Fitness fall out

1st Dec 2018

Richard May reflects on a clear case of likely confusion. O/536/18, Outdoor Physical Training (Opposition), UK IPO, 28th August 2018.

Fitness fallout

O/536/18, Outdoor Physical Training (Opposition), UK IPO, 28th August 2018

Key points

  • The HO found that filing a UK trade mark to prevent another party from using it amounted to bad faith
  • The use of a trade mark by a director of a company in his personal capacity will amount to passing off if the company owns the goodwill in the trade mark

In March 2017, Clinton Slater (the Applicant), a fitness instructor, filed an application in the UK for a sign in classes 35 and 41 (the Application). The Application contained the words “Outdoor Physical Training” and covered training-related services, such as “physical training” and “conducting fitness classes”.

Outdoor Physical Training Ltd (the Opponent) opposed the Application under sections 5(4)(a) and 3(6) of the Trade Marks Act 1994, alleging passing off and bad faith, respectively. The Opponent (and its director, Barnaby O’Neill), claimed the Application was the logo of its fitness training business and that the Applicant, being a former director of the Opponent, had applied for the Application to draw business away from the Opponent, having fallen out with Mr O’Neill.

The Applicant denied the allegations and claimed he created the name “Outdoor Physical Training” and the Application. Of relevance in this case is that the two protagonists – the Applicant and Mr O’Neill – were both directors (and shareholders), between 2013 and 2017, of the Opponent, which had its own legal status as a limited company. 

Bad faith

The Applicant’s written submissions focused heavily on his claim to copyright in a second, older logo – the Old Logo. The Hearing Officer (HO) rightly concluded that this was a red herring. Even if the Applicant did own the copyright in the Old Logo, it did not negate the fact that, when the Application was filed, he was a director of the Opponent and owed a fiduciary duty to protect its interests. Despite this, the Applicant filed a logo knowing the Opponent was using it and knowing the subsequent registration of it would jeopardise the ongoing trade of the Opponent. Accordingly, the HO found the filing of the Application amounted to bad faith.

Passing off

The HO considered the three familiar factors required to succeed under a passing off claim. In terms of goodwill, the HO was happy to accept that, despite a lack of detailed evidence of trading, the Opponent owned the goodwill in the Application, because the Application had only ever been used by the Opponent since circa 2015. Once goodwill was established, the HO concluded that deception was inevitable if the Applicant were to use the Application in his personal capacity. The HO went on to conclude that it was also inevitable that damage would occur, because the Applicant would be “assuming the mantle” of the Opponent and would clearly divert trade through such a confusing form of use. Consequently, passing off was made out. 

Clear direction

This case highlights the problems that can occur when business partners fall out and there is no apparent understanding of the legal status of a limited company in respect of IP rights. The case makes it clear that there are reliable provisions under trade mark law that will support the interests of the limited company/user of a trade mark in circumstances where a director acts in a manner that is contrary to the interests of the company.

Richard May is a Chartered Trade Mark Attorney and Solicitor at Osborne Clarke