was descriptive and that it had been registered for goods that it had no intention of marketing under that brand. Mr Caddick found that the matters relied on by Battle (whether taken collectively or individually) did not come close to showing that Equisafety had acted in bad faith. He therefore dismissed the claim under s.3 (6) and with it the counterclaim.
Issue (e): Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (1) of the Trade Marks Act 1994?
S.10 (1) provides:
"A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered."
"A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered."
The deputy judge rejected the s.10 (1) claim because the defendants' sign was clearly not identical to the registered mark. He acknowledged that it was possible that in assessing Battle's sign, the average consumer might disregard the "HyVIZ" and "Reflective" elements. However, even that would have left the sign "SILVA MERCURY" and that would not have been identical to MERCURY.
Issue (f): Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (2) of the Trade Marks Act 1994?
S.10 (2) states:
"A person infringes a registered trade mark if he uses in the course of trade a sign where because—
(a) the sign is identical to the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or
(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."
"A person infringes a registered trade mark if he uses in the course of trade a sign where because—
(a) the sign is identical to the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or
(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."
At para [50] Mr Caddick noted that the following conditions must be satisfied to establish liability under this subsection:
"(i) there must be use of a sign by a third party within the relevant territory,
(ii) the use must be in the course of trade,
(iii) the use must be without the consent of the proprietor of the trade mark,
(iv) the use must be of a sign which is at least similar to the trade mark,
(v) the use must be in relation to goods or services which are at least similar to those for which the trade mark is registered, and
(vi) the use must be such as to give rise to a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."
He observed in the next paragraph that only conditions (iv) to (vi) were in issue in this case.
"(i) there must be use of a sign by a third party within the relevant territory,
(ii) the use must be in the course of trade,
(iii) the use must be without the consent of the proprietor of the trade mark,
(iv) the use must be of a sign which is at least similar to the trade mark,
(v) the use must be in relation to goods or services which are at least similar to those for which the trade mark is registered, and
(vi) the use must be such as to give rise to a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."
He observed in the next paragraph that only conditions (iv) to (vi) were in issue in this case.
As to condition (iv), Equisafety had argued that if the sign and mark were not identical they could not be more similar. Battle had replied that any similarity was at "a vanishingly low level." In the deputy judge's view, the truth fell somewhere between the two. He held that the average consumer would see Battle's sign as being moderately similar to the registered mark, particularly bearing in mind the element of imperfect recollection. There were obvious visual and aural similarities in that the word MERCURY was part (and not an insignificant part) of Battle's sign. There seemed to be less conceptual similarity as Battle's sign conveyed the concept of a high visibility, silver coloured, reflective product whereas the mark MERCURY conceptually did not point to a high visibility, reflective product but rather to a product with unusual mercurial, god-like or even celestial but unspecified qualities.
With regard to condition (v), Battle accepted that its jacket, gilet, hat band, leg band, tail band and bridle fell within Equisafety's specification but denied that its mobile phone holder did. The judge rejected Battle's contention. A reflective case for a mobile phone was similar to other goods for which MERCURY had been registered such as protective caps for cameras.
In relation to condition (vi), Mr Caddick referred to paras [30] and [31] of Lord Justice Kitchin's judgment in Comic Enterprises Ltd v Twentieth Century Fox Film Corp [2016] EWCA Civ 41 on the approach to be applied in determining whether there is a likelihood of confusion:
"(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion."
Looking at the evidence globally through the eyes of the average consumer and bearing in mind that, for the purposes of s.10 (2), the likelihood of confusion is assessed in the context of the actual use that has been made of the sign complained of, the deputy judge concluded that there was a likelihood of confusion. In his view, an end user was likely to assume that there was some association between Equisafety and the products being marketed and sold by Battle under the above label. That conclusion followed from the fact that Battle's sign was being used in relation to identical or very similar goods. Also, consumers would take notice of the word MERCURY and regard it as being of some trade mark significance. Equisafety had used the MERCURY mark since 2015. It had spent £35,000 per year on advertising which had generated sales of nearly £485,000. All that would have enhanced the mark's distinctiveness and increased the likelihood of confusion."(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion."
Issue (g): Did Battle's actions constitute an infringement of the Mercury trade mark within the meaning of s.10 (3) of the Trade Marks Act 1994?
S.10 (3) provides:
"A person infringes a registered trade mark if he uses in the course of trade in relation to goods or services, a sign which—
(a) is identical with or similar to the trade mark,
…
where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."
S.10 (3A) further provides:
"Subsection (3) applies irrespective of whether the goods and services in relation to which the sign is used are identical with, similar to or not similar to those for which the trade mark is registered."
"A person infringes a registered trade mark if he uses in the course of trade in relation to goods or services, a sign which—
(a) is identical with or similar to the trade mark,
…
where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."
S.10 (3A) further provides:
"Subsection (3) applies irrespective of whether the goods and services in relation to which the sign is used are identical with, similar to or not similar to those for which the trade mark is registered."
Mr Caddick listed the 9 conditions that have to be satisfied to establish liability at para [68]:
"(i) the trade mark must have a reputation in the relevant territory;
(ii) there must be use of a sign by a third party within the relevant territory;
(iii) the use must be in the course of trade;
(iv) it must be without the consent of the proprietor of the trade mark;
(v) it must be of a sign which is at least similar to the trade mark;
(vi) it must be in relation to goods or services;
(vii) it must give rise to a 'link' between the sign and the trade mark in the mind of the average consumer;
(viii) it must give rise to one of three types of injury, that is to say, (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and
(ix) it must be without due cause."
"(i) the trade mark must have a reputation in the relevant territory;
(ii) there must be use of a sign by a third party within the relevant territory;
(iii) the use must be in the course of trade;
(iv) it must be without the consent of the proprietor of the trade mark;
(v) it must be of a sign which is at least similar to the trade mark;
(vi) it must be in relation to goods or services;
(vii) it must give rise to a 'link' between the sign and the trade mark in the mind of the average consumer;
(viii) it must give rise to one of three types of injury, that is to say, (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and
(ix) it must be without due cause."
He noted that conditions (i), (v) and (vii) to (ix) were in contention in this case.
As to the first condition, Mr Caddick referred to para [307] of Mr Justice Arnold's judgment in Sky plc v Skykick UK Ltd [2018] EWHC 155 (Ch), [2018] RPC 5, [2018] ETMR 23:
"Reputation of the trade mark. This is not a particularly onerous requirement. As the Court of Justice explained in Case C-375/97 General Motors Corp v Yplon SA [1999] ECR I-5421:
'[24] The public amongst which the earlier trade mark must have acquired a reputation is that concerned by that trade mark, that is to say, depending on the product or service marketed, either the public at large or a more specialised public, for example traders in a specific sector.
[25] It cannot be inferred from either the letter or the spirit of Article 5 (2) of the Directive that the trade mark must be known by a given percentage of the public so defined.
[26] The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark.
[27] In examining whether this condition is fulfilled, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it.'"
The deputy judge held that the factors relevant to determining whether a mark had a reputation were effectively the same as those for assessing whether it had acquired a distinctive character. In view of his findings on the distinctive character of the MERCURY mark, it followed that condition (i) was satisfied and that the mark had acquired a reputation for the purposes of s.10 (3).
As to the first condition, Mr Caddick referred to para [307] of Mr Justice Arnold's judgment in Sky plc v Skykick UK Ltd [2018] EWHC 155 (Ch), [2018] RPC 5, [2018] ETMR 23:
"Reputation of the trade mark. This is not a particularly onerous requirement. As the Court of Justice explained in Case C-375/97 General Motors Corp v Yplon SA [1999] ECR I-5421:
'[24] The public amongst which the earlier trade mark must have acquired a reputation is that concerned by that trade mark, that is to say, depending on the product or service marketed, either the public at large or a more specialised public, for example traders in a specific sector.
[25] It cannot be inferred from either the letter or the spirit of Article 5 (2) of the Directive that the trade mark must be known by a given percentage of the public so defined.
[26] The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark.
[27] In examining whether this condition is fulfilled, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it.'"
The deputy judge held that the factors relevant to determining whether a mark had a reputation were effectively the same as those for assessing whether it had acquired a distinctive character. In view of his findings on the distinctive character of the MERCURY mark, it followed that condition (i) was satisfied and that the mark had acquired a reputation for the purposes of s.10 (3).
Similarly, condition (v) was satisfied in view of the judge's findings in relation to s.10 (2).
In view of his conclusions on the likelihood of confusion, it followed that there was a link.
(a) detriment to the distinctive character of the mark,
(b) detriment to the repute of the mark and
(c) unfair advantage being taken of the distinctive character or repute of the mark.
Equisafety relied on all three of these types of injury.
He referred to paras [39] to [41] of the Court of Justice's judgment in Case C-487/07 L'Oreal v Bellure NV [2009] EUECJ C-487/07 for guidance on each type of injury:
"[39] As regards detriment to the distinctive character of the mark, also referred to as 'dilution', 'whittling away' or 'blurring', such detriment is caused when that mark's ability to identify the goods or services for which it is registered is weakened, since use of an identical or similar sign by a third party leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so (see, to that effect, Intel Corporation, para.[29]).
[40] As regards detriment to the repute of the mark, also referred to as 'tarnishment' or 'degradation', such detriment is caused when the goods or services for which the identical or similar sign is used by the third party may be perceived by the public in such a way that the trade mark's power of attraction is reduced. The likelihood of such detriment may arise in particular from the fact that the goods or services offered by the third party possess a characteristic or a quality which is liable to have a negative impact on the image of the mark.
[41] As regards the concept of 'taking unfair advantage of the distinctive character or the repute of the trade mark', also referred to as 'parasitism' or 'free-riding', that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation."
"[39] As regards detriment to the distinctive character of the mark, also referred to as 'dilution', 'whittling away' or 'blurring', such detriment is caused when that mark's ability to identify the goods or services for which it is registered is weakened, since use of an identical or similar sign by a third party leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so (see, to that effect, Intel Corporation, para.[29]).
[40] As regards detriment to the repute of the mark, also referred to as 'tarnishment' or 'degradation', such detriment is caused when the goods or services for which the identical or similar sign is used by the third party may be perceived by the public in such a way that the trade mark's power of attraction is reduced. The likelihood of such detriment may arise in particular from the fact that the goods or services offered by the third party possess a characteristic or a quality which is liable to have a negative impact on the image of the mark.
[41] As regards the concept of 'taking unfair advantage of the distinctive character or the repute of the trade mark', also referred to as 'parasitism' or 'free-riding', that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation."
Mr Caddick added that Mr Justice Arnold had pointed out in Sky v Skykick that the stronger the mark's distinctive character, the easier it will be to find that detriment has been caused to it. However, the mere existence of a link is not enough. The proprietor must prove actual injury or a serious likelihood of injury. Equisafety complained of a loss of sales as a result of Battkes's activities but provided no evidence of causation. Though Mr Caddick found that evidence less than helpful, he relied on his finding of a likelihood of confusion to conclude that there must have been some detriment. He found that Battle's use of the word MERCURY in relation to high visibility equestrian products was bound to diminish the ability of Equisafety's mark to act as a designation of origin.
Ms Fletcher had contended that Battle's products were less safe than Equisafety's because they were of inferior quality and used a fabric that "blends into daylight and therefore only potentially enhances rider safety in low light environments". No evidence was adduced in support of that contention and the deputy judge rejected Equisafety's claim in so far as it relied on injury to repute.
In view of his findings on distinctiveness and likelihood of confusion, the judge concluded that Battled took unfair advantage of the MERCURY mark. As he put it at para [82]:
"In effect, in using that word for its high visibility equestrian products, it is benefitting from Equisafety's investment in the Mercury mark without paying anything for it."
Though he had no evidence of Battle's intention in choosing to incorporate the word MERCURY in its sign he inferred that Battle was probably aware of Equisafety's use of that mark when it adopted its sign and it certainly became aware of Equisafety's use after it had received Ms Fltecher's complaint.
"In effect, in using that word for its high visibility equestrian products, it is benefitting from Equisafety's investment in the Mercury mark without paying anything for it."
Though he had no evidence of Battle's intention in choosing to incorporate the word MERCURY in its sign he inferred that Battle was probably aware of Equisafety's use of that mark when it adopted its sign and it certainly became aware of Equisafety's use after it had received Ms Fltecher's complaint.
With regard to condition (ix) Mr Caddick referred to para [123] of Lord Justice Kitchin's judgment in Comic:
"… the concept of due cause involves a balancing between, on the one hand, the interests which the proprietor of a trade mark has in safeguarding its essential function and, on the other hand, the interests of other economic operators in having signs capable of denoting their products and services…"
Battle's argument for the incorporation of the word MERCURY in its sign was that the word was descriptive. As he had already dealt with that argument he found at [87] that Battle's actions were without due cause.
As all the conditions for establishing liability under s.10 (3) had been met, the deputy judge found for Equisafety on Issue (g).
Issue (h): Does Battle have a defence to the infringement claims by reason of s.11 (2) of the Trade Marks Act 1994?
S.11 (2) provides:
"A registered trade mark is not infringed by –
"A registered trade mark is not infringed by –
...............
(b) the use of signs or indications which are not distinctive or which concern the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services ......"
Mr Caddick said that that defence applies only to signs or indications which are not distinctive or which concern the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services. He added that the use must be in accordance with honest practices in industrial or commercial matters.
In this case, Mr Caddick had found that the word MERCURY was distinctive and was not being used descriptively. Also, in view of his conclusions on unfair advantage and due cause, Battle's use of the mark was not in accordance with honest practices in industrial or commercial matters.
Mr Caddick said that that defence applies only to signs or indications which are not distinctive or which concern the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services. He added that the use must be in accordance with honest practices in industrial or commercial matters.
In this case, Mr Caddick had found that the word MERCURY was distinctive and was not being used descriptively. Also, in view of his conclusions on unfair advantage and due cause, Battle's use of the mark was not in accordance with honest practices in industrial or commercial matters.
Issue (i): Did Battle's actions constitute passing off?
It was common ground that Equisafety had to establish goodwill, misrepresentation and damage. On the basis of Mr Caddick's findings in relation to distinctiveness and reputation, it followed that Equisafety had acquired goodwill in the MERCURY mark in relation to high visibility equine products and that it had done so well before Battle started to use MERCURY in its sign.
He also found that that use by Battle clearly involved a misrepresentation that those products were derived from or connected in some way with Equisafety.
Finally, he found that such use inevitably resulted in damage to Equisafety.
For these reasons, he held that Battle's activities amounted to passing off.
Issue (j): Is Mr Dewey liable as a joint tortfeasor for the actions of Battle?
Mr Caddick referred to para [21] of Lord Toulson's judgment in Fish & Fish v Sea Shepherd UK [2015] UKSC 10, [2015] 1 Lloyd's Rep 593, [2015] 1 AC 1229, [2015] AC 1229, [2015] 2 All ER (Comm) 867, [2015] WLR(D) 102, [2015] 4 All ER 247, [2015] 2 WLR 694] AC 1229 for the relevant law:
"D will be jointly liable with P if they combined to do or secure the doing of acts which constituted a tort. This requires proof of two elements. D must have acted in a way which furthered the commission of the tort by P, and D must have done so in pursuance of a common design to do or secure the doing of the acts which constituted the tort. I do not consider it necessary or desirable to gloss the principle further."
"D will be jointly liable with P if they combined to do or secure the doing of acts which constituted a tort. This requires proof of two elements. D must have acted in a way which furthered the commission of the tort by P, and D must have done so in pursuance of a common design to do or secure the doing of the acts which constituted the tort. I do not consider it necessary or desirable to gloss the principle further."
In the deputy judge's view, that did not satisfy the Sea Shepherd test. He observed that Battle is a reasonably large company with 140 employees and there must be acts which it does but for which Mr Dewey cannot be held responsible. Battle's internal emails after receiving Ms Fletcher's email of 6 June 2019 suggest that the use of the word MERCURY was not something of which Mr Dewey had previously been aware which was not surprising given the scale of its operations.
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