20/07/2015
Hot off the press, the 29 June decision of Judge Richard Hacon in the Intellectual Property Enterprise Court (IPEC) The Sofa Workshop Ltd v Sofaworks Ltd [2015] EWHC 1773, (IPEC), contains some interesting conclusions both from the point of view of the European Community at large and in particular the UK.
The action was brought by Sofa Workshop, a retailer of sofas and other furniture as is the defendant Sofaworks. Sofa Workshop and owned two Community Trade Marks (CTMs) for SOFA WORKSHOP covering goods and services relating to various forms of furniture and accessories.
Sofa Workshop argued that Sofaworks infringed its two CTMs as well as its common law rights resulting from use. Sofaworks’ defence was that the CTMs were invalid since SOFA WORKSHOP is descriptive and lacking in distinctive character and, even if they were valid, they were liable to be revoked for non-use on the basis that there had not been genuine use of the marks within the European Community as Sofa Workshop only used SOFA WORKSHOP in the UK.
The decision raised a number of legal issues in terms of both CTMs and national registrations.
Use In One Country
The key case on what use is required to support a CTM is the decision of the Court of Justice at the European Union (CJEU) case ONEL/OMEL: Case C-149/11 Leno Merken. The CJEU held:
- the question of whether there has been ‘genuine use in the Community’ is not to be approached from the perspective of whether there has been use of the mark in more than one, two or any other particular number of EU Member States, since territorial borders are to be disregarded;
- a CTM is put to genuine use in the EU where it is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, and used for the purpose of maintaining or creating market share within the Community for the goods or services covered by the mark;
- whether the mark has been so used will depend on all relevant facts and circumstances, including the characteristics of the market concerned, the nature of the relevant goods and services, the territorial extent and scale of use, and the frequency and regularity of use;
- purely in relation to the territorial extent of use, genuine use in the Community will in general require use in more than one Member State;
- an exception to that general requirement arises where the market for the relevant goods or services is restricted to the territory of a single Member State.
It was accepted that Sofa Workshop had put its CTMs to genuine use on an extensive scale in the UK in the five year period before the counterclaim for revocation, but there was no evidence that any of its advertising was directed at consumers outside the UK and Sofa Workshop had only made one non-UK sale. The judge held that the CTMs had not been used in order to maintain or create market share within the EU and consequently the CTMs should be revoked.
What The Decision Means In Practice
The CJEU specifically did not opine on whether use in one country was enough in ONEL/OMEL. Indeed, some felt that the question was deliberately dodged. However A UK judge – HHJ Hacon – tackled the issue head on in The Sofa Workshop Ltd v Sofaworks Ltd stating unequivocally that use in one country is not enough. The ramifications for CTM holders is that if their mark is actually only in use in one country, they should consider replacing it with a national registration in the country now or at the renewal stage.
Passing Off
In the UK it is possible to bring an action to prevent use of a trade mark by a third party under common law rights known as a ‘passing off’ action. The requirements are to establish a reputation, confusion or likelihood of confusion and damage or likelihood of damage.
The judge held that ‘Sofa Workshop’ had acquired a secondary meaning in the mind of the relevant public as a badge of origin for the goods. On the evidence it was established that a proportion of relevant actual consumers believed that the goods of Sofa Workshop and Sofaworks came from the same undertaking or from economically linked undertakings. As a result, material damage was occurring to the goodwill of Sofa Workshop.
Accordingly, even though its own CTMs were liable for revocation for non-use and were also held to be invalid for descriptiveness/lack of distinctiveness, Sofa Workshop was successful in halting continued use by Sofaworks of its name under its common law rights.
What The Decision Means In Practice
Trade mark owners with potentially vulnerable registrations should therefore always keep in mind that their common law rights may be enough to prevail.
Appeal
The decision is open to appeal on the question of whether use in one country leaves a CTM liable to be revoked for lack of genuine use in the EU. However, it appears that an appeal is unlikely since Sofaworks has indicated that it would be easier to change its name than to appeal.
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 before any action in reliance on it.
