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Trade Marks Newsletter

No. 4

July 2002

Article 5: BABY-DRY v. DOUBLEMINT – Where to Draw the Line?

Article 1: Is Your Company Taking Full Financial Advantage of its Trade Mark Rights?

Recently, the Institute of Trade Mark Attorneys (ITMA) commissioned a Professor from UMIST to investigate how small and medium sized enterprises were exploiting their trade marks.

The report indicates that SMEs are slow to appreciate that they hold valuable and tangible assets, in the shape of trade marks and other IP rights, which can be exploited to generate additional income streams, or to raise project finance.

Difficulties in raising finance are often cited as SMEs as a major obstacle to growth, but they may have overlooked the fact that their brand names are one potential source of such finance.

By contrast, major corporations are more used to leveraging their IP rights and, in particular, their well known brands, to secure additional lending. In 1997, Calvin Klein raised US $58 million on a seven year securitised loan, whose interest and principal repayments were funded from royalty receipts linked to their sales of CK perfume products.

In some cases, a company’s trade mark portfolio may have a value which exceeds that enjoyed by the tangible assets; failure to recognise this led to problems for Volkswagen when they purchased the business of Rolls Royce Motor Company in 1998 at a reported acquisition price of £479 million. However, the ROLLS ROYCE trade mark rights were acquired separately by BMW for a knock-down price of £40 million. One may wonder who got the better deal in these circumstances.If trade mark rights are to be fully exploited and retain their value as vehicles for corporate finance, it is vital to obtain trade mark registration. Unregistered trade marks never command the same market value, since there are often difficulties in proving claims to common-law monopoly rights based on mere use of a brand. One of the first questions that venture capital institutions ask their potential clients is whether they have registered their trade marks, and it is not uncommon to see entries on the UK Trade Marks Register where security interests have been granting to lending institutions as part of a financing deal.

We recommend a regular “health check” in the shape of an audit of your trade mark portfolio to ensure that registrations are taken out for all valuable brands and that registered coverage is adequate to reflect the current scope of business activities. It is surprisingly easy to forget that the company is now operating in new markets without having registered trade mark protection.

Please contact any of this firm’s trade mark advisors for more information as to how to conduct such a trade mark audit, or guidelines for trade mark protection.

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Article 2: Saxon Band Name - Trade Mark Registration Invalid

Disputes between current and former members of well known bands over ownership of the band name are not uncommon – particularly given the potential commercial value of such names and where the matter is not already clearly covered by appropriate contractual arrangements.

In the case of Byford v Oliver and Dawson the High Court recently overturned an initial decision by the UK Trade Marks Registry and as a result declared invalid a trademark registration for the mark SAXON in the name of two of the bands original members.

The SAXON heavy metal rock band was founded at the end of the 1970s – Messrs “Biff” Byford (vocals), Oliver (guitar) and Dawson (bass) were three of the founder members.

SAXON achieved considerable success in the United Kingdom and elsewhere both in terms of music sales, tours and media exposure.

 Dawson left the band in 1986 and Oliver left in 1995 – although the band SAXON fronted by “Biff” Byford continued with various changes of line up. Following their departures Oliver and Dawson performed under various names comprising SAXON (often presented in the same gothic script as that associated with the original band) but accompanied by other matter in particular OLIVER DAWSON SAXON - although seemingly not in a form using SAXON alone.

In 1997 Oliver and Dawson applied to register SAXON per se as a trademark in the United Kingdom covering classes 9, 16 and 41 and subsequently attempted to use the resulting registration to hamper use of SAXON by the Byford led band.

Byford then applied to the UK Trade Marks Office for a Declaration of Invalidity against the registration by Oliver and Dawson on the basis that:

  1. Use of SAXON by Oliver/Dawson would be liable to be prevented by an action for “passing-off”.
  2. The registration was applied for in bad faith.

In the Trade Marks Registry the Hearing Office decided that each of the original members of the band had common law rights in the name of SAXON dating back to the band’s original formation and as such Byford could not have “earlier rights” than Oliver/Dawson and Oliver/Dawson could not be said to have applied to register the mark in bad faith.

Byford appealed the decision to the High Court where Laddie J. reversed the decision and held that contrary to the Hearing Officer’s view the name and goodwill were assets of the particular partnership and not the individuals. He also found that when Dawson left the group in 1986 (i.e. ten years prior to the filing of the application) he abandoned his interests in the name and goodwill and although a position was not so clear regarding Mr Oliver (who had left only two years prior to the filing of the trademark) it did not appear that following his departure he had asserted rights in the mark SAXON per se.

The judge therefore concluded that the recent goodwill and name belonged to the reformed SAXON band(s) led by Mr Byford and as such, the registration of SAXON by Oliver/Dawson was declared invalid on the basis that use of the mark would amount to “passing off” and was applied for in bad faith.

It must be said that the finding in this case appears to be dependent to some extent upon particular facts and it is far from clear that the same outcome would apply in all cases.

However the case highlights the need for clear contractual terms in any agreement between members of bands or other entertainment providers as to entitlement to the band name and trade marks, especially when the original members leave (or reform).

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Article 3: Latest Case Law on Shape Marks in the United Kingdom and European Union

Three recent cases involving shape marks have underlined the difficulties in obtaining registration of this type of mark at both UK and EU level:

1 Axion S.A. vs. OHIM (European Court of First Instance)

This case involves two applications to register the shapes of a cigar and a gold ingot as Community trade marks. The goods applied for were “chocolate, chocolate goods; pastry and confectionery” (the cigar mark) and “chocolate, chocolate goods” and “cardboard packaging in the form of a gold ingot for chocolate and chocolate goods” (the “ingot” mark). Both applications were objected to under Article 7(1)(b) of the CTM Regulation on the grounds that they are “devoid of distinctive character”, and this objection was upheld by OHIM’s Board of Appeal.

On appeal to the Court of First Instance (the CFI), the applicant sought to argue that a minimum degree of distinctiveness is sufficient for a trade mark to qualify as distinctive and registrable. They also claimed that the respective shapes of the marks are unusual, arbitrary and different from the usual shape of those goods or their packaging.

It was held, however, that although Article 7(1)(b) of the CTM Regulation does not distinguish between different categories of marks “the average consumer does not subject the shape and colour of the products concerned to close analysis, but accords them only fleeting attention”. In view of the fact that there are other goods on the market with similar shapes to both the “cigar” and “ingot” applications, the differences in shape and colour relied upon by the applicant were not held to be sufficient to confer distinctive character to the marks.

2 The Procter & Gamble Company vs. OHIM (European Court of First Instance)

Similar considerations applied in The Procter & Gamble Company’s appeal against the refusal of its Community trade mark application for the shape of a bar of soap. This application was objected under Article 7(1)(b) on distinctiveness grounds, and also on the basis that the sign consists exclusively of the shape resulting from the nature of the goods themselves (Article 7(1)(e)(i)) and is a shape which is necessary to obtain a technical result (Article 7(1)(e)(ii)). These last two grounds of objection are unique to shape marks.

In the course of the appeal, the applicant argued that the trade mark applied for is very different from the traditional soap bar shape, because it has a concave profile on the longitudinal side. It was also argued that the shapes of goods that are visible in the normal course of usage (such as soap) are “more durable” as trade marks than are word marks, as the shape is the most visible element.

The CFI, however, rejected the applicant’s claims that the shape is inherently distinctive; on the contrary it was held that the mark applied for is only a slight variation on the various shapes commonly used in respect of soap. Further, even if the consumer did notice the concave profile of the soap, the CFI did not think that he would immediately perceive this shape as an indication of trade origin. Conversely, it was held that the concave profile would be interpreted as either a functional feature making the soap easier to grip, or merely aesthetic. Accordingly, the refusal of this application was upheld. The case is now on appeal to the ECJ.

3 Bongrain S.A. vs. the UK Trade Marks Registry (UK High Court)

The case involved an application to register a series of two three dimensional marks comprising a six lobed shape resembling a flower for “cheese and dairy products”. The application was objected on distinctiveness grounds.

In the appeal against the Registry’s refusal of the application, the Judge upheld the Hearing Officer’s view that the shape was neither striking nor memorable, and is devoid of distinctive character. Although evidence of use was filed, this showed that the trade mark SAINT ALBRAY was printed on each segment of the cheese, and it was held that this word mark, rather than the shape of the goods, would be seen as the trade mark.

It seems, therefore that whilst the Courts accept that the criteria for assessing the distinctiveness of a mark comprising the three dimensional shape of the goods or their packaging are not different from those that apply to other types of mark, they are taking the view that the shape of goods does not communicate information as to trade origin in the same way as, for example, word or device marks. This is the case notwithstanding the fact that the shape applied for may be novel and/or enjoy a high level of recognition on the part of a public; the Courts have held that it does not necessarily follow that the shape has a trade mark function, in that it indicates the origin of the goods.

Accordingly, it is likely to continue to be very difficult to obtain registration of shape marks unless the public is educated into perceiving the shape of the goods as an indicator of origin.

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Article 4: Arsenal v. Reed - The Case Continues

Brand owners in the UK have been eagerly waiting for the next instalment of the court saga that is Arsenal Football Club v M. Reed. The issue of whether a trade mark owner must establish that an unauthorised vendor is using the registered trade mark “in a trade mark sense” in order to succeed in an infringement action is also of obvious interest to many street traders selling unauthorised merchandise bearing well-known marks.

The Court of Appeal have now added their interpretation of the European Court of Justice’s findings on trade mark infringement to the mix. In the original High Court proceedings Mr. Justice Laddie found, as a matter of fact, that Reed’s use of the Arsenal trade marks on scarves, t-shirts and other merchandise, would be perceived by consumers as a badge of support or allegiance to the Arsenal team rather than an indication of the origin of the goods, ie. “trade mark use”. On referral of the question whether trade mark use was required to establish infringement, the ECJ appeared to answer “yes”, and then make a finding of fact to the effect that Reed’s use of the marks created “the impression that there is a material link in the course of trade between the goods concerned and the trade mark proprietor”. Accordingly, the ECJ held that in the circumstances of the case, the defendant had infringed Arsenal’s registered trade marks, despite the presence of a notice at Mr. Reed’s stall warning customers that the goods were not official Arsenal merchandise.

When the case was returned to the UK High Court, Mr. Justice Laddie held that in making a contrary finding of fact, the ECJ had exceeded its jurisdiction. Applying the ECJ’s guidance on the law to the facts as he found them, the Judge dismissed Arsenal’s claim for trade mark infringement.

Reed’s appeal presented the Court of Appeal with the task of trying to reconcile these apparently diverging points of view, whilst being bound by the ECJ’s reasoning. In the Court’s view, the ECJ had reformulated the referred questions to consider not whether the use complained of was “trade mark use” but whether such use was liable “to jeopardise the guarantee of origin which constitutes the essential function of the mark”. The distinction requires a Court to consider the effect of the unauthorised use on a registered proprietor’s trade mark rights. Accordingly, the Court of Appeal felt that the ECJ’s conclusions were not inconsistent with the High Court’s finding that Mr Reed’s use was not trade mark use. They held that the Judge had failed to consider the effect of the Arsenal marks where the merchandise was taken away from Mr Reed’s stall bearing the notice that the merchandise was “unofficial”. To “secondary” consumers the marks would create the impression of a material link between the goods and the Arsenal Football Club. That impression would not be affected by the public’s view of those signs as a badge of support for or affiliation to the club.

Although not strictly necessary, the Court went on to consider whether Mr. Reed’s use might have indeed been trade mark use, and concluded on the evidence that a substantial number of consumers perceived the trade marks as designating the origin of the goods, in addition to also being considered badges of allegiance.

The Court of Appeal’s interpretation of the ECJ’s ruling potentially broadens the scope of infringement under the identical mark/identical goods provisions, as it is not necessary to show that the unauthorised use is “trade mark” use, i.e. denoting the origin of the goods, nor that confusion has arisen. Of course, not all situations in which an identical mark is used in relation to identical goods will infringe – if the use will not harm the ability of the trade mark to distinguish the goods, no infringement will occur. Purely descriptive use will not, therefore, affect the registered rights.Owners of “merchandise” marks will be quick to argue that the decorative use of a trade mark on merchandise may jeopardise the essential function of their registered trade mark rights, and it seems that attempts at point of sale to educate consumers of the actual origin of the goods will not necessarily avoid an infringement action. The implications are clearly positive for trade mark owners engaged in brand merchandising in the light of this decision. However, Mr. Reed raised no positive defences to the infringement action, particularly the argument that he was using the Arsenal trade marks as indications concerning the kind of goods or to indicate other characteristics such as a badge of allegiance. Whether such a defence might still succeed remains to be seen.

However, the saga may not yet be over. The more recent decision from the House of Lords in the counterfeiting case of R v. Johnstone appears to have been reached without sight of the latest Arsenal judgement. In contrast to the Court of Appeal, the Law Lords appear to have concluded that the ECJ’s reasoning requires trade mark use for a successful infringement action. Perhaps a further appeal by Mr. Reed will finally settle this issue.

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Article 5: Anti-Dilution in the EU: Davidoff & Cie SA and Zino Davidoff SA v Gofkid Limited (ECJ 9th January 2003)

Facts of the Case

The proprietor of the well known brand DAVIDOFF held registrations for DAVIDOFF in stylised letters for jewellery and smokers’ articles.

Gofkid owned a German registration for DURFFEE for similar goods. This mark was used by Gofkid in Germany in the same script as that used by Davidoff (with the letters “D” and “FF” in the same distinctive manner).

As both the trade marks and the goods were similar, according to the current interpretation of the Harmonisation Directive (891/104 EEC), Davidoff would be required to prove a likelihood of confusion before being able to succeed against Gofkid in an action for infringement.

This seemed to put Davidoff in a worse position than if Gofkid had actually used their trade mark on dissimilar goods, since in this situation there would have been no need for Davidoff to prove confusion but simply that Gofkid’s use of the trade mark took unfair advantage of or was detrimental to the distinctive character or repute of Davidoff’s famous trade mark.

A reference was therefore made to the ECJ to ask whether Articles 4(4)(a) and 5(2) of the Directive (set out below) are to be interpreted as entitling the Member States to provide specific protection for registered trade marks with a reputation in cases where the later mark or sign (which is identical with or similar to the registered trade mark), is intended to be used or is used for goods or services identical with or similar to those covered by the registered mark.

The Issues

Davidoff argued that the first question must be answered in the affirmative on the ground that the specific protection given to marks with a reputation under Articles 4(4)(a) and 5(2) for non-similar goods must apply a fortiori to goods which are identical or similar.

Conversely Gofkid contended that the question must be answered in the negative as being the solution most in line with the wording of the provisions. Sufficient protection of marks with a reputation was already ensured by Articles 4(1)(b) and 5(1)(b) of the Directive since, according to the case law (in particular Sabel v. Puma and Canon), a likelihood of confusion is more readily found in cases where the mark enjoys a reputation.

In its conclusions, the ECJ found that Articles 4(4)(a) and 5(2) cannot be given an interpretation which would lead to marks with a reputation having less protection where a sign is used for identical or similar goods or services, then where a sign is used for non-similar goods or services.


This decision has been heralded as extending the anti-dilution law in the EU, and providing greater protection for proprietors of well known trade marks. Whether the effects of this decision will make their way into UK law remains to be seen. EU Directives are not directly effective in national law. The UK parliament has to implement the terms of the Harmonisation Directive into UK legislation. Articles 4(4)(a) and 5(2) of the Directive have of course been implemented into Sections 5(3) and 10(3) of the Trade Marks Act 1994 (see over). However, the wording of these latter provisions seems unambiguous –protection is afforded to a trade mark proprietor with a reputation who can prove unfair advantage or detriment to the distinctive character or repute of his trade mark, only where the relevant goods or services are not similar to those for which the trade mark is registered.

That said however the UK courts do tend to look to the Directive for guidance in interpreting national legislation and must correspondingly be influenced by the ECJ’s interpretation of that Directive. It is therefore possible that Sections 5(3) and 10(3) will now be applied to prevent third parties using well known marks on identical or similar goods and services where this causes detriment to the prior rights owner.

This result would clearly be more satisfactory for the proprietors of well known marks by resolving the anomalies noted above. However, it sits uneasily with the unambiguous wording of our UK Act. Future decisions will be awaited with interest.

The Harmonisation Directive (89/104/EEC)

Article 4 – Further grounds for refusal or invalidity concerning conflicts with earlier rights

4. Any Member State may furthermore provide that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid where, and to the extent that:

  • the trade mark is identical with, or similar to, an earlier national trade mark within the meaning of paragraph 2 and is to be, or has been, registered for goods or services which are not similar to those for which the earlier trade mark is registered, where the earlier trade mark has a reputation in the Member State concerned and where the use of the later trade mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trade mark;

Article 5 – Rights conferred by a trade mark

2. Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage or, or is detrimental to, the distinctive character or the repute of the trade mark.

UK Trade Marks Act 1994

5. (3) A trade mark which –

  • is identical with or similar to an earlier trade mark, and
  • is to be registered for goods or services which are not similar to those for which the earlier trade mark is protected, shall not be registered if, or to the extent that, the earlier trade mark has a reputation in the United Kingdom (or, in the case of a Community trade mark, in the European Community) and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.

10. (3) a person infringes a registered trade mark if he uses in the course of trade a sign which

  • is identical with or similar to the trade mark, and
  • is used in relation to goods or services which are not similar to those for which the trade mark is registered, 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.

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Article 6: BABY-DRY v. DOUBLEMINT – Where to Draw the Line?

Many commentators had suggested that the decision rendered by the ECJ in BABY-DRY (case C-383/99 of 20 September 2001) represented a high water mark when it came to accepting potentially descriptive trade marks for registration in Europe. There was still a marked reluctance on the part of the UK Trade Mark Registry, in particular, to follow the findings of that case when assessing distinctiveness for similar marks. A recent opinion from the Advocate General, Francis Jacobs (who also provided the opinion in BABY-DRY) concerning the trade mark DOUBLEMINT, will reinforce the more conservative tendency in their view that BABY-DRY was definitely at one extreme of the spectrum.

The opinion was rendered in the context of an appeal by OHIM against the judgement of the CFI dated 31 January 2001 (case T-193/99 Wm. Wrigley Junior Company v. OHIM). Essentially, the CFI had concluded that DOUBLEMINT for chewing gum was acceptable because the term was not exclusively descriptive, but instead, ambiguous and open to various interpretations. The Advocate General points out that this conclusion was based on an incorrect interpretation of the relevant Article in the CTM Regulation. The CFI had found that DOUBLEMINT was not “exclusively descriptive” because it was capable of being given a number of different meanings by a consumer. In fact, the test of exclusivity in Article 7(1)(c) applied to the nature of the mark rather than its potential meaning.

On this basis alone, the judgement of the CFI appeared to require annulment; however, the Advocate General went on to state that marks which combine two dictionary words are unlikely to be considered distinctive even if they have an element of ambiguity or suggestiveness about them, provided that one of the potential meanings could be struck down under Article 7(1)(c). In this regard, the Advocate General relied on the CFI’s previous judgement in TRUCKCARD (case T-358/00 of 2002).

Clearly aware of the controversy which BABY-DRY had created in the IP world, the Advocate General then went on to explain his reasoning in that case by reference specifically to the apparently contrary approach which the ECJ took in the Windsurfing Chiemsee decision; this section of his opinion appears to contain a tacit admission that he went too far when stating that registration of descriptive terms as trade marks could not confer an unfair advantage on their proprietors because other traders would still be free to use such terms as pure descriptions without infringing. In his latest opinion, the Advocate General affirmed that “it is in the public interest that descriptive signs may be freely used by all”, but justified the acceptance of BABY-DRY on the basis that it still had a sufficient added character to make it different from a simple description for the goods.

Cynics may query what this added character consists of, since BABY-DRY is essentially a combination of two dictionary words, both of which have potentially descriptive connotations for nappies. It thus appears to fail the DOUBLEMINT test. The Advocate General reiterated that the assessment of distinctiveness must always involve an individual decision as to whether a particular sign has purely descriptive characteristics or some perceptible added feature which makes it rather suggestive or allusive. He reaffirmed that BABY-DRY fell the right side of the line.To assist practitioners/tribunals who may find the application of Article 7(1)(c) somewhat perplexing, he formulated the following general guidelines for assessing descriptive character:

  1. whether the proposed trade mark has a factual and objective relationship to the product or one of its characteristics, or whether it is more imaginative and subjective;
  2. how is the term likely to be perceived, i.e. does it convey an immediate message (in the case of an ordinary, definite and down-to-earth term) to the consumer, or would you need the “skills of a cryptic crossword enthusiast” to detect any connection with the designated characteristic;
  3. how significant is the characteristic which the proposed trade mark is designed to suggest/describe in the consumer’s mind. Where such characteristic is essential or central to the product, or may be of particular importance when dictating the consumer’s choice, then the mark should be refused.

Applying these tests to DOUBLEMINT, he concluded that DOUBLEMINT was a compound term having a factual and objective reference to mint flavour in some way doubled, and that it was readily perceivable as such by the average consumer. Flavour was, in relation to chewing gum, a salient feature of the product. It did not matter that neither the particular variety of mint or the precise mode in which the mint flavour was doubled could be discerned. These ambiguities in no way detracted from the fact that the term designated a characteristic of doubled mintiness.

Finally, the Advocate General considered Wrigley’s arguments that they had existing registrations of DOUBLEMINT in a number of EU countries at national level, as well as in Australia and the USA and that OHIM’s failure to take these into account as viable precedents was, in some way, reprehensible. He was able to dismiss the precedents on the basis that they contained additional matter of a figurative nature, or had been accepted prior to the implementation of the Harmonization Directive, while at the same time, paying lip service to the view that the existing of earlier national rights should be taken into account by OHIM (but not necessarily seen as persuasive).

In passing, the Advocate General took the opportunity to comment on the suggestions from members of the IP profession that BABY-DRY should have been refused because it was not sufficiently unusual in terms of the inversion of normal word order to any speaker of a romance language, e.g. French or Italian. He stated that it is not appropriate to examine an English word from the perspective of a consumer in another EU country whose language is different, since it was generally inappropriate to take as a normal yardstick when assessing descriptiveness, a consumer struggling with an imperfect knowledge of a foreign tongue.In this section of his commentary, the Advocate General used the “Windsurfing” reasoning to justify his view that by allowing registration of BABY-DRY, Italian consumers would not be unduly prejudiced because it would not diminish the normal range of Italian terms which Italian purveyors of nappies might use to describe their goods. However, he pointed out that there could be exceptions to this approach where the English word had acquired a separate and accepted meaning in a different country, e.g. “handy”, which apparently is commonly used in Germany to designate a mobile phone.


This opinion represents a clear and cogent statement of the manner in which potentially descriptive terms should be assessed when applying Article 7(1)(c) of the Community Trade Mark Regulation (and any national law equivalent); it places the consumer at the centre of the stage when the assessment of a mark’s potentially descriptive nature is made. Inevitably, every candidate mark has to be assessed on a case-by-case basis and there will be fluctuations in the manner in which the standard is applied, both at OHIM and in EU member states.

Generally however, the message is still positive; if brand owners can devise new marks which have some element of originality (the old UK test used to be summarised as “obviousness of derivation does not equal obviousness of meaning”), then they will be acceptable for registration despite the hurdles in Article 7(1)(c).

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