Trademark - Infringement - Passing off - Confusion

Fine & Country Ltd and other companies v Okotoks Ltd and another company: ChD (Mr Justice Hildyard): 31 July 2012

The claimant companies were in the business of providing services to estate agents, operating under and licensing to independent estate agencies the use of the name and logo ‘Fine & Country’ (F&C).

The claimants provided a marketing umbrella and vehicle for the various independent estate agency businesses that had taken on licences. Under the licence, licensees were entitled to market properties in the upper quartile of the market under the F&C brand. The F&C brand became and remained well known to members of the public and the trade, especially those interested in the sale and purchase of domestic properties at the upper end of the market. The F&C name and device was a UK registered trademark and community trademark (the F&C marks).

The defendants were companies in a group which operated a number of national estate agency brands, including ‘haart’ and ‘fine’. In 2007, the ‘fine haart’ brand was launched, but the defendants subsequently adopted new branding under the name and logo ‘FINE’ (the defendants’ mark). The defendants’ mark, like the F&C mark, was in capitals, with a font with serifs, gold underlining of the word, and a strapline which included the word ‘country’.

The claimants issued proceedings claiming that as a result of the extensive use, advertisement and publicity made of the F&C name and logo by the claimants and their licensees, the F&C marks had acquired a reputation such that the provisions of section 10(2) & (3) of the Trade Marks Act 1994 and article 9(1)(b) & (c) of Council Regulation (EC) 40/94 (on the community trademark), as amended (replaced by Council Regulation (EC) 207/2009 on the community trademark (OJ 2009 L78, p1)) (the regulations) applied. Further, a valuable goodwill and reputation was attached to the F&C name and logo, and such goodwill and reputation belonged to the claimants.

The claimants submitted that the result of the defendants adopting the defendants’ mark and use of the name ‘Fine’ had been very substantial confusion among members of the public and those involved in the property business, that the defendants were passing off or attempting to pass off their services as services of, or connected with, the claimants’, and that the first defendant was infringing the trademarks and the second defendant had procured or conspired with it to do so.

Accordingly, the claimants sought injunctive and remedial relief. The defendants submitted that the F&C marks and the defendants’ mark were descriptive, and that there was no likelihood of confusion or deception such as to find a claim for passing off. Further, the defendants sought revocation of the F&C marks on the ground that they were deceptive.

The issues for determination were, inter alia, first, whether the claimants had established the necessary elements for their claim in passing off, namely, goodwill or reputation, a misrepresentation, and damage or its likelihood. The defendants submitted, inter alia, that any goodwill which had accrued, had accrued to the licensees and not to the claimants; the goodwill had related to and was developed in the course of the licensees’ businesses as estate agents, and not the claimants’ business in licensing the use of the F&C brand and providing the other facilities. Second, whether the F&C marks were liable to revocation or were invalid.

The defendants submitted, inter alia, that the F&C marks were devoid of any distinctive character and/or consisted exclusively of indication which might have served to designate the kind of quality of services, and accordingly breached section 3(1)(b) and (c) of the act and article 9(1)(b) and (c) of the regulations. Further, the defendants contended that as a consequence of the manner in which the licensees had used the marks, they had become deceptive as to their origin and had not been used with the consent of their true owner, namely the first claimant. Third, whether there had been infringement under section 10(2) and/or section 10(3) of the act and article 9(1)(b) and/or article 9(2) of the regulations.

The court ruled: (1) The claimants’ goodwill had, at least in substantial part, been generated by the services and brand provided by the claimants and had accrued to the claimants as the source of those services and that brand. The claimants had developed an attractive force which had brought custom to the services that they had offered and the brand that they had made available on licence. It had been that attractive force that had enabled the claimants to charge significant licence fees.

Accordingly, the claimant had plainly shown goodwill accrued to them such as to have maintained a claim in passing off. The evidence adduced by the claimants had been indicative of confusion, although part of it had not been compelling of it. However, the defendants had decided to ‘live dangerously’; the risk of confusion had clearly been present, and the defendants had appreciated it even if they had thought that they had done enough to have avoided deception. The defendants had been well aware of the resemblance between the F&C marks and the defendants’ mark and had been aware of the possibility that customers would have mistaken one for the other.

The newly branded business of the defendants had been intended to compete directly with F&C, and obtained for the defendants’ local agencies the same kind of up-market business that the claimants’ brand had secured for its licensees, using a logo so designed as to carry a real risk of reasonably foreseeable result, of which the defendants had been aware, that customers might have assumed it to have been connected with, or a new version of, the claimants’ brand and logo. Therefore, the defendants’ brand had been calculated to put customers in mind of the F&C brand and have assumed a connection between the two.

The evidence as a whole had been consistent with potential customers going beyond wondering and into making false assumptions; and that had been such as to cross over to deception, even if it had not been so deep-rooted that it could not have been dispelled or corrected. The similarities between the F&C marks and the defendants’ mark had been confusing and deceptive and/or had been likely to confuse and deceive.

Erosion and damage to the claimants’ business had been likely in consequence. The licensing operations, conducted by the claimants and the other facilities and products they had made available, had generated goodwill which the claimants, as its owners, had been entitled to protect. Even if support in the evidence had not been strong, it had been, in the round, strong enough, and it had been consistent with, and indeed supportive of, that assessment.

Accordingly, on the balance of probabilities, if the defendants were not restrained, a substantial number of potential customers or licensees of the claimants would have been misled into dealing with the defendants in the belief that they had been dealing with the claimants. It had followed that the claimants had demonstrated the required ingredients of reputation/goodwill, deception/confusion and damage (see [71], [72], [112], [177], [200], [203], [204], [286] of the judgment). The claimants’ common law claim in passing off would succeed (see [204], [286] of the judgment).

(2) The F&C marks had been, on registration, and had remained, sufficiently distinctive to have warranted and continued to have warranted registration. The marks had recognisable and recognised separate existence apart from the descriptive and laudatory nature of the words themselves. The words in that context had called to mind the relevant business, not their semantic meaning, in the manner and context in which they had appeared; they had served to identify and distinguish the business.

Further, the consent of the registered proprietor of the F&C marks, if not express, had plainly been implicit, and had been formally ratified. All parties to the various contractual arrangements had made clear and confirmed their consent. The defendants had not established that the F&C marks were not being used by or with the consent of the proprietor, namely the first claimant.

Nor had the defendants established that the use made of the F&C marks had rendered them deceptive as to trade origin and they had failed to show any grounds for a declaration of invalidity, or for revocation, of the F&C marks and their claim would accordingly be dismissed (see [223], [231], [286] of the judgment). Accordingly, the defendants’ claims for declarations of invalidity and revocation of the claimants’ marks had not been well founded (see [237] of the judgment).

(3) Having already found, in the context of the claim for passing off, confusion and deception sufficient to have made good that claim, infringement of article 9(1)(b) and section 10(2) had necessarily followed. However, in addition, as a matter of overall impression, the defendants’ mark and the F&C marks had been sufficiently similar to have likely to have led, and had led, to confusion on the part of the average customer. In particular, the same font, the gold underlining, the capitalisation, and the overall impression created by the two marks had made it all too easy to have mistaken the one as the other, at least when the two had not been laid out together for simultaneous comparison.

The two marks had been easily confused. Further, even had the evidence fallen short of confusion or deception, there would nevertheless have been confusion. The imitation in the defendants’ mark of the first part of the claimants’ name, including the font, capitalisation and underlining alone and in conjunction with the use of the word ‘country’ in the strapline and elsewhere had led to an unjustified association with the claimants’ business.

There had been unfairness in the intentional adoption of a sign which the defendants had well appreciated had been plainly similar in appearance to the F&C mark. Accordingly, the claimants had establish infringement of the F&C marks in terms of article 9(1)(b) and 9(1)(c) of the regulations and, correspondingly, of section 10(2) and (3) of the act (see [246], [247], [250], [264], [267], [286] of the judgment). The elements of a successful claim for breach of articles 9(1)(b) and (c) of the regulations and section 10(2) and (3) of the act had been established (see [274], [286] of the judgment).

Michael Hicks QC (instructed by Wallace) for the claimants; Mark Platts-Mills QC and Jessie Bowhill (instructed by Manches) for the defendants.