Small brand bests Bentley
Michelle Phua explains why this was such a stunning decision. EWHC 2925 (Ch), Bentley 1962 Ltd and Brandlogic Ltd v Bentley Motors Ltd, High Court, 1st November 2019.
On 1st November 2019, the High Court ruled in favour of a small, family-run clothing company, Bentley Clothing, in a trade mark infringement claim against the renowned luxury car manufacturer, Bentley Motors, by virtue of s10(1) of the Trade Marks Act 1994 (the Act).
This decision was stunning, as many saw it as a real-life example of a David and Goliath battle. What was truly remarkable, though, was: (i) the Court’s assessment of what is an identical mark under s10(1) and; (ii) that a brand’s reputation, which would otherwise be seen as a vital tool in registration proceedings, could now be an Achilles’ heel in an infringement claim.
Background
The Claimant is clothing company Brandlogic and its exclusive licensee Bentley 1962 Ltd, which began a business in 1962 (together, Bentley Clothing). Bentley Motors (Bentley), the Defendant, had only ventured into the clothing business in 1987.
The marks in issue concerned use on clothing and headgear under class 25. The Bentley signs are known as the “B-in-Wing device” and the “BENTLEY word mark”. Together, they are the “Combination Sign”.
In 1998, Bentley Clothing became aware of Bentley’s clothing range and approached it to discuss licensing. The parties engaged in several negotiations, but no agreement was reached. In 2004, Bentley filed an EU trade mark application for the BENTLEY word mark under class 25, expanded its clothing range and issued several proceedings against Bentley Clothing at the UK IPO and the EUIPO to revoke its associated marks. Bentley Clothing retaliated by issuing infringement proceedings.
One sign or two?
In deciding whether there is an infringement under s10(1) or s10(2) of the Act, the question was whether the Combination Sign would be seen by the average consumer of clothing as one sign or two. In this regard, “parties who are sophisticated in brand” – such as publishers in the automobile industry and design agencies – were ruled out from the scope of s10.
In the evidence presented by Bentley Clothing, Bentley itself treated the Combination Sign as two separate marks. Examples included: (i) referring to the Combination Sign in plural on swing tags attached to Bentley’s clothing and in the T&Cs issued in relation to its clothing collection; and (ii) allowing licensees to use the Combination Sign either together or separately. The Court rebuffed Bentley’s 2014 brand guidelines, which required use of the Combination Sign as one, finding it unrealistic to expect the average consumer to be aware of such brand policy.
The Court also dismissed Bentley’s claim of issue estoppel, as the proceedings previously decided by the UK IPO related to a claim of passing off and the average consumer’s interpretation of the Combination Sign was not considered. The Court therefore decided that because the two marks were used so extensively and separately in the past, the average consumer would naturally perceive these elements as two different signs.
Likelihood of confusion
Judge Hacon went on to consider the likelihood of confusion in case the Combination Sign was to be treated as one under s10(2). Reference was made to Maier v ASOS plc [2015] EWCA Civ 220’s principles, and assessment was made on the assumption that Bentley Clothing had made a notional and fair use of the BENTLEY word mark in relation to clothing and headgear.
It was clear that the dominant element of the Combination Sign was the BENTLEY word mark. The Court’s reasoning was that given the popularity of the B-in-Wing device in the UK, the BENTLEY word mark below the device would only increase the likelihood of confusion. This was further reinforced by the verbal element of the BENTLEY word mark, as the average consumer would be more likely to refer to the goods by quoting the name than by describing the figurative element of the trade mark.
Defences
The two defences considered in this case were the Transitional Provisions of the 1994 Act and honest concurrent use. Under the Trade Mark Act 1938, a trade mark owner could not sue for infringement in respect of goods or services for which the mark was not registered. Bentley therefore had a continuing right to sell jackets, silk ties, caps and scarves, as these were not covered by the BENTLEY mark registered by Bentley Clothing before 1994. However, the more important question was whether the defence applies to a wider use of the mark. Judge Hacon thought it would be absurd to think it was Parliament’s intention
to allow parties to branch out into new uses of signs which have since become the exclusive right of a trade mark proprietor.
This defence, therefore, did not entitle Bentley to continue the sale of other types of clothing or headgear by using that sign on the goods themselves or on catalogues or other material attached to the goods.
In relation to honest concurrent use1, the Court acknowledged2 that it would be possible for the two separate entities to coexist, such that the inevitable confusion that arises has to be tolerated. However, Bentley’s conduct was found to exacerbate the level of confusion beyond what was inevitable, thus encroaching on Bentley Clothing’s goodwill.
Pragmatic decision
The Court was entirely pragmatic and sympathetic in assessing the merits of this case. The judgment not only highlighted the strength of trade mark protection, but also underlined the risk of a finding of infringement when a reputed brand tries to enter a new market by incrementally increasing its commercial activities without giving due respect to the existing right holders in the given area.
Lastly, it may be good practice to ensure that combination signs are always used in a consistent manner and align with present as well as future business plans.
Key points:
- Reputation of marks established in one trade area may not necessarily mean easy access to another
- Real-world use of a mark will impact the assessment of what is an identical or similar mark
- The importance of conducting thorough searches before launching into new areas of business cannot be emphasised enough
The basis of this defence is found in s7 of the 1994 Act and the judgment in Budĕjovický Budvar, národní podnik v Anheuser-Busch Inc (C-482/09).
Victoria Plum Ltd v Victorian Plumbing [2016] EWHC 2911 (Ch)