Local use and invalidations: when use can defeat a registration
This Court of Appeal decision considers the question of unregistered use and when it can be used to defeat an existing registration. The Court of Appeal held that localised unregistered use may be sufficient to invalidate a registered trade mark, even if the date of first use of the registered trade mark predates that of the unregistered use.
The claimants had operated a business in Birmingham, UK called CASPIAN PIZZA since 1991. Use of CASPIAN PIZZA was protected via trade mark registrations for CASPIAN dating from July 2005 and the mark below which dates from September 2010.
Since 2002, the defendants had operated pizza restaurants in Worcester, UK under the name CASPIAN.
After a franchise agreement between the parties ended, the claimants issued infringement proceedings against the defendants alleging trade mark infringement of their CASPIAN registration. In response to the infringement action, the defendants claimed their own goodwill in the CASPIAN name as a result of their use of CASPIAN in Worcester since 2002 (which predated the franchise agreement previously entered into) and applied to invalidate the claimants trade mark registrations on the grounds of passing off.
The judge at first instance held that the claimants use of CASPIAN since 1991 could not be relied on in an infringement action based on a 2005 registered trade mark against the defendants’ use in Worcester since 2002, as the Trade Marks Act 1994 does not confer rights in a registered trade mark from a date prior to the date of filing of that trade mark merely because that trade mark may have been used previously. Therefore, the defendants were able to rely on the Section 11(3) defence (use of an earlier right in the course of trade in a particular locality which applies only in that locality) to defeat the infringement claim. In granting the defendant’s invalidation action to the CASPIAN registration, the judge held the defendants owned goodwill in CASPIAN through use of the same since 2002 and this goodwill could be used to claim passing off against anyone using CASPIAN for pizza restaurant services. However, the invalidation action to the claimant’s device trade mark was rejected.
Both parties appealed. In granting the defendant’s appeal in respect of the claimant’s device trade mark, but rejecting the claimant’s appeal concerning the invalidation of the CASPIAN trade mark, the court referred to a UKIPO decision concerning a trade mark for SWORDERS which held that the only requirement in an opposition under Section 5(4)(a) (passing off) is that the opponent has established goodwill in the earlier sign in an identifiable geographical area that would qualify for protection in passing off proceedings. Goodwill which is established in a particular locality will be capable of preventing registration of a national mark.
The court could not see any justification for adopting a different position when the challenge is made post-registration. Although the Trade Mark Act 1994 allows for partial invalidity of a registered trade mark in certain situations, there is no possibility of invalidating a trade mark for just part of the UK. Once registration has occurred, a trade mark cannot be altered (save for the limited provisions allowed under Section 44). Therefore, excluding registration of the claimant’s trade marks in Worcester, where the defendants rights existed, was not possible.
when relying on unregistered rights under Section 5(4)(a), use does not have to occur nationwide, as long as the requisite goodwill has been established in a particular locality. Where such goodwill has been established, (providing the remaining elements of passing off are also found to exist), a registered trade mark may be successfully invalidated on the basis of such goodwill, irrespective of whether the registered trade mark owner has used its trade mark prior to the date of creation of the defendant’s unregistered rights.
Use of a registered trade mark prior to the date of filing does not provide a trade mark owner with rights in the registered mark from the date of first use. The trade mark owner may obtain rights through such use, but these rights will only provide the trade mark owner with unregistered rights – not rights which can support a later filed trade mark registration.
Case details at a glance
Decision level: Court of Appeal
Parties: CASPIAN PIZZA LIMITED and others (claimants) and MASKEEN SHAH and others (defendants)
Citation:  EWCA Civ 1874
Date: 23 November 2017
Full decision: http://dycip.com/caspianpizza