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Bentley Motors' appeal stalls to a halt as Court of Appeal confirms trade mark infringement

Heidi Hurdle
20/01/2021

Locations

United Kingdom

The luxury car manufacturer has failed to overturn a High Court decision that found Bentley Motors liable for infringing the BENTLEY trade mark owned by family-run apparels firm, Bentley Clothing.

In Bentley 1962 Ltd v Bentley Motors Ltd, the claimant succeeded in its allegation that the defendant's combined use of the word mark BENTLEY and a winged "B" emblem (the 'Combination Sign') on clothing was an infringement. The significance of the High Court case and the subsequent appeal lies in not only the courts' finding of infringement, but also the courts' treatment of the available defences.

Bentley Clothing's BENTLEY trade mark was first registered in 1982 for 'knitted clothing, shirts and waistcoats'. Five years later, Bentley Motors started selling jackets, silk ties, scarves and caps, initially with only the emblem mark but later with the word mark. Bentley Clothing extended its registration of the mark to a wider array of clothing, footwear and headgear in 1998, and subsequently contacted the defendant about their use of the BENTLEY mark by offering to license their IP rights. Bentley Motors declined but discreetly continued to expand the clothing range which was sold under the BENTLEY word sign. Numerous trade mark disputes between the parties followed.

(Note that Bentley Clothing did not object to Bentley Motor's use of its winged "B" emblem on clothing and headgear.)

The two signs were used separately by Bentley Motors for many years up until 2014 when they changed their company guidelines to stipulate that only the Combination Sign (below) should be used.
In November 2019, his Honour Judge Hacon in the High Court held that Bentley Motors infringed Bentley Clothing's trade marks. In reaching this decision he reasoned that the average consumer was so familiar with Bentley Motors' use of the separate marks that they would have perceived the Combination Sign as two distinct signs used simultaneously, and in the alternative, the Combination Sign would be confusing. Bentley Motors appealed.

Grounds of appeal

First ground

In the High Court, Hacon J held that the Combination Sign would be perceived by the average consumer of clothing and/or headgear as two distinct signs, and therefore its use by Bentley Motors was an infringing act under s10(1) of the Trade Marks Act 1994 (use of identical signs for identical goods). Additionally, should the combination be taken as a single sign it would then infringe under s10(2) of the Act (use of a similar sign for identical goods and a likelihood of  confusion).

Bentley Motors' first ground of appeal asserted that the judge was wrong in his conclusion on infringement. Seemingly disappointed at how little the point was argued, Arnold LJ (who gave the principle judgment) in the Court of Appeal dismissed this ground and upheld the lower court's finding of infringement under both s10(1) and s10(2). The appeal court's judgment [2020] EWCA Civ 1726 can be read here.

Second ground

During the infringement claim, Bentley Motors pled the defence of honest concurrent use. This defence recognises the possibility for two separate entities to co-exist should the co-existing marks not impair the function of the other. Furthermore, the defendant must not take steps that exacerbate the level of confusion beyond that which is inevitable, and thus encroach on the claimant’s goodwill.

In light of Bentley Motors' actions once approached by the claimant in 1998, Hacon J determined that the defendant took deliberate, incremental steps to expand its use of the sign in a dishonest effort to erode Bentley Clothing's goodwill and extinguish their right to protect the registered mark. Therefore, the defendant was not entitled to the defence of honest concurrent use.

In its application for permission to appeal, Bentley Motors claimed that Hacon J erred in law by failing to consider whether the defendant's use affected the function of the claimant's mark. Both Hacon J and Lord Justice Floyd had refused to grant permission to appeal the lower court's decision on honest concurrent use. The Court of Appeal found that as a result of the arguments in this regard, the trial judge had dealt with the point adequately.

Third ground

In addition, Bentley Motors raised the defence within the transitional provisions of the 1994 Act. This entitles the continuance of acts that were first conducted lawfully under the Trade Marks Act 1938 but later became unlawful under the 1994 Act. Until 1998, Bentley Clothing's BENTLEY mark was only registered for "knitted clothing, shirts and waistcoats" and Bentley Motors had sold jackets, silk ties, scarves and caps with the marks prior to the 1994 Act coming into force. Consequentially, the trial judge accepted a restricted defence; the defendant could continue to use the sign in promotional literature for these specific garments but could not use the sign on the garments themselves.

In the final ground of appeal, Bentley Motors contended that the trial judge had been wrong to restrict its defence under the transitional provisions and the entirety of their liability for infringement should have been absolved. The Court of Appeal saw no valid argument for the transitional provision to extend as a defence for the defendant's liability under s.10 (1) or (2) and dismissed the ground of appeal.

Key takeaways

The Court of Appeal's judgment offers insight into the application of the available defences for infringement and cautions those who may consider encroaching on another's rights, no matter how discreetly.

For companies hoping to diversify into new markets, such a strategy can bring rewards and risks. Even seasoned businesses may encounter issues with brand extensions if the existing intellectual property rights of other players in the market are not sufficiently identified beforehand. To safeguard against these risks, companies can adopt a two-pronged approach by registering their trade marks swiftly after an investigation into any existing rights of third parties, coupled with taking prompt action to enforce those rights if interfered with.

With special thanks to trainee, Tessa Waite, for her contribution to this article.
 

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