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Mattel's lack of action held to be 'destructive' of its case against Zynga

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United Kingdom

On 1 November 2013, the Honourable Mr Justice Peter Smith handed down his judgment in the case of J.W. Spear & Sons Ltd Mattel Inc v Zynga Inc [2013] EWHC 3348 (Ch), finding Zynga did not infringe Mattel's Scrabble trade marks.

Overview

J.W. Spear & Sons own the rights to produce and market the board game Scrabble outside North America and they are owned by American toy manufacturing company Mattel, Inc (together "Mattel").  Zynga is a developer of social games for mobile platforms including Farmville, Zynga Poker and Words With Friends.

This dispute related to Zynga's mobile app game Scramble With Friends, which is similar to Boggle and involves players finding as many words as possible in a jumbled 4x4 grid of letters by connecting adjacent letters within two minutes. 

Mattel alleged that Scramble With Friends and the Scramble With Friends logo infringed the following trade marks:

  • CTM registration no. 401737 SCRABBLE in Classes 9, 28 and 41;
  • CTM registration no. 401489 SCRABBLE Device in Classes 9, 28 and 41;
  • UK trade mark registration no. 2154349 for a three dimensional tile mark in Classes 9, 28 and 41; and
  • CTM registration no. 6223077 SCRAMBLE in Classes 9, 28 and 41.
Mattel also alleged passing off, although there was no passing off allegation in relation to the "get up" of the game, only in relation to the words, the use of tiles and the Scramble icon.  However, a summary judgment of 28 November 2012 found that the tile registration was invalid as it was not a "sign" in line with Article 2 of the Trade Mark Directive.  An appeal by Mattel was dismissed by the Court of Appeal in October ([2013] EWCA Civ 1175).
Zynga counterclaimed for a declaration that the SCRAMBLE trade mark was invalid on the grounds of lack of distinctive character, descriptiveness, common usage, bad faith and revocation for genericism (they have also applied to the OHIM for an invalidity declaration).  Proceedings are also ongoing between the parties in France and Germany.
 
Facts
 
Zynga has been producing electronic games since 2007 with its first version of the disputed game launched as Scramble around late 2007.  Scramble With Friends is the fifth edition of the game and was launched in January 2012.  The Scramble With Friends logo consists of rectangular tiles containing letters and numbers, similar to Scrabble tiles.  Further, the "m" in Scramble is stylised and on a quick glance looks similar to a letter "B" on it's side.  Mattel first produced an electronic version of Scrabble around late 2009.  
 
Mattel had been aware of the earlier versions of Scramble but had not made any complaints, nor was it asserted in the proceedings that any of the earlier games infringed or passed off Mattel's trade marks.  In his witness evidence, Mattel's Vice President of global marketing stated that although he was "furious" upon finding out about the Scramble With Friends app in 2012, earlier versions of the Scramble app "did not register with the management".  Another Mattel witness commented that in relation to earlier forms of Scramble With Friends she "did not see the need or it did not call out to me to be similar enough to Scrabble to warrant a conversation with the legal department".
 
Significantly, Mattel had pitched to Zynga for a licence to make physical versions of their games in January 2012.  This included making a physical version of Scramble With Friends, the game which Mattel would later allege was in breach of their rights.  It was only when Hasbro (rights holder for Scrabble in North America) won the licence that Mattel initiated infringement proceedings.  In his evidence Mattel's Vice President of global marketing accepted that it was highly unlikely that proceedings would have been brought had they won the licence and that, in reality, Mattel was only interested in producing board games rather than apps. 
 
However, in internal e-mails, Zynga had acknowledged that there was a possibility that Scramble may be confused with Scrabble
 
Decision
 
In Smith J's view, the lack of activity in relation to the previous four versions of the game was destructive of Mattel's case.  He found that Mattel internally well knew of Zynga's use of the word SCRAMBLE for many years but had decided to do nothing about it.  No explanation was given for this but the conclusion drawn was that Mattel did not perceive use of the word SCRAMBLE as an infringement of their rights.  This view was supported by Mattel's lack of action prior to the proceedings in relation to a large number of other apps containing SCRAMBLE.  Indeed, Mattel had brought proceedings against other games such as Scrabulous, which suggested that in not bringing proceedings earlier, Mattel had been unconcerned about the use of the word SCRAMBLE. 
 
It followed that prior to 2012 Mattel did not perceive there to be any confusion by anyone who used the word SCRAMBLE, and that the only reason they pursued Zynga was because of the failure to secure the board games licence.  Further, Smith J found that whilst people in Zynga thought they may benefit by using SCRAMBLE but were sailing close to the wind, they did not intend to deceive in a way which was actionable. 
 
Regarding infringement of the SCRABBLE marks, in his view Smith J had no clear evidence to assist him in determining whether there was a likelihood of confusion, either on the basis of a substantial proportion of the relevant public potentially being deceived (passing off) or whether there is a potential for deception of the average consumer who is deemed to be reasonably well informed and reasonably observant and circumspect (trade mark infringement).  In particular, he stated that the survey evidence provided by Mattel held no evidential weight whatsoever, nor the large amounts of documentary evidence provided by Mattel.  However, his view was that Mattel did not believe there was any realistic prospect of confusion between the words SCRAMBLE and SCRABBLE.  Therefore, he concluded that although the SCRAMBLE element of the logo looked similar to SCRABBLE at first glance, the word SCRAMBLE with on its own or with "With Friends" did not infringe the SCRABBLE trade marks as it is not similar or likely to cause confusion.
 
In relation to infringement of the SCRAMBLE mark, there was no doubt that the use of SCRAMBLE prima facie infringed Mattel's rights.  However, in the view of Smith J, the word SCRAMBLE is an ordinary word, descriptive of the game and which had become a common name for such games.  Accordingly the SCRAMBLE CTM was held to be invalid on the grounds of Article 7(1)(c) and (d).  For this reason there was no infringement.
 
Comment
 
There are two main lessons to be taken from this case.  Firstly, infringement action should be taken as soon as a trade mark owner is aware of a potentially infringing mark as adverse inferences may be drawn from a lack of action when assessing the likelihood of confusion.  Secondly, this case once again highlights that unless survey evidence is likely to be of real value and that likely value justifies the cost, it will not be given any evidential weight by the court.
 
Leighton Cassidy is a Partner and James Hill is a Trainee Solicitor in the Trade Mark and Brand Protection group at Field Fisher Waterhouse LLP.