A game of two halves: Umbro prevails in diamond mark infringement appeal

Iconic sportswear brand Umbro scored a goal in the English Court of Appeal following unsuccessful trade mark infringement proceedings brought in the High Court against online footwear brand Dream Pairs.

In the leading appeal judgment handed down on 26 January 2024 (Iconix Luxembourg Holdings Sarl v Dream Pairs Europe Inc, Top Glory Trading Group Inc [2024] EWCA Civ 29), Lord Justice Arnold found that Dream Pairs' tilted square sign was, contrary to the High Court's decision, similar to Umbro's famous "double diamond" logo registered as a trade mark protecting various goods, including sports footwear. As a result, there was a likelihood of confusion in relation to Dream Pair's use of its sign for footwear.

Pregame background

The Umbro brand (owned by claimant Iconix Luxembourg Holdings SARL) has been using its "double diamond" logo for sportswear in the UK since 1973. The sign, described as two flat and elongated diamonds, has also been used for footwear since 1987 and, in particular, for football boots:

The defendant, Dream Pairs Europe Inc., is a US-based supplier of women's and children's footwear, primarily active online under the brand 'Dream Pairs'. Its products have been sold online in the UK since 2019, bearing a tilted round-cornered broken square with a line towards the centre ending with a closed loop forming the letter 'P' in the middle (the "DP Logo"). Dream Pairs used the DP Logo both with and without the words 'DREAM PAIRS', and the former version was registered as a UK trade mark:

However, Dream Pairs affixed the DP Logo without verbal elements to some products in its children's range, in particular sports footwear, such as trainers and football boots:

First half

We blogged on the first instance decision back in 2023.

Umbro had alleged that Dream Pairs' use of the DP Logo infringed two UK trade mark registrations protecting variations of its "double diamond" logo ("Umbro's Marks") on grounds that the DP Logo was:

1. similar to, and used in relation to goods and services that are similar to, Umbro's Marks with a likelihood of confusion on the part of the public (section 10(2)(b) Trade Marks Act 1994); and
    
2. similar to Umbro's Marks, where these have reputation in the UK, and Dream Pairs' use of the DP Logo takes unfair advantage of, or is detrimental to, such reputation or distinctive character (section 10(3) Trade Marks Act 1994).

In the High Court judgment of 28 March 2023 (Iconic Luxembourg SARL v Dream Pairs Europe Inc and another [2023] EWHC 706 (Ch)), Mr Justice Miles held that there was no likelihood of confusion because the visual similarities between Umbro's Marks and the DP Logo were "very faint". This was despite finding that Umbro's Marks had enhanced distinctiveness, which would usually favour a finding of greater likelihood of confusion of the relevant public. Instead, the court ruled that such enhanced distinctiveness was not sufficient to overcome its finding of very low visual similarity between the signs.

Miles J also rejected Umbro's claim based on reputation, despite finding that Umbro's Marks were of significant repute, in light of the "at most a very low degree of similarity" between the signs.

Second half

Umbro appealed against the dismissal of its claim by the High Court and further contended that the UK registrations for the DP Logo owned by Dream Pairs should be invalidated as a result of its infringement of Umbro's prior rights.

The appeal was limited to the ground of similarity of the signs and goods and services with a likelihood of confusion of the relevant public. In the appeal, there was no dispute between the parties as to the applicable legal principles. Instead, Umbro's arguments were that the High Court did not correctly assess the similarity between the conflicting marks and, as a result, it failed to correctly assess the likelihood of post-sale confusion.

In relation to the similarity assessment in the first instance, Umbro argued that the High Court was wrong to assess parts of the DP Logo as distinct elements (such as the supposedly dominant P-like form in the middle of the sign) because the DP Logo was not a composite sign. Instead, it was a single sign which should have been considered as a whole. Further, Umbro argued that Miles J's conclusion that the similarity between the conflicting marks was "very faint indeed" was not rational when considering the DP Logo as affixed to footwear without verbal elements. Counsel for Umbro submitted that there was obvious similarity between the signs in the real world, when viewed square-on, and even more from other angles.

Dream Pairs disputed that the High Court made any error in its similarity assessment, particularly in light of both the Opposition Division and the Board of Appeal of the European Union Intellectual Property Office ("EUIPO") having reached the same conclusion.

Arnold LJ agreed that the High Court made an error of principle in assessing the DP Logo as a composite sign consisting of a number of distinct elements, and that such error was material because it led to an undue focus on the differences between the conflicting marks. The Court of Appeal further considered that the EUIPO decisions did not assist Dream Pairs, as the Office did not consider the DP Logo in the form affixed to footwear nor did it consider how the sign would be perceived by consumers in the post-sale context. Ultimately, while Arnold LJ agreed with Miles J's similarity assessment in relation to a side-by-side comparison of the signs as a graphic image, he held that the same assessment was not rationally supportable for the DP Logo as affixed to footwear, especially when not viewed square-on.

In relation to the assessment for likelihood of post-sale confusion, Umbro argued that the High Court fell into a common trap in trade mark cases of assessing similarity of the signs as graphic images compared side by side. As a result, Miles J did not properly consider the impact of the DP Logo as affixed to footwear upon consumers who encountered it for the first time and had never seen its graphical representation before. Further, Umbro argued that the High Court failed to take into account how consumers would encounter the DP Logo in a post-sale context, namely affixed to footwear looking down from head height to the feet of a person wearing Dream Pairs shoes (i.e., not square-on). Dream Pairs disagreed.

Arnold LJ agreed with Umbro and considered that the High Court overlooked that the average consumer encountering the DP Logo for the first time as affixed to footwear, such as football boots worn by someone else, without necessarily knowing what the sign looked like when viewed square-on or represented graphically. Further, the High Court had not considered that the viewer might only see the DP Logo looking down at an angle, and/or just from the front or the rear. In those circumstances, Arnold LJ found that the DP Logo would appear more similar to Umbro's Marks' double diamond.

Taking all of those factors into account, the Court of Appeal found that there was a likelihood of confusion on the part of a significant proportion of consumers and, therefore, Dream Pairs had infringed at least one of Umbro's Marks.

Match analysis

This appeal decision should not come as a surprise to trade mark practitioners, but it is an important confirmation by the Court of Appeal that post-sale confusion must be considered from the point of view of the relevant consumer in applicable real-life scenarios, in particular, when considering likelihood of confusion in the context of trade mark infringement.

We note that the appeal did not concern the High Court's decision that, while reputation can play a key role when assessing the likelihood of confusion, it may not be sufficient to overcome a finding of low similarity between the conflicting marks.

Ultimately, while this was fatal to Umbro's claim in the first instance, the Court of Appeal found that the DP Logo was actually similar to Umbro's Marks to a moderately high degree. Therefore, there was no need for Umbro to rely on enhanced distinctiveness at all.