England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/07/2008

Mr Justice Floyd :

Introduction

1. Under the Trade Marks Act 1938 it was not possible to register a trade mark for services as opposed to goods: see Aristoc v Rysta [1945] AC 48. Under the Trade Marks Act 1984, although it was possible to register a trade mark for services, it was not possible to register a trade mark for retail services, that is to say for a shop: see Dee Corporation's and others' Trade Mark applications [1990] RPC 159. Under the Trade Marks Act 1994 the position is different. In Case C-418/02 Praktiker Bau- und Heimwerkermärkte AG [2005] ECR I-5873, the ECJ held that retail services were registrable. These three appeals, which have been heard together, raise the question of whether it is possible for the operator of a shopping centre to register a trade mark for the services it may provide. Each of the three cases under appeal is an application by a shopping centre operator to do that. In each case, the Registrar of Trade Marks, acting through Mr Nathan Abraham, refused registration of the marks.
2. Mr Richard Arnold QC argued the appeal on behalf of all three applicants/appellants. Mr Michael Edenborough argued the case for the Registrar.
3. It is convenient first to set out the applications under appeal.

The Land Securities application

4. On 20 March 2006 Land Securities plc filed application No. 2417145 to register the following series of two trade marks in respect of a range of goods and services in a number of classes including Class 35:



5. The appeal concerns application No. 2417145B^[1] which is in respect of the following specification of services in Class 35:^[2]

"The bringing together for the benefit of others, of a variety of retail outlets, entertainment, restaurant and other services, enabling customers to conveniently view and purchase goods and services and make use of such facilities in a shopping centre or mall;

the bringing together for the benefit of others, of a variety of retail outlets connected with one or more of the following types of goods, namely, beauty products, toiletries, health and healthcare equipment, pet products, machines for household use, hand tools, gardening tools and accessories, optical goods, cameras, domestic electrical and electronic equipment, including white goods, jewellery, clocks, watches, musical instruments, stationery, publications, artists' materials, CDs, DVDs, leather goods, luggage, travel accessories, furniture, household utensils, furnishings, textiles, footwear, headwear, haberdashery, toys and games, sports equipment and tobacco products, entertainment, restaurant and other services, enabling customers to conveniently view and purchase goods and services and make use of such facilities in a shopping centre or mall;

the bringing together, for the benefit of others, via the Internet, of a variety of beauty products, toiletries, health and healthcare equipment, pet products, machines for household use, hand tools, gardening tools and accessories, optical goods, cameras, domestic electrical and electronic equipment, including white goods, jewellery, clocks, watches, musical instruments, stationery, publications, artists' materials, CDs, DVDs, leather goods, luggage, travel accessories, furniture, household utensils, furnishings, textiles, footwear, headwear, haberdashery, toys and games, sports equipment and tobacco products, financial services and telecommunications services through a virtual shopping mall, enabling customers to conveniently view and purchase those goods and services by means of telecommunications."

The Capital Shopping Centres application

6. On 13 April 2006 Capital Shopping Centres plc filed application No. 2420205 to register the following series of two trade marks in respect of a range of goods and services in a number of classes including Class 35:



7. The appeal concerns application No. 2420205B which is in respect of a specification of services in Class 35 which is not quite identical to the Land Securities application but does not differ from it in any material respect.

The Hammerson application

8. On 30 July 2007 Hammerson plc filed application No. 2462651 to register the trade mark EDEN QUARTER in respect of a range of goods and services in various classes including Class 35.
9. The appeal concerns application No. 2462651D which is in respect of the same specification of services in Class 35 as Capital Shopping Centres application.

Shopping centres

10. Shopping is a major leisure activity in the UK and, I suspect, throughout Europe. A shopping centre is a collection of retail outlets, restaurants and entertainment facilities gathered together in one set of premises under the control of a shopping centre operator. The shopping centre operator is responsible for the appearance and upkeep of the common parts, the general services provided in and around the centre and for letting the individual retail and other units. The shopping centre operator will naturally strive to attract as many visitors to its shopping centre as possible: the busier the centre the more he will be able to charge by way of rents. Some shopping centre operators take a percentage of retail turnover.
11. The specifications of goods also refer to virtual shopping malls accessed by telecommunications: it was not suggested that different considerations of principle applied to this aspect of the applications.
12. Shopping centre operators do not generally retail goods to the public, but they offer a number of services. The applicants summarise them in this way:

a) Selecting an attractive location which has good transport links

b) Providing a well-designed building, or group of buildings, that has a suitable infrastructure and layout to support the centre's operations;

c) Selecting and attracting a suitable mix of retail outlets.

d) Selecting and attracting a suitable mix of other facilities, in particular restaurants, cafes and bars and leisure facilities such as cinemas and bowling alleys.

e) Providing an attractive and comfortable ambience including décor, air conditioning, background music etc.

f) Providing facilities such as car parks, toilets and crèches.

g) Providing convenient opening hours.

h) Providing information (including signage), advice and assistance to customers.

i) Providing specialised assistance such as language facilities, facilities for the disabled etc.

j) Providing loyalty schemes of various kinds.

13. It is clear from the illustrative material which I was shown by Mr Arnold (with Mr Edenborough's agreement) that shopping centres make extensive use of branding. For example they undertake advertising for their centres, publish magazines and issue loyalty cards. White Rose have a Customer Service Centre and provide Centre Ambassadors to assist customers. Brent Cross (not one of the present applicants) have several pages on their website listing customer services including services for customers with disabilities, parent and child facilities, customer information, language assistance, gift cheques and car cleaning.

Mr Abraham's decisions

14. Although there are procedural differences between them, and the minor difference in the specifications which I have noted, it was common ground that the decision of Mr Abraham on the Land Securities application could be taken as representative for the purposes of all three appeals.
15. Mr Abraham's decision can, as it seems to me, be analysed as having rejected the applications on two grounds:

i) the services specified in the applications (which I will refer to as "the Services") were not services within the meaning of the Council Directive 89/104/EEC of 21 December 1988 to approximate the law of the member states relating to trade marks ("the Trade Marks Directive") and therefore the Trade Marks Act 1994 ("the Act");

ii) the specifications of the Services do not comply with rule 8(2)(b) of the Trade Marks Rules 2000 because they lacked the requisite degree of clarity.

16. These two grounds of decision raise the following four questions:

Q1. The meaning of "services" in the Trade Marks Directive/the Act.

Q2. Are the Services normally provided for remuneration?

Q3 Do operators of shopping centres provide the Services?

Q4. Is the nature of the Services sufficiently clearly indicated?

Q1. The meaning of "services"

17. By virtue of section 1(1) of the 1994 Act, a trade mark is "any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings". It is common ground that a sign can only be a trade mark, and thus can only be registered, in respect of "services" within the meaning of the 1994 Act.
18. Neither the Trade Marks Directive nor the 1994 Act contains a definition of the term "services". Mr Abraham referred at [18] to the definition of "services" contained in Articles 4 and 50 of the EC Treaty. It is evident from his subsequent reasoning, and in particular [24] and [27]-[29], that he held that, in order to be "services" within the meaning of the 1994 Act, it was necessary for the Services (i) to be "services" within the meaning of Articles 4 and 50 of the EC Treaty and (ii) to be provided for remuneration.
19. Mr Abraham's reference to Article 4 of the EC Treaty was, as Mr Edenborough accepts, in error. I was told that the provision that he had in fact intended to refer to was Article 4 of the EC Services Directive, Directive 2006/123/EC. That is a directive which contains a specific definition of "services" for the purposes of that Directive. It does not throw any light on what is meant by the term "services" in the Trade Marks Directive and therefore the 1994 Act.
20. Article 50 of the EC Treaty provides, so far as material:

"Services shall be considered to be 'services' within the meaning of this Treaty when they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement of goods, capital and persons.

'Services' shall in particular include:

(a) activities of an industrial character;

(b) activities of a commercial character;

(c) activities of craftsmen;

(d) activities of the professions…."

21. The power to make both the Trade Marks Directive and the Community Trade Marks Regulation stems from the EC Treaty. The Directive was made pursuant to Article 95 (formerly Article 100(a)) and the Regulation pursuant to Article 308 (formerly Article 275). Absent some strong reason, I would be inclined to think that the term "services" was used in the same sense in both the Treaty and the legislation made pursuant to it.
22. In Case C-418/02 Praktiker Bau- und Heimwerkermärkte AG [2005] ECR I-5873, the ECJ had to consider an application to register the stylised word mark PRAKTIKER in respect of the following services: "retail trade in building, home improvement, gardening and other consumer goods for the do-it-yourself sector". The application was refused by the German Patent and Trade Mark Office on the ground that "retail trade" was not an independent service of autonomous economic significance in respect of which it was possible to register a trade mark. The applicant appealed to the Bundespatentsgericht, which referred to the ECJ certain questions of interpretation of the Trade Marks Directive.

16. With regard to the meaning of "services", the Court held as follows:

"27. Under Article 1, the directive applies to 'every trade mark in respect of goods or services'.

28. It does not contain a definition of 'services', which Article 50 EC describes as 'normally provided for remuneration'.

29. Nor does it specify the conditions to which registration of a trade mark for a service is subject, where such registration is provided for by national legislation.

30. In that regard, it should be noted that the fifth recital in the preamble to the directive states that Member States remain free to fix the provisions of procedure concerning the registration of trade marks, in order, for example, to determine the form of registration procedures. The seventh recital nevertheless emphasises that attainment of the objectives sought by the approximation of laws requires that the conditions for obtaining a registered trade mark be, in general, identical in all Member States.

31. However, determination of the nature and content of the service eligible for protection by a registered trade mark is subject, not to the provisions on registration procedures, but to the substantive conditions for acquiring the right conferred by the trade mark.

32. If the concept of 'services' were a matter for the Member States, conditions for the registration of service trade marks could vary according to the national legislation concerned. The objective that acquisition of the right in the trade mark should be subject to 'conditions … identical' in all Member States would not be attained.

33. It therefore falls to the Court to supply a uniform interpretation of the concept of 'services' within the meaning of the directive (see, by analogy, Joined Cases C-414/99 to C-416/99 Zino Davidoff and Levi Strauss [2001] ECR I-8691, paragraphs 42 and 43).

34. In that regard, it should be noted that the objective of retail trade is the sale of goods to consumers. That trade includes, in addition to the legal sales transaction, all activity carried out by the trader for the purpose of encouraging the conclusion of such a transaction. That activity consists, inter alia, in selecting an assortment of goods offered for sale and in offering a variety of services aimed at inducing the consumer to conclude the abovementioned transaction with the trader in question rather than with a competitor.

35. No overriding reason based on the directive or on general principles of Community law precludes those services from being covered by the concept of 'services' within the meaning of the directive or, therefore, the trader from having the right to obtain, through the registration of his trade mark, protection of that mark as an indication of the origin of the services provided by him.

36. That consideration is illustrated by the Explanatory Note to Class 35 of the Nice Classification, according to which that class includes 'the bringing together, for the benefit of others, of a variety of goods … enabling customers to conveniently view and purchase those goods'.

37. With regard to Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), it must be observed that OHIM now accepts that the services provided by retail undertakings are, as such, eligible for registration as Community trade marks and that they will fall under Class 35 of the Nice Classification (see Communication No 3/01 of the President of [OHIM] of 12 March 2001 concerning the registration of Community trade marks for retail services).

38. Moreover, it must be noted that, firstly, all the parties concerned which have submitted observations to the Court have accepted that at least certain services provided in connection with retail trade can constitute services within the meaning of the directive and that, secondly, according the information before the Court, such an analysis underlies a practice now widely adopted in the Member States.

39. Consequently, it must be concluded that the concept of 'services' within the meaning of the directive includes services provided in connection with retail trade in goods."

23. Thus, the Court referred at [28] to the definition of "services" in Article 50 of the EC Treaty, and noted that this states that they are "normally provided for remuneration". The Court went on at [33] to say that it fell to the Court to supply a uniform interpretation of the concept of "services" within the meaning of the Directive, and to hold that retail services fell within that definition. Mr Arnold submits that the Court did not expressly hold that for a service to be within the Directive it has to be one which is "normally provided for remuneration", and there was no reason why the meaning of services in the Directive should be so constrained. Mr Edenborough submitted that the Court was holding, by implication, that services must normally be provided for remuneration.
24. In my judgment, "services" within the Trade Marks Directive and the Trade Marks Act must be of the kind that are "normally provided for remuneration". Firstly, given that the Directive is made pursuant to the Treaty, it would be surprising if the services to which the Directive applied were a wider category than those regulated by the Treaty itself. Secondly I think that it is implicit in the judgment of the ECJ in Praktiker that the court regarded the definition of services as including the restriction drawn from Article 50 of the Treaty. Thirdly the opinion of Advocate General Léger in Praktiker at paragraph 53 (quoted below) supports that view, making the contrast between eligible services and services provided on a purely disinterested basis. Lastly, I think there is force in Mr Edenborough's submission for the Registrar that one would not expect legislation concerned with trade marks to afford protection to activities which are wholly altruistic, as opposed to those undertaken, at least in some way, by way of trade.
25. Thus, like Mr Abraham, I proceed on the basis that, to be registrable, services must be of the kind "normally provided for remuneration".

Q2. Are the Services normally provided for remuneration?

26. Mr Abraham dealt with this question in the following way:

"In this case, where the specifications in question appear to simply describe the 'placement' or 'arrangement' of third-party service providers within a physical or virtual environment … I cannot see how those specifications reflect the provision of a service whose remuneration would actually take place."

27. It is true that the activity of a shopping centre operator of bringing together a variety of retail outlets is not one which would be separately itemised on an invoice. But I do not think that the exercise of determining whether an activity is of a kind "normally provided for remuneration" requires this sort of analysis. In paragraph 53 of the opinion in Praktiker the Advocate General said this:

"Furthermore, I agree with all the interveners and the Bundespatentgericht in taking the view that these services, even if they are not separately invoiced, may nevertheless be deemed to be provided for remuneration because they are supplied in order to promote the sale of certain goods and not on a purely disinterested basis, and their cost to the retailer is recovered in his profit margin on the sale of the goods themselves. Consequently it may be concluded that the requirement laid down by Article 50 EC that services are to be provided for remuneration is fulfilled, and reference to this is justified when interpreting the Directive, taking account of its aim of promoting, inter alia, the free movement of services between the Member States."

28. Those remarks were made in connection with the trade of a retailer, but if one asks a similar question in relation to the trade of a shopping centre operator, I think one comes to a similar conclusion. The shopping centre operator provides a mix of retail outlets and other facilities such as restaurants, bars, cafes and cinemas in an appropriate ambience, coupled with other common services such as those I have described above. That is part of the trade of the shopping centre operator. In terms of Article 50 of the EC Treaty, the activities are "of a commercial character", in my view placing them beyond doubt within the definition of "services" in the Treaty, and therefore in the Directive and the Act. The operator may be remunerated in a manner which is directly related to the custom which it attracts, but, even if that is not so, the Services are not provided in a purely disinterested way.
29. Mr Edenborough submitted that Services are not correctly characterised as "normally provided for remuneration" if the payment is made by a party who is not receiving the benefit of the services. For my part I do not think that the definition of services uses the notion of remuneration as anything other than a way of identifying the type of services eligible for protection. I do not believe it to be concerned with any particular manner of remuneration. I therefore do not think it is legitimate to read into the definition of services a further requirement as to the manner in which the remuneration is paid. The services provided by a doctor do not cease to be "services" if they are provided under the National Health, or under a contract of health insurance.
30. Accordingly, I hold that the Services are "normally provided for remuneration".

Q3. Do operators of shopping centres provide the Services?

31. In Praktiker, at [34], the ECJ held this about the retail trade in goods:

"That trade includes, in addition to the legal sales transaction, all activity carried out by the trader for the purpose of encouraging the conclusion of such a transaction. That activity consists, inter alia, in selecting an assortment of goods offered for sale and in offering a variety of services aimed at inducing the consumer to conclude the abovementioned transaction with the trader in question."

32. Mr Arnold says there is an analogy with the services a shopping centre operator provides. He puts it in this way in his skeleton argument:

"Just as a shop selects an assortment of goods offered for sale and offers various services aimed at inducing the consumer to purchase goods from that shop rather than a competitor's shop, so too does a shopping centre select an assortment of shops, restaurants, cinemas etc and offer various services aimed at inducing the consumer to purchase goods and services from outlets in its centre rather than those in a competitor's centre."

33. Mr Arnold points to what he says is an inconsistency in Registry practice. Practice Amendment Notice 6/05, which followed Praktiker, specifically lists as acceptable "department store services connected with the sale of [various products]". He relies on the case of a department store trading under an overall mark, but which contains numerous franchises operated by others. He says that there is no distinction in principle between a department store operating in this way and a shopping centre. The department store is encouraging the customers to conclude transactions with any of the retailers within the store.
34. At [25]-[26] of his decision, Mr Abraham rejected the analogy based on the reasoning in Praktiker. Mr Abraham said this:

"By comparison to the Praktiker case, the specifications claimed by application number 2417145B appear to have far less of a direct connection with the selection and purchasing of goods."

35. Mr Edenborough supported the reasoning of Mr Abraham in a number of ways. Firstly he said that there is no commercial connection between the operator of the shopping centre and the trade in the goods in question. This, he said was inconsistent with the essential function of a trade mark. He submitted that a member of the public would not perceive that any money he is paying will go to the shopping centre operator for the provision of the centre itself. Secondly he submitted that adapting the retail services phraseology ("the bringing together of a variety of goods") from Praktiker to the present case ("the bringing together of a variety of retail outlets") was inappropriate because it "misses the heart of the retail services that the ECJ found to be protectable, namely the services provided by the trade mark holder intended to encourage transactions with a particular trader."
36. I agree that the connection between the shopping centre operator and the selection and purchasing of goods is different from the connection between a retailer and the selection and purchasing of goods. But that does not mean that the operators of shopping centres are not providing services within the meaning of the legislation.
37. It is clear from illustrative material which I have referred to above that shopping centres are increasingly branding their activities. Consumers have a choice as to the shopping centre to which they will go and at which they will spend their money, and they will distinguish between them by use of the shopping centre's brand. The "transaction" which the shopping centre is encouraging by use of its mark is not so much the conclusion of any individual transaction with one retailer in its stores as opposed to another, but the conclusion of transactions within its shopping centre as opposed to that of its rival shopping centres. In order to encourage that transaction the shopping centre operator does all he can to make the shopping centre as a whole an attractive place for the consumer to come and spend money. In that manner the operator generates a goodwill associated with the name or mark under which the shopping centre trades. To that extent, the shopping centre operator is providing services. To that extent also, the trade mark of the shopping centre is fulfilling its essential function, that is to say it is distinguishing the services of one undertaking from those of another and guaranteeing the origin of services to which the mark is applied. The analogy with a department store, though not exact, is persuasive.
38. I can accordingly see no reason in principle why it cannot be said that a shopping centre operator is providing the Services.

Q4. Is the nature of the Services sufficiently clearly indicated?

39. Rule 8(2)(b) of the Trade Mark Rules 2000 provides that

"Every application shall specify … the goods or services which are appropriate to the class and they shall be described in such a way as to indicate clearly the nature of those goods or services and to allow them to be classified in the classes specified in Schedule 4".

40. There is no dispute as to the purpose which underlies the rule. In trade marks as with any other statutory monopoly it is essential that the rights granted are sufficiently clear. In particular, in the case of trade marks, the purpose of the rule is to enable (a) the granting body to ensure that it complies with the absolute and relative grounds of objection; (b) to allow third parties to know the scope of the right granted and (c) to allow the registration to be confined to the area in which there will be or has been use.
41. Mr Abraham held the Appellants had failed to comply with this rule for a number of reasons.
42. First, at [29], Mr Abraham held that the fact that he was unable to see how the Services were provided for remuneration reflected the specification's inability to meet the criteria in rule 8(2)(b). I think Mr Abraham was in error here. The questions of, firstly, whether the Services are provided for remuneration and, secondly, whether they are sufficiently clearly defined are quite separate questions, and need to be dealt with as such.
43. Secondly, at [30] Mr Abraham held that the definition of the Services "do[es] not clearly indicate the nature of any service provided". His view was that, although it was clear from the material on file (rather than the specification of services) that the applicants did provide services such as car parks and crèches, the specification itself was neither accurate not sufficiently clear. He was of the view that what should have happened is that the applicants should have filed more limited and reworded specifications. In those circumstances it would be likely that some of the services would have been more suitable to other classes.
44. Mr Arnold submits that the definition of the Services accords with that allowed for retail services in Praktiker, where the Court said:

"49.       In those circumstances, for the purposes of registration of a trade mark covering services provided in connection with retail trade, it is not necessary to specify in detail the service(s) for which that registration is sought. To identify those services, it is sufficient to use general wording such as 'bringing together of a variety of goods, enabling customers to conveniently view and purchase those goods'.

50. However, the applicant must be required to specify the goods or types of goods to which those services relate by means, for example, of particulars such as those contained in the application for registration filed in the main proceedings (see paragraph 11 of this judgment)."

45. Mr Arnold also draws attention to the fact that the Services are defined in a manner which is very similar to that said to be acceptable for retail services in Practice Amendment Notice 6/05.
46. It will be recalled that the opening section of the specification is in these terms:

"The bringing together for the benefit of others, of a variety of retail outlets, entertainment, restaurant and other services, enabling customers to conveniently view and purchase goods and services and make use of such facilities in a shopping centre or mall;

47. I think that, subject to the matters I deal with hereafter, the wording of the specification is sufficiently clear to capture the services of a shopping centre operator.
48. Mr Edenborough criticised certain parts of the definition. He identified the following problems:

(a) Who are the "others" that purportedly benefit from these Services?

(b) What are the "other services" that are being brought together?

(c) The term "such facilities" is imprecise, because it is based upon imprecise foundations.

(d) The term "following types of goods" is too wide in its scope.

(e) The phrase "entertainment, restaurant and other services" is not based upon any specified goods (which the first part of that section purports to define and delineate), and the term "other services" is inherently imprecise.

(f) The clause "to conveniently view and purchase goods and services" is imprecise, because it is based upon imprecise foundations as those services are not defined.

49. I think objections (b), (c), (e) (to the extent it complains of "other" services) and (f) are justified. I do not see any problem with (a) as there is no need to specify the classes of persons to whom the services are provided. Objections (d) and the first part of (e) are only good if the classes of goods or services respectively are imprecise, which they are not.
50. Objections (b), (c), the second part of (e) and (f) are, however, quite separate objections to, or at least far more specific objections than, those raised by Mr Abraham. They are not the subject of any Respondent's notice. The objections go to the fringes of the applications and not the core, and could in principle be remedied. For example, I think the phrase "and other services" is too broad and non-specific, as is the phrase "such facilities" which renders it unclear what facilities are being referred to.
51. It seems to me that if I am to allow these more specific objections to be raised at all, I must allow the applicants the opportunity to amend to overcome them. I think that Mr Abraham was wrong to refuse the applications as a whole on the rule 8(2)(b) ground.

Conclusion and further steps

52. I have come to the conclusion that I should allow the appeal and remit the case for the specification of goods to be limited to meet the findings in my judgment. I should point out, in fairness to Mr Abraham, that he was faced with deciding the case without the benefit of the extended oral argument which I have heard, or indeed any oral argument at all.
53. I was invited to consider whether I should refer some of the questions I have considered to the European Court of Justice. I have been able to reach a decision without doing so. It does seem to me that very many trade mark cases involve a point of law on which it is possible to surmise that reasonable minds might differ, and this case is one such. Because trade mark law is now governed by the directive, almost all such points would be eligible for referral. Nevertheless, it is not necessary or desirable, or even practical, for every such point to be referred from a court which is not a court of ultimate resort. It seems to me that the guidance given in Praktiker, whilst on a strict view limited to retail services, is general enough to make it unnecessary to put the parties to the expense and delay of a reference.

Note 1   All three applications in this case are so-called “divisional applications” having been divided out of other applications to enable this point to be decided without holding up other parts of the original application which might expect a smoother passage: see Section 41 Trade Marks Act 1994.    [Back]

Note 2   This is the form in which it is agreed the specification should appear on the Register, although at the time of the hearing, due to an oversight, it was incorrectly recorded. Nothing turns on the precise form.     [Back]