Claridge Candles’ Claridge’s Clash Published By Alex Borthwick, Of Counsel and Joseph Donkin, Paralegal at Powell Gilbert LLP 21/10/2019 16:05:22 The parties and the trade marks Proceedings for trade mark infringement and passing off were brought in October 2018 before the Intellectual Property Enterprise Court by the owner of the famous London Mayfair hotel, Claridge’s, against a newly established seller of self-branded scented candles and diffusers, Claridge Candles Limited and its owner/sole director. Claridge’s owned two UK trade mark registrations for the word mark “CLARIDGE’S”. One mark was registered solely for goods in Class 21 (household utensils). Prior to the start of the trial, this mark was voluntarily surrendered, and the specification of the second mark (the “Mark”) narrowed. On 8 January 2018, Claridge Candles filed an application for a UK trade mark for the word mark “CLARIDGE”, to cover a number of specified goods in classes 3 and 4, which would subsequently appear on the company’s candles and diffusers. Claridge’s opposed this application and the UK IPO stayed the opposition pending the court proceedings. There were six key issues for the judge, Mr Recorder Douglas Campbell QC, to consider in this matter which ultimately reinforced the importance having a luxury brand and widespread name recognition in the defence of trade marks. Infringement of the Claimant’s Mark 1. Whether the Claimant’s Mark had an enhanced distinctive character and/or reputation in the UK in relation to any of the goods or services in relation to which it was registered, and if so, which of them. The focus here was on reputation of the Mark. Under General Motors v Yplon Case C-375/97  RPC 52, Claridge’s had to demonstrate for the purposes of section 10(3) of the Trade Marks Act 1994 (the “Act”) that the Mark was known “by a significant part of the public concerned by the products or services covered by that trade mark”. A substantial amount of evidence was submitted in relation to the London hotel, including its turnover (at around £50 million or more since 2008), its marketing expenditure (~£1.5mil per year since 2008), press coverage, its BBC Two TV series and its international awards. In light of the evidence, Recorder Campbell QC was entirely satisfied that the Mark had a “very substantial reputation” in the UK when used in relation to hotel services, indicating that the mark was in use at least in relation to class 43. 2. Whether the Defendants’ acts done in relation to their CLARIDGE sign constituted infringement pursuant to section 10(3) of the Act. To infringe under section 10(3), the claimant must prove use of an identical or similar sign in the course of trade that takes unfair advantage of the distinctive character or reputation of the trade mark. Recorder Campbell QC stressed that the advantage must be unfair and not merely economic or commercial, citing Argos Limited v Argos Systems Inc  EWCA Civ 2211. Under L’Oreal v Bellure C-487/07,  ECR I-5185, which was also referenced in the judgment, unfair advantage can be established where there is a transfer of the image of the proprietor’s mark on to the defendant’s goods. The judge’s findings were as follows: The mark and sign were visually and aurally almost identical, with a high degree of conceptual similarity (as one is the possessive form of the other). Although the goods in respect of which the Mark was used and were intended to be used were not all related, both parties treated the case as “all or nothing”. None of the types of goods considered was close to ‘hotel services’, but the Defendants’ candles were all premium products so the parties’ goods and services may have appealed to a similar part of the public. As noted above, the Claimant’s Mark had a very substantial reputation. The Claimant’s Mark was inherently distinctive – it was an uncommon name and had become internationally recognisable through its “long and well-publicised use”. The public may have believed the parties’ goods and services came from the same or economically-linked undertakings and there was a likelihood of confusion. Recorder Campbell QC concluded that there was a link between the two signs due to the similarity of the mark and sign, the fact that both were premium offerings, the strength of the Mark’s reputation and the degree of its distinctive character. The Second Defendant’s subjective intentions were considered indeterminate and irrelevant by the judge, who held that the use of the CLARIDGE sign would effect a transfer of image and take unfair advantage of the Mark’s reputation for “luxury, glamour, elegance, and exclusivity”. 3. Whether the Defendants’ acts done in relation to their CLARIDGE sign constituted infringement pursuant to section 10(2) of the Act. Section 10(2) requires the mark and sign and their respective goods to be identical or similar and there to exist a likelihood of confusion on the part of the public. As discussed further at Issue 6 below, it was held that the part of the specification of the Mark relied upon by the Claimant in its case on section 10(2) was to be revoked for lack of genuine use so the Defendants did not infringe under section 10(2). Passing Off 4. Whether the Defendants’ use of CLARIDGE amounted to passing off. Recorder Campbell QC noted that it was unusual for the Claimant to submit that its case on passing off fell within its case on section 10(3) and not 10(2). He noted that the Claimant’s goodwill in relation to hotel services was undisputed, as was damage if there had been a misrepresentation. The focus was therefore on misrepresentation. The judge found in favour of the Claimant on its passing off claim, for the same reasons given for Issue 2 discussed above. Liability of the Second Defendant 5. Whether the Second Defendant was liable as a primary tortfeasor for the alleged acts of trade mark infringement and passing off. Recorder Campbell QC held that the Second Defendant was personally liable, being the natural person who offered CLARIDGE branded candles to the public. The judge referred to the leading authority on personal liability, MCA Records v Charly Records (No. 5)  EWCA Civ 1441, and explained that there was no defence to the tort simply because it was committed in the course of employment. Counterclaim for revocation of the Claimant’s Mark 6. Whether the Claimant has put its Mark to genuine use in the UK, and if so, in relation to which goods and services. Recorder Campbell QC noted that The London Taxi Corporation v Frazer-Nash Research  EWHC 52 contained a summary of the law on genuine use. In summary, for there to be genuine use of a trade mark, “the use must be such as to create or preserve a market (or outlet) for the goods or services that bear the mark”. In the judge’s view, Claridge’s had failed to establish genuine use in relation to goods in class 3 and 5. Here, the Claimant argued that the public took into account its supply of toiletries when selecting a hotel room. However, the judge held that the Claimant's use of its Mark in relation to toiletries did not create or preserve a market for toiletries because the Claimant had never marketed its toiletries. The Claimant had also not demonstrated genuine use in connection to the sale of champagne in hampers, as the goods were LAURENT PERRIER branded champagne; the sale of third party goods was not sufficient to show the use of the Mark in connection with such goods. However, the Mark had been used on an alcoholic product called “CLARIDGE’S Le Fumoir aged Negroni”, so there was genuine use in relation to aged Negroni. The Defendants therefore succeeded to some extent in their counterclaim for revocation of the Mark, with the result that amendment of the specification was necessary. Conclusions Therefore, Claridge’s was successful overall in obtaining a judgment for trade mark infringement and passing off. Whilst Claridge’s trade mark portfolio suffered a degree of collateral damage, the case illustrates the potentially wide scope of protection of trade marks that have a strong reputation. In particular, the judge’s recognition of the “image of luxury, glamour, elegance, and exclusivity” of the Mark enabled him to find that use of a very similar sign for unrelated goods would take unfair advantage. Brands operating in or on the fringes of the luxury market will no doubt take note of this judgement which confirms that having a luxury brand is an important asset for successful IP protection.