What protection does a Community Trade Mark (CTM) confer? And how far does the own name defence extend? The Court of Appeal of England and Wales was split in Roger Maier and Assos of Switzerland SA v ASOS plc and ASOS.com Limited.

Assos is a premium cycling wear brand, established in Switzerland in the 1970s. Asos is an online fashion retailer retailing both its own and third party goods. Assos sued Asos for trademark infringement, on the basis of a CTM for the word ASSOS. The CTM is registered in various classes, including class 25 for clothing.

Earlier this month, the Court of Appeal held ([2015] EWCA Civ 220) that Asos' name was both confusingly similar to, and likely to cause detriment to the distinctive character of, Assos' mark. However, Asos could escape liability on the basis that it was using its own name in accordance with honest practices in industrial or commercial matters (Sales LJ dissenting).

Background

Assos, whose logos have included the following:

applied for a CTM (54890/2005) in September 2005 for the word mark ASSOS for goods in classes 3, 12 and 25.

Asos, founded in 1999 under the name "As Seen On Screen", has morphed from selling clothing as seen on TV shows and in the style of those items into a general fashion retailer, with a major online presence. It also retails a substantial range of own-brand clothing and other goods. Its logo has evolved over time:

In 2009, Asos filed a UK trademark for ASOS in respect of goods in various classes including those in classes 3, 25 and 35.

Decision

(i) The scope of Assos' CTM

Relying on the fact that Assos' clothing had only been sold for use by cyclists, Kitchin LJ and Underhill LJ held that the specification of its mark should be limited to cover: "Specialist clothing for cyclists; jackets, t-shirts, polo shirts, track-suit tops, track-suit bottoms, casual shorts, caps".

Dissenting, Sales LJ's view was that this was too narrow. He considered that there is a comparatively wide linkage between the goods or services specified in the registration for which there has been genuine use and the extent of the protection which continues.

He said: "Assos has made genuine use of its mark to sell fashionable casual wear, and it has a legitimate interest to have CTM protection for the development of that business in future, following fashion trends as they emerge in the market to the extent that Assos believes it can profitably do so". In his view, the appropriate formulation was "Specialist clothing for racing cyclists and casual wear".

(ii) Infringement under Article 9(1)(b)

Overturning the first instance decision, all members of the Court of Appeal agreed that Assos' claim for infringement under Article 9(1)(b) of the Community Trade Mark Regulation (the Regulation) was made out. Asos had used a sign which was similar to Assos' CTM in relation to goods which were similar to or identical to those covered by the mark, and there was a likelihood of confusion between the two on the part of the relevant public.

The Court of Appeal criticised the trial judge for having failed to consider a notional and fair use of the ASSOS mark across the breadth of its (adjusted) specification, ie. in respect of all those goods and services for which the mark may be used, and for having focused instead on those for which the mark had in fact been used.

Kitchin LJ found there to be a "definite similarity" between the mark ASSOS and the sign ASOS. Further, he found the goods for which the mark was registered were the same as or similar to the various categories of clothing and footwear sold by Asos.

The "critical question" was whether there was a likelihood of confusion between the two. In Kitchin LJ's judgment, there is such a likelihood. He highlighted that neither the mark nor the sign has a conceptual meaning and that they were visually and aurally very similar. There was therefore a likelihood of confusion by the sale of casual wear marked ASOS.

As to the other class 25 goods sold by Asos, Kitchin LJ stated that he had given this question "anxious consideration", and ultimately found that the likelihood of confusion extended to these goods too.

(iii) Infringement under Article 9(1)(c)

The first instance judge had accepted that the ASSOS mark had a reputation among cyclists but rejected Assos' claim under Article 9(1)(c) of the Regulation. She was not persuaded that use of the sign ASOS had in any way diminished or otherwise damaged the distinctive character or repute of the CTM. The Court of Appeal considered that the judge's analysis involved an unduly restrictive approach.

Emphasising that his decision went no further than his judgment on Article 9(1)(b), Kitchin LJ held that Asos' activities had caused (or were likely to cause) detriment to the distinctive character of the ASSOS mark: they had weakened, or were likely to weaken, in some circumstances, the ability of the mark to identify at least some of the goods for which it is registered as being the goods of Assos.

Sales LJ went further, finding that "the swamping effect from the prevalence and pre-eminence in the market place of Asos's use of the "ASOS" sign is such that Assos cannot gain the full benefit from its own branding and marketing efforts to which it should be entitled, by virtue of the protection conferred by its CTM."

Any attempt by Assos to broaden its consumer base would be devalued to the benefit of Asos and Assos "would struggle to make its distinctive voice heard in the market place to attract the customers for its own goods, to allow it to generate income to enable it to expand its business and the range and quality of the goods which it can offer to the public within the scope of its CTM."

(iv) Article 12(a)/own-name defence

Article 12(a) of the Regulation provides that a CTM proprietor cannot prevent a third party from using his own name or address in the course of trade, provided that he uses them in accordance with honest practices in industrial or commercial matters.

Kitchin LJ (with whom Underhill LJ agreed) held that Asos was entitled to the benefit of this defence. The name ASOS had arisen honestly from the original "As Seen On Screen". There had been no confusion in practice between the companies' respective goods or services and - in a finding which seems hard to reconcile with the decision on infringement - there was no real likelihood of it occurring in the future.

Although Asos had not conducted any trademark searches before making the change or filing its UK TM application, it had not taken any steps towards the Assos business model. This can be contrasted with Birss J's approach in Thomas Pink Limited v Victoria's Secret UK Limited [2014] EWHC 2631 (Ch).

In considering whether Victoria's Secret had acted with due cause when extending its PINK brand into Europe, Birss J held that in not having conducted a trademark search: "the premise on which [Victoria's Secret] decided to enter the European market was adopted in good faith but it was wrong". He therefore rejected their argument that they had due cause for their actions.

Kitchin LJ also relied on the fact that, belatedly, following the commencement of the litigation, Asos had taken steps to minimise the possibility of confusion and not to sell cycling inspired fashion wear. Asos had fulfilled its duty to act fairly in relation to Assos' legitimate interests and had not conducted its business so as to compete with Assos unfairly.

Sales LJ dissented. In his view, when applying the "honest practices" standard required by the defence, the interests of the CTM proprietor must be given significantly more weight than Kitchin LJ or Underhill LJ had afforded them. "This was not a case of an under-resourced one-man company making an unwitting and perhaps excusable blunder in choosing a confusing name."

Like Birss J in the Victoria's Secret decision, Sales LJ highlighted the importance of carrying out reasonable clearance checks. In his view, a "crude check by googling" (which is what Asos' evidence showed it had done) was not a fair attempt to have regard to the potential legitimate interests of others. Any investment which Asos had made in its brand after it knew or should have been aware of Assos' interests was precarious and should be afforded less weight.

(v) Invalidity of Asos' UK TM

Assos challenged the registration of Asos' UK TM on the basis of its earlier CTM and rights in passing off. The High Court judge had found that there was no relevant likelihood of confusion, nor any real possibility that the use of the UK TM would take unfair advantage of or be detrimental to the distinctive character or repute of the TM.

The Court of Appeal, following its findings on infringement of the ASSOS mark by the sign ASOS, allowed Assos' appeal, finding the ASOS mark invalid in relation to all goods covered by the ASSOS mark, including all those in class 25.

Comment

In light of the dissenting judgment in this decision, it seems likely that the parties may seek permission to appeal to the Supreme Court.

Kitchin LJ's observations regarding evidence of actual confusion are also interesting for future cases. He noted that the existence of such evidence might provide "powerful" support for a finding of a likelihood of confusion, but the absence of such evidence is not necessarily fatal.

"If the mark has only been used to a limited extent or in relation to only some of the goods or services for which it is registered, or in such a way that there has been no possibility of the one being taken for the other … there may, in truth, have been limited opportunity for real confusion to occur."