INTELLECTUAL PROPERTY ENTERPRISE COURT
Fetter Lane, London, EC4A 1NL
B e f o r e :
| COREIX LIMITED
|- and -
(1) CORETX HOLDINGS PLC
(2) CORETX SUBHOLDINGS LIMITED
(3) CORETX CONNECT LIMITED
(4) CORETX COMMUNICATIONS LIMITED
(5) MIMIC LIMITED (formerly CORETX MEDIA LIMITED)
(6) CORETX LIMITED
(7) CORETX FINANCING LIMITED
(8) CORETX MANAGE LIMITED
(9) CORETX PROTECT LIMITED
Victoria Jones (instructed by DAC Beachcroft LLP) for the Defendants
Hearing dates: 7th - 8th June 2017
Crown Copyright ©
Mr Recorder Douglas Campbell QC:
The Claimant's witnesses
The Defendants' witnesses
Registered trade mark infringement under s 10(2) of the 1994 Act/Art 5(1)(b) TMD
"… in light of the foregoing discussion we do not accept that a finding of infringement is precluded by a finding that many consumers, of whom the average consumer is representative, would not be confused. To the contrary, if, having regard to the perceptions and expectations of the average consumer, the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court then we believe it may properly find infringement."
If the mark and the sign have both been used and there has been actual confusion between them, this may be powerful evidence that their similarity is such that there exists a likelihood of confusion. Conversely, the absence of actual confusion despite side by side use may be powerful evidence that they are not sufficiently similar to give rise to a likelihood of confusion. This may not always be so, however. The reason for the absence of confusion may be that the mark has only been used to a limited extent or in relation to only some of the goods or services for which it is registered, or in such a way that there has been no possibility of the one being taken for the other. So there may, in truth, have been limited opportunity for real confusion to occur.
"I also think the judge was wrong to say that it required evidence of actual consumers to establish BMW's case. Where what is in issue is an ordinary consumer product the court is not normally assisted by the evidence of individual consumers to establish what impression is conveyed by a sign: see Interflora I  EWCA Civ 1501 at  - . The court has to make its own assessment, taking into account all relevant circumstances. Although Miss Scott identified some respects in which the evidence from BMW's employees might have been improved, she was not able to identify what additional evidence from consumers the judge could legitimately have had in mind. She accepted that evidence of actual confusion is never a pre-requisite of success in an infringement or passing off action."
Perceiving the mark as a whole
The Defendants' word sign
The Defendants' logo sign
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[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture]/
i) There is a common element of CORE at the beginning, and whatever this is taken to mean will be the same in each case.
ii) It was common ground on the evidence that TX was widely regarded as an abbreviation for "transmit" in relation to data transmission. The Defendants also alleged, and the Claimant did not dispute, that IX was commonly understood to stand for "information exploitation" or "internet exchange". The Claimant submitted that IX was thus also related to data transmission and the Defendants did not dispute this either. On this basis these elements are conceptually similar too.
Distinctive character of earlier mark
a. Between 2003 and August 2013 the Claimant had generated a total turnover of trade conducted under or by reference to the mark of around £15million. Its annual turnover in 2012-2013 was around £3million. Around ¾ of this trade was is in the UK. None of this was challenged.
b. The Claimant spent just under £30k on marketing and promotion of its mark in 2008, rising to just over £60k in 2013 (much of which was online). The Claimant also attended a number of trade shows and conferences to promote its business under the mark. None of this was challenged either, nor was it said to be trivial.
c. The Claimant has received a number of glowing testimonials and high ratings from the users of its service on various industry websites, including www.serchen.co.uk and Web Hosting Talk. I was shown a number of such testimonials and ratings and in particular was shown that the Claimant was referred to simply as "Coreix". The Defendants did not suggest these reviews were unrepresentative.
d. The Claimant also referred to the fact it has been nominated for and has won a number of industry awards. It is true that some of the reviews and awards post-dated 2013, although not all of them. The Claimant made the point that even those which did post-date 2013 reflected historic performance by the Claimant.
i) The first was evidence from security guards, delivery firms, and the like relating to a data centre facility owned and controlled by a company called Virtus ("the Virtus Data Centre"). The Claimant's data centre was located within the Virtus Data Centre, in data hall DH5, and the Claimant also had staff on site. The Defendants also took space within the Virtus Data Centre. It was not clear to me precisely what the Defendants' actual presence at this site was, but it did at least have some machines in data hall DH6b and Mr Latter told me that he had seen parcels addressed to the Defendants in the mail room at the Virtus Data Centre.
ii) The other was Mr Lee-Johnson's evidence about trade shows he had attended, namely Cloud Expo 2016 on 12 April 2016, Internet of Things on 12 May 2016, and the Cloud and Infrastructure Summit 2016 on 22 September 2016.
Security guards and delivery firms
i) On 15th April 2016 the security team at the centre tried to deliver a parcel which was addressed to Coretx to the Claimant. He explained that it took some persuasion before the security team realised that the parcel was actually for the Defendants, not the Claimant, even though it had the Defendants' name on it.
ii) A more serious incident occurred on 9th June 2016. A customer of the Defendants, Mr Rhys Evans, was duly granted rights of access by the Defendants to access their data hall (DH6b). However Mr Evans needed access to the Claimant's data hall, DH5. Although the security staff are required to have special security training (under an industry qualification which lasts for 3 years) they mistakenly contacted the Defendants. The Defendants then wrongly granted approval which they had no power to give, and thereby Mr Evans was given access to DH5. Mr Ganchev became aware of the issue as he passed the security desk himself and raised the alarm. After what I imagine were heated discussions between the Claimant and the security staff, Mr Evans was escorted from the building although he was allowed back in later. Mr Latter confirmed Mr Ganchev's account.
Conclusion on likelihood of confusion
Registered trade mark infringement under s 10(3) of the 1994 Act/Art 5(2) TMD
i) First, the evidence of confusion itself. It was submitted that this showed that the ability of the average consumer immediately to identify the Claimant's services offered under the mark had diminished. This had led and/or would lead to a change in economic behaviour.
ii) Secondly, the Claimant submitted that the scale of the Defendants' infringement was such that the reputation of its mark was swamped: see Sutherland v V2 Music  EMLR at . In particular, the Defendants' business had at one point been about 4 times as big as that of the Claimant, but was now even bigger, hence its continued infringement was likely to destroy that reputation. This also had led and/or would lead to a change in economic behaviour.
iii) Thirdly the Claimant said that its turnover had (in the Claimant's view) suffered. However as the Defendants pointed out the Claimant's turnover actually continued to rise during the period of the alleged infringement, even if this rise was not at the 12% rate of growth which the Claimant had come to enjoy in previous years.
iv) Fourthly the Claimant drew attention to various further documents. One was a letter dated 23rd February 2017 from Simon Wilcox of Digital Craftsmen in which Mr Wilcox gave his personal belief that there was "lots of opportunity for confusion between the two brands". Mr Wilcox did not give evidence at trial. Another was a confused transcript of a telephone call between Mr Lee-Johnson and a Mr Luke Shelvin. Mr Lee-Johnson was cross-examined on this call and he admitted that it was not as relevant as a previous telephone call he had with Mr Shelvin, which he had not recorded. Another was an email from "Michael" of VM Hosts who said he fully agreed with the Claimant's displeasure about the Defendants' name change. Michael did not give evidence at trial. None of this evidence took the Claimant's case very far.
i) First, the Defendants were about 4 times the size of the Claimant. It is not impossible that the larger group might want to free-ride on the reputation of the smaller company's mark but this is uncommon.
ii) Secondly, Mr Hawkins explained how he had, with some assistance from Mr Barter, come up with the coreTX name in 2013. In fact Mr Hawkins's original idea for the mark was CORTEX because he wanted a reference to the cerebral cortex of the brain. However due to what he said was an issue with a third party trade mark registration it was changed to coreTX which he thought was even better. This evidence was corroborated by Mr Barter. I accept this explanation as to where the Defendants' name originally came from. Hence it had nothing to do with the Claimant.
iii) Thirdly when Mr Dean was asked in cross-examination whether he really believed that the Defendants wanted to benefit from the reputation of the Claimant's mark, his answer was hesitant and lacked conviction. I appreciate that Mr Dean had no first hand knowledge one way or the other, so I attribute only limited significance to his answer, but he was as well placed as anyone to assess whether this part of his company's case was realistic and he did not appear to think that it was.
iv) That leaves the fact that it was Mr Ross who selected CORETX as the name of the group in 2016, coupled with the fact that Mr Ross did not attend trial. This needs more detailed consideration.
"As to the question of acquiescence, the matter may perhaps be put in this way: When the Defendants started using the word "Electrix", they either knew of the Plaintiff's mark "Electrux" or they did not. If the Defendants did know of it then they adopted and used "Electrix" at their peril and were not entitled to assume that the Plaintiffs accorded them their consent to the infringement involved merely because the Plaintiffs, knowing of the Defendant's use of "Electrix", did nothing to enforce their rights. In this alternative, it would have been for the Defendants to apply for and obtain the Plaintiff's consent to their use of "Electrix", or, failing that, to apply for and adopt some other name instead of it. If, on the other hand, the Defendants did not know of the Plaintiffs' mark, "Electrux", that could only be because they omitted to take the precaution of searching the Register of Trade Marks…. even in the second of the two alternatives above stated, I fail to see how the Plaintiff's delay in taking proceedings after becoming aware of the Defendants' use of "Electrix" can be held to have led the Defendants to spend money in building up the goodwill associated with "Electrix" in the belief, induced by such delay, that they were entitled to use that name."
"First, A makes a false representation of fact to B…Second, in making the representation, A intended or knew that it was likely to be acted upon., B, believing the representation, acts to its detriment in reliance on the representation. Fourth, A subsequently seeks to deny the truth of the representation. Fifth, no defence to the estoppel can be raised by A".
The Claimant's failure to take action in relation to coreTX
i) Mr Barter said that although coreTX was used alongside the C4L brand, C4L remained the primary brand. This point was amply supported by a number of photographs taken of D3's stand at various trade shows, all of which confirmed Mr Barter's evidence that coreTX and C4L were used together.
ii) Furthermore the use of coreTX was all in relation to a specific type of network called an MPLS network. Mr Hawkins explained that the actual go-live date of the coreTX network was delayed and it was only officially launched in late 2015 or early 2016. The use of CORETX was as the name of the Defendants' entire business.
The fact that the parties continued to do business with each other generally
Conclusion on acquiescence and estoppel
i) As regards estoppel by convention: even if there had been a common assumption (eg that the Claimant would never sue in relation to the coreTX mark, or variants thereof), the Defendants did not rely on that assumption. This assumption also came to an abrupt end in April 2016, within 77 minutes of the use complained of becoming known to the Claimant.
ii) As regards estoppel by representation, the Claimant never made any representation to D3, let alone any of the other Defendants. The Claimant never intended any such representation to be acted upon. There was no such reliance by any of the Defendants.
Validity of D3's registered trade mark
i) The action succeeds on each of ss 10(2) and 10(3) of the Trade Marks Act 1994, and passing off.
ii) The defences of acquiescence and estoppel fail.
iii) D3's registered trade mark no. 3 030 562 is invalid.