BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
The Rolls Building
7 Rolls Buildings
London, EC4A 1NL
B e f o r e :
Sitting as a Deputy High Court Judge
| (1) BEAUTY BAY LIMITED
(2) DOTCOM RETAIL LIMITED
|- and -
|BENEFIT COSMETICS LIMITED
MS JESSIE BOWHILL (instructed by Burges Salmon LLP) for the Defendant
Hearing dates: 11, 12 and 14 February 2019
Crown Copyright ©
Roger Wyand QC, Deputy High Court Judge :
The Product Complained of
Class 3: Personal care products; skin care preparations; cosmetics.
Class 35: Retail services connected with the sale of fragrances, perfume, toiletries, cosmetics, soaps, shampoos, hair care preparations, skin care preparations, essential oils, sun care and tanning preparations.
The Claimants' case
i) Directive (EU) 2015/2436 of 16 December 2015 ("the Directive").
ii) The Trade Marks Act 1994 ("the TMA") – as regards the UK trade mark – which implements the Directive.
iii) European Parliament and Council Regulation (EU) 2017/1001 of 14 June 2017 ("the EUTMR") – as regards the EU trade mark.
i) Whether Benefit's use of the sign is of such a type as may affect the functions of a trade mark.
ii) Whether there is a likelihood of confusion.
iii) Whether the BB Trade Marks have a reputation in the relevant territory.
iv) Whether the use of the sign BEAUTY & THE BAY gives rise to a link between the sign and the BB Trade Marks in the mind of the average consumer.
v) Whether the use of the sign BEAUTY & THE BAY causes detriment to the distinctive character of the BB Trade Marks or takes unfair advantage of the distinctive character or the repute of the BB Trade Marks.
vi) Whether the use of the sign BEAUTY & THE BAY is without due cause.
vii) Whether the sign is non-distinctive or concerns characteristics of the goods or services.
viii) Whether the use of the sign by Benefit is in accordance with honest practices in industrial or commercial matters.
i) Whether BBL is the owner of goodwill that is associated with the sign BEAUTY BAY in the minds of the relevant public.
ii) Whether Benefit's use of the sign BEAUTY & THE BAY is a misrepresentation likely to deceive the relevant public.
iii) If so, whether such deception is likely to damage BBL.
Infringements in other EU states
The Defendant's case
The Claimants' Witnesses
i) David Gabbie is one of the two brothers who founded the Claimants' business. Counsel for the Defendant criticised his evidence citing two particular examples where it was said to be unsatisfactory. He exhibited a photograph of the Benefit Product displayed in Boots in Manchester which was said to have been wholly misleading. He produced a photograph which he said was an example of the Benefit Product not being displayed in the Benefit environment. The photograph did not show the wider picture of the display and he accepted in cross-examination that it was, in fact, in the Benefit environment. Mr Gabbie did not himself take the photograph and, whilst it did not show the wider context of the display I do not accept that Mr Gabbie was intending to mislead the court. The display was on the 'edge' of the Benefit area within Boots and other evidence showed that the Benefit Product was not always within a Benefit area. He was also criticised for giving evidence that contradicted evidence he gave in earlier litigation with eBay as to the meaning of the word 'Bay'. I do not find this evidence contradictory. His earlier evidence was in a particular context which is different from the context in this case. I found him a satisfactory witness.
ii) Arron Gabbie is the brother of David Gabbie. The only criticism of his evidence was that when he gave evidence about current trends in the beauty and fashion industry for collaborations it was not from his own knowledge but was obtained by internet searches he had carried out. I do not regard this as a valid criticism. He had produced examples of such collaborations and it did not matter whether these were examples he had known about prior to this case or whether he had discovered them when he was preparing his evidence. The evidence was equally relevant whether it was prior knowledge on his part or obtained by internet searches.
The Defendant's Witnesses
i) Tram Nguyen is Senior Director of Copy at Benefit Cosmetics LLC in San Francisco. I found her to be an honest and straightforward witness. She was cross-examined on the fact that she said in her first witness statement that she had had a conversation with Ms Suarez when in fact she had never spoken to Ms Suarez. I accept her explanation that she was copied in on an exchange of emails with Ms Suarez and she said that was the conversation to which she was referring.
ii) Megan Fletcher is Lead Senior Graphic Designer at Benefit Cosmetics LLC in San Francisco. She was not seriously challenged on any of her evidence and I found her an honest and straightforward witness.
iii) Lauren Byrne is the former Marketing Manager for Benefit. Ms Byrne gave evidence in her first witness statement as to Benefit's sales figures in the UK. These figures were also included in the Defence. Ms Byrne was present in Court during BBL's counsel's opening address. On hearing BBL's counsel's comments on those figures she realised that the figures she had put in her witness statement were wrong. She informed Benefit's lawyers that she believed this was the case and that evening they contacted the Chief Financial Officer of Benefit to obtain the accurate figures. Ms Byrne then put in a further witness statement correcting the figures in her earlier witness statement. The earlier figures were too small by about a factor of ten. Unfortunately, a further error was made when putting forward the revised figures in that the new figure was said to be for the UK only when in fact it included Europe. Both of these were clearly honest mistakes and there was no advantage to Benefit in putting forward an understatement of its relevant sales figures. Ms Byrne took steps to correct her error as soon as she realised the mistake. I found Ms Byrne to be an honest and straightforward witness.
iv) Jillian Cho is Senior Director, Legal Counsel of Benefit Cosmetics LLC. Ms Cho gave a short witness statement to explain how the incorrect sales figures were given in the Defence. She had signed the Statement of Truth on the Amended Defence and she was cross-examined about this and criticised for not giving sufficient attention to this when she signed it. However, the sales figures were in the unamended Defence, the Statement of Truth for which was signed by the CEO of Benefit. I do not believe that Ms Cho can be criticised for failing to spot the error in the figures which were not the subject of the amendments. I found Ms Cho to be an honest and straightforward witness.
A Pleading Point
Trade Mark Infringement: Article 9(2)(b)
"2. Without prejudice to the rights of proprietors acquired before the filing date or the priority date of the EU trade mark, the proprietor of that EU trade mark shall be entitled to prevent all third parties not having his consent from using in the course of trade, in relation to goods or services, any sign where:
…(b) the sign is identical with, or similar to, the EU trade mark and is used in relation to goods or services which are identical with, or similar to, the goods or services for which the EU trade mark is registered, if there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark; …"
The Average Consumer
"31. I agree … that the notion of an average consumer requires the court to consider any relevant class of consumer, and not to average them. I believe that conclusion to be consistent with the approach taken by this court in Interflora Inc and another v Marks and Spencer plc …
34. As with all issues in trade mark law, the answer to disputed questions is normally provided by considering the purpose of a trade mark which, broadly speaking, is to operate as a guarantee of origin to those who purchase or use the product. In principle, therefore, and in the absence of any authority cited to us which is directly in point, I would consider that the term average consumer includes any class of consumer to whom the guarantee of origin is directed and who would be likely to rely on it, for example in making a decision to buy or use the goods…"
Are the Conditions Satisfied?
The Likelihood of Confusion
"38. The risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion (see, inter alia, Case C-342/97 Lloyd Schuhfabrik Meyer  ECR I–3819, paragraph 17; Case C-120/04 Medion ECR I–8551, paragraph 26; and Case C–102/07 adidas and adidas Benelux  ECR I–2439, paragraph 28)."
(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; and
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion.
32. In Maier  FSR 20 we explained (at ) that to this summary should be added the further guidance provided by the Court of Justice in Canon  FSR 332 (at ) that the risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion for the purposes of the provision.
33. The decision in Specsavers  FSR 19 clarified one further important point concerning the context of the accused use. As this court said at :
"… In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context."
"66 It must therefore be concluded, as indicated in points 48 to 52 of the Advocate General's Opinion, that although the trade mark for which registration is sought may have been used as part of a registered trade mark or in conjunction with such a mark, the fact remains that, for the purposes of the registration of the mark itself, the trade mark applicant must prove that that mark alone, as opposed to any other trade mark which may also be present, identifies the particular undertaking from which the goods originate." (emphasis added)
Comparison of the goods and services
Comparison of the mark and the sign
Degree of attentiveness of the average consumer
"99… As I have said in a number of judgments, absence of evidence of actual confusion is not necessarily fatal to a claim under Article 5(1)(b). The longer the use complained of has gone on in parallel with use of the trade mark without such evidence emerging, however, the more significant it is. Other relevant factors are the scale of the use complained of and the likelihood of actual confusion being detected.
101. What is the likelihood of confusion being detected? Confusion would only be likely to be detected if customers complained. It is more likely that confused customers would complain to House of Fraser than to Jack Wills. The House of Fraser garments were being sold at similar prices to equivalent Jack Wills ones. There is no suggestion that the House of Fraser garments were of inferior quality or style. Someone who purchased a House of Fraser garment for themselves thinking it was a Jack Wills garment, but later discovered that it was not, might well do nothing because they liked the garment. If the garment was purchased for another person to wear, the consequences would depend on whether the recipient had requested a Jack Wills garment; whether, if so and the recipient realised that it was not a Jack Wills garment, the recipient chose to complain to the purchaser; and, if so, what the purchaser then did e.g. whether the purchaser simply returned the garment to House of Fraser without explaining why. In these circumstances, it is conceivable that some confusion might have gone undetected for some time."
i) This was a very good product: there were no complaints about it whatsoever.
ii) So even if someone subsequently appreciated their mistake, why would they complain to anyone about it?
iii) The fact that the Benefit Product was a Christmas gift makes detection of confusion even less likely. Someone purchasing a Benefit Product as a gift and believing it to be a product of BBL would only become aware of their error if they were alerted to it by the recipient of the gift. If the recipient of the gift had not specifically requested something from BBL, they would have no way of knowing the purchaser had been confused.
iv) On the other hand, if the recipient had specifically requested a gift from BBL, they may not realise that the Benefit Product had not come from BBL. They may assume that Benefit's products are available through BBL. Even if the recipient realised that the Benefit Product had not come from BBL they may not complain to the purchaser, both because the Benefit Product is a good quality product and because complaining in these circumstances would be impolite. Even if the recipient did complain to the purchaser, the purchaser may not raise the issue with Benefit as opposed to simply returning the item.
v) It is more likely that confused customers who mistakenly purchased the Benefit Product would complain to Benefit rather than to BBL. There is no evidence that Benefit has attempted to investigate whether there have been any instances of confusion.
vi) Ms Byrne, on behalf of Benefit, fairly admitted that such complaints would not come to her attention in any event.
vii) The time period over which (most of) the Benefit Product was sold was fairly brief (mostly over the Christmas period).
Infringement under Article 9(2)(c)
111. In Interflora this court explained (at ) that a proprietor of a registered trade mark alleging infringement under Article 5(2) must therefore show that the following requirements are satisfied: (i) the registered trade mark must have a reputation in the relevant territory; (ii) there must be use of a sign by a third party in the relevant territory; (iii) the use must be in the course of trade; (iv) it must be without the consent of the proprietor; (v) it must be of a sign which is identical with or similar to the trade mark; (vi) it must be in relation to goods or services; (vii) it must give rise to a link between the sign and the trade mark in the mind of the average consumer; (viii) it must give rise to one of three types of injury, that is to say, (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark, or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and (ix) it must be without due cause.
24. The public amongst which the earlier trade mark must have acquired a reputation is that concerned by that trade mark, that is to say, depending on the product or service marketed, either the public at large or a more specialised public, for example traders in a specific sector.
25. It cannot be inferred from either the letter or the spirit of Article 5(2) of the Directive that the trade mark must be known by a given percentage of the public so defined.
26. The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark.
27. In examining whether this condition is fulfilled, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it.
Detriment to distinctive character
"As regards, in particular, detriment to the distinctive character of the earlier mark, also referred to as 'dilution', 'whittling away' or 'blurring', such detriment is caused when that mark's ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is notably the case when the earlier mark, which used to arouse immediate association with the goods and services for which it is registered, is no longer capable of doing so."
i) The more immediately and strongly the trade mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is detrimental to the distinctive character of the mark;
ii) The stronger the earlier mark's distinctive character and reputation, the easier it will be to accept that detriment has been caused to it;
iii) The existence of a link between the sign and the mark does not dispense the trade mark proprietor from having to prove actual and present injury to its mark, or a serious likelihood that such an injury will occur in the future;
iv) The more "unique" the trade mark, the greater the likelihood that use of a later identical or similar mark will be detrimental to its distinctive character;
v) Detriment to the distinctive character of the trade mark is caused when the mark's ability to identify the goods or services for which it is registered and used as coming from the proprietor is weakened. It follows that proof that the use of the sign is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the mark is registered consequent on the use of the sign, or a serious likelihood that such a change will occur in the future.
# Gift set SRP Units sold 1 Beauty & The Bay £34.50 29,855 2 Hello San FrancisGLOW £19.50 28,728 3 City Lights Party Nights £24.50 14,224 4 B. Right By The Bay £39.50 11,711
As regards the concept of 'taking unfair advantage of the distinctive character or the repute of the trade mark', also referred to as 'parasitism' or 'free-riding', that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation.
44. In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark's reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the mark, the Court has already held that, the stronger that mark's distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. It is also clear from the case-law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark or is, or will be, detrimental to them (see, to that effect, Intel paragraphs 67 to 69).
45. In addition, it must be stated that any such global assessment may also take into account, where necessary, the fact that there is a likelihood of dilution or tarnishment of the mark.
49. In that regard, where a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of his own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark.
44. Where the proprietor of the mark with a reputation has demonstrated the existence of one of the forms of injury referred to in Article 5(2) of Directive 89/104 and, in particular, has shown that unfair advantage has been taken of the distinctive character or the repute of that mark, the onus is on the third party using a sign similar to the mark with a reputation to establish that he has due cause for using such a sign (see, by analogy, Case C-252/07 Intel Corporation  ECR I-8823, paragraph 39).
45. It follows that the concept of 'due cause' may not only include objectively overriding reasons but may also relate to the subjective interests of a third party using a sign which is identical or similar to the mark with a reputation.
46. Thus, the concept of 'due cause' is intended, not to resolve a conflict between a mark with a reputation and a similar sign which was being used before that trade mark was filed or to restrict the rights which the proprietor of that mark is recognised as having, but to strike a balance between the interests in question by taking account, in the specific context of Article 5(2) of Directive 89/104 and in the light of the enhanced protection enjoyed by that mark, of the interests of the third party using that sign. In so doing, the claim by a third party that there is due cause for using a sign which is similar to a mark with a reputation cannot lead to the recognition, for the benefit of that third party, of the rights connected with a registered mark, but rather obliges the proprietor of the mark with a reputation to tolerate the use of the similar sign.
The Article 14 Defence
1. An EU trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade:
…(b) signs or indications which are not distinctive or which concern the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of the goods or services;…
2. Paragraph 1 shall only apply where the use made by the third party is in accordance with honest practices in industrial or commercial matters.
i) It is descriptive;
ii) It will be understood as a play on "Beauty and The Beast";
iii) It will be seen as merely decorative and part of the overall psychedelic/summer of love artwork; and,
iv) The Benefit Logo will be perceived as the origin indicator.
"In considering whether a defendant is acting fairly in relation to the legitimate interests of the trade mark proprietor it will be relevant to consider, among other things, whether there exists a likelihood of confusion; whether the trade mark has a reputation; whether use of the sign complained of takes advantage of or is detrimental to the distinctive character or repute of the trade mark; and whether the possibility of conflict was something of which the defendant was or ought to have been aware. The national court must carry out an overall assessment of all the circumstances and determine whether the defendant is competing unfairly."