Pre-Brexit trade mark law still applies – for now
Locations
The judge (Tindal HHJ) in the recent case of E-Accounting Solutions Limited & Anor v Global Infosys Limited & Anor ([2023] EWHC 2038 (Ch)) proactively considered which law applied to trade mark infringement in the light of the UK's exit from the EU – and concluded that for now, the law remains the same.
Case Background
The Claimant offered online accountancy services under the name Advance Track (either one or two words), and had registered a UK trade mark for 'Advance Track' (two words), for various goods and services including "accountancy services" in class 35. The Defendant was a direct competitor of the Claimant and offered identical services. It instructed its marketing consultants to include the keyword 'advancetrack' (one word) in its Google AdWords campaign; "advancetrack" also appeared in the text of its internet adverts accessed via that keyword.
The Claimant issued proceedings, asserting that both these uses of 'advancetrack' infringed its trade mark under sections 10(1), 10(2) and 10(3) Trade Marks Act 1994 ("TMA"). It also claimed passing off.
What law applies to trade marks?
The position on trade mark infringement and passing off was fairly straightforward – there was infringement under ss10(1), 10(2) and 10(3) TMA as well as passing off, which is unsurprising given the fact pattern.
What is particularly interesting about this case is the judge's proactive and structured analysis of the extent to which UK trade mark law, which is based on and was intended to give effect to EU law, remains the same as before Brexit – i.e. what law applied?
This was of general relevance, but it particularly impacted infringement under s10(1) TMA, into which EU law had implied a requirement for an 'adverse effect' on the functions of the trade mark. That requirement is not specified in the wording of s10(1)TMA1 (or indeed either of ss10(2) or 10(3), but in those subsections, the judge's view was that adverse effect is almost implicit if the requirements are fulfilled). A literal interpretation of the wording of s10(1) TMA, i.e. without the necessity for adverse effect, would mean that any use of the mark in the course of trade infringed whether the mark was adversely affected or not, which did not seem right. The judge wanted to know whether or not he should imply the 'adverse effect' requirement into s10(1) TMA.
Whilst the UK was part of the EU, EU law had supremacy over UK law, and as part of that there was an obligation to interpret the TMA consistently with the EU directive it was intended to implement (most recently enacted as the Trade Marks Recast Directive EU 2015/2436 (the "Directive")). The European Union (Withdrawal) Act 2018 ("EUWA") moves away from that general position and, in essence, has the effect that:
- where legislation has not been amended since 31 December 2020 (the end of the Brexit transition period), EU supremacy continues to apply; whilst
- where legislation has been amended since 31 December 2020, the extent to which EU supremacy and prior domestic or EU case law remains binding depends on the intention of the amendment.
The TMA has not been amended since 31 December 2020. Therefore the relevant law remains as it was before Brexit; the judge said "the provisions and retained case-law each Counsel relied on remain the same as pre-Brexit and binding on me".
The judge noted that the Retained EU Law (Revocation and Reform) Act 2023 ("REULA")2 had received royal assent just before the trial was heard. REULA is not yet fully in force; it is anticipated that it will be fully in force from 1 January 2024 although the implementing statutory instrument has not yet been drafted. The judge believed it wise to "consider whether the result would be the same now on ordinary domestic statutory interpretation, in case Counsel and I are wrong to consider EUWA (as opposed to REULA) means Brexit has not yet made a difference to s.10 TMA".
The judge then ran through the principles of ordinary domestic statutory interpretation, concluding that "s.10 TMA falls to be interpreted on orthodox domestic statutory interpretation principles as intended to implement the … Directive" and that the Directive could be used as an external aid to interpreting the TMA. Therefore, even if EUWA did not have the effect that the previous EU law still had supremacy over s10 TMA, that same law would still apply in this instance; it was clear that Parliament had intended the TMA to mean the same as the Directive.
As far as s10(1) TMA was concerned, this meant that an adverse effect on the functions of the trade mark was required for infringement.
Comments
It is helpful to know that Brexit issues have been fully considered and that the law on trade marks as we know it remains the same. It is equally helpful to know that this may not always be the case, and to have a reminder of the interpretation principles which will apply when amendments are made.
There is a mindset change needed: legislative amendments are likely to be more impactful than they were. The judge puts it as follows:
"Of course, I could simply have said that it was common ground that this was the position [i.e. that trade marks law remains the same]. However, since statutory amendments can now make such a dramatic difference (unlike 15 years ago in Intel); and with such seismic changes to EU-derived domestic legislation on the horizon, it is increasingly important that the legal position in each case is pro-actively considered."
Although we have not analysed it here, the judge also sets out his reasoning on infringement and passing off very clearly. This case may prove a very valuable resource for judges who, like Tindal HHJ, are not expert in trade marks which may increasingly be the case now that claims in the small claims track of the Intellectual Property Enterprise Court are automatically transferred to Manchester3, which to date has not had many trade mark expert judges.
Finally, the judge asks "Where does this leave the small business wondering whether to use competitor brands as keywords?", and concludes that "It may be wise for a small business to get advice, especially in these legally as well as commercially uncertain times, as our legal system begins in earnest to detach from the EU".
If you would like any further advice on these issues and how they may affect your business, please do not hesitate to get in touch with us.
With thanks to Trainee Solicitor, Haleema Punnu, for her contribution to this blog.
Footnotes:
1. 10(1) TMA: "A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered."
2. For further information on REULA, please see our previous blog here: Retained EU Law (Revocation and Reform) Act 2023 receives Royal Assent | Fieldfisher