MR JUSTICE ARNOLD :
Contents
| Topic |
Paragraphs |
| Introduction |
1 |
| The Trade Marks |
2-3 |
| The sign complained of |
4 |
| The Claimants' notice of partial discontinuance and the Defendant's application to set it aside |
5-28 |
| Domestic procedural law: CPR Part 38 |
12-20 |
| Subject-matter jurisdiction under European law |
21-28 |
| The witnesses |
29-47 |
| The Claimants' witnesses |
29-36 |
| Consumer witnesses |
36 |
| The Defendant's witnesses |
37-47 |
| Trade witnesses |
47 |
| Factual background |
48-88 |
| The Claimants |
48-59 |
| The Claimants' trade mark registrations |
60 |
| The Defendant |
61-73 |
| The Defendant's trade mark registrations |
74 |
| The parties' knowledge of, and contacts with, each other |
75-88 |
| Key legislative provisions |
89-92 |
| Relevant dates for assessment |
93-105 |
| The law |
93-98 |
| Assessment |
98-105 |
| The average consumer |
106-107 |
| The law |
106 |
| Assessment |
107 |
| Invalidity of the EU Trade Marks on relative grounds |
108-110 |
| Revocation of the Trade Marks for non-use |
111-184 |
| The law |
111-123 |
| The law with respect to genuine use |
114-115 |
| The law with respect to genuine use in the Union |
118 |
| Use of the trade mark in a form differing in in elements which do not alter its distinctive character |
119-123 |
| Assessment:UK864, UK398 and EU651 (Classes 25, 35) |
124-173 |
| The global e-shop |
125-146 |
| The AliExpress store |
147-157 |
| Social media |
158 |
| Offline uses |
159-162 |
| Overall assessment |
163-173 |
| Assessment: UK444 and EU044 (Class 14) |
174-178 |
| Assessment: UK444, UK757 and EU335 (Class 18) |
179-182 |
| Assessment: EU150 (Class 9) |
183-184 |
| Invalidity of UK297 on the grounds of bad faith |
185-197 |
| The law |
186-188 |
| Assessment |
189-197 |
| Invalidity of UK297 on relative grounds |
198-201 |
| Infringement |
202-216 |
| The law as to honest concurrent use |
205-208 |
| Assessment |
209-216 |
| The Defendant's counterclaim for passing off |
217 |
| Summary of principal conclusions |
218 |
Introduction
1.
This case concerns a conflict over the use of the trade mark GIORDANO
for clothing. Although GIORDANO is an Italian family name, neither side is
Italian. The Claimants’ business is based in Hong Kong, and their core markets
are in Asia, Australasia and the Middle East. The Defendant’s business is based
in the Netherlands, and its markets are in Europe. Both businesses are
well-established and have used the GIORDANO trade mark since the 1980s. The
Claimants own a considerable number of UK and EU registered trade marks
consisting of or comprising the word GIORDANO, including those listed in
paragraphs 2 and 3 below (“the Trade Marks”). The Claimants allege that the
Defendant has infringed the Trade Marks. (A claim for passing off was abandoned
at the beginning of the trial.) The Defendant denies infringement and
counterclaims for revocation and/or a declaration of invalidity of the Trade
Marks and for passing off. In a nutshell, the Defendant’s position is that the
Claimants have not made genuine use of the Trade Marks and thus it is the
Defendant which is the senior user of the trade mark GIORDANO in Europe. This
case is one of around 60 trade mark disputes that have been or are being fought
by the parties all round Europe (some of which I will refer to below). The
situation cries out for a commercial settlement, but in the absence of a
settlement the courts and tribunals must decide each case. This one raises a
considerable number of issues, although the number was reduced during the
course of the trial.
The Trade Marks
2.
The First Claimant (“Walton”), a company incorporated in the Cayman
Islands, is the registered proprietor of the following UK Trade Marks:
i)
UK Trade Mark No. 2,000,864 consisting of the word GIORDANO for
“articles of clothing, footwear and headgear” in Class 25 registered on 8
December 1995 with a filing date of 31 October 1994 (“UK864”).
ii)
UK Trade Mark No. 2,010,444 consisting of the word GIORDANO for goods in
Classes 14 and 18 including “wallets” and “belts made of leather and imitation
leather” registered on 22 December 1995 with a filing date of 8 February 1995
(“UK444”).
iii)
UK Trade Mark No. 2,140,398 consisting of the device 
for “clothing, footwear and
headgear” in Class 25 registered on 23 January 1998 with a filing date of 24
July 1997 (“UK398”).
iv)
UK Trade Mark No. 2,141,757 consisting of the device for goods including “bags,
handbags, leather cases, travelling bags, shoulder belts; briefcases, file
cases, attaché cases, purses, key bags …; umbrellas, parasols …” in Class 18
registered on 4 September 1998 with a filing date of 12 August 1997 (“UK757”).
v)
UK Trade Mark No. 3,007,297 consisting of the stylised word 
for goods and
services in Classes 18, 25 and 35 including “clothing, footwear and headgear” and
“retailing … services relating to … clothing, footwear, headgear” registered on
12 December 2014 with a filing date of 4 September 2014 (“UK297”).
3.
Walton is the registered proprietor of the following EU Trade Marks:
i)
EU Trade Mark No. 966,150 consisting of the device 
for goods in Class 9
including “eyewear” registered on 16 April 2007 with a filing date of 14
October 1998 (“EU150”).
ii)
EU Trade Mark No. 4,099,651 consisting of the word GIORDANO for services
in Class 35 including “retailing … services in respect of … clothing, footwear,
headgear” registered on 8 February 2006 with a filing date of 14 September 2000
(“EU651”).
iii)
EU Trade Mark No. 1,856,335 consisting of the word GIORDANO for goods in
Class 18 registered on 10 July 2010 with a filing date of 14 September 2000
(“EU335”).
iv)
EU Trade Mark No. 2,239,044 consisting of the device 
for goods in Class 14
registered on 8 August 2002 with a filing date of 31 May 2001 (“EU044”).
The sign complained of
4.
The Claimants complain of the use of the word GIORDANO by the Defendant.
The Defendant has used this sign both in plain type and in the form of various
logos over the years, but neither side suggests that the different forms of use
make any difference to the issues.
The Claimants’ notice of
partial discontinuance and the Defendant’s application to set it aside
5.
On 12 October 2015 and 9 February 2016 respectively Abanicos Ltd, a
company owned by Arnold Verweij, the founder of the Defendant, applied to the
European Intellectual Property Office (“EUIPO”) to revoke EU335 and EU651 on
the ground of non-use. The Claimants commenced these proceedings on 25 August
2016 alleging infringement of all the Trade Marks. On 21 October 2016 the
Defendant served a Defence and Counterclaim seeking revocation and/or
declarations of invalidity of all the Trade Marks. Following discussions
between the parties, on 11 May 2017 the parties sent a joint letter to the
Court (“the Joint Letter”) contending that there were “special grounds” for
continuing with the claim and counterclaim pursuant to what is now Article
132(1) of European Parliament and Council Regulation 2017/1001/EU of 14 June
2017 on the European Union trade mark (codification) (“the Regulation”) for the
following reasons:
“1. First,
assuming that the validity of these marks remains before the High Court, the
parties have agreed to request a suspension of the proceedings before EU IPO.
This avoids the prospect of parallel proceedings.
2. Second,
this action before the High Court includes grounds of invalidity in relation to
EU TMs 1 856 335 and 4 099 651 additional to those before the EU IPO. In
addition to revocation for non-use (which is before the EU IPO), the Defendant
has also put validity in issue in the High Court proceedings on the basis of
earlier rights owned by the Defendant and an allegation of bad faith.
According, the proceedings before the EU IPO would not, even if determined,
resolve the dispute between the parties in relation to the validity of these
marks.
3. Third,
for similar reasons, the proceedings before the EU IPO will not resolve the
overall dispute between the parties: conversely; the present English
proceedings will consider both the validity of the Claimants’ rights and the
lawfulness of the Defendant’s trade in the UK. It will therefore be necessary
for the High Court proceedings to continue regardless of the outcome of the
proceedings before the EU IPO.
4. Fourth,
the current proceedings before the High Court raise substantially the same
issues of genuine use in relation to other UK and EU marks of the First
Claimant. The disclosure and evidence in relation to these marks will also
apply equally to the EU TMs 1 856 355 and 4 099 651. It would therefore be far
more efficient, and in accordance with the overriding objective, to determine
all of those issues together.
5. Fifth,
given the nature of the matters in dispute (in particular, concerning
historical use of the EU TMs and bad faith) it is necessary and appropriate
that disclosure be given in order for the factual issues in dispute to be
fairly determined. Similarly, it will be necessary to test both parties’
evidence in cross-examination. Conversely, there is no procedure for
disclosure or oral evidence before the EU IPO.
6. Finally,
based on the Court Diary, the High Court proceedings are likely to come on for
trial between February and May 2018. Early and comprehensive resolution of the
dispute in the UK (including with respect to the EU TMs) is much more likely to
provide the commercial certainty needed for the parties (and indeed third
parties) as regards the validity of the EU TMs 1 856 335 and 4 099 651, rather
than waiting until the proceedings before the EU IPO have run their course.”
6.
On 11 May 2017 Master Clark made an order for directions by consent which
included a direction that the trial of the proceedings take place in a window from
1 February 2018 to 31 May 2018 (although subsequently the trial was fixed for 11
June 2018). The order included the following recitals:
“UPON noting that the validity of EU trade mark numbers
4,099,651 and 1.856,335 is already in issue before the EU Intellectual Property
Office in cancellation actions 11916C and 012500C but considering that there
are special guards for continuing this action with respect to those EU trade
marks so that all issues between the parties may be heard and determined
together
AND UPON the parties undertaking to procure a stay of the
abovementioned cancellation proceedings pending the outcome of these
proceedings”.
7.
On 22 May 2017 the parties wrote to EUIPO jointly requesting a
suspension of the revocation proceedings against EU651 and EU335. On 11 July
2017 EUIPO suspended those proceedings until a final decision had been taken in
these proceedings.
8.
On 6 June 2018 the Claimants served a notice of discontinuance of their
claim in so far as it related to the EU Trade Marks. On 7 June 2018 the
Defendant applied to set aside the notice of discontinuance. On the first day
of trial, 11 June 2018, I heard argument on the Defendant’s application. At the
conclusion of the argument, I announced that I would set aside the notice of
discontinuance for reasons to be given later in writing. My reasons are set out
below, considering the position as at 11 June 2018.
9.
I will begin by noting two points. First, the Defendant was not
concerned by the discontinuance of the Claimants’ allegations of infringement
of the EU Trade Marks (which counsel for the Claimants made clear would not be
pursued either way). The Defendant’s concerns arose out of what the Claimants
asserted was the consequence of that discontinuance, namely that it deprives
this Court of jurisdiction over the counterclaim so far as it related to the EU
Trade Marks.
10.
Secondly, it was not in dispute that the Claimants submitted to the in
personam jurisdiction of this Court by bringing the claim against the
Defendant, that that submission extended to the Defendant’s counterclaim and
that the Court retained jurisdiction over the Claimants with respect to the
counterclaim even if they discontinued the claim: see Fakih Brothers v A P
Moller (Copenhagen) Ltd [1994] 1 Lloyds Rep 103 at 109 (Hobhouse J),
Glencore International AG v Exter Shipping Ltd [2002] EWCA Civ 524,
[2002] CLC 1090 at [45]-[49] and [53] (Rix LJ) and cf. Linuzs v Latmar
Holdings Corp [2013] EWCA Civ 4, [2013] ILPr 19 at [30]-[34] (Toulson LJ). As
will appear, the issue in the present case is one of subject-matter
jurisdiction.
11.
I will first consider the position applying domestic procedural law, and
then turn to consider the Court’s subject-matter jurisdiction as an EU trade mark
court under European law.
Domestic procedural law: CPR Part 38
12.
CPR Part 38 provides, so far as relevant, as follows:
“38.2
(1) A claimant may discontinue all or part of a claim at any
time.
(2) However –
(a) a claimant must obtain the permission of the court if he
wishes to discontinue all or part of a claim in relation to which –
…
(ii) any party has given an undertaking to the court;
38.4
(1) Where the claimant discontinues under rule 38.2(1) the
defendant may apply to have the notice of discontinuance set aside.
38.7 A claimant who discontinues a
claim needs the permission of the court to make another claim against the same
defendant if –
(a) he discontinued the claim after the defendant filed a
defence; and
(b) the other claim arises out of facts which are the same or
substantially the same as those relating to the discontinued claim.”
13.
The Court may set aside a notice of discontinuance if it is an abuse of
the process of the court, but the court’s power to do so is not limited to such
circumstances and it may be exercised whenever it is necessary to give effect
to the overriding objective of dealing with the case justly and at
proportionate cost: see Sheltam Rail Co (Pty) Ltd v Mirambo Holdings Ltd
[2008] EWHC 829 (Comm), [2009] Bus LR 302 at [34]-35] (Aikens J) and High
Commissioner for Pakistan in the UK v National Westminster Bank plc [2015] EWHC 55 (Ch) at [46] (Henderson J). As Aikens J observed in the former case, a
useful question to ask is whether, if permission of the court had been required
to serve a notice of discontinuance, that permission would have been granted
unconditionally; and the court is also entitled to consider what the claimant
is attempting to achieve by serving the notice.
14.
In the present case, the Claimants’ professed objective was to simplify
and streamline the issues for trial. The Claimants said that, during the course
of preparing for trial, they came to the (admittedly rather late) realisation
that the claims for infringement of the EU Trade Marks added little, if
anything, to the claims for infringement of the UK Trade Marks and that the
counterclaims would require the Court to consider a number of additional
issues, adding time and expense to the trial. The Claimants did not shrink,
however, from asserting that it was an inevitable consequence of their decision
to discontinue the infringement claims that the Court was deprived of
jurisdiction to determine the Defendant’s counterclaims relating to the EU
Trade Marks regardless of the Defendant’s desire to continue with those
counterclaims.
15.
Turning to consider whether the Court would permit the Claimants to discontinue
unconditionally if permission were required, it seems to me to be clear that
the answer is no. The notice of discontinuance was served on the eve of trial,
after the close of statements of case, disclosure and exchange of witness
statements. Indeed, it was served on the same day that skeleton arguments were
due to be (and were) exchanged. Thus most of the costs had been incurred, and
the parties were about to commence battle. In those circumstances, I consider
that the conditions that the Court would impose on the Claimants would be that
they undertake to the Court (i) not to bring any further claims for
infringement of any of the EU Trade Marks against the Defendant in any other
Member State without the permission of this Court (cf. rule 38.7) and (ii) not
to rely upon any of the EU Trade Marks to oppose any trade mark application by (or
seek cancellation of any trade mark registration of) the Defendant in the EUIPO
or any Member State if that would not be possible were the Defendant’s
counterclaim to succeed in full against the EU Trade Marks.
16.
Counsel for the Claimants informed me that he was not instructed to
offer undertaking (i), let alone undertaking (ii). Counsel for the Claimants
nevertheless submitted that the Defendant would not be prejudiced because the
Defendant could resume the revocation proceedings against EU651 and EU335 in
the EUIPO and could bring further proceedings for cancellation against EU651
and EU335 and for revocation and cancellation against EU150 and EU044.
Moreover, in relation to EU150 and EU044, he offered an undertaking by the
Claimants not to rely upon any evidence of use in response to proceedings for
revocation of those Trade Marks in the EUIPO which post-dated the dates which
are relevant for the assessment of the counterclaim for revocation in these
proceedings (so as to avoid the admitted prejudice to the Defendant arising out
of a later period for the assessment of non-use if the Defendant had to start
fresh revocation proceedings in the EUIPO). Finally, he pointed out that the
Claimants accepted that they would have to pay all the costs of these
proceedings in relation to the EU Trade Marks.
17.
I do not accept that submission. The Claimants’ position would require
the Defendant, having got virtually to the door of this Court with its
counterclaim, essentially to start all over again in the EUIPO. That would at a
minimum entail a considerable delay in the resolution of the Defendant’s
attacks on the EU Trade Marks. Moreover, the Defendant would be exposed to the
risk that the Claimants, having seen all the Defendant’s criticisms of the
evidence filed by the Claimants in these proceedings, would take the
opportunity to file better evidence in the EUIPO. Even if the evidence was in
fact no better, there would no doubt be arguments as to whether it was or not.
18.
In those circumstances, I consider that the service of the notice of
discontinuance amounted to an abuse of process, because its effect, if allowed
to stand and if it had the consequence contended for by the Claimants, would be
to shield the EU Trade Marks from a determination of their validity by this
Court and to allow the Claimants to invoke the EU Trade Marks in further
infringement and/or opposition (or cancellation) proceedings in other Member
States pending determinations by the EUIPO. Thus it would enable the Claimants
to obtain a collateral advantage from the discontinuance of their infringement
claim.
19.
Even if it did not amount to an abuse of process, I consider that the
Court should exercise its discretion to set the notice of discontinuance aside
because that would enable the Court to determine all of the issues raised in
these proceedings justly and at proportionate cost. Moreover, that accords with
the parties’ agreement, as set out in the Joint Letter, that that represented
the best way in which to deal with the issues. Nothing had changed since then
to justify the Claimants unilaterally withdrawing from that agreement.
20.
I would add that, in relation to EU651 and EU335, I consider that the
Defendant’s position is even stronger. This is because in my view the Claimants
required the Court’s permission to discontinue the claim in relation to those
Trade Marks pursuant to rule 38.2(2)(a)(ii) due to the undertaking recorded in
the order of Master Clark. Counsel for the Claimants’ only answer to this point
was to submit that the undertaking was predicated upon there being infringement
claims extant, and that it no longer applied if they ceased to be extant. But
that submission presupposes that the Claimants were unilaterally entitled to
discontinue those claims, and thus assumes what it seeks to prove. Given that
the Court’s permission was required, and in the absence of the undertakings from
the Claimants which I consider are required to protect the Defendant, I would
refuse the Claimants permission to discontinue in relation to EU651 and
EU335.
Subject-matter jurisdiction under European law
21.
The relevant provisions of the Regulation are as follows:
“Article
122
Application of Union rules on
jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters
1. Unless
otherwise specified in this Regulation, the Union rules on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters shall
apply to proceedings relating to EU trade marks and applications for EU trade
marks, as well as to proceedings relating to simultaneous and successive
actions on the basis of EU trade marks and national trade marks.
2. In
the case of proceedings in respect of the actions and claims referred to in
Article 124:
…
(b) Articles
25 and 26 of Regulation (EU) No 1215/2012 shall apply subject to the
limitations in Article 125(4) of this Regulation;
…
Article
124
Jurisdiction
over infringement and validity
The EU trade
mark courts shall have exclusive jurisdiction:
(a) for
all infringement actions and — if they are permitted under national law —
actions in respect of threatened infringement relating to EU trade marks;
…
(d) for
counterclaims for revocation or for a declaration of invalidity of the EU trade
mark pursuant to Article 128.
Article
125
International
jurisdiction
1. Subject
to the provisions of this Regulation as well as to any provisions of Regulation
(EU) No 1215/2012 applicable by virtue of Article 122, proceedings in respect
of the actions and claims referred to in Article 124 shall be brought in the
courts of the Member State in which the defendant is domiciled or, if he is not
domiciled in any of the Member States, in which he has an establishment.
2. If
the defendant is neither domiciled nor has an establishment in any of the
Member States, such proceedings shall be brought in the courts of the Member
State in which the plaintiff is domiciled or, if he is not domiciled in any of
the Member States, in which he has an establishment.
3. If
neither the defendant nor the plaintiff is so domiciled or has such an
establishment, such proceedings shall be brought in the courts of the Member
State where the Office has its seat.
4. Notwithstanding
the provisions of paragraphs 1, 2 and 3:
(a) Article
25 of Regulation (EU) No 1215/2012 shall apply if the parties agree that a
different EU trade mark court shall have jurisdiction;
(b) Article
26 of Regulation (EU) No 1215/2012 shall apply if the defendant enters an
appearance before a different EU trade mark court.
5. Proceedings
in respect of the actions and claims referred to in Article 124, with the
exception of actions for a declaration of non-infringement of an EU trade mark,
may also be brought in the courts of the Member State in which the act of
infringement has been committed or threatened, or in which an act referred to
in Article 11(2) has been committed.
Article
126
Extent of
jurisdiction
1. An
EU trade mark court whose jurisdiction is based on Article 125(1) to (4) shall
have jurisdiction in respect of:
(a) acts
of infringement committed or threatened within the territory of any of the
Member States;
…
2. An
EU trade mark court whose jurisdiction is based on Article 125(5) shall have
jurisdiction only in respect of acts committed or threatened within the
territory of the Member State in which that court is situated.
Article
127
Presumption
of validity — Defence as to the merits
1. The
EU trade mark courts shall treat the EU trade mark as valid unless its validity
is put in issue by the defendant with a counterclaim for revocation or for a
declaration of invalidity.
…
3. In
the actions referred to in points (a) and (c) of Article 124, a plea relating
to revocation of the EU trade mark submitted otherwise than by way of a
counterclaim shall be admissible where the defendant claims that the EU trade
mark could be revoked for lack of genuine use at the time the infringement
action was brought.
Article
128
Counterclaims
1. A
counterclaim for revocation or for a declaration of invalidity may only be
based on the grounds for revocation or invalidity mentioned in this Regulation.
2. An
EU trade mark court shall reject a counterclaim for revocation or for a
declaration of invalidity if a decision taken by the Office relating to the
same subject matter and cause of action and involving the same parties has
already become final.
…
4. The
EU trade mark court with which a counterclaim for revocation or for a
declaration of invalidity of the EU trade mark has been filed shall not proceed
with the examination of the counterclaim, until either the interested party or
the court has informed the Office of the date on which the counterclaim was
filed. The Office shall record that information in the Register. If an
application for revocation or for a declaration of invalidity of the EU trade
mark had already been filed before the Office before the counterclaim was
filed, the court shall be informed thereof by the Office and stay the proceedings
in accordance with Article 132(1) until the decision on the application is
final or the application is withdrawn.
…”
22.
In Adobe Systems Inc v Netcom Distributors [2012] EWHC 1087 (Ch),
[2012] ETMR 38 Mann J held that, on a proper interpretation of what were then
Articles 96 and 100 of Council Regulation 207/2009/EC of 26 February 2009 on
the Community trade mark (codified version) (now Articles 125 and 128 of the
Regulation), this Court did not have (subject-matter) jurisdiction to entertain
a counterclaim for revocation of what were then Community trade marks where the
counterclaim would not provide a defence to the infringement claim even if it
was wholly successful.
23.
Although counsel for the Defendant reserved the right to argue that Adobe
v Netcom was wrongly decided in a higher court, she did not submit that I
should not follow it.
24.
Accordingly, the question which arises is whether this Court is
precluded from giving effect to the conclusion which I have reached applying
domestic procedural law because it would be incompatible with European law
since it would involve the Court determining a counterclaim relating to
European trade marks which was no longer one which had defensive effect.
25.
Counsel for the Defendant submitted that the Court was not so precluded
for three separate reasons. First, she submitted that what mattered was whether
the Court had jurisdiction at the date the counterclaim was served. If it did,
then the Court could not lose jurisdiction subsequently. I do not accept this
submission. In Case C-4/03 Gesellschaft für Antriebstechnik mbH & Co KG
v Lamellen und Kupplungsbau Beteiligungs KG [2006] ECR I-6509 the Court of
Justice of the European Union held at [25] that the exclusive jurisdiction
provided for by what is now Article 24(3) of European Parliament
and Council Regulation 1215/2012/EU of 12 December 2012 on jurisdiction
and the recognition and enforcement of judgments in civil and commercial
matters (recast) (“the Brussels I Regulation”) applied “whatever the
form of proceedings in which the issue of a patent's validity is raised, be it
by way of an action or a plea in objection, at the time the case is brought or
at a later stage in the proceedings [emphasis added]”. Furthermore, Article
27 requires a court of a Member State which is seized of a claim which is
“principally concerned with” a matter over which the courts of another Member
State have exclusive jurisdiction by virtue of Article 24(4) to decline
jurisdiction. It follows that the subject-matter jurisdiction of a court in European
law can be changed by procedural steps which occur after the service of the
relevant originating process: see e.g. Anan Kasei Co Ltd v Molycorp
Chemicals & Oxides (Europe) Ltd
[2016] EWHC 1722 (Pat), [2016] Bus LR 945.
26.
Secondly, counsel for the Defendant submitted that, if the notice of
discontinuance was set aside, then the parties would simply be returned to the
position they were in the day before the notice was served. As she pointed out,
there is no dispute that, as at 5 June 2018, this Court had jurisdiction to
determine both the claim and the counterclaim relating to the EU Trade Marks.
Absent a discontinuance by the Claimants of the claim, that would continue to
be the case. I accept this submission. In effect, what I have concluded
applying domestic procedural law is that it was simply too late, having got
this close to trial, for the Claimants to be permitted unilaterally to
discontinue their claim, and thus the Court remained seized of both the claim
and the counterclaim. It makes no difference that the Claimants made it clear
that they did not intend to pursue their arguments in support of the claim in
any event.
27.
Counsel for the Claimants submitted that this raised an issue of
interpretation of the Regulation which should be referred to the CJEU for a
preliminary ruling. Counsel for the Defendant resisted a reference. In my
judgment it is not appropriate to refer the matter to the CJEU at this stage of
the proceedings.
28.
Finally, counsel for the Defendant submitted that the Joint Letter
represented an agreement on jurisdiction falling within Article 25 of the Brussels
I Regulation to which the Court was required to give effect pursuant to Articles
122(2)(b) and 125(4)(a) of the Regulation. I am doubtful whether this is
correct. Article 125(4)(a) of the Regulation provides that Article 25 of the
Brussels I Regulation shall apply if the parties agree that a different EU
trade mark court shall have jurisdiction to that which would otherwise have
jurisdiction under Article 125(1) to (3). At present, it seems to me that this
refers to the jurisdiction of the EU trade marks court over infringement
claims: see Article 126(1). If Mann J’s reasoning in Adobe v Netcom is
correct, then an EU trade mark court’s jurisdiction to entertain a counterclaim
is parasitic upon its jurisdiction to determine the claim. Thus an agreement on
jurisdiction as to an infringement claim within Article 125(4)(a) could extend
to jurisdiction over a defensive counterclaim; but it does not follow that
Article 125(4)(a) enables jurisdiction to be conferred over a counterclaim
independently of jurisdiction over the claim. Turning to the Joint Letter, my
provisional view is that this did not amount to an agreement within Article
125(4)(a), because it was not an agreement for a different national EU trade
mark court to have jurisdiction to that which would have had jurisdiction under
Article 125(1)-(3). (As I understand it, the jurisdictional basis for the
Claimants’ claim for infringement of the EU Trade Marks against the Defendant is
Article 125(5).) In the light of the conclusions reached above, however, it is
not necessary for me to reach a conclusion on these points.
The witnesses
The Claimants’ witnesses
29.
Lau Kwok Kuen, also known as Peter Lau, has been the Chief Executive and
Chairman of Giordano International Ltd, the parent company of the Giordano
Group, which includes the Claimants, since 1994. Mr Lau has worked for the Giordano
Group since 1987. He gave evidence primarily about the history of the Giordano
Group and its historical use of the Trade Marks in the UK and the remainder of
the EU. No criticism was made of his evidence.
30.
Mark Loynd is the General Counsel and Company Secretary of the
Giordano Group. He has been employed by the Giordano Group since September
2013. He became Head of International Brand Collaborations in 2015. (Prior to
this, international operations and expansion were primarily dealt with by Dominic
Irwin, Giordano Group’s former Chief Financial Officer, and Ishwar Chugani, the
Managing Director of Giordano Group’s Middle East subsidiary and a director of
Giordano International Ltd since 1 February 2013.) He has been a director of Walton
since 15 March 2016, a director of the Second Claimant (“Giordano UK”) since 27
October 2015 and a director of Giordano International Ltd since 9 March 2017.
He gave evidence primarily about the Giordano Group’s recent use of the Trade
Marks in the UK and the remainder of the EU. Counsel for the Defendant
submitted that Mr Loynd’s written evidence had to be treated with care, because
it was expressed in broad and vague terms which gave an impression of use on a
greater scale than was really justified by the facts. I agree with this. Counsel
for the Defendant also criticised Mr Loynd’s oral evidence as being affected by
selective recollection. I agree that Mr Loynd professed to have difficulty in
remembering some points which one would have expected him to have a better
recollection of, but this may be explicable as being due to jet-lag. In any
event the points were not of particular significance.
31.
Huang Chaoxiong is a senior programmer at Shenzhen Tiger Enterprises Ltd
(“Shenzhen”) a company within the Giordano Group. He has been employed by
Shenzhen since 2002. He gave evidence about the operation of the Giordano
Group’s global e-shop website. Counsel for the Defendant submitted that Mr
Huang’s evidence had to be treated with considerable caution for two reasons.
32.
The first reason is that Mr Huang’s first witness statement described
the geotargeting feature of the global e-shop as having been present in the
period 2010 to 2016. In fact, this feature was only introduced in the 2016
version of the global e-shop which was operational from about 22 February 2016.
Not only that, but it subsequently emerged that Mr Huang based his evidence in
his first statement on the source code for the 2016 version of the global
e-shop, and not the 2010 version. The source code for the 2010 version was only
(partially) disclosed (following a specific disclosure application by the
Defendant at the pre-trial review) on 4 June 2018, and it was only on 6 June
2018 that a third witness statement from Mr Huang was served correcting his
first statement. This put the Defendant in considerable difficulties in dealing
with this evidence (compounded by the Claimants’ notice of discontinuance and
the consequent need to make the Defendant’s application to set it aside). Thus
it was too late, for example, for the Defendant to attempt to adduce expert
evidence about the source code. Yet further, Mr Huang was unable to explain why
key files from the 2010 version of the source code showed last modification
dates in August and September 2015.
33.
The second reason is that Mr Huang gave evidence through an interpreter.
It is not the fault of the witness, but there was difficulty in taking Mr Huang’s
evidence due to the inadequacy of the interpreter, who did not seem familiar
with all the terminology she was required to interpret. This is despite the
fact that (according to the Claimants’ representatives) she has a degree in
Information System Design and thus would reasonably have been expected to be
competent in the relevant technical vocabulary. The result is that aspects of
Mr Huang’s oral evidence were somewhat unclear.
34.
Counsel for the Defendant submitted that, in those circumstances, the
Court should only rely upon Mr Huang’s evidence where it was supported by
contemporaneous documents the date of which the court could be confident of. I
accept this submission.
35.
Li Jiaxin is an operations specialist who has been employed by Shenzhen
since 9 June 2014. She gave evidence about the operation of the Giordano
Group’s AliExpress store. She gave evidence partly through the same
interpreter, but there was less difficulty with her evidence since it was less
technical as well as being given partly in English. Counsel for the Defendant
submitted that Ms Li’s recollection was not as good as her witness statement
suggested. I agree with this. Counsel for the Defendant also submitted that Ms
Li had a tendency to argue the Claimants’ case. I agree that Ms Li did slip
into argument occasionally, but I do not regard that as detracting from the
remainder of her evidence.
36.
Consumer witnesses. The Claimants adduced evidence from seven UK
consumers who had purchased GIORDANO clothing from (in six cases) the Giordano
Group’s global e-shop and (in one case) the Giordano Group’s AliExpress store: Robert
Batchelor, Timothy Crawshaw, Michael Donnelly, Linda Nicoll, Simon Nudds, Rocio
Reyes-Pava and Robert Schuck. The Claimants served hearsay notices in respect
of Mr Crawshaw and Mr Donnelly’s statements, Mr Donnelly because he was abroad
at the time of the trial and Mr Crawshaw because his employer was unwilling to
release him to attend. The Defendant did not require Mr Batchelor, Ms Nicoll or
Mr Schuck to attend for cross-examination. Mr Nudds and Ms Reyes-Pava were
cross-examined. No criticism was made of their evidence or the manner in which
it had been obtained.
The Defendant’s witnesses
37.
Arnold Verweij is the founder of the Defendant, which he set up
in 1955 and ran until 1997, when he handed over operational control to his sons
Karel and Robert. He gave evidence about the history of the Defendant’s
GIORDANO brand.
38.
Karel Verweij is one of Arnold’s sons. He started working for the
Defendant in 1989. He gave evidence about the history of the Defendant’s
GIORDANO brand and its use in the UK.
39.
Stefan Donga is the Export Manager of the Defendant and is
responsible for its sales in the UK and across Europe other than the
Netherlands. He is also the Management Assistant to Arnold, Karel and Robert Verweij,
which means that he is also involved in management aspects of the business. He
started working for the Defendant in 2003 on a part-time basis, and has been
full-time since 2007. He gave evidence about the Defendant’s use of GIORDANO
across the UK and the remainder of the EU.
40.
Kurt Stöpetie is a partner at the Dutch law firm Brinkhof Advocaten NV,
who has been assisting the Defendant with this matter since 2014. He gave
evidence about the Defendant’s trade mark portfolio and the status of parallel
disputes with the Giordano Group in other EU jurisdictions.
41.
Anthony Wade was a selling agent for the Defendant in the South
of England and Wales from 2008 to 2015. He gave evidence about the nature and
extent of sales and the reputation of the Defendant’s GIORDANO clothing in the
industry in the UK. His witness statement was the subject of a hearsay notice
as he was unable to attend the trial for health reasons.
42.
Paul Walsh is a partner in Bristows LLP, the Defendant’s solicitors. He
exhibited a number of documents concerning the Giordano Group’s global e-shop
and the Google Analytics data for that website. As Mr Walsh of course accepted,
he was not qualified to give, and did not purport to give, expert evidence on
these matters. Thus the function of his evidence was simply to verify the
documents and explain their sources. Despite this, counsel for the Claimants spent
some time cross-examining Mr Walsh as to the inferences to be drawn from the
documents. This was not a productive exercise. Nevertheless, one of the points
counsel put to Mr Walsh requires further comment.
43.
Reliance was placed by the Claimants upon Google Analytics data for the
global e-shop. Google Analytics is a service provided by Google which tracks
and reports the number of visitors to websites, the locations of such visitors,
how many times they visit, how many pages they view and how long they spend on
the site. The Giordano Group subscribed to Google Analytics to monitor visitors
to the global e-shop. Mr Huang exhibited some Google Analytics data to his
first witness statement and calculated some figures from the data (which he
later corrected in his second statement). The Defendant applied for specific
disclosure of further Google Analytics data at the pre-trial review. Instead of
disclosure, an order was made for the Defendant’s legal representatives to be
provided with restricted access to the Giordano Group’s Google Analytics
account. They interrogated the account and retrieved additional data which Mr
Walsh exhibited. Counsel for the Claimants pointed out that Mr Walsh had not
himself participated in this exercise, and therefore was unable to speak to
what had been done. I am unimpressed with this criticism, since (a) any
questions could have been put to the Defendant’s solicitors in correspondence
and (b) the Claimants had access to all the data.
44.
Counsel for the Claimants put it to Mr Walsh, and Mr Walsh accepted, that
Mr Walsh was not an expert in interpreting Google Analytics data and that he
had made no attempt to compare the data for the Giordano Group’s global e-shop
with relevant benchmarks. The same goes for Mr Huang, however. Thus I have been
left in the position of trying to interpret the Google Analytics data as best I
can assisted by such explanations as are available from the documentary
evidence and the witnesses were able to give.
45.
Marc Linsner is a trainee solicitor who gave evidence about the
Giordano Group’s pop-up shops in the UK. He was not cross-examined.
46.
Sarah Watson is a former trainee solicitor who gave evidence about one
of the Giordano Group’s UK pop-up shops and its 1997 Whittard venture. Her
evidence was the subject of a hearsay notice.
47.
Trade witnesses. The Defendant adduced evidence from proprietors
of five long-established, family-run, independent menswear retailers who have
sold the Defendant’s GIORDANO clothing for varying periods: Blake Bowden
(Warwick Bowden & Sons Ltd, which owns Wakefields in Horsham, Weir Rhodes
in Guildford and Warwicks in Windsor and has sold the Defendant’s clothing
since 2010); Richard Moore (J A Moore in Kenilworth, which has sold
the Defendant’s clothing since at least 2005); Neil Raven (Ravens of Southend,
which sold the Defendant’s clothing from 2010 to 2017); Matthew Rawlings (W D
Coe Ltd, which owns Coes in Ipswich, Felixstowe, Lowestoft and Maldon, Goddards
in Kings Lynn and Golding of Newmarket and has sold the Defendant’s clothing
since 2001) and Ashley Smart (Robert Smart Menswear in York, which has sold the
Defendant’s clothing since 2009). Mr Raven and Mr Smart’s statements were the
subject of hearsay notices. The Claimants did not require any of the other
three witnesses to attend for cross-examination.
Factual background
The Claimants
48.
Giordano Ltd was founded in Hong Kong by Jimmy Lai in 1981. He chose the
name from a pizza restaurant in New York. He thought it would be advantageous
to have an Italian name. Mr Lai ceased to have any management role in the
company in 1994 and he sold his shareholding in 1996.
49.
Giordano Ltd started by manufacturing and retailing GIORDANO branded casual
clothing in Hong Kong. To begin with, it just sold men’s clothing. In about
1986 or 1987 it branched out into unisex clothing, and in the early 1990s it
introduced children’s clothing. By the late 1980s, the company had stores in
Hong Kong, Singapore and Taiwan. It focussed on selling a relatively small
number of garment designs in a wide range of colours, which enabled it to be
very efficient and to compete aggressively on price. It also offered a full
refund policy with no questions asked. This approach was very successful. Thus
the company’s turnover almost tripled between 1989 and 1993 from HK$711.5 million
(about £52 million) to HK$2,334 million (about £205 million).
50.
By 1991, Giordano Ltd was a subsidiary of Giordano Holdings Ltd. This
company was publicly listed on the Hong Kong stock exchange in 1991. After a restructuring
in 1995, Giordano Holdings Ltd was voluntarily de-listed and Giordano
International Ltd was simultaneously listed on the Hong Kong stock exchange.
Giordano International Ltd thus became, and remains, the parent company of the
Giordano Group.
51.
On 1 May 1997 Giordano Ltd entered into a franchising agreement with
Whittard of Chelsea plc (“Whittard”) and Giordano (UK) Ltd, a franchisee
controlled by Whittard. The agreement, which was to last for an initial period
of five years, provided for Whittard to set up GIORDANO-branded stores in the
UK and the Republic of Ireland and to sell clothing, watches and leather goods
in those stores. The first store opened in mid-June 1997 in Peascod Street in
Windsor (“the Whittard Shop”). Whittard was dissatisfied with the level of
sales, however. According to Dr Lau, Whittard closed the Whittard Shop in
September 1997. The last period for which there are surviving sales records,
however, is the week ending 13 July 1997. So far as the records go, the
Whittard Shop sold some 960 items of clothing. Giordano Ltd subsequently
terminated the agreement on 23 July 1999.
52.
The Giordano Group appears to have been somewhat scarred by this
experience. Although the Claimants’ evidence is that the Group has always
remained interested in franchising its stores in the UK and elsewhere in the EU
and has had approaches from, and in some cases discussions with, a number of
potential partners over the years, to date nothing has come of these approaches
and discussions. I shall return to this point below.
53.
The Giordano Group established an online shop in the late 1990s. By 2005
it had separate websites servicing Hong Kong, China, Korea and Taiwan. By
January 2010 it had an e-shop servicing Australia, China, Hong Kong, Indonesia,
India, Japan, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, Taiwan,
Thailand and the United Arab Emirates. In December 2010 it launched its global
e-shop. This is central to the non-use issue, and I shall discuss it in detail
below. It is convenient to note here, however, that I take the date of December
2010 from paragraph 4 of Mr Huang’s first statement, which is supported by a
screenshot from the internet archive known as the WayBack Machine dated 25
December 2010.
54.
On 27 January 2014 the Giordano Group began selling its goods via an
online store on the AliExpress platform. This again is significant for the
non-use issue, and I shall discuss it in detail below.
55.
Since the employment of Mr Loynd, the Giordano Group has made various efforts
to increase its presence in the UK and the EU. These efforts have included the
opening of temporary “pop-up” stores in the UK and Spain in 2016. Again, I
shall discuss these in more detail below.
56.
Giordano UK was incorporated on 27 October 2015. It is licensed to use
the Trade Marks in the UK. According to Mr Loynd, it was set up “to prepare for
[the Giordano Group’s] expansion into the market in Europe”. Prior to that, the
Giordano Group did not have a UK subsidiary. Giordano UK does not have any
employees. According to its VAT returns, it made sales of £797 in April to June
2016.
57.
In the 2017 annual accounts of Giordano International Ltd there is an
analysis of GIORDANO sales by market. The markets are identified as, in
summary, mainland China, Hong Kong, Taiwan, various other Asia–Pacific
countries, the Middle East, and “Overseas franchisees” (South Korea, Southeast
Asia and other markets). There is no suggestion that the Giordano Group has an
established market for GIORDANO clothing in the UK or the EU.
58.
The Giordano Group has a network of 2,414 GIORDANO retail stores across
these markets. Some of these stores are directly-operated stores (“DOS”),
whereas others are franchised. There is a breakdown of the location of these
stores in the 2017 accounts as follows:
|
Location
|
Store Number at December 2017
|
Store Number at December 2016
|
|
Mainland China
-
DOS
-
Franchised
|
324
605
|
357
562
|
|
The rest of Asia Pacific
|
602
|
581
|
|
Taiwan
|
200
|
203
|
|
The Middle East
-
DOS
-
Franchised
|
148
41
|
150
41
|
|
Hong Kong and Macau
|
75
|
73
|
|
South Korea – franchised
|
193
|
200
|
|
Southeast Asia – franchised
|
212
|
217
|
|
Other Markets - franchised
|
14
|
13
|
59.
Dr Lau’s evidence was that, to date, the Giordano Group has not wanted
to undertake the financial investment involved in establishing DOS outside of
their core markets, such as in the UK and the remainder of the EU, although it remained
interested in the possibility of franchise arrangements.
60.
The Giordano Group’s total sales in the year ending 31 December 2017 were
over HK$5.4 billion (over £520 million). There is no dispute that the GIORDANO
brand is well known in its core markets, and in particular in Hong Kong, China
and Taiwan. Moreover, Giordano Group has something of an international
reputation. For example, it was presented with the Emerging Market Retailer of
the Year Award in 2013 and the International Retailer of the Year Award in 2015
by Retail and Leisure International, an international retail industry
publication.
The Claimants’ trade mark registrations
61.
Giordano Ltd obtained its first trade mark registration for GIORDANO in
Class 25 in Jordan on 17 April 1982. Giordano Ltd applied to register a
stylised form of GIORDANO in Class 25 in Hong Kong on 6 November 1986, and this
proceeded to registration on 20 May 1988. Subsequently the registration was
assigned to Walton. Since then, Walton has built up a sizable portfolio of
registrations of marks consisting of or comprising GIORDANO, including the
Trade Marks, in many countries of the world. The Giordano Group has also
acquired some registrations made by third parties (although none of these are
relied on in these proceedings).
The Defendant
62.
The Defendant is a family-run business based in the Netherlands. The
business was founded by Arnold Verweij in 1955. The Defendant was incorporated
in 1986, took over the business in 1987 and changed its name to its present
name in 1997. It is now run by Karel and Robert Verweij.
63.
The business had modest beginnings in the form of a single retail shop
in Rotterdam selling quality clothing imported from Italy. It developed a
wholesale arm to the business, which first traded from the back of the shop but
has since grown over time. In 1976, it acquired a textile factory in Ireland to
produce its own knitwear to wholesale to retailers across Western Europe. The
knitwear range has always been sold under the brand name BAILEYS (named after
the pub in Dublin where Arnold Verweij signed the contract to purchase
the factory). BAILEYS is now focused on knitwear and outerwear.
64.
By the late 1980s, Arnold Verweij wanted to expand the business
offering by way of a new brand name and clothing range. He came up with the
name GIORDANO whilst on a trip to Italy in 1989. He saw the name on some wine
(it continues to be a brand of Italian wine to this day), and he liked the fact
that it sounded Italian as Italian clothing was perceived to be particularly
luxurious and fashionable. It was first used for knitwear, but the new range
was swiftly expanded to include shirts and then other items. Tailored shirts
are now the Defendant’s core product (they retail at around £80–£90), but the
Defendant also sells GIORDANO blazers, jackets, trousers, shorts, beachwear,
scarves, pyjamas and shoes. These are all designed in-house by the Defendant.
65.
The Defendant started selling GIORDANO clothing in the Netherlands in
1989, and it was not long before it was also selling in Ireland. The Defendant expanded
to other European countries organically, as part of the natural evolution of
its business and as it encountered opportunities, for example by being
introduced to national sales agents or by word of mouth at trade shows. The Defendant
made sales in Belgium and Luxembourg from 1996, Spain from 1997, Germany from
(at the latest) 2001, and has since entered Austria, Italy, Switzerland, and
Denmark, and has made sales in Lithuania, Hungary, France, Poland, Romania,
Malta and Greece.
66.
The Defendant sold its first order to a UK customer in 2000. This was
after it had been approached by David Coe and colleagues from Coes. Mr Coe and
his colleagues wanted to sell the Defendant’s GIORDANO branded clothing through
his company’s stores. Mr Coe and his colleagues visited the Defendant’s
showroom in Amsterdam in August 2000, placed an order on the spot and the goods
were shipped to the UK in January 2001. There were further shipments during the
course of that year. Around £5,816 worth of sales were made in that year
(wholesale value).
67.
By 2002, the Defendant was already selling GIORDANO to a number of other
UK retailers. In that year sales grew to £32,007 (wholesale value). By 2010
sales had reached £409,046 (wholesale value). By 2015, about 150 different
companies were stocking GIORDANO in the UK through their independent clothing
stores and boutiques. In total, the Defendant has sold GIORDANO goods to 359
customers who have retailed those goods through 375 UK stores. It has a loyal
customer base and a significant proportion of repeat business, with about 200
customers placing orders in 2017. GIORDANO had been recognised in a number of
trade publications since 2010 as a leading menswear brand.
68.
The Defendant achieves a significant proportion of its sales via sales
agents such as Mr Wade who travel around the UK showing the Defendant’s
GIORDANO clothing to potential retail customers. The agents also host hotel
shows and private presentations to retailers. It is common for European brands
and wholesalers without stores of their own to use agents in this way to sell
their goods to independent retailers in the UK. The Defendant’s agents receive
commission on the wholesale value of the goods they sell. When orders are
placed through an agent, he will send it back to the Defendant’s head office in
Amsterdam. The Defendant then confirms and fulfils the order directly. Payment
is made directly from the buyer to the Defendant.
69.
In addition to using agents, the Defendant also generates business via a
number of trade shows that it attends (together with its agents) in the UK and
elsewhere in the EU, and in particular the following:
i)
IMC Menswear Show. The IMC buying group is a consortium of independent
menswear retailers with about 100 members trading from over 200 shops. It holds
trade fairs in Northampton in February and August every year. Approximately 40
suppliers are invited to exhibit their clothing ranges at the fair. The show is
normally attended by over 70 buyers. The Defendant has exhibited annually since
2002. Around 80–90% of IMC members (including Mr Smart, Mr Raven and Mr
Rawlings) sell or have sold the Defendant’s GIORDANO clothing.
ii)
Moda. This is the UK’s largest fashion trade exhibition and takes place
at the NEC, Birmingham. It also takes place in February and August each year
(to reflect the summer and winter buying seasons, respectively). There are
normally about 1500 brands or suppliers exhibiting, with 12,000 odd visitors
over the course of the three-day event. The Defendant has exhibited every year
since February 2008.
iii)
INDX Menswear. This show takes place twice per year at the
Cranmore Park Exhibition Centre in Solihull and showcases over 100 brands
including GIORDANO. The Defendant has exhibited every year since 2016 (and also
in 2008-2010 when it was previously known as the AIS Menswear show).
iv)
Panorama, Berlin. This is an important European trade show for major
buyers and store groups. The Defendant has exhibited five times since 2014.
v)
Modafabriek, Amsterdam. This is a major clothing show with over 20,000
visitors. The Defendant exhibited in 2012 and 2013, hosting “open house” events
for buyers during the show since its headquarters are nearby.
70.
The Defendant’s evidence is that neither it nor any of its sales agents
or the retailers giving evidence have encountered or heard of the Giordano
Group or any other GIORDANO brand apart from the Defendant’s at any of these
shows.
71.
Sales of the Defendant’s GIORDANO branded clothing have increased
annually (with jumps in 2002 and 2009 after it started to attend IMC and Moda
respectively). By 2005, the volume of sales was sufficient to justify the
Defendant opening a UK bank account so that its UK customers could pay in
sterling (and not Euros). In 2016 the Defendant sold nearly 24,000 items in the
UK with a wholesale value of £748,711 (corresponding to a retail value of around
£2 million).
72.
The Defendant has had a website at www.verweij.com since June 1997, on
which it hosts a business-to-business platform accessible by its trade
customers, from which they can buy the Defendant’s products and download logos
and promotional material. The Defendant also has a social media presence,
including on Facebook, Instagram and YouTube.
73.
The GIORDANO range has a number of sub-lines, which help orientate
consumers towards the styling or fit of a particular range of clothing under
the brand. Examples include GIORDANO Tailored (which relates to a more modern,
tailored shirt fit), GIORDANO Outfitters (a regular shirt fit), GIORDANO Slim
Fit (for a slim fit shirt) and GIORDANO Blue (for more casual clothing that can
be worn with jeans).
The Defendant’s
trade mark registrations
74.
The Defendant applied for its first trade mark registration for GIORDANO
in the Benelux territory in Classes 18 and 25 on 11 August 1989, and this
application was successful. On 18 January 1991 the Defendant obtained an international
registration for GIORDANO in Classes 18 and 25 designating Austria, France, Germany,
Italy, Portugal, Spain (Class 18 only) and Switzerland based on the Benelux
registration. (Further details of these registrations are set out in paragraph 108
below.) The Benelux registration (together with a number of other registrations
and applications) was assigned to Abanicos, and exclusively licensed to the
Defendant, pursuant to agreements dated 20 March 2007 and 13 December 2007.
The parties’ knowledge of, and contacts with, each
other
75.
It appears that the Defendant first became aware of the GIORDANO
business in Hong Kong, although not of the identity of Walton, in about late November
1990. At that time the Defendant had its GIORDANO branded clothing manufactured
in Hong Kong. One of its Hong Kong manufacturers, Fook Loy Knitting Factory Ltd
(“Fook Loy”), discovered that there was a Hong Kong registration owned by
another party (i.e. Walton) and alerted the Defendant, although without
identifying the owner. Arnold Verweij took the view that this should not be a
problem given that the clothes were to be exported to the Netherlands, where
the Defendant owned the trade mark. It is clear from correspondence disclosed
by the Defendant that both Fook Loy and Fancy Garment Factory Ltd raised
concerns with the Defendant about the risk of infringement in January to March
1991, but Arnold Verweij and Karel Verweij explained that the Defendant
persuaded the manufacturers to take the risk and they continued to manufacture
GIORDANO branded clothing for the Defendant for many years.
76.
At around the same time, in about April or May 1991, Arnold Verweij and
Karel Verweij visited Hong Kong and went to a shopping centre where they
discovered a Giordano Group store. They went inside the store and saw the
clothing being sold. It appears from Arnold Verweij’s evidence that he also
encountered Giordano Group stores when visiting Hong Kong, India and Taiwan in
the early 1990s.
77.
On 2 April 1993 Walton applied to register a stylised form of GIORDANO
in Class 25 in France. The application was published on 14 May 1993. On 16 June
1993 the Defendant’s trade mark attorney requested that the application be
withdrawn, relying upon the Defendant’s international registration covering
France. On 18 October 1993 Walton withdrew the application. It appears that
this was the first time the Giordano Group became aware of the Defendant’s
existence, but it is unclear what (if anything) more the Giordano Group learnt.
Dr Lau’s evidence was that he was not personally involved in this episode.
78.
On 14 October 1998 Walton filed the application for EU150. The
application was published on 23 July 2001. On 18 October 2001 the Defendant
opposed the application, relying upon its Benelux registration. The Defendant
was required to prove use of its trade mark, and filed evidence of use on 1
November 2002. This evidence included a print-out of some pages from the
Defendant’s website dated 30 October 2002 which included the statement that the
Defendant’s collections were available in 500 menswear shops throughout the
Netherlands and were available in Belgium, Ireland, Spain, Germany and many
other European countries. On 16 April 2003 Walton’s trade mark attorneys filed
observations which appended a list of registered trade marks owned by Walton
running to over 12 pages, including UK864 and UK444. On 16 February 2005 the
Opposition Division rejected the appeal on the ground that the Defendant had
failed to prove genuine use of its trade mark during the relevant period. The
Defendant appealed, and on 16 June 2005 submitted additional evidence of use
which included declarations by Karel and Robert Verweij. On 10 April 2006 the
Second Board of Appeal dismissed the appeal, holding that the evidence filed by
the Defendant before the Opposition Division did not establish genuine use of
the trade mark during the relevant period and that the additional evidence
filed on appeal was inadmissible. Subsequently EU150 proceeded to registration.
(In these proceedings, by contrast, the Claimants have conceded that there was
genuine use of both the Defendant’s Benelux registration and its international
registration in Austria and Italy during the relevant period.)
79.
The Defendant contends that, even if it was not aware before, the
Giordano Group became aware of the Defendant’s use of GIORDANO in relation to
menswear on a substantial scale in the Netherlands and elsewhere in the EU as a
result of the evidence filed by the Defendant on 1 November 2002. It is clear
from the contents of Walton’s trade mark attorneys’ observations dated 16 April
2003 that they had taken instructions from their client about the Defendant’s
evidence. Accordingly, I accept this contention.
80.
The Claimants contend that the Defendant became aware of UK864 and UK444
as result of the observations filed by Walton on 16 April 2003. Both Arnold
Verweij and Karel Verweij gave evidence that they did not become aware of
Walton’s UK registrations until much more recently, however. Arnold Verweij
thought it was around 2014/2015, while Karel Verweij thought it was only as a
result of the letter before action in these proceedings dated 24 March 2016. It
does not matter which of these two dates is correct. Given the issue before
OHIM (as it then was), it is conceivable that the Defendant’s trade mark
attorneys did not forward the list of registrations to the Defendant. Even if
they did, it is plausible that Karel Verweij did not read it. Moreover, Karel
Verweij gave evidence that the Defendant had not obtained a UK trade mark
search. Accordingly, I accept the Defendant’s evidence that it was not aware of
UK864 or UK444 prior to about 2014/2015 at the earliest.
81.
In December 2007 the Giordano Group was contacted by one of its clothing
manufacturers in Hong Kong, Esquel Enterprises Ltd, as a result of an approach
from the Defendant. Esquel wanted to know whether there would be a conflict if
it worked with the Defendant. It is clear from an email from Angus Mai to
William Yue and Queenie Fung of Giordano Group dated 20 December 2007 that they
were aware that the Defendant was a Dutch company selling GIORDANO branded
clothing and were aware of its website.
82.
In June 2012 the Giordano Group was approached by a Dutch retail group
which expressed interest in stocking the GIORDANO brand. Although these
discussions did not lead anywhere, it is evident from an email from Mr Chugani to
a colleague dated 6 August 2012 that Mr Chugani was aware that there was “a
company operating stores and selling Giordano shirts” in the Netherlands.
83.
On 14 January 2014 Mr Chugani sent the Defendant an email with the
subject “Introduction to Giordano International” in the following terms:
“To the Directors/Export Manager – Verweij Group
I would like to introduce our company and brand – Giordano.
Giordano International, founded in Hong Kong in 1981,
currently operates 2,800 stores in 40 countries around the world.
We understand that your company has also been distributing
Giordano branded shirts, especially in the Benelux countries, and I would like
to start a discussion on the possibility of us working together.”
At the foot of the email was a
panel containing further information about the Giordano Group.
84.
Karel Verweij replied on 24 January 2014 asking for more information
about Giordano Group’s proposals for cooperation. Mr Chugani responded later
the same day enclosing a link to Giordano Group’s brochure and saying:
“We are now looking to expand our operations beyond Asia and
the Middle East.
As you have been operating in the Benelux for many years now,
there could be opportunities for both sides.”
He finished by suggesting a
meeting.
85.
On 26 March 2014 Karel Verweij replied saying that the Defendant had
started selling GIORDANO shirts in 1989 and that it was currently selling to
approximately 1500 retailers in countries across Europe. He said that the
Defendant was interested to talk to the Giordano Group about possibilities for
the future, “also with a view to avoid any possible conflicts”, and agreed that
a meeting would be a good idea. On 1 April 2014 Mr Chugani responded suggesting
a meeting in Amsterdam on 2 May 2014. This led to a meeting between Mr Chugani
and Arnold, Karel and Robert Verweij at the Defendant’s offices on 3 June 2014.
On 4 June 2014 Mr Chugani sent the Verweijs an email thanking them for their
hospitality and expressing confidence that there could be many possible areas
of cooperation between the parties.
86.
About a month after Mr Chugani’s email dated 14 January 2014, on 18
February 2014 Walton applied to register stylised forms of GIORDANO JUNIOR and
GIORDANO/LADIES in Classes 9, 18 and 25 and Classes 9, 25 and 35 respectively
as EU trade marks numbers 12,611,075 (“EU075”) and 12,610,945. Walton did not
inform the Defendant that it was doing this. The applications were published on
6 May 2014. On 31 July 2014 the Defendant and Abanicos filed oppositions on
relative grounds relying upon their earlier Benelux and international
registrations. (These oppositions were subsequently withdrawn on 27 November
2017, and so the applications proceeded to registration. Instead the Defendant
and Abanicos filed cancellation actions on 23 January 2018 and 22 January 2018,
but by then Walton had requested conversion of EU075 in Class 25 into national
marks.)
87.
Although discussions continued on a without prejudice basis intermittently
for a year, no agreement was reached. On 27 May 2015 Karel and Robert Verweij
sent Mr Chugani an email discussing various possible forms of cooperation, and
suggesting that the most practical solution would be an agreement dividing the
world into two areas of exclusivity. The email concluded by saying that, in
order to safeguard the Defendant’s position, it had had no alternative but to file
the oppositions referred to above and that it would do the same against some
other applications of the Giordano Group. On 5 August 2015 Mr Chugani replied reiterating
that the Giordano Group was willing to discuss a mutually beneficial solution,
but in the meantime would protect its rights and interests in GIORDANO. On 27
August 2015 Mr Stöpetie wrote to Mr Loynd proposing a meeting with a view to
reaching an agreement, but said that in the meantime the Defendant would
protect its rights and interests in GIORDANO. On 4 September 2015 there was a
meeting between the Giordano Group and the Defendant in Paris. On 17 September
2015 Anthony Tong of Giordano Group’s Hong Kong solicitors Robin Bridge and
John Liu sent Mr Stöpetie an email informing him that, while the Giordano Group
remained sincerely interested in finding a solution acceptable to both parties,
until an agreement had been reached, Giordano Group considered that it was
obliged to preserve its position by taking appropriate legal actions. On 22
September 2015 Mr Stöpetie replied saying that the Defendant understood this
and that the Giordano Group would appreciate that the same went for the
Defendant. To that end, he invited the Giordano Group voluntarily to surrender
its European registrations, including the UK Trade Marks, failing which the
Defendant would apply to cancel them. Mr Loynd accepted that, as a result, Walton
was aware from that date that its trade marks were vulnerable to a revocation attack
by the Defendant.
88.
On 8 October 2015 the Defendant filed revocation applications in respect
of each of the UK Trade Marks except UK297 at the UK Intellectual Property
Office (“the IPO Applications”). On 14 October 2016 the Registrar of Trade
Marks referred the IPO Applications to this Court, where they have been
continued by the Defendant’s counterclaim.
Key legislative provisions
89.
At the dates when the applications for the EU Trade Marks were filed,
the legislation which governed what were then called Community trade marks, and
are now called EU trade marks, was Council Regulation 40/94/EC of 20 December
1993 on the Community trade mark. This was subsequently replaced by Council
Regulation 207/2009/EC of 26 February 2009. It has in turn been amended by
European Parliament and Council Regulation 2015/2424/EU of 16 December 2015 and
then replaced by the Regulation. The Claimants’ infringement allegations relate
to periods covered by Regulation 207/2009, Regulation 207/2009 as amended by
Regulation 2015/2424 and the Regulation. There is no material difference for the
purposes of this case between the relevant provisions of these regulations,
although the numbering of the articles has changed. It is therefore convenient
to refer to the provisions of the Regulation.
90.
The key provisions of the Regulation are as follows:
“Article 8
Relative
grounds for refusal
1. Upon
opposition by the proprietor of an earlier trade mark, the trade mark applied
for shall not be registered:
(a) if
it is identical with the earlier trade mark and the goods or services for which
registration is applied for are identical with the goods or services for which
the earlier trade mark is protected;
(b) if
because of its identity with or similarity to the earlier trade mark and the
identity or similarity of the goods or services covered by the trade marks
there exists a likelihood of confusion on the part of the public in the
territory in which the earlier trade mark is protected; the likelihood of
confusion includes the likelihood of association with the earlier trade mark.
…
4. Upon
opposition by the proprietor of a non-registered trade mark or of another sign
used in the course of trade of more than mere local significance, the trade
mark applied for shall not be registered where and to the extent that, pursuant
to the Union legislation or the law of the Member State governing that sign:
(a) rights
to that sign were acquired prior to the date of application for registration of
the EU trade mark, or the date of the priority claimed for the application for
registration of the EU trade mark;
(b) that
sign confers on its proprietor the right to prohibit the use of a subsequent
trade mark.
…
Article 9
Rights
conferred by an EU trade mark
1. The
registration of an EU trade mark shall confer on the proprietor exclusive
rights therein.
2. Without
prejudice to the rights of proprietors acquired before the filing date or the
priority date of the EU trade mark, the proprietor shall be entitled to prevent
all third parties not having his consent from using in the course of trade, in
relation to goods or services, any sign where:
(a) the
sign is identical with the EU trade mark and is used in relation to goods or services
which are identical with those for which the EU trade mark is registered;
(b) the
sign is identical with, or similar to the EU trade mark and is used in relation
goods or services which are identical with or similar to the goods or services for
which the EU trade mark, if 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;
…
Article 18
Use of an
EU trade mark
1. If,
within a period of five years following registration, the proprietor has not
put the EU trade mark to genuine use in the Union in connection with the goods
or services in respect of which it is registered, or if such use has been
suspended during an uninterrupted period of five years, the EU trade mark shall
be subject to the sanctions provided for in this Regulation, unless there are
proper reasons for non-use.
The following shall also
constitute use within the meaning of the first subparagraph:
(a) use
of the EU trade mark in a form differing in elements which do not alter the
distinctive character of the mark in the form in which it was registered,
regardless of whether or not the trade mark in the form as used is also
registered in the name of the proprietor;
…
Article 58
Grounds
for revocation
1. The
rights of the proprietor of the EU trade mark shall be declared to be revoked
on application to the Office or on the basis of a counterclaim in infringement
proceedings:
(a) if,
within a continuous period of five years, the trade mark has not been put to
genuine use in the Union in connection with the goods or services in respect of
which it is registered, and there are no proper reasons for non-use; however,
no person may claim that the proprietor's rights in an EU trade mark should be
revoked where, during the interval between expiry of the five-year period and
filing of the application or counterclaim, genuine use of the trade mark has
been started or resumed; the commencement or resumption of use within a period
of three months preceding the filing of the application or counterclaim which
began at the earliest on expiry of the continuous period of five years of
non-use shall, however, be disregarded where preparations for the commencement
or resumption occur only after the proprietor becomes aware that the
application or counterclaim may be filed;
…
2. Where
the grounds for revocation of rights exist in respect of only some of the goods
or services for which the EU trade mark is registered, the rights of the
proprietor shall be declared to be revoked in respect of those goods or
services only.
Article 59
Absolute
grounds for invalidity
1. An
EU 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.
…
3. Where
the ground for invalidity exists in respect of only some of the goods or
services for which the Community trade mark is registered, the trade mark shall
be declared invalid as regards those goods or services only.
Article 60
Relative
grounds for invalidity
1. An
EU trade mark shall be declared invalid on application to the Office or on the
basis of a counterclaim in infringement proceedings:
(a) where
there is an earlier trade mark as referred to in Article 8(2) and the
conditions set out in paragraph 1 or 5 of that Article are fulfilled;
…
(c) where
there is an earlier right as referred to in Article 8(4) and the conditions set
out in that paragraph are fulfilled;
…
All the conditions referred to in
the first subparagraph shall be fulfilled at the filing date or the priority
date of the EU trade mark.
…”
91.
Parallel provisions to those set out in paragraph 90 above are contained
in Articles 4(2), 5(1),(4)(a), 10(1),(2)(a),(b), 16(1),(5)(a) and 19 of European
Parliament and Council Directive 2015/2436/EU of 16 December 2015 to
approximate the laws of the Member States relating to trade marks (recast)
(“the Directive”) which replaced European Parliament and Council Directive
2008/95/EC of 22 October 2008 which in turn replaced Council Directive
89/104/EEC of 21 December 1988.
92.
The provisions of the Directive listed in paragraph 91 above are
implemented in the UK by sections 3(6), 10(1),(2), 46(1)(a) and 47(1) of the
Trade Marks Act 1994.
Relevant dates for assessment
The law
93.
The relevant date for assessing whether a trade mark is invalid is the
date on which the application was filed (unless reliance is placed by the
proprietor on subsequently acquired distinctive character where the ground of
invalidity relied upon is lack of distinctive character): see Case C-192/03 Alcon
Inc v Office for Harmonisation in the Internal Market [2004] ECR I-8993.
94.
The relevant date for the assessment of whether a trade mark was applied
for in bad faith is the date when the application was made: see Case C-529/07 Chocoladefabriken
Lindt & Sprungli AG v Franz Hauswirth GmbH [2009] ECR I-4893 at [35].
It is not in dispute that, although the relevant date is the application date,
later evidence is relevant if it casts light backwards on the position as at
the application date: cf. Case C-259/02 La Mer Technology Inc v Laboratoires
Goemar SA [2004] ECR I-1159 at [31] and Alcon at [41].
95.
The question whether the use of a sign infringes a trade mark pursuant
to Article 10(2)(a),(b) of the Directive or Article 9(2)(a),(b) of the
Regulation falls to be assessed as at the date that the use of the sign was
commenced: see Case C-145/05 Levi Strauss & Co v Casucci SpA [2006] ECR I-3703. Where the use of the sign commenced more than six years (i.e. the
limitation period) before the claim form, then the relevant date is six years
before the date of the claim form: see Stichting BDO v BDO Unibank Inc [2013] EWHC 418 (Ch), [2013] ETMR 31 at [98].
96.
The date for assessing a claim of passing off is the date the conduct
complained of commenced: see Starbucks (UK) Ltd v British Sky Broadcasting
Group plc [2015] UKSC 31, [2015] 1 WLR 2628 at [16].
97.
The dates for assessing whether there has been genuine use of a trade
mark depend on the basis of the claim for revocation (non-use for five years
from registration and/or non-use for five years subsequently), whether use has
been commenced or resumed after the expiry of that five year period and before
the claim is made and, if so, whether such commencement or resumption of use
was within the period of three months before the claim and whether the
proprietor was aware that a claim might be made: see Article 58(1)(a) of the
Regulation, Article 19 of the Directive and section 46(1),(3) of the 1994 Act.
Assessment
98.
It is common ground that the validity of each of the Trade Marks falls
to be assessed as at the respective filing dates set out in paragraphs 2 and 3
above.
99.
It is also common ground that the Claimants’ allegations of infringement
fall to be assessed as at 25 August 2010 (i.e. six years before the claim form).
100.
So far as non-use is concerned, the Defendant’s primary case is that the
Claimants made no genuine use of any of the Trade Marks (apart from UK297,
which is not open to attack on this ground) in the five-year periods following
registration. The Claimants accept that, save in the case of UK864, they made
no genuine use of the Trade Marks prior to 2010, but contend that they commenced
or resumed use in 2010. In relation to UK864, the Claimants contend that they
made genuine use of this Trade Mark by sales from the Whittard Shop and thus it
cannot be revoked prior to 13 July 2002 (five years after the last recorded
sale from the Whittard shop). Since that is more than six years prior to the
claim form, however, this point is academic.
101.
Accordingly, prima facie, the relevant periods for assessing
whether the Claimants have made genuine use of the Trade Marks are as follows:
i)
for the UK Trade Marks (apart from UK297): 8 October 2010 to 7 October 2015
(i.e. the five years preceding the IPO Applications);
ii)
for EU335: 12 October 2010 to 11 October 2015 (i.e. the five years
preceding the Defendant’s revocation application in the EUIPO);
iii)
for EU651: 9 February 2011 to 8 February 2016 (i.e. the five years
preceding the Defendant’s revocation application in the EUIPO);
iv)
for EU335 and E044: 21 October 2011 to 20 October 2016 (i.e. the five
years preceding the Defendant’s counterclaim in these proceedings).
102.
As discussed below, the Claimants rely upon both alleged online and
alleged offline uses of the Trade Marks. The Defendant accepts that the dates
set out in the preceding paragraph are the relevant dates with respect to the
alleged online uses, but contends for different, earlier dates with respect to
the alleged offline uses. Although it appears to make little, if any,
difference to the assessment, I do not accept this differentiation. In my view
the dates for assessment cannot depend on the nature of use claimed by the
trade mark proprietor. Moreover, I do not accept the Defendant’s arguments for
the earlier dates.
103.
In relation to the UK Trade Marks, the Defendant relies upon Mr Loynd’s
acceptance that Walton was aware that its trade marks were vulnerable to a
revocation attack by the Defendant from 22 September 2015 as justifying
assessment over the period 22 September 2010 to 21 September 2015. The
Claimants do not allege that they commenced or resumed use in the three months
prior to the IPO Applications, however. The Claimants’ case is one of commenced
or resumed use starting in 2010 and continuing thereafter.
104.
In relation to the EU Trade Marks, the Defendant contends that the
relevant dates are three months earlier than the dates set out in paragraph 101
above. Again, however, the Claimants do not allege that they commenced or
resumed use in the three months prior to the various applications.
105.
Turning to the Defendant’s counterclaim for passing off, the Defendant
contends that the relevant date for assessing this is April 2016, which is when
the Claimants opened their pop-up shop in London. The Claimants contend that
the relevant date is December 2010, when the Giordano Group launched its global
e-shop. (For the avoidance of doubt, December 2010 is less than six years prior
to the date of the Defendant’s counterclaim.) Whether that is correct date
depends on whether there was use of the name GIORDANO by the Claimants in the
UK prior to April 2016. I will consider this question below.
The average consumer
The law
106.
It is settled that many issues in European trade mark law fall to be
assessed from the perspective of the “average consumer” of the relevant goods
or services, who is deemed to be reasonably well-informed and reasonably
observant and circumspect. I reviewed this concept in Enterprise Holdings
Inc v Europcar Group UK Ltd [2015] EWHC 17 (Ch), [2015] FSR 22 at
[130]-[138]. Since then, it has been considered by the Court of Appeal in London
Taxi Corporation Ltd v Frazer-Nash Research Ltd [2017] EWCA Civ 1729,
[2018] FSR 7, where Floyd LJ (with whom Kitchin LJ agreed) said:
“31. I agree … that the notion of an average consumer requires
the court to consider any relevant class of consumer, and not to average them.
I believe that conclusion to be consistent with the approach taken by this
court in Interflora Inc and another v Marks and Spencer plc …
34. As with all issues in trade mark law, the answer to
disputed questions is normally provided by considering the purpose of a trade
mark which, broadly speaking, is to operate as a guarantee of origin to those
who purchase or use the product. In principle, therefore, and in the absence of
any authority cited to us which is directly in point, I would consider that the
term average consumer includes any class of consumer to whom the guarantee of
origin is directed and who would be likely to rely on it, for example in making
a decision to buy or use the goods….
35. In
the present case I cannot therefore see any a priori reason for
excluding the hirer of a taxi from the class of consumers whose perceptions it
is necessary to consider. The guarantee of origin which the mark provides is
directed not only at purchasers of taxis but also at members of the public,
such as hirers of taxis. The hirer is a person to whom the origin function of
the vehicle trade mark might matter at the stage when he or she hires the taxi.
I entirely accept that the hirer is also a user of taxi services, so that any
dissatisfaction with the taxi or its performance is likely to be taken up with
the taxi driver or his company. But if, for example, the taxi were to fail for
reasons not associated with the taxi service, it would be on the manufacturer
identified by his trade mark that the hirer would, or might, wish to place the
blame. …”
Assessment
107.
The Defendant contends that there are two different average consumers in
this case: (i) retailers of menswear, who are likely to exercise a high degree
of care and attention; and (ii) members of the general public who purchase
menswear, who are likely to exercise a reasonable degree of care and attention.
Counsel for the Claimants did not take issue with this.
Invalidity of the EU Trade Marks on relative grounds
108.
The Defendant attacks the validity of the EU Marks under Article 60(1)(a)
of the Regulation on the basis that they conflict with its earlier Benelux and
international trade marks, the details of which are as follows:
i)
Benelux Trade Mark No. 465,445 for the word GIORDANO in Classes 18
and 25 in the name of Abanicos and exclusively licensed to the Defendant
registered on 1 April 1990 with a filing date of 11 August 1989.
ii)
International Trade Mark No. 566,522 for the word GIORDANO in Classes
18 and 25 in the name of the Defendant registered on 18 January 1991 based on
the Benelux Trade Mark. The Defendant relies upon the designation of the
International Trade Mark in Austria and Italy.
109.
After I decided to set aside the Claimants’ notice of discontinuance in
respect of the EU Trade Marks, the Claimants accepted that the EU Trade Marks
were invalidly registered in respect of Benelux, Austria and Italy. The
Claimants reserved the right to apply to convert the EU Trade Marks to national
trade marks in respect of the other Member States. As is common ground, the
Claimants’ ability to convert the EU Trade Marks depends on the outcome of the
Defendant’s other attacks.
Revocation of the Trade Marks for non-use
110.
The Defendant seeks revocation of all the Trade Marks (except for UK297)
for non-use. This is the most important issue in the case, although it breaks
down into a number of sub-issues.
The law
111.
The law with respect to targeting. In order for use of a trade
mark online to qualify as use in the UK or elsewhere in the EU, the use must be
targeted at the UK or elsewhere in the EU. In Merck KGaA v Merck Sharp &
Dohme Corp, [2017] EWCA Civ 1834, [2018] ETMR 10 Kitchin LJ, having
considered the judgments of the CJEU in Joined Cases C-585/08 and C-144/09 Pammer v
Reederei Karl Schluter GmbH & Co. KG and Hotel Alpenhof GesmbH v Heller [2010] ECR I-12527, Case C-324/09 L’Oréal
SA v eBay International BV [2011] ECR I-6011 and Case C-173/11 Football Dataco Ltd v Sportradar GmbH [EU:C:2012:642], [2013] FSR 4, and a number
of domestic authorities, summarised the relevant principles as follows:
“[167] First,
in determining whether an advertisement of goods bearing a trade mark on the
website of a foreign trader constitutes use of the trade mark in the UK, it is
necessary to assess whether the advertisement is targeted at consumers in the
UK and in that way constitutes use of the mark in relation to goods in the
course of trade in the UK.
[168] Secondly,
the mere fact that a website is accessible from the UK is not a sufficient
basis for concluding that an advertisement displayed there is targeted at
consumers in the UK.
[169] Thirdly,
the issue of targeting is to be considered objectively from the perspective of
average consumers in the UK. The question is whether those average consumers
would consider that the advertisement is targeted at them. Conversely, however,
evidence that a trader does in fact intend to target consumers in the UK may be
relevant in assessing whether its advertisement has that effect.
[170] Fourthly,
the court must carry out an evaluation of all the relevant circumstances. These
may include any clear expressions of an intention to solicit custom in the UK
by, for example, in the case of a website promoting trade-marked products,
including the UK in a list or map of the geographic areas to which the trader
is willing to dispatch its products. But a finding that an advertisement is
directed at consumers in the UK does not depend upon there being any such clear
evidence. The court may decide that an advertisement is directed at the UK in
light of some of the non-exhaustive list of matters referred to by the Court of
Justice in Pammer at [93]. Obviously the appearance and content of the
website will be of particular significance, including whether it is possible to
buy goods or services from it. However, the relevant circumstances may extend
beyond the website itself and include, for example, the nature and size of the
trader’s business, the characteristics of the goods or services in issue and
the number of visits made to the website by consumers in the UK.”
112.
What the Court of Justice said in Pammer at [93] was as follows:
“The following matters, the list of which is not exhaustive,
are capable of constituting evidence from which it may be concluded that the
trader’s activity is directed to the Member State of the consumer’s domicile,
namely the international nature of the activity, mention of itineraries from
other Member States for going to the place where the trader is established, use
of a language or a currency other than the language or currency generally used
in the Member State in which the trader is established with the possibility of
making and confirming the reservation in that other language, mention of
telephone numbers with an international code, outlay of expenditure on an
internet referencing service in order to facilitate access to the trader’s site
or that of its intermediary by consumers domiciled in other Member States, use
of a top-level domain name other than that of the Member State in which the
trader is established, and mention of an international clientele composed of
customers domiciled in various Member States. It is for the national courts to
ascertain whether such evidence exists.”
113.
In a judgment delivered between argument and judgment in Merck v
Merck, Abanka dd v Abanca Corporación SA [2017] EWHC 2428 (Ch),
[2018] Bus LR 612, Daniel Alexander QC sitting as a Deputy High Court Judge
made some illuminating observations which in my judgment are consistent with
the case law of the CJEU and Kitchin LJ’s summary of the principles:
“[102] The [Trade
Marks Act 1994] and the relevant EU legislation are designed to ensure that a
mark only remains on the register if some serious effort have been made by the
proprietor itself to develop the market in the particular territory in respect
of which use is alleged (see case law cited above). Where the proprietor has
not sought to do so and it is a matter of happenstance that its customers are
doing business in the UK and contact the proprietor in its “home” country in
order to do so or present its (eg) credit cards for payment, it is hard to see
why such indirect and passive mere visibility of the mark in the UK should
constitute use. Were it otherwise, the continued registration of a mark would
depend on the, perhaps fortuitous, fact that, in the relevant years, customers
of the trade mark proprietor (rather than the proprietor itself) were doing
business in the country in question, were living in the UK or the proprietor
was in contact with the customer while in the UK. That would carry a risk that
an undertaking would be treated as having used a mark in a wide range of
territories, not on the basis of any acts it had itself undertaken or procured
in those territories but simply on the basis that its customers in a foreign
country had engaged in activities in the UK using services provided in that foreign
country. If that approach were to be adopted, it may then become necessary to
treat (for example) every presentation of a credit card for payment in a
foreign country by a person taking advantage of credit services provided by a
foreign bank as ‘use’ of the mark on the card by the card provider. Or, as soon
as internet banking is made available, it may become necessary to treat the
mark used as having been used in every place from which those services were
accessible and had been accessed (at least to an extent that went beyond de
minimis). In my judgment, that would not accord with the purposes of the
provisions concerning use of the mark by the proprietor, nor would it be
consistent with the existing case law. The availability of internet provided
services requires a degree of new thinking but there does not seem a principled
reason why the fundamental analysis here should differ from the approach taken
to services not provided over the internet. For example, in a situation in
which the only use alleged of a mark in the UK was by way of customers of a
foreign bank who while in the UK telephoned or wrote to that bank to arrange
for some services to be provided, it would be a stretch to say that the foreign
bank was using its mark in the UK, even if (for example) people benefitted from
its actions in the UK, such as by receiving money in the UK or undertaking
transactions on their foreign account—such as paying a supplier in the UK.
[103] Put
colloquially, a proprietor should be treated as having used a mark in the UK if
it has, itself ‘pushed’ its business and mark into the UK, not if it has been
‘pulled’ into the UK by (for example) its customers abroad, even though they
may be based in the UK. That is the upshot of the case law on ‘direction’ or
‘targeting’ of a website to the UK cited above (see the summary of CJEU case
law in the Stichting BDO case [2013] FSR 35). Quite what constitutes
enough push of goods, services or advertising for them to the UK is not always
easy to determine, especially in cases where a proprietor may be, in effect, a
‘pulled-pusher’ in that, without having taken any active steps to develop the
market in the UK, it none the less takes business from consumers based in the
UK.”
114.
The law with respect to genuine use. The CJEU has considered what amounts to “genuine
use” of a trade mark in a series of cases: Case C-40/01 Ansul BV v Ajax
Brandbeveiliging BV [2003] ECR I-2439, La Mer (cited above), Case C‑416/04 P
Sunrider Corp v Office for Harmonisation in
the Internal Market (Trade Marks and Designs) [2006] ECR I‑4237,
Case C-442/07 Verein Radetsky-Order v
Bundervsvereinigung Kamaradschaft ‘Feldmarschall Radetsky’ [2008] ECR I-9223, Case C-495/07 Silberquelle GmbH v Maselli-Strickmode GmbH
[2009] ECR I-2759, Case C-149/11 Leno Merken BV v Hagelkruis Beheer BV
[EU:C:2012:816], [2013] ETMR 16, Case C-609/11 P Centrotherm
Systemtechnik GmbH v Centrotherm Clean Solutions GmbH & Co KG
[EU:C:2013:592], [2014] ETMR, Case C-141/13 P Reber Holding & Co
KG v Office for Harmonisation in the Internal
Market (Trade Marks and Designs) [EU:C:2014:2089]
and Case C-689/15 W.F. Gözze Frottierweberei GmbH v Verein Bremer Baumwollbörse
[EU:C:2017:434], [2017] Bus LR 1795.
115.
The principles established by these cases may
be summarised as follows:
(1) Genuine
use means actual use of the trade mark by the proprietor or by a third party
with authority to use the mark: Ansul at [35] and [37].
(2) The
use must be more than merely token, that is to say, serving solely to preserve
the rights conferred by the registration of the mark: Ansul at [36]; Sunrider
at [70]; Verein at [13]; Leno at [29]; Centrotherm at
[71]; Reber at [29].
(3) The
use must be consistent with the essential function of a trade mark, which is to
guarantee the identity of the origin of the goods or services to the consumer
or end user by enabling him to distinguish the goods or services from others
which have another origin: Ansul at [36]; Sunrider at [70]; Verein
at [13]; Silberquelle at [17]; Leno at [29]; Centrotherm
at [71]. Accordingly, affixing of a trade mark on goods as a label of quality
is not genuine use unless it guarantees, additionally and simultaneously, to
consumers that those goods come from a single undertaking under the control of
which the goods are manufactured and which is responsible for their quality: Gözze
at [43]-[51].
(4) Use
of the mark must relate to goods or services which are already marketed or
which are about to be marketed and for which preparations to secure customers
are under way, particularly in the form of advertising campaigns: Ansul
at [37]. Internal use by the proprietor does not suffice: Ansul at [37];
Verein at [14] and [22]. Nor does the distribution of promotional items
as a reward for the purchase of other goods and to encourage the sale of the
latter: Silberquelle at [20]-[21]. But use by a non-profit making
association can constitute genuine use: Verein at [16]-[23].
(5) The
use must be by way of real commercial exploitation of the mark on the market
for the relevant goods or services, that is to say, use in accordance with the
commercial raison d’être of the mark, which is to create or preserve an
outlet for the goods or services that bear the mark: Ansul at [37]-[38];
Verein at [14]; Silberquelle at [18]; Centrotherm at [71];
Reber at [29].
(6) All
the relevant facts and circumstances must be taken into account in determining
whether there is real commercial exploitation of the mark, including: (a)
whether such use is viewed as warranted in the economic sector concerned to
maintain or create a share in the market for the goods and services in
question; (b) the nature of the goods or services; (c) the characteristics of
the market concerned; (d) the scale and frequency of use of the mark; (e) whether
the mark is used for the purpose of marketing all the goods and services
covered by the mark or just some of them; (f) the evidence that the proprietor
is able to provide; and (g) the territorial extent of the use: Ansul at
[38] and [39]; La Mer at [22]-[23]; Sunrider at [70]-[71], [76];
Leno at [29]-[30], [56]; Centrotherm at [72]-[76]; Reber at
[29], [32]-[34].
(7) Use
of the mark need not always be quantitatively significant for it to be deemed
genuine. Even minimal use may qualify as genuine use if it is deemed to be
justified in the economic sector concerned for the purpose of creating or preserving
market share for the relevant goods or services. For example, use of the mark
by a single client which imports the relevant goods can be sufficient to
demonstrate that such use is genuine, if it appears that the import operation
has a genuine commercial justification for the proprietor. Thus there is no de
minimis rule: Ansul at [39]; La Mer at [21], [24] and [25]; Sunrider
at [72] and [76]-[77]; Leno at [55].
(8) It
is not the case that every proven commercial use of the mark may automatically
be deemed to constitute genuine use: Reber at [32].
116.
Counsel for the Claimants suggested that there was a difference between
the assessment of what amounted to genuine use of a trade mark, and in
particular the quantitative extent of the use required, depending on whether
the trade mark was a national trade mark or an EU trade mark. As counsel for the
Defendant pointed out, however, the Court of Justice has expressly held that
the same principles are applicable to the interpretation of the relevant
provisions of both the Directive and the Regulation: see Leno at [31].
117.
Although both counsel made submissions based on the facts of some of
these cases, and in particular the quantities of goods involved, the Court of
Justice has made it clear that this is not a helpful exercise. As the Court
stated in Sunrider at [77], “courts ruling in two different cases may
assess differently the genuine nature of the use alleged before them, even when
instances of that use have generated comparable sales volumes”. The Court has
repeatedly made it clear that the assessment is a multi-factorial one, in which
the quantity of the goods sold is only one factor. Thus, as has often been
pointed out, it depends on (among other things) the nature of the goods: sale
of a small quantity of goods is more likely to qualify as genuine use where the
goods are passenger airliners than where the goods are potatoes.
118.
The law with respect to genuine use in the Union. Whereas a
national mark needs only to have been used in the Member State in question, in
the case of a EU trade mark there must be genuine use of the mark “in the Union”.
In this regard, the Court of Justice has laid down additional principles to
those summarised above which I would summarise as follows:
(9) The territorial borders of
the Member States should be disregarded in the assessment of whether a trade
mark has been put to genuine use in the Union: Leno at [44], [57].
(10) While
it is reasonable to expect that a EU trade mark should be used in a larger area
than a national trade mark, it is not necessary that the mark should be used in
an extensive geographical area for the use to be deemed genuine, since this
depends on the characteristics of the goods or services and the market for
them: Leno at [50], [54]-[55].
(11) It
cannot be ruled out that, in certain circumstances, the market for the goods or
services in question is in fact restricted to the territory of a single Member
State, and in such a case use of the EU trade mark in that territory might
satisfy the conditions for genuine use of a EU trade mark: Leno at [50].
119.
Use of the trade mark in a form differing
in elements which do not alter its distinctive character. The CJEU stated in Case
C-252/12 Specsavers International Healthcare Ltd v Asda Stores Ltd
[EU:C:2013:497], [2013] ETMR 46 (“Specsavers (CJEU)”) at [29] that the objective of what is now Article 18(1)(a)
of the Regulation was:
“by avoiding imposing a requirement for strict conformity
between the form used in trade and the form in which the trade mark was
registered, … to allow the proprietor of the mark, in the commercial
exploitation of the sign, to make variations in the sign, which, without
altering its distinctive character, enable it to be better adapted to the
marketing and promotion requirements of the goods or services concerned.”
120.
In BUD and BUDWEISER BUDBRÄU Trade Marks
[2002] EWCA Civ 1534, [2003] RPC 25 Lord Walker of Gestingthorpe (with whom
Pill LJ agreed) held that the correct approach to section 46(2) of the 1994
Act, which corresponds to Article 15(2)(a) of the Regulation, was as follows:
“43. …. The
first part of the necessary inquiry is, what are the points of difference
between the mark as used and the mark as registered? Once those differences
have been identified, the second part of the inquiry is, do they alter the
distinctive character of the mark as registered?
44. The
distinctive character of a trade mark (what makes it in some degree striking
and memorable) is not likely to be analysed by the average consumer, but is
nevertheless capable of analysis. …
45. Because
distinctive character is seldom analysed by the average consumer but is capable
of analysis, I do not think that the issue of ‘whose eyes?—registrar or
ordinary consumer?’ is a direct conflict. It is for the registrar, through the
hearing officer's specialised experience and judgment, to analyse the ‘visual,
aural and conceptual’ qualities of a mark and make a ‘global appreciation’ of
its likely impact on the average consumer, who:
‘normally perceives a mark as a
whole and does not proceed to analyse its various details.’
The quotations are from para.[26]
of the judgment of the Court of Justice in Case C-342/97 Lloyd Schuhfabrik
Meyer GmbH v Klijsen Handel BV [1999] ECR I-3819; the passage is dealing
with the likelihood of confusion (rather than use of a variant mark) but both
sides accepted its relevance.”
121.
As this indicates, and as the recent decision of CJEU in Case C-501/15 European
Union Intellectual Property Office v Cactus SA [EU:C:2017:750], [2018] ETMR 4 at [68]-[71] confirms, the normal approach to the assessment and comparison
of distinctive character applies in this context.
122.
As the case law of the General Court makes clear, alteration or omission
of elements which are not distinctive is not capable of altering the
distinctive character of a trade mark: see Case T-690/14 Sony Computer
Entertainment Europe Ltd v Office for Harmonisation in the Internal Market
(Trade Marks and Designs) [EU:T:2015:950] at [45]. Furthermore, when a trade
mark is composed of word elements and figurative elements, the former are, as a
rule, more distinctive than the latter: see Sony at [49]. Accordingly,
it is possible in an appropriate case for use of the word element on its own to
constitute use of the trade mark: see Sony at [51].
123.
The proprietor of the trade mark is not
precluded from relying upon use of the trade mark in a form differing in
elements which do not alter the distinctive character of the trade mark by the
fact that that different form is itself registered as a trade mark: see Case
C-553/11 Rintisch v Eder [EU:C:2012:671], [2013] ETMR 5 and Specsavers (CJEU),
which have been given legislative endorsement in Article 18(1)(a) of the
Regulation.
Assessment: UK864, UK398 and EU651 (Classes 25 and 35)
124.
The Claimants rely upon various different categories of use as amounting
to genuine use of UK864 and UK398 in relation to clothing and footwear in the
UK and genuine use of EU651 in relation to retail services relating to clothing
respectively. There are two broad categories: online use and offline use. The
former consists primarily of (i) advertising and offers for sale and (ii)
actual sales made by (a) the global e-shop and (b) the AliExpress store. The
Defendant disputes that these uses are uses within the relevant territories,
contending that they are not targeted at the UK or other Member States of the
EU. The offline uses take various forms. The Defendant contends that much of
this evidence does not establish actual use of these Trade Marks, and that even
where it does, the uses are mostly irrelevant since they are not within the
relevant periods or in the wrong territory. The Defendant further contends a
small number of uses are either of the wrong sign or token. I shall consider
the various types of use relied upon category by category, beginning with the
online uses. I shall then make an overall assessment in relation to each of
these Trade Marks.
125.
The global e-shop. The relevant version of the global e-shop is
the 2010 version, which was operational from December 2010 to about 22 February
2016. The 2016 version, which was operational from about 22 February 2016, is
not relevant mainly because it is too late. From December 2010 to about June
2012 the global e-shop was located at http://gb.e-giordano.com. After about 5 June
2012 (when Giordano Ltd acquired the domain name giordano.com from a US company
called Giordano Automation) it was located at http://gb.giordano.com. I note
the following points about the global e-shop.
126.
First, it was an international website. The Claimants themselves
describe the site as a “global” e-shop. Furthermore, Mr Huang accepted that it
was a global website serving global users.
127.
Secondly, the general appearance of the home page was US-oriented or at
best (from the Claimants’ perspective) international: the language was English;
a tab at the top right of the home page displayed the legend “Shipping to”
together with, as the default option, “United States” and a US flag; prices
(when displayed) were in US dollars; the imagery, in the rare instances it had
any identifiable location, was of the US (such as a photograph of the New York
skyline); the models were predominantly (but not exclusively) Caucasian; symbols
indicated that payment by PayPal, MasterCard, Visa, American Express and bank
transfer were accepted; and two email addresses were given “bulk purchase: silas@giordano.com.cn”
(apparently Chinese) and “your feedback: au-eshop@giordanogroup.com”
(apparently Australian). No UK or EU address, telephone number or email address
was given. It is therefore not surprising that Ms Reyes-Pava’s evidence was
that she thought that the website (which she visited after buying trousers from
the AliExpress store as discussed below) was operated by an American company.
128.
Thirdly, the bottom of the home page contained small links to “Giordano
Australia E-Shop”, “Giordano China Website”, “Giordano Taiwan Website” and
“Complete List of Global E-Shop”. The first three links, as their names
suggested, were to country-specific subsites located at country-specific
subdomains for Australia, China and Taiwan respectively. There is no dispute
that the country-specific subsites were targeted at the respective countries:
for example, the Australian subsite was priced in Australian dollars, had
Australian-specific content and Australian contact information and orders were
fulfilled by an Australian subsidiary. Clicking on the fourth link led a page
bearing the strapline “World Without Strangers” superimposed on a photograph of
four models beneath the brand name GIORDANO. Below the photograph and strapline
was the invitation “Visit our eshop/website” above a table displaying the names
of 32 countries. 17 of these were European: 16 EU countries, including the UK,
and Switzerland. One was the United States. Clicking on one of the non-European
countries other than the US led to a country-specific subsite displaying the
name and flag of the relevant country (except that in a few cases it was that
of a different country, such as Australia rather than Oman). By contrast,
clicking on any of the European countries or the US redirected the user back to
the global home page described above. Although Mr Huang suggested that this
would have led to the relevant country name and flag being displayed to the
user, I am not satisfied that that was the case during the relevant period.
129.
Fourthly, a user could place an order via the global e-shop and have the
goods delivered to almost any country in the world: at the point of entering
the shipping address, the user was presented with a dropdown menu listing most
countries of the world in alphabetical order. Mr Huang included in his first
statement a screenshot of the section of the menu containing the UK which runs
from Tokelau to Wallis and Fortuna. Thus European users could (and did, as
discussed below) place orders for delivery to their home addresses. It appears,
although the evidence is not very clear, that at this point the flag for the
relevant country would be displayed to the user. Prices and payment were in US$,
although a UK user who opted to use PayPal (as Mr Batchelor, Ms Nicoll, Mr
Nudds and Mr Schuck did) would be informed by PayPal of the sterling equivalent.
130.
Fifthly, it is relevant to consider how a European user would find the
global e-shop. The Claimants rely upon the fact that, during the relevant
period, many of the hits on the first page of a Google search for “giordano” were
for Giordano Group websites, with the global e-shop near the top. (The Giordano
Group did not engage in keyword advertising, and so these were organic search
results.) As the Defendant points out, however, this presupposes that the
consumer is already familiar with GIORDANO as a brand of clothing. Moreover, in
order for the consumer to be searching for a Giordano Group website, the
consumer would need to be aware of GIORDANO as denoting the Giordano Group’s
clothing. Four of the six consumer witnesses relied upon by the Claimants who
purchased goods from the global e-shop found the global e-shop by carrying out
a Google search, while two say that they found the global e-shop easily but do
not specify precisely how. As discussed in more detail below, in all six cases,
they had already encountered Giordano Group clothing.
131.
Counsel for the Defendant submitted that the best evidence as to the
frequency with which users visited the global e-shop as a result of Google
searches for “Giordano” comes from the Claimants’ Google Analytics data, which
shows that there were 16 UK visitors to the 2016 version of the global e-shop
as a result of such searches in the period from 22 February to 21 October 2016
(12 of whom were new users and none of whom purchased anything). Counsel for
the Defendant submitted that the figures during the period from December 2010
to February 2016 are unlikely to have been significantly higher. While this
seems plausible, the data discussed below indicates a rather higher level of
visitors to the global e-shop, and it would be surprising if a proportion of
those visitors had not found it through Google searches.
132.
A user could also click through to the global e-shop from the Giordano
Group’s Hong Kong website located at wwe.giordano.com.hk, but that was a
website in Cantonese which Mr Huang accepted was targeted at Hong Kong.
Similarly, a user could click through from www.e-giordano.com, but that was a
website in Mandarin which Mr Huang accepted was targeted at China.
133.
Sixthly, the Claimants rely upon Google Analytics data for the global
e-shop. For the reasons touched on above, these data are not very easy to
interpret. Mr Huang set out the data below in his second statement.
United Kingdom
|
Year
|
Unique visitors
|
Sessions
|
Avg. pages per session
|
Avg. session duration (s)
|
|
2011
|
2795
|
3108
|
3.96
|
172.31
|
|
2012
|
2420
|
2789
|
4.18
|
186.20
|
|
2013
|
3073
|
3544
|
3.89
|
149.38
|
|
2014
|
2616
|
3061
|
3.89
|
151.06
|
|
2015
|
2949
|
3467
|
4.21
|
187.27
|
Rest of EU
|
Year
|
Unique visitors
|
Sessions
|
Avg. pages per session
|
Avg. session duration (s)
|
|
2011
|
2191
|
2696
|
6.76
|
314.91
|
|
2012
|
3420
|
4091
|
5.47
|
249.54
|
|
2013
|
4723
|
5481
|
4.44
|
185.99
|
|
2014
|
3775
|
4297
|
4.62
|
178.45
|
|
2015
|
3662
|
4481
|
4.77
|
219.93
|
134.
In response Mr Walsh exhibited Google Analytics data obtained from the
inspection referred to in paragraph 43 above. These data show that the
proportion of UK traffic to the global e-shop during the period 1 December 2010
to 1 March 2016 was 4.97% (14,277 UK visitors out of 287,304) and the
proportion of UK sessions was 4.71% (16,743 out of 355,823). 90.95% were new
visitors, while 9.07% were returning visitors. The average number of pages per
session for UK visitors was 3.92 while the average session duration was 168
seconds. These figures are in fairly good agreement with Mr Huang’s figures,
but provide a little more context and detail. An additional piece of
information is that the average page load time for UK visitors was 12.41 seconds,
which may explain the low proportion of returning visitors.
135.
It is unclear from the evidence whether or not Giordano Group utilised
the option available in Google Analytics from about 30 July 2014 to exclude known
bots and spiders. The figures from before that date will have included visits
from bots and spiders, rather than human beings. Even assuming that Giordano
Group did utilise this option after that date, the figures will have included
visits by bots and spiders which were not known to Google Analytics. Thus all the
figures are likely to be inflated, but there is no evidence as to how big a
factor this is.
136.
Nor is there any evidence as to what proportion of UK visitors were
expatriates from countries in the Giordano Group’s core markets or people from
those countries who were temporarily residing in or visiting the UK. It seems
probable that a proportion of the UK visitors fell into these categories,
however. This may go some way to explaining the discrepancy between the numbers
of UK visitors and the small number of such visitors who arrived via Google
searches. (Another factor, of course, is the use of other search engines; but
Google is the predominant search engine in the UK.)
137.
Seventhly, the Claimants rely upon the fact that 536 visitors with .uk
email addresses or UK shipping addresses registered with the global e-shop
during the period 2010-2016. This is about 2.4% of UK visitors to the site.
Since a number of the consumer witnesses registered, at least some of those
registering will have been consumers who found the global e-shop in the same
way as they did i.e. through searching for GIORDANO as a result of having
encountered it in the Giordano Group’s core markets. The consumer witnesses who
registered, and presumably anyone else who registered, received periodic
promotional emails from Giordano Group as a result.
138.
Eighthly, the current shipping fees for goods ordered from global e-shop
are US$ 15 for the UK and US$ for 20 for other European countries. It appears
that the same level of shipping fees applied during the relevant period (thus
Ms Nicoll was charged US$ 15). Orders are shipped from Guangzhou, China and
normally reach European countries within 10-20 days, but Giordano Group does
not take any responsibility for delays. It appears that the same was true
during the relevant period, although Mr Nudds commented that the goods he
ordered arrived more quickly than he had expected. Returns must be made to
Guangzhou within seven days of arrival. Again, it appears that the same was
true during the relevant period (although the invoice sent to Ms Nicoll stated
that the goods could not be refunded or exchanged).
139.
Ninthly, it is not in dispute that the Giordano Group made a small
quantity of sales of clothing to EU, including UK, consumers, during the
relevant period from the global e-shop. Both the invoices for these sales and
the actual clothes bore the GIORDANO trade mark. The figures for the UK and the
EU including the UK are set out below.
Sales to consumers in the UK
|
Year
|
Quantity
|
US$
|
|
2010
|
0
|
0
|
|
2011
|
45
|
1,836.75
|
|
2012
|
38
|
2,225.38
|
|
2013
|
22
|
806.85
|
|
2014
|
26
|
686
|
|
2015
|
45
|
1,199.40
|
|
Total
|
176
|
6,754.38
|
Sales to consumers in the
EU (including UK)
|
Year
|
Quantity
|
US$
|
|
2010
|
2
|
60.09
|
|
2011
|
179
|
6,016.28
|
|
2012
|
155
|
7,610.13
|
|
2013
|
117
|
5,302.55
|
|
2014
|
142
|
2,668.55
|
|
2015
|
564
|
4,612.30
|
|
Total
|
738
|
26,269.90
|
140.
The US$ figures set out above include delivery fees. For example, the
figure of US$806.85 for sales to UK consumers in 2013 includes US$120 of
delivery fees. Thus the actual value of clothing sold in that year was only US$686.85.
If that year was representative, the total of UK sales would be US$5,750. The
EU figure would be no more than US$22,363, and almost certainly somewhat lower
due to the higher shipping charges for the remainder of the EU. Doing the best
I can, it is likely that the EU figure did not exceed US$20,000.
141.
Tenthly, the Claimants place considerable reliance upon the largely
unchallenged evidence of the six consumer witnesses. Their evidence is briefly
summarised in the table below.
|
Witness
|
How encountered GIORDANO
|
Reason for visiting global
e-shop
|
|
Batchelor
|
Had lived in Thailand and
travelled in SE Asia and became customer then
|
Repeat purchase
|
|
Crawshaw
|
Had lived in Hong Kong and
became customer then
|
Repeat purchase
|
|
Donnelly
|
Purchased shirts from shop
in Singapore Airport
|
Repeat purchase
|
|
Nicoll
|
Purchased shirts from shop
in Singapore Airport
|
Repeat purchase (to
replace lost shirts purchased in Singapore Airport)
|
|
Nudds
|
Had travelled to Hong Kong
and Thailand and became customer then
|
Repeat purchase
|
|
Schuck
|
Had lived in Dubai and
became customer then
|
Repeat purchase
|
142.
The Claimants particularly rely upon the evidence given by the consumers
that, as they variously put it:
i)
“I was never in any doubt that the website was meant for me as a UK
consumer” (Batchelor);
ii)
“I never felt as though the website was not meant for me as [a] UK
consumer” (Crawshaw);
iii)
“I was never concerned that the Giordano website was not designed for me
as a UK consumer” (Donnelly);
iv)
“I had no doubt that this website was specifically making Giordano
products available to UK consumers” (Nicoll);
v)
“I always felt that the website was an international website which
served UK consumers” (Nudds);
vi)
“I always considered that the website … was specifically meant for me as
a UK consumer” (Schuck).
143.
This evidence has to be treated with some caution. For example, it is
clear from Mr Schuck’s evidence that he was influenced by a statement made by
Jessy Lee of the Giordano Group in an email dated 5 January 2015 that “the
shirt you said is not sold in our online shop because each shop would have
different products to keep its [sic] unique”. Mr Shuck interpreted this to mean
that “the prices and products sold on the Giordano site for the UK were
different to any other country’s site in order to make sure each one was
unique”. That is not in fact what the email says and it is not correct. As for
Ms Nicoll, she explains in her statement that the reason she thought this was
that she was able to request delivery to the UK, whereas she had not been able
to do so when she visited the Giordano Group’s previous online shop in November
2010. Moreover, she acknowledges that “clearly this was an international
website which sold clothing to people from various countries”. Overall, I
consider that the most representative statement is that of Mr Nudds.
144.
Considering the evidence with respect to the global e-shop as a whole, I
conclude that the 2010 version was not targeted at the UK or any country in the
EU. Apart from the country-specific subsites mentioned above, it was an
international website selling GIORDANO clothing to consumers all around the
world. It is true that it offered delivery to the UK and other EU countries,
but it offered delivery to most other countries as well. The high point of the
Claimants’ case is the fact that 16 EU countries were listed in the table of 32
countries referred to in paragraph 128 above, but as discussed there clicking
on any of those countries simply led the user back to the global home page. To
adopt Mr Alexander QC’s terminology, the 2010 version of the global e-shop did not
“push” advertisements and offers for sale at the UK or elsewhere in the EU,
rather they were “pulled” into these jurisdictions by users based here who had
encountered the GIORDANO brand while residing in or visiting one (or more) of the
Giordano Group’s core markets.
145.
It is necessary to distinguish between the advertisements and offers for
sale made by the global e-shop and the specific sales made to consumers in the
UK and elsewhere in the EU, however. While I consider that the global e-shop’s
advertisements and offers for sale were not targeted at the UK or EU, and thus
did not represent use of GIORDANO in those countries, I consider that the
specific sales did represent use of GIORDANO in relation to clothing in the UK
and the EU. This was not a case of isolated or accidental sales, but of
repeated sales over an extended period which occurred as a result of a
deliberate policy on the part of the Giordano Group to sell goods to consumers
in many countries, including the UK and other countries in the EU. Moreover,
those sales resulted in GIORDANO-branded goods being shipped to the UK and
elsewhere in the EU and worn by consumers in those countries. Thus these sales
represented “pulled-pushing” by the Giordano Group.
146.
The question whether there was genuine use of any of the Trade Marks as
result of the sales made by the global e-shop is a separate question which I
will consider below.
147.
The AliExpress store. AliExpress is an e-commerce platform
operated by AliBaba which serves the world apart from China. The Giordano Group
has operated a store on AliExpress located at www.aliexpress.com/store/1113130 since
late January 2014. There is less evidence about this than about the global
e-shop, and in any event it is not necessary for me to consider it in as much
detail. I note the following points.
148.
First, the AliExpress store is again an international one.
149.
Secondly, in order to find the AliExpress store a consumer would again
normally need to have heard of GIORDANO. Ms Reyes-Pava provides an exception,
since she searched for fleece-lined trousers using Google Images, and found a
pair she liked the look of for sale on what turned out to be the AliExpress
store. Prior to this, she had never heard of GIORDANO. Thus it was pure chance
that Ms Reyes-Pava encountered the AliExpress store. It is very unlikely that
any other consumer will have found it in the same way.
150.
Thirdly, prices were displayed in US$ by default. It appears that by 27
August 2015 AliExpress had introduced a dropdown menu enabling users to select
one of a number of different currencies, including GBP.
151.
Fourthly, the AliExpress store operated on Pacific Time.
152.
Fifthly, like the global e-shop, the AliExpress store offered shipping
to almost every country in the world. By 27 August 2015 AliExpress had
introduced a dropdown menu enabling the user to select one of a large number of
countries to ship to (each country being accompanied by its national flag).
153.
Sixthly, although AliExpress provided free shipping to the UK by China
Post air mail (or more recently AliExpress standard shipping), the estimated
delivery time was 20-40 days and delivery was only guaranteed by the Giordano
Group within 60 days.
154.
Seventhly, a screenshot of the AliExpress store from the WaybackMachine
dated 12 November 2015 includes a store map for the Giordano Group’s stores
which does not include any in Europe.
155.
Eighthly, the Claimants rely upon the evidence of Ms Reyes-Pava that she
was “always sure that the Giordano AliExpress website was for me as a UK
consumer”. But this was partly based on her recollection that the prices had
been displayed in sterling, and it is not clear that her recollection was
correct.
156.
Ninthly, it is not in dispute that the Giordano Group made a small
quantity of sales of clothing to EU, including UK, consumers, during the
relevant period from the AliExpress store. Again, both the invoices for these
sales and the actual clothes bore the GIORDANO trade mark. The figures for the
UK and the EU including the UK are set out below.
Sales to consumers in the UK
|
Year
|
Quantity
|
US$
|
|
2010
|
0
|
0
|
|
2011
|
0
|
0
|
|
2012
|
0
|
0
|
|
2013
|
0
|
0
|
|
2014
|
3
|
49.78
|
|
2015
|
39
|
1,098.11
|
|
Total
|
42
|
1,147.89
|
Sales to consumers in the EU
(including UK)
|
Year
|
Quantity
|
US$
|
|
2010
|
0
|
0
|
|
2011
|
0
|
0
|
|
2012
|
0
|
0
|
|
2013
|
0
|
0
|
|
2014
|
32
|
773.93
|
|
2015
|
389
|
9,240.45
|
|
Total
|
421
|
10,014.38
|
157.
The conclusions that I reach in relation to the AliExpress store are the
same as in relation to the global e-shop: the advertisements and offers for
sale were not targeted at the UK or the rest of the EU, but the specific sales
were. Again, the question whether the latter amounted to genuine use is a
separate question.
158.
Social media. The Giordano Group operates English language social
media accounts on Facebook and Instagram. Counsel for the Claimants did not
rely upon this form of use in his opening and closing submissions, and so I do
not propose to deal with it in any detail. Suffice it to say that I agree with
the Defendant that it does not assist the Claimants for the reasons given in
the Defendant’s written closing submissions.
159.
Offline uses. Although the Claimants’ evidence describes various
offline uses – or attempted uses – of GIORDANO, counsel for the Claimants
placed little reliance on this evidence in his submissions. Again, therefore, I
do not propose to deal with most of the evidence in any detail. Again, suffice
it to say that I agree with the Defendant that it does not assist the Claimants
for the reasons given in the Defendant’s written closing submissions. In
particular, a lot of the uses relied upon were too early or too late. I will
say a little more about two specific categories of use.
160.
First, as mentioned above, Dr Lau and Mr Loynd gave evidence about
approaches from, and discussions with, various potential franchisees and other
partners in Europe over the years. The Claimants have disclosed emails and
correspondence relating to a number of these approaches and discussions.
Counsel for the Defendant submitted, and I agree, that the overall impression
conveyed by this evidence is of a lack of interest on the part of Giordano
Group in entering the European market at least until relatively recently. In
any event, none of this evidence shows actual use of any of the Trade Marks
during the relevant periods.
161.
Secondly, as also mentioned above, the Giordano Group opened pop-stores
in Spain and the UK. In Spain, there were four shops in Madrid open from 6
December 2015 to 31 January 2016, 15-17 January 2016, 28-30 January 2016 and
2-29 February 2016. The Defendant contends that this use is too late, but I
find that most of it is not too late for EU651 - only the period from 8
February 2016 onwards. There were sales of €4,069.36 in December 2015 and
€6,776.46 in January 2016 with over €1000 worth of returns. Discounts of 70%
were offered in February 2016, even though the Giordano Group’s stated policy
is to resist discounting. The Defendant contends that, having regard to timing
(not long after 22 September 2015) and the circumstances, this was token use
i.e. use for the purpose of trying to maintain (some of) the Trade Marks. I
accept that contention.
162.
The first UK store was in Liverpool from 15 February to 14 March 2016.
No sales figures have been disclosed. The second UK store was in Brick Lane,
London from 9 April to 27 May 2016. Mr Loynd accepted that much of the stock
sold in London was heavily discounted. Although sales figures have been
disclosed, they do not correlate with the figure from the relevant VAT returns
set out in paragraph 56 above. This use is too late. The Defendant contends
that, having regard to the timing and circumstances, it was also token use. Again,
I accept that contention.
163.
Overall assessment. The main uses relied upon by the Claimants
are the global e-shop and the AliExpress store. For the reasons explained
above, I conclude that the advertisements and offers for sale made by the
global e-shop and the AliExpress store were not targeted at the UK or other
countries in the EU, but the actual sales were. Rightly, the Defendant does not
contend the actual sales were token: they were normal commercial transactions.
But the Defendant nevertheless contends that, taking all the relevant factors
into account, the sales did not amount to genuine use of UK864, UK398 or EU651.
164.
The Defendant particularly relies upon the following factors in support
of this contention. First, the “pulled-pushing” character of the sales. The
Giordano Group was not actively selling to the UK or the rest of the EU, it was
passively accepting orders from those locations.
165.
Secondly, the nature of the goods. Clothes are staple consumer items purchased
by virtually everyone in the EU on a regular basis. Moreover, the Giordano
Group’s clothes are inexpensive, everyday casual articles.
166.
Thirdly, the nature of the market. The EU market for clothing is vast,
and the UK market is very large. It is not a market with special
characteristics, and it is an EU-wide market.
167.
Fourthly, the scale of the sales is miniscule compared to the size of
the market in the UK, let alone the EU, particularly bearing in mind that it is
spread across the relevant five-year periods.
168.
Fifthly, the scale of the sales is commercially insignificant in the
context of the Giordano Group’s own business. As counsel for the Defendant put
it, in the context of a business with sales of over £520 million in 2017, the
value of the sales is little more than a rounding error.
169.
Sixthly, the scale of the sales is commercially insignificant when
viewed just in the context of the Giordano Group’s online sales. By comparison,
its Chinese website generated HK$310 million in sales in 2017, which represented
93.2% of its online sales.
170.
Overall, the Defendant contends that the sales are not consistent with
any real attempt to create or preserve a market for the Giordano Group’s goods
in the UK or its retail services in the EU. I accept this. Accordingly, I
conclude that the Claimants have not established genuine use of UK864, UK398 or
EU651. Each of those Trade Marks will be revoked with effect from five years
after their respective registration dates.
171.
Three points remain for me to deal with briefly. First, the Defendant
contends that use of GIORDANO in plain type does not amount to use of UK398 in
any event. I disagree. In my view use of GIORDANO in plain type amounts to use
of the Trade Mark in a form differing in elements which do not alter its
distinctive character. The distinctive character of UK398 derives from the word
GIORDANO. Neither the word LADIES, which is wholly descriptive, nor the
typography, which is essentially just a decorative font and a difference in the
sizes of the two words, contribute any significant distinctive character to the
Trade Mark.
172.
Secondly, if I had found that there was genuine use of EU651, I would
have found that it was genuine use in the Union given that there were sales to
a number of EU countries.
173.
Thirdly, if I had found that there was genuine use of EU651, I would
only have found that there was genuine use in relation to online retail
services relating to clothing, and so the remainder of the specification would
fall to be revoked.
Assessment: UK444 and EU044 (Class 14)
174.
The Claimants’ evidence of use of these Trade Marks relates to a licence
granted by Walton to Solar Time Ltd (“Solar”) on 11 November 2000 to
manufacture and market Class 14 goods under various GIORDANO trade marks. As
counsel for the Defendant pointed out, it is striking that, although the
Claimants filed a witness statement from Notan Tolani of Solar in opposition to
the IPO Applications, the Claimants did not rely upon this statement at trial
or any other evidence from Solar. Although Mr Loynd exhibited various Solar
invoices and other documents evidencing use in the UK and the EU, with three
exceptions they are all either too early or too late.
175.
The first and most important exception is an invoice dated 29 January
2014 from Solar to NHP Hanse Distribution GmbH (“NHP”) in Germany. The invoice
is for 2,124 watches at a total price of US$ 69,336 FOB Hong Kong shipped by
air. The goods are described as “‘GIORDANO’ WATCHES” and the invoice states
that the prices are inclusive of gift box, guarantee booklets and warranty
cards. A box headed “Shipping Marks” includes the statement “BRAND: GIORDANO”. Counsel
for the Defendant accepted that the invoice itself amounted to use of GIORDANO
in relation to watches in Germany, but submitted that it did not establish use
in relation to the actual watches for two reasons. First, because it did not
establish that the watches themselves were marked GIORDANO. I do not accept
this submission. The licence agreement plainly envisages that the watches will
be marked GIORDANO, the other evidence shows that watches marked GIORDANO were
produced and in my view the natural interpretation of the invoice is that the
watches in question were marked GIORDANO. Secondly, because the evidence did
not establish that the watches had been sold by NHP. That I accept, but it
remains the case that the invoice establishes the sale and shipment of GIORDANO
watches to a distributor in Germany. What it does not establish is use of the
domino logo which is the subject of EU044.
176.
The second exception is some posts on a Giordano Timewear Facebook page operated
by Solar dating from 18 February 2013 to 2 June 2014. The Claimants made no
attempt to show that this was targeted at the UK or elsewhere in the EU,
however. Nor is there any use of the domino logo.
177.
The third exception is a Giordano Timewear website operated by Solar
located at www.giordanotimewear.com. The earliest date established for this is
16 July 2015, but that is within the relevant periods for both UK444 and EU044.
The only basis for suggesting that the website targeted the EU is that it had a
“contact us” page giving contact details for the Czech Republic, Greece, Italy
and Portugal. While this is certainly a pointer toward targeting the EU, in my
judgment it is not sufficient on its own. In any event there is no use of the
domino logo.
178.
Overall, there is no evidence of use of UK444 within the relevant
period. As for EU044, there is no evidence of use of the domino logo within the
relevant period. While there is evidence of use of GIORDANO in Germany, I do
not consider that amounted to use of EU044 in a form differing in elements
which do not alter its distinctive character. A significant part of the
distinctive character of EU044 derives from the domino logo, even if the
dominant element is the word GIORDANO. Accordingly, both Trade Marks will be
revoked from five years after their respective registration dates.
Assessment:
UK444, UK757, UK297 and EU335 (Class 18)
179.
The Claimants’ evidence of use of these Trade Marks partly relates to
licences granted by Walton to Solar on 11 October 2003 and 20 July 2012 to
manufacture and market Class 18 goods under various GIORDANO trade marks and
partly to use by the Giordano Group itself. Again, there is no direct evidence
from Solar (although Mr Loynd relied upon a statement by Mr Tolani in the EUIPO
by way of hearsay).
180.
So far as the Solar licence is concerned, the only evidence of use
during the relevant period is hearsay evidence from Mr Tolani (unsupported by
any documentation) of sales in Switzerland in 2013, but that does not assist
the Claimants.
181.
Turning to the Giordano Group’s own use, Mr Loynd exhibited a single
screenshot from the WayBack Machine dated 13 June 2015 showing that a faux
leather wallet had been advertised on the global e-shop. This does not assist
the Claimants because I have already concluded that such advertisements were
not targeted at the UK or elsewhere in the EU. Mr Loynd also gave evidence
about the manufacture of 160 leather bags bearing a different version of the
GIORDANO LADIES mark for Giordano Ltd in Italy in 2002, but as he accepted
those bags were exported to Hong Kong (presumably for sale by the Giordano
Group there). Finally, although Mr Loynd gave no specific evidence on the point
in his witness statement, the Claimants disclosed documents evidencing sales of
belts through the global e-shop. During the relevant period, a total of eight
belts were sold: one to the Czech Republic, two to the Republic of Ireland, two
to Italy and three to the UK. I accept these sales were targeted to the
countries in question, but I do not accept that they amount to genuine use of
these Trade Marks.
182.
Accordingly, I conclude that the Claimants have failed to establish
genuine use of these Trade Marks during the relevant periods. It follows that
they must be revoked with effect from five years after their respective registration
dates.
Assessment: EU150
(Class 9)
183.
The Claimants’ evidence of use of this Trade Mark relates to licences
granted by Walton to Vista Eyewear International (Asia) Ltd (“Vista”) on 19
July 2010 and 14 February 2014 to manufacture and market eyewear bearing
various GIORDANO trade marks. As Mr Loynd accepted, however, Vista operates in
Asia, and does not operate in the EU. Mr Loynd gave evidence that Vista had
attended the MIDO international eyewear show in Milan to promote
GIORDANO-branded eyewear between 2012 and 2016, but he did not suggest that
Vista had made any sales of eyewear in any EU country as a result. In any event,
there is no evidence of any use of the domino logo at MIDO.
184.
Accordingly, I conclude that the Claimants have failed to establish
genuine use of this Trade Mark during the relevant period. It follows that it
must be revoked with effect from five years after its registration date.
Invalidity of UK297 on the ground of bad faith
185.
The Defendant contends that Walton applied to register EU150, EU651 and
UK297 in bad faith (a similar attack on EU335 and EU044 was abandoned in
closing submissions). Having regard to my conclusion that all of the EU Trade
Marks must be revoked for lack of genuine use, it is not necessary to consider
this attack on EU150 and EU651. In the case of UK297, the Defendant contends
that this application was made in bad faith for three cumulative reasons,
namely:
i)
Walton had no intention to use UK297 when the application was made;
ii)
Walton knew about the Defendant’s prior use of the sign GIORDANO in
respect of clothing in the EU before Walton filed UK297, and consequently it is
to be inferred that the purpose of the application was to prevent the Defendant’s
legitimate business and/or to confer a monopoly on Walton to which it was not
entitled; and
iii)
Walton filed the application after the Claimants had started negotiations
with the Defendant in January 2014, and consequently it is to be inferred that Walton
intended to block the Defendant’s trade in GIORDANO in the UK and
illegitimately to bolster its position in the negotiations.
The law
186.
I reviewed the general principles concerning bad faith as a ground of
invalidity in Red Bull GmbH v Sun Mark Ltd [2012] EWHC 1929 (Ch), [2013] ETMR 53 at [130]–[138]. Leaving aside the question of the date of assessment,
which I have already dealt with, these may be summarised as follows:
i)
A person is presumed to have acted in good faith unless the contrary is
proved. An allegation of bad faith is a serious allegation which must be
distinctly proved. The standard of proof is the balance of probabilities, but
cogent evidence is required due to the seriousness of the allegation. It is not
enough to prove facts which are also consistent with good faith.
ii)
Bad faith includes not only dishonesty, but also some dealings which
fall short of the standards of acceptable commercial behaviour observed by
reasonable and experienced people in the particular area being examined.
iii)
The purpose of this ground of invalidity is to prevent abuse of the
trade mark system. There are two main classes of abuse. The first is abuse
vis-à-vis the relevant office, for example where the applicant knowingly
supplies untrue or misleading information in support of his application; and
the second is abuse vis-à-vis third parties.
iv)
In order to determine whether the applicant acted in bad faith, the
tribunal must make an overall assessment, taking into account all the factors
relevant to the particular case.
v)
The tribunal must first ascertain what the defendant knew about the
matters in question and then decide whether, in the light of that knowledge,
the defendant's conduct was dishonest (or otherwise fell short of the standards
of acceptable commercial behaviour) judged by the ordinary standards of honest
people. The applicant’s own standards of honesty (or acceptable commercial
behaviour) are irrelevant to the enquiry. (In this respect, the approach to be
taken is consistent with that recently articulated by the Supreme Court in Ivey
v Genting Casinos UK Ltd [2017] UKSC 67, [2017] 3 WLR 1212.)
vi)
Consideration must be given to the applicant’s intention. This is a
subjective factor which must be determined by reference to the objective
circumstances of the particular case.
187.
So far as the second class of abuse identified above is concerned, counsel
for the Claimants relied on what I said in Hotel Cipriani srl v Cipriani
(Grosvenor Street) [2009] EWHC 3031 (Ch) [2009] RPC 9 at [186]:
“It is clear that an application can be made in bad faith vis-vis
a third party in circumstances where the third party cannot maintain a relative
ground of objection to the registration of the Community trade mark under
Arts.8 and 52. Generally speaking, bad faith in such a case will involve some
breach of a legal or moral obligation on part of the applicant towards the third
party. The classic instance of this is where the applicant has been in
discussions with a foreign manufacturer about distributing the latter's goods
in the Community, and then applies to register the trade mark under which the
goods are marketed in the country of origin and under which the manufacturer
proposes to market them in the Community. It is not necessary, however, for
there to have been contractual or pre-contractual relations between the parties
in order for an application to be made in bad faith. Thus bad faith may exist
where the applicant has sought or obtained registration of a trade mark
for use as an instrument of extortion, as in the Melly case. Nevertheless,
I consider that Art.51(1)(b) has no application to situations involving a bona
fide conflict between the trade mark rights, or perceived rights, of
different traders.”
I adhere to what I said there,
which I believe remains an accurate statement of law.
188.
I reviewed the law as to whether lack of intention to use the trade mark
amounted to bad faith at length in Sky plc v SkyKick UK Ltd [2018] EWHC 155 (Ch) at [175]-[234] and [2018] EWHC 973 (Ch) at [20]-[21]. For the reasons
explained in those judgments, I have referred questions to the CJEU on this
topic.
Assessment
189.
For the reasons explained above, the question whether Walton acted in
bad faith when applying for UK297 must be assessed as at 4 September 2014.
190.
Mr Loynd stated in his witness statement that the application for UK297 was
made on his instructions “because of the efforts that Dominic Irwin and myself
were making in respect of the UK market and because I considered that it was
prudent that most up to date iteration of the GIORDANO logo was registered”. He
said that this pre-dated his knowledge of the Defendant’s activities in the UK,
which he did not become aware of until “later in 2015”. He also said that
Walton had applied for UK297 at a time when it had existing trade marks across
the EU, including the UK, and had been selling the relevant goods through the
online stores (i.e. the global e-shop and the AliExpress store) for several
years. Finally, he said that Walton had had a genuine intention to use it.
191.
Counsel for the Defendant did not challenge Mr Loynd’s evidence that
Walton had had a genuine intention to use UK297 at the date of the application,
and therefore it is not open to the Defendant to rely upon this ground for the
allegation of bad faith.
192.
Counsel for the Defendant did challenge the explanations Mr Loynd gave
for the making of the application. As she pointed out, it was Mr Loynd’s own
evidence that the Giordano Group had started using the particular stylised form
of GIORDANO which is the subject of UK297 in about 2005. Thus it was nearly a
decade old. When challenged, Mr Loynd said that Walton had also applied to
register that form in Asia, but as counsel for the Defendant submitted, there
is a difference between registering a mark in a core market and registering it
outside that core market. When counsel for the Defendant pointed out that
Walton already had the word GIORDANO registered in the UK, Mr Loynd claimed
that he thought it was “important to have a uniform mark protected in all the
regions we were interested in”. If that was the explanation, Walton would have
applied to register the stylised form in Classes 18, 25 and 35 in the EU at the
same time, but it did not. (In saying this, I do not overlook the fact that
Walton had filed applications in various countries to register giordano/ladies
and GIORDANO junior in the same font in February and March 2014.)
193.
Mr Loynd accepted that he was aware that the earlier UK marks would be
vulnerable to revocation if they had not been used. It was not put to him,
however, that he knew in September 2014 that they had not been used and thus
were liable to revocation.
194.
Mr Loynd did not accept that he was aware of the Defendant’s trade in
the UK at the time. It is clear from the evidence that the Giordano Group was
aware that the Defendant was marketing GIORDANO-branded clothing in a number of
countries in the EU. The evidence does not affirmatively establish that the
Giordano Group was aware that the Defendant’s trade extended to the UK, but it
seems to me that Giordano Group must have appreciated from what it did know
that it was likely that the Defendant was trading in the UK.
195.
Mr Loynd accepted that he was aware of the discussions between Mr
Chugani and the Defendant. When asked why the Giordano Group had not informed
the Defendant of its intention to file UK297, he relied upon the stance taken
by the Defendant that it would act to protect its interests. Although Mr Loynd
referred to Mr Stöpetie’s email dated 22 September 2015, it is fair to say that
Karel Verweij had previously adopted that stance in his email dated 27 May
2015. Either way, that took place in 2015, after the filing of UK297. Nevertheless,
the fact of the matter remains that, by 4 September 2014, the trade mark war
between the Giordano Group and the Defendant had already broken out. It does
not matter whether one regards the first shot as being Walton’s EUTM applications
filed on 18 February 2014 or the oppositions filed by the Defendant and
Abanicos on 31 July 2014. By mid-August 2014, when the oppositions were
notified to Walton, it would have been clear to both sides that the other was
likely to take such steps in the relevant trade mark offices that it considered
appropriate to protect its interests. I do not think that the timing of the
filing of UK297 is a coincidence.
196.
The conclusion I draw from the evidence is that Walton’s reason for
filing the application for UK297 was not in order to ensure that that stylised
form was protected. Rather it was, as counsel for the Defendant put to Mr
Loynd, to provide the Giordano Group with an additional piece of armoury in
order to bolster its position in the UK. Contrary to the submission of counsel
for the Defendant, however, I do not consider it significant that the Giordano
Group did not inform the Defendant that it was filing UK297. I consider it
probable that the Giordano Group anticipated that UK297 would come to the
Defendant’s attention in due course, just as the EUTM applications filed on 18
February 2014 had. In any event, I cannot see what difference it would have
made if the Giordano Group had informed the Defendant. Nor do I consider it
significant that the Giordano Group had acquired two third-party registrations
of trade marks comprising GIORDANO in 2004 and 2008. These were acquired a long
time before the discussions with the Defendant, and there is nothing to suggest
that they were acquired in order to target the Defendant.
197.
In those circumstances, I am not persuaded that Walton acted in bad
faith in filing UK297. It has not been shown that it did not intend to use
UK297. Nor has it been shown that it filed the application because it realised
that its existing UK Trade Marks were liable to be revoked for non-use.
Although the parties were in discussions with each other on 4 September 2014,
the trade mark war had already started. Walton owed the Defendant no legal or
moral obligation. Nor do I consider that it behaved in an underhand way.
Invalidity of UK297 on relative grounds
198.
The Defendant also attacks the validity of UK297 on relative grounds.
Specifically, the Defendant contends that, as at 4 September 2014, the use of
UK297 in the UK was liable to be prevented by virtue of the law of passing off
within section 5(4)(a) of the 1994 Act which gives effect to Article 5(4)(a) of
the Directive.
199.
It is not necessary for me to consider the law of passing off or its
application to the facts of this case, because the Claimants accept that, but
for one point, the Defendant would have acquired goodwill in GIORDANO in
relation to clothing by 4 September 2014, and accordingly that the use of UK297
would have amounted to passing off.
200.
The Claimants contend that the Defendant could not have acquired any
goodwill in GIORDANO because they were infringing the other Trade Marks, and in
particular UK864. This contention gave rise to some complicated arguments as to
whether or not the present case could be distinguished from Inter Lotto (UK)
Ltd v Camelot Group plc [2004] EWCA Civ 1132, [2004] RPC 9. It is not
necessary for me to consider those arguments, however, because I have concluded
all the other Trade Marks should be revoked for non-use. As explained below, it
follows that they have not been infringed. If I am wrong in that conclusion,
the Inter Lotto point raises a pure issue of law which the Court of
Appeal will be able to decide on the basis of my findings of fact. All I would
say is that, in my view, the issue is not one purely of domestic law, but also
one of European law.
201.
Accordingly, I conclude that UK297 is invalid on this ground.
Infringement
202.
Counsel for the Claimants sensibly concentrated on the Claimants’ claim
for infringement of UK864 pursuant to section 10(1) of the 1994 Act, which
gives effect to Article 10(2)(a) of the Directive, by use of the sign GIORDANO
in relation to mens’ clothing since 25 August 2010. It is difficult to see how,
if the Claimants’ claim for infringement of UK864 fails, the Claimants can be
in any better position with respect to their claims for infringement of the
other Trade Marks.
203.
The case law of the CJEU establishes that the proprietor of a trade mark
can only succeed in a claim under Article 10(2)(a) of the Directive if six
conditions are satisfied: (i) there must be use of a sign by a third party
within the relevant territory; (ii) the use must be in the course of trade;
(iii) it must be without the consent of the proprietor of the trade mark; (iv)
it must be of a sign which is identical to the trade mark; (v) it must be in
relation to goods or services which are identical to those for which the trade
mark is registered; and (vi) it must affect, or be liable to affect, one of the
functions of the trade mark.
204.
There is no dispute that, if UK864 was validly registered from 25 August
2010, then conditions (i) to (v) are satisfied in relation to that Trade Mark.
The dispute is as to condition (vi). The Defendant contends that this condition
is not satisfied because there has been honest concurrent use of the GIORDANO
trade mark. Given that this is not a pure issue of law, I must deal with it in
case I am wrong in concluding that UK864 should be revoked with effect from
prior to 25 August 2010. Accordingly, I will consider it on the assumption that
UK864 remains registered.
The law as to honest concurrent use
205.
Condition (vi) is not one which appears on the face of Article 10(2)(a)
of the Directive or Article 10(2)(a) of the Regulation. Instead, it is a
condition which has been read into those provisions by the CJEU as a matter of
interpretation. I reviewed the law with respect to condition (vi) in Supreme
Pet Foods Ltd v Henry Bell & Co Ltd [2015] EWHC 256 (Ch), [2015] RPC 22
at [86]-[164], and concluded that, once the trade mark proprietor has shown
that condition (v) is satisfied, the defendant bears the onus of proving that
the use does not affect, nor is liable to affect, any of the functions of the
trade mark. Counsel for the Defendant did not take issue with that conclusion.
206.
As I noted in the course of that review at [144]-[149], in Case C-482/09
Budějovický Budvar NP v Anheuser-Busch Inc [2011] ECR I-8701 the
Court of Justice ruled that:
“Article 4(1)(a) of Directive 89/104 must be interpreted as
meaning that the proprietor of an earlier trade mark cannot obtain the
cancellation of an identical later trade mark designating identical goods where
there has been a long period of honest concurrent use of those two trade marks
where, in circumstances such as those in the main proceedings, that use neither
has nor is liable to have an adverse effect on the essential function of the
trade mark which is to guarantee to consumers the origin of the goods or services.”
207.
It is clear that the same principle applies to infringement claims under
Article 10(2)(a) of the Directive: see Budějovický Budvar at [67]-[70]
and IPC Media Ltd v Media 10 Ltd [2014] EWCA Civ 1403, [2015] FSR 12.
208.
In Victoria Plum Ltd v Victorian Plumbing Ltd [2016] EWHC 2911 (Ch), [2017] Bus LR 363 Henry Carr J considered the test for honesty in this
context, and concluded at [79]:
“In my judgment, the factors which have been considered in
the context of honest commercial practices in respect of the own name defence
need a degree of adaptation when considering whether ‘concurrent use’ is
honest. In particular: (i) The defendant has a duty to act fairly in relation
to the legitimate interests of the trade mark proprietor. (ii) All
circumstances must be considered when ascertaining whether or not the use by
the defendant is honest, including whether the defendant can be regarded as
unfairly competing with the trade mark proprietor. (iii) However, the question
is not simply whether use of the sign complained of gives rise to consumer
deception, as such deception may have to be tolerated. Similarly, the defendant
may well be aware of the existence of such confusion, having lived with it for
a considerable period. (iv) The question is whether the defendant has taken
steps which exacerbate the level of confusion beyond that which is inevitable
and so has encroached upon the claimant’s goodwill. (v) Whether the defendant
ought to be aware that such steps will exacerbate confusion is a relevant
factor.”
Assessment
209.
The Claimants contend that the Defendant cannot satisfy the onus of
establishing honest concurrent use for two main reasons: (i) there has been no real
coexistence of the parties’ trade marks which has educated the relevant public
to distinguish between them; and (ii) the Defendant’s use of the sign GIORDANO
has not been honest.
210.
So far as the first point is concerned, counsel for the Claimants relied
on the facts that (i) although both sides had used the trade mark GIORDANO for
clothing in the UK since December 2010, they had done so through different
trade channels (the Claimants by online sales through their global e-shop and
AliExpress store and more recently by sales in their pop-up shops, the
Defendant by sales through independent menswear retailers) and (ii) the
relatively small scale of both sides’ uses, and in particular the Claimants’.
He argued that there was no evidence that consumers had learnt to differentiate
between the two brands, and that it was inherently unlikely that they would
have done. On the contrary, all of the Defendant’s trade witnesses said in
their witness statements that they had never heard of the Claimants’ GIORDANO
brand prior to these proceedings.
211.
Furthermore, counsel for the Claimants relied upon evidence that a number
of retailers of the Defendant’s clothing had copied the Claimants’ logos. The
Defendant’s evidence was that the reason for this was that the persons in
question had carried out internet searches, found one of the Claimants’
websites and cut-and-pasted a logo into their materials. Similarly, one of the Defendant’s
retailers, Tim Garner Ltd trading as Claytons, had advertised the Defendant’s clothing
on its website with a description referring to the Claimants’ GIORDANO brand: “Giordano
International was founded in Hong Kong in 1981 and is now one of the world’s
leading international retailers…”. As Mr Loynd pointed out, the text in
question had been copied from one of the Giordano Group’s websites. It is
likely that the explanation is the same. Finally, even Mr Donga had exhibited
to his witness statement for the IPO Applications an extract from the Coes
website which included a copy of one of the Claimants’ logos without noticing
that. Counsel for the Claimants submitted that what this evidence showed was confusion,
or at least the likelihood of confusion, between the respective trade marks.
212.
I do not accept this argument. It is not a requirement of the doctrine
of honest concurrent use that the relevant public has learnt to distinguish
between the two trade marks. On the contrary, as Kitchin LJ explained in IPC
v Media 10:
“49. …
the Court has not ruled that honest concurrent use cannot avail a trader if the
impugned use is liable to cause some confusion. Indeed, this court was required
to consider that very question in deciding the ultimate outcome of that case,
for Anheuser-Busch argued that, in the light of the guidance given by the
Court, the doctrine could only apply where the level of confusion was de
minimis. It continued that if there was a level of confusion above that,
then the essential function of the trade mark relied upon would be impaired and
a case of permissible honest concurrent use would not be made out.
50. This
court rejected that submission. Sir Robin Jacob (with whom Ward LJ and Warren J
agreed) put it this way ([2013] RPC 12):
‘20. I
do not accept that. The Court could have said just that but did not. The rather
self evident point as to the effect of a long period of honest concurrent use
was clearly laid before the Court when I summarised Mr Mellor’s submission:
‘Mr Mellor suggests that the
Court might recognise a further exception in the case of long established
honest concurrent use. For in such a case the guarantee of origin of the mark
is not impaired by the use of the mark by each party. Once such concurrent use
is established the mark does not solely indicate the goods of just one of the
users. It means one or the other. Hence there is no impairment of the guarantee
and, if impairment is the touchstone of art.4(1), no infraction of it.’
21. The
Court did not rule that only de minimis levels of confusion are
acceptable when there is honest concurrent use. Nor did the Court rule that the
inevitable confusion in a same mark/same goods case is enough to take a case
out of acceptable concurrent use. Yet that is what Mr Bloch’s submissions
involve.
22. More
fundamentally, Mr Bloch’s submissions involve the unstated premise that even
where there is long established honest concurrent use the mark of one party
must provide a guarantee of origin in that party and not the other. That is
quite unrealistic. Here for instance, Budweiser has never denoted AB’s
beer alone.
23. So
I do not think that there is any impairment of the guarantee of origin – of
either side’s mark. The guarantee is different given a situation of long
established honest concurrent use.’
51. I
respectfully agree that there may well be more than de minimis confusion
in a case of honest concurrent use. No doubt many consumers will recognise that
the marks are used by different businesses, but others will not. In other
words, once honest concurrent use is established, the mark does not solely
indicate the goods or services of just one of the users. As Sir Robin Jacob
explained, in such a case the guarantee given by the mark is different.”
213.
Turning to the second point, counsel for the Claimants submitted that
the Defendant had not discharged its duty to act fairly in relation to the
legitimate interests of the trade mark proprietor. He argued that, even if the
Defendant had not known of UK864 until relatively recently (as I find it did
not), the Defendant ought to have carried out a search of the UK trade mark
register before marketing its goods here.
214.
I do not accept this argument for a number of reasons. First, if a mere
failure to carry out a search was sufficient to deprive a defendant of an
honest concurrent use defence, that would mean that it was very rarely
available. Secondly, counsel for the Claimants did not say what the Defendant
was supposed to have done if it had carried out a search and found UK864. The
logic of the argument appears to be that it should have applied for revocation
prior to marketing its goods. But I do not see why a defendant should be under
a duty to make such an application prior to marketing. Thirdly, the argument is
inconsistent with Henry Carr J’s analysis of the law in Victoria Plum. As
he held, the key question is whether the Defendant has taken steps which
exacerbate the level of confusion beyond that which is inevitable and so has
encroached upon the Claimants’ goodwill.
215.
Although I have not accepted the Claimants’ main arguments, it remains
necessary to stand back and consider whether the Defendant has discharged the
onus of establishing that, as a result of its honest concurrent use, its use of
the sign GIORDANO neither has had, nor is liable to have, an adverse effect on
any of the functions of UK864. It is only necessary to consider the essential
function of denoting origin, since counsel for the Claimants did not suggest
that there could be any effect on any other function. In my judgment, the
Defendant has discharged the onus upon it for the following reasons. The
Defendant’s use commenced in January 2001, and has been continuous since them. The
Defendant’s turnover in the UK has steadily grown as a result of organic growth
in the business. As explained above, the Defendant’s use has been honest,
because it has done nothing to increase the likelihood of confusion occurring.
Although the Claimants have been making online sales to UK consumers since
December 2010, there is no evidence of any consumer confusion as a result. It
is tolerably clear that the main reason for this is that the Claimants’ UK
customers are almost exclusively people who encountered the GIORDANO brand
outside the UK. Other contributing factors may be the facts that the Defendant
only sells menswear and that its goods are more stylish and higher priced.
Although it is inherently probable that, if the Claimants were to expand their
use of UK864, in particular by selling their clothes through bricks-and-mortar
retail outlets on a larger scale than the pop-up shops, there would be some
consumer confusion, that would not be the Defendant’s fault. That would be no
more than the inevitable consequence of the Claimants having allowed the
Defendant to build up a substantial trade under the GIORDANO trade mark over
many years.
216.
Accordingly, I would if necessary hold that the Defendant had not
infringed UK864. It would follow that they had not infringed any of the other
Trade Marks either.
The Defendant’s counterclaim for passing off
217.
Given my conclusion that the Giordano Group’s sales of clothing to UK
consumers via the global e-shop and the AliExpress store targeted the UK, it
follows that the relevant date for assessment is December 2010. (It would not
make any difference to liability, as opposed to quantum, if the relevant date
were April 2016, however.) Strictly speaking, a different company in the
Giordano Group must have been responsible for those sales (Giordano UK did not
even exist in December 2010); but as I understand it, the Claimants accept
liability for any passing off. The position in relation to the counterclaim
mirrors the position in relation to the relative grounds attack on the validity
of UK297: subject to the Inter Lotto point, the Claimants accept that the
Defendant would have acquired goodwill in GIORDANO in relation to clothing by December
2010, and accordingly that their use of GIORDANO in relation to clothing
amounted to passing off. Again, in the light of my conclusions on revocation,
the Inter Lotto point does not arise.
Summary of principal conclusions
218.
For the reasons given above, I conclude that:
i)
all of the Trade Marks except for UK297 must be revoked with effect from
five years after their respective registration dates;
ii)
UK297 is not invalid on the ground that the application was made in bad
faith, but it is invalid on relative grounds;
iii)
it follows that the Defendant has not infringed any of the Trade Marks;
and
iv)
it also follows that the Claimants are liable for passing off since
December 2010.
