Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Pebble Beach Company v. Lombard Brands [2002] ScotCS 265 (24 September 2002)
URL: http://www.bailii.org/scot/cases/ScotCS/2002/265.html
Cite as: [2002] ScotCS 265, 2002 SCLR 1052

[New search] [Help]

OUTER HOUSE, COURT OF SESSION

A2252/02

OPINION OF LORD MENZIES

in the cause

PEBBLE BEACH COMPANY

Pursuers;

against

LOMBARD BRANDS LIMITED

Defenders:

________________

Pursuers: C.H.S. McNeill; Maclay Murray & Spens

Defenders: Robertson; McClure Naismith

6 September 2002

The pursuers are the owners and operators of the golf course and leisure resort in Monterey County, California known as Pebble Beach. The defenders are a company domiciled in the Isle of Man. They market a range of whisky products to the retail whisky trade. In their defences they aver that their whisky products are of a high quality, have been reviewed favourably in whisky publications and have won awards, and that since about 1980 the defenders' gold label blended scotch whisky has been sold world-wide.

The pursuers are the proprietors of Community Trade Mark 116939 "Pebble Beach" which is registered in classes 9, 28 and 41. Class 9 covers "computer software, magnetic and electronic data carriers, computers for games not included in other classes"; Class 28 covers "games and playthings, gymnastic and sporting articles not included in other classes"; Class 41 covers "sporting activities, courses and sports lessons ('clinics') and organising golf and tennis tournaments". The defenders have registered the mark "Pebble Beach" in the United Kingdom Trade Marks Register in Class 33 (alcoholic beverages except beers). The defenders intend to market, sell and distribute a new range of malt whiskies in the very near future, which range will include an Islay Malt, a Highland Malt and a Speyside Malt. They intend to call the Islay Malt "Tidal Ebb", the Highland Malt "Driftwood" and the Speyside Malt "Pebble Beach".

In this action the pursuers seek inter alia two interdicts against the defenders. In terms of their first conclusion they seek interdict and interim interdict against the defenders, their agents and servants and anyone acting on their behalf or on their instructions from infringing the pursuers' said trade mark (a) by selling or offering to sell or exposing for sale or transporting for distribution or dealing in any way whatsoever with bottled whisky bearing, on labels or otherwise, the sign "Pebble Beach", (b) by affixing the sign "Pebble Beach" directly or by means of a label or labels to bottles containing whisky or to packaging containing whisky, (c) exporting whisky under the sign "Pebble Beach" or (d) using the sign "Pebble Beach" in relation to whisky in any business papers or advertising. In terms of their second conclusion they seek interdict and interim interdict against the defenders, their agents or servants and anyone acting on their behalf or on their instructions from passing themselves off as the pursuers or as part of or as associated with the pursuers' business by (a) selling or offering to sell or exposing for sale or transporting for distribution or exporting or dealing in any way whatsoever with bottles of whisky bearing, on labels or otherwise, the sign "Pebble Beach" or (b) using the sign "Pebble Beach" in relation to whisky in any business papers or advertising.

This matter came before me as an opposed motion in the Vacation Court, on the pursuers' motion for interim interdict in terms of their first two conclusions. The material which was before me, and which I took into account in reaching my decision on interim interdict, comprised the summons (as amended) and 15 productions for the pursuers, and defences and 23 productions for the defenders.

Before dealing with the legal basis for the pursuers' claims for interim interdict, it is appropriate to summarise the factual basis on which they seek interdict. They aver that the golf course at Pebble Beach, California was established in 1919 and since then has acquired a world-wide reputation at the highest level in the golf world. It hosts major international golfing events which have been won by world famous golfers known to millions of people, golfers and non-golfers alike, around the world. United Kingdom television audiences for the US Open are in the region of one million, and many other championships are held there. Associated with the golf course, the pursuers also own and operate a world famous resort with luxury lodgings which attracts visitors world-wide, including from the United Kingdom and including Scotland. Their golf courses and resort have been consistently marketed for many years under the name Pebble Beach. The pursuers have always supported the Pebble Beach enterprise with a high level of marketing and promotional activity internationally. The pursuers own the trade mark "Pebble Beach" in a variety of classes in 36 countries, and in the financial year 2001 their marketing and promotional budget exceeded US$2,700,000. Pebble Beach branded services and goods are promoted, advertised and reported extensively through numerous media world-wide including the Internet directly by the pursuers and under licence by third parties. Gifts and alcohol related products such as glasses and decanters bearing the Pebble Beach mark are available world-wide. The Pebble Beach mark has been licensed to a number of United Kingdom retailers for use on a variety of products including whisky flasks. Revenue from licensed products in the United Kingdom is about US$250,000 a year. The pursuers aver that an association with their resort lends prestige to the product in the mind of the consumer and serves as an assurance as to the quality of the product. In their licensing agreements the pursuers make stipulations as to the quality of the product and maintain control over which products are marketed under the sign and which are not.

The pursuers go on to aver that there is an association in the minds of the public between golf and whisky. In support of this they point to the fact that certain whisky producers have sponsored golf teams and championships. They also aver that the defenders themselves market a "golfing greats" range of single malt whiskies featuring some of golf's greatest players.

Against this background the pursuers sought interim interdict. The legal basis on which they sought interim interdict in terms of the first conclusion was Article 9 of the European Union Council Regulation 40/94 of December 20^th 1993. The legal basis for the second conclusion was common law passing off. I propose to consider the submissions made to me under the following headings, namely (1) whether the pursuers have made out a prima facie case under Regulation 40/94; (2) whether the pursuers have made out a prima facie case of passing off; and (3) where the balance of convenience lies.

(1) HAVE THE PURSUERS MADE OUT A PRIMA FACIE CASE UNDER REGULATION 40/94?

The pursuers' case was founded in this respect on Article 9(1)(c) of the Regulation (which is in substantially similar terms to Section 10(3) of the Trade Marks Act 1994). It provides as follows:-

"Rights Conferred by a Community Trade Mark

(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....

(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the Community trade mark."

For the pursuers Mr McNeill submitted that they were accordingly entitled to prevent the defenders (to whose use of the trade mark the pursuers had not consented) from using the sign "Pebble Beach" in the course of their trade. It was a sign identical with or similar to the pursuers' Community trade mark, and the defenders intended to use it in relation to goods which were not similar to the goods and services for which the pursuers' Community trade mark was registered. The pursuers' Community trade mark has a reputation in the Community. The defenders' use of it took unfair advantage of the distinctive character or repute of the pursuers' trade mark, or alternatively, it was detrimental to the distinctive character or repute of the pursuers' trade mark. The defenders' use of the sign was moreover without due cause.

It is apparent that the defenders' sign is identical with the pursuers' Community trade mark. It was also not a matter of dispute that the defenders intended to use the sign in relation to goods or services which are not similar to those for which the pursuers' Community trade mark was registered. The discussion before me as to whether the pursuers had made a prima facie case under the Regulation focused principally on four matters, namely have the pursuers made out a prima facie case that -

(a) their trade mark has a reputation in the community,

(b) the defenders' use of the sign would take unfair advantage of the
distinctive character or repute of the trade mark,

(d) the defenders' use of the sign would be without due cause.

(a) Reputation in the Community

In support of his submission that the pursuers have a prima facie case in this regard Mr McNeill relied on General Motors Corp. v Yplon SA [1999] All ER (EC) 865. This was a case brought under Article 5(2) of Council Directive (EEC) 89/104 and concerned a dispute between two parties each of whom owned the Benelux Trade Mark "Chevy" but in respect of non-similar products or services. There are aspects of this case which are relevant to some of the other matters in dispute. (In passing, it should be noted that the case provides support for the view that there is no requirement in an application under Article 9(1)(c) for the pursuer to establish a likelihood of confusion in the mind of the public. This view has received support in the English Courts in relation to Section 10(3) of the Trade Marks Act 1994 - see Premier Brands UK Limited v Typhoon Europe Limited 2000 FSR 767. In this regard the situation under the Council Regulation and the Trade Marks Act falls to be distinguished from the common law remedy of passing off, in which, parties were agreed, there was a necessity to show a likelihood of confusion on the part of the public).

On the question of reputation, the judgment of the Court in General Motors gives guidance (at paragraphs 24-29) as to how the test of "reputation in the community" is to be approached. The reputation may be with either the public at large or a more specialised public - for example, in this case, the public interested in golf. There is no requirement to establish that a given percentage of this sector of the public knows of the trade mark, but a significant part of the public concerned by the products or services covered by that trade mark must know of it. In examining whether this condition is fulfilled, the Court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it. The trade mark need not have a reputation throughout the whole of the territory of the member state, but must exist in a substantial part of it.

Applying these considerations to the material before me, although the market share held by the trade mark within the United Kingdom sector of the public interested in golf may not be particularly high, I had little difficulty in being satisfied that the pursuers have at least a prima facie case in this regard. Indeed, Mr Robertson for the defenders accepted that the pursuers have a reputation, although he disputed that this reputation had a distinctive exclusive quality. Standing the fact that this matter may require to go to proof, and that my decision is only in respect of interim interdict applications, it is not appropriate that I should elaborate further on my reasons. Suffice it to say that I was satisfied that the pursuers have established a prima facie case of sufficient reputation to enable them to rely on the provisions of Article 9(1)(c) of Regulation 40/94.

(b) Would the defenders' use of the sign take unfair advantage of the distinctive

character or repute of the pursuers' trade mark?

In this regard the pursuers relied on the lack of apparent connection between the defenders' product and Pebble Beach (whether as a proper noun or otherwise). The product which the defenders intended to market under this name would be Speyside Malt whisky and Mr McNeill submitted that whilst there may be pebbles on the banks of the Spey, there are no beaches on a riverbank. The pursuers offered to prove that this was an attempt to associate the defenders' product with the prestige and reputation built up by the pursuers over many years and at considerable expense. Mr McNeill submitted that there was no objective justification for the defenders to call their Speyside Malt "Pebble Beach", and that the Court should infer that this was an unfair attempt to take advantage of the connection in the mind of the relevant sector of the public between whisky and golf, and in particular between the defenders' product and the pursuers' prestige resort and golf course.

Mr Robertson for the defenders disputed the alleged link between whisky and golf in the public perception. He pointed (under reference to productions 7/22 and 7/23) to the fact that golfing events and championships attracted sponsorship from a wide variety of business sponsors, including manufacturers of motor cars, cigarettes, watches, electronic, television and camera equipment, bankers, credit card providers and telephone system providers. The mere fact that some golf events are sponsored by businesses connected with the whisky trade does not suggest that there is an association in the public mind between golf and whisky. Turning to the specifics of the defenders' range of whiskies, the range used a coastal theme, and the labelling on the bottles referred to the geographical nature of the name. The Lombard name was clearly displayed on several positions in the get-up of the product, on both the capsule and the label. The fact that the defenders had originally intended to market the Speyside Malt in this range under the name "Harbour Lights" but had been forced to change this when they discovered that this sign had already been registered in the same class of the Trade Marks Register undermined the pursuers' contention that the defenders were deliberately setting out to use the pursuers' name and take unfair advantage of its distinctive character or repute. There were good reasons for marketing this product under the name "Pebble Beach", not because it took unfair advantage of the distinctive character or repute of the pursuers' mark, but for unrelated reasons of geography and description of taste. In this regard he referred me to a publication by Scottish Natural Heritage (Production 7/8) which stated that "The pebbles on the beach at Spey Bay come from distant mountains, washed down by glacial melt-waters, rounded and smoothed, to form the largest shingle bar in Scotland." He also referred me to an Internet site (a printout from which formed production 7/9) which described another Speyside Malt whisky as being "pebble smooth and round". He submitted that these were marketing considerations which validly supported the defenders' use of the name "Pebble Beach" for this product.

Mr Robertson emphasised that it was not enough for the pursuers to aver that the defenders' use of the sign took advantage of the distinctive character or repute of the pursuers' trade mark - they must aver unfair advantage. Moreover, there must be averments of specific aspects of the pursuers' reputation which would be likely, through association, to benefit the defenders' mark to some significant extent. He submitted that there were generalities in the pursuers' averments, but no specification of the particular aspects of their reputation which would be likely to benefit the defenders' mark. In this regard he referred me to a decision in the Trade Marks Registry before Mr Alan James in Oasis Stores Limited's Trade Mark Application [1998] RPC 631, and in particular to paragraphs (6) and (7) of the headnote, and to Mr James' determination at page 649 at about line 5:

"I do not consider that simply being reminded of a similar trade mark with a reputation for dissimilar goods necessarily amounts to taking unfair advantage of the repute of that mark. The opponents' chances of success may have been better if they were able to point to some specific aspect of their reputation for batteries etc. sold under their mark which was likely, through (non-origin) association, to benefit the applicants' mark to some significant extent. However, in my judgment, the opponents have not established any such conceptual connection between their reputation for batteries etc., and the goods in respect of which the applicants' mark is to be used."

I was conscious of the fact that I could only proceed on the basis of ex parte statements, and that I should not approach this matter in the same way as if I had heard evidence and was reaching a concluded view on a perpetual interdict. However, I had the advantage of seeing the bottles in the defenders' proposed "coastal range", including the labelling and get-up of the Speyside Malt which they propose to market under the name "Pebble Beach". Moreover, although I accept that it is not necessary for the pursuers to aver or establish in the context of their case under Council Regulation 40/94 that there is a risk of confusion in the public mind, it seems to me that I must be satisfied that there is at least a prima facie risk of some association in the public mind between the pursuers' trade mark and the defenders' product. I must also be satisfied that there is a prima facie case that the defenders' use of the sign would take unfair advantage of the distinctive character or repute of the pursuers' trade mark. Not only must this advantage be unfair, but it must be of a sufficiently significant degree to warrant restraining what is, ex hypothesi, a non-confusing use. It is worthy of note that there is a general reluctance to apply these provisions (or their predecessors or equivalents in the Trade Marks Act 1994) too widely. The Advocate General in his opinion in General Motors (supra, at para. 43) observed that:

"It is to be noted in particular that Article 5(2), in contrast to Article 5(1)(b), does not refer to a mere risk or likelihood of its conditions being fulfilled. The wording is more positive: 'takes unfair advantage of, or is detrimental to' (my emphasis). Moreover, the taking of unfair advantage or the suffering of detriment must be properly substantiated, that is to say, properly established to the satisfaction of the national court: the national court must be satisfied by evidence of actual detriment, or of unfair advantage."

In Pfizer Limited v Eurofood Link (United Kingdom) Limited [2000] ETMR 896 Mr Simon Thorley QC, sitting as a Deputy High Court Judge, observed (at para. 37) that,

"the concept of 'unfair advantage' requires an inquiry into the benefit to be gained by the defendant from the use of the mark complained of and the concept of 'detriment' requires an inquiry into the damage to the good will accruing to the business in the goods sold under the trade mark. The advantage or detriment must be of a sufficiently significant degree to warrant restraining what is, ex hypothesi, a non-confusing use."

Neuberger J. observed in Premier Brands UK Limited v Typhoon Europe Limited [2000] FSR 767 at 789 that, in relation to the equivalent provisions of the Trade Marks Act 1994,

"Section 10(3) is not intended to have the sweeping effect of preventing the use of any sign which is the same, or similar to, a registered trade mark with a reputation; nor is section 10(3) intended to enable the proprietor of a well-known registered mark to be able to object as a matter of course to the use of a sign which may remind people of his mark".

Finally, as has already been observed, any advantage to the defenders must not only be unfair but more than de minimis - see the decision of Laddie J in Barclays Bank Plc v R B S Advanta [1996] RPC 307, at 316 - ".... The use must either give some advantage to the defendant or inflict some harm on the character or repute of the registered mark which is above the level of de minimis."

I do not consider that the decision in British Telecommunications Plc v One in a Million Limited [1999] FSR 1 is of any real assistance in the present case. That case concerned what I was told is known as "cyber squatting", whereby a person acquires the domain name to well-known corporations such as Marks and Spencer, British Telecommunications, or Virgin. The element of unfair advantage in such a situation is much more apparent than it is in the present case.

Taking all of the above considerations together, I was not satisfied that the pursuers have made out a prima facie case that the defenders' use of the sign takes unfair advantage of the distinctive character or repute of the pursuers' Community Trade Mark. First, it was not clear to me that any advantage is unfair. The geographical and descriptive reasons advanced by the defenders appeared to me to be a justification for the use of the sign. Moreover, there was a lack of specification in the pursuers' averments, submissions and in the rest of the material before me as to the precise respects in which the defenders' use of the sign would result in advantage to them. I am not satisfied that in this regard the averments of an association in the public mind between golf and whisky are sufficiently specific, particularly when it appears that there are also links between golf and motor cars, banks, cigarettes, credit cards, telephone service providers, watchmakers and others. Moreover, there is nothing in the get-up of the defenders' product which seeks to take specific advantage of any such association as may exist - there are no golf clubs, pictures, maps or other indicators on the label which suggest an association with golf courses in general, or the pursuers' golf courses in particular. If the defenders' use of the sign takes unfair advantage of the distinctive character or repute of the pursuers' Community Trade Mark (and I am not to be taken as suggesting that it does), it appears to me that any such advantage is unlikely to be more than de minimis, and therefore not of a sufficiently significant degree to warrant restraining what is a non-confusing use.

or repute of the pursuers' trade mark?

The exercise of assessing whether this test has been met or not is quite separate from, and alternative to, the exercise of assessing whether there has been unfair advantage. Detriment involves looking to the effect of the defenders' use on the distinctive character or repute of the pursuers' mark, whereas advantage involves looking at the effect of non-confusing association on the defenders' use of the sign. Notwithstanding this difference, several of the observations made in the authorities referred to above are also relevant to the question of detriment - for example, the need for a prima facie case of actual detriment, and the need for any such detriment to be more than de minimis.

For the pursuers Mr McNeill submitted that their name was associated with the highest possible quality. The Pebble Beach Golf Club was an aspirational destination, and it was of the utmost importance to the pursuers that their name should not be tarnished, blurred or diluted. The pursuers had a high degree of concern for any products which bear the name "Pebble Beach" and would not wish to be associated with anything which does not meet their high standards. To this end they insisted on strict quality control with regard to any licensed products, and he referred me to the Sample Licence Agreement (No 6/4 of process) and in particular to Clauses 7-10 thereof. He suggested that the distiller of this Speyside Malt has chosen not to sell it under his own name. The pursuers have no control over the quality of the product, and even if the current product is of a high quality, there is no guarantee of the quality of future batches. Moreover, the pursuers have no control over the quality of the packaging and get-up of the product. Even if the product and its packaging were of high quality, there would still be damage to the distinctive character or repute of the pursuers' mark. Other potential licensees would be discouraged from entering licensing agreements with the pursuers if there were unlicensed products on the market.

Although Mr Robertson for the defenders accepted that the pursuers have a reputation, he submitted that their reputation does not have a distinctive exclusive quality, and that the association between whisky and golf is not borne out. He pointed out (under reference to No 7/10 of process) that there were several other businesses which were accessible on the Internet and which used the sign "Pebble Beach". These ranged from a bed and breakfast establishment in Ireland to a 56 unit cottage development in Manitoba, Canada, a house rental business in Vancouver Island and a software company based in England specialising in the television broadcast industry. He submitted that this last use of the sign "Pebble Beach" was of particular significance because it involved trading in one of the classes in which the pursuers' Community Trade Mark was registered. Mr Robertson also pointed out that the pursuers make no averments that the defenders' product is of poor quality. In the Licence Agreement (No 6/4 of process) the pursuers' licensed marks do not include "Pebble Beach", but rather "Pebble Beach Golf Links". The defenders aver that

"Purchases from the pursuers' website from customers living outwith the United States cannot be completed online. It is necessary to make direct contact by telephone or e-mail for orders placed outwith the United States. No alcoholic beverages are sold or advertised. The crystal and mugs advertised all bear the pursuers' distinctive cypress tree logo."

Under reference to No 7/11 of process he submitted that the products manufactured under licence by English Pewter (which is the only licensee that sells products related to alcoholic beverages) bore a layout of the pursuers' golf course, and were clearly a golf related product. The get-up of the defenders' product has neither a tree nor anything related to golf on it.

The concept of dilution, together with "blurring" and "tarnishing", is examined in Premier Brands UK Limited (supra at p. 786-789). Some light is shed on the test of detriment by the observation of the Court of Justice in General Motors (at para. 30 of the Court's judgment) that "the stronger the earlier mark's distinctive character and reputation, the easier it will be to accept that detriment has been caused to it". The test of detriment was examined more fully (albeit in the context of the similar provisions of the Trade Marks Act 1994) by Mr Allan James in Oasis Stores (supra at p. 649) where he observed:

"Any use of the same or a similar mark for dissimilar goods or services is liable, to some extent, to dilute the distinctiveness of the earlier mark. The provision is clearly not intended to have the sweeping effect of preventing the registration of any mark which is the same as, or similar to, a trade mark with a reputation. It therefore appears to be a matter of degree. In considering detriment under this heading, it appears to me to be appropriate to consider:

(1) the inherent distinctiveness of the earlier trade mark;

(2) the extent of the reputation that the earlier mark enjoys;

(3) the range of goods or services for which the earlier mark enjoys a reputation;

(4) the uniqueness or otherwise of the mark in the marketplace;

(5) whether the respective goods/services, although dissimilar, are in some way related or likely to be sold through the same outlets;

(6) whether the earlier trade mark will be any less distinctive for the goods/services for which it has a reputation than it was before."

He went through a similar exercise in another case that came before him some three months later, namely the Audi-Med Trade Mark [1998] RPC 863. In each of these cases he held that detriment to the distinctive character or repute of the earlier trade mark was not established.

Whilst no doubt the list referred to by Mr Allan James was not intended to be exhaustive, for my part I have little difficulty in accepting that these are relevant considerations when assessing (as best I can on the material before me, and before any evidence is led) whether the pursuers have established a prima facie case of detriment to the distinctive character or repute of their mark. Applying these tests, the pursuers' mark, being in the nature of a geographical feature, appears to me to be inherently less distinctive than a mark comprised of a surname or names, such as Marks and Spencer, Barclays Bank, British Telecommunications or the like. Moreover, when considering the extent of the reputation that the pursuers' mark enjoys in the relevant sector of the British public, it must be borne in mind that the pursuers' golf course is on the West Coast of America, and that the reputation of famous golf courses within the United Kingdom such as St Andrews, Muirfield, Lytham St Annes or Carnoustie may be expected to be of greater extent in this sector of the British public. A range of goods or services for which the pursuers' mark enjoys a reputation relates to the provision of a golf course (or golf courses) and a holiday resort - it does not include the marketing, manufacture or distribution of whisky. While the pursuers' mark is unique in the market place for golf courses and golfing resorts, it is apparent that it is not unique in other market places (including computer software, which is one of the classes covered by the pursuers' certificate of registration). Although the pursuers aver that the services which they provide are in some way related to the goods to be marketed by the defenders, it appears to me that there is only a somewhat tenuous and general association between golf and whisky, and there are no specific averments on behalf of the pursuers that the defenders' goods will be likely to be sold through the same outlets as the pursuers' goods or those manufactured by their licensees. Generally, it does not appear to me to be likely that the pursuers' mark will be any less distinctive for the services for which it has a reputation than it was before.

Even if I am wrong in my assessment under these various criteria (and of course I can only reach a very provisional view on the basis of the limited material before me), it seems to me unlikely that if there is any detriment to the distinctive character or repute of the pursuers' Community Trade Mark that such detriment will be more than de minimis. Having regard to all of the above, I was not satisfied that the pursuers have made out a prima facie case that the defenders' use of the sign is detrimental to the distinctive character or repute of the pursuers' Community Trade Mark.

(d) "Without due cause"

If I am wrong in my assessment of whether the pursuers have made out a prima facie case of either unfair advantage or detriment, it is necessary to look to whether, on a prima facie basis, the defenders' use of the sign is without due cause.

For the pursuers Mr McNeill submitted that there was a high burden on a defender who tries to suggest that his use of a pre-existing sign is not without due cause, and that this will be an extremely difficult burden to discharge if the Court is satisfied with regard to unfair advantage or detriment or both. In this case he submitted that there could be no due cause for the defenders using this sign, particularly standing the absence of pebble beaches on the River Spey and the fact that they could use many other names with a suitable geographic content for their proposed product. He accepted that the defenders have the UK trade mark "Pebble Beach" for Class 33: alcoholic beverages; whisky. He also accepted that the pursuers did not oppose this registration at the time, but he explained that this was only because they were not aware of it. The pursuers have taken steps to lodge an application for revocation of the defenders' UK trade mark. Such revocation procedure can only be initiated in separate proceedings in the High Court in England, and No. 6/9 of process is a draft claim form for the pursuers in such proceedings. I was told that these proceedings had been initiated on the same day as parties appeared before me, and that the grounds for revocation are substantially the same as the grounds on which the pursuers sought interim interdict in terms of their first conclusion before me. Mr McNeill submitted that this was a case in which the defenders' trade mark was prima facie invalid, and I should attach no weight to the fact that at present it exists.

For the defenders Mr Robertson submitted that the Court must take account of the fact that the defenders own the registered trade mark "Pebble Beach" for alcoholic beverages including whisky, and that the defenders have been involved in the whisky business for a considerable time using the Lombards name, which they propose to use on this product. Even if I held that there was some detriment to the distinctive character or repute of the pursuers' Community Trade Mark, there would still be no basis for the Court to hold that the pursuers had a prima facie Article 9 case.

The test of "without due cause" was considered by the High Court in England in Pfizer Limited (supra at para. 34), and in more detail in Premier Brands UK Limited (supra at p. 789-792). In the latter case, Neuberger J. observed,

"the words 'being without due cause' are somewhat opaque in their effect. I consider that they have to be read as not merely governing the words 'the use of the sign', but also as governing the words 'takes unfair advantage of, or is detrimental to'.... It requires the defendant to show not merely that the use of the allegedly infringing sign in connection with the defendants' goods is 'with due cause'; it also requires him to show that although the use of the sign might otherwise be said to 'take unfair advantage of or is detrimental to' the mark, the advantage or detriment are not 'without due cause'".

I respectfully agree with this view.

As an example of the application of this test, Neuberger J. quoted from Lucas Bols [1976] IIC 420 at 425, where the Court observed that,

"What this requires, as a rule, is that the user (of the mark) is under such a compulsion to use this very mark that he cannot honestly be asked to refrain from doing so regardless of the damage the owner of the mark would suffer from such use, or that the user is entitled to the use of the mark in his own right and does not have to yield this right to that of the owner of the mark...."

In the present case I think it would be difficult to argue that the defenders are under such a compulsion to use this very mark that they cannot honestly be asked to refrain from doing so. However, the alternative situation referred to in the extract may apply to this case. The defenders are entitled to the use of the mark in their own right. The pursuers did not object to the defenders' registering this mark, and the defenders now have a right to use it. The pursuers assert that they are challenging that right, and that they are confident that they will succeed in their application for revocation of the defenders' mark. That may be so, but it seems to me that until the pursuers have successfully obtained revocation of the defenders' trade mark, I cannot close my eyes entirely to its existence. There is certainly not enough material before me to enable me to conclude that the application for revocation will inevitably succeed. That being so, even if I had taken the view that there was a prima facie case of either unfair advantage or detriment, I should have found difficulty in holding that the pursuers had made out a prima facie case that the defenders' use, and any advantage or detriment, were without due cause.

In conclusion with regard to prima facie case on the pursuers' first conclusion, I was not satisfied that the pursuers had made out a prima facie case for the reasons outlined above. I therefore refused interim interdict in terms of the first conclusion.

2. HAVE THE PURSUERS MADE OUT A PRIMA FACIE CASE ON

PASSING OFF?

In support of his second conclusion, Mr McNeill observed that the question of trade mark and the classes in which it is registered is of no relevance to the common law remedy of passing off. The pursuers offered to prove that they have considerable goodwill, and that they are an international business with customers in the UK and in Scotland in particular. Not only are these customers visitors to the pursuers' golf course and resort, but they are also purchasers of Pebble Beach goods in the UK with sales to the extent of about US$250,000 per annum. Unlike the remedy under Article 9(1)(c), the pursuers require to satisfy the Court that there is a likelihood of confusion in the public mind. They must show that by reason of trade in this country in goods or services bearing a particular name there has accrued to their business a reputation or goodwill associated with that name, and that what the defenders are proposing to do will misrepresent their goods as being the goods of, or otherwise connected with, the pursuers, so that these goods are accepted on the face of the pursuers' reputation. They must also establish quantifiable damage to their goodwill within this jurisdiction. Mr McNeill submitted that the pursuers had a prima facie case of passing off.

Mr Robertson disputed this. He maintained that the pursuers' case on confusion was weak in averments, and not supported by the materials before me. There was no particular or special link between whisky and golf, nor was there any realistic risk that the public would be misled into thinking that the defenders' product was produced by the pursuers or their licensees. It was one of a range with a coastal theme, and there was nothing in the get-up of the range to suggest a link with golfing in general or the pursuers in particular. Moreover, that part of the Conclusion which sought interim interdict against the defenders from exporting their product was irrelevant in a passing off claim, as the only goodwill which was relevant for a passing off claim was goodwill within the jurisdiction.

I was not satisfied that the pursuers had made out a relevant prima facie case of passing off. The suggestion that members of the public will be confused merely by the name "Pebble Beach" on a Speyside Malt whisky into believing that it is a product of a Californian golf club resort or its licensee appears to me somewhat far fetched. In any event, there was nothing in any of the material before me to suggest that the defenders were misrepresenting their goods as being the goods of, or otherwise connected with, the pursuers. I therefore refused interim interdict in terms of the Second Conclusion.

3. THE BALANCE OF CONVENIENCE

In light of my decisions on prima facie case in relation to the First and Second Conclusions, it is unnecessary for me to deal with the question of balance of convenience at any length, as this would arise only if I was satisfied that the pursuers had made out a prima facie case on one or other Conclusion. However, if I am wrong in my views as to prima facie case, and in any event in deference to the arguments advanced by counsel, I set out my reasoning on balance of convenience briefly.

Mr McNeill's submission was that it would be very difficult, if not impossible, to quantify the pursuers' losses as a result of dilution or tarnishing of their brand in the event that interim interdict were to be refused. These were an insidious type of damage, and it would be almost impossible to quantify it in any subsequent action for damages. By contrast he asserted that if interim interdict was granted but ultimately the pursuers did not obtain a permanent interdict, the defenders would be able to use the name "Pebble Beach" for their product after the action was concluded. This was not like a business name which could never be used again - the defenders would still have their trade mark and could still invoke the name. Moreover, nearly all of their costs would be relatively easily quantifiable - for example, re-packaging, re-labelling, photography and loss of sales. They could therefore raise an action for damages against the pursuers for wrongful interdict, and a figure could be put on their losses, unlike the insidious type of damage which the pursuers would suffer. Moreover, he pointed out that there was no limit to the quantity of whisky which the defenders could sell under the name "Pebble Beach". The pursuers were reasonably apprehensive that the defenders intended to market a significant quantity of this product, and he drew my attention to the averments in Article 6 of Condescendence that the defenders have applied for trade marks in respect of this sign in between 20 and 40 countries. The pursuers believe that the defenders have incurred substantial expenditure in marketing the product under the name "Pebble Beach" and for such expenditure to be justified, the quantities which the defenders intend to market under that sign must be substantial.

In reply Mr Robertson submitted that the pursuers' averments in support of balance of convenience were very general and did not justify the granting of interim interdict. He reiterated that the defenders have a registered trade mark in this name, and no objection had been lodged. There would be great difficulty in quantifying the defenders' loss in the event that interim interdict was granted and ultimately interdict was refused. The loss of the name "Pebble Beach" would effectively result in the loss of the whole "coastal" range, which was presently being advertised to the trade. The defenders anticipated that this would in turn result in loss of sales of the defenders' "jewel" range. As a matter of commercial reality, if the defenders were forced to change the name of the Speyside Malt in their coastal range there would be no real prospect of their reviving this name, even if perpetual interdict was ultimately refused. The defenders have been advertising the launch of their "coastal" range and have received interest from customers in the whisky trade (he indicated that there was no greater interest in the product named "Pebble Beach" than in the other coastal titles, which supported his position that there was no unfair advantage). The defenders were under the necessity of marketing this range of whiskies in the very near future, because sales to the whisky trade required to be made in October in order to meet the lucrative Christmas market.

I found the question of convenience to be fairly finely balanced, but I reached the conclusion that the balance of convenience favoured the defenders and the refusal of interim interdict. If the pursuers are ultimately successful in obtaining perpetual interdict, the period during which their reputation will have suffered detriment, or their goodwill will have been damaged, will in my view not be unduly great, particularly as they assert that they are "an aspirational venue". Any detriment to the distinctive character or repute of the mark or any damage to goodwill is unlikely to be significant in the early stages of the sales of the defenders' proposed product. By contrast, the potential losses to the defenders if they miss the lucrative Christmas market, having already given the product some publicity within the whisky trade, seem likely to be greater and more immediate. In these circumstances, if it had been necessary for me to do so, I should have held that the balance of convenience favoured the refusing of these interim interdicts.