31/07/2019
What’s in a Name? After this year’s changes to the UK Trade Mark Act, significantly less than there used to be, it seems.
On 14 January 2019, the Trade Marks Regulation 2018 (SI 2018/825), implementing the Trade Marks Directive (EU) 2015/2436 and amending the Trade Marks Act 1994 and the Trade Mark Rules 2008, came into force. One of the many changes that the Regulation brought about was the effective removal of the ‘own name’ defence as it applies to company names (and following the decision in Hotel Cipriani SRL v Cipriani (Grosvenor Street) to trading names also). However, under the amended legislation, the use of a sign as a trade or company name is specifically included in the list of infringing acts (under Section 10(4)(ca)).
What this means in practical terms is that the ‘own name’ defence to trade mark infringement can no longer be relied upon. Although it still technically applies to “the use by an individual of his own name or address” (Section 11(2)(a)), in practical terms, even a sole trader is unlikely to be trading under his or her personal name and is far more likely to be trading via a limited company or other corporate instrument. This is also likely to be the case even when the company brand corresponds to a personal name (as would often be the case for fashion designers, for example). One possible instance where the defence would apply could be a celebrity or other famous person endorsing a product of another trader (assuming the celebrity would be considered as ‘trading’ in the context in the first place). However, aside from this, it is very difficult to see how the defence could now practically apply.
Interestingly, the removal of the equivalent provision from the European Trade Mark Regulation (Article 1(13)) is already the subject of an attempted reference to the CJEU as part of the current ‘SKYKICK’ dispute (Sky v SkyKick [2017] EWHC 1769). Essentially, the defendant in this case, Skykick Inc., has alleged that the change to the law interferes with the freedom to conduct business and the right to property which companies enjoyed under the pre-existing law. In particular, Skykick alleged (among other things) that there has been no proper assessment of the impact of the change in law, it is discriminatory as against natural persons, and there is no good reason for it.
In response, Sky Plc pointed out that the defence was originally only intended to apply to natural persons but was construed as covering legal entities as well by the CJEU in the Anheuser-Busch v Buddejovickybudvar (C-245/02 [2004] ECR-I-10989). In other words, all that has happened is that the EU legislature has made an alteration to the law so as to return it to what was originally intended.
While the trial judge (Judge Birss QC) considered that both Sky and Skykick had properly arguable cases on the merits, he refused to make the reference, primarily due to the fact that he considered that the case was more likely to be decided on other points and the reference may turn out to be unnecessary.
Comment
As the arguments in the SKYKICK dispute show, the decision to remove the defence to company or trade names has been the subject of some criticism. It is also not immediately clear why change was required when the previous defence appeared to work well.
Under the old legislation, the use of a company name as a defence to trade mark infringement was acceptable, provided that the company name was used “in accordance with honest practices in industrial or commercial matters”. This enabled the courts to look at the circumstances surrounding the adoption and use of the company name, including whether it had been adopted with the earlier trade mark in mind, whether the defendant had due cause to adopt and use the name, whether there had been instances of actual confusion, detriment or unfair advantage and so on. In instances where the defendant clearly had due cause to adopt the company name (e.g. Stitching BDO v BDO Unibank) the defence would likely apply. In cases where they did not, it was less likely to (Cipriani).
To quote Judge Birss QC in Redd Solicitors LLP v Red Legal Ltd, “the heavy lifting is done by the “honest practices” proviso”, and the case law in this area does show that this was arguably the best way of striking the best balance between competing interests. The changes to the legislation remove this defence at a stroke (subject to any legal challenge). Furthermore, there are no transitional provisions, which could mean that a company which has been able to avail itself of this defence may now find itself open to an infringement claim.
Practical Points
As outlined above, the removal of the own name defence as it applies to companies means that the position of trade mark holders is significantly improved. For rights holders, this is good news. It does however seem more important than ever in light of these recent changes that traders apply to register their trading and/or company names, as the best defence possible to third party infringement claims. The amended legislation also gives trade mark holders significantly improved rights against commercial competitors.
If you would like to discuss protecting a company name as a registered trade mark, or have any questions in relation to company names or trading names, please contact one of our team.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
