Our guest blogger Dr Stephen James writes again for Ward Trade Marks.Stephen is a past president of CITMA, and a leading practitioner with almost 40 years’ experience in UK and EU trade mark law.

This time he reviews another recent case before the UK IPO where the owner of a get-up mark with a reputation successfully enforced its rights, and contrasts that with an older case where a famous brand faces having its long held ‘colour’ (EU) trade marks cancelled owing to insufficient ‘clarity and precision’ with the marks’ representation on the register.

Duracell v Powercell

The similarity of trade marks is a serious business. Powercell beverages had obtained two UK trade mark registrations (nos. 3064190 and 3087667) for (respectively) the black and white and the two colour combination marks shown below.

similarity of trade marks similarity of trade marks - Powercell vs Duracell

Both registrations protected energy drinks (and similar) in classes 32 and 33.

Invalidity of Registration S47

Having missed the chance to oppose the registration of these two similar trade marks, Duracell batteries subsequently applied to invalidate both rights under section 47 of the UK Trade Marks Act 1994. They relied on a number of grounds but principally on their earlier EUTM 146670 in class 9 protecting the get-up (shape and colours) of their Duracell batteries, together with their UK reputation in that get-up (section 5 (3) of the 1994 Act). Under that provision, owners of an earlier trade mark right can invalidate a later UK trade mark registration if the later trade mark is identical with or has similarities to the earlier trade mark, and the earlier trade mark has a reputation in the UK (or, if relevant, the EU) 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.

Evidence of Reputation

Duracell filed a substantial body of evidence to establish its UK reputation in not only its Duracell branded batteries but also get-up of those batteries (i.e. absent of the word Duracell). That is, in the mark protected by EUTM 146670, shown here.

similarity of trade marks

In reply, Powercell explained the development of their energy drink can designs. Perhaps crucially however, they also accepted that Duracell had a reputation in their earlier get-up mark (EUTM 146670) and that there was ‘a degree of similarity’ between their (Powercell’s) marks and that owned by Duracell.

The Hearing

The Hearing Officer (Ms Beverley Hedley) began by setting out the law in respect of a case based on Section 5 (3) of the Act. The summary is below:

18) The leading cases in assessing a claim under section 5(3) of the Act are the following judgments of the Court of Justice of the European Union (‘CJEU’): Case C-375/97, General Motors, [1999] ETMR 950, Case 252/07, Intel, [2009] ETMR 13, Case C-408/01, Addidas-Salomon, [2004] ETMR 10 and Case C-487/07, L’Oreal v Bellure [2009] ETMR 55 and Case C-323/09, Marks and Spencer v Interflora. The law appears to be as follows:

(a) The reputation of a trade mark must be established in relation to the relevant section of the public as regards the goods or services for which the mark is registered; General Motors, paragraph 24.

(b) The trade mark for which protection is sought must be known by a significant part of that relevant public; General Motors, paragraph 26.

(c) It is necessary for the public when confronted with the later mark to make a link with the earlier reputed mark, which is the case where the later mark would cause the average consumer to bring the earlier mark to mind; Adidas Saloman, paragraph 29 and Intel, paragraph 63.

(d) Whether such a link exists must be assessed globally taking account of all relevant factors, including the degree of similarity between the respective marks and between the goods/services, the extent of the overlap between the relevant consumers for those goods/services, and the strength of the earlier mark’s reputation and distinctiveness; Intel, paragraph 42

(e) Where a link is established, the owner of the earlier mark must also establish the existence of one or more of the types of injury set out in the section, or there is a serious likelihood that such an injury will occur in the future; Intel, paragraph 68; whether this is the case must also be assessed globally, taking account of all relevant factors; Intel, paragraph 79.

(f) Detriment to the distinctive character of the earlier mark occurs when the mark’s ability to identify the goods/services for which it is registered is weakened as a result of the use of the later mark, and requires evidence of a change in the economic behaviour of the average consumer of the goods/services for which the earlier mark is registered, or a serious likelihood that this will happen in future; Intel, paragraphs 76 and 77.

(g) The more unique the earlier mark appears, the greater the likelihood that the use of a later identical or similar mark will be detrimental to its distinctive character; Intel, paragraph 74.

(h) Detriment to the reputation of the earlier mark is caused when goods or services for which the later mark is used may be perceived by the public in such a way that the power of attraction of the earlier mark is reduced, and occurs particularly where the goods or services offered under the later mark have a characteristic or quality which is liable to have a negative impact of the earlier mark; L’Oreal v Bellure NV, paragraph 40.

(i) The advantage arising from the use by a third party of a sign similar to a mark with a reputation is an unfair advantage where it seeks to ride on the coat-tails of the senior mark in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image. This 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 (Marks and Spencer v Interflora, paragraph 74 and the Court’s answer to question 1 in L’Oreal v Bellure).

Substantial reputation for batteries

Ms. Hedley then reviewed the copious evidence of reputation put in by Duracell and concluded that, even though the get-up employed by the earlier mark owner had always been used in conjunction with the word mark Duracell, the evidence confirms that the get-up (shapes/colours) had itself acquired a substantial reputation in the UK (and in the EU) in respect of batteries.

Dissimilarity of the goods

Moving on to the link between Duracell’s mark and batteries and Powercell’s marks and energy drinks (and similar), the Hearing Officer noted that clear dissimilarity between the two sets of goods. However, she also noted that Powercell’s two marks were both likely to be perceived as the device of a battery.

Notional fair use of Powercell’s black and white mark

More controversially, Ms Hedley also accepted that a notional and fair use of Powercell’s black and white energy drink mark could be in the striking copper and black colours of Duracell battery. Bearing all of this in mind, the Hearing Officer decided that Duracell’s battery get-up would be brought to mind by a significant proportion of consumers of class 32 and 33 goods sold under Powercell’s two registered marks. This finding was made in spite of the clear dissimilarity between the two sets of goods.

Coat-tail riding

Turning to the question of (taking) unfair advantage, Duracell argued that their reputation (both in the word mark Duracell and their copper/black coloured get-up) was for a product that had long-lasting energy and endurance. By choosing closely similar trade marks for their energy drinks (and similar), Duracell’s argument continued, Powercell was seeking to inform their potential consumers that their drinks would also greatly enhance energy levels and endurance. This, it was further submitted, would make such potential energy drink consumers more likely to purchase Powercell’s products, a clear example of coat-tail riding.

Ms Hedley agreed with Duracell submissions. In her view there was

“a non-hypothetical risk that the link consumers will make between the respective marks will result in the positive characteristics associated with the earlier mark, namely the mark’s reputation for long-lasting energy and endurance transferring to the proprietor’s marks. This association with the applicant’s reputed mark would give the proprietor more custom it would not otherwise have enjoyed and make its job of marketing its goods easier.

“As this would come without paying any compensation to the applicant, and without the proprietor expending the money necessary to create a market for its own goods and services in the UK, this is unfair advantage. This finding applies to all of the goods covered by the proprietors’ marks. The proprietor’s defence, based upon the goods being wholly dissimilar does not assist it and neither does its reference to other marks on the register in classes 32 and 33 containing the device of a battery, not least because there is nothing to indicate that any of those marks are actually in use.”

Duracell’s ‘unfair advantage’ invalidity ground succeeds

On this basis, the Hearing Officer found that Duracell’s Section 5(3) (unfair advantage) ground of invalidation succeeded against both of Powercell’s UK trade mark registrations.
It used to be universally accepted that a trade mark that was registered in black and white would essentially protect any and all colour combinations of the same mark. This basic tenet of trade mark law has recently been eroded, not least by the EUIPO inspired Common Communication on the Common Practice of the Scope of Protection of Black and White Marks. This testament to vagueness and lack of clarity has significantly muddied the waters in this area. So, it is a breath of fresh air to see a UK Hearing Officer taking a sensible and straightforward view in the above invalidity actions that Powercell’s black and white mark (UK 3064190) also covers colour combination marks even one as striking as copper and black.

The value of ‘get up’ trade mark registrations

The above invalidation actions also illustrate the value of owning a trade mark registration for the total get-up of a product, that is shape and colour/ colour combination.

In the writer’s view, such a mark is much more likely to be deemed valid and enforceable under present EU/UK trade mark practice than a trade mark registration for just a shape or just a colour combination. This view has recently been reinforced by two CJEU cases (T-101/15 and T-102/15) involving Red Bull.

Red Bull v Optimum Mark

Red Bull owned two EUTM registrations (nos. 2534774 and 9417668) covering energy drinks. The registrations were attempts to protect the blue/silver colour combination of Red Bull cans in as broad a fashion as possible. The mark simply consisted of a square of two (blue and silver) colours, see below, together with an explanation.

similarity of trade marks

In the case of EUTM 2534774, the explanation read

“Protection is claimed for a colours blue (RAL 5002) and silver (RAL 9006). The ratio of the colours is approximately 50%: 50%.

In relation to EUTM 9417668, the explanation stated

“the two colours will be applied in equal proportion and juxtaposed to each other. Blue (Pantone 2747C), silver (Pantone 877C).

Neither of these marks should have been accepted (and registered) because they both cover literally millions of possible trade marks. Nevertheless they both were.

Inadequate clarity and precision

Eventually, the Polish company Optimum Mark, got around to challenging Red Bull’s two colour combination EUTMs on the ground that they were inadequately graphically represented (Article 7(1) a of the old EUTM Regulation 207/2009). Both the Cancellation Division and the Appeal Board at OHIM (as was) agreed with Optimum Mark and invalidated Red Bull’s registrations. The Austrian company appealed to the CJEU (General Court) but to no avail.

According to the court

Para 44

“Economic operators must be able to acquaint themselves, with clarity and precision, with registrations or applications for registration made by their actual or potential competitors, and thus to obtain relevant information about the rights of third parties.”

In other words, the public, companies and trade mark offices need to know what a registered mark (or a mark applied for) is in order to consider the breadth of protection.

Para 59

“The graphic representation of the contested (Red Bull) marks consisted of a mere juxtaposition of two colours without shape or contours allowing several different combinations of the two colours.”

Para 64

“The arrangement of two colours may fail to be predetermined or uniform not only because of the different proportions of those colours but also because of the different spatial position of those colours in the same proportions.”

Red Bull’s appeal dismissed

For these, and other reasons, the General Court dismissed Red Bull’s appeal and maintained the invalidations. The reader can rest assured that these adverse decisions will be appealed further by Red Bull.

In the writer’s view, however, the Red Bull cases, as well as the Powercell/Duracell case, were correctly decided. It is submitted that whilst get-up marks (omitting any word marks) which claim the copper and black Duracell battery, the blue and silver Red Bull can and the green and yellow John Deere tractor, in the form that these products are sold, should be viewed as clear, precise and acceptable as trade marks, trade mark applications or registrations. Whereas two colour blocks such as Red Bull’s invalidated rights should be viewed as unclear, imprecise and unacceptable or invalid.

Clarity and precision is key

This will probably not be popular policy for many trade mark owners. However, they should consider this.
For every occasion in which you are the owner of a colour combination mark that is impossible to interpret, there will be another occasion when you are trying to decide what on earth registrations like the Red Bull colour combination type actually mean. A lack of clarity and a certain imprecision may suit trade mark lawyers. However, trade mark owners should be seeking a legal framework in which there is a greater certainty.

Dr Stephen James
Ward Trade Marks

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