Short-sighted Advertising Campaign by Asda Provides Some Clarification on Community Trade Mark Rights

Specsavers has won the latest round in a high profile case revolving around Asda’s advertising campaign of their in-store opticians. Specsavers appealed to the Court of Appeal following an earlier decision by the High Court arguing that this advertising campaign breached their intellectual property rights by infringing their registered European Community Trade Marks.

The Relevant Legislation

The Community Trade Mark Regulation provides the owner of a Community Trade Mark (CTM) with several exclusive rights. These include the right to prevent unauthorised third parties from using any signs that:

  1. May likely cause confusion to the public because of its identity or similarity to the CTM or because of the similarity of the goods or services covered by the CTM and the sign (Article 9(1)(b) CTM Regulation), or
  2. Are identical or similar to the CTM where use of the sign causes the third party to have an unfair advantage due to the distinctive character or reputation of the CTM (Article 9(1)(c)).

Furthermore, the CTM Regulation provides that where an owner has failed to put the CTM to use for a continuous period of 5 years, a third party can apply for the CTM to be revoked.

Facts

Asda began a marketing campaign in October 2009 to re-launch its optical business. Specsavers initiated proceedings against Asda for infringing their CTM under Articles 9(1)(b) and (c) and for passing off.

Specsavers had registered their name as a CTM and registered a number of variations on their double-ellipse logo mark (including a mark with their name, an unshaded mark with their name and a mark without their name). None of the marks were registered in any particular colour, but generally, Specsavers used the logo in mid-to-dark green.

During their marketing campaign, Asda used two straplines – “Be a real spec saver at Asda” and “Spec saving at Asda,” together with a double-ellipse logo with their name.

The High Court held that Asda had infringed Article 9(1)(b) by using the phrase “be a real spec saver at Asda” as it took unfair advantage of the distinctive character and reputation of the CTM of Specsavers. However, Specsaver’s claims against the second strapline, against Asda’s logos and for passing off were dismissed. Moreover, Asda’s application to have the unshaded and unworded logo revoked was granted.

Specsavers appealed. Asda also cross-appealed against the finding of an infringement under Article 9(1)(b).

Court of Appeal Decision

  1. Allowed Specsaver’s appeal in respect of the allegation the second strapline (“spec saving at Asda”) infringed Article 9(1)(c);
  2. Dismissed Asda’s cross-appeal against the finding that the strapline “be a real spec saver at Asda” infringed the word marks under Article 9(1)(c); and
  3. Allowed Specsaver’s appeal in respect of the allegation that the Asda logo infringed the shaded and unshaded logo marks under Article 9(1)(c).

The judge held that Article 9(1)(c) provided a wider protection for a CTM with a reputation than Article 9(1)(b). The judge found that the straplines used by Asda were visually and conceptually similar to those of Specsavers and that Asda had intended this as a means to show their superiority in terms of value, range and professionalism. As a result, Asda had a marketing advantage that was unfair and obtained without due cause as Asda intended to benefit from the power of attraction to the Specsavers brand and exploit Specsavers’ marketing efforts.

In relation to Asda’s logo, the court consider all relevant circumstances, including the reputation attached to the Specsaver’s CTM, the fact the goods were identical and that Asda targeted Specsavers to show their superiority. As such, the use of the logo created a link with the Specsavers logo in the minds of the average consumer, this therefore conferred an advantage on Asda and this advantage was unfair and without due cause.

  1. Dismissed Specsaver’s appeal that both straplines and the Asda logo infringed Article 9(1)(b)

The court held that when assessing whether there is a likelihood of confusion arising from the use of a sign under Article 9(1)(b), the court must view this from an average consumer’s perspective, taking into account all circumstances that are likely to operate in the consumer’s mind and the likely impression the sign will make on him.

It was held that the law was unclear in this area, especially in relation to where logos were registered in black and white but had acquired a distinctive character (i.e. in this case dark green as used by Specsavers) and whether this could provide enhanced reputation to the logo CTM. The Court of Appeal therefore referred the following questions to the European Court of Justice for guidance on this issue:

1. 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?

2. 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?

  1. In relation to Asda’s application to revoke the wordless logo mark and in respect of the allegation that Asda’s logo infringed this mark under Articles 9(1)(b) and 9(1)(c), the Court of Appeal referred further questions to the European Court of Justice:

3. Where a trader has separate registrations of Community trade marks for:

  1. a graphic device mark;
  2. 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?

4. Does it make a difference if:

  1. the word mark is superimposed over the graphic device?
  2. the trader also has the combined mark comprising graphic device and word mark registered as a Community trade mark?

5. 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?

Comment

This judgment has helped to clarify this area of law, and some key legal points have arisen:

  • A court must consider the context and circumstances in which use has been made of a CTM when assessing the likelihood of confusion to a consumer.
  • Furthermore, a court can take into consideration the intention of the defendant when using a sign to associate itself with the values/reputation of another CTM registered owner.
  • European trade mark law is not clear on whether a mark registered in black and white is registered in respect of all colours, or whether the use of a graphic mark and a word mark together is sufficient to qualify as use of each of the marks separately and therefore preventing them from being revoked on non-use grounds.

Overall, brand owners will certainly welcome this decision, particularly on the logo issue as the judge emphasised the importance of not obtaining an unfair advantage by organisations basing their advertising campaigns on the reputation of other CTM-registered organisations. The decision, therefore becomes a warning for organisations about the dangers of a marketing campaign that aggressively targets a competitor by reference to its trade mark.

As the Court of Appeal has referred a number of questions to the ECJ, this case may have asked more questions than it actually answers. Therefore, we must wait for the guidance from the ECJ before this area of law becomes clearer.