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The wheels come off: High Court finds infringement of BMW's trade marks and design rights

Natasha Rao
07/09/2020

Locations

United Kingdom

BMW has recently succeeded in a long-standing trade mark and design right infringement claim against UK-based companies Premier Alloy Wheels and DGT Wheels and Tyres in respect of their import and sale of replica alloy wheels (Bayerische Motoren Werke AG v Premier Alloy Wheels (UK) Ltd and others [2020] EWHC 2094 (Pat)).

Background

BMW first complained about DGT's activities back in 2012 to its owner Mr Devon Thompson.  In consideration of BMW not bringing legal proceedings, Mr Thomson and DGT signed contractual undertakings not to infringe a number of BMW's IP rights.

However, upon the grant of a search order by the court in June 2018, BMW was able to uncover evidence of over 1600 infringing wheel centre caps and other badges (including those bearing BMW's trade marks) in DGT's warehouse. BMW also found evidence that DGT was purchasing replica alloy wheel products (including some with BMW roundels) from a number of Chinese and other suppliers.

The court last month heard BMW's case against DGT and Premier Alloy Wheels (the company operating DGT's warehouse premises) for trade mark infringement, Registered Community Design (RCD) infringement, and passing off. The court also had to decide whether two relatives of Mr Thompson, a Mr Jerome and Mr David Layzell, were jointly liable for any such activities, and whether Mr Thompson had breached the undertakings he signed in 2014.

Judgment

The court found in BMW's favour in its trade mark infringement, passing off, and breach of contract claims. It also found in its favour in respect of its RCD claims, dismissing an invalidity counterclaim that had been brought by the defendants and finding infringement of six of BMW's RCDs. The judge noted that the defendant's validity attack had been particularly hampered by the fact that so much of the pleaded prior art was illegible and of insufficient quality to be probative.

The court also found that Mr Jerome and Mr David Layzell were jointly liable with DGT because of the extent of their involvement in the business. In particular, despite Mr David Layzell's largely clerical role in the company, the importance of the role he performed and his knowledge of the infringement (including BMW's initial complaint in 2012) were found to be conclusive evidence of common design.

Finally, the court denied BMW any further injunctive relief beyond the six infringed RCDs. BMW had argued that injunctive relief should be granted in respect of a further four designs given the popularity of those designs, the extent of the defendants' offering, and therefore the likelihood that wheels made to these designs were displayed or sold by the defendants. However, the judge disagreed, pointing out that if these designs were so popular he would have expected BMW to have found actual evidence of infringement.

Comment

This judgment provides helpful guidance as to how the courts will approach allegations of joint liability in practice. The fact that it was "difficult to see what would have happened in terms of [DGT's] business administration" without Mr David Layzell's activities – such as invoicing, arranging shipping and supply, and payroll – weighed heavily in favour of a finding of joint tortfeasorship, despite the fact that his role was administrative and unpaid. Rightsholders should therefore be encouraged to think widely when identifying potential joint tortfeasors at the beginning of a claim.

This case also highlights the need for the claimant to fully justify the need for any additional injunctive relief. While the court has shown willingness in some cases to grant wide injunctions which go beyond specific product names and cover a broader category[1], this requires evidence to be put forward of a genuine threat of infringement across the breadth of that category (which was not present in this case). Rightsholders should think early on about whether they can properly substantiate the need for a broader injunction (e.g. whether there is evidence that a consumer is likely to seek out further similar infringing goods or services).
 
[1] See for example Microsoft v Electro-Wide [1997] FSR 580 where the court granted an injunction in respect of 'any piece of operating system computer software' despite having evidence of infringement only in relation to specific Microsoft operating system software

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Areas of Expertise

Intellectual Property