Posted on August 6, 2010 by Louise Berg

One in the Eye for Specsavers

Last week the Chancery Division dealt a blow to Specsavers when judgment was given in its trade mark infringement claim against Asda. Keen-eyed observers will also see that Specsavers were represented by the aptly named Adrian Speck.

Asda ran an in-store advertising campaign for its optician's services which featured a logo containing two ovals along with the straplines "Be a real spec saver at Asda" and "Spec savings at Asda". Specsavers, whose own logo consists of two interlocking ovals framing the word 'Specsavers', brought claims for trade mark infringement on the basis that the use of the logo and the straplines caused confusion, and took unfair advantage of their registered marks. They also claimed passing off. (The logos can be seen in the appendices to the judgment which can be found here.)

The court ruled against Specsavers on all but one of its claims. It was a clean sweep for Asda on likelihood of confusion (or the lack of it), which can be a difficult claim to run in comparative advertising cases: in order to draw an effective comparison, it must be possible for consumers to distinguish between the two traders in question, and so comparative campaigns are generally designed to avoid confusion. Specsavers did have some success on the 'unfair advantage' claims, as the court held that Asda's use of the "Be a real spec saver at Asda" strapline took unfair advantage of the SPECSAVERS trade mark. The use of the words 'spec saver' was a clear link to the SPECSAVERS mark, and by using it Asda were taking unfair advantage of Specsavers' established reputation. There was, however, no unfair advantage in Asda's use of the ovals logo (which was held to have only a weak resonance with the Specsavers logo) or the "Spec savings at Asda" strapline.

There was an obvious intention on Asda's part to incorporate a reference to Specsavers into their campaign and the court seemed to accept that it was 'living dangerously'. Intention is generally irrelevant in trade mark infringement claims (except perhaps where it comes into the 'honest practices' test applying to some of the defences), but here the court conceded that if there is evidence showing a defendant is 'living dangerously', that would be admissible but not conclusive in relation to the question of actual confusion. In this case the 'living dangerously' evidence did not affect the result on confusion, but it did appear to make the court more amenable to a finding that there was a link between the logo used by Asda and the Specsavers logo. The court's approach appears to suggest that advertisers who deliberately sail close to the line could find themselves in more trouble, but anyone who mounts a comparative advertising campaign will surely be 'living dangerously' in the same way that Asda was. Comparative campaigns will always involve a deliberate attempt to incorporate a reference to another trader. The trick is to live dangerously by sailing close to the line without crossing it, so it is important to obtain good compliance advice.

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Posted on July 9, 2010 by Christopher Hackford

AdWords - the latest clarification from the ECJ

Following the ruling of the European Court of Justice (ECJ) on Google's Adwords policy in the Louis Vuitton case, which we wrote about in March, a new decision dealing with the problems associated with AdWords was handed down yesterday in the case Portakabin Ltd v Primakabin BV, Case C-558/08.

Portakabin build and supply mobile buildings and own the trademark for "Portakabin" in that market sector in the Benelux countries. Primakabin, a seller and lessor of new and second-hand mobile buildings, including legitimate second-hand Portakabin buildings, used the word "Portakabin" and some similar misspelled variants as keywords on Google's AdWords. Portakabin sued for trademark infringement and, after passing through the Dutch courts, a number of questions were subsequently referred to the ECJ.

The judgment reiterates one of the main decisions in the Louis Vuitton case: that advertisers who use competitor's trademarks as "keywords", must make it clear in the advertisement that there is no commercial connection between the advertiser and the proprietor of the trademark. This case goes on state that, unless this is done, there is no defence under Article 6 of the Trademark Directive (which in essence allows third parties to use trademarks to indicate the origin of products provided that such use is in accordance with honest commercial practices).  

However this latest decision also makes clear that re-sellers of second-hand products can use third party trademarks as keywords, provided that it is clear from their website that they only sell "used" or "second-hand" products manufactured by the trademark owner and providing that the manner by which he sells those products does not risks seriously damaging the reputation of the trademark owner or his mark.

This latest decision also confirms that misspellings of trademark names constitute signs which are similar to the trademark, and therefore the usual rules of analysis apply: notably, is there a likelihood of confusion?

All very helpful, and we now await the ECJ's ruling in the Marks & Spencer v Interflora case which will analyse issues on dilution and the free-riding on the distinctive character of the trademark.

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Posted on June 1, 2010 by Christopher Hackford

The L'Oreal Saga - Trademarks and Comparative Advertising

 In an extraordinarily frank judgment on 21 May 2010, Lord Justice Jacob handed down the Court of Appeal’s (CA) final decision in the case L’Oreal SA v Bellure NV [2010] EWCA Civ 535, following last summer’s response by the European Court of Justice (ECJ) to a number of trademark questions referred to it by the CA. The judgment deals particularly with the issues of comparative advertising and the use of comparison lists for advertising purposes.

What is fascinating about the judgment is Lord Justice Jacob’s strong disagreement with the ECJ’s decision, and he makes it abundantly clear that he is following their decision extremely reluctantly. For the first 21 paragraphs of a 51 paragraph judgment, he criticises the ECJ’s decision, stating that in his view, it is contrary to the principle of freedom of commercial expression and it disadvantages poorer consumers, whilst favouring luxury brand owners, despite the fact that a brand owner’s business is unlikely to be affected to any significant extent by the sale of the legitimate low-cost imitation products.

 

 

The brief facts of the case are as follows. Bellure produces legitimate cheap perfumes, but packaged its products at the time of the case in a similar manner to L’Oreal’s high quality products. They also used comparison lists to compare the smell of the Bellure perfumes with named L’Oreal perfumes, such as Tresor, the names of which are all registered trademarks. L’Oreal sued for trademark infringement and passing off, in respect of both the comparison lists and the packaging. In the early stages of the case, the packaging of the Bellure products changed and was therefore no longer in issue, and the court also decided that under English law, passing off did not extend to some sort of “nebulous tort of unfair competition”.

However, the question as to whether references to the named smell-a-like perfumes in the comparison list were an infringement of trademark or not was referred to the ECJ. The ECJ was asked to decide whether Bellure’s action in comparing the smells of their perfumes with those of L’Oreal in comparison lists constituted trademark infringement under Article 5(1)(a) of the Trademark Directive, and, if so, whether Bellure had a defence under the provisions of the Comparative Advertising Directive (CAD). The ECJ was also asked to decide if the use in a comparison list was an infringement under Article 5(2) of the Trademark Directive.

The ECJ found that references to registered trademarks in a comparison list did fall within Article 5(1)(a) of the Trademark Directive: that is, that the use of an identical name to a registered trademark in a comparison list may amount to an infringement of trademark, when comparing identical goods/services, unless the use is purely descriptive. The ECJ went on to state that use in comparison lists is more than “purely descriptive” as it is used for advertising purposes.

Having decided therefore that the use fell within Article 5(1)(a), the ECJ considered whether the use complied with the conditions required by the CAD, and thus would prevent it being an infringement of trademark. The CAD allows comparative advertising provided that certain conditions are met. One of those is that the comparison “does not take unfair advantage of the reputation of a trademark” and another that the comparison does not “present goods or services as imitations or replicas of goods or services bearing a trademark”. The ECJ interpreted “imitations and replicas” very widely, and decided that smell-a-like perfumes would amount to “imitations” of the original one.

As a result of this decision, the CA was “forced to conclude” that Bellure had not complied with the provisions of the CAD, and thus that their comparison list amounted to an infringement of trademark. Lord Justice Jacob, in his judgment, stated that he saw “no rational basis” for this position. He considered that a trader, if he produces lawful replica goods, he should be entitled to inform the public of what they are: it was in the interest of the consumer for him to do so.

The CA did not need to consider whether Bellure was also taking unfair advantage of L’Oreal’s trademark under Article 5(2), since the use was already an infringement under Article 5(1)(a). However, both the ECJ in its decision and Lord Justice Jacob in his judgment, made observations on this provision of the Directive, which have a potentially significant effect on advertisers.

The ECJ defined “unfair advantage” widely, and stated that “where a third party attempts … to ride on the coat tails of [a] mark in order to benefit from its power of attraction, its reputation and its prestige … the advantage resulting from such use must be considered to be an advantage that has been unfairly taken”. To which, Lord Justice Jacobs said “I do not agree with or welcome this conclusion – it amounts to a pointless monopoly. But my duty is to apply it. For by the use of the comparison lists there is clearly free-riding of the sort condemned by the Court.”

Despite Lord Justice Jacob’s frankly-made reservations, the law is thus: any advertiser who tries to enhance its own reputation by using or associating itself with a trademark with an existing reputation (or “exploiting the coat tails” of the registered trademark, as the ECJ referred to it) will be regarded as taking unfair advantage of that trademark, and the use is likely therefore to amount to an infringement. Clearly, as a result of this case, referring to a registered trademark in a comparison list is now likely to amount to an infringement of trademark. However, the decision also means that an advertiser who features or refers to a well-known registered trademark in its advertising in order to enhance its own product could also be liable for an infringement, even if the advertiser’s own product is in an entirely different category of goods and services.
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