Court of Appeal Upholds CTM Infringement in Specsavers v. Asda, Refers Questions to CJEU

The UK Court of Appeal on January 31 handed down its judgment in Specsavers International Healthcare Ltd and Ors v. Asda Stores Ltd. The court upheld two of Specsavers’ grounds of appeal and has stayed a third pending a reference to the Court of Justice of the European Union.

Background

The appeal arose from the judgment of Mr Justice Mann on October 6, 2010 in which he held that supermarket chain Asda’s marketing campaign for its opticians only infringed Specsavers’ registered trade marks in one aspect, despite the fact that it was clearly Asda’s intention that its marketing campaign should draw comparisons with Specsavers.

The relevant Specsavers registered community trade marks (“CTM”) are the word mark SPECSAVERS and the logo marks:

The Asda logo complained of was:

The logo was also used with the colour scheme inverted. Further, two of Asda’s campaign straplines used in its promotional campaign in conjunction with the Asda logo were “Be a real spec saver at Asda” (“Strapline 1”) and “Spec savings at Asda” (“Strapline 2”).

In summary, Mann J found that:

• Asda’s logo did not infringe Specsavers’ CTMs under Articles 9(1)(b) or (c) of the Trade Marks Regulation. Further, although Specsavers’ logo had always been used in the same green colour, its marks were not limited in colour so Specsavers could not enhance the case for infringement by requiring a comparison between the mark with a specific colour and the Asda logo.

• Neither Strapline 1 or Strapline 2 infringed Specsavers’ CTMs under Article 9(1)(b) of the Trade Marks Regulation as in the context in which they were used there was no likelihood of confusion.

• Strapline 1 infringed Specsavers’ CTMs under Article 9(1)(c) of the Trade Marks Regulation because it took unfair advantage of the Specsavers CTMs. However, Strapline 2 did not so infringe.

• The Specsavers registered CTM with the typical Specsavers logo shape but not containing the word Specsavers (the last Specsavers CTM shown above) should be revoked for non-use because the shape had never been used in the business as a logo by itself, only in combination with the word Specsavers (“the revoked CTM”).

Court of Appeal

Specsavers appealed against the findings of non-infringement and the revocation of the revoked CTM. Asda cross-appealed against the finding that Strapline 1 infringed Specsavers’ CTM.

The Court of Appeal judgment provided by Kitchin LJ, held as follows.

Article 9(1)(b) Trade Marks Regulation

Mann J’s approach to the question of the likelihood of confusion arising under Article 9(1)(b) was entirely correct. The average consumer would see the signs “spec saver” and “spec savings” in the context of the straplines and the other materials on which they were used as a whole, and they should be considered on that basis. Thus the straplines and Asda’s logo were not likely to cause confusion or association with Specsavers’ CTMs and there was no infringement under Article 9(1)(b).

Article 9(1)(c) Trade Marks Regulation

Strapline 1 was “intended to bring Specsavers to mind and to convey superiority in terms of value, and superiority or parity in the areas of range and professionalism, and it has done so in a manner which does not involve an objective comparison of verifiable and representative features of the parties’ goods or services.” Therefore Mann J was correct in finding that it infringed Specsavers’ CTMs.

Strapline 2 also used the concept of Specsavers as a value provider in order to give Asda a marketing advantage. Mann J erred in focusing too much on the differences between the two straplines which in reality were not significant. Therefore Strapline 2 also infringed Specsavers’ CTMs under Article 9(1)(c).

When looking at the Asda logo and the Specsavers signs in isolation the link between them (even taking into account their respective green colours) was weak, and Mann J was entitled to reach this view, particularly in light of the difference in wording. However, Mann J gave no judgment on the case based on the cumulative effect of the Asda logo and the straplines. Due to the association of the Asda logo and the straplines through the marketing campaign, the Court of Appeal was satisfied that the use of the Asda logo was such as to create a link with the Specsavers logo in the mind of the average consumer. This link conferred an unfair advantage on Asda and caused the Asda logo to infringe the Specsavers logo marks under Article 9(1)(c).

Questions Referred to the CJEU

In relation to the revoked CTM, the Court of Appeal considered that, due to conflicting case law, it required guidance from the CJEU on the issue of what constitutes use of a graphic device for the purposes of the Trade Marks Regulation. The questions asked were:

• “A.  Where a trader has separate registrations of Community trade marks for:
  •  (i)  a graphic device mark;
  • (ii)  a word mark;
•     and uses the two together, is such use capable of amounting to use of the graphic device mark for the purposes of Article 15 of Regulation 40/94? If yes, how is the question of use of the graphic mark to be assessed?
•  B.  Does it make a difference if:
  •  (i)  the word mark is superimposed over the graphic device?
  • (ii)  the trader also has the combined mark comprising graphic device and word mark registered as a Community trade mark?
•  C.  Does the answer to A or B depend upon whether the graphic device and the words are perceived by the average consumer as:
  •  (i)  being separate signs; or
  • (ii)  each having an independent distinctive role? If so, how?”

A further issue that the Court of Appeal sought guidance on was the permissibility of taking into account the enhanced reputation that Specsavers have in the colour green. This also raised a secondary issue because Asda’s logo was the standard colour green used for much of its branding so Asda would have its own reputation in that colour.

The further questions were:

• “D.  Where a Community trade mark is not registered in colour, but the proprietor has used it extensively in a particular colour or combination of colours such that it has become associated in the mind of a significant portion of the public (in a part but not the whole of the Community) with that colour or combination of colours, is the colour or colours in which the defendant uses the sign complained of relevant in the global assessment of:
  •  (i)  likelihood of confusion under Article 9(1)(b); or
  • (ii)  unfair advantage under Article 9(1)(c) of Regulation 40/94? If so, how?
•  E.  If so, is it relevant as part of the global assessment that the defendant itself is associated in the mind of a significant portion of the public with the colour or particular combination of colours which it is using for the sign complained of?”

Comment

The test for unfair advantage that was applied by Mann J was considered by many to be too restrictive at the time of the judgment so it perhaps comes as no surprise that the Court of Appeal has upheld two of Specsavers’ grounds of appeal and stayed a third pending a reference to the CJEU. The fact that the Court of Appeal focused on Asda’s clear intention to target and parody Specsavers as a factor in finding an unfair advantage demonstrates the risks in launching a marketing campaign that centers on references to a competitor’s trade marks.

It will be interesting to see how the CJEU responds to the questions that have been raised concerning use of a graphic device and how it distinguishes between separate use and use as one mark. In relation to references D and E, Kitchin LJ’s provisional view that acquired distinctiveness of a mark through use of a particular colour scheme may be taken into account is a sensible one considering that acquired distinctiveness through use is a relevant factor when considering the validity of trade marks.