England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM THE REGISTRAR
OF TRADE MARKS
IN THE MATTER OF UK TRADE MARKS
APPLICATIONS NOS 1 385 089 AND 1 424 644

		Ch/2003/APP/0124 Royal Courts of Justice Strand, London, WC2A 2LL
		29/04/2004

Mr Justice Lightman:

PRELIMINARY

1. This is an application by Kambly SA Spécialités De Biscuits Suisses ("Kambly") which came before me on the 31^st March 2004 ahead of an appeal by Kambly from the decision of Mr Foley (for the Registrar) rejecting the opposition by Kambly to the registration of two trade marks by Intersnack Knabber-Gebäck GmbH & Co KG ("Intersnack") due to commence on that date. By the application Kambly seeks permission to adduce fresh evidence and to amend the Grounds of Opposition to the registration and the Grounds of Appeal.
2. By reason of the dates of the applications by Intersnack for registration of the trade marks the transitional provisions of the Trade Mark Act 1994 ("the 1994 Act") provide that the applications continue to be governed by the Trade Mark Act 1938 ("the 1938 Act"). The application before me raises a number of questions of construction of the 1938 Act. All references to sections are references to sections of the 1938 Act unless the contrary appears.
3. In this judgment I shall draw no distinction between Kambly and its predecessor in title and Intersnack and its predecessor in title since that distinction has no significance.

FACTUAL HISTORY

4. In a statutory declaration in the main action Mr Christian Lehmann, the company secretary of Kambly, stated that the snack product the subject of the Kambly Trade Marks, a cracker in the shape of a goldfish (which I shall refer to as "the Cracker") was first sold in Switzerland. Kambly thereafter turned its attention to the export market. Kambly decided to exploit the export market by entering into licence agreements with licensees in a number of countries who would manufacture and sell the Cracker in designated countries. In 1962 one such designated country was the USA and the licensee was Pepperidge Farm Inc ("Pepperidge").
5. On the 29^th March 1960 Kambly filed an application for registration of trade mark No. 803846 Goldfischli (device mark) under Class 30 (flour, confectionery, bread, cake and biscuits, other than biscuits for animals), and on the 12^th April 1966 Kambly filed an application for registration of trade mark No. 893185 Goldfish (word mark) likewise under Class 30 in respect of like goods. Both applications duly led to registration. I shall refer to both trade marks as "the Kambly Trade Marks". Kambly obtained the registrations with a view to licensing the sale and manufacture of the Cracker under the Goldfischli mark in the UK. Kambly did not however succeed in reaching an agreement with a potential licensee in the UK, and in August 1995 Kambly concluded an agreement with Pepperidge for the manufacture for sale of the Cracker in the UK. In October 1996 Pepperidge licensed an English company, G Costa Company Ltd ("Costa"), to distribute the Cracker here.
6. On the 23^rd May 1989 Intersnack filed an application for registration of trade mark No 1385089 Goldfischli (device mark) under Class 30 in respect of a much wider category of goods. On the 11^th May 1990 Intersnack filed an application for registration of trade mark No. 1424644 Goldfischli (word mark) under Class 30 again for a wider class of products including "snack products". I shall refer to both trade marks as "the Intersnack Trade Marks".
7. I should mention at this stage the general rule (subject only to limited exceptions) that in case of all trade marks the date of the application for registration is deemed by section 19 to be the date of registration.
8. As was necessary to clear the way for progress of its application for registration of the Intersnack Trade Marks, by applications filed on the 31^st August 1993 Intersnack sought under section 26 rectification of the Register of Trade Marks by the complete removal of the Kambly Trade Marks on the ground that during a continuous period of five years ending one month prior to the date of the applications there had been no bona fide use of the Kambly Trade Marks in relation to the goods for which they were registered. Intersnack claimed that they were aggrieved by the registrations because the registrations constituted barriers to the registrations for which they were applying.
9. Kambly opposed the applications for removal and, after a contested hearing at which both parties were represented by Counsel, by a decision dated the 17^th December 1997 ("the First Decision") the Assistant Registrar of Trade Marks held that there had been no such bona fide use in this case for the five year period between the 31^st July 1988 and the 31^st July 1993 and he held that the Kambly Trade Marks should be removed from the Register of Trade Marks.
10. Thereafter the parties (through their retained trade mark agents) proceeded with their pleadings on Intersnack's applications for registration. In their Amended Statement of Grounds, after pleading the Kambly Marks, Kambly went out of its way specifically to plead as follows:

"2. The said trade marks have been used by [Kambly] and/or their licensees in the United Kingdom of Great Britain and Northern Ireland and elsewhere in relation to their goods and have become well known as their trade marks

…7. The Mark which the applicants are seeking to register is calculated to deceive or cause confusion and the registration by the applicants of the Mark would interfere with the use by [Kambly] of its trade marks which it is actually using."

11. The applications for registration of the Intersnack Trade Marks proceeded to a hearing before Mr Foley. Again both parties were represented by Counsel. Kambly raised four grounds of opposition.
12. The first ground invoked by Kambly was section 17(1) which requires an applicant for registration of a trade mark to be the proprietor of the trade mark. Kambly maintained that Intersnack was not entitled to claim to be the proprietor of the Intersnack Trade Marks as unregistered marks. Kambly adduced no evidence of use within the United Kingdom by Kambly of the Intersnack Trade Marks in respect of the Cracker or otherwise but sought to rely on a licensing agreement made between Kambly and Intersnack. (Mr Foley found that this agreement was contrary to Article 81(1) and accordingly void under Article 81(2) of the European Treaty).
13. The second ground invoked by Kambly was the definition of the term "trade mark" in section 68(1). Kambly maintained that the Intersnack Trade Marks were not used or proposed to be used in relation to the goods for which registration was sought for the purpose of indicating a connection in the course of trade between the goods and a person having the right to use the marks.
14. The third ground invoked was section 17(2) which confers on the Registrar a discretion to refuse an application. Kambly maintained that in the exercise of his discretion Mr Foley should refuse the applications because they were made in the full knowledge of Kambly's prior rights in the trade mark.
15. The fourth ground invoked was section 11 which provides that it is unlawful to register as a trade mark any matter the use of which would, by reason of its being likely to deceive or cause confusion or otherwise, be disentitled to protection in a court of justice. Section 11 is concerned with the protection of the public as well as with passing-off and the like. Kambly maintained that use of the Intersnack Trade Marks in relation to the goods in respect of which the applications were made was calculated to deceive and cause confusion.
16. Mr Foley in his decision dated the 10^th December 2002 ("the Second Decision") held that all the grounds of opposition failed and that he should accept the applications for registration of the Intersnack Trade Marks.
17. On the 17^th December 2002 Kambly instructed (in place of the trade mark agent previously acting on its behalf) Dechert LLP ("Dechert") to act on its behalf on the appeal against the Second Decision, Dechert served an Appellant's Notice dated the 21^st February 2003. The date for hearing the appeal was fixed for the 31^st March 2004.
18. In or about March 2003 Dechert began investigating the sale between 1980 and 1993 of the Cracker manufactured in the USA by Pepperidge at commissaries (or shops) on the nine American military bases in the UK. The investigation was apparently sparked by a chance remark by one unidentified member of Dechert to another. Dechert concluded its investigation in or about February 2004. The length of time taken is explained as due to the distance back in time of the relevant events, the difficulty of identifying personnel with the relevant knowledge and involvement and the difficulty of obtaining access to such personnel. The product of the investigation was eight witness statements in which the witnesses set out their knowledge relating to such sales. No prior intimation was given to Intersnack of this ongoing investigation. The statements are to the effect that the Cracker was ordered for shops on the bases from an American company C Lloyd Johnson Incorporated ("CLJ") (which was a military broker) and CLJ in turn purchased from Pepperidge.
19. Dechert sent copies of the witness statements to Intersnack by letter dated the 12^th February 2004 requesting their consent to the evidence being admitted on the appeal. On the 24^th February 2004 Dechert wrote to Intersnack enclosing a draft Re-Amended Statement of Grounds of Opposition and a draft Amended Grounds of Appeal, and requested their consent to the amendments. By the application to amend the Statement of Grounds of Opposition Kambly seeks to raise a point which had not previously been raised, that under section 12 the continued registration of the Kambly Trade Marks at the date of the application for registration of the Intersnack Trade Marks and the similarity of one to the other in law preclude registration of the Intersnack Trade Marks. By the application to amend the Grounds of Appeal, Kambly seeks to raise the contention based on section 12 and the separate contention based on its new evidence that registration of the Intersnack Trade Marks should be refused under section 11 on the ground that, in view of the use of the Kambly Trade Marks by Kambly shown by that evidence, use of the Intersnack Trade Marks would be likely to deceive and confuse the public.
20. By letter dated the 10^th March 2004 Intersnack wrote declining to give consent to the introduction of the new evidence or the amendments to the Amended Statement of Grounds and Grounds of Appeal. On the 17^th March 2004 Mr Goldberg, an assistant solicitor with Dechert, signed a witness statement in support of the application before me for the necessary permission to amend and to admit the fresh evidence.

APPLICATIONS GENERALLY

21. Before I turn to each of the applications in turn, I should make one general observation. It is a relevant consideration in considering applications such as the present whether their refusal may lead to a multiplicity of proceedings. A party which is refused permission to raise a new case or present new evidence may be entitled to bring fresh proceedings and have the new case or evidence taken into account in those proceedings. Where this is so, the overriding objective may require the court to allow the application in order to avoid multiplicity of proceedings. No such consideration comes into play in this case. If the applications before me are refused and the appeal fails, Kambly will not be entitled again to invoke the provisions of the 1938 Act to challenge the Intersnack Trade Marks. Kambly will be entitled to attempt to challenge the Intersnack Trade Marks under certain different provisions of the 1994 Act, but that entitlement exists irrespective of any decision on this application or indeed on the appeal.

APPLICATION UNDER SECTION 12

22. Section 12 (so far as material) reads as follows:

"12(1) Subject to the provisions of subsection (2) of this section, no trade mark shall be registered in respect of any goods or description of goods that is identical or nearly resembles a mark belonging to a different proprietor and already on the register in respect of?

(a) the same goods

(b) the same description of goods …."

23. The case which Kambly wishes to raise is that registration of the Intersnack Trade Marks is barred by section 12 because at the date of the applications for such registration the Kambly Trade Marks were still registered and the Intersnack Trade Marks nearly resemble (if they are not identical with) the Kambly Trade Marks and they are in respect of the same goods or same description of goods.
24. Kambly recognise that, if this case is to be raised, permission is required to amend both the Statement of Grounds of Opposition and the Statement of Grounds of Appeal. This case plainly could and should have been raised (if raised at all) prior to the hearing before Mr Foley. In that regard the only explanation proffered for this failure is a sentence in paragraph 20 of Mr Goldberg's witness statement which reads as follows:

"This point could have been raised earlier, but was not because, I understand, its force was not appreciated."

25. This explanation is totally deficient. Mr Goldberg was not involved until the appeal stage and the basis of his understanding is unstated.
26. In my judgment this application should be refused for three independent reasons. The first is that the case sought to be raised is clearly bad in law. The existence of a trade mark on the register at the date of application for registration is not under the 1938 Act a bar to an application for registration of another identical or similar trade mark so long as the previously registered trade mark is removed from the register by the date that the trade mark applied for is registered. The language of section 12 makes plain that the critical date is the date of the entry on the register: see Lord Diplock in GE Trade Mark [1973] RPC 297 at 328 and see In the Matter of a Trade Mark "Palmolive" (1932) 44 RPC 269 at 276. It is nothing to the point that the relevant date for the application of section 11 is the date of the application for registration and that the statutory predecessor to both sections 11 and 12 was a single section in an earlier Act.
27. Mr Baldwin, Counsel for Kambly, relies in support of his application to amend on the decision of Mr Allan James in Riviera Trade Mark [2003] RPC 50. Mr Alan Jones in that case held that under the 1994 Act a registration subsisting at the date of an application for registration of an identical or similar trade mark is fatal to a subsequent application for registration unless the order directing revocation of the subsisting registration provides that the revocation shall have effect from a date preceding the date of the application for revocation. The question has been raised before me whether that decision can be reconciled with the view expressed by the hearing officer in Transpay [2001] RPC 191. But the position under the 1994 Act, whatever it may be, cannot affect the position under the 1938 Act. Indeed the hearing officer in Transpay at paragraph 22 clearly stated that the position under the 1938 Act is as I have stated it in paragraph 26 above.
28. The second reason why the application should be refused is the absence of any such exceptional circumstances as may justify allowing Kambly to raise this case for the first time very shortly before the hearing of the appeal. A change of view whether or not to raise the case is no justification. Substantive justice and the overriding objective require, where this is possible, that the parties advance their entire case from the outset: see notes to CPR 52.8. Permission to raise the new case known but discarded previously is rarely to be granted. That is a sufficient reason for my refusal of permission in this case. I should add however that permission should even more rarely be granted where the new case involves the appellate body admitting fresh evidence previously available to the applicant. Mr Goldberg in paragraph 20 of his witness statement says blandly that the section 12 case is not dependent on the introduction of new evidence. By this I understand him to mean that Kambly is content for this issue to be determined without any fresh evidence being called. But Mr Baldwin concedes (as he must) that, if the case is raised, Intersnack must be entitled (as it would wish ) to call evidence, and whilst Mr Baldwin says that he will not seek to call evidence if Intersnack does not do so, he wishes to reserve the right to call evidence in reply to evidence presented by Intersnack. In my judgment it would be totally wrong to allow this application even if the case sought to be raised had any substance in law.

APPLICATION UNDER SECTIONS 11 AND 17

29. I turn now to the application to admit on the appeal the evidence of eight witnesses of sales of the Cracker at US bases. In the witness statements Mr Ribardo speaks of sales from 1993 to the present day, Mr Swayzee of sales from 1988 to 1991; Ms Goovers of sales from 1982 to the present day; Mr Schultz of sales from 1980 to 1989; Mr Yaksich of sales from 1991 to the present day; Mr Rowe of sales from 1983 to 1992; Mr Bendetson (sales manager of CLJ) of sales from 1985 to 1989 "when I believe CLJ stopped selling them to commissaries in the UK"; and Mr Barlow speaks of the licence granted by Pepperidge in October 1996 to Costa to distribute the Cracker in the UK and the continuous distribution of the Cracker in and since 1997.
30. Kambly wish to use this evidence to defeat the claim to registration of the Intersnack Trade Marks by establishing: (1) that Kambly was the proprietor of the trade mark which Intersnack is seeking to register and that accordingly Intersnack was barred by section 17 from applying for registration under section 17(1). Section 17(1) (as I have already said) requires an applicant for registration of a trade mark to be the proprietor; and (2) that it was unlawful to register the Intersnack Trade Marks under section 11. Section 11 (again as I have already said) provides that it is unlawful to register as a trade mark any matter the use of which would by reason of its being likely to deceive or cause confusion or otherwise be disentitled to protection in a court of justice.
31. Intersnack argues that there are in the way of the application obstacles, both as a matter of substantive law and procedurally.
32. The first obstacle as a matter of substantive law arises from the First Decision. The issue between the parties on the application for the rectification of the register by removal of the Kambly Trade Marks was whether or not there was any use of the Kambly Trade Marks in the five year period preceding the application for rectification. The First Decision decided that there had been no such user. This created an issue estoppel between the parties precluding Kambly from raising this issue again, most particularly on the application (ongoing at the date of the application for rectification) for registration of the Intersnack Trade Marks. Accordingly evidence of the witnesses so far as it relates to the five year period is both irrelevant and inadmissible.
33. The evidence submitted however contains evidence of user prior to the five year period and Mr Baldwin contends that he can rely on this (albeit distant in time) evidence of user. But in my view the effect of the First Decision goes beyond ruling out a claim to user during the five year period. In this regard the history of the provisions of section 26 is highly significant.
34. The Trade Mark Act 1883 made no provision for rectification of the register in the event of non-user, but case law established that non-user may evidence abandonment in which case the register could be rectified: see Louise v. Gainsborough (1903) 20 RPC 61 at 68. The Trade Mark Act 1905 gave statutory recognition to this doctrine and effectively provided that five years non-user gave rise to a presumption of abandonment, for section 37 provided that a trade mark might be taken off the register if there was non-user for five years immediately preceding the application for registration unless "such non-user is shown to be due to special circumstances in the trade and not to any intention not to use or to abandon such trade mark in respect of such goods". Section 26(1) and (3) of the 1938 Act are to same effect.
35. As it seems to me the five year non-user is a statutory modification of the common law doctrine of abandonment of trade mark. Non-user for the statutory period has the practical effect for the purposes of the 1938 Act of an abandonment, and it cannot be open to the former registered proprietor of the trade mark removed from the register on this ground to seek to rely on earlier user to establish a trade mark which bars registration by the successful applicant for rectification of his own trade mark. To allow Kambly to do this would frustrate the purpose and effect of the First Decision and section 26.
36. Mr Miller, Counsel for Intersnack, has further argued that as a matter of substantive law the evidence of sales of the Cracker on the US bases does not constitute the necessary public use by Kambly of the Kambly Trade Marks to trigger application of section 11 in respect of sales of the Cracker outside the bases. These are separate markets and customers at the bases will have known that the Cracker were imported from the USA. Both parties place reliance on the judgments of Oliver LJ and Dillon LJ in Anheuser-Busch Inc v. Budejovicky [1984] FSR 413 and Kambly relies on a dictum of Morritt V-C in Gerber Trade Marks [2003] RPC 1. This question is one of some difficulty, and since the application can be decided without answering it, I need say nothing more about it.
37. I turn to the procedural obstacle. The proper approach to applications to admit fresh evidence on trade mark appeals was the subject of detailed consideration in the judgment of May LJ in Du Pont De Nemours & Company v. S T Dupont [2004] FSR 15. After making clear that under the CPR there was no substantial difference between the approach under the CPR and the previous rules, in paragraphs 103-4 he went on to say:

"103. … Pumfrey J [in Wunderkind T.M. [2002] RPC 45] in my view correctly summarised the position in paragraph 57 of his judgment, where he said:

'There is no doubt that in a trade mark appeal other factors outside the Ladd v. Marshall criteria may well be relevant. Thus in my judgment it is legitimate to take into account such factors as those enumerated by Laddie J in Hunt-Wesson, provided always that it is remembered that the factors set out in Ladd v. Marshall are basic to the exercise of the discretion to admit fresh evidence and that those factors have peculiar weight when considering whether or not the overriding objective is to be furthered.'

104. This passage, in my view, properly recognises that the same principles apply in trade mark appeals as in any other appeal to which Part 52 applies; but that the nature of such appeals may give rise to particular application of those principles appropriate to the subject matter."

38. The factors set out in Ladd v. Marshall, whilst now only guidelines and not rules, are basic to the exercise of discretion to admit fresh evidence and have peculiar weight when considering whether or not the overriding objective is to be furthered.
39. An application for permission to admit further evidence on an appeal should never be made in a casual manner. Such permission (if opposed on substantive grounds) will not lightly be granted. The application is for an indulgence, and this requires the applicant to make full and detailed disclosure of all matters material to the application which he knows or can reasonably ascertain. In this case the disclosure is threadbare. The supporting witness statement of Mr Goldberg is totally uninformative. He says that he is a solicitor at Dechert who were first instructed by Kambly on the 17^th December 2002. He says nothing of his role in the litigation or (with one exception) his source of knowledge of anything which he says. The exception is in paragraph 12 where he says:

"The Appellant was not aware of the use of the 'Goldfish' mark in the UK until the Appellant's solicitors began their investigation. I refer for example to the witness statement of John Bendetson at Exhibit 'SSG 15'."

40. The Statement of Mr Bendetson however lends no support whatsoever for this proposition, and the proposition can scarcely stand with paragraph 2 of the Amended Statement of Grounds or with the contents of the witness statement of Mr Barlow that in October 1996 Pepperidge licensed Costa to sell the Cracker in the UK and that Costa sold them here in 1997 and ever since.
41. Mr Baldwin relies on the statutory declaration of Mr Lehmann as stating (by implication) that Kambly did not know that sales of the Cracker were being made here before 1997. Mr Lehmann does not say this, and the contents of his statutory declaration are not directed at the issue on this application. In a word, the general terms of the statutory declaration are no substitute for the precise and specific evidence called for on this application. Kambly does not, e.g. say whether sales of the Cracker were taking place at US bases throughout the world. If so, it would surely be expected that sales might be taking place here. No evidence assists the court on this question.
42. I am not satisfied on the totally inadequate evidence put before me that Kambly did not know of sales here until 2003. As I have already noted, Kambly specifically pleaded such sales in this case. No evidence has been filed explaining the pleading or any departure from it. Still less am I satisfied that Kambly could not have known this fact if it had made reasonable enquiries. Enquiries were called for (at the least) of their licensee Pepperidge, CLJ and Costa. The evidence is silent as to such enquiries.
43. The minimum evidence called for on this application was evidence from officers of Kambly of their state of knowledge, of what enquiries they made and what enquiries they could reasonably have made. No effort has been made to undertake the exercise required on making the application to admit the new evidence. For this reason alone the application should be refused.
44. I would (if necessary) go on to hold: (1) that there are serious questions as to the credibility of the evidence sought to be admitted. There is apparently no contemporaneous documentary evidence. Mr Bendetson, the sales manager of CLJ, says that CLJ ceased selling the Cracker to commissaries in the UK in 1989. He should know and yet others say that the sales continued thereafter. No reconciliation is even attempted; (2) that the late admission of the evidence is calculated to prejudice Intersnack who, if the evidence is admitted, will be required now at this very late date to investigate the position regarding sales in the UK since 1980 and will have to face a further delay in concluding this already protracted litigation; and (3) that I am not satisfied that the evidence would have an important influence on the outcome of the appeal. In this regard, it is to be remembered that issue estoppel at the very least precludes reliance on the most recent five year period, there is no sample packaging and there is a difference between Kambly's "Goldfish" and Intersnack's "Goldfischli", their respective device marks and their markets.
45. For all these reasons, notwithstanding Mr Baldwin's forceful submissions, Kambly's application to admit the fresh evidence must fail.

CONCLUSION

46. I accordingly dismiss this application.