2024] EWCA Civ 1103, TVIS Ltd v Howserv Services Ltd and others, Court of Appeal, 2nd October 2024

PET INSURERS PUT UP A FIGHT

Sarah Neil summarises a case that gives ‘paws’ for thought

KEY POINTS

Evidence of a market should not be overlooked, as it can give context to a dispute

Evidence of actual confusion can be helpful to assess the distinctiveness or descriptiveness of a mark and conceptual similarity, as it helps to demonstrate how marks are perceived by consumers

Poor time management can have a significant impact on the outcome of a trial where it results in insufficient time to discuss key issues

In this recent Court of Appeal (CoA) decision relating to the dog-eat-dog world of pet insurance, the Appellant (TVIS) argued that the High Court (HC) had made errors in finding that use of the mark PETSURE had not infringed earlier rights in the mark VETSURE. The CoA agreed that the HC had presented ‘im-purr-fect’ reasoning and overturned the decision. The decision hinged on the assessment of the evidence before the Court and should give litigants ‘paws’ for thought on the importance of properly explaining the evidence during submissions.

Background

TVIS is a pet insurance company, founded in 2009, which operates under the brand VETSURE and holds trade mark registrations in this mark. Howserv moved into pet insurance under the brand name PETSURE in 2020 and filed a trade mark application for PETSURE. TVIS did not oppose the application, but it did file invalidity proceedings after the mark matured to registration. In October 2021, TVIS filed proceedings before the HC alleging trade mark infringement and passing off, and the invalidity proceedings were transferred from the UK IPO into the HC proceedings.

Evidence was submitted to help the Judge understand the state of the UK pet insurance market. Specifically, it showed that the top six insurance companies occupied around 89% of the market, leaving more than 60 smaller insurance companies to occupy the remaining market. Both TVIS and Howserv were evidenced to be small players in the pet insurance market.

Evidence was also introduced to demonstrate that many insurance companies have brand names that include the word PET or another word alluding to an animal. However, only two companies (one of which is TVIS) use the word VET in their brand name, and no other company on the market uses the suffix -SURE.

HC decision

It is worth noting that the trial took place under the Shorter Trial Scheme and lasted three and a half days. Despite the fact this should have been ample time (at least according to the CoA), the parties did not manage to make all of their submissions during the course of the trial. This may have turned out to be a highly relevant error in time management, as the consequence was that the HC Judge did not receive any oral submissions on the evidence of actual confusion filed by TVIS.

In summary, the HC found that VETSURE and PETSURE are visually and phonetically similar, but the conceptual differences are sufficient that a likelihood of confusion is avoided. In relation to the evidence of actual confusion, it was concluded that the vast majority showed “administrative errors” or consumers making “mistakes” because they were paying insufficient attention, as opposed to being confused.

CoA decision

The CoA agreed with many of the criticisms raised by TVIS and, on its reassessment of the matter, found that use of PETSURE constituted trade mark infringement under s10(2) of the Trade Marks Act 1994, as well as passing off. Howserv’s trade mark registration was also invalid. The key findings are as follows:

The Judge had erred in finding that VETSURE and PETSURE have different concepts without explaining what those concepts were. He also seemed to have overestimated the importance of conceptual similarity for a finding of a likelihood of confusion. Further, the finding that the marks were conceptually different enough to prevent confusion was incompatible with the evidence, which demonstrated that consumers had the potential to be confused.

The Judge erred in assuming that, because the component parts of VETSURE were descriptive, the composite mark must also be descriptive. Further, the Judge had been unclear and inconsistent in the finding on inherent distinctiveness, and the finding of a reputation means that the mark must have had at least some additional distinctive character.
The Judge was wrong to dismiss instances of actual confusion relied on by TVIS as merely “mistakes” or “administrative errors”. The Judge did not go far enough in questioning what had caused the consumer to make the mistake. Evidence included examples of customers filing claim forms with the wrong company, as well as customers clarifying which company they were talking to. While some of the examples showed consumers realised their mistake quickly, this does not prevent a finding that those consumers were confused.
At the very least, the evidence demonstrated that VETSURE and PETSURE were understood by consumers to be indicators of the entity providing the services, as opposed to merely descriptive words.

Context is key

This case is an important reminder not to overlook the importance of evidence in many different aspects of the assessment of a likelihood of confusion. Ultimately, the decision came down to the HC having reached conclusions that were simply incompatible with the evidence before it, although it should be remembered that the Judge did not have the benefit of submissions on the evidence. Evidence was key to understanding how the consumer perceived the marks, which is relevant to the assessment of distinctive character and useful in demonstrating the nature of the confusion in the marketplace.

Another way in which the evidence was important was in setting out the context in which this dispute takes place. The HC Judge had passed comment on how only a very small number of examples of actual confusion had been put before the Court. However, evidence was filed which demonstrated that the pet insurance market was dominated by a small number of companies and that both TVIS and Howserv were small players in a very large market. In this context, it is surprising that consumers were repeatedly making contact with the wrong company. In the words of counsel for TVIS: “These were two relatively small ships in a vast ocean, and yet [there was] instance after instance of them crashing into each other.”

Howserv might, however, be the cat with nine lives, as, according to public records, it has filed a request to make an appeal to the Supreme Court, which is under review at the time of writing.