Strand, London, WC2A 2LL
B e f o r e :
| (1) HOTEL CIPRIANI SRL
(2) HOTELAPA INVESTIMENTO HOTELEIRO SA
(3) ISLAND HOTEL (MADEIRA) LIMITED
|- and -
|CIPRIANI (GROSVENOR STREET) LIMITED
CIPRIANI INTERNATIONAL SA
James Mellor QC and Charlotte May (instructed by CMS Cameron McKenna LLP) for the Defendants
Hearing dates: 28-31 October, 3-7 November 2008
Crown Copyright ©
MR JUSTICE ARNOLD :
The name Cipriani
HC's Community trade marks
"Hotels, hotel reservation, restaurants, cafeterias, public eating places, bars, catering; delivery of drinks and beverages for immediate consumption."
HC's United Kingdom trade marks
i) On 30 July 2007 Arrigo, Giuseppe, Cipriani Fifth Avenue, LLC, Downtown Restaurant Company, LLC and GC Alpha, LLC entered into a plea agreement with the District Attorney of the County of New York under which Arrigo, Giuseppe and the companies agreed to plead guilty to tax offences. In the case of Arrigo he agreed to plead guilty to one count of a violation of Tax Law §1805(b), False Returns or Reports; Corporate Taxes, a class E felony. In return the District Attorney agreed to recommend to the Court that he be sentenced to five years' probation and (jointly and severally with the other defendants) to pay $10 million in satisfaction of New York State and New York City tax obligations through tax year 2004 and the cost of prosecution. The agreement provided that at the time of the plea Arrigo would admit under oath the following facts:"I am an owner and corporate officer of Cipriani International, S.A. ('Cipriani SA'), a foreign holding corporation formed under the laws of Luxembourg. Cipriani S.A. in turn wholly owns Cipriani USA, Inc. ('Cipriani USA') a Delaware corporation with its principal office at 110 East 42nd Street, New York, New York. Cipriani USA owns numerous subsidiaries which operate various restaurants, banquet halls and real estate venues in New York City such as the Rainbow Room located at Rockerfeller Plaza, Downtown by Cipriani, Harry Cipriani, 55 Wall Street and Cipriani Dolci in Grand Central Terminal. Cipriani SA also owns the rights to the Cipriani name and the other trademark property such as food recipes and distinctive décor used in the various Cipriani restaurants and banquet facilities.I aided in knowingly filing false New York State corporate tax returns for Cipriani USA and its subsidiaries with the intent to substantially understate their corporate tax liabilities and, thereby, evade New York State and New York City corporate taxes. Specifically, in tax years 2003 and 2004, Cipriani USA illegally deducted from its gross profits certain royalty payments deducted pursuant to a licensing agreement with Cipriani SA. According to that licensing agreement USA had agreed to pay a royalty of 11.5% of sales to Cipriani SA in exchange for the right to use the Cipriani name and other trademark property in the United States. In fact, the implementation of this licensing agreement was illegal under New York State law. New York State law in these years provided that in order for the royalties to be deducted by a New York State corporation to a related foreign licensor, the royalties were required to be taxed by the country of the licensor at a rate at least equal to the tax rate imposed by New York State. In fact, I knew that the royalties were being taxed in Luxembourg at a rate that was less than the rate of tax imposed by New York State. Additionally, no royalty payments were ever actually made to Cipriani SA for the tax years 2003 and 2004. These deductions by Cipriani USA on the New York State corporate tax returns were illegal and were taken with my knowledge and my intent to substantially understate the company's New York State and New York City tax liability. For tax years 2003 and 2004, New York State and New York City taxes were evaded in the amount of approximately $10,000,000."Prior to Arrigo's cross examination the Defendants made an application for any cross-examination about this matter to be heard in secret. This eventually led to an agreement between the parties, the details of which they agreed should be kept secret, as a result of which Arrigo was not cross-examined about the matter, but the Claimants were permitted to make submissions as to Arrigo's credibility. I accept the submission of counsel for the Claimants that this episode gives rise to serious concern over Arrigo's credibility as a witness, particularly given that Arrigo did not explain himself in oral evidence.
ii) In 2001 Arrigo was prosecuted by the Venetian tax authorities for evading some £500,000 in taxes. They alleged that he had made the profits from Harry's Bar (as to which, see below) appear about half what they really were by means of a fictitious discount which only appeared on the copy of customers' bills retained by Harry's Bar. Arrigo accepted in cross-examination that this had occurred in some cases, although he claimed not in all the cases alleged. He settled the case by agreeing to pay the taxes demanded.
iii) The Defendants originally pleaded that the Caffetteria di Palazzo Grassi (as to which, see below) had opened in 2000, whereas I am satisfied that in fact it opened in 1986. Arrigo was unable to explain how this error had occurred or why he had not corrected it prior to his second witness statement. While I accept that this was a mistake, and one which amounted to an error in the Claimants' favour, it inspires little confidence in the accuracy of Arrigo's evidence. More seriously, he stated in his third witness statement that he did not recall that this cafeteria had an official name. He went on that he could not explain why the words "Caffetteria di Palazzo Grassi Dell'Harry's Bar" were printed on the cover of the menu, saying "Someone must have been responsible for this but I cannot remember". During his oral evidence he claimed not to have been aware that this name was on the cover until he had seen it recently, but accepted that he must have been the one who gave the instructions for the cover to be printed.
iv) In his second statement, he disputed the account given by one of the Claimants' witnesses, Anthony Kavanagh, in his witness statement as to Giuseppe Senior's shareholding in HC. Mr Kavanagh's account was based on his examination of HC's statutory records including the register of shareholders. Mr Kavanagh said that Giuseppe Senior had had a 13.33% shareholding prior to selling out. In response Arrigo asserted that Giuseppe Senior had ended with a 33.33% shareholding. He gave no basis for this assertion. Mr Kavanagh's account was not challenged in cross-examination. In cross-examination Arrigo initially repeated his assertion, but eventually accepted that it was wrong.
v) During cross-examination Arrigo asserted that bills at Harry's Bar had referred to the Hotel Cipriani and Hotel Villa Cipriani at a time when the Cipriani family no longer had any connection with them. No such assertion was made in any of his three witness statements, it is unsupported by any other evidence, it was not put to any of the Claimants' witnesses and it is inherently improbable.
vi) During cross-examination Arrigo asserted that the reason why the word LONDON did not appear together with the word CIPRIANI on the doormat of the Restaurant was that there was "no space".
vii) During cross-examination Arrigo disclaimed knowledge of, and responsibility for, a number of other matters which one would expect him to know of and be responsible for.
Relevant dates for assessment of reputation and goodwill
"It is quite simple. The best meals in the world are to be purchased at Harry's Bar in Venice."
Hotel Villa Cipriani
Caffetteria di Palazzo Grassi
Cipriani restaurants in New York
Cipriani restaurants in Buenos Aires
Cipriani Porto Cervo
Cipriani Hong Kong
Ristorante Hotel Cipriani and Ristorante Villa Cipriani
Stationery used by ACS and CS
Italian registered trade marks
The dispute between ACS, Arrigo and SFIP
The US litigation
"1. Hotel may use the name 'Hotel Cipriani' in the United States in connection with the hotel business. In addition, Hotel may operate restaurants in a hotel which it owns or manages in the United States which shall be identified as 'Hotel Cipriani Restaurant' or 'Restaurant Hotel Cipriani' or its equivalent. Hotel, may not in any such restaurant use the name 'Cipriani' alone or the names 'Harry Cipriani' or 'Bellini by Cipriani', and Hotel will not commence use of the 'Hotel Cipriani' name in a restaurant located in a city in which Arrigo is already using the 'Cipriani' name in a restaurant.
2. Arrigo may conduct any business it chooses to engage in, providing that it is designated, with or without the bartender logo, as 'Cipriani' with the identity of the product or service offered or any other descriptive terms or name except use of the word 'hotel' in connection therewith.
3. Both parties consent to registrations by the other in the United States Patent and Trademark Office consistent with the rights set forth in paragraphs one (1) and two (2) above.
4. Arrigo may continue to use the present inventory of products and packaging until the same is exhausted that currently contains only the name 'Cipriani'.
5. The parties will maintain their services and products at a high level of quality that appeals to sophisticated clientele."
The OHIM oppositions
"It was concluded above that the identical word 'CIPRIANI' is the dominant and distinctive component of the marks in comparison, both visually and phonetically.
Moreover, it is the part in which the distinctiveness of the CTM application lies, as it is much stronger than the directly descriptive word 'SERVICE' and the allusive figurative element.
Considering that the respective [services] are identical, and that the differentiating features of the CTM application have only a secondary impact on its overall impression, there are sufficient grounds to suggest that the average consumer may directly mistake the one mark for the other, or at least associate the two assuming that they indicate origin from the same or connected undertakings. All the more so, since the opponent has additionally proved that the mark 'CIPRIANI' enjoys considerable international esteem and notoriety in relation to hotel services.
Hence, it is concluded that the reproduction of the earlier mark in the CTM application in its entirety generates sufficient visual and phonetic similarities between the marks to give rise to confusion on the part of the public in the territory in which the earlier mark is protected, in this case the Community."
"It was concluded above that the identical word 'CIPRIANI' is the dominant and distinctive component of the marks in dispute, both visually and phonetically, as it is much stronger than the directly descriptive words 'HOTEL' and 'FOOD' and the allusive figurative element.
In addition the opponent has succeeded in proving that the mark 'CIPRIANI' enjoys considerable reputation in relation to hotel services, as the identifier of one of the most prestigious and highly esteemed hotels in Italy.
Indeed the evidence shows that the opponent's establishment has been ranked for decades among the best of the sector in specialised directories, both because of the quality of its services and its imposing site in the Venetian lagoon. It achieves significant turnovers (an average of 11.000.000 US$ per year between 1990-1994) of which a considerable amount (more than half a million US$ per year) is spent for promotional purposes, in particular by way of promotional entries in specialised magazines and directories. Moreover, the international press has published a variety of articles attesting to the fame of the 'HOTEL CIPRIANI' and many celebrities have stayed at the hotel over the years. Furthermore, the submitted materials show that the opponent's establishment includes a top level restaurant offering a variety of gourmet dishes, pasta and confectionery prepared daily in the premises and that the hotel also organises gastronomy related activities such as cookery courses and competitions.
On the other hand, some of the applicant's goods have been found to be clearly dissimilar to the opponent's services.
The Court has made clear that the similarity of goods is a conditio sine qua non for the application of Article 8(1)(b) by ruling that '... the likelihood of confusion presupposes that the goods or services covered are identical or similar ...' and that '...even if a mark is identical to another with a highly distinctive character, it is still necessary to adduce evidence of similarity between the goods or services covered ...' (Canon, paragraph 22).
It follows that for those goods of the applicant that were found dissimilar to the opponent's services, that is 'meat, fish, poultry and game; meat extracts; dried fruits and vegetables; eggs, milk; edible oils and fats, coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee; flour and preparations made from cereals, bread, honey, treacle; yeast, baking powder; salt, vinegar, spices; ice' there can be no likelihood of confusion, notwithstanding the high degree of similarity between the signs and the reputation of the opponent's marks.
It should also be noted that the opponent has not grounded his opposition on Article 8(5) CTMR which could potentially lead to the rejection of the application even for dissimilar goods. Neither has he claimed or proved that use of the application would take unfair advantage of, or be detrimental to, the distinctiveness or repute of his earlier registrations.
Therefore, the opposition is dismissed for these goods.
Nevertheless, the comparison has shown that the remaining goods, namely 'jellies, jams; preserved and cooked fruits and vegetables; fruit sauces; milk products; pastry and confectionery, ices; mustard; sauces (condiments)' are processed foodstuffs which are complementary to the opponent's services and may be prepared by hotels or restaurants or produced on their behalf.
In the opinion of the Office, if these similarities between the respective goods and services are combined with the close similarity of the signs and the high distinctiveness of the earlier marks, they may indeed justify an assumption on the part of the public that such goods either originate directly from the opponent, or that the opponent is somehow involved in their production or is ultimately responsible for their quality.
To this extent, the opposition is well founded on Article 8(1)(b) CTMR and the application may not proceed to registration as regards these goods."
"The internationally expansionist group that owns Harry's Bar in Venice opened in London in 2004, aiming to bring a large dose of the cosmopolitan swish of the watery city to central London."
The entry goes on to state that "the signature selection of Cipriani cakes is vigorously pushed" and to identify the proprietor as Arrigo.
Events leading to the proceedings
"It was in 1879 that James LJ observed that 'the very life of a trade mark depends on the promptitude with which it is vindicated', Johnston v Orr-Ewing (1879) 13 Ch.D 434 at p. 464. Nothing has changed. Like gardens trade mark cases always get worse with neglect – even if rights are not actually lost, delay is apt to turn what would be over in a few weeks by a quick application into a mini State Trial. As here."
The 1967 Agreement
"3.1 Lei conviene che la Società, potrà conservare la propria denominazione attuale e ch e l'Hotel Villa Cipriani di Asolo potrà conservare la propria insegna attuale, ed in generale che la Societa e l'Hotel Villa Cipriani avronno diritto di usare il nome 'Cipriani' in via esclusiva, anche dopo che sarà venuta a cessare ogni partecipazione Sua o della Sua famiglia al capitale della Società, ed anche nel caso in cui Lei o Suo figlio ceasino di far parte del consiglio di amministrazione della Società; Lei si impegna, inoltro, ad astenersi, ed a far si che ogni persona della Sua famiglia si astenga, per il periodo di cinque anni da oggi, dall'iniziare nuove imprese con la denominazione 'Cipriani', oppure nouve imprese con siano comunque idonee a sviare la clientela della Societa, o dell'Hotel Villa Cipriani, se non con il nostro consenso. Resta peraltro inteso che Lei ed i Suoi successori ed aventi causa potranno continuare ad usare il nome 'Cipriani' per la Locanda Cipriani di Torcello.
3.2 Noi ci impegnamo ad asternerci, per il periodo di cinque anni da oggi, dall'iniziare nuove imprese con is denominazione 'Cipriani', se non con il Suo consenso.
3.3 Noi ci impegnamo a fare del nostro meglio aifinche anche in futuro sia conservate l'attuale eccellenza qualitative dei servizii che la Società e l'Hotel Villa Cipriani offrono alle proprie rispettive clientele."
"3.1. You agree that the Company may retain its current name and that the Hotel Villa Cipriani di Asolo may retain its current logo and, in general, that the Company and the Hotel Villa Cipriani will have the right to use the name 'Cipriani' on an exclusive basis, even after any participation by you or your family in the capital of the Company has come to an end, and even in the event that you or your son cease to be on the Company's board of management. You also agree to refrain, and to see to it that every member of your family refrains, for a period of five years from today, from starting new businesses with the name 'Cipriani', or new businesses that are apt to divert customers from the Company or Hotel Villa Cipriani, except with our consent. It is, however, understood that you and your successors in interest may continue to use the name 'Cipriani' for the Locanda Cipriani in Torcello.
3.2 We agree to refrain, for a period of five years from today, starting new businesses with the name 'Cipriani', except with your consent.
3.3 We agree to use our best efforts to insure that in future the current outstanding quality of services offered by the Company and the Hotel Villa Cipriani to their respective clienteles is preserved."
"Art. 1362 Intenzione dei contraenti
Nell'interpretare il contratto si deve indagare quale sia stata la comune intenzione delle parti e non limitarsi al senso letterale delle parole. Per determinare la comune intenzione delle parti, si deve valutare il loro comportamento complessivo anche posteriore alla conclusione del contratto.
Art. 1362 Intention of the contracting parties
In interpreting the contract, one has to enquire on the common intent of the parties and not limit oneself to the literal meaning of the words. For determining the common intent of the parties, one must estimate their conducts as a whole also after the execution of the contract.
Art. 1363 Interpretazione complessiva delle clausole
Le clausole del contratto si interpretano le une per mezzo delle altre, attribuendo a ciascuna il senso che risulta dal complesso dell'atto.
Art. 1363 Overall interpretation of the clauses
The clauses of the contract must be interpreted the ones by means of the others, giving to each one a meaning which derives from the whole agreement.
Art. 1364 Espressioni generali
Per quanto generali siano le espressioni usate nel contratto, questo non comprende che gli oggetti sui quali le parti si sono proposte di contrattare.
Art. 1364 General expressions
However generic the expressions used in the contract may be, this only encompasses the subject matters which the parties decided to agreed upon.
Art. 1365 Indicazioni esemplificative
Quando in un contratto si è espresso un caso al fine di spiegare un patto, non si presumono esclusi i casi non espressi, ai quali, secondo ragione, può estendersi lo stesso patto.
Art. 1365 Examples
When in a contract an example is expressly included in order to explain an obligation of the agreement, one cannot assume that all other non expressly included examples to which, rationally, the obligation may extend are excluded.
Art. 1366 Interpretazione di buona fede
Il contratto deve essere interpretato secondo buona fede.
Art. 1366 Interpretation of good faith
The contract must be interpreted in accordance with good faith.
Art. 1367 Conservazione del contratto
Nel dubbio, il contratto o le singole clausole devono interpretarsi nel senso in cui possono avere qualche effetto, anziché in quello secondo cui non ne avrebbero alcuno.
Art. 1367 Preservation of the contract
In doubt, the contract or the single clauses must be interpreted in the meaning in which that they can give somewhat result, instead of those in which they would not have any.
Art. 1368 Pratiche generali interpretative
Le clausole ambigue s'interpretano secondo ciò che si pratica generalmente nel luogo in cui il contratto è stato concluso. Nei contratti in cui una delle parti è un imprenditore, le clausole ambigue s'interpretano secondo ciò che si pratica generalmente nel luogo in cui è la sede dell'impresa.
Art. 1368 General interpretative practices
Ambiguous clauses must be interpreted in accordance with what is the general practice in the place where the agreement was concluded. In the contracts in which one of the parties is an entrepreneur, ambiguous clauses must be interpreted in accordance with what is generally practised in the place where the company is located.
Art. 1369 Espressioni con più sensi
Le espressioni che possono avere più sensi devono, nel dubbio, essere intese nel senso più conveniente alla natura e all'oggetto del contratto.
Art. 1369 Expressions with more meanings
The expressions which may have more meanings, in doubt, must be interpreted in the meaning which is most consistent with the nature and the subject matter of the contract.
Art. 1370 Interpretazione contro l'autore della clausola
Le clausole inserite nelle condizioni generali di contratto o in moduli o formulari predisposti da uno dei contraenti s'interpretano, nel dubbio, a favore dell'altro.
Art. 1370 Interpretation against the author of the clause
Clauses inserted in the general conditions of the contract or in forms or formularies pre-arranged by one of the contracting parties, in doubt, must be interpreted in favour of the other.
Art. 1371 Regole finali
Qualora, nonostante l'applicazione delle norme contenute in questo capo (1362 e seguenti), il contratto rimanga oscuro, esso deve essere inteso nel senso meno gravoso per l'obbligato, se è a titolo gratuito, e nel senso che realizzi l'equo contemperamento degli interessi delle parti, se è a titolo oneroso.
Art. 1371 Final rules
In case the contract remains obscure, notwithstanding the application of the rules included in this chapter (articles 1362 and the following), the contract must be interpreted in the less onerous way for the debtor, in case it is a contract with no consideration, and in the meaning that realizes the fair reconciliation of the parties' interests, in case it is with consideration."
La tutela del diritto alla ditta, sigla, od insegna è indipendente dalla sua inclusione nel marchio e dal brevetto per marchio stesso.
Coloro ai quali spetta il diritto ditta, sigla od insegna, hanno anche la facoltà esclusiva di farne uso come marchio, per la loro industria o il loro commercio. Il proprio nome, o la sigla corrispondente, può essere usato come marchio. Quando però questo sia costituito dallo stesso nome, ditta, sigla, od insegna usati da altri in un marchio anteriore, per prodotti o merci dello stesso genere, deve essere accompagnato da elementi idonei a differenziarlo.
The protection of the right to the trade name, acronym or sign is independent from its inclusion in a trademark and the registration of the same mark.
Those whom the right to the trade name, acronym, sign belongs to have the exclusive right to make use of it as a trade mark for their own industry or trade. One can use his own name, or the corresponding acronym, as a trade mark. When, however, it consists of the same name, trade name, acronym or sign already used by another party as a trademark for goods or wares of the same kind, it must be used together with sufficient elements of differentiation.
È vietato di usurpare il nome di un individuo, o la sigla corrispondente o la ragione sociale o denominazione di una società; è del pari vietato di appropriarsi della ditta, sigla, insegna di una impresa, nonché dell'emblema caratteristico, della denominazione o titolo di Enti o Associazioni ed apporli sopra stabilimenti, sopra opere di industria o di commercio o sopra disegni, incisioni od altre opere d'arte, anche quando la ditta, la sigla, l'insegna, o la denominazione o il titolo anzidetto non facciano parte di un marchio o trovinsi comunque brevettati in conformità di questo decreto,
It is prohibited to usurp the name of an individual, or the corresponding acronym or the name or denomination of a company; it is equally forbidden to appropriate the trade name, acronym, sign or characteristic emblem, denomination or title of Entities or Associations and place any of them over establishments, over industry or trade wares or over drawings, prints or other works of art, even when the trade name, the acronym, the sign or the emblem, denomination or title are not part of any trade mark or registrations issued in accordance with this Decree.
Il marchio non può essere trasferito se non in dipendenza del trasferimento dell'azienda o di un ramo particolare di questa, a condizione, inoltre, che il trasferimento del marchio stesso avvenga per l'uso di esso a titolo esclusivo.
In ogni caso dal trasferimento del marchio non deve derivare inganno in quei caratteri dei prodotti o merci che sono essenziali nell'apprezzamento del pubblico
A trade mark cannot be transferred unless in connection with the transfer of a business (and of its assets) or branch thereof, conditioned, furthermore, upon the fact that the transfer must take place for the use of the mark on an exclusive way.
In any case, the transfer should not give rise to any deception with regard to those elements of the goods or wares which are essential in the consumers' appreciation."
"Art. 2557 Divieto di concorrenza
Chi aliena l'azienda deve astenersi, per il periodo di cinque anni dal trasferimento, dall'iniziare una nuova impresa che per l'oggetto, l'ubicazione, o altre circostanze sia idonea a sviare la clientela dell'azienda ceduta.
Il patto di astenersi dalla concorrenza in limiti più ampi di quelli previsti dal comma precedente è valido, purchè non impedisca ogni attività professionale dell'alienante. Esso non può eccedere la durata di cinque anni dal trasferimento.
Se nel patto è indicata una durata maggiore o la durata non è stabilita, il divieto di concorrenza vale per il periodo di cinque anni dal trasferimento.
Art. 2557 Prohibition to compete
Those who sell a business, must abstain, for a period of five years from the time of the sale, from starting a new business that, by reasons of its objects, location or other circumstances, is likely to divert customers of the sold business away.
The agreement not to compete which exceeds the limits provided for by the previous paragraph is valid provided that it not impedes any professional activity of the seller. It cannot last longer than five years from the time of the sale.
If in the agreement not to compete a longer term is indicated, or no term is provided for, the prohibition to compete is valid for the period of five years from the time of the sale.
Art. 2596 Limiti contrattuali alla concorrenza
Il patto che limita la concorrenza deve essere provato per iscritto. Esso è valido se circoscritto ad una determinata zona o a una determinata attività, e non può eccedere la durata di cinque anni.
Se la durata del patto non è determinata o è stabilita per un periodo superiore a cinque anni, il patto è valido per la durata di un quinquennio.
Art. 2596 Contractual limitations to competition
Agreements limiting competition must be evidenced in writing. They are valid if limited to a certain area or a certain activity and cannot last longer than five years.
If the agreement does not provide for a term or indicates a longer term, the agreement is valid for five years."
i) Giuseppe Senior agrees that the Company may retain its current name (denominazione) and that Hotel Villa Cipriani can retain its current sign (insegna), and in general that the Company and Hotel Villa Cipriani will have the right to use the name (nome) Cipriani on an exclusive basis (in via esclusiva), even after Giuseppe and his family cease to own any shares in, or be represented on the board of, the Company.
ii) Giuseppe Senior agrees to refrain (and to see that his family refrains) for 5 years from starting (a) any new business with the name Cipriani and (b) any new business (i.e. with any name) that is apt to divert customers from the Company or Hotel Villa Cipriani, except with SOP's consent.
iii) SOP agrees that Giuseppe Senior and his successors may continue to use the name (nome) Cipriani for the Locanda Cipriani.
The key provisions of the Regulation
"Article 9 Rights conferred by a Community trade mark
1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;
(b) any sign where, because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, 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;
(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.
Article 12 Limitation of the effects of a Community trade mark
A community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:
(a) his own name or address;
Provided he uses them in accordance with honest practices in industrial or commercial matters.
Article 51 Absolute grounds for invalidity
1. A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings,
(b) where the applicant was acting in bad faith when he filed the application for the trade mark."
Infringement of the CTM
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 appreciation of the visual, aural and conceptual similarities of the marks must therefore be based on the overall impression created by the marks bearing in mind their distinctive and dominant components;
e) 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;
f) there is an interdependence between the various relevant factors, so that a lesser degree of similarity between the goods or services may be offset by a great degree of similarity between the marks, and vice versa;
g) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
h) 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;
i) the risk that the public might wrongly believe that the respective goods or service come from the same or economically linked undertakings constitutes a likelihood of confusion.
"22. It is frequently said by trade mark lawyers that when the proprietor's mark and the defendant's sign have been used in the market-place but no confusion has been caused, then there cannot exist a likelihood of confusion under Art.9.1(b) or the equivalent provision in the Trade Marks Act 1994 ('the 1994 Act'), that is to say s.10(2). So, no confusion in the market-place means no infringement of the registered trade mark. This is, however, no more than a rule of thumb. It must be borne in mind that the provisions in the legislation relating to infringement are not simply reflective of what is happening in the market. It is possible to register a mark which is not being used. Infringement in such a case must involve considering notional use of the registered mark. In such a case there can be no confusion in practice, yet it is possible for there to be a finding of infringement. Similarly, even when the proprietor of a registered mark uses it, he may well not use it throughout the whole width of the registration or he may use it on a scale which is very small compared with the sector of trade in which the mark is registered and the alleged infringer's use may be very limited also. In the former situation, the court must consider notional use extended to the full width of the classification of goods or services. In the latter it must consider notional use on a scale where direct competition between the proprietor and the alleged infringer could take place.
23. This is of significance in this case because, as noted above, there is no suggestion that there has been any confusion in the market place between the activities of the defendant under the sign 'COMPASS LOGISTICS' and the claimant, or any other member of the Compass Group, under the mark 'COMPASS'. Mr Wyand relies on this as being a good indication that there is no likelihood of confusion. But in my view Mr Purvis is right when he argues that the question of infringement has to be answered by assessing the likelihood of confusion were the claimant to use the mark 'COMPASS' in a normal way in respect of all services covered by the registration, including for business consultancy services in the field of logistics, that is to say the same specialist field the defendant operates in."
Own name defence
Own name of CGS?
"As for section 11(2)(a), that provision can afford the first defendant no defence as it is not using its own name. William Asprey is not himself trading and so section 11(2)(a) cannot avail him."
It is also relevant to note what Peter Gibson LJ said at  in relation to the own name defence advanced by the claimants to the passing off claim:
"As the judge said, the defence has never been held to apply to names of new companies as otherwise a route to piracy would be obvious. For the same reason a trade name, other than its own name, newly adopted by a company, cannot avail it. Further, as the judge also pointed out, because a company can choose to adopt any trading name, there could be an own name defence in almost every case if Mr Bloch were right. In my judgment he is not."
"The use of the name 'The Premier Company (UK) Ltd' and the address 'Premier House' on the swing tags is within s.11(2)(a) of the 1994 Act.
That cannot be said in relation to the self-introduction by sales staff as being from 'Premier", or from 'Premier Luggage' or 'Premier Luggage Company'. The own name defence provided by s.11(2)(a) is not available because the name used was not the name 'The Premier Company (UK) Limited'; it was an abbreviation or adaption of that name."
"Must Article 5(1) of Directive 89/104/EC be interpreted as meaning that the adoption, by a third party without authorisation, of a registered word mark, as a company, trade or shop name in connection with the marketing of identical goods, amounts to use of that mark in the course of trade which the proprietor is entitled to stop by reason of his exclusive rights?"
"in the event that the national court should decide that Article 5(1)(a) of the directive entitles Céline SA to prevent the use of the 'Céline' sign by Céline SARL, and in order to enable that court to give judgment in the case before it, whether Article 6(1)(a) of the directive precludes, in circumstances such as those arising in the main proceedings, the proprietor of a mark prohibiting a third party from using a sign which is identical to his mark as a company or a trade name."
As discussed below, the Court went on to give guidance as to the interpretation of the requirement in Article 6(1)(a) that the use complained of be in accordance with honest practices. It is clear from this that the Court considered that, if the national court were to conclude that the use complained of fell within Article 5(1)(a), it could nevertheless be saved from infringement by Article 6(1)(a) provided that the national court was satisfied that the use was in accordance with honest practices.
The position of Giuseppe and CI
Use in accordance with honest practices?
"Members may provide limited exceptions to the rights conferred by a trade mark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trade mark and of third parties."
"Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition."
"Use of the trade mark will not be in accordance with honest practices in industrial and commercial matters if, for example:
– it is done in such a manner as to give the impression that there is a commercial connection between the third party and the trade mark owner;
– it affects the value of the trade mark by taking unfair advantage of its distinctive character or repute;
– it entails the discrediting or denigration of that mark;
– or where the third party presents its product as an imitation or replica of the product bearing the trade mark of which it is not the owner."
"… in assessing whether the condition of honest practice is satisfied, account must be taken first of the extent to which the use of the third party's name is understood by the relevant public, or at least a significant section of that public, as indicating a link between the third party's goods or services and the trade-mark proprietor or a person authorised to use the trade mark, and secondly of the extent to which the third party ought to have been aware of that. Another factor to be taken into account when making the assessment is whether the trade mark concerned enjoys a certain reputation in the Member State in which it is registered and its protection is sought, from which the third party might profit in marketing his goods or services."
"The mere fact that there exists a likelihood of aural confusion between a word mark registered in one Member State and an indication of geographical origin from another Member State is therefore insufficient to conclude that the use of that indication in the course of trade is not in accordance with honest practices. In a Community of 15 Member States, with great linguistic diversity, the chance that there exists some phonetic similarity between a trade mark registered in one Member State and an indication of geographical origin from another Member State is already substantial and will be even greater after the impending enlargement."
"I conclude from Gerri/Kelly that a man may use his own name even if there is some actual confusion with a registered trade mark. The amount of confusion which can be tolerated is a question of degree – only if objectively what he does, in all the circumstances, amounts to unfair competition, will there also be infringement. In practice there would have to be significant actual deception – mere possibilities of confusion, especially where ameliorated by other surrounding circumstances (mere aural confusion but clearly different bottles) can be within honest practices. No doubt in some cases where a man has set out to cause confusion by using his name he will be outside the defence (cf. the English passing off cases cited above) – in others he may be within it if he has taken reasonable precautions to reduce confusion. All will turn on the overall circumstances of the case."
"53. It seems clear that the question of knowledge is crucial in that context.
54. A person cannot normally be said to be acting in accordance with honest commercial practice if he adopts a name to be used in trade for purposes of distinguishing goods or services which he knows to be identical or similar to those covered by identical or similar existing trade mark.
55. Nor indeed will mere ignorance of the existence of the trade mark be sufficient to bring the adoption and use of the name within the fold of honest practice. Honest practice in the choice of a name to be used in trade must imply reasonable diligence in ascertaining that the name chosen does not conflict with, inter alia, an existing trade mark, and thus in verifying the existence of any such mark. And a search in national and Community trade mark registers is not normally particularly difficult or burdensome.
56. However, if reasonable diligence has been exercised, and no such mark has been found, then it does not seem possible to assert that the person adopting the name has in that regard acted contrary to honest practices in industrial or commercial matters. In those circumstances, it is of course only exceptionally that there will in fact be a trade mark similar or identical to the name, whose proprietor would wish to prevent use of the name. But if that were to be the case, it seems to me that the trade mark proprietor's right would be limited by Article 6(1) of the Directive, since the limitation is conditional only on the honesty of the user's conduct.
57. On the other hand, if a similar or identical trade mark were found, the extent to which the trade mark proprietor could prohibit use of the name would depend on the user's conduct thereafter. Honest practice would presumably imply at least contacting the trade mark proprietor and seeking his reaction. If he objected to use of the name on reasonable grounds (and any of the circumstances falling within Article 5 would seem, by definition, capable of providing reasonable grounds for objection), then subsequent use of the name objected to would not be in conformity with honest commercial practice."
Validity of the CTM
"93. The law regarding bad faith was recently reviewed by Professor Ruth Anand sitting as the Appointed Person in AJIT WEEKLY Trade Mark  RPC 25. She held as follows:
 … Bad faith is to be judged according to the combined test of dishonesty for accessory liability to breach of trust set out by the majority of the House of Lords in Twinsectra Ltd v Yardley  2 AC 164, with Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd  RPC 367 providing the appropriate standard, namely acceptable commercial behaviour observed by reasonable and experienced persons in the particular commercial area being examined.
 … the upshot of the Privy Council decision in Barlow Clowes is: (a) to confirm the House of Lords' test for dishonesty applied in Twinsectra , i.e. the combined test [footnote omitted]; and (b) to resolve any ambiguity in the majority of their Lordships' statement of that test by making it clear that an enquiry into a defendant's views as regards normal standard of honesty is not part of the test. The subjective element of the test means that the tribunal must ascertain what the defendant knew about the transaction or other matters in question. It must then be decided whether in the light of that knowledge, the defendant's conduct is dishonest judged by ordinary standard of honest people, the defendant's own standards of honesty being irrelevant to the objective element ….
 In view of the above and in particular the further clarification of the combined test given by the Privy Council in Barlow Clowes, I reject Mr Malynicz's contention that the Hearing Officer erred in failing to consider the registered proprietor's opinions on whether its conduct in applying for the mark fell below ordinary standard of acceptable commercial behaviour.
94. There was no dispute before me as to the correctness of Professor Anand's analysis. I would add three comments. First, this analysis deals with some of the problems with the reasoning of the Court of Appeal in Harrison v Teton Valley Trading Co Ltd  EWCA Civ,  1 WLR 2577 which I identified in Robert McBride Ltd's Application  ETMR 85 at –. Secondly, I do not consider that the correctness of this analysis is called into question by the recent decision of the Court of Appeal in Abou-Rahmah v Abacha  EWCA Civ 1492. Thirdly, I consider that there is little difference between Professor Anand's exposition of the law and that given by First Cancellation Division of OHIM in DAAWAT Trade Mark (Case C000659037/1, June 28, 2004) at  and GERSON Trade Mark (Case C00066563/1, July 29, 2004) at :
 Neither the CTMR nor the IR provide any guidance on what acts constitute bad faith. The term bad faith is not defined in Community trade mark law. OHIM has published some guidance on its interpretation of bad faith in view of the EU enlargement and has stated among others than bad faith can be considered to mean 'dishonesty which would fall short of the standards of acceptable behaviour'. This definition for bad faith was used in the United Kingdom (Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd  RPC 367) (see OHIM Bad Faith Case Study 31/01/2003 …). In its case law the Cancellation Division has held that bad faith is the opposite of good faith, generally implying or involving, but not limited to, actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually bad faith can be understood as a 'dishonest intention'. This means that bad faith may be interpreted as unfair practices involving lack of any honest intention on the part of the applicant of the CTM at the time of filing. Bad faith can be understood either as unfair practices involving lack of good faith on the part of the applicant towards the office at the time of filing, or unfair practices based on acts infringing a third person's rights. There is bad faith not only in cases where the applicant intentionally submits wrong or misleading by insufficient information to the office, but also in circumstances where he intends, through registration, to lay his hands on the trade mark of a third party with whom he had contractual or pre-contractual relations (see the Cancellation Division's decision in BE NATURAL of 25/10/2000, C000479899/1, at Nos. 10–11).
95. The relevant date for assessing whether an application to register a trade mark was made in bad faith is the application date: HOTPICKS Trade Mark  EWHC 689 (Ch),  RPC 2."
"22. Article 51(1)(b) CTMR does not protect owners of (trade mark) rights against trade mark applications which were filed independently of such (earlier) rights and it does not (predominantly) seek protection of owners of (trade mark) rights within the Community who may invoke relative grounds of refusal. Aticle 51(1)(b) is a trade mark law inbuilt unfair competition rule, according to which applications merely qualify as having been filed in bad faith, where i.a. there is reason to believe that the application is somehow the result of or influenced by earlier trade related contacts of a certain level between the parties, allowing for a conclusion of an unfair trade practice on the part of the CTM applicant. The bad faith clause has, as all unfair competition rules, a wide scope of application in as much as it covers a wide variety of different trade practices and in as much as the concept develops in time with the changeable perception of the relevant trade of what is to be considered an 'unfair practice'.
23. Whether or not an earlier relationship between the holder of a right and the CTM applicant qualifies as sufficient a relationship to suggest that filing of a CTM application constitutes unfair practice has to be decided therefore on a case by case basis. ..."
"Bad faith may broadly be explained as the state of somebody who consciously does something wrong or mistaken – for example, contrary to accepted principles of ethic behaviour or honest business practices – thereby achieving an unjust advantage or causing others an unjust damage. The applicant for cancellation maintains that 'dishonest' intentions – such as deceiving another party – unfair practices, somebody's intention to lay its hands on a trade mark belonging to another party with whom it had contractual or pre-contractual relations, are also indicative of bad faith. In the Board's opinion, all this boils down to the shorter definition given at the beginning, i.e. doing something wrong, knowingly, thereby causing an unjust damage to another party. In any event there is a presumption that the party acts in good faith."
"Bad faith may be defined as referring to the state of someone, who knowingly by doing something contrary to accepted principles of ethical behaviour or honest commercial and business practices, gains an unjust advantage or causes unjust damage to others."
"9. Neither the CTMR nor the IR provide any guidance on what acts constitute bad faith. The term bad faith is not defined in Community trade mark law. OHIM has published some guidance on its interpretation of bad faith. In its case law the Cancellation Division held that bad faith is the opposite of good faith, generally implying or involving, but not limited to, actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually, bad faith can be understood as a 'dishonest intention'. This means that bad faith may be interpreted as unfair practices involving lack of any honest intention on the part of the applicant of the CTM at the time of filing. Bad faith can be understood either as unfair practices involving lack of good faith on the part of the applicant towards the Office at the time of filing, or unfair practices based on acts infringing a third person's rights. There is bad faith not only in cases where the applicant intentionally submits wrong or misleadingly insufficient information to the Office, but also in circumstances where he intends, through registration, to lay his hands on the trade mark of a third party with whom he had contractual or pre-contractual relations (see the Cancellation Division's decision in BE NATURAL of 25/10/2000, C000479899/1, at Nos. 10–11)
10. In the current case, there have been no contractual or pre-contractual relations between the parties. The preexistence of contractual or precontractual relations is typical in some identified bad faith categories for example, a case where the distributor or a person willing to distribute the products of another applies for a sign used by the manufacturer to identify its goods without its authorization. However, bad faith applications may exist, where no contractual or pre-contractual relations between the parties have existed, if from the circumstances it can be inferred that the application is contrary to good faith, i.e. falls short of the acceptable standards of commercial behavior.
11. Taking into consideration the concept of bad faith as explained above, unless the applicant of the Community trade mark can justify its action, the Office must conclude bad faith, in circumstances, where the applicant applies for a Community trade mark while knowing, as a result of contacts with a third party, that the said party is using, in good faith and in a regular manner, an identical trade mark for identical goods and services. In such circumstances, if in addition the trade mark or its distinctive element is already registered outside the European Community and evidence existed that the third party was planning to sell in the Community under said trade mark, it has to be considered that the application was applied for with the intention of pre-empting the owner of the mark from using it in the European Community. Anyone who misappropriates the trade mark of a third party in such a manner, acts in bad within the meaning of Article 51(1)(b) CTMR."
"17. One of the general principles of trade mark law is that protection of trade marks is territorial, which means that it depends on the law of the country that grants the protection as it is recognized by Article 6(1) of the Paris Convention for the Protection of Industrial Property, according to which 'the conditions for the filing and registration of trademarks shall be determined in each country of the Union by its domestic law'.
18. The condition for such protection in the Community is registration of the trade mark. Articles 5 and 6 CTMR establish the general rule of absolute accessibility permitting that any person may acquire a Community trade mark registration. Property in a Community trade mark is therefore acquired not by prior adoption and use but just by prior registration as happens in most of the world. The Community registration system follows the traditional principle of 'fist-to-file' incorporated by Article 8(2) CTMR to resolve the potential conflicts between different owners of the same or similar trade marks protected in the Community or in any of its Member States.
19. The general rule of absolute accessibility of the Community registration system is completed with rules, one general and another specific, necessary to close the door of the registration to misuse of the system and to fraudulent misappropriations. The general rule is the provision of Article 51(1)(b) CTMR. The specific rules are the provisions of Articles 8(3), 11, 18 and 52(1)(b) CTMR, that incorporate the provision of Article 6 septies of the Paris Convention to prevent a specific but typical – so typical that its regulation by the Paris Convention was necessary – case of misappropriation that occurs when the trade mark is filed fraudulently by a disloyal agent or representative of the proprietor without his consent. In conclusion, the first applicant, provided he has acted in good faith and there are no relative grounds for refusal, becomes the owner of a Community trade mark.
20. Article 51(1)(b) CTMR contains the general clause providing for the invalidity of a Community trade mark filed in bad faith. It seems clear that the mark filed by a disloyal agent without the proprietor's consent is an example of misappropriation and the mark filed in bad faith but the agent's mark case is qualified by Article 52(1)(b) CTMR as a relative ground for invalidity unlike Article 51(1)(b) CTMR which qualifies the bad faith filing as an absolute ground for invalidity. The difference between absolute and relative grounds for invalidity are important since pursuant Article 55(1) CTMR the invalidity request based on absolute grounds may be submitted by any natural or legal person while that based on the relative ground of the agent's mark may only be filed by the proprietor. This important difference of qualification might be justified for the reason that the general clause of Article 51(1)(b) CTMR covers not only cases of misappropriations, where the qualifications as an absolute ground is not justified, resulting in opening the locus standi to unconcerned persons when only the private interest of the damaged person is concerned, but also cases of misuse of the registration system with the wrong purpose not protected by the Community trade mark law, where the open locus standi or public action is justified by the protection of public interest.
21. As the present case might only be qualified as a case of misappropriation but not at all as a case of misuse, the Board will concentrate below on the concept of bad faith filing as far as the misappropriation is concerned, without taking into account misuse.
22. It is a general principle of law that good faith is presumed until the contrary is proved. Thus the burden of proof of mala fides is thrust upon the cancellation applicant (see Decision of the First Board of Appeal of 31 May 2007 in Case R-255/2006-1 JOHNSON PUMP (FIG. MARK) at paragraph 29; and Decisions of the Second Board of Appeal of 21 August 2007 in Case R 1264/2006-2 – KRÉMOVÝ; and of 31 August 2007 Case R 1265/2006-2 – SMETANOVÝ, paragraph 31).
23. Bad faith is not defined in Community trade mark law as stated by the contested decision. According to the undisputed statement of the contested decision, it can be considered as meaning 'dishonesty which would fall short of the standards of acceptable commercial behaviour'. This notion of bad faith is not substantially different from that of 'honest practices in industrial or commercial matters' used by Article 12 CTMR, which limits the trade mark right allowing a third party the use of the mark in specific cases provided he uses it in accordance with honest practices in industrial or commercial matters. The condition requiring use of the trade mark to be made in accordance with honest practices in industrial or commercial matters must be regarded as constituting in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner, as the Court of Justice stated in its judgment of 7 January 2004 in Case C-100/02 Gerolsteiner Brunnen GmbH & Co. v Putsch GmbH ('Gerri')  ECR I-691, at paragraph 24).
24. Consequently, as the contested decision stated, there is bad faith when the CTM applicant intends through registration to lay its hands on the trade mark of a third party with whom it had contractual or pre-contractual relations, or, the Board adds, any kind of relation where good faith applies and imposes on the applicant the duty of fair play in relation to the legitimate interests and expectations of the other party. In such a hypothesis, the CTM applicant would have acted in bad faith in filing a CTM application, the filing would have been done so fraudulently and would have constituted a misappropriation of the (sic) another's trade mark, which according to the ancient rule fraus omnia corrumpit would completely justify the invalidity sanction of the registration laid down by Article 51(1)(b) CTMR."
"31. The registration of a trade mark constituted by a surname cannot be refused in order to ensure that no advantage is afforded to the first applicant since Directive 89/104 contains no provision to that effect, regardless, moreover, of the category to which the trade mark whose registration is sought belongs.
32. In any event, the fact that Article 6(1)(a) of Directive 89/104 enables third parties to use their name in the course of trade has no impact on the assessment of the distinctiveness of the trade mark, which is carried out under Article 3(1)(b) of the same directive.
33. Article 6(1)(a) of Directive 89/104 limits in a general way, for the benefit of operators who have a name identical or similar to the registered mark, the right granted by the mark after its registration, that is to say after the existence of the mark's distinctive character has been established. It cannot therefore be taken into account for the purposes of the specific assessment of the distinctive character of the trade mark before the trade mark is registered."
"where and to the extent that, pursuant to the Community legislation of the Member State governing that sign:
(a) rights to that sign were acquired prior to the date of application for registration of the Community trade mark, or the date of the priority claimed for the application for registration of the Community trade mark;
(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark."
Furthermore, Article 52(2) provides that a Community trade mark may be declared invalid where its use may be prohibited by another earlier right protected by Community or national law, including "a right to a name".
"31. Against this evidential background, and assisted by the material produced during the course of the rebranding exercise, it seems to me to be clear, and I so find, that the use of the word 'McAlpines' or 'McAlpine', in the construction industry field, is capable of referring to Robert. This is so notwithstanding that it is also capable of referring to Alfred. It seems to me to be of the essence of goodwill that is jointly owned (a fact that is conceded in this case) that that should be the case.…
36. Accordingly [as a result of the re-branding] there is, and will be, a situation in which 'McAlpine' features almost exclusively in the trading persona of Alfred. Does this amount to a misrepresentation for the purposes of the law of passing off? In relation to relevant activities, it seems to me that it does. I have already found that the word is capable of referring to Robert, so using the word will inevitably amount to a misrepresentation because the business being referred to is not in fact that of Robert. I accept Mr Wyand's submission that the use of the word, in a market which understands the word to refer to Robert even if it is capable of referring to Alfred, is a statement that the user is the entity known as McAlpine, and as such is a misrepresentation. Since the use of that word lies at the heart of the present corporate presentation and image, the misrepresentation is made out….
39. I accept that most professionals in the market know that there are two McAlpine companies, and that those who are actually dealing with either of them will by and large know with whom they are dealing once they start to deal in earnest. I also accept that in some contexts, and to many people, it will be appreciated that 'McAlpine' or 'McAlpines' will be correctly understood to mean Alfred. However, none of that detracts from the fact that Alfred is seeking to use a word which is frequently associated with (and taken to denote) Robert and use it to connote itself (Alfred). I accept, as submitted by Mr Thorley (and indeed accepted by Mr Wyand) that mere confusion is not enough, but on the facts of this case there is more than confusion. There is a misrepresentation. The fact that some are not misled does not prevent there being a misrepresentation and a person who corrects himself or is corrected by others has still been misrepresented to….
49. Just as the sole owner's rights should not be reduced, blurred or diminished, nor should a joint owner's, whether at the hands of the other joint owner or a third party. Neither owner has higher rights in the name and reputation than the other. But it seems to me to follow from that that neither is entitled to start to elbow the other aside by using it to describe its own business in a way which suggests the exclusion of the other. This is not to invent the tort of misappropriation of goodwill, which I have disclaimed above. It is to recognise that the shared rights to goodwill can be damaged by the co-owner arrogating to himself the use of the name in circumstances where that amounts to a misrepresentation and a partial ouster of the claimant. Because the rights are shared, Robert has had to live with the risks flowing from the use of the name by another, but that risk was limited by the general use of 'Alfred' as a prefix. Once the prefix goes, there is scope for a greater amount of elbowing (or blurring, or diminishing, or erosion (per Peter Gibson L.J., in the passage from Tattinger, cited above)), to which Robert has not consented.
50. Is this sort of loss made out here? It seems to me that it certainly is. Before the rebranding, the co-owners of the goodwill co-existed and exploited the name, and benefited from it, in whatever manner they could. But at all times their activities in that respect were as a matter of fact constrained by the fact that an identifier was added to make it clear which party was speaking or being referred to. That identifier was available not only to the parties, but was also available to third parties such as the press and the construction industry generally. The exploitation was carried out without misrepresentation, and without either party taking steps to suggest that it was the sole owner of the name. That has now changed. Alfred has taken steps which suggest that it is the sole owner of the name, and to do that is to affect the value of the name to Robert because it starts to elbow it out—it deprives Robert of some of the value of the name to itself, and it blurs or diminishes Robert's rights. So to hold is not to let the metaphor govern the principle; it is to acknowledge the principle and to acknowledge the usefulness of the metaphor in expounding it. It is no answer to say that Robert could also call itself McAlpine (as was suggested in the trial). The fact is that Alfred has sought to do so, and it cannot escape the consequences by saying that Robert could do that as well if it wanted."
Validity of the UKTM
"A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented-
(a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade."
"The establishment by [HC] of another CIPRIANI restaurant in the UK would undoubtedly give rise to deception. The likelihood of deception would be increased if the second CIPRIANI was established in London. … The establishment by [HC] of a Hotel Cipriani, say in London, would also give rise to deception."
(1) the claimant's goods or services have acquired a goodwill in the market and are known by some distinguishing name, mark or other indicium;
(2) there is a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant; and
(3) the claimant has suffered or is likely to suffer damage as a result of the erroneous belief engendered by the defendant's misrepresentation.
"The problem of the foreign claimant whose goods or business may be known in a particular jurisdiction although he has no business there is one of the most intractable in the law of the passing off."
As he goes on to discuss, it is a problem upon which much judicial ink has been spilt in common law countries with somewhat divergent results. Fortunately, it is not necessary for me to attempt a complete analysis of this problem, even if that were possible. For the purposes of the present case, it is sufficient to state my understanding of the law in a number of propositions and mention some of the principal authorities which support them.
"In [the Sheraton] case the judge found on the facts that the plaintiff corporation effected [sic: the sense is accepted] bookings in this country for their hotels abroad. That operation might very well be held to support what the judge held prima facie on the motion, that it did support a conclusion that the plaintiff corporation had acquired a reputation and goodwill (which terms the judge treated as interchangeable) in this country.
The position in the present case is quite different because there is no suggestion (the plaintiff company has no office here nor is there any suggestion that they would effect [sic: the sense is accept] bookings) that one would make in London a booking of a table in a night club in Paris."
"After all, an international hotel does not only draw guests and bookings from the city in which it is actually located, so it is unrealistic to regard more than a proportion of its total goodwill as being situated there. The same is true of businesses such as car hire which will be used mainly by visitors. The majority of the reported cases on service businesses have concerned businesses … providing services at or from fixed premises abroad, and if these cases seem to present the greatest conceptual difficulty that is at least partly the result of the obsolete tendency to associate the goodwill of a business uniquely with the place or places where the business is carried on. This has been repudiated in the case of businesses dealing in goods, and it is now suggested that a service business operating from a place or places abroad has customers and therefore goodwill in England to the extent that persons from England consciously seek out and make use of its services in preference to those available from its competitors, in England or elsewhere. So the foreign business has goodwill here if English residents are prepared to go to it (literally or figuratively) to avail themselves of its services, or if the availability of those services abroad is a material factor in their travelling to wherever the services can be acquired or experienced."
"it should not matter either way whether the contract for the provision of the services is made or performed inside or outside the jurisdiction".
"Q. So what I am putting to you is when you first opened in 2004 inevitably there would have been a lot of people in the UK, potential customers, who knew of the Hotel Cipriani who had not heard of your Cipriani restaurants and who would have assumed that there was a connection with the hotel. Correct?
A. Correct, but the style of the Cipriani restaurant in London has nothing to do with the Hotel Cipriani."
"Protection of well-known trade marks: Article 6bis
(1) References in this Act to a trade mark which is entitled to protection under the Paris Convention or the WTO agreement as a well known trade mark are to a mark which is well-known in the United Kingdom as being the mark of a person who -
(a) is a national of a Convention country, or
(b) is domiciled in, or has a real and effective industrial or commercial establishment in, a Convention Country,
whether or not that person carries on business, or has any goodwill, in the United Kingdom. References to the proprietor of such a mark shall be construed accordingly.
(2) The proprietor of a trade mark which is entitled to protection under the Paris Convention or the WTO agreement as a well known trade mark is entitled to restrain by injunction the use in the United Kingdom of at trade mark which, or the essential part of which, is identical or similar in his mark, in relation to identical or similar goods or services, where the use is likely to cause confusion. This right is subject to section 48 (effect of acquiescence by proprietor of earlier trade mark).
(3) Nothing in subsection (2) affects the continuation of any bona fide use of a trade mark begun before the commencement of this section."
A well-known mark?
"57. In reaching conclusion (b) Mr James referred to paragraph 31 of the Opinion of Advocate General Jacobs in Case C-375/97 General Motors Corp v Yplon SA  ECR I-5421. Although it is primarily concerned with Articles 4(4)(a) and 5(2) of the Directive, I think it is worth quoting the relevant section of the Opinion in full:
30. Both in the proceedings before the Court, and in general debate on the issue, attention has focused on the relationship between 'marks with a reputation' in Article 4(4)(a) and Article 5(2) of the Directive and well-known marks in the sense used in Article 6bis of the Paris Convention for the Protection of Industrial Property. Well-known marks in that sense are referred to in Article 4(2)(d) of the Directive.
31. General Motors, the Belgian and Netherlands Governments and the Commission submit that the condition in the Directive that a mark should have a 'reputation' is a less stringent requirement than the requirement of being well known. That also appears to be the view taken in the 1995 WIPO Memorandum on well-known marks.
32. In order to understand the relationship between the two terms, it is useful to consider the terms and purpose of the protection afforded to well-known marks under the Paris Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Article 6bis of the Paris Convention provides that well-known marks are to be protected against the registration or use of a 'reproduction, an imitation, or a translation, liable to create confusion' in respect of identical or similar goods. That protection is extended by Article 16(3) of TRIPs to goods or services which are not similar to those in respect of which the mark is registered, provided that use of the mark would 'indicate a connection between those goods or services and the owners of the registered trade mark and provided that the interests of the owner of the registered trade mark are likely to be damaged by such use'. The purpose of the protection afforded to well-known marks under those provisions appears to have been to provide special protection for well-known marks against exploitation in countries where they are not yet registered.
33. The protection of well-known marks under the Paris Convention and TRIPs is accordingly an exceptional type of protection afforded ever to unregistered marks. It would not be surprising therefore if the requirement of being well-known imposed a relatively high standard for a mark to benefit from such exceptional protection. There is no such consideration in the case of marks with a reputation. Indeed as I shall suggest later, there is no need to impose such a high standard to satisfy the requirements of marks with a reputation in Article 5(2) of the Directive.
34. The view is supported by at least some language versions of the Directive. In the German text, for example, the marks referred to in Article 6bis of the Paris Convention are described as 'notorisch bekannt', whereas the marks referred to in Article 4(4)(a) and Article 5(2) are described simply as 'bekannt'. The two terms in Dutch are similarly 'algemeen bekend' and 'bekend' respectively.
35. The French, Spanish, and Italian texts, however, are slightly less clear since they employ respectively the terms 'notoirement connues', 'notoriamente conocidas', and 'notoriament conoscuiti' in relation to marks referred to in Article 6bis of the Paris Convention, and the terms 'jouit d'une renommée', 'goce de renombre', and 'gode di notorietà' in Article 4(4)(a) and Article 5(2) of the Directive.
36. There is also ambiguity in the English version. The term 'well known' in Article 6bis of the Paris Convention has a quantitative connotation (the Concise Oxford Dictionary defines 'well known' as 'known to many') whereas the term 'reputation' in Article 4(4)(a) and Article 5(2) might arguably involve qualitative criteria. The Concise Oxford Dictionary defines reputation as '(1) what is generally said or believed about a person's or thing's character or standing…; (2) the state of being well thought of; distinction; respectability;…(3) credit, fame, or notoriety'. Indeed it has been suggested that there is a discrepancy between the German text compared with the English and French texts on the grounds that the 'reputation' of a trade mark is not a quantitative concept but simply the independent attractiveness of a mark which gives it an advertising value.
37. Whether a mark with a reputation is a quantitative or qualitative concept, or both, it is possible to conclude in my view that, although the concept of a well-known mark is itself not clearly defines, a mark with a 'reputation' need not be as well known as a well-known mark.
58. The Advocate General refers in one of his footnotes to Mostert [Famous and Well-Known Marks]. Mostert at 8-17 suggests the following criteria derived from a number of sources for assessing whether a mark is well-known:
(i) the degree of recognition of the mark;
(ii) the extent to which the mark is used and the duration of the use;
(iii) the extent and duration of advertising and publicity accorded to the mark;
(iv) the extent to which the mark is recognised, used, advertised, registered and enforced geographically or, if applicable, other relevant factors that may determine the mark's geographical reach locally, regionally and worldwide;
(v) the degree of inherent or acquired distinctiveness of the mark;
(vi) the degree of exclusivity of the mark and the nature and extent of use of the same or a similar mark by third parties;
(vii) the nature of the goods or services and the channels of trade for the goods or services which bear the mark;
(viii) the degree to which the reputation of the mark symbolises quality goods;
(ix) the extent of the commercial value attributed to the mark.
59. In September 1999 the Assembly of the Paris Union for the Protection of Intellectual Property and the General Assembly of the World Intellectual Property Organisation (WIPO) adopted a Joint Recommendation concerning Provision on the Protection of Well-Known Marks. Article 2 of the Joint Recommendation provides:
(1)(a) In determining whether a mark is a well-known mark, the competent authority shall take into account any circumstances from which it may be inferred that the mark is well known.
(b) In particular, the competent authority shall consider information submitted to it with respect to factors from which it may be inferred that the mark is, or I not, well known, including, but not limited to, information concerning the following:
1. the degree of knowledge or recognition of the mark in the relevant sector of the public;
2. the duration, extent and geographical area of any use of the mark;
3. the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;
4. the duration and geographical area of any registration, and/or any applications for registration, of the mark, to the extent that they reflect use or recognition of the mark;
5. the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognized as well known by competent authorities;
6. the value associated with the mark.
(c) The above factors, which are guidelines to assist the competent authority to determine whether the mark is a well-known mark, are not pre-conditions for reaching the determination. Rather, the determination in each case will depend upon the particular circumstances of that case. In some cases all of the factors may be relevant. In other cases some of the factors may be relevant. In still other cases none of the factors may be relevant, and the decision may be based on additional factors that are not listed in subparagraph (b), above. Such additional factors may be relevant, alone, or in combination with one or more of the factor listed in subparagraph (b), above.
(2)(a) Relevant sectors of the public shall include, but shall not necessarily be limited to:
(i) actual and/or potential consumers of the type of goods and/or services to which the mark applies;
(ii) persons involved in channels of distribution of the type of goods and/or services to which the mark applies;
(iii) business circles dealing with the type of goods and/or services to which the mark applies.
(b) Where a mark is determined to be well known in at least one relevant sector of the public in a Member State, the mark shall be considered by the Member State to be a well-known mark.
(c) Where a mark is determined to be known in at least one relevant sector of the public in a Member State, the mark may be considered by the Member State to be a well-known mark.
(d) A Member State may determine that a mark is a well-known mark, even if the mark is not well-known or, if the Member State applies subparagraph (c), known, in any relevant sector of the public of the Member State.
(3)(a) A Member State shall not require, as a condition for determining whether a mark is a well-known mark:
(i) that the mark has been in, or that the mark has been registered or that an application for registration of the mark has been filed in or in respect of, the Member State;
(ii) that the mark is well known in, or that the mark has been registered or that an application for registration of the mark has been filed in or in respect of, any jurisdiction other than the Member State; or
(iii) that the mark is well known by the public at large in the Member State.
(b) Notwithstanding subparagraph (a)(ii), a Member State may, for the purpose of applying paragraph (2)(d), require that the mark be well known in one or more jurisdictions other than the Member State.
60. Two points of interest emerge from Article 2 of the Joint Recommendation. The first is that the list of six criteria contained in Article 2(1)(b) is not inflexible, but provides as it were a basic framework for assessment. The second is that prima facie the relevant sector of the public consists of consumers of and traders in the goods or services for which the mark is said to be well known."
i) I consider that there was a high degree of recognition of the mark amongst such persons: Hotel Cipriani was famous.
ii) The mark had been used for approaching 50 years. The primary use was only in Venice, but many British consumers in the relevant sector had been exposed to it.
iii) The mark had been widely promoted by HC and publicised by third parties.
iv) The mark was registered as a Community trade mark.
v) The mark had not been enforced.
vi) The mark was a valuable one: Hotel Cipriani had a prestigious reputation.
Likely to cause confusion?
A reference to the ECJ?
i) CGS's use of the sign Cipriani infringes the CTM pursuant to Article 9(1)(a) and CGS has no defence to that claim under Article 12(a).
ii) CGS's use of the sign Cipriani London infringes the CTM pursuant to Article 9(1)(b) and CGS has no defence to that claim under Article 12(a).
iii) The Defendants' counterclaims for declarations that the CTM and the UKTM are invalidly registered both fall to be dismissed.
iv) CGS is liable for passing off.
v) HC is entitled to an injunction under section 56.
vi) Giuseppe and CI are jointly liable with CGS.