This article first appeared on World Trademark Review in August 2019. For further information please go to www.worldtrademarkreview.com.
The IP Enterprise Court has ruled that Claridge Candles Limited and its shareholder and director infringed Claridge Hotels’s trademark and passed off their goods as those of Claridge Hotels
The court found that CLARIDGE'S had a substantial UK reputation for hotel services and “an image of luxury, glamour, elegance and exclusivity”
The defendant’s use of CLARIDGE would cause a transfer of image from the claimant's mark to the defendants' sign in the mind of the average consumer, which constituted an infringement
In Claridge's Hotel Limited v Claridge Candles Limited ( EWHC 2003), Douglas Campbell, sitting as a judge in the IP Enterprise Court has ruled that both Claridge Candles Limited and its shareholder and director, Denise Shepherd, infringed Claridge Hotels’s trademark and passed off their goods as those of Claridge Hotels.
The claimant has operated a well-known hotel in London under the name CLARIDGE'S since 1856. The defendant, a small company based in Kent, sold candles and reed diffusers under the name CLARIDGE CANDLES. The claimant owned two UK trademark registrations for the word mark CLARIDGE'S. This action was initially based on both marks, but after the defendants counterclaimed for revocation of the marks for non-use, the claimant voluntarily surrendered one registration entirely and partially suspended the other. At the trial date, the claimant’s registration covered goods and services in Classes 3, 5, 16, 35, 43 and 44. The claimant’s action alleged infringement of Sections 10(2) and 10(3) of the Trademarks Act 1994 as well as the tort of passing off.
Under Section 10(2), a trademark is infringed by third-party use of an identical or similar mark in relation to the same or similar goods or services and there exists a likelihood of confusion on the part of the public. Campbell found for the defendants on this claim, because all of the claimant’s arguably similar goods and services were revoked for non-use.
Under Section 10(3), a mark is infringed by third party use of an identical or similar mark in relation to different goods/services, where the earlier mark has a reputation in the United Kingdom and use of the latter, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the earlier mark. Campbell found that CLARIDGE'S had a very substantial reputation in the United Kingdom for hotel services and also had “an image of luxury, glamour, elegance, and exclusivity as a result of the nature and extent of the Claimant's use thereof”. Due to the defendant’s products also being premium offerings, the strength of the mark's reputation and the degree of its distinctive character, it was concluded that there would be a link between the defendants' sign and the claimant's mark in the mind of the average consumer and that the defendant’s use of CLARIDGE would cause a transfer of image from the claimant's mark to the defendants' sign in the mind of the average consumer. This constituted an unfair commercial advantage and therefore an infringement.
The claim of passing off also succeeded on essentially the same basis as the Section 10(3) claim.
Counterclaim for revocation of the claimant's registration
The defendant’s counterclaim for revocation of the claimant’s registration was largely successful. While the claimant was able to defend its registration in relation to hotel, café and bar services in Class 43 and beauty treatments in Class 44, elsewhere its specifications were significantly restricted. With regard to toiletries, while the claimant had provided thousands of bottles of branded products to guests, this did not constitute use of the CLARIDGE’S mark in relation to those goods because they were not marketed or sold separately. The use demonstrated did not create or preserve a market for toiletries. Such use might help to create or preserve a market for the hotel services since the evidence did show that toiletries were a factor in a consumer's choice of hotel, but that was considered irrelevant.
Liability of the second defendant
The evidence established that Shepherd was the only employee, only director, company secretary and majority shareholder in the first defendant. However, in this instance she was found personally liable not due to her influence over the company, but because she personally committed the infringements, albeit in the course of company business.
This case is a reminder that proof of use requirements are to show real commercial exploitation of a mark in relation to the relevant goods/services. Provision of branded products is not enough if they are not sold or marketed separately in order to create or maintain a market for those particular products.
The case also emphasises that claimants relying on registrations outside the grace period risk losing them if they have not put the mark to genuine commercial use. Claimants would do well to carefully consider the rights relied upon in oppositions or infringement cases.
Finally, the case also demonstrates that infringers can be held personally liable for acts carried out in the course of business. As Shepard owned and controlled the business, this probably made little difference to the matter at hand. However, the same reasoning could also apply to employees of larger companies, where the distinction may be relevant.