Nothing beats a trade mark
Richard May summarises a case that was fast and flurry-ous.  EWHC 1893 (Ch), Frank Industries Pty Ltd v Nike Retail BV and Ors, IPEC, 25th July 2018.
 EWHC 1893 (Ch), Frank Industries Pty Ltd v Nike Retail BV and Ors, IPEC, 25th July 2018
- The Court had to consider how the public would perceive LDNR and LNDR in context
- The Claimant succeeded in bringing an expedited claim for trade mark infringement and passing off in IPEC five months after issuing the claim
LNDR (pronounced L-N-D-R), a premium activewear brand, has successfully sued Nike for trade mark infringement and passing off in IPEC within five months of issuing the claim form. The judgment shows the speed at which the English IP courts can act when a case is urgent.
The claim was brought by Frank Industries, the owner of UK and IR (EU) trade marks for LNDR, registered in respect of, among other things, “clothing … sportswear” in class 25 (the LNDR Marks). The Defendants were entities in the Nike group. Frank Industries complained about Nike’s use of the sign LDNR in its high-profile “Nothing Beats a Londoner” campaign, which commenced in January 2018 and quickly gained popularity in a blaze of social media activity. The complaint was directed at phrases like “Nothing beats a LDNR” and “Show you’re a LDNR”, but also against the signs depicted opposite, where LDNR was used in conjunction with Nike’s swoosh trade mark on, for example, clothing.
The full trial was preceded by a flurry of activity. Frank Industries sent a letter before action on 26th January 2018 and subsequently applied for an interim injunction on 19th February 2018. Frank Industries was able to rely on evidence of actual confusion because three witnesses, on seeing the sign LDNR in the Nike campaign, believed that Frank Industries and Nike were collaborating. On 2nd March 2018, HHJ Hacon granted an interim injunction and directed an expedited trial of the claim at the Claimant’s request. Nike appealed, but on 13th March 2018 the Court of Appeal substantially upheld HHJ Hacon’s decision. The net result was that Nike was forced to stop using LDNR in its campaign and archive or blur past references to LDNR on most of its social media accounts, pending a full trial.
Full trial fast
The importance of the case to both parties was reflected in the speed with which the claim came to trial.
Five months after issuing the claim the full trial took place in IPEC before Mr Justice Arnold. The main issues to be decided were:
- the validity of the LNDR Marks;
- infringement under Article 10(2)(b) of the Trade Marks Directive (the Directive) and Article 9(2)(b) of the EUTM Regulation (the Regulation); and
- Nike’s defence under Article 7(1)(b) of the Directive and Article 14(1)(b) of the Regulation.
On the first issue, context was key. Nike argued that the LNDR Marks were invalidly registered by virtue of being inherently descriptive as an abbreviation meaning Londoner. Frank Industries disagreed and stated that, even now, people ask what LNDR means. Indeed, Nike was unable to point to any dictionary reference that defined LNDR as Londoner. Instead, Nike largely relied on social media posts featuring references to “Lndr” meaning Londoner. The Court was not persuaded. While the meaning of “Lndr” in the online posts may have been clear by their context, ie London-related topics, this failed to establish that LNDR would be perceived by consumers as meaning Londoner when used in the context of clothing. Consequently, the Court concluded the LNDR Marks were valid and inherently distinctive to a moderately strong degree.
On the second issue, the Court was quick to conclude LDNR is similar to LNDR: the marks being identical save that the middle two letters are transposed. Neither did it hesitate to conclude that the contested goods (clothing) were identical. The main concern was whether Nike had used LDNR “in relation to clothing”, ie as a trade mark. Nike argued it had not. Nike contended: (1) its famous trade marks, NIKE and the swoosh, clearly denoted origin; and (2) consumers would not perceive LDNR as denoting origin because they would perceive it to mean Londoner. The Court considered the evidence, which included the Lock-up on Premier League football advertising boards and on T-shirts worn by the likes of Sir Mo Farah and bearing the ® symbol next to both the swoosh and the sign “LDNR”, and concluded that Nike did use LDNR “in relation to” clothing. This conclusion was supported by the Court’s assessment that, when Nike launched its campaign in January, LDNR was not an established or recognised abbreviation, even though in some contexts it was capable of being understood by some as meaning Londoner. It followed that Nike had infringed the LNDR Marks due to a likelihood of confusion.
On the third issue, Nike argued that, even if there was a prima facie case of infringement, it could rely on the defence of honest descriptive use. To establish this defence, Nike had to show that LDNR indicated a characteristic of the goods and that the sign had been used in accordance with honest practices. For the reasons already discussed, the Court decided LDNR was not an indication of any characteristic of clothing. In terms of honest use, the Court considered several factors, including: Nike’s knowledge of the LNDR Marks (having conducted a clearance search six months before launching its campaign); that Nike should have appreciated that there was a likelihood of confusion and that Frank Industries would object; continued use of LDNR by Nike would interfere with Frank industries’ ability to exploit the LNDR Marks; Nike did not establish sufficient justification for using LDNR; and Frank Industries complained very quickly. In light of these factors, the Court did not consider that Nike acted fairly and it would not be in accordance with honest practices for Nike to continue its use of LDNR in the future. Accordingly, Nike’s defence failed.
Context is king
This case highlights the importance of how signs are perceived in context, particularly non-dictionary defined terms. In this case, context was king and the Court was satisfied that enough people would perceive LDNR as a brand name, despite accepting that some would understand it to mean Londoner. It must have helped that Frank Industries was able to provide three witnesses who were confused into thinking there was a collaboration between the two parties. The case also highlights the speed with which IP courts are prepared to act in urgent matters, which is very necessary in today’s digital age.
Richard May is a Chartered Trade Mark Attorney and IP Solicitor at Osborne Clarke.
Osborne Clarke acted for Frank Industries in the proceedings.