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Published: Fri, 02 Feb 2018
“In our view Baby Dry brought about a considerable change in trade mark law, and, in turn, Doublemint signals a volte-face, a return to some kind of orthodoxy. If this is right, given the variations in the approach taken by the ECJ, all precedential authority needs to be treated with care. “
With reference to the relevant case law, discuss the extent to which this statement accurately reflects the current legal position regarding ‘descriptive’ trademarks.
This discussion will begin by exploring the nature of the Trademark and if one is denied a Trademark what is the alternative route, i.e. Passing Off. It will compare and contrast the benefits of Trademarks over Passing Off in the UK and argue that it is necessary that Trademark law need to combine some elements of the UK’s Passing Off in order to broaden its expanse and ensure that long held logos can be Trademarks, such as Doublemint. It will then discuss the problems encountered in Character Merchandising in the UK and explore the similarities between this area and Descriptive Trademarks creating a more persuasive argument for reform. There needs to be clarification as there does not seem to be much difference between the descriptive nature of Baby Dry and Doublemint but the decisions were completely different. It will argue that the notion of goodwill should be introduced as an alternative basis for a Trademark because if it were available then famous logos and Trademarks in the US, such as Holly Hobbie and Doublemint, would be granted in the EU and UK through the TMA, which implements the EU Council Directive 89/104/EEC, which relaxes of what can be registered as a trademark.
The main piece legislation that governs trademark protection is the TMA, which implements the a stronger system of protection which is superior to the common law system of passing off; however it is much easier to find a breach because a trademark implies goodwill and a trader in the course of trade. It allows any mark that identifies/distinguishes a business and is a feature that the public recognizes as distinctive to the business and can be graphically displayed. This includes:
�?� Letter/number combinations
�?� Logo marks and business names
�?� Vehicle designs
�?� Shapes but not those of containers
�?� Shop facades – see Macdonalds – Golden Arches
�?� Sound Patterns
Like most of Intellectual Property a trademark is referred to as personal property, which a company/individual can sell, lease, and license. Although the method of approaching a breach of trademark is the same as passing off there are advantages to registration of a trademark. It is easier to prove because there is no need to prove goodwill and reputation as the trademark is registered and this is already defined. The basic premise of actions for trademark breached follows the same rules as passing off, which is defined in the case of Perry v Truefitt , “a man is not to sell his own goods under the pretence that they are the goods of another trader.” Therefore this creates a scenario in tort law that allows for traders to sue other traders who use the characteristics specific to their product. The case of Reckitt & Colman Products v Borden the elements passing off were as following:
�?� Existence of claimant’s goodwill
�?� Damage or likely damage
However some judges still prefer the elements of the Spalding Case . Therefore the case of Consorzio de Proscicuto di Parma v Marks & Spencer compromised between the two and defined passing off in the three elements of Reckitt, but consequential damage had to be present. This formula in Marks & Spencer Case was approved in Hodgkinson and Corby Ltd v Wards Mobility Services . The tort of passing off also does not apply to the honest use of one’s name in the name of their business as held in Wright, Layman & Chinley Ltd v Wright . Therefore to be a successful case of passing off the appropriate elements have to be fulfilled and it cannot be the honest use of one’s own name. In a trademark breach the elements of misrepresentation and damage are the only characteristics which are easier to prove as the following consideration of elements will consider.
The mere copying of a name, style, design or characteristic is not enough for a successful case of passing off, there must be goodwill associated with the reputation. In the case of Reddaway v Banham it was determined that reputation comes through consistent use. The question of time that this reputation has to be in consistent use is dependant on the type of business, for example in the case of Country Sound Plc v Ocean Sound Plc it was decided that goodwill can be acquired through six months especially because this is a case of media and wide coverage is determined by its type of business. However it is not always the case of only media forms or large companies acquiring goodwill quickly, for example in the case of Stannard v Reay it was determined that three weeks was sufficient to create goodwill for a Mr Chippy on the Isle of Wight, because it was a van that travelled the whole Island on a regular basis. The date that goodwill is required for a successful passing off case is the date that the legal action was initiated, as per Premier Luggage and Bags Ltd v Premier Company (UK) Ltd . It has also been determined that goodwill can exist when the product has not been made available to the public; as long as a sufficient number of people know about the product, e.g. through media broadcast . Therefore illustrating that it is important how the goodwill became associated with the product, e.g. through an advertising campaign as in the case of Whitworth Foods Ltd v Hunni Foods (International) Ltd . In some cases the goodwill of a name may be associated with both the goodwill of both the defendant and the claimant, e.g. in the case of Provident Financial plc v Halifax Building Society an injunction was allowed because the Halifax was planning to go into business of motor insurance, which the Provident already conducted under the name of Halifax, which also shows that goodwill can be associated with a place. However in respect to some descriptive words no goodwill can be associated, as with the case of Office Cleaning Services Ltd v Westminster Windows and General Cleaners Ltd . This is usually so when there is no distinctiveness in the word, such as oven chips or Chicago pizza ; however if there is a case when the word can be identified as distinctive then protection through passing off was allowed, e.g. the case of Antec International Ltd v South Western Chicks (Warren) Ltd .
Goodwill may also be tied to a geographical range, for example the case of Maxim’s Ltd v Dye proved that the range of goodwill can transcend borders, i.e. the restaurant Maxim’s in Paris was held to have international fame and goodwill therefore it was a case of passing off to open a restaurant called Maxim’s in England. Other examples of transnational goodwill would be McDonalds, Levi Strauss and Esso. This case was followed in the Indian case of Calvin Klein Inc v International Apparel Syndicate . The general rule held in English courts with respect to companies and goodwill is that a trader must show that at least a customer would be misled that the offending company is associated with the petitioning company’s goodwill. The case of Panhard et Levassor SA v Panhard Levassor Motor Co Ltd is an illustration of this because even though the French car manufacturer had no business established in England it was held that goodwill existed there. However the Crazy Horse Saloon Case held that there had to business taking place in the UK, yet this has been heavily criticized especially in an increasingly global world and foreign cases are following the Panhard Case as this makes more sense in the modern world of media and the world wide web ; therefore creating a very broad test for the existence of goodwill. As this discussion to show what constitutes goodwill is broad and in many cases it is hard to prove and the case law is contradictory. It is much simpler to go through a simple legal process of registration, as set out in statute; as well as have a mediator of disputes such as the Trademark register. In the UK the problem of local is solved, i.e. they apply throughout the EU if a Community Trademark and nationally if a UK Trade Mark. Also it allows some protection of where one wants to market their trade mark goods. Therefore the ideal approach is a trademark rather than passing off, because the hardest criterion of goodwill is surpassed. The following two criteria are applicable in Trademark and Passing Off actions and as this discussion will illustrate are much easier to prove.
This is the second element of the modern approach to passing off and the first element of a Trade Mark action whereby the customers are led to believe that the origin of goods is from a company with the associated goodwill, as in the case of the Swiss Chalet Chocolate Bar Case . In order for there to be misrepresentation there has to be a consideration of a number of elements, such as the two companies working in the same industry sector . In the case of HFC Bank Plc v Midland Bank Plc it was illustrated that confusion cannot equate to passing off in isolation there has to be an associated goodwill. It is also held that a non-effective misrepresentation is not actionable for passing off because it has not affected the goodwill of the company . In respect to parodies as long as it is very clear that the parody is not associated with the plaintiff company and the source of the parody can be made clear. Agreement, by lack of initial action, actual or constructive, in an activity will defeat an action of passing off as in the case of Vine Products Ltd v MacKenzie & Co Ltd . This case leads to a second form of passing off other than the straight passing off through misrepresentation of one’s goods as another’s goods. The second type of passing off is imputing that the quality of another’s goods and one’s goods is one and the same, which has been a major case in the area of true and misrepresented Champagne and Advocaat, as with the Spanish Champagne Case or the Erven Warnick Case ; however this has not been isolated to expensive high quality alcohol, e.g. Bristol Conservatories Ltd v Conservatories Custom Built Ltd .
Misrepresentation can also be done through imputing authorisation, i.e. implying authorisation by an appropriate person in the plaintiff company. Intention and fraudulent motives are not necessary for a successful action of passing off and innocence is no defence . There are two more important areas that have to be considered when discussing passing off, which are common fields of activity and post-sale confusion. For there to be a successful action of passing off the traders must be in a similar line of activity, e.g. there is no similarities between a car company and a television company so there is no misrepresentation therefore no passing off . Finally for a passing off action to succeed there must be evidence that customers or ultimate customers have been deceived or, if the defendant’s planned activity were to come to fruition, a real likelihood of confusion. However this confusion must happen at the point of sale and not after sale, e.g. blue putty called Sellotak was not an example of passing off because the blue putty was hidden in the packaging and the producer was easily identified and could not be confused with the Bluetak producers. This makes sense because it would be taking passing off too far if just because an item is the same colour that it could result in a successful action of passing off, where would it stop? Yet as the TMA shows colours can be trademarked therefore this shows that there is further protection; however it is important to show that there was actual misrepresentation. This is much easier with trademarks because if it is being used then it is being misrepresented unless it is:
�?� A person’s own name and address
�?� Indication of kind, quality, quantity, intended purpose, value, geographical origin, time of production or rendering, characteristics of good and services (the colour used for bluetak etc)
�?� The mark is necessary to indicate purpose of product, e.g. BMW spare parts
One can try a case of passing off, but as this comparison shows if there is no breach of trademark, it is highly unlikely that there is going to be a successful passing off case.
Damage to goodwill of the real possibility of is an essential factor of a successful case, as determined in the Erven Warnik Case. This damage could result from; lost sales because the person is buying the other product under the misrepresentation that it is the plaintiff company’s product ; the defendant’s product is inferior and the loss of the plaintiff company’s goodwill because there is a real belief that the product is the plaintiff company’s ; and erosion of the name because the exclusivity is no longer present . Therefore the plaintiff must be able to show that there has been or will be substantive damage to his company’s goodwill, mere speculation will not suffice of the moron in a hurry . An example is the Morgan Grampian plc v Training Personal Ltd case where it was held that using a formula in a title of a series of articles and copying it suffices damage to goodwill. It has also been held the use of a company name for an internet address may amount to passing off, e.g. Harrods Ltd v UK Network Services Ltd and the extreme case which was actual fraud of Marks & Spencer plc V One in a Million Ltd . The damages for Trademark are nominal for the mere use and no damage to goodwill ; the claimant can claim for the profit on every infringing item proving that a sale occurred to a deceived customer ; and special damages covering the fraudulent use of claimant’s Trademark and loss of sales.
The final benefit that Trademarks over Passing Off is that Passing Off supplies a variety of defences, whereas a infringement of a Trademark is an infringement, i.e. there are only exceptions, and damages are payable on the loss occurred. There are defences to passing off which are; a dispute over the ownership of goodwill; the activities have not harmed the plaintiffs goodwill ; passing off is not in the course of a trade plaintiff has no trade interest to be harmed ; there is no goodwill in the disputed area ; honest use of one’s name ; estoppel stops the actions of the plaintiff because they have encouraged the defendant’s actions . The remedies of a successful passing off action are; injunctions; and/or damages or an account of the offending company’s profits. Therefore a Trademark is highly important for a distinguishing mark; however there have been problems of what distinguishing factor is and the following consideration of Character Merchandising, which mirrors the modern problems of descriptive Trademarks.
The Expansion of Trademarks:
Personality merchandising prior to the Talksport Case was seen as a void in English law; however character merchandising such as cartoon characters were respected, e.g. Teenage Mutant Ninja Turtles Case . Therefore Talksport Case brought everything up to date to protect the images of celebrities, which are their trade and where their reputation and goodwill are centred. The application to the law of passing off follows the formula set down in respect to if a trademark or name was being copied. It was argued that this case could not be a passing off case because even though it dealt with endorsements rather than misrepresentation of one trader by another following the case of Elvis Presley TradeMarks ; however this was not held to be so because the trade of Irvine relied in his person and this was classed as a specific characteristic or trademark. Therefore after this was held to be capable of being a passing off case it was recognized that the most recent passing off case dealing with endorsements was the 1947 case of McCullogh v Lewis A May and it was in this case that the controversial element of a common field of activity was central. The notion of common field of activity was introduced in the case of BMA v Marsh . The May Case failed on this point and with respect to most cases dealing with personality merchandising this would be the case, unless one individual was passing themselves off as the other in their specific area of trade. The May Case has blocked the avenue of justice for those individual’s who rely on their image as their income and their trade, therefore under the traditional approach of common field of activity the claim as set by Irvine would have failed.
The common field of activity has become very controversial in recent years, where it has been argued it is not necessary in the law of passing off. This is especially apparent with the expanding of companies and the overlap in conducting their business. The case of May is a very unfair and unbalanced approach to personality merchandising that has successfully created a law that was fair enough to protect the image that is central to the individual’s trade. Therefore if this approach to personality was still valid law there would be no case for a famous person to protect this area that is a key part of their industry. This case did not rule that there was no possibility of identical merchandising in the activities of the two parties because of the obvious business nature and the interest of the defendant in its image to enhance the trade of goods. Therefore in order to ensure that injustices never occur in the future or re-occur in the present, the element of a common field of activity was abolished and a successful action for passing off can occur via traders in different lines of business. In short the Talksport Case it has been understood that the personality is capable of being a trademark or image that is tied to a company’s or individual’s business practice and goodwill. It has ensured that valid cases in this area of law are upheld by eliminating the notion of a common field of activity, which means very little in the modern approach to industry, i.e. personalities and images are used to promote goods over a range of products and to limit to a common field o activity misses the broad spectrum of endorsements. Therefore the approach taken in Talksport is much more appropriate in a very media-orientated society that trademarks can be created and passing off can occur between different industries, which is especially so if an image is associated with beauty and wealth or integrity and honesty over a large range of products. However the Holly Hobbie Trademark has to be heeded as this is a long standing logo internationally; however could not be a Trademark because it could not show strict control of the logo and was denied. This is still good law and therefore in many cases character merchandising will be left to the law of Passing Off. This is going to be the case of Descriptive Trademarks, even in the light of the Baby Dry Case. Therefore leaving longstanding logos, such as Doublemint left to the confused law of Passing Off, i.e. Passing Off is the leftovers of Intellectual Property Law.
Descriptive Trademarks have had similar problems in whether they can be registered as a Trademark, especially since it would be hard to prove in a passing off case as with Character Merchandising. The basic of the TMA holds that a descriptive character can not be a Trademark; however there have been certain Trademarks that have been descriptive but capable of being a Trademark. This is because the rules under the EU Council Directive 89/104/EEC which is incorporated in the TMA does not rule out Trademarks of description exclusively, there is the allowance that if the Trademark is distinctive in nature then it will be awarded Trademark status. This has caused confusion because what is excluded and what is not, i.e. what is distinctive. This is a question that is as hard to show as goodwill in the action of Passing Off. Therefore in the Baby Dry Case the question was if Baby Dry Pamper could be trademarked. The examiner of OHIM and the Court of First Instance said no:
The Examiner’s decision to refuse registration was sustained by the First Board of Appeal of the OHIM which held that BABY-DRY in relation to diapers, whose purpose was to keep babies dry, consisted exclusively of words “which may serve, in trade, to designate the intended purpose of the goods” and that “it was also devoid of distinctive character,” and thereby unregistrable under Article 7(1)(b) and (c) of Regulation No. 40/94. The Court of First Instance affirmed this decision and agreed that BABY-DRY “merely conveyed to consumers the intended purpose of the goods but exhibited no additional feature to render the sign distinctive”.
The ECJ overturned this and ruled that it was distinctive, although was descriptive therefore could be held as a Trademark:
[D]escriptiveness must be determined not only in relation to each word taken separately but also in relation to the whole which they form. Any perceptible difference between the combination of words submitted for registration and the terms used in common parlance of the relevant class of consumers to designate the goods or services or their essential characteristics is apt to confer distinctive character on the word combination enabling it to be registered as a trade mark.
This therefore causes some problems with certainty in English law with what a Trademark is; however in ways it makes the situation simpler in respect to Intellectual Property law. Also as with the problems of character merchandising there are circumstances where there is a distinctive but descriptive Trademark, because baby-Dry most people associate with Pampers and no other diaper company. However the Doublemint Trademark was refused on being descriptive; however in the light of Baby-Dry this makes no sense as Doublemint Gum is distinctive to Wrigley’s and if a Passing Off case was used it would be successful because the associations in the mind of the consumer. This seems to be going back to an orthodox position and creating a system of leftovers, as with character merchandising that makes no sense, i.e. the Holly Hobbie Trademark. The rules that the EU have set have created harmonization; but some decisions are just not making sense, as with the cases concerning character merchandising in the UK. Rather there needs to be an approach that maybe does work with Passing Off a bit better, i.e. it simplifies the notion of goodwill and reputation because both Holly Hobbie and Doublemint are internationally known logos and it seems to defeat the purpose of Trademark law to deny them. It makes sense why critics of the decisions in the USA are calling for US Trademarks to be recognized in the UK:
Chicago-based Wm. Wrigley Jr. Co.’s seemingly never-ending battle to secure a European Union (EU) trademark on its 89-year-old, fabulously successful Doublemint brand proves the point… Mr. Jacobs opined, Doublemint is no more than a descriptive word… But Chicago residents know that there is something pretty special about Doublemint gum, and it transcends the literal meanings of “double” and “mint.” Chicagoans also know that Mr. Jacobs’ parochial view, influential as it is likely to be, stands to do irreparable harm to American businesses that attempt to register their well-known brand names in the EU. Before more damage is done, the Bush administration must promote a treaty to ensure that long-recognized U.S. trademarks are presumed to be protectable in the EU, and that companies with established trademarks in Europe enjoy the same deference here.
Bainbridge, 2002, Intellectual Property 5th Edition, Longman
Lionel Bentley & Brad Sherman,, 2003, Intellectual Property Law, Oxford University Press
Ladas & Parry, 2002, European Court of Justice allows Registration of the Trademark Baby-Dry and defines Distinctiveness can be found at: http://www.ladas.com/BULLETINS/2002/0202Bulletin/EUTrademarkDistinctiveness.html
M. Lane, 2003, European Union continues to gum up US Trademarks can be found at: http://www.marcjlane.com/article/EU%20trademarks%20June%202003.htm
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