England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		07/06/2013

MR. JUSTICE BIRSS:

1. This is hearing of the Claimants' application for permission to adduce survey evidence in a trade mark and passing off case and for directions.
2. Zee TV is an Indian based satellite and cable television channel owned by the first claimant. It is based in Mumbai and broadcasts a wide range of programming in Hindi and other regional languages of India. Zee TV was launched in India on 1st October 1992, becoming India's first Hindi satellite channel.
3. Zee TV was launched in the United Kingdom in March 1995 and has broadcast continuously since that time. It has always been extremely popular with the UK's large South Asian population, say the claimants.
4. Current Zee channels that are available on, amongst other things, the Virgin and Sky platforms, are Zee TV, Zee Cine, Zee Cafe and Zee Punjabi. The family of Zee TV channel brands all make use of the word "Zee", as well as a large stylised Z device. Examples were given in evidence.
5. The second claimant generates turnover, which it says is significant, through the sale of advertising on the Zee channels. The claimants have a website at www.zeetv.com, which the claimants say is and has at all material times been accessed by large numbers of UK residents. The site contains video clips, details about television shows, a television schedule and various downloads. There is also a related Facebook page and a Twitter feed, both of which the claimants say are used by large numbers of social media users in the United Kingdom. In addition, the second claimant operates a UK targeted website at zeetv.co.uk, which carries similar content, including TV programming information as well as the ability to interact through Facebook and Twitter.
6. The defendant is a company incorporated in England in 2011. It was named Zeebox Limited in August 2011. In about November 2011 the defendant launched an app called Zeebox. The Zeebox app button and branding are all shown in the evidence. One example is:

7. Mr. Popat, who is giving evidence for the claimant, explains that the app is described in Apple's app store as follows:

"Use Zeebox while you watch TV. It's social, clever and fun. Zeebox helps you discover, connect, share and interact all live as you watch. Find out more about what is live on screen with our live Zee tags. Zeebox plus TV is magic."

8. Its features are described in the app store as follows:

"The best TV guide around:
Remote control your connected TV, Sky + or TiVo box from your phone or iPad;
Chat live during TV shows;
Best of all it is a 100% absolutely, totally, free."

9. The Zeebox app is available free of charge to users of the iPad, the iPhone and Android smartphones. Mr. Popat also explains that he believes the app is being 'monetised' in a typical way for free apps, through advertising and click to buy models. It is also said to be available through a web interface to users of other devices such as laptop computers.
10. Proceedings were issued in the High Court in July 2012. The claimant's claim includes a claim for passing off arising from the claimant's extensive use, it says, of the word "Zee" and/or "Zee TV" and/or the "Z" device in the United Kingdom since 1995. The claimant also claims that the defendant has infringed its various trade marks. Some of the trade marks in this have been stayed under article 104, but some have not.
11. The defendant's answer to the passing off claim, in summary, is that neither the Z device nor the word "Zee" are distinctive of the claimants in the field of TV broadcasting. In addition, the defendant contends that no substantial number of members of the public will believe that the defendant's products or services are the claimant's products or services or connected in the course of trade with the same.
12. The claimant has done two pilot surveys and applies for leave to do a full survey and adduce the evidence as a result.
13. Before me on this application is Mr. Malynicz, instructed by Ingram Winter Green, appears for the claimant. Mr. Roberts, instructed by Herbert Smith, appears for the defendant.

The law.

14. Imperial Group PLC v Phillip Morris [1984] RPC 293 was the starting point for the modern approach to the admission of survey evidence in cases of trade mark infringement and passing off. In that case Whitford J laid down guidelines for the future conduct of surveys, which have since become known as the Whitford Guidelines. The Whitford Guidelines were recently summarised by Lewison LJ in Marks & Spencer v Interflora Incorporated [2012] EWCA Civ 1501, which I will refer to as Interflora 1. At paragraph 61 Lewison LJ said the following:

"(i) If a survey is to have any validity at all, the way in which the interviewees are selected must be established as being done by a method, such that a relevant cross section of the public is interviewed;

(ii) any survey must be of a size which is sufficient to produce some relevant result viewed on a statistical basis;

(iii) the party relying on the survey must give the fullest possible disclosure of exactly how many surveys they have carried out, exactly how those surveys were conducted and the totality of the number of persons involved, because otherwise it is impossible to draw any reliable inference from answers given by a few respondents;

(iv) the questions asked must not be leading and must not direct the person answering the question into a field of speculation upon which that person would never have embarked had the question not been put;

(v) exact answers and not some sort of abbreviation or digest of the exact answer must be recorded;

(vi) the totality of all answers given to all surveys should be disclosed;

(vii) the instructions given to the interviews must also be disclosed."

15. Lewison LJ, in Interflora 1, also said:

"Evidence that is not useful should not be allowed to distract the focus of a trial, even if it is technically admissible."

16. He indicated that surveys that are not fully compliant with the Whitford Guidelines are one example. At paragraph 21 he said:

"The value of the evidence is severely diminished if not eliminated by a failure to follow the Whitford Guidelines."

17. In Interflora 1 Lewison LJ summarised that the standard practice in trade mark and passing off cases in future should be as follows:

"(i) A party may conduct a true pilot survey without permission, but at its own risk as to costs;

(ii) no further survey may be conducted or adduced in evidence without the court's permission;

(iii) no party may adduce evidence from respondents to any survey without the court's permission."

18. Then, at paragraph 151:

"When applying for permission, as referred to in subparagraph 2 above, the applicant should provide the court with:

(i) the results of any pilot survey;

(ii) evidence that any further survey will comply with the Whitford guidelines;

(iii) the cost of carrying out the pilot survey and the estimated cost of carrying out the further survey."

19. At paragraph 147 of Interflora 1 Lewison LJ explained that such a procedure provides the court with the material it needs to rule definitively on whether the cost of the full survey should be undertaken. It would be a false kindness simply to permit the survey to go ahead on the basis that the trial judge can always subsequently rule it inadmissible. He said:

"The objective of such an application is to have a definitive ruling one way or the other. It is a natural temptation for a judge who is not immersed in the case to leave questions of admissibility to trial. It is the temptation to which I succumbed in UK Channel Management Limited v E! Entertainment Television Incorporated. But balancing the cost of a survey (or witness collection exercise) against its likely utility, this temptation should be resisted."

20. The test to be applied is a cost benefit test (see paragraph 150 of Interflora 1):

"In deciding whether to give permission, the court must evaluate the results of whatever material is placed before it. Only if the court is satisfied that the evidence is likely to be of real value should permission be given. The reliability of the survey is likely to play an important part in that evaluation. Even then the court must be satisfied that the value justifies the cost. As Mr. Hobbs said, this requires the court to conduct a cost benefit analysis. In a case of trade mark infringement, in which the issue is one of deception in relation to the provision of ordinary consumer goods or services, these criteria are likely to be satisfied only in a special or unusual case."

21. Having dealt with paragraph 150, I will note that in this action it is the passing off case and not a trade mark case that I am being asked to adduce the survey in relation to.
22. The question of survey evidence returned to the Court of Appeal in a case referred to as Interflora 2, which is Interflora Inc. v Marks & Spencer [2013] EWCA Civ 319. Lewison LJ, at paragraphs 26 to 28, said as follows:

"26. With the benefit of hindsight, perhaps I did not make my message clear enough in Interflora 1. Let me say it again but more loudly. A Judge should not let in evidence of this kind unless the party seeking to call that evidence satisfies him (a) that it is likely to be of REAL value; and (b) that the likely value of the evidence justifies the cost.

27. Thus, in my judgment, the judge should have asked himself whether the evidence was likely to be of real value. The negative way of framing the test means that evidence which was not of real value will be admitted in a case which, after all, is about the provision of ordinary consumer services.

28. I am unable to tell from the judge's statement that he considered that the evidence would be likely to have some value, whether he simply thought that the value would be more than minimal or whether he thought it would carry real weight. If the latter, I find it hard to identify why he thought that. In my judgment, therefore, the judge conducted a flawed analysis of the nature of the application, the quality of the raw data that supported the witness statement and ultimately applied too lax a test."

23. Mr. Roberts also reminded me that since 1st April 2013 the overriding objective has changed. CPR 1.1 now provides:

"(1) These rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost. (Emphasis added)

(2) Dealing with a case justly and at proportionate cost includes, so far as is practicable –

(a) ensuring that the parties are on an equal footing;

(b) saving expense;

(c) dealing with the case in ways which are proportionate –

(i) to the amount of money involved;

(ii) to the importance of the case;

(iii) to the complexity of the issues; and

(iv) to the financial position of each party.

(d) ensuring that it is dealt with expeditiously and fairly; and

(e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases."

24. Although this revision to the CPR came into effect after Interflora 2, nevertheless at paragraph 30 of Interflora 2 Lewison LJ drew attention to the fact that the Jackson reforms would place an even heavier burden of scrutiny on the potential cost of survey exercises when weighed against the potential benefit. He said this:

"30. As is well known, the growing cost of civil litigation has caused extensive changes to the civil procedure rules, which are due to come into force on 1st April 2013. Among the most significant changes is the recasting of the overriding objective so that it now becomes dealing with cases justly and at proportionate cost. It will make it all the more important for judges to exercise their power to limit or exclude technically admissible evidence which is not of real value."

25. I will now turn to look at the survey in this case in more detail.
26. The claimant carried out two pilot surveys among British Asian people. The British Asian people were identified by appearance, but at the conclusion of the questions their ethnicity was identified and it demonstrated that identifying British Asian people by appearance seemed to work pretty well.
27. The survey was set up as follows; both pilot 1 and pilot 2 surveys were done the same way. The surveys began with a filtering question, ruling out anyone working in specified occupations such as market research or law. That was question 1. Then there were a series of pre-screening questions relating to age, gender and occupation. Those were questions 2 to 4. At question 5 and 6 there was further filtering; only respondents who regularly used a smartphone or tablet or similar and/or who regularly used a laptop at home could participate in the survey.
28. It was suggested in the course of Mr. Robert's skeleton that people who had been selected for the survey were shown a list of TV service providers before being shown the relevant cards. That is not correct. Mr. Malynicz explained to me and showed in the evidence that the list of TV service providers was only provided at the end of the survey and not at the beginning.
29. After question 6, questions 7 to 9 were as follows:

"This is the name or logo of [app related to TV/website relating to TV]. What can you tell me about it?"

30. The significance of the fact that there were three questions 7 to 9 and square brackets is that depending on the answers to the filtering questions people were either asked about an app, a website or both. When being asked whichever of those three questions was appropriate, the person was shown a card. On the card was an image of the Zeebox logo with the word Zeebox underneath.
31. Question 10 was as follows:

"Who do you think was responsible for Zeebox?"

32. Question 11 presented respondents with a further show card, prompting them to identify which types of TV their household received. Question 12 then asked respondents which Asian TV channels they were aware of. Question 13 identified as to whether, if the answers were used in a legal case, the respondent was willing to be contacted. Question 14 asked the respondents to identify their ethnicity.
33. In the final question respondents were asked to look at the answers that had been written down and to confirm their accuracy. This was followed by the interviewer's signature and confirmation that the interview had been carried out in accordance with the Market Research Society code.
34. Broadly speaking, the results were as follows: The first pilot survey (P1) interviewed 58 people. Mr. Malynicz submits that it generated 10 positive responses. When I say "positive responses" I mean a response which Mr. Malynicz would rely on to support his client's case. The second pilot survey (P2) interviewed 66 people and produced 17 positive responses.
35. The claimant says it wishes to use this for the passing off case and not the trade mark case. The point the claimant is making is that for passing off it says it is legitimate to look at a narrow population of people i.e. the people within its goodwill. The claimant refers to the words of Millett LJ, as he then was in Harrods v Harrodian [1996] RPC 697. The learned judge said this:

"In the course of argument before us, the judge was criticised for having considered only those members of the public who had made inquiry of the school with a view to sending their children there. It was submitted that he wrongly allowed himself to be influenced by the consideration that the choice of a fee paying school for one's children is not an impulse purchase and that a parent who was considering the children's school for his children would be likely to make sufficient inquiries to eliminate any potential confusion that might otherwise occur. This would have been wrong, for the relevant public is not confined to parents who take up places at the school. The plaintiffs and the defendants appeal to a common section of the public - affluent members of the middle class who live in London, shop at Harrods and who wish to send their children to fee paying schools. They are persons who must be kept in mind when considering the likelihood of confusion."

36. Mr. Malynicz also referred, in the judgment of Lewison LJ in Interflora 1, to the judgment of Jacob J as he then was in the Neutrogena case ([1996] RPC 473), as follows:

"It is not a defence to a passing off that many of the defendant's sales do not cause deception or confusion. There is passing off even if most of the people are not fooled most of the time but enough are for enough of the time. By 'enough' I mean a substantial number of the plaintiff's customers or potential customers deceived for there to be a real effect on the plaintiff's trade or goodwill. In this case (where most of these are probably not confused) the crucial question is whether or not the plaintiffs have established a sufficient degree of confusion and deception to take the case above a de minimis level, for there are always some people who are confused and even when products and names are well differentiated mistakes do occur."

37. I should note, although it does not matter, that the question of referring to things being de minimis or above a trivial level was questioned in the Court of Appeal in that case, but that is not material for the question I have to address today.
38. The claimant says even if what the defendants do is not confusingly similar when considering a consumer somehow averaged across the whole British population (even if that is appropriate for a trade mark case), in a passing off case it is legitimate and correct to look at a narrower group: the claimant's actual customers or potential customers. The claimant says the survey is directed to show that in that group there will be an association or a link. The claimant says the cost is modest, about £60,000, the probative value of the survey evidence is high and, in the context of this case, likely to be of real value. The benefit of the evidence will justify the cost.
39. The defendant submits that permission should not be given. It relies on a statement, which is in fact an expert's report, from Mr. Malivoire. He is a very experienced expert in surveys and appears regularly in trade mark and passing off cases. The defendant makes three fundamental points, supported by Mr. Malivoire. First, it submits that the sample is unrepresentative. Second, it submits that in the survey the respondents were invited to speculate. Third, it submits that the results show that one interviewer got five times as many positives as all his colleagues put together, undermining the entire exercise.
40. The final point would be a good point, however it relates only to the first pilot survey P1. In fact, it is the reason why the claimants then carried out the second survey P2. On the second survey there was no such effect. Accordingly, I do not need to take into account this third point.
41. The defendant says the real cost would be about £150,000. In summary, Mr. Roberts says as follows: If the court gives the claimant permission to conduct a full survey, the result will be a statistically skewed sample of 400 further people will be lured by a series of leading questions into contrived speculation about the provenance of an artificial and a contextual stimulus. He submits I should not give permission.

Assessment

42. In my judgment this case turns on essentially two points. First, is it legitimate to consider British Asians as a distinct group? Broadly, the claimant's case is that even if most of the UK population have not heard of Zee TV and therefore to them Zeebox as a TV related app has no resonance, that does not matter because to the claimant's potential customers, that is to say the British Asian community, the mark is known and to them the use of the expression Zeebox will lead to confusion. The claimant says this is legitimate and the defendant says it is not. The defendant also says that the British Asian community is not a homogeneous group.
43. In my judgment the survey has no relevance to this issue. If the claimant loses this argument then the survey will be of no value. It does not mean that it will lose the case, however, because irrespective of the scope of its goodwill it still has its registered trade marks and an entirely legitimate case to run on trade mark infringement.
44. The second point in this case depends on the claimant winning the first point. If the claimant wins on the first point and it is legitimate to look at the British Asian community as a population, the question is then whether the Zeebox as a television app, is confusingly similar, from the point of view of the claimant's actual customers or potential customers.
45. On that question the court will receive evidence. One would expect the claimant to call evidence showing its advertising and so on, how it markets itself to its customers, that scale of its business. These are all conventional matters of evidence in a passing off case. The defendant will call a similar kind evidence attempting to try and point the other way.
46. Watching television is not an esoteric exercise and a judge will be well able to deal with it and make an assessment. Downloading apps may be a somewhat more esoteric exercise but that can be readily explained. In my judgment this is the sort of evidence that will be the primary evidence on the issue.
47. One of the points, familiar in passing off, is the submission made here that there is no evidence of actual confusion taking place. The defendant emphasises this. No doubt that is one reason why the claimant wants to do a survey. The real point of the survey, says Mr. Malynicz, is to show a propensity among the relevant public to make a link between the claimants' and the defendant's marks.
48. The claimants' fundamental submission is that the survey will yield evidence of real value for the following reason: They say the trial judge is not likely to be a viewer of Zee TV, nor is he or she likely to be aware of how distinctive the mark ZEE is to British Asians in the United Kingdom. They contend that evidence of a reaction of British Asians, who are reasonably technologically savvy, that is to say regular users of smartphones and laptops, will be of real assistance in assessing the likelihood of deception at trial, along with the other evidence that will be called.
49. As Mr. Malynicz says, no survey is perfect. Here, there are major arguments about the questions posed when the defendant's logo is presented to the subjects. The defendant says that the questions invite the subjecs to speculate. In that respect the defendant is supported by Mr. Malivoire's evidence. It is clear that there will be argument about this. All I can say at this stage, in my judgment, is it entirely foreseeable that the court could come to either view, but what is clear is that there will be a substantial argument about this at trial.
50. As a matter of costs, in fact the evidence is relatively clear. The survey evidence will add about £150,000, roughly half on each side, to the costs which the parties are likely to incur. The evidence is again tolerably clear that the total cost of these proceedings, both claimant and defendant, will be about £1 million; that is about £600,000 on the defendant's side and about £400,000 on the claimants' side.
51. Mr. Malynicz says, and he is of course mathematically correct, that £150,000 is 15% of the total. But I note that the survey is only led for the passing off claim, whereas the total involves the cost of the trade mark case as well. The registered trade mark element of this case is an important part of it and thus the survey is likely to represent a substantial cost in relation to the passing off claim.
52. Another argument which arises is about the representative nature of the sample, but I do not see that as significant. The claimants say that their case is that the relevant public for passing off is British Asians. Of course, this group is not homogeneous but that does not matter to the claimant. They say that this is the group that they aim at and that is the group that the survey is dealing with.
53. As for a point about the lack of evidence of actual confusion, a court dealing with trade mark and passing off matters is very familiar with this question. There are all sorts of reasons why there may be a lack of confusion. The law is clear, that a lack of actual confusion is not an absolute requirement by any means. It is a relevant factor to be weighed up, but it will always be relevant, irrespective of the results of a survey.
54. It is obvious that the survey is not going to be all the evidence that the claimant relies on by any means and Mr. Malynicz did not say that it was. The claimant will be highly likely to be able to call proper evidence making out its case about a likelihood of misrepresentation on the British Asian community. Of course, the defendant will also be able to call evidence intending to try and show the opposite. However in my judgment if the evidence that the claimant is going to call anyway is not sufficient to persuade the trial judge in the claimant's favour then I doubt this survey will help. If I thought the passing off was weak then things might be different. Then things would be like the Jif Lemon case, in which an intrinsically weak passing off case was made good by survey evidence. But, in my judgment, in this case the results of a full survey based on this pilot may be confirmatory of a conclusion the judge has reached on the evidence already, but I think the survey is not likely to be of real value. It will be of some value, but I am not satisfied that the value justifies the substantial cost of carrying it out and the increase in the length of the trial which it will inevitably cause. Accordingly, I will dismiss the claimant's application.