Owners of trade mark registrations have the option of opposing an application made by a third party on the basis of their registered rights. Owners of marks with a reputation have the added protection of opposing an application based not only on their registered rights but also on the basis of the reputation that they have gained in that earlier mark and that use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.
It is often difficult to decide whether or not a trade mark owner has a significant enough reputation in a trade mark, and whether they have a real chance of success under Section 5(3) of the UK’s Trade Marks Act 1994.
However, the case discussed below not only clearly outlines the requirements for a successful Section 5(3) claim but also highlights the requirements for an Opponent to bring a claim under the heading of bad faith.
In the present case, UK trade mark opposition decision no. O-227-14, a now dissolved, Welsh company called Fosters Brewing Company Limited (“FBC”) filed a UK trade mark application to register a series of three marks, one of which is shown below:
The UK application claimed “beers, stouts, lager, porter and ales, mineral and aerated waters, non-alcoholic drinks” in Class 32. Unsurprisingly, this application was opposed by S & NF Limited (“SNF”) , the owner of the internationally distributed brand of lager, Foster’s, on the basis of five earlier UK trade mark and Community registrations for marks consisting of or containing an F logo. The opponent claimed to have a reputation in the UK or the Community in respect of each of these earlier marks. In the decision given by the Hearing Officer (Mr Allan James), the following two earlier marks were relied on primarily:
Both of the most relevant earlier UK trade mark registrations (nos. 1459375 and 1149746) covered “beers” in Class 32.
SNF claimed that registration of the Foster Brewing marks would be contrary to Section 5(3) of the 1994 Act because:
1. SNF’s earlier marks have been extensively promoted and advertised;
2. The earlier and later marks are similar, the goods are identical or similar, and this meant that use by FBC of their mark would bring SNF’s marks to mind;
3. FBC would gain an unfair advantage from such a link;
4. If FBC’s goods are inferior, the reputation of SNF in their earlier marks would be tarnished;
5. Use of FBC’s marks would lessen the ability of SNF to create an immediate association with their goods thus diluting the distinctive character of their earlier marks;
6. This dilution would result in a change of economic behaviour on the part of the UK public who would then be less likely to buy SNF’s products;
7. FBC’s marks include a red letter ‘F’ within a blue oval shaped background, which is particularly associated with SNF’s Foster’s lager.
In addition to the Section 5(3) claim, SNF also filed a claim under Section 3(6) of the 1994 Act, namely that the application had been made in bad faith. The main point to note under that claim was that FBC would have known about SNF’s Foster’s and F (logo) branding as well as the success of the Foster’s and F (logo) brands before filing their later UK trade mark application. It was noted, in particular, that FBC had already filed a UK trade mark application (no. 2654723) for a reverseF logo that they had withdrawn following an opposition, again filed by SNF. In addition, SNF claimed that the Director of FBC had, in the past, applied to register various forms of well known marks that belong to third party brand owners without authorisation.
During the course of the present opposition, FBC denied the claims made by SNF, although they did not file any evidence in the proceedings. SNF, on the other hand, did file evidence showing the long-standing use of their F (logo) in relation to beer and related goods as well as their high turnover of, and extensive expenditure on marketing for, Foster’s lager. They also relied on the fact that the Director of the applicant, MrBadisha had been a Director of other companies that were named after well known, third party owned brands e.g. Carling Black Label Limited.
In the decision given by Mr James, the main point to note is the fact that the Opponent had extensively used its F logo mark in a particular colour scheme (a red F with a white surround on a blue oval background), and that this was deemed to be relevant in the finding of similarity. In fact, the Hearing Officer found that, once the colour of the marks was taken into account, “a relatively limited degree of similarity between the Applicant’s marks and the Opponent’s F (logo) (considered as wholes) is sufficient to cause an average consumer of the goods covered by the Applicant’s marks to call the Opponent’s F (logo) to mind”.
Mr James also took into consideration both the reputation that the Opponent has in its F (logo) and the other surrounding circumstances of the case. This enabled him to come to the conclusion that the Applicant intended the marks applied for to take advantage of the reputation of the Opponent’s F (logo). He stated that“there is therefore a risk, which is more than merely hypothetical, that the use of the Applicant’s mark will result in an unfair advantage in the future”.
Mr James then turned to the issue of bad faith. This is generally a difficult ground to establish under UK trade mark practice. A number of hoops need to be jumped through in order to establish this ground of opposition in this country.
When the Hearing Officer reviewed the evidence before him he came to the conclusion that the Applicant clearly knew about the Opponent’s earlier F (logo) when applying to register its marks. He decided that these applications were filed to take advantage of the reputation of the earlier marks. Given that the company name Fosters Brewing Company was adopted and that the marks were intended for use in relation to beers, the Hearing Officer concluded that“it is difficult to think of an honest reason why anyone else would adopt a company name including the word Fosters and Brewing. This …… all points to the current application being part of a plan to imitate the Opponent’s trade name and trade marks in order to gain a commercial advantage for the Applicant … I therefore find that the application was made in bad faith”.
This is a recent decision that shows how extensive use of colours can be useful in protecting your brand. Whilst no specific colour claim was made in the trade mark registrations owned by SNF, they had filed their registrations in colour. This decision serves to reinforce the recommendation that, if a particular colour or colour combination is important, the owner should be encouraged not only to file their mark in black and white but also for that particular colour combination. This would then give the owner the broadest protection possible in the future.
As in this opposition, some detective work should always be undertaken if you are intending to bring a claim of bad faith. Looking into the background of the Applicant’s directors and their possible past activities is usually a good place to start!
If, as in the above case, you can find a preference for the choice of marks or company names that “pay homage” to earlier well known brands, you will have a better chance of persuading the authorities to make a finding of bad faith.