Case of the week: IP

Sir John Thomas (President); Kitchin LJ; Black LJ.

31 January 2012

The Court of Appeal (CoA) referred to the European Court of Justice (ECJ) questions about the proper interpretation of Regulation 40/94 on the community trademark.

Appeal allowed in part; cross-appeal dismissed; questions referred to the ECJ

Specsavers appealed a decision that certain aspects of a marketing campaign launched by supermarket group Asda did not infringe its registered trademarks and that one of its marks was invalid for non-use.

Asda cross-appealed against the one finding of infringement made by the judge.

Specsavers held the wordmark SPECSAVERS and trademarked logos consisting of overlapping ovals, mostly with words written on them.

When Asda launched a campaign with logos consisting of non-overlapping white ovals with ‘Asda Opticians’ written on them in a lighter shade of green Specsavers responded by bringing infringement proceedings.

The judge held that the claim  failed as it could not rely on the particular colour of its marks as, if a mark was unlimited as to colour, it was registered for all colours.

While there was a degree of similarity between the logos there was a significant area of visual difference and the wording used by Asda introduced a significant difference, giving a very different overall impression.

The claimant succeeded in respect of the first strapline, as there was a link between the strapline and the mark in that the words ‘spec saver’ plainly called to mind SPECSAVERS, but it failed in respect of the logos and second strapline.

Specsavers’ wordless logo fell to be revoked for non-use as it had not been used by itself in connection with the services for which it had been registered.

Appeal allowed in part; cross-appeal dismissed; questions referred to the ECJ

The judge approached the issue of the likelihood of confusion arising from the use of the straplines entirely correctly. It was unclear whether the judge was wrong in his consideration of colour. Therefore, the ECJ needed to be consulted on whether it was permissible to take into account the enhanced reputation enjoyed by Specsavers with the colour green.

Asda adopted the strategy of using a strapline that was intended to bring Specsavers to mind and convey superiority. The judge was right to find that this constituted an infringement of the word marks under art.9(1)(c).

In respect of the second strapline the judge had erred by focusing on differences between the two straplines when the reality was that they were quite similar.

Further, Specsavers had, contrary to the judge’s finding, made out a case of unfair advantage. Accordingly, the judge should have found that the second strapline infringed Specsavers’ word and logo marks.

The use of the Asda logo permitted it to benefit from the power of attraction, reputation and prestige attaching to Specsavers and its logo marks, and to exploit without paying compensation the marketing efforts the optician had made.

Accordingly, the logo infringed Specsavers’ logo marks when used as part of the composite campaign.

Specsavers’ appeal against the decision that its wordless mark should be revoked and also the issue of whether Specsavers’ logo infringed that mark under art.9(1)(b) and art.9(1)(c) fell to be stayed pending a reference to

the ECJ.

Commentary: Sahira Khwaja

The Specsavers v Asda decision demonstrates the perils for traders conducting a marketing campaign that aggressively targets a competitor by reference to its trademarks, outside the ambit of comparative advertising.

It also confirms the significant change in the assessment of trademark infringement by the UK courts, in that this assessment is no longer limited to a comparison between the earlier mark and the later sign, without taking into account the context for use of the sign, which now seems to lie at the heart of the assessment.

Accordingly, the court attached great significance to Asda’s understanding of the nature of the market, the characteristics of the average consumer and other matters affecting how that average consumer would react to the use of its signs. This presumed understanding, coupled with Asda’s intention to bring Specsavers to mind and to feed off its reputation without causing consumer confusion, seems to have played a major part in the Court of Appeal’s decision to uphold the High Court’s finding that there was no likelihood of confusion. Nevertheless, it decided that Asda’s signs did take unfair advantage of the distinctive character or repute of Specsavers’ community trademarks.

Two sets of questions concerning the scope of trademark registrations (on colour and whether a logo is used) were also referred to the ECJ. If the ECJ takes the more restrictive view on either question, then brand owners will have to adopt more expansive filing and use strategies.

Sahira Khwaja, partner (pictured), and Anat Paz, senior associate, Hogan Lovells

 

For Specsavers

James Mellor QC and Adrian Speck, 8 New Square 

Antony Gold, Eversheds

For Asda

Iain Purvis QC, 11 South Square

Helyn Mensah and Iain Connor, Pinsent Masons