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UNITARY PATENT

In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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Own Name Defence: Is the Law an Assos?

A recent case before the English Court of Appeal (Roger Maier and Assos of Switzerland S.A. v Asos plc and Asos.com Ltd) considered the “own name defence” provided by EU trade mark law and reached an interesting decision.
Asos is a UK-based, on-line retailer of fashion and beauty products operating on a global basis through its website www.asos.com. Its sales for the financial year up to August 2013 were reported to be £754 million. It has websites targeting France, Germany, Italy and Spain, as well as the UK. Further, it distributes its products in over 200 other countries from its distribution centres in the UK. Its name is derived from the phrase As Seen On Screen, a phrase under which the company operated from its formation in 1999 until 2003/4.

Mr Maier is the CEO of Assos of Switzerland, a Swiss company that was established in the 1970s by Mr Maier’s father and that sells high-end cycling related clothing and accessories under the Assos trade mark, again on a worldwide basis. These sales generally take place through specialist cycling goods stores. By 2013/14, Assos’ annual (wholesale) sales were in the region of £14 to 15 million.

The evidence before the Court of Appeal showed that, although both companies had sold their goods (and provided their services) under their respective marks in the EU for up to ten years, there were few, if any, examples of the consumers of Asos and Assos products being confused by the proximity of the two trade marks.

In the case under consideration, Mr Maier owned a CTM registration dated September 2005 for the trade mark Assos covering goods in classes 3, 12 and 25. The UK based company owned a UK trade mark registration dated October 2009 for Asos covering inter alia goods in classes 3 and 25 and related retail services in class 35. In December 2011, Assos (Mr Maier and his Swiss company) brought trade mark infringement and passing off proceedings in the English High Court against the UK company’s activities in the EU under their house mark (Asos). These proceedings were brought by Assos under Article 9 of the CTM Regulation.

Assos also sought to invalidate the internet retailer’s UK trade mark registration for Asos (in so far as it claimed goods and services in classes 3, 25 and 35) based on its earlier CTM registration (for Assos). Asos in turn sought to part-revoke Assos’ CTM registration (granted in September 2006) on the ground of five years non-use in the EU. They also relied on the “own name defence” afforded them under Article 12 of the CTM Regulation (Section 11(2)(a) of the UK Trade Marks Act 1994).

In the High Court, the case focussed on the main battleground, the UK company’s registration and use of the trade mark Asos in respect of class 25 goods. In rejecting Assos’ claims, the judge (Mrs Justice Rose) ruled as follows:

•    The specification of Mr Maier’s CTM registration, in so far as it protected class 25 goods, should be limited to “Specialist clothing for racing cyclists; jackets, t-shirts, polo shirts, tracksuit tops, tracksuit bottoms, casual shorts, caps” since these were the only class 25 goods for which genuine use had been shown in the EU.

•    On the evidence and, in particular, given the absence of actual confusion between the marks, there was no likelihood of confusion and no damage (undue advantage or detriment) to the distinctive character or repute of Assos’ CTM. The internet retailer’s use of its trade mark (Asos) therefore did not infringe Mr Maier’s registration.

•    In view of the lack of confusion between the marks, there had been no passing-off.

•    The invalidity attack on the UK trade mark registration for Asos also failed for the same reasons that the trade mark infringement action was rejected.

Both parties appealed to the Court of Appeal, although Assos dropped its claim of passing off. In their split judgement (two in favour, one against), given in April 2015, the Appeal Court reached somewhat different conclusions to the High Court judge but, by a different route, still allowed the internet retailer to continue to trade under its house mark.

The Appeal Court first considered the part revocation of Assos’ CTM registration. They agreed with the judge that the class 25 specification should be narrowed but found that she had been a little harsh in her ruling. According to the Court of Appeal, a proper (limited) specification should not only cover the precise goods for which genuine use had been shown, but also those goods which the average consumer would think fell into the same sub-category. On that basis, the Appeal Court limited Assos’ (CTM) specification to “Specialist clothing for cyclists; tracksuits, t-shirts, polo shirts, shorts, caps and jackets”.

Again disagreeing with the judge, the Appeal Court then found that the internet retailer’s use of the trade mark Asos in respect of class 25 goods did infringe Mr Maier’s (narrowed) CTM registration for Assos. Taking into account the breadth of his CTM registration, as well as the Swiss company’s reputation in their house mark (Assos), the Appeal Court found both that a likelihood of confusion did exist and that the UK company’s use of its trade mark (Asos) did dilute the distinctive character of the CTM for Assos.
At this point, the Swiss company must have thought that their number had come up in the lottery. However, life is rarely so simple. It was at this juncture that the Appeal Court turned to the “own name defence” that had been raised by Asos.
Article 12(a) of the CTM Regulation reads as follows:

A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:

his own name and address; …

Provided he uses them in accordance with honest practices in industrial and commercial matters.

It was accepted by the Appeal Court that the defence under Article 12(a) is available to legal persons, that is to both companies as well as individuals. On the facts before them, the Court of Appeal also found that

•    The trade mark Asos had been adopted honestly by the internet retailer (as an acronym of their former name As Seen On Screen);

•    The UK company’s house mark had also been adopted in ignorance of the Swiss company’s earlier mark, Assos;

•    There had been no effective steps taken to clear the trade mark Asos (that is no checks of relevant trade mark registers had been conducted) prior to its adoption as a house mark;

•    After the legal proceedings had begun, the internet retailer had removed certain goods from its website in order to reduce the chance of any confusion occurring between its Asos branded goods and the goods sold by the Swiss company under its Assos trade mark.

Considering this factual background in the round, the Court of Appeal (by a 2-1 majority) found that the trade mark Asos had been chosen honestly. Further, the UK company had not run its business in a way that would compete with Assos unfairly. Finally, there 

was, as the High Court judge had noted, no evidence of confusion amongst relevant consumers. Taking all of this into account, the Appeal Court ruled that the UK company could rely on the provisions of Article 12(a) and could therefore continue to use its house mark, Asos.

Having dealt with the issue of trade mark use, the Appeal Court then turned to the attack on Asos’ UK trade mark registration. They again overturned the High Court decision to find this registration valid.


Unlike the judge at first instance who had considered the actual use of both marks in the past, when considering the matter, the Appeal Court ruled that the comparison should be between the notional and fair use of each mark in relation to their respective specifications of goods/services. On that basis, the Court of Appeal found that there was a likelihood of confusion and that the UK trade mark registration for Asos was therefore invalid for goods in classes 3 and 25, as well as related services in class 35.

Comment

When the own name defence is invoked by an individual trading in an honest way alongside an earlier trade mark owner, there may be some justification for its existence. After all, we are all given our names by our parents and most of us choose to bear that burden throughout our lives. Thus, if an individual called Henry Samuel opened a jewellery shop in London and took care to distinguish his services from those provided by the more famous jeweller H. Samuel, there may be some justification for allowing him to continue. If he changed his trading style to H. Samuel however, then he could, and indeed should, expect trouble from his larger competitor.

When it comes to an own name defence for company names, and their associated house marks, however, the situation is, in the writer’s view, rather different. A company is not given its name, it chooses it. Good business practice also requires that it should conduct at least a rudimentary check of the appropriate trade mark registers before commencing use. This is why the success of the own name defence in the Asos/Assos case is, in the writer’s opinion, rather more difficult to justify. It is no surprise to learn that this Appeal Court decision is almost certain to be appealed further to the UK Supreme Court.

It is also probably why, when the CTM Regulation is amended, probably in 2016, the own name defence for companies and their names seems set to disappear. Under Article 12 of the new Regulation, the defence will only apply to a “natural person” who trades honestly. On that basis, if the new Regulation had been in force when Assos brought its case, the Appeal Court should have ruled entirely in favour of the Swiss specialist clothing house.

Having said that, the above case does illustrate an important issue that should concern those involved in trade mark practice. That is the significant difference between what the market can tolerate when it comes to the coexistence of very similar trade marks and what trade mark tribunals, especially in OHIM and the European Court, think it can tolerate.

An earlier dispute between the same protagonists, in which the Swiss company successfully opposed a CTM application for Asos, went up to the European Court of Justice (C-320/14). At every stage, the two marks were, perhaps not surprisingly, found to be highly similar, whilst the actual coexistence of the two marks in much of the EU market was dismissed because it was not “peaceful”. The various trade mark actions between the two parties were seen as evidence of this lack of “peace”.

And yet, the two marks do coexist in the market, and have done so for over 10 years, apparently without any actual confusion. In the writer’s view, there is a strong argument (as in the Skype v Sky case discussed elsewhere in this edition of Make Your Mark ), that the trade mark register should reflect the reality of the market.

As far as the Assos/Asos case is concerned, it is suggested that this might be resolved to everyone’s satisfaction if the internet retailer rebranded to an Asos logo that was easily distinguishable from the Assos trading style and paid the Swiss company a significant recompense (many times its (the Swiss company’s) annual turnover might do it). The alternative would be to continue, in the manner of the Budweiser dispute, with a trade mark war that keeps the respective legal advisers happy, but seems to make little sense in commercial terms.