COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
THE HON MR JUSTICE JACOB
London, WC2A 2LL
B e f o r e :
LORD JUSTICE JUDGE
LORD JUSTICE CARNWATH
(1) WWF – WORLD WIDE FUND FOR NATURE
(Formerly World Wildlife Fund)
(2) WORLD WILDLIFE FUND INC
|- and -|
|WORLD WRESTLING FEDERATION ENTERTAINMENT INC||Defendant/|
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr G W Hobbs QC, Miss S M L Ward and Miss E K Himsworth (instructed by S J Berwin) for the Defendant/Appellant
AS APPROVED BY THE COURT
Crown Copyright ©
Lord Justice Carnwath :
“The Defendant’s product – wrestling as mass entertainment – is highly individualised and distinctive. It involves the promotion of individual wrestlers as larger-than-life, exaggerated characters, each with a unique stage persona and stage name reflective of that persona, who engage in wrestling contests and other pre-scripted, staged events which are televised live.”
“It is clear that over the period from 1983 when the new management took over and the initials WWF were introduced, until today, the Federation has been transformed from a smallish promoter of a minority sporting entertainment into a significant global player in the leisure and entertainment world…
The core product around which the brand is based is live wrestling, the core idea is raw aggression. A cast of heroes and villains, who become the stars, feature in a series of simple predictable stories. The brand is then extended into every possible distribution channel, from the core activity, live events, to cable and broadcast TV, pay-for-view, on-line, home video through to character merchandising and licensing. In 1999 there were 100 licensees around the globe who created clothing, tapes, videos, games, cut-out figures all featuring the Federation’s stars and the Federation’s logo and initials, generating sales of $400 million.”
Events leading to the contract in dispute
"As you know, Titan Sports, Inc., ("Titan") has applied for federal trademark registration of the mark "WWF" in International Class 41. Your client, the World Wildlife Fund, has filed for extensions of time to oppose such registration, on the basis that its mark may be confused with the registered "WWF" trademark of the World Wildlife Fund.
By letter dated September 6, 1989, you requested that Titan Sports agree that it would not use the mark "WWF" in "Times Roman" typeface when that mark was standing alone, that is, when not used in conjunction with the World Wrestling Federation's logo or when the context of the World Wrestling Federation Magazine.
Titan Sports is willing to accept the terms of your offer, on the condition that by doing so, the World Wildlife Fund agrees that it will not oppose federal trademark registration by Titan Sports of the mark "WWF" in Class 41, Serial No. 770,628."
“This was an anxious and frightening time for me, my family and many of our staff… We were suffering from declining revenues and losing our market share, making our lenders concerned. On top of all this, there was the spectre of the worst scenario, that my husband would go to prison and the Federation would go out of business…”
“As far as the products of the respective parties are concerned, no danger of confusion is to be assumed. The overall impression created by the publications of the Plaintiffs and the Defendant is so different that the average purchaser wishing to buy a wrestling magazine will hardly mistake it for the WWF News, or vice versa. On the other hand, indirect risk of confusion does indeed prevail: owing to the high degree to which the Plaintiff’s mark WWF is well known, the public may well get the wrong impression that the Plaintiff is in some form associated with the World Wrestling Federation. Danger of confusion has thus been sufficiently proved in this case.”
“It seems in fact probable that in the event of the continued marketing of the Defendant’s products the prejudices as claimed will indeed arise, and in particular, considerable damage to the Plaintiff’s reputation is to be expected which, as experience has shown, is very difficult to remedy. The Plaintiff has a genuine interest in not being identified with the ideals of the World Wrestling Federation, which are in blatant contrast to his own principles. As stated in the foregoing, the Defendant’s actions have given rise to a risk of confusion which likewise affects the good reputation enjoyed by the Plaintiff. Neither does he have to tolerate the ‘watering down’ of his trade mark…”
“Overwhelming repugnance at being associated with the World Wrestling Federation; violence, anti-conservation with Skinner and Jake the Snake.”
WHEREAS, the Fund is the world's largest private environmental conservation organization carrying on its activities using the initials WWF as well as providing goods and services under the mark WWF and wishes to avoid any confusion with the trade name "World Wrestling Federation" when abbreviated to the initials "WWF" by Titan;
WHEREAS, the National Affiliates are all signatories to agreements with the Fund under which they are each licensed by the Fund to use and sublicense the use of the initials "WWF" in connection with their activities;
WHEREAS, Titan is in the business of providing sports entertainment services and goods and does so under the marks "World Wrestling Federation" and "WWF".
NOW, THEREFORE, the parties, in consideration of the mutual covenants and agreements contained herein and intending to be legally bound hereby, agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth as follows:
1.1 "Initials" means the initials "WWF" in any language, but does not include Titan's logo or the name "World Wrestling Federation".
1.2 "Titan's Logo" means Titan's World Wrestling Federation logo in all forms appearing in Annex II attached hereto and made a part hereof and in any color or combination of colors selected by Titan.
ARTICLE 2. UNDERTAKINGS BY TITAN
2.1 Subject to the provisions of Article 5, Titan undertakes, whether acting directly or indirectly through its officers, servants, agents, subsidiaries, licensees or sublicensees, its television or other affiliates, or otherwise howsoever, and subject only to the terms hereinafter set out in this Agreement:
(1) forthwith to cease and thereafter to refrain from using or causing to be used the Initials whether in printed or written or other visual form in any country of the world in or for the purposes of or in connection with its business;
(2) with reasonable dispatch, in all countries to withdraw and to refrain from filing any application for registration of the Initials or any mark consisting of or including the Initials as a trade mark or service mark and immediately to cancel any registration of any such mark, except (a) Titan's logo, or (b) where such mark is consistent with the oral uses of the initials permitted only in Section 2.1 (6)(b) of this Agreement;
(3) immediately to cease and thereafter refrain from using or causing to be used the Initials orally in any language in any country of the world in or for the purposes of or in connection with:
(a) the promotion or sale of or in any other connection with any goods whatsoever;
(b) the encouragement directly or indirectly of support including donations or otherwise for charitable or similar purposes; or
(c) the promotion or sale of or in any other connection with any services, other than as permitted under Section 2.1 (6)(b);
(6) PROVIDED THAT nothing in the foregoing undertakings shall prevent any of the following:
(a) the use of Titan's logo and/or the name "World Wrestling Federation";
(b) the occasional use of the Initials orally, but only in the English language during Titan sports entertainment events presented in any language, whether pre-recorded or live or whether televised or not, including in the story lines, interviews, comments, introductions and promotions of such events, etc. (e.g. "the current WWF champion"), provided that, Titan will use its best efforts not to use the Initials orally in scripted matter including story lines, comments, introductions or promotions;
ARTICLE 5. UNITED STATES OF AMERICA
This Agreement shall not apply to the United States of America as to the oral use of the Initials in relation to goods; however, this Agreement shall apply to the United States of America in relation to the printed, written, visual or other uses of the Initials upon or otherwise in relation to goods made or offered for sale by Titan or its licensees or the use of the Initials in any manner in connection with solicitation of charitable donations, otherwise the rights of Titan and of the Fund in the United States of America shall only be subject to that certain Letter Agreement between Titan and World Wildlife Fund, the United States affiliate of the Fund, dated September 12, 1989 (the "Letter Agreement")…, with the Fund standing in the stead of World Wildlife Fund.
“The parties hereby acknowledge that Titan is permitted to maintain those registrations authorized under Section 2.1(2)(b) hereof specifically in order that Titan may retain the protections afforded thereby to assist in abating infringing uses of the Initials by third parties…”
By Article 6.3, the Federation agreed -
“never to attack or deny any rights of the Fund in its name ‘WWF’ or the Fund’s trademarks consisting of or containing the Initials (except if the Fund shall have abandoned the same) and their use for any goods or services in any country whatsoever other than in International Class 41 for ‘services for wrestling entertainment’…”
The Post Contract Events
… since at least 1997 the Federation has simply ignored the contract. In particular with its adoption of the website address www.wwf.com in that year the Federation has more or less used the initials at will and on an increasing scale. It also dropped the block logo and went over to what was called the "scratch logo"…To my eye it is more obviously the initials than the block logo.
“The popularity of the Federation’s web-site, which has consistently been one of the top 50 most-visited sites on the world wide web, illustrates the significance of the internet for the Federation. The Federation has invested substantial resources into the development of the internet division which had helped its overall business to grow and to maintain popularity and profitability…For example, the Federation now sells tickets for its live events on the internet. As a result, in 2000, some of its live events sold out in record time… The Federation received on average 250-300 million page views per month over the five months ending June 2001. The Federation attributes its growth in large measure to its successful internet sites.”
I took the view that the Agreement did not expressly cover the internet and furthermore that the Federation was allowed (see Article 5) to provide services in the United States under the Initials. There was no doubt in my mind that the delivery of internet services in the United States by the Federation fell, in any event, within the parameters of this Article.”
He thought that the Federation’s decision to accept the agreement had been “inexplicable”, other than in the context of the severe pressure the McMahons had been under at the time. Before us, Mr Hobbs has not argued that the establishment of the web-site, based on the letters, was other than a clear breach of the agreement.
Principles for summary judgment
“There was no dispute as to these. I have to be satisfied that the defendant has no real prospect of successfully defending the claim. It is immaterial in relation to that test that lengthy litigation is in prospect, see per Lord Hope in Three Rivers DC v Bank of England (No 3)  2 All ER 513 at 546. What I am looking for is "absence of reality" to use Lord Hobhouse's words in Three Rivers at page 568b.”
Breach of contract
“The Agreement as a whole regulates visual and oral expression of “the initials WWF in any language”. The reference to “language” indicates that the restrictions in the Agreement are directed to use of the initials WWF as a morpheme and do not apply to graphic designs in logotype form merely because they are designs out of which the letters W, W and F can be extracted”
Consistently with this approach, he says that the examples of the block logo, shown in Annex 2 of the Agreement, were outside the agreement; their specific exclusion was for the avoidance of doubt only.
“Thus a restraint imposed by an intellectual property dispute settlement should only be regarded as falling within the restraint of trade doctrine (and thus require justification) if the restrained party can show that: (a) the restraint actually imposes a real fetter on his trade; and (b) the restraint goes beyond any reasonably arguable scope of protection of the intellectual property right in issue. If the restrainee can show that, the restrainor may nonetheless justify by showing (c) that the restraint nonetheless provides a protection which he reasonably needs. I add (c) because there may be cases where the restrainor can justify the restraint independently of or in conjunction with any intellectual property right. The ultimate question is whether the restraint is reasonable in all the circumstances. The restrainor's intellectual property rights are not necessarily the sole determinant of this.” (emphasis added)
(It seems right to regard the emphasised words as intended to express the same test as the words “obviously overreach” in the earlier paragraph.)
“First, this was a settlement agreement. It was made on the footing that each party had some legitimate interest in its trademarks and logos which it wishes to protect. The agreement was drawn up specifically so as to avoid challenges and contests in a host of countries. It was implicit in such a settlement that the parties were not attempting a finite assessment of all their rights country by country. They adopted a broad-brush approach. If one party to such an agreement, dissatisfied with his bargain, can by challenging its enforceability require the court to explore and adjudicate upon the validity and strength of the other's rights country by country, then such an agreement would totally fail to achieve its object of avoiding disputes and litigation. A settlement agreement would settle nothing. It would merely set the stage for the very lengthy and expensive litigation sought to be avoided.” (para 149)
“The Court acknowledges that, as the Applicant and the Government of the Federal Republic of Germany submit and the Commission also concedes, agreements known as delimitation agreements are lawful and useful if they serve to delimit, in the mutual interests of the parties, the spheres within which their respective trade marks may be used, and are intended to avoid confusion or conflict between them. That is not to say, however, that such agreements are excluded from the application of Article 85 of the Treaty if they also have the aim of dividing up the market or restricting competition in other ways…” (para 33)
In that case, as the Court held, the agreement was not a settlement of a genuine dispute. BAT’s opposition was “an abuse of (its) rights” (para 35) and the agreement was based on “a contrived conflict” (para 37).
“I think the Fund had a legitimate interest in any injurious association with the Federation, whether conscious or even sub-conscious. It had an interest in the initials remaining unsullied, in putting as much clear water as possible between it and the Federation. Moreover that interest is worldwide. One must take into account the possibility of association (commercial or otherwise) in many lands, in many tongues and by people who are not particularly familiar with the Federation.” (para 35)
“where it does not appear that the public could believe that the goods or services come from the same undertaking or, as the case may be, from economically-linked undertakings” (para 30). (see also Marca Mode CV v. Adidas AG  ETMR 723 at paragraph 41).
“The prevailing view is that the presence in the market place of different marks which call each other to mind is necessary but not sufficient without more to warrant the conclusion that the use of one is detrimental to or takes unfair advantage of the distinctive character of the other.”
“The possibility of success for the Fund in some countries was realistic: the Federation was genuinely at risk at least of a patchwork of decisions around the world. Nor is it without significance that the Federation, although mainly on the receiving end of disputes, itself opposed the Fund's trademark applications in some countries. These matters go to show that the disputes of the time cannot be dismissed as mere "contrived conflicts."”
“… no-one can doubt that the agreement was negotiated by a series of proposals and counterproposals with each party being fully represented. Nor can it be doubted that the Federation at the time was a substantial concern with a large and profitable multinational business… The authorities do not call for a detailed examination of the relative financial strengths of the parties or the pressures under which their respective managements happen to be at the time. All that is called for is a proper negotiation between commercial parties…” (para 43-4)
“The argument only arises if the restraint was not within Art 81 at the time of the contract but would be within it if the contract were made now. I think one must ask why the restraint has become more onerous. The answer is because the Federation has broken the agreement by committing itself to WWF more - especially with the website. I think it is obvious that a changed circumstance brought about by a breach of the contract cannot be a material consideration. A party cannot rely upon its own breach of contract to escape from it.” (para 48)
Conclusions and remedy
“Such agreements cannot be properly held to apply to cases which, although covered by the words of the agreement, cannot be reasonably supposed ever to have been contemplated by the parties, and which on a rational view of the agreement are excluded from its operation by falling, in truth, outside, and not within, its real scope. But, even if some extreme case of a technical breach producing no injury to the party to be protected could be proved, sound principle requires, not that the agreement should be void in toto, but only in so far as it is really unreasonable. Even if the restriction could not be so construed as to exclude such a case, no jury would give the plaintiff any damages, and no judge would grant him an injunction. In such an extreme case the defendant is sufficiently protected against oppression without holding the agreement void in toto, and I am unable to see that public policy requires more.”