ON APPEAL FROM
THE HIGH COURT OF JUSTICE, CHANCERY DIVISION
THE HON MR JUSTICE FLOYD
Case No HC08C00448
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE ETHERTON
LORD JUSTICE PATTEN
| (1) BEST BUY CO. INC
(2) BEST BUY EUROPE DISTRIBUTIONS LIMITED
|- and -
|WORLDWIDE SALES CORPORATION ESPANA S.L.
Mr P Prescott QC & Mr J Hill (instructed by Kuit Steinart Levy LLP) for the Respondent
Hearing date: 5th May 2011
Crown Copyright ©
The Master of the Rolls:
The factual background
"Notwithstanding the above background, and without prejudice to [BBES's] rights in the 'Best Buy' name, our client believes that there may be scope for co-existence within the European Union between their business of retail services and [the defendant's] products branded under their Best Buy and Star Device mark. Indeed, there may even be commercial opportunities between our clients' respective businesses.
In the circumstances, and to avoid any unnecessary expense within the opposition proceedings [BBES] would be prepared to agree to an extension of the cooling-off period to allow further time within which to discuss the terms of a possible co-existence agreement. We enclose an extension request. If you agree to extend this period please have this signed and sent to OHIM by the deadline of 29 August 2008.
We would be grateful if you could confirm that [the defendant] would be interested in discussing this further and look forward to hearing from you at your earliest opportunity."
"in Europe and in particular in Spain, as well as in advertising and in the media, as at present, represents a conflict with the intellectual property rights duly registered by [the defendant] in Spain and Europe which would entitle it to take the appropriate legal action to defend its interests".
"If, taking into account the above, [BBES] were to remain interested in using the BEST BUY trademark in Europe my client would be prepared, taking up the proposal made by [BBES] in your fax of 28 August 2008, to reach a negotiated solution which would enable [it] to do so while at the same time compensating [the defendant] for the cessation of its activity that this would undoubtedly entail.
Until a negotiated solution is reached, we hereby request that [BBES] refrain from using the BEST BUY trademark in Europe, issuing any press articles or making any announcements of its imminent activities in Europe (news that has already caused confusion and concern among [the defendant's] customers).
In order to ensure that [the defendant] is able to protect its rights in a proper fashion, we hereby request that, within a term of fifteen (15) calendar days as of the date of receipt of this letter, you reply to us in writing confirming (i) [BBES'] willingness to start a negotiation process with [the defendant] in order to attempt to find a negotiated solution to the conflict; or (ii) [BBES's] undertaking to not use the BEST BUY trademark in Europe, or issue any news in the press or make any announcements of any imminent activity in Europe, or indeed use such trademark in any other way."
"Notwithstanding the above, for the avoidance of doubt any negotiations are without prejudice to [BBES's] position that its use of the BEST BUY Mark would not infringe [the defendant's] rights on the basis that, among other things, [BBES's] proposed use is not confusingly similar to [the defendant's] registered marks and the words BEST BUY as depicted in [the defendant's] logos are not distinctive."
The statutory background
"For the purposes of this section, a person uses a sign if, in particular, he –
(a) affixes it to goods, or the packaging thereof;
(b) offers or exposes goods for sale, puts them on the market … under the sign, or offers or supplies services under the sign;
(c) imports or exports goods under the sign;
(d) uses the sign on business papers or in advertising."
"(1) Where a person threatens another with proceedings for infringement of a registered trade mark other than—
(a) the application of the mark to goods or their packaging,
(b) the importation of goods to which, or to the packaging of which, the mark has been applied, or
(c) the supply of services under the mark,
any person aggrieved may bring proceedings for relief under this section.
(2) The relief which may be applied for is any of the following—
(a) a declaration that the threats are unjustifiable,
(b) an injunction against the continuance of the threats,
(c) damages in respect of any loss he has sustained by the threats;
and the plaintiff is entitled to such relief unless the defendant shows that the acts in respect of which proceedings were threatened constitute (or if done would constitute) an infringement of the registered trade mark concerned.
(4) The mere notification that a trade mark is registered, or that an application for registration has been made, does not constitute a threat of proceedings for the purposes of this section."
The issues on this appeal
i) Does the September letter contain a threat of infringement proceedings within section 21(1); if so,
ii) Does the September letter contain a threat of such proceedings in the English courts; if so,
iii) Does the threat of proceedings fall outside the exclusions in paras (a) to (c) of section 21(1); if so,
iv) Is the September letter precluded from being a threat by virtue of containing settlement proposals; if not,
v) Are the claimants "persons aggrieved" and therefore entitled to relief under section 21?
At trial, Floyd J answered each of the first four questions in the affirmative. Thus, he answered the first three questions in favour of the claimants, but, as he answered the fourth question in favour of the defendant, he was able to dismiss the claim without deciding the fifth question.
Did the September letter contain a relevant threat?
"The policy represented by the first statutory threats provision … was clearly to stop patentees who were (in Pope's words about Addison) 'willing to wound but afraid to strike' from holding the sword of Damocles above another's head: see Simon Brown LJ in Unilever PLC v Procter & Gamble Co. … In summary, the term 'threat' covers any information that would convey to a reasonable man that some person has trademark rights and intends to enforce them against another. It matters not that the threat may be veiled or covert, conditional or future. Nor does it matter that the threat is made in response to an enquiry from the party threatened ...".
Was the threat of proceedings in the UK?
Was the threat outside the exceptions in paras (a) to (c) of section 21?
As the September letter referred to settlement, could it be relied on as a threat?
"was part of a negotiating process and falls within the protection of the without prejudice rule. Having been invited by BBES to negotiate within the cooling off period, with BBES plainly asserting the strength of its own position, [the defendant's] response was doing no more than the same thing in relation to its own rights. Parties are to be expected, if invited to negotiate, to start from a position of strength, and then to indicate where concessions might be possible. The [September] letter indicated, for example, that notwithstanding [the defendant's] monopoly position in Europe under these trade marks, potentially giving it the right to exclude BBES altogether by litigation, it might be prepared to give up those rights in return for money. That is a concession, albeit a limited one, which in accordance with the public policy basis for the rule, attracts the protection of the privilege." –  EWHC 1666 (Ch), para 41.
Are the claimants "person[s] aggrieved"?
Lord Justice Etherton:
Lord Justice Patten: