Mr Justice Vos:
- F C Frost Limited, the Defendant, is a company that was started by a Mr Frederick Charles Frost and his wife in 1971. In the broadest outline, its case is that it has traded since then in the UK selling drainage products and washroom products. It operates a slightly unusual business model in that it obtains most of its business from architects and interior designers, who specify the Defendant's products, often for major building projects. The building contractor or, more normally, a sub or sub-sub-contractor, is then required to place an order for and purchase the Defendant's specified products in order to fulfil its contract. The Defendant has used certain signs, logos and names over its 42-year business career, but those that are in issue in this case are predominantly "FC Frost", "Frost" and "Watrous". The latter sign or name ceased to be used by the Defendant in about 2004.
- The Claimant is Frost Products Limited, a Canadian corporation, which also sells washroom products, but it is and always has been based near Toronto in Canada. The Claimant says that it started trading as long ago as 1929, and was known for many years as Frost Metal Products Limited. It has made various attempts to enter the UK market, starting as long ago as the 1970s. As will later appear, none of these attempts have been conspicuously successful and it is conceded by the Claimant that its actual sales in the UK have been modest. The Claimant has for many years used the trading name "Frost" which appears inside an oval on many, if not most, of its products.
- In this action, the Claimant seeks to protect a Community Trade Mark numbered 007 320 542 relating to the word "Frost" in relation to classes 6, 21 and 34 (the "Claimant's Mark"). The Claimant filed the Claimant's Mark for registration on 16th October 2008.
- Classes 6, 21 and 34 are as follows:-
|Safety grab bars made of metal
bathrobe hooks made of metal
|Ash receptacles not of precious metal.
sanitary napkin and condom
paper towel dispenser and waste receptacle
combination toothbrush and tumbler holders
combination soap holders and safety grab bars
- After the Claimant registered the Claimant's Mark, on 18th December 2009, the Defendant filed for registration 8 UK trade marks numbered as follows and in relation to the following words: 2 534 808 (Frost start), 2 534 813 (Frost signature), 2 534 867 (Frost Washroom), 2 534 868 (Frost vision), 2 534 871 (Frost bespoke), 2 539 115 (frost start (word and device)), 2 539 117 (frost Signature (word and device)), and 2 539 119 (frost bespoke (word and device)) (the "Defendant's Marks").
- The primary question in this case is whether the Claimant's Mark is valid. It is suggested it is not for two main reasons. First, because as at 16th October 2008, the Defendant could successfully have sued the Claimant for an injunction to restrain its use of the word "Frost" in relation to the sale of washroom products, and secondly because it is said that the Claimant was acting in bad faith when it filed its application for the Claimant's Mark.
- If the Claimant's Mark is valid, subsidiary questions arise as to whether the Defendant can be enjoined from using what it claims to be its own name, namely "Frost", whether the Defendant has infringed the Claimant's Mark, and whether the Defendant's Marks are invalid.
- The main areas of argument have revolved around the questions of whether the Defendant would have had any or any sufficient goodwill or reputation in washroom products to have brought a passing off action in 2008, whether the sign "Frost" was of more than mere local significance, and whether it could properly be regarded as the Defendant's own name.
- I shall deal with these questions in due course, but first I shall set out the relevant chronological background, the issues, and a brief description of the evidence that was advanced at the trial, and the applicable EU and UK legislation. Despite the fact that this is a Patent County Court case, I have been provided with no less than 17 bundles of documents and authorities. In the circumstances, the parties and junior counsel did well to complete the initial evidence and argument in 1½ court days. As will appear in due course, I invited further argument on certain issues arising under articles 8(4) and 111 of the Council Regulation of 20th December 1993 on the Community Trade Mark, 40/94/EEC (the "CTMR"), at which point both sides instructed leading counsel.
- In 1929, the Claimant's business was begun.
- In 1962, Mr R Warren Biggar, the father of the present Vice President, Mr James (known as 'Jay') Biggar ("Mr Biggar") purchased the Claimant company.
- On 16th November 1971, the Defendant company was incorporated by Mr Frederick Charles Frost and Mrs Daphne Maureen Frost. The Defendant alleges that it first used the name "Frost" from that date.
- On 27th September 1988, the Defendant filed a UK trade mark in the name of "Watrous" for registration at the UK IPO.
- On 25th February 1997, the Defendant's first website at www.fcfrost.com was registered. It went live later in 1997.
- On 1st January 2005, the Claimant entered into a written sales representation agreement with Robert Sherwood Agencies of Stansted in Essex in respect of the UK, Ireland and Europe.
- In November 2005, the second version of the Defendant's website at www.fcfrost.com went live.
- In October 2007, the third version of the Defendant's website at www.fcfrost.com went live.
- On 12th June 2008, the Defendant registered with the UK IPO a series of product design rights numbered 4007945 to 4007990.
- On 17th September 2008, Mr Biggar of the Claimant wrote to Ms Caroline Ryan of Perrem Design Hardware in Dublin ("Perrem"), saying that the Claimant was "very interested" in working with Perrem "as our representative and distributor in Ireland", and "[w]e look forward to working together and developing a strong long term business relationship".
- On 16th October 2008, the Claimant filed for registration the CTM number 007 320 542 in relation to classes 6, 21 and 34 (the "Claimant's Mark")
- On 26th June 2009, Mr Biggar wrote to Perrem saying: "Frost has just recently received full Brand, Copyright, Logo Rights and Protection for UK and Europe. We are interested in aggressively expanding our distribution network and presence in UK and Europe. Are you able to open Ashford Heating and other dealers in the UK? Will you be purchasing for these dealers and redistributing to them? ... Are there trade shows or Industry magazines we should participate in to gain market exposure? Can you recommend a company like yourself in Europe that can help us [develop] a distribution network?"
- On 1st July 2009, Perrem wrote to Mr Biggar of the Claimant saying: "To answer your questions; Yes, we can get companies in the UK to come on board as Frost dealers and I believe this is a crucial factor to build Frost as a successful brand there. The same will apply in other European countries. We would like to discuss with you the best way to service these markets, but in short we would like the opportunity to act as agent for Frost in the UK and mainland Europe and we have the right connections in mainland Europe to develop the distribution network there also. … I would like to come back to you very soon with a proposal and a business plan for your consideration …".
- On 7th August 2009, the Claimant's Mark was granted.
- On 18th December 2009, the Defendant filed the Defendant's Marks for registration at the UK IPO.
- On 14th January 2010, the Defendant launched a new generation of marketing materials using the name "Frost". Also in January 2010, the fourth version of the Defendant's website at www.fcfrost.com went live.
- On 18th July 2012, the Claimant issued its claim form saying that "[t]he Claimant is the owner of a Community Trade Mark being infringed by the Defendant". The Particulars of Claim alleged:-
i) Infringement of the Claimant's Mark by:-
a) using in the course of trade a sign identical with the Claimant's mark in relation to goods identical to those for which the Claimant's Mark is registered contrary to article 9(1)(a) of the CTMR;
b) causing confusion in the marketplace contrary to article 9(1)(b) of the CTMR.
ii) That the Defendant's Marks were invalid under sections 47 and 5 of the Trade Marks Act 1994 (the "TMA 1994") on the grounds that there was an earlier mark that is identical for identical goods and/or there is a similar mark for identical or similar goods, for which there is a likelihood of confusion including a likelihood of association.
- On 12th September 2012, the Defendant served its defence and counterclaim alleging, amongst other things, that the Defendant had common law rights in and relating to the name "Frost", and that the Claimant's Mark was applied for in bad faith knowing of the Defendant's earlier rights, and that it was devoid of distinctive character.
- On 13th December 2012, HHJ Birss QC gave directions for trial outlining the issues to be considered at that trial.
- On 2nd January 2013, Mr Biggar of the Claimant emailed Perrem asking for a letter of support in relation to this claim saying: "[i]t has recently come to our attention that [the Defendant] has now introduced a line of commercial washroom accessories that is very similar to ours. We believe this has clearly infringed our registered brand protection rights".
- On 3rd January 2013, Perrem wrote to Mr Biggar addressed "To whom it may concern" saying: "[Perrem] have been the [Claimant's] agent for Ireland and the UK since 2008. We promote the [Claimant's] range under this brand name in the market and the [Claimant's] products are synonymous in the industry for commercial washroom products and accessories and good quality and design. [The Defendant] are a drainage products company and to sell washroom products also under this name will create confusion in the market place and damage the name and hard work already done over the past number of years to [the Claimant's] products brand".
- On 26th June 2013, Warren J dismissed the Claimant's application to strike out the Defendant's reply evidence.
- When the case began, I provided counsel with a list of the issues that I thought the court needed to decide. With some amendments, these issues were broadly agreed as follows:-
i) Issue 1: Whether the registration of the Claimant's Mark should be declared invalid under article 8(4) of the CTMR on the ground that the Defendant could have prohibited the use of the name "Frost" in the course of trade by an action for passing off against the Claimant as at 16th October 2008? This issue raises the following 5 subsidiary questions as at that date:-
a) Issue 1a: Whether the Defendant had an established reputation and associated goodwill in the name "Frost" in relation to the sale of washroom products?
b) Issue 1b: Whether the Defendant's sign or name "Frost" was used in the course of a trade of more than mere local significance within the meaning of article 8(4)?
c) Issue 1c: Whether, had the Claimant used the Claimant's Mark, it would have thereby misrepresented or threatened to misrepresent to the public such that its conduct was leading or likely to lead the public to believe that its goods were the goods of or associated with the Defendant?
d) Issue 1d: Whether the Defendant would have suffered or was likely to have suffered damage by reason of that erroneous belief engendered by the Claimant's misrepresentation?
e) Issue 1e: Whether, the Claimant could have been prevented from using the word "Frost" by injunction?
ii) Issue 2: Whether the Claimant was acting in bad faith when it filed the application for the Claimant's Mark within the meaning of article 52(1)(b) of the CTMR?
iii) Issue 3: If the Claimant's Mark is valid, can the Claimant prevent the Defendant's use of the name "Frost" in relation to its products as its "own name" under article 12(a) of the CTMR?
iv) Issue 4: If the Claimant's Mark is valid, has the Defendant infringed it on the basis that either:-
a) its sign is identical to the Claimant's Mark and is used in relation to goods or services similar to those for which the Claimant's Mark is registered, under article 9(1)(a) of the CTMR; or
b) its sign is similar to the Claimant's Mark and is used in relation to goods or services identical with or similar to those for which the Claimant's Mark is registered, and there exists a likelihood of confusion on the part of the public which includes the likelihood of association with the Claimant's Mark under article 9(1)(b) of the CTMR?
v) Issue 5: If the Claimant's Mark is valid, whether the Defendant's Marks are invalid on the ground that:-
a) The Defendant's signs are identical to the Claimant's Mark and are registered for goods similar to those for which the Claimant's Mark was protected under sections 47(2)(a) and 5(2)(a) of the TMA 1994; or
b) The Defendant's signs are similar to the Claimant's Mark and are registered for goods identical to or similar to those for which the Claimant's Mark was protected and there exists a likelihood of confusion on the part of the public which includes a likelihood of association with the Claimant's Mark under sections 47(2)(a) and 5(2)(b) of the TMA 1994?
The Claimant's evidence
- Mr James Biggar was the only witness for the Claimant. He is a Vice President of the Claimant company in Canada. He has worked for the Claimant since 1978, when he was 19.
- Mr Biggar's witness statement identified 5 instances of confusion resulting from the Defendant's alleged inappropriate use of the "Frost":-
i) On 16th March 2012, Mr Terry Holden of Howard Brothers, a UK company, wrote to the Claimant asking whether it could supply the Defendant's product numbers.
ii) On 20th March 2012, Ms Jane Marshall of Deckers Ltd. wrote to the Claimant seeking parts and general information, appending product photos for the Defendant's products.
iii) On 25th April 2012, Mr David Ashton, a UK based architect, wrote to the Claimant's email address speaking of a stalled UK building project and enclosing product specifications including the Defendant's products.
iv) On 1st August 2012, M Marc Boidron of Ets Lapize de Sallee in France asked the Claimant for a price of a product with the Defendant's product number.
v) On 18th October 2012, M Andy De Pré of Omer Deloof NV in Belgium wrote to the Claimant asking whether it could supply the Defendant's product numbers.
- Mr Biggar's evidence was that the Claimant has no system for monitoring trade mark applications in the UK, but does have a system for monitoring trade mark applications at the Office for Harmonisation in the Internal Market (Trade Marks & Designs) ("OHIM"), but nevertheless was unaware of all the Defendant's applications.
- Mr Biggar said that the Claimant's trade is washroom or toilet room products of a sanitary nature and ancillary products. The Claimant tends to sell to suppliers of building services and builders, and its consumers are the installers of washrooms.
- When Mr Biggar came to give oral evidence, he was, I am afraid to say, somewhat less than impressive. He had in his mind a case theory, which he often returned to, without adequate regard to the facts with which he was confronted. He said, for example, that he had no knowledge of the fact that the Defendant had traded in washroom products in the UK since at least 1980. It was quite clear to me that he was fully aware of that fact at the time he gave evidence.
- Mr Biggar explained that the Defendant had come to his attention from their website in the late 1990s, because the two companies had a similar name. His view at that time was that nothing needed to be done because the Defendant traded in drainage products, but he decided to watch what the Defendant was doing periodically. He had made no attempt to obtain the Defendant's brochure at that time. Had he done so, he accepted that it would have been readily apparent that the Defendant was already trading in washroom products.
- Mr Biggar regularly repeated his mantra that he had only got to know in 2010 that the Defendant had introduced a new washroom accessory line. I am afraid to say that, for a number of reasons, I was unable to accept that evidence.
- Mr Biggar was asked about the Claimant's trading with Bowater Scott in the UK in the 1970s. It appeared from his re-examination that he had visited the UK with his father on a Canadian government funded trade mission in 1979 or 1980, and they had visited Kimberley Clark and Bowater Scott, and discussed towel dispensers and tissue dispensers with them. He agreed that the actual trading with Bowater Scott was before his time, and that the Claimant can produce no invoices of its sales. The Claimant's internal production log books for March 1972 showed that it was providing samples of folded towels to Bowater Scott. Mr Biggar said that the Claimant had made three sizes of towel cabinets for them.
- As for the Claimant's more recent trade in the UK, it became clear in cross-examination that this was extremely limited. The Claimant had no UK customer after Bowater Scott until January 2005, when it entered into a sales representation agreement with Robert Sherwood Agencies from Stansted in Essex, when Mr Sherwood visited the Claimant in Canada. The agreement purportedly covered "UK, Ireland and Europe". Mr Biggar accepted that, although the Claimant had had high hopes for this agreement, they only sold a few thousand pounds worth of products. The first order in December 2006 worth C$1,389.75 was shipped to an address in Canada. A further order in July 2007 worth C$190.80 was addressed to a UK address but the invoice states "must be in Toronto by 26th July". 5 subsequent orders between 29th January 2008 and 6th April 2009 totalled some C$6,000, and all, save one, was sent to the same customer: "Better Living Products UK Limited", a company which seems to have had an outlet in Ontario. Ultimately, Mr Sherwood was dropped based on his poor performance.
- Mr Biggar was asked about his 17th September 2008 letter to Perrem saying that the Claimant was "very interested" in working with Perrem "as our representative and distributor in Ireland". Perrem remains the Claimant's agent in Ireland. Perrem was never granted a trade mark licence by the Claimant.
- Before the Claimant applied for its CTM on 16th October 2008, it seems to have only fulfilled one non-sample order by Perrem for goods worth C$496.00. Thereafter, the trade seems to have been almost as thin. Mr Biggar accepted that the Claimant's sales through Perrem and Robert Sherwood Agencies were "the extent of our sales into Europe".
- Mr Biggar was asked about Perrem's email of 1st July 2009, and accepted that Perrem was recognising the fact that the Claimant's brand had not been built in the UK by 1st July 2009.
- Mr Biggar said that the Claimant had made a verbal distribution agreement with Relcross in Devizes, Wiltshire in or around 2012, but had not granted them a trade mark licence.
- Mr Biggar accepted in cross-examination that it was his position, having seen the documents, that the Defendant was a facilitator supplying services rather than products. He said this despite also saying that he had read the numerous testimonials from architects and others with whom the Defendant has dealt over many years. Again, I found Mr Biggar's evidence impossible to accept. When challenged he suggested that he had been talking about the Defendant's manufacturing capability. I reject that evidence.
- After some debate, Mr Biggar was forced to admit that the documentation showed that the Defendant had indeed been supplying washroom products under its Frost brand in the UK since 1980. He also accepted that the items in class 21 for which the Claimant's Mark had been registered covered the items that the Defendant had been supplying. Mr Biggar had not mentioned the Defendant's business to the Claimant's trade mark attorneys, but he agreed it would have been sensible if he had.
- Ultimately, Mr Biggar denied that he had deliberately turned a blind eye to the Defendant's washroom products business, that he had chosen not to find out more about it, and decided that he would steal a march on the Defendant once it was discovered the Defendant had no registered trade mark. I formed the view that Mr Biggar had done all these things that he denied.
- Mr Biggar was then asked about the evidence that he had put forward in his witness statement as to confusion. He accepted that he needed to show that people were confusing the Defendant for the Claimant's business, rather than the other way round. If people were in fact confusing the Claimant's business for that of the Defendant, that did not help the Claimant's case.
- Mr Biggar was shown Mr Holden's statement, and accepted that he had not contacted him. It was clear that Mr Holden had confused the Claimant's business for that of the Defendant. He complained that the Claimant had not put him right.
- Mr Biggar did not know whether any of the other allegedly confused persons had been contacted by the Claimant's customer service staff, but he had not done so. It was put to him that all the incidents of confusion were in fact "reverse confusion" i.e. a person thinking he was dealing with the Defendant, but ending up enquiring of the Claimant in error. Mr Biggar said that there was confusion both ways. I do not think so.
- Finally, Mr Biggar said in re-examination that he had not in fact read the Defendant's testimonials before he gave evidence, when he had said the opposite in cross-examination. I quizzed him about this inconsistency, and he maintained that he had not read them. I am afraid I did not believe him – if he had not read them, he knew perfectly well what they said, and chose, as in so many parts of his evidence, to close his eyes to the true facts.
The Defendant's evidence
- The Defendant sought to rely on a number of what were termed "testimonials" from its customers. Those writing the testimonials were not called to give evidence. Although Mr Ashley Roughton, junior counsel for the Claimant, did not object to my looking at these testimonials, he did argue that they should not be given as much weight in the circumstances, a submission which I accept. I also, however, accept Ms Denise McFarland's, junior counsel for the Defendant, reason for not calling these people, which was that this was supposed to be a quick and simple Patent County Court matter, which would have been much extended if all these people had been required to come along to give evidence.
- Before dealing with the Defendant's live evidence, I shall summarise the more important points from the testimonials as follows:-
i) Ms Annette Main, technical librarian of Rogers Stirk Harbour + Partners said: "[t]o those in our practice the name "Frost" in relation to washroom equipment would be identified with FC Frost Ltd. and no-one else".
ii) Mr Simon Gazzard of Paul Davis & Partners Architects said: "I have dealt personally with FC Frost Limited commonly known to me and colleagues in the practice as "Frosts" on various projects in the past. ... FC Frost Ltd/Frosts have been long established in the UK Washroom sector for decades occupying a high profile position within that specialist sector. ... To my knowledge there has only been one business called or identified as "Frost" in the UK washroom sector and that is FC Frost Ltd, well known for their customised and standard premium products".
iii) Mr Mark Sutcliffe of Foster + Partners wrote that he could: "confirm that Foster + Partners know of FC Frost Limited (Frost) as a supplier of commercial washroom equipment in the UK and elsewhere...and have had regular dealings with Frost over the last 25 years or more".
iv) Mr Terry Holden of Howard Bros Joinery Limited (to whom Mr Biggar had referred) said that his company had had a long association with "Frost's", but he had tried to contact the Defendant to place an order in error at an email address of the Claimant (info@frostproductsltd). The Claimant's reply did not tell him that he had contacted a Canadian washroom company, and he was led to believe he was dealing with the Defendant. Mr Holden thought that the Claimant was using the name "Frost" in order to confuse contractors and convert work intended for the Defendant.
v) Mr Timothy Eavis, a senior associate in HOK says: "FC Frost Ltd, also known as Frost's for short, is well known to me and within our wider practice. Frost's are well known within the speciality washroom sector and work with architects and interior designers …. For the entire period I have known of Frost's (FC Frost Ltd), including my time at Building Design Partnership in late 1980s, where I specified the Watrous product line of Frosts, they are the only firm I have known in the UK washroom market using the name 'Frost'".
vi) Ms Billie Lee of Horden Cherry Lee Architects Limited said: "F.C. Frost Ltd. are well known within the specialist UK washroom sector with a focus on premium projects. I am personally aware that they have undertaken a considerable number of projects with Foster and Partners Architects over a wide time span of many years. … In the washroom sector I immediately associate the name "Frost" or "Frosts" with F.C. Frost Ltd. and not any other organisation".
vii) Mr John Drew, a principal in the international architects' practice of Pringle Brandon Perkins + Will said that he had never heard of the Claimant, and that the only firm he knew in the washroom market using the name "Frost" was the Defendant.
viii) Mr Ron Cheles of Firmdale Hotels said that the Defendant was well known in the UK market as a specialist washroom business, and he had never heard of the Claimant.
- Mr Kevin Frost was the first live witness for the Defendant. He is now the CEO of the Defendant. He is a solicitor by profession, but has had a long connection with the Defendant's business. He was employed full time as Administration Manager and then General Manager between 1994 and 1999, was Company Secretary between 1990 and 1998, and has been a director since 2002. He came back full time into the Defendant's business in 2009.
- Mr Frost said in his statement that the Defendant operates through two distinct divisions as follows:-
i) The first designs and sells metal drainage products including floor drains, roof drains, grease separator equipment and related items. These items are mainly sold to the commercial construction market. Contracts are typically issued by and won from consulting mechanical engineers based on a technical specification, and the sale of the products is to the appointed drainage contractor.
ii) The second division designs and sells washroom products and other architectural products such as customised module systems for large public spaces or concourses. Contracts are issued by and won from architects or interior designers based again on a technical specification, and the sale of the products is the appointed head contractor or a fit out or managing joinery contractor.
- Mr Frost made clear from the exhibited technical marketing literature to his statement that the Defendant has operated in the washroom products market since at least 1994 under the name and logo "Frost", and since 2003 under the logo of "Frost" written as it is today with an emphasised middle "o".
- Mr Frost describes the history of the use of the name and logo "Frost" by the Defendant as follows in his statement:-
"43. The name Frost has been used by the company without interruption since incorporation of the Company in 1971, both in respect of the washroom and architectural products and also the drainage business. The brand has always centred on the "Frost" mark.
44. From incorporation in November 1971 until 1989, for both divisions, the Company has used the simple text mark "frost" on a coloured strip background … and occasionally also using a capital "F", "Frost".
45. In 1989, as part of a modern marketing initiative and the introduction of new catalogue formats, for the washroom and architectural division, the Company carried forward the original 'frost' branding but also incorporated a star [also referred to as a 'sparkle'].
46. In February 2003 the third evolution of the 'frost' mark was launched. It incorporated 'frost' in stylised text with the 'o' emphasised within a blue disc …. This mark had been used on paperclips … from 2001 but only on those items. This mark was used for both the architectural and washroom and drainage divisions. The drainage division of the Company has continued to use the blue disk version of the logo ….
47. In 2007 the fourth evolution of the mark was launched. The mark 'frost' was again in stylised text, with the 'o' emphasised but within a black disc …. A further mark was introduced using the same 'frost' stylised text in a silver disc …. The fourth evolution of the mark was only used by the architectural and washroom division. This mark was applied for on 4 December 2009 and was registered as a trademark on 19 May 2010 ….
48. In 2009 I oversaw the introduction of a new generation of marketing materials for the architectural and washroom division. These were launched in January 2010. This was the fifth evolution of the mark for this division. In short, we carried forward elements in the logo we had been using continuously since 1971, 2003 and 2007 to form our 2009 logo, which remains our logo today.
49. When I returned to the business in 2009 we had many architectural and washroom division products in a variety of different markets and I believed clarification of the existing market sectors would assist both specifiers and contractors. Therefore using our unregistered, core family name, and pre-existing mark of "Frost" as a central theme I created four brand segments each with their own identity. The idea behind this was that each would immediately identify the four different market segments. Each was derived from and continued to incorporate our central historic mark. I regarded this as important in better displaying our existing capabilities although the task was essentially an administrative tidying up exercise. The four sector targeted subsidiary brands that evolved are as follows:
(1) Start – entry level commodity products (former premium products diminished in design appearance terms by the passage of time).
(2) Signature - premium level design washroom products, for the high end niche market.
(3) Vision - top end premium products featuring usage of modern building materials such as glass, Corian, and wood veneers. This creates a unique choice for washroom products where others continue to mass produce commodity level stainless items. This in turn offers a unique and fully customised option to customers in a unique business niche at the top end premium market.
(4) Bespoke - 100% OME design and build service and has operated for the past 41 years".
- In paragraph 27 of his third statement, Mr Frost says this:-
"For the avoidance of doubt I wish to confirm that both the separate architectural washroom and drainage divisions of the business have been in existence since incorporation in November 1971 and that both have operated under the company brand of F C Frost and /or Frost at all material times since then. As the business has expanded its range and in particular since we entered the more "bespoke" market we have used the name or mark Frost and/or F C Frost more extensively, and at different times we have used it embossed or stamped into or onto certain products as well as being only used on packaging, labels, or other business papers and invoices etc. but as a name it is well known in our niche market, and has always been used as both our trading name and style and also as a trade name and mark. Mr Biggar and the Claimant cannot legitimately suggest otherwise".
- Mr Frost said in his statement that the Claimant has had no presence in the UK market save in respect of the odd job every few years. They are, according to Mr Frost, now targeting markets where the Defendant has an established reputation.
- In cross-examination, Mr Frost was asked about the sign or logo on the Defendant's factory that is the simple word "frost". He said that the 'sparkle' had been superimposed by the Defendant's catalogue producers on the photo of the factory used in many editions of the catalogue. That logo was used with the sparkle for both drainage and washroom products between 1971 and 1989.
- Mr Frost described the two stage process of the Defendant's business model. In essence, architects and interior designers approach the Defendant for a washroom specification within the building giving a guide to the contractors tendering for the work. The contractors then approach the Defendant and the successful contractor becomes the Defendant's customer for the washroom products specified.
- Mr Frost was then asked about the "Watrous" brand name for the Defendant's washroom products. He explained that the product line descriptor is "Watrous", but the Defendant company's brand name is "Frost" and "FC Frost". Mr Frost was able to point to the Defendant's brochures over many years dealing with the numerous prestigious projects within the UK employing the Defendant's washroom products. These include the British Library, the Gherkin, the Houses of Parliament, the Bullring, the Millennium Dome and many other landmark buildings in the UK.
- Mr Frost was asked about the Defendant's catalogues printed in 2001, and it was pointed out that the Watrous name was on every page, whilst the Frost and FC Frost names were only on the front and back. Mr Frost said that the branding was "Frost" and the Watrous product name was removed altogether in 2004. Mr Frost explained that that there had been a bespoke part of the business for 41 years, even before Mr Ted Williams joined the Defendant
- It was expressly suggested to Mr Frost, based on some of its publicity materials and the Defendant's contractual terms and conditions that the Defendant wanted to be known as FC Frost, and not as "Frost". Mr Frost's reply was to say that the Defendant wished to be known as, and was commonly known as "Frost". Its trading name was simply "Frost".
- In relation to the Claimant's trading in the UK, Mr Frost said that he had asked his father, Mr Frederick Charles Frost, who is now very elderly, about it in Autumn 2012, and he had said that he had a general awareness of the Claimant in Canada, and its origins, but he was absolutely certain that the Claimant had not been active in the UK market.
- I found Mr Frost to be a reliable and straightforward witness, whose evidence I felt I could accept without reservation.
- The next witness was Mr Daniel Robert Batchford, who was the Defendant's sales executive for the UK washroom market. His evidence concerned the Claimant's business. He says he recalls seeing a specification in 2009 for one of the Claimant's paper towel/bin combinations units, and then again in January 2012. A third time this happened was a specification from Cheeseman Joinery, and Mr Batchford informed them that the product was the Claimant's. This happened on one or two subsequent occasions.
- Mr Batchford was only asked one or two questions by way of clarification of his witness statement.
- Mr David Vine has been employed by the Defendant for 26 years as a warehouseman, and was able personally to confirm that the Defendant had made, sold and supplied washroom products since at least 1987. The goods were supplied with a Frost logo self adhesive label on them.
- In cross-examination, Mr Vine confirmed that the Defendant's customers are the contractors, and that the label affixed to the Defendant's washroom products used the name FC Frost Limited.
- Mr Edward Thomas Williams is the Technical Manager of the Defendant, having been employed by it since 14th January 1980. He has designed and sometimes patented the Defendant's washroom products. In 1980, the Defendant's business was based in Maldon in Essex and employed 15-20 people. There were then the two distinct divisions about which Mr Frost spoke. The business was roughly split 60:40 between washroom and drainage products. In his first statement, Mr Williams explains the nature of the Defendant's washroom products business over the period between 1980 and the present day.
- In his second statement, Mr Williams dealt with Bowater Scott, explaining that its main business in the 1980s was the supply of paper towels, and their plastic dispensers were supplied as part of the deal for the purchase of towels. Mr Williams rebutted the suggestion that the Defendant simply fits or installs washroom products or supplies services, making it clear that its business is as Mr Frost described in supplying specified washroom products.
- Mr Williams was not challenged in cross-examination. He confirmed that the Defendant was the only company in the bespoke market, and that the Claimant could have traded with Bowater Scott without the Defendant knowing about it
The provisions of the Council Regulation of 20 December 1993 on the Community Trade Mark, 40/94/EEC
- Article 8(4) of the CTMR provides as follows:-
"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 Community 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 Community trade mark, or the date of the priority claimed for the application for registration of the Community trade mark;
(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark".
- Article 9(1) of the CTMR provides as follows:-
"1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;
(b) any sign where, because of its identity with, or similarity to, the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;"
- Article 12 of the CTMR provides as follows:-
"A community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:
(a) his own name or address;
Provided he uses them in accordance with honest practices in industrial or commercial matters".
- Article 14 of the CTMR provides as follows:-
"Complementary application of national law relating to infringement
1. The effects of Community trade marks shall be governed solely by the provisions of this Regulation. In other respects, infringement of a Community trade mark shall be governed by the national law relating to infringement of a national trade mark in accordance with the provisions of Title X.
- Article 52(1) of the CTMR provides as follows:-
"A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings: …
(b) where the applicant was acting in bad faith when he filed the application for the trade mark".
- Article 53(1) of the CTMR provides as follows:-
"A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings: …
(c) where there is an earlier right as referred to in Article 8(4) and the conditions set out in that paragraph are fulfilled".
- Article 111 of the CTMR provides as follows:-
"1. The proprietor of an earlier right which only applies to a particular locality may oppose the use of the Community trade mark in the territory where his right is protected in so far as the law of the Member State concerned so permits.
2. Paragraph 1 shall cease to apply if the proprietor of the earlier right has acquiesced in the use of the Community trade mark in the territory where his right is protected for a period of five successive years, being aware of such use, unless the Community trade mark was applied for in bad faith.
3. The proprietor of the Community trade mark shall not be entitled to oppose use of the right referred to in paragraph 1 even though that right may no longer be invoked against the Community trade mark".
The provisions of the Trade Marks Act 1994
- Section 5(2) of the TMA 1994 provides as follows:-
"(2) A trade mark shall not be registered if because—
(a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or
(b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,
there exists a likelihood of confusion of the part of the public, which includes the likelihood of association with the earlier trade mark".
- Section 47(2) of the TMA 1994 provides as follows:-
"(2) The registration of a trade mark may be declared invalid on the ground—
(a) that there is an earlier trade mark in relation to which the conditions set out in section 5(1), (2) or (3) obtain, or
(b) that there is an earlier right in relation to which the condition set out in section 5(4) is satisfied,
unless the proprietor of that earlier trade mark or other earlier right has consented to the registration".
- Before dealing with the issues, it is useful to set out some of the more important authorities in the areas that have formed the focus of the case. Accordingly, I shall deal with the following:-
i) The elements of passing off.
ii) Goodwill and reputation in the law of passing off.
iii) The meaning of "a sign used in the course of trade of more than mere local significance" in article 8(4) of the CTMR.
iv) The meaning of "bad faith" in article 52.1(b) of the CTMR.
v) The "own name" defence in article 12(b) of the CTMR.
The elements of passing off
- Kerly's Law of Trade Marks and Trade Names 15th edition 2011 ("Kerly") recites the "classical trinity" for the definition of the elements of the cause of action in passing off at paragraphs 18-005 to 18-006 as follows:-
"18-005 The "Jif Lemon" case [Reckitt & Colman Products Ltd. v. Borden  R.P.C. 31] is important in at least two respects. First, the House of Lords confirmed that each passing off case depended on its own facts. Secondly, their Lordships reverted to the "classical trinity" for their definition of the elements of the cause of action. Lord Oliver put the matters a successful claimant must prove as follows:
"First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services.
Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to belief that the goods or services offered by him are the goods or services of the plaintiff.
Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff" [at page 406].
18-006 Lord Jauncey stated the principles thus [at pages 416-7]:
"[quoting Lord Langdale] 'a man is not to sell his own goods under the pretence that they are the goods of another man …' Accordingly a misrepresentation achieving such a result is actionable because it constitutes an invasion of proprietary rights vested in the plaintiff. However, it is a prerequisite of any successful passing off action that the plaintiff's goods have acquired a reputation in the market and are known by some distinguishing feature. It is also a prerequisite that the misrepresentation has deceived or is likely to deceive and that the plaintiff is likely to suffer damage by such deception. Mere confusion which does not lead to a sale is not sufficient".
"It is not essential … that the defendant should misrepresent his goods as those of the plaintiff. It is sufficient that he misrepresents his goods in such a way that it is a reasonably foreseeable consequence of the misrepresentation that the plaintiff's business or goodwill will be damaged".
Goodwill and reputation in the law of passing off
- The argument in this case has focussed on goodwill and reputation in the law of passing off. In these circumstances, it is useful for me to deal with some of the more important authorities that the parties have referred to at the outset.
- In Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd  AC 217, Lord Macnaghten said this at page 223:-
"What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates".
- Lord Lindley said this in the same case at page 235:-
"Goodwill regarded as property has no meaning except in connection with some trade, business, or calling. In that connection I understand the word to include whatever adds value to a business by reason of situation, name and reputation, connection, introduction to old customers, and agreed absence from competition, or any of these things, and there may be others which do not occur to me. In this wide sense, goodwill is inseparable from the business to which it adds value, and, in my opinion, exists where the business is carried on. Such business may be carried on in one place or country or in several, and if in several there may be several business, each having a goodwill of its own".
- Recent cases have made clear that reputation and goodwill are not the same. It is as well to remember, as Oliver LJ re-stated in Anheuser-Busch Inc v. Budejovicky Budvar NP  FSR 413 that goodwill cannot exist in a vacuum, whilst mere reputation may exist without any supporting local business. Moreover, reputation does not constitute property which the law protects.
- Kerly said this at paragraph 18-048 about the different kinds of goodwill in the modern age:-
"Identification of the person who benefits from and therefore owns the attractive force which brings in custom is straightforward in the old-fashioned case of a shop selling its own produce. As commerce has grown in complexity and particularly with the advent of the internet, there are myriad ways in which goods reach the ultimate consumer and a number of traders are likely to be involved in that process. In these circumstances, issues can arise as to who is the owner of the relevant goodwill. So far as the provision of services is concerned, there tends, necessarily, to be a somewhat more direct relationship between the provider of the service and the consumer. Even here, modern commercial methods, franchising for example, tend to increase the divide between the owner of the goodwill and the consumer. Likewise with the provision of information over the internet".
The meaning of "a sign used in the course of trade of more than mere local significance" in article 8(4) of the CTMR
- Very little authority on the meaning of the words "more than mere local significance" in article 8(4) of the CTMR was referred to in the course of the first two days of the trial, although it was clear that the parties disagreed as to the proper construction of the article. Ms McFarland argued that, where a domestic passing off claim was in issue under article 8(4), the words "mere local significance" had to be judged against the UK market, since it was only in that market that a passing off claim could be brought. Conversely, Mr Roughton submitted that the words had to be judged against the whole EU market or at least the whole of the territory for which the CTM in question was registered. Both parties referred to Laddie J's judgment in Compass Publishing BV v. Compass Logistics Ltd  RPC 41. This turned out to be a somewhat unfortunate debate, in that ultimately leading counsel for both parties agreed that Laddie J's views in Compass had been superseded by subsequent decisions of the Court of Justice of the European Union ("CJEU").
- In the circumstances, I shall deal only briefly with Compass. In that case, Laddie J was considering a claim for infringement of two UK trade marks and a Community Trade Mark in the business consultancy market. The Defendant argued that it could have brought a passing off claim against the Claimant at the relevant time based upon its goodwill and reputation in the logistics consultancy market in England and Wales. Laddie J decided that the Defendant had built up some goodwill, but its use of its name in England and Wales alone was of no more than mere local significance, so its defence failed. Laddie J focussed on the distinction between article 8(4) and article 111 of the CTMR (previously article 107) which allows the proprietor of an earlier right which applies only in a particular locality to oppose the use of a CTM in the territory where his right is protected (article 111(1)), and prevents his opposing the use of that local right even though it may no longer be invoked against the CTM (article 111(3)). Laddie J's reasoning in paragraphs 52-64 of his judgment is instructive even if now superseded, but in paragraph 56, he summarised the appropriate test as follows: "In summary, it seems to me that a mark should be considered as having mere local significance within the meaning of art 8(4) if its geographical spread is restricted to substantially less than the whole of the European Union and that, from the perspective of the Community market in the services or goods in question, the mark is of little significance. If the prior mark covers the whole or substantially the whole of the Community Market or it is significant there, its Community impact will be too large to ignore and it will invalidate a subsequent application for a conflicting Community trade mark". Laddie J concluded that part of his judgment by commenting on the fact that the defendant had not relied on article 111 of the CTMR. In the course of the initial argument of this case, Ms McFarland for the Defendant also did not expressly rely on article 111.
- After the conclusion of the argument at the trial, I started to prepare my judgment, and realised that the argument on articles 8(4) and 111 of the CTMR had been incomplete. Accordingly, I requested further assistance from Counsel on three points as follows:-
i) Whether the meaning of the words "in the course of trade more of more than mere local significance" in article 8(4) of the CTMR are to be judged by Laddie J's test in Compass supra at paragraph 56 of his judgment in that case, or whether and if so what other test should be applied?
ii) If it were to be determined that the Defendant's trade was not of more than mere local significance, is the Defendant permitted on the basis of the pleadings, and does it seek to rely on article 111 of the CTMR, and if so what is the effect of article 111 on the relief sought in this case?
iii) Can the parties confirm, in the light of the apparent importance of the point on "mere local significance" in this case, that they are not seeking a reference to the CJEU as to the proper meaning of the words "in the course of trade more of more than mere local significance" in article 8(4) of the CTMR?
- It was at this point that both sides instructed their leading counsel. In essence, the Claimant responded as follows:-
i) It did not endorse Laddie J's test, but referred to the further European authorities mentioned below for the propositions that the questions of significance and locality are cumulative conditions, both of which had to be proved, and that these questions must be judged by reference to each territory in which the right to use a sign is protected (i.e. here in England and Wales).
ii) The Defendant was not permitted to rely on article 111 of the CTMR because (a) it was not pleaded, (b) the Defendant has not sought to oppose the Claimant's use of the Claimant's Mark in the UK, and cannot now do so, (c) article 111(3) is only concerned where an article 111(1) right has been established, which the Defendant has not done here, (d) if the Defendant can, nevertheless, rely on article 111(3), it has to prove a right of more than mere local significance under article 8(4) which it has not done.
iii) If there is inadequate guidance from the European authorities a reference to the CJEU should be sought.
- The Defendant responded broadly as follows:-
i) Laddie J was wrong in Compass. The proper test is to be found in CJEU's judgment in Anheuser-Busch infra.
ii) The Defendant can and does rely on article 111 of the CTMR, since no further facts need to be proved, and it has already pleaded its common law rights in the sign or name "Frost". The Defendant would seek permission to amend if necessary. But the effect of article 111(3) is to deny the Claimant any relief.
iii) No reference to the CJEU is sought by the Defendant "at this stage".
- I shall now deal with the important additional authorities that my call for further argument produced.
- In Alberto Jorge Moreira de Fonseca Lda v. Office for Harmonisation in the Internal Market (OHIM) (Joined cases T-318 to T-321/06)  Bus LR D101, the Court of First Instance of the European Communities said this about the meaning of article 8(4) of the CTMR at paragraphs 36-38:-
"36 As regards the interpretation of the condition relating to the significance of the sign in question, according to which that significance must be more than merely local, it must be pointed out first that the rationale of that provision is to restrict the number of conflicts between signs, by preventing an earlier sign, which is not sufficiently important or significant, from making it possible to challenge either the registration or the validity of a Community trade mark.
37 Furthermore, the significance of a sign used to identify specific business activities must be established in relation to the identifying function of that sign. That consideration means that account must be taken, first, of the geographical dimension of the sign's significance, that is to say of the territory in which it is used to identify its proprietor's economic activity, as is apparent from a textual interpretation of Article 8(4) of Regulation No 40/94. Account must be taken, secondly, of the economic dimension of the sign's significance, which is assessed in the light of the length of time for which it has fulfilled its function in the course of trade and the degree to which it has been used, of the group of addressees among which the sign in question has become known as a distinctive element, namely consumers, competitors or even suppliers, or even of the exposure given to the sign, for example, through advertising or on the internet.
38 The relevance of an examination of the economic dimension may be understood through a teleological interpretation of the condition relating to the significance of the sign relied on. Thus, as has already been stated in paragraph 36 above, the purpose of that condition is to restrict the possibilities of conflict to those which may exist with signs which are truly significant. In order to ascertain the actual significance of the sign relied on in the relevant territory, the Court must not therefore confine itself to a purely formal assessment, but must examine the impact of that sign in the territory in question after it has been used as a distinctive element.
39 It follows from the above that, contrary to what the applicant submits, the fact that a sign confers on its proprietor an exclusive right throughout the national territory is in itself insufficient to prove that it is of more than mere local significance within the meaning of Article 8(4) of Regulation No 40/94.
41 For the purposes of Community law, the sign in question is of more than mere local significance in the relevant territory where its impact is not confined to a small part of that territory, as is generally the case with a town or a province. However, it is not possible to establish a priori, in an abstract manner, which part of a territory must be used to prove that a sign is of more than mere local significance. Therefore, the assessment of the sign's significance must be made in concreto, according to the circumstances of each case.
42 In short, in order to be able properly to oppose the registration of a Community trade mark or to obtain a declaration of invalidity, it is necessary to establish that, through use, the sign relied on has acquired a significance which is not restricted from the point of view of the third parties concerned to a small part of the relevant territory" (emphasis added).
- It will be observed that the Court of First Instance was emphasising that the exercise was to be undertaken in relation to the "relevant territory", rather than from the Community perspective suggested by Laddie J.
- In Anheuser-Busch, Inc v. Budejovicky Budvar (Case C-96/09 P)  ETMR 31, the Grand Chamber of the CJEU considered Budvar's opposition to the registration of 4 CTMs of the word "BUD" in relation to the Anheuser-Busch's Budweiser beer. Budvar relied on certain prior rights effective in Austria, Benelux and Austria, and registered in France, Italy and Portugal.
- Advocate General Cruz Villalón gave a detailed exposition of the meaning of article 8(4) of the CTMR at paragraphs 126-138 of his opinion. He made a comparison of the English, Italian, Portuguese and German versions of the text of article 8(4), and said at paragraph 133 that: "[t]he territorial area by reference to which that significance must be assessed is the territory in which the sign benefits from legal protection…".
- The Grand Chamber of the CJEU said this at paragraphs 157-163 of its judgment:-
"157 The common purpose of the two conditions laid down in Article 8(4) of Regulation No 40/94 is to limit conflicts between signs by preventing an earlier right which is not sufficiently definite - that is to say, important and significant in the course of trade - from preventing registration of a new Community trade mark. A right of opposition of that kind must be reserved to signs which actually have a real presence on their relevant market.
158 Accordingly, the significance of a sign cannot be a function of the mere geographical extent of its protection, since, if that were the case, a sign whose protection is not merely local could, by virtue of that fact alone, prevent registration of a Community trade mark - and could do so even though the sign is used only to a very limited extent in the course of trade.
159 It follows that, in order to be capable of preventing registration of a new sign, the sign relied on in opposition must actually be used in a sufficiently significant manner in the course of trade and its geographical extent must not be merely local, which implies, where the territory in which that sign is protected may be regarded as other than local, that the sign must be used in a substantial part of that territory.
160 In order to ascertain whether that is the case, account must be taken of the duration and intensity of the use of that sign as a distinctive element vis-à-vis its addressees, namely purchasers and consumers as well as suppliers and competitors. In that regard, the use made of the sign in advertising and commercial correspondence is of particular relevance.
161 Since, as has been stated at paragraph 159 of this judgment, it is necessary to examine the use of the sign concerned in the course of trade in a part - not merely local - of the territory of protection, the General Court also made an error of law - as is maintained both by Anheuser-Busch in the second part of its first plea and by OHIM in its first plea - in holding, at paragraph 167 of the judgment under appeal, that Article 8(4) of Regulation No 40/94 does not require that the sign concerned be used in the territory in which it is protected and that use in a territory other than that in which it is protected may suffice, even where there is no use at all in the territory of protection.
162 It is in fact only in the territory in which the sign is protected, whether the whole or only part of it is concerned, that the applicable law confers on the sign exclusive rights which may enter into conflict with a Community trade mark.
163 Furthermore, the condition relating to use in the course of trade must be assessed separately for each of the territories in which the right relied on in support of the opposition is protected. The significance of the sign cannot therefore, in this case, be inferred from a cumulative assessment of the use of the sign in the two relevant territories, namely Austria so far as protection under the relevant bilateral treaties is concerned and France as regards protection under the Lisbon Agreement" (emphasis added).
- On 22nd January 2013, the General Court decided Budejovicky Budvar v. OHIM (joined cases), by way of the application of the Grand Chamber's decision in Anheuser Busch. It said the following, reiterating the appropriate tests to be applied and their application, at paragraphs 47 and 56:-
"47 It must be recalled that the object of the condition laid down in Article 8(4) of Regulation No 40/94 relating to use in the course of trade of a sign of more than mere local significance is to limit conflicts between signs by preventing an earlier right which is not sufficiently definite - that is to say, important and significant in the course of trade - from preventing registration of a new Community trade mark. A right of opposition of that kind must be reserved to signs with a real and actual presence on their relevant market. To be capable of preventing registration of a new sign, the sign relied on in opposition must actually be used in a sufficiently significant manner in the course of trade and its geographical extent must not be merely local, which implies, where the territory in which that sign is protected may be regarded as other than local, that the sign must be used in a substantial part of that territory. In order to ascertain whether that is the case, account must be taken of the duration and intensity of the use of the sign as a distinctive element for its addressees, namely purchasers and consumers as well as suppliers and competitors. In that regard, the use made of the sign in advertising and commercial correspondence is of particular relevance. In addition, the condition relating to use in the course of trade must be assessed separately for each of the territories in which the right relied on in support of the opposition is protected. Finally, use of the sign in the course of trade must be shown to have occurred before the date of the application for registration of the Community trade mark (judgment on appeal, paragraphs 156 to 159)" (emphasis added).
- Both parties referred to paragraphs 9-155 to 9-156 of Kerly, which pointed out the discrepancy between Laddie J's judgment and the decision of the CJEU in Anheuser-Busch. And finally, Mr Richard Miller Q.C. for the Defendant referred me to a number of case summaries at paragraph 3.2.2 in Part 4 of the OHIM Manual Concerning Opposition under the heading "Rights under Article 8(4)".
The meaning of "bad faith" in article 52.1(b) of the CTMR
- The parties relied on two cases in relation to the proper understanding of the term 'bad faith" as used in article 52(1)(b) of the CTMR.
- In Harrison's Trade Mark Application  F.S.R. 10, the Court of Appeal considered the existing English and European authorities in relation to the meaning of "bad faith" in section 3(6) of the TMA 1994. Arden LJ concurred with Sir William Aldous, and pointed out that the concept of "bad faith" in the TMA 1994 was "an autonomous concept of European Union law", and that its meaning had to be sought in the Council Directive which section 3(6) sought to implement. Sir William Aldous said this at paragraphs 25-34:-
"25. Lord Hutton went on to conclude that the true test for dishonesty was the combined test. He said:
"36. … Therefore I consider … that your Lordships should state that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct."
26. For my part, I would accept the reasoning of Lord Hutton as applying to considerations of bad faith. The words "bad faith" suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.
28. The parties have not made a complete search of all the decisions of the First Cancellation Division. It may be that we were referred to the ones which were of most significance to this appeal. None of them dealt in detail with the issue in this case, but the judgments appear consistent with the test I have proposed.
29. In Surene Pty Ltd v Multiple Marketing Ltd C000479899/1, the proprietor, Multiple Marketing, distributed the applicant for revocation's products under the trade mark BE NATURAL. The Cancellation Division held that the application had been made in bad faith. It said:
"10. Bad faith is a narrow legal concept in the CTMR system. Bad faith is the opposite of good faith, generally implying or involving, but not limited to, actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually, bad faith can be understood as a 'dishonest intention'. This means that bad faith may be interpreted as unfair practices involving lack of any honest intention on the part of the applicant of the CTM at the time of filing.
11. Bad faith can be understood either as unfair practices involving lack of good faith on the part of the applicant towards the Office at the time of filing, or unfair practices based on acts infringing a third person's rights. There is bad faith not only in cases where the applicant intentionally submits wrong or misleading by insufficient information to the Office, but also in circumstances where he intends, through registration, to lay his hands on the trade mark of a third party with whom he had contractual or pre-contractual relations."
30. In the Senso Di Donna's Trade Mark case C0006716979/1,  E.T.M.R.5, the First Cancellation Division said:
"17. Bad faith is a narrow legal concept in the CTMR system. Bad faith is the opposite of good faith, generally implying or involving, but not limited to actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually, bad faith can be understood as a 'dishonest intention'. This means that bad faith may be interpreted as unfair practices involving lack of any honest intention on the part of the applicant of the CTM at the time of filing. Example: if it can be shown that the parties concerned had been in contact, for instance at an exhibition in the respective trade, and where then one party filed an application for a CTM consisting of the other party's brand, there would be reason to conclude bad faith. In this case, however, according to the meaning of the term 'bad faith', there is no evidence that Senso di Donna Vertribes – GmbH was acting dishonestly or that they intended any similar act, or were involved in unfair practices or the like."
31. To similar effect was the decision in Lancôme Parfums et Beauté and Cie's Trade Mark  E.T.M.R. 89.
33. The judge applied the statement of Lindsay J. in Gromax which is cited above in . He was right to do so. The words "bad faith" are not apt for definition. They have to be applied to the relevant facts of each case. The test is the combined test and the standard must be that of acceptable commercial behaviour observed by reasonable and experienced persons in the particular commercial area being examined. I stress "acceptable commercial behaviour" to exclude behaviour that may have become prevalent, but which would not upon examination be deemed to be acceptable.
34. It appears from the report "Bad Faith Provision in the European Union and in EU Candidate Countries", prepared by the European Legislation Analysis Sub- Committee (April 8, 2002) of the International Trade Marks Association, that the standard of bad faith applied differs slightly in some of the States to which the Directive now applies. That was also the view expressed by Professor Philips in Trade Mark Law, A Practical Anatomy (Oxford University Press, 2003). At p.447 he said:
"The fact that "bad faith" has been considered in a number of cases involving CTM's means that a body of coherent doctrine is building up. In contrast the doctrine on "bad faith" under the Directive is inevitably going to be, at least initially, less coherent since it is derived from a variety of different tribunals in different countries."
Even so, there appears to be a consensus that seeking to monopolise another's trade mark and other unfair practices would render an application invalid for bad faith".
- In Chocoladefabriken Lindt & Sprüngli AG v. Franz Hauswirth GmbH (Case C-529/07)  ETMR 56, the Court of First Instance said this at paragraphs 38-51:-
"38 As regards more specifically the factors specified in the questions referred for a preliminary ruling, namely:
- the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought;
- the applicant's intention to prevent that third party from continuing to use such a sign; and
- the degree of legal protection enjoyed by the third party's sign and by the sign for which registration is sought;
the following points can be made.
39 First, with regard to the expression 'must know' in the second question, a presumption of knowledge, by the applicant, of the use by a third party of an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought may arise, inter alia, from general knowledge in the economic sector concerned of such use, and that knowledge can be inferred, inter alia, from the duration of such use. The more that use is long-standing, the more probable it is that the applicant will, when filing the application for registration, have knowledge of it.
40 However, the fact that the applicant knows or must know that a third party has long been using, in at least one Member State, an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought is not sufficient, in itself, to permit the conclusion that the applicant was acting in bad faith.
41 Consequently, in order to determine whether there was bad faith, consideration must also be given to the applicant's intention at the time when he files the application for registration.
42 It must be observed in that regard that, as the Advocate General states in point 58 of her Opinion, the applicant's intention at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case.
43 Accordingly, the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of the applicant.
44 That is in particular the case when it becomes apparent, subsequently, that the applicant applied for registration of a sign as a Community trade mark without intending to use it, his sole objective being to prevent a third party from entering the market. …
46 Equally, the fact that a third party has long used a sign for an identical or similar product capable of being confused with the mark applied for and that that sign enjoys some degree of legal protection is one of the factors relevant to the determination of whether the applicant was acting in bad faith.
47 In such a case, the applicant's sole aim in taking advantage of the rights conferred by the Community trade mark might be to compete unfairly with a competitor who is using a sign which, because of characteristics of its own, has by that time obtained some degree of legal protection. …
51 Furthermore, in order to determine whether the applicant is acting in bad faith, consideration may be given to the extent of the reputation enjoyed by a sign at the time when the application for its registration as a Community trade mark is filed".
The "own name" defence in article 12(b) of the CTMR
- It is clear from the authorities in this area that the own name defence is available to legal persons as well as natural persons, and that elements of a corporate name such as "Limited" may be disregarded (paragraph 130 of Arnold J's judgment in Hotel Cipriani SRL v. Cipriani (Grosvenor Street) Limited  RPC 9). It is also clear from paragraph 138 of the same judgment that article 12(a) is to be construed narrowly as it is an exception to article 9(1) of the CTMR. In the Court of Appeal, Lloyd LJ (with whom Stanley Burnton and Jacob LJJ agreed) said this at paragraph 72:-
"In my judgment, the article 12(a) defence may be available in respect of a trading name, as well as the corporate name of a company, but it will depend on (a) what the trading name is that has been adopted, (b) in what circumstances it has been adopted, and (c), depending on the relevant circumstances, whether the use is in accordance with honest practices".
Consideration of the issues
- It is convenient to start by examining the sub-issues to issue 1 before determining issue 1 itself.
Issue 1a: Whether the Defendant had an established reputation and associated goodwill in the name "Frost" in relation to the sale of washroom products?
- Mr Roughton's main argument was that the Defendant's reputation in the name "Frost" was only amongst architects and specifiers, and, as such, did not engender a goodwill which related to the washroom products in question. No reputation was established amongst the contractors who actually bought the washroom products, and the architects went to Frost to obtain help with their specifications rather than to purchase the goods. Mr Roughton pointed to Lord Oliver's requirements (in the "Jif lemon" case supra) that the Defendant "must establish a goodwill or reputation attached to the goods … in the mind of the purchasing public", and that "the get-up is recognised by the public as distinctive specifically of the plaintiff's goods". He said that, in this case, the Defendant had no goodwill of that kind.
- In my judgment, Mr Roughton's approach is too narrow. In essence, he seeks to construe Lord Oliver's dictum as a deed. Some help can be obtained from classic passages from the speeches that I have cited above in the House of Lords in IRC v. Muller & Co's Margarine. There it is made clear that goodwill is nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates. The Defendant in this case had just such a power of attraction. The fact that it sold its products by using architects to specify its products, and thereby forcing contractors to buy, cannot deprive the Defendant of its goodwill. The power of attraction in this case operated somewhat differently from the traditional brand name or shop name that brings consumers into a shop. But as the editors of Kerly pointed out in the passage I have cited above, there are now a myriad of ways in which goods reach the ultimate consumers. The fact that traditional routes of supply are not used cannot deprive a trader, with an established reputation amongst a substantial number of people, from owning the benefit and advantage of that good name and reputation and connection of his business.
- The facts of this case are, in my judgment, quite stark. On the evidence it seems to me that the Defendant has been trading in washroom products in a small way since 1971, and in a larger way since 1980. It has built up a good reputation with the major firms of architects in the UK. I did not need the testimonials to prove that. It was proved by the fact that the Defendant's products have been purchased for inclusion in so many iconic buildings in the UK and beyond. It is hardly surprising that many of those buildings were in London, but that does not mean that the Defendant's reputation was confined to London as suggested by Mr Roughton – a point to which I shall return.
- I am also of the opinion that the fact that the Defendant's reputation was most prominent amongst the international architects firms who design these important buildings cannot have deprived the Defendant of adequate goodwill to bring a claim for passing off. The disconnect between the specifiers and the purchasers is simply part of the machinery of purchase. The defendant was plainly known to many contractors who purchased their goods. It was better known in the architects' library of suppliers of washroom products. But that cannot matter, since the Defendant's power of attraction and reputation drew both architects to specify, and through that conduit, contractors to purchase.
- In my judgment, any other result would make a mockery of the concept of goodwill. The defendant has obviously run a highly successful washroom products business supplying major buildings in the UK and beyond. That much was crystal clear on the evidence. It is true as Mr Roughton said that buildings are not purchasers. But contractors are, and they are drawn to buy the Defendant's products by the power of attraction operating on the architects and specifiers. That in my judgment would be sufficient goodwill attaching to the goods that the Defendant supplies in the minds not only of those taking the purchasing decisions, namely the professional architects and specifiers, but also in the minds of those they advise, the building developers, and the contractors who are the ultimate purchasers.
- As will appear below, I was also satisfied on the evidence that the goodwill in question attached to the sign and name "Frost" under which name the Defendant sold its washroom products. That was clear from the internet websites down the years and the brochures and publicity materials produced to the court. The argument that the Defendant only put itself forward as "FC Frost", and not as "Frost" was simply factually incorrect. It is true that its website address was "fcfrost" and that the full company name was, as one would expect, on formal company documents, but the logo and trading name was always "Frost". I accept that, up to 2004, the Defendant also used the brand name "Watrous" to attach to its washroom products. But that did not mean that the company trading name of "Frost" was any the less well-used and well understood by those receiving its marketing materials. For years the prominent label "Frost" was on the Defendant's factory premises, and the photograph of that factory showing that name was used in its brochure advertising. I have no doubt, as the testimonials support, that the Defendant was known as "Frost" and that it intended so to be known.
Issue 1b: Whether the Defendant's sign or name "Frost" was used in the course of a trade of more than mere local significance within the meaning of article 8(4)?
- After the further argument that I have described above, there was little between the parties on the law. It is clear that the dividing line is to be drawn between local traders using a sign locally on the one hand, and traders in a specific territory (e.g. England and Wales) using a sign in a "sufficiently significant manner in the course of trade", where the geographical extent of that trade is not merely local, so that the sign is used in a substantial part of the territory, on the other hand (see paragraph 159 of the Grand Chamber in Anheuser-Busch supra). The court must take account of the duration and intensity of the use of the sign as a distinctive element vis-à-vis its addressees, including its use in advertising and commercial correspondence.
- In my judgment, however, the use of the sign in question has to be viewed in the context of the market for the goods in question. The goods here are washroom products. But such products are supplied in different ways. Ordinary consumers buy tissue dispensers or toilet roll holders from shops or DIY supermarkets. But the Defendant is not in that market and its business should not be viewed as if it were. The market concerned in this case is the market for the installation of washroom products in building projects. There was little formal evidence about the scale of this market either in the UK or elsewhere, but it must be limited by the number of developments going on at any one time.
- It is important to realise that the Defendant advertises to its target architects and interior designers on the web and at trade shows such as Interbuild. The architects to whom it pitches operate on an international stage including the EU. That cannot be doubted, since the iconic buildings into which the Defendant's products have been placed were designed by some of the leading architecture firms in the world, such as Lord Foster's firm and Lord Rogers's firm. The fact that these firms have their head offices in London should not serve to confuse the true comparison that is being undertaken. They are international firms.
- I have also looked through the list of projects kept by Mr Williams between 1990 and 2004, from which one can obtain a sense of the scale and scope of the business. It is clear from that that most of the Defendant's international jobs seem to be in the Middle East, and very few are in other parts of Europe outside the UK. But this is not what matters for the purposes of the question that needs to be asked under article 8(4) of the CTMR. What matters is whether the sign was used before 16th October 2008 in England and Wales in a sufficiently significant manner, and whether the use of the sign was used in a substantial part of England and Wales, and not merely locally – judged in the context of the relevant market.
- I was not shown the Defendant's accounts or turnover figures, but it is nonetheless clear that the Defendant is in a substantial way of business. It has operated for many years, using the sign "Frost". Its products have been used in numerous landmark projects by the most influential architects firms. The projects are not just in London, though many are in London. That is inevitable bearing in mind the size and iconic nature of such projects. In my judgment, the evidence clearly established both (i) that the Defendant's was using the sign "Frost" to apply to its washroom products from 1971 to October 2008 in England and Wales in a significant manner, and (ii) that the sign was used during that time in a substantial part of England and Wales, and not merely locally. In this latter context, it is wholly unrealistic to suggest that because the Defendant's factory is in Essex, its business is local to Essex. It is equally wrong to suggest that its business or reputation is confined to London. The market for washroom products to be provided for building developments is a national one, and the Defendant has a national business in England and Wales. I cannot say how far the Defendant's business penetrates Scotland and Northern Ireland, but it seems to have some involvement in the Scottish market at least. For my purposes, the territory must be England and Wales, since I am looking at a putative passing off action brought in that jurisdiction.
- I, therefore, conclude that the Defendant's sign "Frost" is to be regarded as "of more than mere local significance" within the meaning of article 8(4).
- It will be obvious from what I have said that I do not think the law as to the meaning of article 8(4) of the CTMR is in doubt and that have no need to refer the matter to the CJEU to obtain its opinion.
- Finally, under this heading, I should mention article 111 of the CTMR. Since I have decided that the Defendant's sign is of more than mere local significance, I do not need to decide whether, had it not been, the Defendant could have relied on article 111. I should say, however, that, had I needed to do so, I would have decided that:-
i) The Defendant did not need to plead reliance on article 111(3), having stated in its Defence that it relied on its common law rights in the sign "Frost".
ii) Though the Defendant has not previously opposed the use of the Claimant's Mark in the territory in which the Defendant does business (under article 111(1)), it could, had it not succeeded under article 8(4), have relied upon article 111(3) to prevent the Claimant from opposing the use of the Claimant's local right to sell washroom products under the name "Frost" in the relevant territory.
iii) I cannot determine what that relevant territory might have been, since I have already determined that the Defendant's business is in fact a national one in its specific market.
iv) The Claimant's construction point to the effect that "right referred to in paragraph 1" in article 111(3) is the right to oppose the use of the CTM, and not the right to use the mark in the local area in relation to particular goods, is wrong.
Issue 1c: Whether, had the Claimant used the Claimant's Mark, it would have thereby misrepresented or threatened to misrepresent to the public such that its conduct was leading or likely to lead the public to believe that its goods were the goods of or associated with the Defendant?
- Mr Roughton conceded that, if issues 1a and 1b were decided against the Claimant, the necessary misrepresentation was established in the putative passing off claim in 2008. I have concluded on the evidence that his concession was properly made. I therefore find that, had the Claimant used the Claimant's Mark in England and Wales before 16th October 2008, it would have thereby made a misrepresentation which was likely to lead the relevant public to believe that its goods were the goods of or associated with the Defendant.
Issue 1d: Whether the Defendant would have suffered or was likely to have suffered damage by reason of that erroneous belief engendered by the Claimant's misrepresentation?
- Mr Roughton also conceded that, if issues 1a and 1b were decided against the Claimant, the necessary damage or apprehension of damage would have been established in the putative passing off claim in 2008. As with issue 1c, I have concluded on the evidence that Mr Roughton's concession on this issue was well made. I therefore find that, had the Claimant used the Claimant's Mark in England and Wales before 16th October 2008, the Defendant would have been likely to have suffered damage by reason of an erroneous belief engendered by the Claimant's misrepresentation.
Issue 1e: Whether, the Claimant could have been prevented from using the word "Frost" by injunction?
- The next question is whether an injunction would have been granted in 2008 to protect the Defendant's right to use the sign "Frost" in relation to washroom products. I have no doubt that the Defendant could have obtained such a passing off injunction against the Claimant. Mr Roughton submits that any injunction would have been limited to London. For the reasons I have already given, that submission misunderstands the market in which the Defendant was trading both in 2008 and today. The market undoubtedly covered the whole of the UK, even if the most prestigious projects were, not surprisingly, concentrated in London. The projects list shows a wide spread across the UK. I have no doubt that, had the Defendant sought an injunction to restrain the Claimant from using the word "Frost" in relation to its washroom products before 17th October 1998, it would have obtained such an injunction covering at least the whole of the jurisdiction of England and Wales.
Issue 1: Whether the registration of the Claimant's Mark should be declared invalid under article 8(4) of the CTMR on the ground that the Defendant could have prohibited the use of the name "Frost" in the course of trade by an action for passing off against the Claimant as at 16th October 2008?
- In the foregoing circumstances, the Defendant could have prohibited the use of the sign "Frost" in the course of trade in washroom products in this jurisdiction by an action for passing off against the Claimant as at 16th October 2008. Since the Defendant's use of the sign "Frost" was in the course of a trade that was of more than mere local significance within the meaning of article 8(4) of the CTMR, the registration of the Claimant's Mark must be declared invalid under that article.
Issue 2: Whether the Claimant was acting in bad faith when it filed the application for the Claimant's Mark within the meaning of article 52.1(b) of the CTMR?
- The Claimant's submission under this head is that "bad faith must be more than knowing about the Defendant's trading position". The Defendant submits that the court should not follow Harrison's Trade Mark, and should rather be guided by the Lindt case, which I have already cited. The Claimant also submits that the court should have regard to the facts that (i) the Defendant did not register "Frost" as a mark for many years; (ii) there was doubt about whether the Defendant had goodwill in the name "Frost"; (iii) the Claimant had a modest trading history in the UK, so it was "not a case of just taking something from the Defendant without more"; and (iv) the test is wholly subjective anyway, so that the question is whether the Claimant was abusing a relationship between it and the Defendant.
- In my judgment, Lindt and Harrison are addressing different questions. Harrison is addressing the meaning of "bad faith" in the CTMR, and Lindt is addressing the factors that may be taken into account in determining whether it exists. Bad faith is, as many cases have said, the opposite of good faith, generally implying or involving, but not limited to actual or constructive fraud. It may be a design to mislead or deceive another, or involve any other sinister motive. It also includes unfair practices involving a lack of any honest intention. The factors that may be taken into account include:-
i) Knowledge that a third party is using the sign in a Member State, which can be inferred from length of use;
ii) The applicant's intention, when the application was made, including the intention to prevent a third party marketing a product, and the lack of intention to use the CTM himself; and
iii) The extent of the reputation enjoyed by a third party's sign at the time of the application.
- Mr Biggar was, as I have already said, not an impressive witness. He was cagey and evasive. But more importantly than that, it seemed to me that his position was indefensible. He was, on his own analysis, checking the Defendant' website periodically from the late 1990s. If that was the case, then he must have known that the Defendant was selling washroom products under the name "Frost". He repeated too often that he did not know that fact until 2010. His evidence on that question, whether challenged directly or not, was wholly implausible and inconsistent. Mr Biggar's position on the UK market was also wholly exaggerated. From time to time, he appears to have taken some desultory steps to establish an English or Irish agency. Whether the agency was expressed to cover the whole of Europe or not, it had no presence outside England and Ireland. The steps Mr Biggar took were wholly ineffective. The evidence of trade with Bowater Scott decades ago was again exaggerated. The relationship seems to have been almost insignificant. The later trade in the UK was modest in the extreme. In truth, the Claimant has never really traded in Europe at all; it has made a few isolated sales, mostly related to Canadian entities or business. The correspondence shows that the Claimant was never in regular contact with its supposed agents in Europe.
- The chronology from 2008 is, however, important. Mr Biggar's 17th September 2008 letter to Perrem said that the Claimant was "very interested" in working with Perrem "as our representative and distributor in Ireland". The Claimant then filed its application for the Claimant's Mark a month later on 16th October 2008. 9 months later nothing much had happened, but Mr Biggar wrote to Perrem saying: "Frost has just recently received full Brand, Copyright, Logo Rights and Protection for UK and Europe. We are interested in aggressively expanding our distribution network and presence in UK and Europe. ... Are there trade shows or Industry magazines we should participate in to gain market exposure? Can you recommend a company like yourself in Europe that can help us [develop] a distribution network?" This shows, in my judgment, that Mr Biggar never really regarded Perrem as a 'European' agent, and that he was intending to use the CTM to expand into the UK. Moreover, he does not seem to have thought that the Claimant really had any UK business at the time. Mr Perrem suggested that he could help Mr Biggar to expand into the UK, but little seems actually to have been done.
- The conclusions that can be drawn from this and from Mr Biggar's evidence seem to me to be as follows.
- First, the Claimant did not genuinely believe that it had a UK or European trade that it wanted to protect in 2008 when it registered the Claimant's Mark. It seems most likely that it was the Claimant's intention to use it to launch such a business.
- Secondly, I am quite sure that Mr Biggar either knew full well about the Defendant's washroom product business from his regular looks at their website over many years or deliberately turned a blind eye to it. In either case, he deliberately chose not to find out more about them or alert his trade mark attorneys to their existence, as he accepted he ought to have done. In this way, he was seeking to steal a march on the Defendant as was put to him, but which he denied.
- I can only conclude that Mr Biggar intended to try to prevent the Defendant using its "Frost" trading name from the start. He simply cannot have been unaware of the Defendant's business. The idea that he thought that the Defendant was involved only in drainage at any time in the 2000s is simply incredible and unbelievable.
- Thus, it seems to me that Mr Biggar was involved in a series of unfair practices, without an honest motive or intention. Had he been acting in good faith, he would have drawn the Defendant's business to the attention of his trade mark attorneys who would no doubt have advised him to seek trade mark protection which did not include the UK. He did not do so because he wanted a platform "aggressively" to promote his business in the UK, as he said. He was intending to do so at the Defendant's expense as this litigation demonstrates.
- Applying the tests that I have sought to summarise, I have no doubt that the Claimant acted, through Mr Biggar, in bad faith in applying for the Claimant's Mark in October 2008, knowing of the Defendant's business and doing nothing about that knowledge. If I were to be wrong in finding that Mr Biggar actually knew of the Defendant's washroom products business (which I do not believe I am), he knew of it constructively, since he was checking their website regularly and could and should have found out before applying for the Claimant's Mark.
- In the circumstances, the Claimant's Mark should be declared invalid on the ground that the Claimant was acting in bad faith when it filed its CTM application in October 2008.
Issue 3: If the Claimant's Mark is valid, can the Claimant prevent the Defendant's use of the name "Frost" in relation to its products as its "own name" under article 12(a) of the CTMR?
- In the light of my findings this far, this issue does not arise. I should, however, say that if it had been relevant, I would have held that the Defendant was entitled to rely on its "own name" defence in respect of the trade name "Frost" used by it. It is no answer to suggest, as Mr Roughton sought to do, that the name is unclear or uncertain and that the Defendant has used variously Frost, Frost's or FC Frost. The Defendant has regularly and consistently over many years used the trade name "Frost" as its trade name applicable to its entire business and thereby to all its products. "Watrous" was the name of the range of washroom products, but the use of that name was discontinued in 2004, 4 years before the Claimant's application for a CTM. "FC Frost Limited" was the full company name used, as one would expect, on formal company documents and on terms and conditions and the like. FC Frost by itself was not much used. "Frost" was the trade name found on the factory, on the brochure, on the website and on the various marketing materials that the Defendant produced. The fact that the website used an address including "fcfrost" is just one minor factor. Applying Lloyd LJ's tests in Cipriani supra (a) "Frost" was the trading name adopted by the Defendant many years before 2008, (b) the name was adopted at a time when the Claimant's trade in the UK was de minimis and anyway not known to the Defendant, and (c) the Defendant's use of the name "Frost" was throughout honest and reasonable.
- In the circumstances, I have no doubt that, even had the Claimant's Mark, been valid, the Defendant could have resisted this claim under article 12(a), since the Defendant has been using its own trade name "Frost" in the course of an honest and legitimate trade.
Issue 4: If the Claimant's Mark is valid, has the Defendant infringed it on the basis that either (a) its sign is identical to the Claimant's Mark and is used in relation to goods or services similar to those for which the Claimant's Mark is registered, under article 9(1)(a) of the CTMR; or (b) its sign is similar to the Claimant's Mark and is used in relation to goods or services identical with or similar to those for which the Claimant's Mark is registered, and there exists a likelihood of confusion on the part of the public which includes the likelihood of association with the Claimant's Mark under article 9(1)(b) of the CTMR?
- In the circumstances of my previous findings, I do not need to deal with the Defendant's alleged infringement. Had it been relevant, I do think that the Defendant would have been guilty of article 9(1)(b) infringement. The possibility of confusion both ways was absolutely clear on the evidence, and from a cursory inspection of the two companies' websites.
Issue 5: If the Claimant's Mark is valid, whether the Defendant's Marks are invalid on the ground that: (a) The Defendant's signs are identical to the Claimant's Mark and are registered for goods similar to those for which the Claimant's Mark was protected under sections 47(2)(a) and 5(2)(a) of the TMA 1994; or (b) The Defendant's signs are similar to the Claimant's Mark and are registered for goods identical to or similar to those for which the Claimant's Mark was protected and there exists a likelihood of confusion on the part of the public which includes a likelihood of association with the Claimant's Mark under sections 47(2)(a) and 5(2)(b) of the TMA 1994?
- This issue too is now irrelevant. But again, I think the Defendant's Marks would have been invalid had the Claimant's Mark been valid for the reasons I have given above. The addition of other words after the name "Frost" would not, I think, have saved the Defendant in those circumstances.
- For the reasons I have given, in my judgment:-
i) The Defendant could have successfully brought a passing off action against the Claimant to restrain the Claimant's use of the name "Frost" in England and Wales before 16th October 2008;
ii) The Claimant's Mark should be declared invalid under article 8(4) of the CTMR because the Defendant's trade is to be regarded as of more than mere local significance within the meaning of that article, and because the Defendant could have brought the passing off action referred to in paragraph (i) above;
iii) The Claimant was acting in bad faith within the meaning of article 52(1)(b) of the CTMR, when it applied for the Claimant's Mark on 16th October 2008.
iv) The Defendant could, in any event, have resisted the Claimant's claims for infringement on the ground that it was using its own name "Frost" in the course of its trade in washroom products prior to 16th October 2008.
- In the circumstances, I will declare the Claimant's Mark to be invalid and will dismiss the Claimant's action.
- I will hear counsel as to any appropriate ancillary orders and as to costs.