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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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Whither the Collective Mark

Traders own trademarks, associations own collective marks. The former distinguish the goods of one trader from those of another, the latter the goods of members from those of non-members. So the conventional thinking goes. In fact, however, the law has been evolving since the introduction of collective marks at UK and Community level in 1994, and a recent decision of the Intellectual Property Enterprise Court (The National Guild of Removers and Storers Ltd. v Milner [2014] EWHC 670 (IPEC) ) casts doubt on the continuing role of collective marks in the brand landscape.


​The clear view emerging is likely to be welcomed by associations facing the choice between trademark protection and the more onerous requirements of collective mark registration.

The Guild and Its Marks
The claimant was a trade association of businesses in the removal and storage area. Its logo was a registered UK trademark (no. 2425258), and membership entailed permission to use the Guild’s logo in advertising.

The defendant (Mr Milner) was a former member of the Guild who, after his membership came to an end, continued to use the Guild’s logo in advertising. The Guild sued for trademark infringement and passing off.

Mr Milner counterclaimed for revocation and invalidity of some of the Guild’s trademark registrations on the basis that they had been applied for in bad faith, because the marks were always intended to be used as collective marks, denoting membership of an association, rather than as trademarks. Consequently, the Guild’s declarations on the two application forms that there was a bona fide intention to use the marks as trademarks was therefore false. Moreover, Mr Milner cast aspersions on the claimant’s motives, noting that filing for trademarks instead of collective marks had allowed the claimant to evade the additional collective mark fees and the drafting and filing of regulations governing use of the collective marks. 

As the marks had always been used as collective marks rather than as trademarks, the defendant further submitted that the claimant’s registrations were also vulnerable to cancellation for non-use.

Collective Marks, Reconsidered
The UK-IPO’s published practice since 2001 had been to object to applications to register the same mark as both a trademark and a collective mark in the same ownership. 

Dual status would mean that the mark could not be regarded as capable of distinguishing goods or services of members of an association from those of non-members, since it was also to be used to distinguish trade origin as an ordinary trademark. The same mark in use as both a trademark and a collective mark would, moreover, be liable to deceive the public as regards the character or significance of the mark.

Since the IPO’s practice was published in 2001, however, the Courts have been busy giving nuance to the formerly clear distinction between what trademarks and collective marks signified. Notably, in Scandecor Development AB v Scandecor Marketing AB ([2002] FSR 7), the House of Lords observed that “when [consumers] see goods to which a mark has been affixed, they understand that the goods have been produced either by the owner of the mark or by someone else acting with his consent.” 

This recognition of modern licensing practices and consumer expectations was, while not directly on the point, important in the IPEC’s findings in National Guild v Milner. The judge considered that “the direction of travel” in the development of trademark law in the world of modern commerce meant that trademarks still carried out a trademark function if they indicated that goods or services were produced by someone licensed to use the mark. Hitherto this had been the preserve of collective marks. Now, however, there was little to distinguish them. 

In this case, the Guild contended that it had filed for the marks as trademarks rather than collective marks in good faith. It gave evidence that it had contacted the IPO before filing the applications explaining how the marks were to be used, and that based on the IPO’s advice it had filed for trademarks. The Guild’s evidence was that it knew nothing of collective marks and would have followed whatever advice the IPO had given, and that the additional fee for collective mark registration would not have deterred it had the IPO recommended that course of action. It did not, however, and the Guild therefore applied for the marks as trademarks. 

Based on this evidence, the judge declined to find that the Guild had acted in bad faith when filing the applications. 

Moreover, since, in the Court’s view, use of the marks to denote the goods or services of licensees, even non-exclusive licensees, was use of a trademark (as opposed to merely being collective mark use), the defendant’s non-use challenge also failed.

Comment
Reading this judgment gives the strong feeling that collective marks have outlived their usefulness.

The judge himself found “it hard to think of a circumstance in which an association entitled to apply for a collective mark could not avoid the cost and inconvenience” of paying the collective mark fees and drafting regulations governing use “by applying instead for a trade mark.” However, “whatever the legislative intent at the time of drafting, the view on how a trade mark may be used has been updated and has altered.” 

In some ways this is a bold decision since, as the judge noted, the conclusions drawn rendered the statutory provisions relating to collective marks “largely pointless”. However, those provisions were drafted before the House of Lords decided Scandecor and the law of trademarks has, in line with modern commerce, moved on.

It would be premature to declare collective marks moribund on the back of this single decision, albeit at High Court level. However, the reasoning in it is persuasive, and there is good reason for associations now to reconsider their options when looking to protect elements of branding. Collective mark protection is more onerous and costly to secure than trademark registration, and there seems little in fact to distinguish between what trademarks and collective marks actually signify in trade. This decision suggests that associations should have little to fear in applying for simpler and cheaper trademark protection instead. The development of commerce and the law is on their side.

This decision should be welcomed by trade and industrial bodies, chambers of commerce, clubs and other associations with names and logos that members are permitted to use in marketing their own goods and services. For those who have not protected these elements of branding, now is the time to evaluate whether and how best to protect them. 

For those who have protected collective marks already, now is a good time to review the portfolio and to consider whether additional, and perhaps broader, trademark protection may also be advisable.

Whither collective marks, then, following this decision? There is no indication that they are going away. But they may now be entering their sunset years. The dusk for them is, however, the dawn for others, and associations may benefit from increased opportunities for trademark protection in respect of licensed branding.

Traders own trademarks, associations own collective marks. The former distinguish the goods of one trader from those of another, the latter the goods of members from those of non-members. So the conventional thinking goes. In fact, however, the law has been evolving since the introduction of collective marks at UK and Community level in 1994, and a recent decision of the Intellectual Property Enterprise Court (The National Guild of Removers and Storers Ltd. v Milner [2014] EWHC 670 (IPEC) ) casts doubt on the continuing role of collective marks in the brand landscape.

The clear view emerging is likely to be welcomed by associations facing the choice between trademark protection and the more onerous requirements of collective mark registration.

The Guild and Its Marks
The claimant was a trade association of businesses in the removal and storage area. Its logo was a registered UK trademark (no. 2425258), and membership entailed permission to use the Guild’s logo in advertising.

The defendant (Mr Milner) was a former member of the Guild who, after his membership came to an end, continued to use the Guild’s logo in advertising. The Guild sued for trademark infringement and passing off.

Mr Milner counterclaimed for revocation and invalidity of some of the Guild’s trademark registrations on the basis that they had been applied for in bad faith, because the marks were always intended to be used as collective marks, denoting membership of an association, rather than as trademarks. Consequently, the Guild’s declarations on the two application forms that there was a bona fide intention to use the marks as trademarks was therefore false. Moreover, Mr Milner cast aspersions on the claimant’s motives, noting that filing for trademarks instead of collective marks had allowed the claimant to evade the additional collective mark fees and the drafting and filing of regulations governing use of the collective marks. 

As the marks had always been used as collective marks rather than as trademarks, the defendant further submitted that the claimant’s registrations were also vulnerable to cancellation for non-use.

Collective Marks, Reconsidered
The UK-IPO’s published practice since 2001 had been to object to applications to register the same mark as both a trademark and a collective mark in the same ownership. 

Dual status would mean that the mark could not be regarded as capable of distinguishing goods or services of members of an association from those of non-members, since it was also to be used to distinguish trade origin as an ordinary trademark. The same mark in use as both a trademark and a collective mark would, moreover, be liable to deceive the public as regards the character or significance of the mark.

Since the IPO’s practice was published in 2001, however, the Courts have been busy giving nuance to the formerly clear distinction between what trademarks and collective marks signified. Notably, in Scandecor Development AB v Scandecor Marketing AB ([2002] FSR 7), the House of Lords observed that “when [consumers] see goods to which a mark has been affixed, they understand that the goods have been produced either by the owner of the mark or by someone else acting with his consent.” 

This recognition of modern licensing practices and consumer expectations was, while not directly on the point, important in the IPEC’s findings in National Guild v Milner. The judge considered that “the direction of travel” in the development of trademark law in the world of modern commerce meant that trademarks still carried out a trademark function if they indicated that goods or services were produced by someone licensed to use the mark. Hitherto this had been the preserve of collective marks. Now, however, there was little to distinguish them. 

In this case, the Guild contended that it had filed for the marks as trademarks rather than collective marks in good faith. It gave evidence that it had contacted the IPO before filing the applications explaining how the marks were to be used, and that based on the IPO’s advice it had filed for trademarks. The Guild’s evidence was that it knew nothing of collective marks and would have followed whatever advice the IPO had given, and that the additional fee for collective mark registration would not have deterred it had the IPO recommended that course of action. It did not, however, and the Guild therefore applied for the marks as trademarks. 

Based on this evidence, the judge declined to find that the Guild had acted in bad faith when filing the applications. 

Moreover, since, in the Court’s view, use of the marks to denote the goods or services of licensees, even non-exclusive licensees, was use of a trademark (as opposed to merely being collective mark use), the defendant’s non-use challenge also failed.

Comment
Reading this judgment gives the strong feeling that collective marks have outlived their usefulness.

The judge himself found “it hard to think of a circumstance in which an association entitled to apply for a collective mark could not avoid the cost and inconvenience” of paying the collective mark fees and drafting regulations governing use “by applying instead for a trade mark.” However, “whatever the legislative intent at the time of drafting, the view on how a trade mark may be used has been updated and has altered.” 

In some ways this is a bold decision since, as the judge noted, the conclusions drawn rendered the statutory provisions relating to collective marks “largely pointless”. However, those provisions were drafted before the House of Lords decided Scandecor and the law of trademarks has, in line with modern commerce, moved on.

It would be premature to declare collective marks moribund on the back of this single decision, albeit at High Court level. However, the reasoning in it is persuasive, and there is good reason for associations now to reconsider their options when looking to protect elements of branding. Collective mark protection is more onerous and costly to secure than trademark registration, and there seems little in fact to distinguish between what trademarks and collective marks actually signify in trade. This decision suggests that associations should have little to fear in applying for simpler and cheaper trademark protection instead. The development of commerce and the law is on their side.

This decision should be welcomed by trade and industrial bodies, chambers of commerce, clubs and other associations with names and logos that members are permitted to use in marketing their own goods and services. For those who have not protected these elements of branding, now is the time to evaluate whether and how best to protect them. 

For those who have protected collective marks already, now is a good time to review the portfolio and to consider whether additional, and perhaps broader, trademark protection may also be advisable.

Whither collective marks, then, following this decision? There is no indication that they are going away. But they may now be entering their sunset years. The dusk for them is, however, the dawn for others, and associations may benefit from increased opportunities for trademark protection in respect of licensed branding.