Trade Mark Newsletter March 2004
Contents
"Relentless" Erosion Of Uk Passing
Off Law
Filing A Community Trade Mark - Use Of Class Headings
Filing A Community Trade Mark - Why Register Now?
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"Relentless" Erosion
Of Uk Passing Off Law
In our September 2003 Newsletter we reported the case involving
a dispute over rights in the HOTPICK/HOT PICKS trade mark (Inter
Lotto (UK) Limited v. Camelot Group Plc). In an interim judgement
the High Court decided that Lotto’s common law rights in the
name HOTPICK were sufficient to prevent Camelot’s continued
use of their registered trade mark HOT PICKS and that the common
law protection afforded to users of trade marks under the law of
“passing off” was unaffected by the provisions of the
Trade Marks Act, 1994. The decision was upheld by the Court of Appeal
subsequently and created an unusual situation since Camelot were
then unable to enforce their registered trade mark rights against
Lotto (although in theory they were still enforceable against third
parties).
Although this case confirmed that common law user rights which
were earlier in date would defeat a later trade mark registration,
a different result has recently occurred in the case of Hart v.
Relentless Records Limited, which also involved a clash of unregistered
and registered trade mark rights, and another interim decision by
the High Court.
In this latter case, the second claimant (Relentless Recordings
Limited) was set up to trade as a record company in 1995 but its
business operations were only marginal, being primarily confined
to making and distributing small quantities of promotional records.
Indeed the company had always filed dormant accounts at Companies
House. The defendant company, Relentless Records Limited began operating
in 1999, and obtained a registration of the trade mark RELENTLESS
for sound recordings. The defendant’s activities then attracted
the attention of the first claimant, Mr. Hart who had co-founded
the second claimant company, Relentless Recordings Limited. He took
action for “passing off” against Relentless Records Limited;
they counter-claimed for trade mark infringement.
During the trial it became apparent that the first claimant, Mr.
Hart, had never personally traded using the name Relentless Records
and that he had no sustainable claim to goodwill in the name. Accordingly
that section of the claim was summarily dismissed. Because the second
claimant was a dormant company, an order for security of costs was
then made and not fulfilled, with the consequence that the second
claimant’s case was later struck out by the High Court.
The court’s decision therefore only involved the counterclaim
by the defendant for trade mark infringement; they had requested
summary judgement and in reply the first claimant sought to challenge
the judge’s conduct of the case on the grounds of bias. He
also attacked the defendant’s registration of RELENTLESS as
a trade mark on the grounds that it was too widely worded and argued
that it was improperly registered since the joint claimants had
common law rights in the RELENTLESS name at the time when the defendant’s
application was filed. An allegation of bad faith relating to the
trade mark filing was also made.
In his interim decision the judge rejected the accusations of bias
and indicated that the claimant had no realistic prospect of success
in attacking the defendant’s mark. However the case was set
down for further legal argument prior to a final decision on the
defendant’s counter-claim.
In passing, the judge commented that the law of passing off did
not protect goodwill of a trivial extent (the implication being
that the claimants had nothing more than this to rely on). Although
enforceable property rights were created by simply putting marks
into use prior to the coming into force of the trade mark registration
system in the UK (which first occurred in 1876), since that date
persons claiming user rights in trade marks sufficient to found
a claim for “passing off” needed to establish something
more.
This decision, albeit an interim judgement by the UK High Court,
and in contrast to the HOT PICKS case, highlights the fact that
unregistered trade mark rights only prevail over registered rights
where there is substantial prior use and this is demonstrated to
the satisfaction of the relevant Tribunal. In most cases, later
registered rights will win out in the absence of a sustainable claim
to goodwill. Due to these uncertainties in establishing common law
user rights, trade mark owners are clearly better protected from
the outset by obtaining trade mark registrations (whether in the
UK or via the Community Trade Mark system) to reinforce their claims
to exclusivity.
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Filing A Community Trade Mark - Use
Of Class Headings
A recent communication from the President of OHIM (No. 4003 of 2003)
concerning the use of International class headings in lists of goods
and services covered by CTM filings has caused some surprise among
UK trade mark advisers.
It should be remembered that OHIM are keen to encourage use of
the International classheadings for such filings because it eases
their translation costs; already CTM applications must be translated
into each of the national languages of the 15 current EU Member
States. When the 10 new members join in May 2004 this will impose
an even greater translation burden.
The communication from OHIM suggests that filing applications using
the whole class heading automatically provides coverage for all
goods or services in that class. Equally the OHIM notification states
that use of a particular general indication e.g. “data processing
equipment and computers” in Class 9 would also cover “computer
software” in that class even if not specifically mentioned,
since the latter term is within the general description.It is regrettable
that OHIM are prepared to accept such broad claims as a matter of
general principle; this makes it increasingly difficult for traders
seeking to adopt a new mark to assess whether an existing CTM registration
is a real conflict in commercial terms without making use enquiries
to check on the precise field of business activity.
By contrast, the US requirement that trade mark owners specify
the precise field of use, although often frustrating, at least gives
a clearer picture to those searching the database as to what prior
rights owners are actually interested in.
It should also be remembered that the class headings set out in
the International Classification are intended for guidance only
(as is clearly indicated in the general remarks which preface the
International Classification listing).
The statements from OHIM also run contrary to indications from the
UK Trade Mark Registry and have yet to be tested in any form of
court proceeding, either by way of infringement action or a request
for revocation alleging non-use.
In this latter context, it is also noteworthy that there are some
ambiguous statements towards the end of the OHIM notification which
may be read as suggesting that use, for example, on “computer
software” would be sufficient to maintain a CTM registration
for “data processing equipment and computers” even if
the proprietor cannot demonstrate use on this latter category of
item.
It seems more likely that the OHIM notification intended to say
that a mark covering “data processing equipment and computers”
will be maintained for “computer software” if the owner
of the mark could only show genuine use on those items - even if
the term “computer software” was not separately mentioned
in the original registration wording.
While the current position remains ambiguous, it is probably safer
for applicants to include the precise goods of interest to them
in their specification wording even if they also use the International
class heading in the claim.
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Community Trade Marks - Why Register
Now?
On 1 May 2004, the European Union will expand from 15 member states
to 25.
Existing Community Trade Mark registrations (and applications filed
before 1 May 2004) will automatically extend to cover the new member
states. Equally, new filings made after 1 May 2004 will cover all
25 countries.
Registering a Community Trade Mark is, and will continue to be,
the most cost-effective way of securing protection for trade mark
rights throughout the European Union. Moreover, it is clear that
a CTM registration has other advantages, relative to national rights:
Specifically, if a proprietor wishes to oppose another Community
Trade Mark, filed later than his own mark, it is far simpler to
base an opposition on a single Community Trade Mark registration
than to rely on individual national registrations (which may not,
in any case, cover the complete territory of the European Union).If
an opposition is based on a valid Community Trade Mark, and is successful,
the mark opposed will fail in all EU countries and the applicant
will have no “fall back”. By contrast, if an opposition
is based on national rights in some, but not all of the EU member
states, even if it succeeds, the Community Trade Mark owner has
the option of converting his claim to national filings in the remaining
countries.
Another important point is that when oppositions are based on national
rights, the applicant for the Community Trade Mark which is being
challenged, often has the option to invoke the “proof of use”
procedures. These are strictly applied by OHIM and there are many
reported cases where the proof of use adduced by the prior rights
owner is not considered sufficient to support the opposition.
By contrast, if the use requirement is invoked against an opponent’s
prior Community Trade Mark, it is only necessary to supply proof
of genuine use in a single member state to satisfy this requirement.
This follows from the Community Trade Mark’s essential character
as a unitary right.
For both these reasons, it makes sense to consolidate existing
national holdings by filing a Community Trade Mark, even now.
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