European Union: High Court Should Have Gone To Specsavers

Last Updated: 15 February 2012
Article by Tom Scourfield and Tom Reid

Although Specsavers had been broadly successful at first instance, the Court of Appeal has partially overturned a decision of the High Court, finding that additional aspects of a marketing campaign by Asda, targeted at customers of Specsavers, infringed Specsavers' word and logo marks.

In doing so, the Court of Appeal has also referred a number of questions to the Court of Justice of the EU. Such questions particularly relate to the validity of "wordless" marks when used only in conjunction with another word mark.

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Full Article

Specsavers International Healthcare Ltd and others v Asda Stores Ltd

[2012 EWCA Civ 24]

Summary

Although Specsavers had been broadly successful at first instance, the Court of Appeal has partially overturned a decision of the High Court, finding that additional aspects of a marketing campaign by Asda, targeted at customers of Specsavers, infringed Specsavers' word and logo marks.

In doing so, the Court of Appeal has also referred a number of questions to the Court of Justice of the EU. Such questions particularly relate to the validity of "wordless" marks when used only in conjunction with another word mark.

Facts

In 2008, Asda sought to re-launch its optical business, seeking in particular to target customers of Specsavers. This re-launch culminated in a marketing campaign featuring the following logo:

Asda also made use of the straplines "Be a real spec saver at Asda" and "Spec saving at Asda".

The Claimants / Appellants (collectively "Specsavers") bought an action against Asda for trade mark infringement on the basis of its earlier CTM registrations for the word "SPECSAVERS" and the following logos:

The High Court rejected all of the claims for infringement except in respect of the first strapline "Be a real spec saver at Asda", which it considered to be an infringement under Article 9(1)(c) of Regulation 207/2009/EC.

The High Court further revoked Specsavers' wordless logo mark for non-use.

Specsavers appealed this decision arguing that the Judge was wrong to reject its claim for infringement under Articles 9(1)(b) and 9(1)(c) in respect of the second strapline and the Asda logo. Specsavers also appealed the decision to revoke the wordless logo mark and the failure to find infringement of such a mark.

Asda cross-appealed against the finding of infringement under Article 9(1)(c) in relation to the first strapline.

Law

Article 9 of Regulation 207/2009/EC states as follows:

"(1) A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
...

(b) any sign where, because of its identity with, or similarity to, the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;

(c) any sign which is identical with, or similar to, the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark."

Court of Appeal Decision

Article 9(1)(b) – Confusion

Specsavers submitted that, in assessing the straplines, the Court should have simply compared the mark "SPECSAVERS" with the signs "Spec saver" and "Spec saving". However, the Court of Appeal, applying O2 v Hutchinson [2008] ECR I-4231, stated that it was highly artificial to compare the mark and the sign through the eyes of the average consumer without considering what impact the overall use of the sign in context would have on him. In other words, the sign is not to be considered stripped of its context. The additional wording in the strapline and, in particular, the inclusion of the well-known name "Asda" was sufficient to dispel any likelihood of confusion.

Specsavers further submitted that the Specsavers logo enjoyed an elevated reputation in the colour green and this should be taken into account in assessing likelihood of confusion. The High Court judge had analysed the similarity between the logos on the basis that the Specsavers logos were being used in the same colour as the Asda logo. He was not, however, willing to attach any significance to the enhanced reputation enjoyed by Specsavers in the colour green.

Specsavers argued that a mark registered in black and white was registered for all colours. The global appreciation test for infringement takes into account the reputation of a mark and, therefore, it is not possible to assess infringement by looking at the register alone. Asda, in contrast, contended that colour did not form part of Specsavers registrations and therefore should not be borne in mind when assessing infringement. Both parties were able to point to case law which supported their assertions.

The Court therefore concluded that the law on this issue was not clear and would require the following questions to be referred to the Court of Justice of the EU:

"D. Where a Community trade mark is not registered in colour, but the proprietor has used it extensively in a particular colour or combination of colours such that it has become associated in the mind of a significant portion of the public (in a part but not the whole of the Community) with that colour or combination of colours, is the colour or colours in which the defendant uses the sign complained of relevant in the global assessment of (i) likelihood of confusion under Article 9(1)(b) or (ii) unfair advantage under Article 9(1)(c) of Regulation 40/94? If so, how?

E. If so, is it relevant as part of the global assessment that the defendant itself is associated in the mind of a significant portion of the public with the colour or particular combination of colours which it is using for the sign complained of?"

Nonetheless, the Court considered that the issue of colour made no difference to the ultimate conclusion regarding the likelihood of confusion in respect of the Asda logo when compared with the Specsavers logos (with the exception of the wordless logo), on the basis that the High Court judge had assessed the logos as if they were in the same colour and the addition of the word Asda was sufficient, regardless of colour, to dispel the likelihood of confusion.

The Court further upheld the High Court's findings in respect of evidence the Asda had been "living dangerously" by trying to design its marketing campaign in a manner to mimic Specsavers. This evidence did not however amount to evidence of an intention to confuse. Indeed "Asda had no wish for consumers to confuse one business for the other and so the judge held its intention and conduct could not be relied upon as evidence of a propensity to confuse".

The Court of Appeal therefore upheld the High Court's decision in respect of Article 9(1)(b), namely that neither the second strapline nor the Asda logo created a likelihood of confusion.

Article 9(1)(c) Unfair Advantage

The Court of Appeal dismissed Asda's cross-appeal. Asda had made no attempt to comply with the Comparative Advertising Directive when creating its campaign. Instead, the strapline "was intended to bring Specsavers to mind...and it has done so in a manner which does not involve an objective comparison of verifiable and representative features of the parties' goods or services".

Regarding the second strapline, the Court of Appeal agreed that the sign "Spec saving" was not as close to "SPECSAVERS" as "Spec saver" (as used in the first strapline). However, the sign and mark were still very similar, visually, aurally and conceptually. The second strapline clearly created a link between Asda and Specsavers and Asda "used the concept of Specsavers as a value provider and such use inevitably gave Asda a marketing advantage". Such an advantage was unfair because "Asda intended to benefit from the power of attraction attaching to the Specsavers brand and to exploit, without paying any compensation, Specsavers' marketing efforts". The second strapline therefore infringed under Article 9(1)(c).

Regarding the logo mark, Specsavers submitted that the High Court should have taken into account the cumulative effect of the campaign as a whole and the effect of colour. The Court of Appeal held that:

"...in assessing the likelihood of confusion under Article 9(1)(b), the court must take into account all the circumstances of the allegedly infringing use that are likely to operate in the average consumer's mind in considering the sign and the impression it is likely to make on him. It follows that it is appropriate to consider the cumulative effect of the signs in issue, subject to the requirement explained by this court in [L'Oreal v Bellure] that the test remains founded upon the mark as registered. In my judgment, the position under Article 9(1)(c) must be the same"

Many consumers who would have seen the logo would also have been exposed to one of the two straplines. Therefore, the Court of Appeal held that the use of the Asda logo "permitted Asda to benefit from the power of attraction, reputation and prestige attaching to Specsavers" and this amounted to infringement under Article 9(1)(c) of the two Specsavers logos featuring the word Specsavers.

Non-use

Finally the Court considered the revocation of the wordless logo mark. Specsavers had appealed this decision by relying on its use of the shaded logo with the word "Specsavers" across it (the first logo shown above). The High Court judge had held that the addition of the word "Specsavers" altered the distinctive character of the wordless mark such that the wordless mark was not being used.

Again, the Court of Appeal held that the case law was not clear and referred the following questions to the Court of Justice of the EU:

"A. Where a trader has separate registrations of Community trade marks for
(i) a graphic device mark;

(ii) a word mark;
and uses the two together, is such use capable of amounting to use of the graphic device mark for the purposes of Article 15 of Regulation 40/94? If yes, how is the question of use of the graphic mark to be assessed?

B. Does it make a difference if:
(i) the word mark is superimposed over the graphic device?

(ii) the trader also has the combined mark comprising graphic device and word mark registered as a Community trade mark?
C. Does the answer to A or B depend upon whether the graphic device and the words are perceived by the average consumer as (i) being separate signs; or (ii) each having an independent distinctive role? If so, how?"

The Court stayed the decision on whether Asda's logo infringed the wordless mark, pending the decision of the Court of Justice on the above questions. The parties were invited to prepare further written submissions on this point, should it prove necessary, after the Court of Justice had responded.

Comment

The referral of questions to the Court of Justice means that this case will rumble on for a number of months longer.

However, the questions raised will be of particular interest to brand owners with marks for wordless logos or shape marks which are always used in conjunction with another word mark. Depending on the decision of the Court of Justice, this could have significant consequences for the validity of such marks and may cause trade mark proprietors to reconsider their usage.

The decision also demonstrates that parties who intend to "live dangerously" in emulating the well known trade marks of others do so at significant risk of infringement if they do not comply with the criteria of the Comparative Advertising Directive.

The full judgment can be found here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 07/02/2012.

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