UK trademark law has been significantly harmonised with that of the other jurisdictions of the EU during the past 20 years. In that model, strong rights are given to the first to register a mark (though some rights remain for a prior user of an unregistered trademark in the UK who has established business goodwill represented by the trademark). Further, the trademark offices conduct limited examination of applications and instead place the onus on the trademark proprietor to police the trademark register as well as the marketplace.
With the UK currently negotiating its exit from the EU, there is no suggestion of the UK adopting anything other than the European model of trademark registration in the short to medium term. In essence, if and when the UK leaves the EU, substantive trademark law will remain closely similar to that found in the rest of the EU.
On the enforcement front, the UK courts frequently grapple with difficult cases caused by the changing face of commerce in the internet age. Cases relating to Google AdWords services, Google AdSense services or the liability of internet service providers, for example, have all been heard and decided in recent years, although there is still potential for further questions to be decided. There has also been continued emphasis on simplifying court procedures, with the aim of lowering legal costs and using technology in the court system. This will continue to be the direction of travel, with possible pilot schemes in the future in which cases will be managed wholly online.
II LEGAL FRAMEWORK
Registered trademark protection in the UK is governed principally by:
- • Trade Marks Act 1994 (as amended);
- • Trade Mark Rules 2008 (as amended);
- • EU Trade Mark Regulation – Council Regulation (EC) No. 207/2009 (as amended);
- • EU Trade Mark Implementing Regulation – Commission Regulation 2868/95 (as amended);
- • Misleading and Comparative Advertising Directive (2006/114/EC);
- • Paris Convention for the Protection of Industrial Property;
- • Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Trade Marks;
- • TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights);
- • Singapore Treaty on the Law of Trademarks; and
- • Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.
The UK Intellectual Property Office (UKIPO), based in Newport, Wales, is responsible for administration of the UK trademark register as well as policy issues relating to intellectual property for Her Majesty’s Government. The UKIPO is an executive agency of the Department for Business, Energy and Industrial Strategy. It collaborates with the EU Intellectual Property Office (EUIPO), which is responsible for administration of the EU trademark register, and the World Intellectual Property Organization (WIPO), which has similar responsibility for the international trademark register.
Nominet is the UK’s domain name registry, which is responsible for the management of country code top-level domains ending with .uk.
Companies House is responsible for the registration of companies in the UK.
iii Substantive law
Set out below are the key legal bases for the protection of trademarks and similar indicia of corporate identity.
Registered trademarks (including collective or certification marks)
Registration is obtained by the methods outlined below, in Section III.
Unregistered and well-known marks
Unregistered trademarks are protected by the law of passing off, which is described in Section IV.iii (Causes of action). Well-known marks are protected by the Trade Marks Act 1994. They are given a status equivalent to registered trademarks and that status would be particularly useful in protecting marks that are known in the UK but have not been used or have not generated goodwill in the UK. However, proving that a mark is well known is onerous and there is relatively little case law.
Obtaining a company name gives no cause of action against later third parties. Nevertheless, it is not permissible to register a company with a name that is identical or very closely similar to that of an existing registered company. However, to prevent use of a later company name more broadly, reliance must be placed on the law of registered trademarks or passing off, assuming the requirements are met. (Note, however, that there is a limited facility to cancel abusive company names using the Company Names Tribunal.)
Trade names and business names
Obtaining or using either a trade name or a business name gives no cause of action against later third parties as such, unless the requirements of the law of passing off or registered trademarks are met.
Broadly, these may be registered as collective or certification marks, or even as ordinary trademarks. They may also be protectable under the law of passing off. There are provisions of EU law (Regulation 2081/92 on the Protection of Geographical Indications and Designations of Origin for Agricultural Products and Foodstuffs), which provide specific protection for indications that have been granted the status of protected designation of origin (PDO) or protected geographical indication (PGI). Applications in the UK should be made to the Department of the Environment, Food and Rural Affairs.
Obtaining a domain name gives no cause of action against later third parties. Nevertheless, it is not possible to register a domain name that is precisely identical to an existing one. To prevent use of a later domain name more broadly, reliance must be placed on the law of registered trademarks or passing off, assuming the requirements are met. (Note, however, that there is a limited facility to cancel or transfer abusive or bad faith domain names using Nominet.)2
III REGISTRATION OF MARKS
Registered protection for a trademark in the United Kingdom may be obtained by one of three routes:
- a an application filed at the UKIPO to obtain a UK trademark registration;
- b an application filed at the EUIPO to obtain an EU trademark registration; and
- c an application filed at WIPO to obtain an international registration designating either the UK or the EU.
The focus of this chapter is on procedure before the UKIPO.
The official fees for a UK trademark application are £170 (assuming the application is filed online), and an additional £50 for each class of goods or services covered in addition to the first.
The application should set out the mark applied for (in jpeg format if a logo element is included), the goods and services specified, set out in class order, according to the Nice Classification, and the name and address of the proprietor (including state of incorporation for a company). An address for service in the European Economic Area must also be provided.
When an applicant claims priority under the Paris Convention, it should include basic details of the priority applications, but it is not necessary to supply a certified copy of the priority application unless requested to do so by the UKIPO.
If a logo mark is shown in black and white, the UKIPO will not consider these colours to be a feature of the mark unless there is an express indication in the application to that effect. Sound marks may be acceptable where there is, for instance, musical notation clearly describing the mark. Moving image marks are acceptable and may be represented by a series of images, clearly described.
It is a particular feature of UK trademark law that the applicant must make a declaration on the application form, at filing, that
the trade mark is being used, by the applicant or with the applicant’s consent, in relation to those goods or services, or that there is a bona fide intention that it should be so used.3
This declaration applies to both UK trademark applications filed at the UKIPO and international applications designating the UK filed at WIPO.
Although this declaration is not tested or examined by the UKIPO, any application or registration may be opposed or sought to be declared invalid by a third party on the basis that the application or registration was obtained in bad faith, where the applicant did not have the requisite intention to use.
Once an application has been filed at the UKIPO, a filing receipt will be issued promptly and the application will be examined within three to six weeks. If no objections are raised, it will be published in the Trade Marks Journal. Publication opens a period of two months (extendible by one month at a potential opponent’s request), during which third parties may oppose registration. If no oppositions are filed, the application should proceed to registration within approximately five months of filing the application.
The process and timeline is very similar for an international application designating the UK.
It should also be noted that applications filed at the UKIPO (but not at the EUIPO or WIPO) may also seek registration in respect of a series of marks, that is to say variations of the mark (where those variations do not include differences in distinctive character). A maximum of six marks may be included in a series (with additional official fees of £50 for each of the third to sixth marks in the series). If the UKIPO holds that one of the marks does not constitute a series (i.e., it differs in its distinctive features from the other marks) that mark must be deleted in order that the others may proceed to registration.
i Inherent registrability
The UKIPO examines an application to assess whether the mark applied for is inherently registrable. An objection will be raised if the mark is:
- a devoid of any distinctive character;
- b descriptive of any characteristic of the goods or services in respect of which the mark is to be used (or worse, where it has become customary for the relevant goods or services);
- c a shape resulting from the nature of the goods themselves, a shape necessary to obtain a technical result, or a shape giving substantial value to the goods;
- d contrary to public policy or principles of morality;
- e deceptive;
- f such that its use is prohibited by any rule of law;
- g such that it is or contains, for example, the royal coat of arms, the royal flags, heraldic arms, flags of the UK or national emblems of Paris Convention countries; or
- h one where the application has been made in bad faith.
Most objections will be raised in respect of categories a to c, above. The Manual of Trade Marks Practice sets out the UKIPO’s approach to certain categories of marks but, in recent years, emphasis has been placed more on assessing each mark on its merits and less on a particular category of mark. For instance, it used to be the case that common surnames were considered prima facie unregistrable and the number of examples of any given surname in a UK telephone directory was considered a relevant rule of thumb in assessing registrability of a surname. That type of approach is now out of favour. Nevertheless, the Manual still indicates that names of famous people will require careful assessment. A famous name is more likely to be held to be unregistrable, particularly for goods such as posters or other image carriers, but each case will be assessed on the facts.
If an objection is raised under category a or b, above, the applicant will be given two months to provide submissions or evidence in response. That period can be extended upon request for good reason. It may be appropriate to seek to overcome the objection by providing evidence of how the word is used in commerce, or technical explanations if either the word or the relevant goods are technical.
Alternatively, an applicant may seek to argue that the mark has acquired distinctiveness through its use. The applicant will need to provide evidence to support that argument. As a rule of thumb, at least five years’ use of a mark, across the majority of the UK, would be required to put forward a reasonable argument for acquired distinctiveness. A shorter period may suffice if, for example, there has been high-profile advertising. If the word applied for is particularly descriptive, evidence of the applicant’s use on its own may not be sufficient and it may be helpful if third-party evidence is obtained as well, such as how the mark is used in the media. In practical terms, the UKIPO requires evidence to be filed in the form of a statement by a relevant witness, such as a director of the applicant, and exhibiting relevant documents.
An objection raised under categories c to h, above, (including objections relating to the shape of the mark) may not in law be overcome by acquired distinctiveness.
ii Prior rights
The UKIPO will not of its own motion raise any objection to an application on the basis of any conflict with an earlier trademark or other right (except, for example, emblems of Paris Convention countries, etc., as described above). The UKIPO does, however, conduct a search of the UK trademark register, the EU register and the international register (if the UK or EU is designated). If any conflicting mark is revealed, it is forwarded to the applicant for information. A period – typically two months – will be set for the applicant to confirm whether it wishes to limit its application or withdraw it (in view of the prior right revealed), seek consent from the prior rights owner, or seek to persuade the UKIPO that the conflicting right has been incorrectly raised.
If the applicant makes no response, the UKIPO will, after that period, permit the application to proceed to publication in the Trade Marks Journal, and that publication opens a period of two months, during which third parties may oppose the application if they so wish. At the same time, the UKIPO writes to the prior rights owner (if the prior right is a UK trademark or a UK designation of an international trademark) alerting the owner to the publication of the application (in case a possible conflict should be found at a later stage).
Under current practice, it is much less common for an applicant to seek express consent from the proprietor of an earlier conflicting trademark or to seek to persuade the UKIPO that in fact no conflict exists, at the examination stage. It is more likely that this type of conflict will be addressed in any later opposition proceedings, either in a decision by the UKIPO or in settlement discussions alongside those proceedings.
It should be noted that whereas the UKIPO conducts a search of UK trademarks, EU trademarks and international trademarks (designating the UK or EU), and while these properties may form the basis of a third-party opposition, these are not the only rights that may be relied upon in opposition proceedings. An opponent may also rely on any other earlier right, including a copyright, design right or registered design with effect in the UK or any rule of law. The most common rule of law relied upon is the law of passing off. An opponent here may claim that it is the prior user of a mark, such that the opponent has established a goodwill represented by the mark, before the filing of the application, and that the use of the mark applied for (since it is, for example, confusingly similar, for similar goods) would amount to a deceptive misrepresentation liable to damage the goodwill of the opponent. Note that the opponent does not seek to pursue a claim for passing off as such (which would need to be brought in the courts) but, instead, seeks to argue that registration of the later mark should be refused because its use would amount to passing off.
iii Inter partes proceedings
Any party may oppose registration of a trademark on the grounds that it does not meet the inherent registrability criteria. The proprietor of an earlier right may also oppose registration on the grounds of its right. An opponent is required to file form TM7 and pay a fee of £200. If the rights relied upon are registered or pending trademark rights, it may be sufficient to outline the details of those rights and claim that the use of the applicant’s mark will result in a likelihood of confusion or dilution.
If the earlier registered trademark rights are more than five years old, it is necessary to state in respect of which goods or services the earlier trademark has been used. In practice, it is possible to indicate that this information will follow and can instead be provided in response to the UKIPO’s indication of deficiency in that information.
If other rights are relied upon, such as an earlier passing off right, more detail is likely to be needed, such as when the mark was first put to use, in what geographical area, and in respect of which goods or services.
The UKIPO will examine the form TM7 and notice of opposition and, if it is acceptable, will set a period of two months for the application to file its counterstatement on form TM8. The counterstatement will respond to the pleaded grounds of opposition, either accepting, denying or putting the opponent to proof and, where relevant, pleading its alternative case.
Once the UKIPO has assessed that the applicant’s counterstatement fulfils formality requirements, it sets the following timetable:
- a a period of two months for the opponent to file any facts or submissions in support of its opposition. Evidence of facts must be in the form of a witness statement signed under a statement of truth;
- b upon filing of the opponent’s evidence, a period of two months for the applicant to file any evidence or submissions in support of its application; and
- c upon filing of the applicant’s evidence, a further period of two months for the opponent to file any evidence or in reply.
Each of these evidence periods can be extended upon request and for good reason. Any request must clearly specify what action has been taken to date to meet the deadline, why further time is needed, i.e., what further action needs be undertaken and how long that will take. In practice, in the absence of very good reasons, the UKIPO is unlikely to extend any deadline by more than one month.
Once the evidence stages of the proceedings are closed, the parties may agree for a decision to be made by a hearing officer from the papers on file; an opportunity for the parties to provide written submissions will also be provided at this stage. Alternatively, either party has a right to request a hearing. This may be held in person but may also be held by video link with the hearing officer in the UKIPO’s Newport office.
A decision is likely to be issued within 12 months of the filing of the opposition refusing the application, partially refusing the application or rejecting the opposition. The hearing officer will also make an award of costs in the prevailing party’s favour. The level of the award is taken from a limited set scale and is not intended to fully compensate the prevailing party for the legal costs incurred. A typical award may be in the region of £1,500 to £2,000.
It should be noted that the initial deadline set for the applicant to file a counterstatement can be met by the parties instead consenting to and filing a request to enter a cooling-off period. This is for an initial nine months (which can be extended to 18 months) and postpones the evidence stages of proceedings.
Post-registration application for declaration of invalidity or declaration for revocation
The same basic procedure is provided for a post-registration application for a declaration for invalidity, which may be sought on any of the grounds that could have been pleaded in opposition. A similar procedure applies to a post-registration revocation on the grounds that a mark has not been put to genuine use within the five years since the mark was registered or that the mark has become generic.
It should be noted that an application for a declaration of invalidity or an application to revoke a registration may be brought in the courts as well as the UKIPO. The UKIPO proceedings again have a limited cost award regime, so bringing a case in the courts is likely to be more expensive, but with a greater opportunity to recover more of the legal costs incurred during the proceedings.
Decisions by the UKIPO may be appealed to the High Court of England and Wales, or to the Court of Session in Scotland, or to the High Court in Northern Ireland. Of these, the High Court of England and Wales (High Court) is used most frequently. Decisions by these courts may also be appealed further to appellate courts.
Generally, none of the aforementioned courts will rehear a case, but will instead review the UKIPO decision. That means that there is a high hurdle for any party to clear in filing additional evidence at the appeal stage. Costs orders issued at the end of any appeal are not taken from the UKIPO’s limited set scale but, instead, are issued in accordance with the Civil Procedure Rules (CPR) and are intended to compensate the prevailing party to the extent that its legal costs have been proportionately and reasonably incurred.
As an alternative to the court system, a party may appeal a UKIPO decision to an ‘appointed person’. This is a tribunal, established by statute, consisting of a small number of leading trademark practitioners (typically barristers and academics) designated as appointed persons, who sit individually to hear appeals. Although appointed persons have broadly the same powers as the High Court on appeal, the tribunal is intended to be a low-cost forum. On that basis, costs orders that may be made in the prevailing party’s favour are again made on a set limited scale. Decisions made by an appointed person are final and, accordingly, there is a power for cases of general legal importance to be transferred to the courts.
IV CIVIL LITIGATION
For cases of a value under £10,000, the small claims track of the Intellectual Property Enterprise Court (IPEC) provides a useful venue. No costs awards may be made on this track but injunctions and other similar remedies may be available to the successful claimant. This track may not be suitable for cases of any complexity.
For cases of a value of up to £500,000, the multitrack of the IPEC is available. The Court’s procedures are designed for small and medium-sized enterprises (SMEs), in that it has powers to limit the scope of the disclosure process and the number of witnesses. It is intended for cases that may be decided in a trial lasting typically two days. A particularly attractive feature of the IPEC’s process is that, with rare exceptions, the maximum award in costs that may be made after trial is £50,000. This gives a good degree of certainty to parties as to what their liability may be in the event that a case is lost.
The IPEC is a specialist list in the Chancery Division of the High Court with procedures updated in recent years to be attractive to SMEs.
The High Court, Chancery Division, is the traditional home for intellectual property (IP) cases. There is no cap on the value of cases that may be brought in the High Court and it has the greatest capacity for long trials, with significant disclosure exercises and witnesses. It is the most appropriate venue for the most complex cases. There is no cost capping regime. The parties must, however, provide a detailed budget for the case fairly early in the proceedings but the budget itself can be expensive to prepare. It would not be unusual for legal costs in bringing a trademark case to trial to incur costs of at least £400,000.
The High Court has recently piloted a Shorter and Flexible Trial Scheme. This scheme is intended for cases with a trial of no more than four days. The Court exercises powers akin to those in the IPEC, where disclosure or witness evidence may be controlled or limited. There is no requirement for budgeting, nor is there a costs-capping regime. It is intended that the limits and controls on procedure, and the expeditious processing of cases to trial, will reduce costs overall.
ii Pre-action conduct
The Practice Direction on Pre-action Conduct is set out in the CPR.4 This specifies that, in the absence of special circumstances, a claimant should approach the defendant and set out the details of the complaint before any court claim is issued. If this requirement is not complied with, the claimant may later be penalised by not being granted as high an award of costs as it otherwise would (even where it is wholly successful in the substance of the claim).
In some areas, however, such as personal injury claims, there are additional protocols that set out in fuller detail the precise steps that must be taken before a claim is issued. There are no protocols in IP cases, mainly because the law of unjustified threats historically made it difficult to draft pre-action protocols mandating that a claim be set out in detail to an alleged infringer when the law of unjustified threats made it potentially actionable for a complainant to threaten to sue in respect of certain acts. The law of unjustified threats was reformed in 2017, so it may be that there will be a return to the question of whether it is possible to specify detailed protocols for pre-action conduct in IP cases.
It should also be noted that Part 36 of the CPR5 provides a formal set of rules whereby settlement offers, made in accordance with those rules, and that are not accepted, have an impact on any costs award that may be made after trial. The rules are complex but broadly are intended to penalise a party that refuses a settlement offer on terms that are more favourable than the terms which that party ultimately obtains after trial. Part 36 offers for settlement may be made prior to the issue of proceedings.
iii Causes of action
In the courts
A trademark owner may bring a complaint against third-party misuse of its trademark by way of:
- a trademark infringement (where it is the proprietor of a registered trademark in the UK, whether UK trademark, EU trademark or international trademark designating the UK or EU); or
- b the common law tort of passing off (where it is the owner of a goodwill in a business in the UK represented by its trademark).
These causes of action may be brought simultaneously. For example, if a registered trademark has been used in the UK, it is frequently also the case that this use will have established a basis for a passing-off claim. There is nothing to prevent the running of both causes of action simultaneously and in many cases that may be a prudent course. There have been cases where, for example, an EU trademark has ultimately been held to be invalid by a UK court (which otherwise would have been infringed) and where the claimant was able to succeed in preventing the defendant’s use of its mark in the UK on the basis of the claimant’s alternative claim in passing off.
Either cause of action may be brought on a quia timet basis, that is to say on the basis of infringing activity that has not yet taken place. Either action may be brought to prevent third-party use of a trademark, trade name, company name, domain name, get-up or any other indicia or sign used in the course of business in respect of a good or service.
An action in infringement will be successful if the claimant proves that the defendant’s use of a relevant sign:
- a is use of a sign sufficiently similar to the registered trademark, for sufficiently similar goods or services, that there is a likelihood of confusion; or
- b is sufficiently similar to the registered mark, in which there is a reputation, that the sign will call to mind the registered mark and will:
• take unfair advantage of or free ride on the reputation;
• tarnish the reputation; or
• blur or erode the distinctive character of the registered mark.
An action in passing off will be successful if the claimant proves that:
- a it is the owner in the UK of a goodwill in a business represented by a trademark or other distinctive indicia (such as a packaging get-up);
- b the use by the defendant of its sign amounts to, or would amount to, a deceptive misrepresentation to a substantial proportion of the relevant consumers; and
- c that such misrepresentation is liable to lead to damage to the claimant’s goodwill.
Companies House administers the registration of companies in the UK. Rules provide that a new company may not adopt a name that is identical to the name of an existing registered company or one that is very similar (according to specific narrow rules).
Despite the general rules, it is possible to register a company name that (in trademark terms) would be considered similar to an existing name. It may be possible to prevent the use and registration of such a name under actions for passing off or trademark infringement through the courts.
An alternative venue, however, is the Company Names Tribunal. This has a narrow remit, adjudicating on cases that might broadly be described as abusive names. It provides a useful and cheap facility to remove from the companies register any names that are obviously attempting to take unfair advantage of more famous existing companies or trademarks. A significant limitation, however, is that a complaint may be made only in respect of a company that has not yet traded under its name.
Abusive .uk domain names may also be addressed through the dispute resolution service provided by Nominet. The rules of procedure are similar to the ICANN6 rules applicable to .com domain name disputes, but there are some differences.
iv Conduct of proceedings
The process of a claim in the IPEC follows the following broad outline. There are variations in other courts.
- a Issue of a claim form. This step consists of a claimant forwarding a completed claim form (a brief summary of the claim) to the IPEC and paying to the Court the issue fee. This fee may vary between £1,000 and £10,000, depending on the level of damages sought in the claim. The Court then seals (i.e., officially stamps) the claim form and returns it to the claimant.
- b If the defendant is in the UK, the claimant now has four months to serve the claim form (along with full details of the claim, called the ‘particulars of claim’) on the defendant. For a defendant UK company, good service of the claim form and particulars may be achieved by posting the documents to the company’s registered address.
- c Once the defendant has been served with the claim form and particulars of the claim, it has 14 days to file an acknowledgement of service at court. (Later deadlines are determined by the particular court in which the claim is brought.) Typically, a defendant in the IPEC will have a period of 42 days from service of the claim to file its full defence. Shorter periods apply in the High Court.
- d Once a defence has been filed, the claimant may take steps to bring the matter to a case management conference (CMC) and, where applicable in the High Court, this will include preparation of legal costs budgets for the case. The CMC may be fixed some time after the defence has been received.
- e At the CMC, the Court will make findings as to the issues to be decided in the case and specify what disclosure and inspection of documents will be provided by the parties, what witness evidence, including expert evidence, may be filed and served by the parties and, in the IPEC, when the trial and issue of judgment shall take place.
- f A typical period to provide initial disclosure may be one month but the parties have some latitude to agree amendments to the timetable. In the IPEC, it is more typical for the Court to order specific disclosure (i.e., disclosure of documents relating to particular issues) rather than standard disclosure (i.e., all relevant documents, both supportive and adverse to a party’s case). From the point where litigation is contemplated, the parties remain under a duty to preserve documents that may need to be disclosed.
- g After the disclosure process, evidence may then be prepared and filed in the form of witness statements, which do not have the formality of other jurisdictions, that is to say they do not need to be notarised. However, the particular format of the statement requires a ‘statement of truth’, and a false statement may be punishable as contempt of court. It should be borne in mind that all witnesses who give evidence may be cross-examined at trial.
- h Trial: skeleton arguments (i.e., short summaries of the facts and legal arguments) should be filed shortly before trial along with authorities (i.e., relevant cases and legislation). At trial in the IPEC, typically one day may be taken up by cross-examination of witnesses and a second day with legal submissions and argument.
- i Judgment is likely to be pencilled in to be issued around six weeks after trial.
- j The overall process may take 18 months on average, but there is a wide variation since the parties to some extent influence how quickly the proceedings move to a decision.
The courts have a wide inherent jurisdiction in granting remedies to a claimant who is successful in an action for trademark infringement or passing off. The following are some of the more usual remedies sought.
- a An injunction preventing use of the trademark or sign complained of. In trademark infringement cases the injunction may be granted in broad terms (i.e., ‘the defendant shall not infringe UK trademark number ...’). In passing-off cases, the order may be more limited, enabling a defendant to continue use of its mark if it takes sufficient steps to ensure that no misrepresentation is caused. Breach of an order, in whatever form, by the defendant may amount to contempt of court, punishable by a fine and ultimately imprisonment.
- b Similar orders compelling the defendant to change its company name or transfer its domain name.
- c An order to deliver up all infringing goods or articles in the claimant’s possession, custody or control.
- d An enquiry as to damages or at the claimant’s election an account of profits.
- e An order to pay the claimant’s legal costs. The claimant, where successful, is in principle entitled to compensatory payment from the defendant for legal costs, provided they are proportionately and reasonably incurred. Nevertheless, the courts have a wide discretion and may take into account the parties’ behaviour before and during proceedings, as having an effect on any costs order that is made. A rough rule of thumb is that a court is likely to make an award of cost amounting to around 70 per cent of the actual costs incurred.
- f An order for publication of judgment. In certain circumstances, the courts may order that a defendant should publicise the judgment (on its website, for example), if it is thought that this may assist in dispelling the confusion that has been caused by the previously infringing use.
The courts may also grant interim remedies before trial (particularly interim injunctions). The test for whether an interim injunction should be granted includes a number of factors but a critical one is the speed at which the claimant seeks the remedy. If the defendant has been on the market for several months, with the claimant’s knowledge, that will reduce the likelihood that the claimant will be able to obtain an interim injunction.
V OTHER ENFORCEMENT PROCEEDINGS
i Criminal proceedings
It is a criminal offence (under Section 92 of the Trade Marks Act 1994) to apply to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trademark or to sell, or offer to sell, such goods. No equivalent provisions apply to misuse of a trademark in respect of services. Penalties upon conviction include fines and potentially substantial prison sentences. In principle, many acts of trademark infringement could be pursued under criminal law as much as under civil law. In practice, the criminal provisions are rarely relied upon between, or against, legitimately trading businesses.
There is a statutory duty on public authorities (namely trading standards offices of local government) to prevent unauthorised use of registered trademarks. In practice, funding of these offices may vary across the country and they may not necessarily have the manpower to pursue criminal trademark cases except in the most serious matters.
It is also possible for trademark proprietors to bring a private prosecution, that is to say to initiate criminal proceedings themselves rather than relying on a trading standards office. This is often an unattractive option, since the evidentiary burden is high (the case will need to be proved to the criminal standard ‘beyond reasonable doubt’ rather than the civil standard ‘on the balance of probabilities’). Further, there will be no automatic award of legal costs, although forfeiture proceedings may be separately pursued.
The Police Intellectual Property Crime Unit7 (PIPCU), part of the City of London Police, has recently been established, with funding from the UKIPO, to address IP crime with a particular focus on counterfeits provided online. The website provides a form enabling reports or allegations of IP crime to be submitted.8
ii Customs procedures
Regulation (EU) 608/2013 (the Regulation) provides a comprehensive procedure for customs action to prevent import into the UK or EU of goods infringing an IP right. This applies also to goods that infringe registered trademarks but not to grey goods.
HMRC and the UK Border Force work together in implementing these provisions.
A trademark proprietor may make an application to HMRC for action under the Regulation to specify, for example, the registered trademarks that it would like HMRC particularly to monitor. This may apply to the UK only or, in an EU application, to several customs authorities within the EU. An application will need to include information such as the trademark right, with evidence of registration, a description of the relevant goods to be monitored along with any technical data permitting recognition of authentic goods, and the name and contact details of any legal representatives. The trademark proprietor will also need to indemnify the customs authorities for their costs, expenses and liabilities. There are no official fees in making the application.
Where any goods are seized under the application for action, HMRC will notify the registered trademark proprietor, or its representative, and grant a period of 10 days (or three days in the case of perishable goods), during which the trademark proprietor may indicate that the goods, in its view, infringe its right, and either consent to or request destruction of the goods. The proprietor may obtain samples for assessment. If the importer of the goods provides no objection to destruction within the same 10-day period, or provides no response, the goods may proceed to destruction. If the importer objects to destruction, the goods shall be released, unless the trademark proprietor promptly issues a claim for trademark infringement in the courts. The goods shall be detained pending resolution of the court action.
HMRC may also notify a trademark proprietor ex officio if it detains goods that it suspects infringe a registered trademark right, even if no application for action is in force. A similar procedure shall apply but the first step will be for the trademark proprietor to make an application for action.
VI RECENT AND PENDING CASES
Set out below are some noteworthy recent decisions.
Argos Ltd v. Argos Systems Inc9
Argos Limited is a well-known high street retailer in the UK. The US company, Argos Systems Inc (ASI) is a wholly unrelated business operating a website at argos.com (a domain name it legitimately owned). ASI used the Google AdSense service on its site, which automatically provided advertisements to visitors to the site. UK consumers looking for Argos Limited’s site sometimes found the argos.com site. Although they often quickly moved off the site, they were able to view adverts on the argos.com site produced by the Google AdSense service. Those adverts were sometimes for Argos Limited and sometimes for Argos Limited’s competitors. Argos Limited complained that this use amounted to trademark infringement. The High Court held, however, that Argos Limited itself had consented to the use of ARGOS on ASI’s website, in adverts, since Argos Limited had itself signed up to the Google AdSense service, and consent had been granted in the terms of that service. Second, the appearance of competitor websites in the adverts on ASI’s site was a result of the activities of Argos’ representatives (such as viewing competitor websites and returning to the ASI website). Finally, the Court held that the ASI site was not directed to the UK consumer at all, such that in essence there was no use of any trademark by ASI in the UK jurisdiction. It will be appreciated that the Court here was drawing some fine distinctions and a slightly different set of facts may have a different result.
Société des Produits Nestlé SA v. Cadbury UK Ltd10
The Court of Appeal held (agreeing with the High Court and the UKIPO) that the shape of a four-fingered chocolate bar was not registrable as a trademark in respect of chocolate products. Nestlé had applied for registration of the shape of its very well-known Kit Kat chocolate bar. It provided survey evidence, which showed that UK consumers, when presented with the shape, were able unprompted to provide comments such as ‘It’s a Kit Kat’. Nevertheless, in Nestlé’s marketing of the product, the shape was always under a foil wrapper bearing the words Kit Kat (without any picture of the shape), and the chocolate bar itself, in the four-fingered shape, always carried the words Kit Kat embossed in the bar. In essence, the Court held that although the shape was recognised by consumers, it was not a trademark relied upon by the consumer in the purchasing process and hence the mark had not acquired distinctiveness. This was a long-fought litigation, including a reference to the Court of Justice of the European Union, and the result is suggestive that parties will find it more difficult in the future to register shapes of products as trademarks. Proprietors seeking to achieve registration should actively advertise the shape in their marketing and seek to educate the consumer into perceiving the shape as an indication of brand origin.
R v. M & Ors11
The UK Supreme Court held that the criminal provisions of the Trade Marks Act 1994 apply not just to unauthorised use of registered trademarks on counterfeit goods (i.e., where the mark is applied to goods that have never been authorised by the trademark proprietor) but also to unauthorised use in respect of grey goods (i.e., here the mark is applied to goods that have at some point been authorised by the trademark proprietor, such as overrun goods produced by a contract manufacturer).
The following areas are examples of where there is likely to be future activity relevant to trademark proprietors.
Intellectual Property (Unjustified Threats) Act 2017
This Act came into force in October 2017. It reforms and liberalises the law in the UK relating to unjustified threats to bring proceedings for trademark infringement. (In the UK, a claimant’s threat of proceedings is itself, in certain circumstances, actionable.) The liberalisation is intended to make it easier for a registered trademark proprietor to legitimately make threats of proceedings, without the risk of being counter-sued, while at the same time protecting traders from bullying or illegitimate threats from unscrupulous trademark proprietors. Notably, it removes liability from regulated legal representatives, who were previously permitted to be sued and joined to proceedings when acting on client instructions. There are nevertheless certain conditions that must be complied with in order for legal representatives to obtain that protection. The Act also provides for a regime where it should be easier for registered trademark proprietors and their representatives to approach, for example, retailers of allegedly infringing goods to obtain information about the primary infringer. One note of caution for overseas lawyers: the reform has made it actionable to threaten to bring trademark proceedings (not necessarily in the UK) in respect of acts or threatened acts in the UK. A complaint relating to pan-European activity may in certain circumstances now be actionable in the UK even where there was no threat to bring trademark proceedings in the UK. The new legislation is likely to be an area for further litigation.
Directive (EU) 2015/2436 of the European Parliament and of the Council
This EU Directive will be implemented into UK trademark law by January 2019. There is a range of changes, of which some are more significant than others. One example is that the defence to infringement by use of one’s own name will in future apply only to natural persons (at the moment the defence applies also to legal persons). A more substantial change will be made to the circumstances in which a registered trade proprietor will be able to apply to invalidate the registration of (and prevent the use of) a later trademark. Currently, it is possible for a registered trademark proprietor to invalidate a later third-party registration even though the proprietor’s registration was itself revocable (for lack of use) at the date the later third-party registration was applied for (assuming the registered proprietor later puts its own trademark back to use). This will change, so that the registered proprietor will be able to invalidate a later registration only when its earlier registration was not open to revocation at the date of filing of the later third-party registration. This may well create complicated factual questions to be decided by the courts.
UK exit from the EU
When the UK leaves the EU, European Union Trade Marks (EUTMs) (in the absence of agreement otherwise) will cease to have effect in the UK. Proprietors of EUTMs will nevertheless have legitimate expectations that their trademarks will continue to be protected in the UK by some method. It is anticipated that, upon exit from the EU (or by the end of any transitional period), the UK will automatically enter all existing EUTMs (pending or registered) onto the UK trademark register, as new UK applications or registrations, and that these new UK trademarks will retain any filing data, such as filing dates, that is identical to the equivalent EUTMs. By this mechanism, existing EUTMs proprietors would have continued protection in the UK, after exit, by virtue of being proprietors of new UK registrations as well. Nevertheless, the precise details of this transfer mechanism, or any alternative mechanism ultimately adopted (and the other transitional provisions of trademark law that will be required), have not been finalised and are still the subject of negotiation between the UK and EU. Clearly, this is an area of focus for the years ahead.
1 Peter Houlihan is a partner at Cleveland Scott York.
2 See: https://www.nominet.uk/wp-content/uploads/2015/08/DRS-Policy.pdf.
3 Section 32(3) of the Trade Marks Act 1994.
4 See: www.justice.gov.uk/courts/procedure-rules/civil/rules/pd_pre-action_conduct.
5 See: www.justice.gov.uk/courts/procedure-rules/civil/rules/part36.
6 Internet Corporation for Assigned Names and Numbers.
7 See: https://www.cityoflondon.police.uk/advice-and-support/fraud-and-economic-crime/pipcu/Pages/default.aspx.
8 See: https://www.cityoflondon.police.uk/advice-and-support/fraud-and-economic-crime/pipcu/Pages/Make-a-referral.aspx.
9  EWHC 231 (Ch) (15 February 2017).
10  EWCA Civ 358 (17 May 2017).
11  UKSC 58 (3 August 2017).