Scottish Court of Session Decisions

Gleneagles Hotels v. Quillco 100 Ltd & Anor [2003] ScotCS 92 (1 April 2003)

OUTER HOUSE, COURT OF SESSION
A372/03	OPINION OF LORD NIMMO SMITH in the cause GLENEAGLES HOTELS LIMITED Pursuer; against QUILLCO 100 LIMITED and TONI ANTIONIOU Defenders:   ________________

 

Pursuer: Smith, Q.C., Higgins; Dundas & Wilson, C.S.

Defenders: Sandison; DLA

1 April 2003

1. In this intellectual property action the pursuers conclude inter alia as follows:

"1. For interdict against the defenders or either of them, their employees or agents or anyone on their behalf or acting under their instruction from infringing or continuing to infringe the pursuer's rights in United Kingdom trade marks in the word 'GLENEAGLES' Nos. 2107251, 1449398, 1282654 and 1281655 and that by using the name 'GLENEAGLES FILM STUDIOS' ('the GFS name') and/or the Gleneagles Film Studios sign comprising the words 'GLENEAGLES FILM STUDIOS' and depicting a glen and an eagle in substantially similar form to the sign in the Appendix hereto (the 'GFS sign') (a) in the course of developing and/or marketing a hotel, conference facilities, timeshare lodges, golf courses, club house and restaurant facilities at Aberuthven, Perthshire or any of the foregoing, and (b) in the course of developing and/or marketing a film studio complex and/or housing at Aberuthven, Perthshire aforesaid and (c) causing, directing, procuring, assisting or enabling others to do any of the above acts; and for interdict ad interim.

3. For interdict against the defenders or either of them, their employees or agents or anyone on their behalf from passing off as those of the pursuer the services provided by, and the business operated by, the defenders, and that by promoting or advertising the 'Gleneagles Film Studios' development at Aberuthven, Perthshire under the GFS name or GFS sign similar to the said GFS sign in the Appendix hereto; and for interim interdict."

On 11 February 2003, before the summons was served on the defenders, having heard counsel for the pursuer, I granted interim interdict in terms of these conclusions. Defences have now been lodged on behalf of both defenders, who have enrolled a motion for recall of the interim interdict. I heard this motion on 21 March 2003.

2. It is averred in the summons that the pursuer was formerly named Gleneagles Hotels Plc. The pursuer owns and operates the Gleneagles Hotel ("the Hotel") and associated facilities, which include four golf courses (three of them championship golf courses), a golf academy, a country club, conference facilities and timeshare accommodation. The Hotel is located at the mouth of Glen Eagles, a glen in the Ochil Hills. It currently has 275 bedrooms. It was established in 1924. Since that time, it has achieved a five star grading and an international reputation. In particular, tourists come from all over the world to play golf at the hotel. Professional golf tournaments are also played in the Hotel's PGA Centenary Golf Course, which was designed by Jack Nicklaus. The defenders take no serious issue with these averments. They add that Gleneagles is also the name of a private estate and mansionhouse, and is commonly used by extension to refer also to the wider area surrounding the glen and estate. Whether or not this is so, I might add that it seems generally to be overlooked that the origin of "Eagles" in the name of the glen is ecclesiastical rather than aquiline.
3. The pursuer goes on to aver that it is the proprietor of all trade marks relative to the Hotel and associated facilities. In particular, it is the proprietor of the following UK trade marks in the word "GLENEAGLES": (a) 2107251 (in class 35 - management of golf clubs and courses, advisory services in relation thereto); (b) 1449398 (in class 37 - construction of golf courses, associated practice facilities and clubhouses, etc); (c) 1282654 (in class 41 - services for the provision of courses of instructions, for the organising of sporting events, etc); and (d) 1281655 (in class 42 - provision of hotel services, services for the provision of food and drink, accommodation and conference facilities, etc). From the productions it can be seen that in respect of 2107251 the filing date was 9 August 1996 and the registration date 21 February 1997, in respect of 1449398 the dates were 7 December 1990 and 24 July 1992, in respect of 1281654 the dates were 1 October 1986 and 3 March 1989, and in respect of 1281655 the dates were 1 October 1986 and 4 November 1988. It appears therefore that it was only in 1986 that it occurred to the then proprietors of the Hotel that trade mark protection might be appropriate.
4. The pursuer avers that it has built up substantial goodwill in these trade marks in the United Kingdom, Europe and worldwide. It has spent significant resources in building up reputation in them. It has for many years used a combination of the word "GLENEAGLES" with an eagle device on its stationery and promotional material, some of which has been lodged as productions. As such, it has used the said combination sign or mark to promote the services offered by it. The pursuer owns separate trade marks in the eagle device and has built up substantial goodwill in the combination sign or mark in the United Kingdom, Europe and the United States and worldwide. It has spent significant resources in building up reputation in this sign or mark. The defenders add to the pursuer's description of the eagle device that it consists of a traditional and moderately realistic depiction of a whole eagle volant with outstretched wings, surmounting a set of antlers.
5. The pursuer goes on to aver that a local property developer, whose name appears in the productions as Maher Al Tajir, has submitted an application to Perth & Kinross Planning Department in respect of a development to be located on the property adjacent to the west of the Hotel. The development is to be called Gleneagles West. It is to consist inter alia of a five star hotel, golf courses and luxury housing. The pursuer is to be associated with this development. The pursuer has entered into temporary licence arrangements with the developer in order to permit the development to use the GLENEAGLES trade mark. The pursuer proposes to enter into detailed licence agreements as part of a development agreement for Gleneagles West.
6. On 5 February 2003 the first defender submitted an application to Perth & Kinross Planning Department in respect of a planned 800 acre development near the village of Aberuthven in Perthshire. The proposed development is to consist of a film studio complex, a five star hotel with 200 beds and conference facilities, restaurant, two golf courses with clubhouse, timeshare accommodation and 500 houses including affordable housing. (The expression "affordable housing" seems, from the productions, to mean the same as "low-cost housing", by contrast with "executive accommodation".) At the time when the action was raised the project was being promoted and funded by Gleneagles Film Studio Partnership. The pursuer avers that it has been unable to establish the legal status of Gleneagles Film Studio Partnership, and the defenders explain that the name is used by them to refer to the proposed business vehicle which will operate the film studios when they open. I conclude from this that there is no such firm presently in existence.
7. The entire project has been promoted under a badge or sign consisting of the words "GLENEAGLES FILM STUDIOS" used in combination with an eagle device. A copy of this badge or sign is reproduced in the appendix to the summons. As averred by the pursuer, the words "FILM STUDIOS" are written in significantly smaller lettering than the word "GLENEAGLES". It may be added that the letters "G" and "S" are larger than the other letters in "GLENEAGLES", and above this word there appears a representation of a loch with hills on either side, with an expanse of sky above in which the eagle device appears. The defenders aver of this device that it is a highly stylised modern impressionistic representation of an eagle's head alone, formed with two main strokes and an eye circle, and that it has never been used in conjunction with an antler device.
8. The cost of the overall project is estimated by the defenders to be in the region of £250m, of which the cost of the film studio element is estimated at £30m. The defenders aver that the central feature of the proposed development is the film studio and its associated facilities, and all other features of the proposals are properly regarded as merely ancillary thereto. I may add, in respect of this last averment, that this is borne out by the productions, which include a copy of a brochure and other publicity material issued by the defenders. I see no need at this stage to go into the detail of the various passages to which I was referred, but in order to convey something of the impression given by the promotional literature I should quote these sentences from the introduction to the brochure:

"Nestling in the glorious Strathearn valley several miles north east of the world famous Gleneagles Hotel, Gleneagles Film Studios will offer a unique £250 million destination for the business, tourist, leisure and residential user.

The 800-acre campus will combine Scotland's own national film studios with a wealth of residential, tourist, community, educational, sports and leisure facilities in an unrivalled 'blockbuster production' destined to bring Oscar status to Perthshire."

9. The second defender is a director of the first defenders and is a spokesman for the proposed Gleneagles Film Studios Partnership. On 4 February 2003 there was a presentation for members of the public, at which details of the proposed development were outlined. Copies of the brochure were provided to members of the public. The front cover is headed "The Vision" and is otherwise occupied by the words "GLENEAGLES FILM STUDIOS" used in combination with an eagle device, as already described.
10. On 5 February 2003 a press launch of the project was organised by the second defender on the first defender's behalf. The front cover of the "press pack" was similar to that of the brochure. The pack contained a section headed "FAQ's". Question and answer 28 were in the following terms:

"Q. Why call the development Gleneagles Film Studios when it is nothing to do with the hotel and is several miles away from Gleneagles itself?

A. It is all about trying to put the studios on the international map.... While it may be a few miles out of Gleneagles by local perception, in global terms it helps pinpoint it exactly. Gleneagles is also a name associated with the very best of Scotland - a five-star service in a five-star setting. We make no apologies for adopting a name which is internationally identified with the finest things our country can offer. We feel confident that Gleneagles Film Studios will only enhance the already excellent reputation associated with that title."

11. The defenders aver that the press launch was organised by the second defender qua director of the first defender, that it took place in a suite in the pursuer's hotel, that the pursuer was aware that the launch was to be organised to promote the development under the name "GLENEAGLES FILM STUDIOS", and that it took no objection thereto. The press pack, they aver, makes it clear that the development is not associated with the Hotel and no reports published by members of the press after the launch disclosed that any person attending the launch had any apprehension that such a collection existed or was claimed.
12. Section 10 of the Trade Marks Act 1994 provides inter alia:

"(2) A person infringes a registered trade mark if he uses in the course of trade a sign where because -

(a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or

(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,

there is exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.

(3) A person infringes a registered trade mark if he uses in the course of trade a sign which -

(a) is identical with or similar to the trade mark, and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered,

where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."

13. The pursuer avers that it reasonably apprehends infringement of its trade marks under both of these sub-sections. So far as sub-section (2) is concerned, the pursuer avers that the defenders' name and sign are similar to the name "GLENEAGLES". The defenders' proposed services, involving hotel, conference facilities, timeshare accommodation, golf courses, clubhouse and restaurant facilities are identical or similar to those for which the pursuer's trade marks are registered. There exists a likelihood of confusion on the part of the public, including the likelihood of association with the pursuer's trade marks. So far sub-section (3) is concerned, the pursuer avers that the use of the defenders' name and sign, in as much as said use is in relation to services which are not similar to those for which the pursuer's trade marks are registered, is without due cause and takes unfair advantage of, and is detrimental to, the distinctive character and repute of the pursuer's trade marks. The defenders' name and sign are being used as a banner for services which include services which are identical or similar to those for which the pursuer's trade marks have been registered. The defenders' choice of the name "Gleneagles" was deliberately made to exploit a well-known brand. The defenders' development is likely to dilute and tarnish said name.
14. The defenders deny these averments. So far as section 10(2) is concerned, they aver that the name and sign used by the first defender are not sufficiently similar to those used by the pursuer to cause any reasonable confusion on the part of the public. They aver that at the meeting in January 2003 Peter Lederer, managing director of the pursuer, stated that the pursuer did not object to the use of the word "GLENEAGLES" in connection with the proposed development so long as it was made clear that the development was not associated with the pursuer's hotel, and as long as the pursuer's eagle device was not used in connection with the development. In reliance on that statement, the defenders adopted the name "GLENEAGLES FILM STUDIOS" and designed their own eagle device. They incurred expense reasonably estimated at £50,000 in producing promotional material using that name and device in connection with the proposed development.
15. In response to this, the pursuer has lodged an affidavit by Mr Lederer. He is also chairman of Visit Scotland (formerly the Scottish Tourist Board). In it he states inter alia that he welcomes the creation of a film studio in Scotland and that he has no objection to the proposed development as such. His objection is to the use of the name "GLENEAGLES". Some years ago he was involved in discussions with the second defender about a proposal to develop the Strathallan Estate, owned by Sir William Denby-Roberts, as a film studio, with the three parties working in partnership and the "GLENEAGLES" name being licensed to it. This proposal did not proceed further. He had a meeting with the second defender on 10 January 2003 when arrangements were made for the press launch to take place at the Hotel. Mr Lederer made clear that he objected to any use of the name "GLENEAGLES" or the pursuer's logo in connection with the development.
16. The defenders, however, maintain that they have observed the conditions made by the pursuer upon the use of the word "GLENEAGLES" with the proposed development. In these circumstances, the pursuer is personally barred from objecting to the use of the name and device in connection with the development.
17. In their defences, the defenders state:

"Notwithstanding the foregoing, the defenders are prepared formally to undertake to the Court that they will not, pending final determination of this action, use either the name 'Gleneagles Film Studios' or any other name including the word 'Gleneagles', or their own eagle device hereinbefore condescended upon, in connection with any part of their proposed development other than the film studio complex."

This was repeated by their counsel before me.

18. So far as section 10(3) is concerned, the defenders aver that the pursuer's mark has no particular distinctive character or repute in the United Kingdom such as to qualify for protection under that sub-section. They aver that "Gleneagles" is primarily the name of an area in Scotland. It has been adopted by businesses trading both within and outwith that area for many years, and the pursuer has no greater rights in the use of the name than have other businesses which have adopted it, other than in the context of the classes of business in respect of which the pursuer claims to enjoy registered trade marks. The word "Gleneagles" is used, and has in the past been used, in the course of business by numerous entities in the United Kingdom which have no connection with or licence from the pursuer. There then follows a list of these entities, both those which currently trade and those which do not. They aver that the second defender adopted the name "GLENEAGLES FILM STUDIOS" because the location of the Gleneagles area is more widely familiar than "Aberuthven" "Strathearn" or any of the other names which could have been used, with no greater decree of accuracy, to describe its location.
19. This is a convenient point at which to consider whether the pursuer has made out a prima facie case for trade mark infringement. Having regard to the undertaking offered by the defenders, it was not in issue at the hearing of the motion that the pursuer has a prima facie case under section 10(2) in respect of the proposed hotel, conference facilities, timeshare accommodation, golf courses, clubhouse and restaurant facilities. Counsel for the defenders invited me to treat the film studios separately. There is no averment in the defences, no did counsel offer any explanation, as to how the film studios could be treated separately. The defenders' promotional material contains a great deal more "vision" than solid detail. On my reading of the literature, the film studios are an integral part of, and central to, the whole development. Assuming, however, that they can be treated separately, so that the expression "GLENEAGLES FILM STUDIOS" is capable of dissociation from the rest of the development, I have to consider whether the pursuer has a prima facie case under section 10(3). Counsel for the defenders also addressed me on the question whether the defenders' sign is identical with or similar to the pursuer's trade mark. Clearly there is identity in the word "GLENEAGLES", though of course the defenders add "FILM STUDIOS" in smaller letters. Each of the parties uses a representation of an eagle, though in a very different form. It cannot be said that there is not a prima facie case at least of a similarity to the pursuer's trade mark.
20. The main issue between the parties came to be whether the pursuer has averred a prima facie case that the use of the defenders' sign is without due cause and either takes unfair advantage of or is detrimental to the distinctive character for the repute of the pursuer's trade mark. Counsel for the defenders referred at some length to Premier Brands UK Limited v Typhoon Europe Limited [2000] FSR 767 and to Daimlerchrysler AG v Javid Alavi (t/a Merc) [2001] RPC 42. He also referred to the Opinion of Lord Menzies in Pebble Beach Co v Lombard Brands Limited 2002 SLT 1312. I think it inappropriate at this stage to embark on a detailed analysis of what was decided in these cases. The main submission of counsel for the defenders was that, for there to be unfair advantage, there had to be competition between the parties, which there was not in relation to film studios, and that detriment (of which "blurring" and "tarnishing" are features) required to be the subject of specific averment once detriment had in fact occurred. In reply to these submissions, counsel for the pursuer referred to a passage in Kerly, Trade Marks and Trade Names, 13th Ed., paras 8-81 to 8-84. He also submitted that, although trading has not yet started, it was sufficient to aver the likelihood of detriment.
21. In my opinion, the averments of the pursuer are sufficient to establish a prima facie case of infringement under section 10(3) as well as under section 10(2). Although the proposed film studios are not directly in competition with the pursuer's existing and proposed activities, they are only a few miles from the Hotel, they are an aspect of the leisure industry, and are closely tied in with aspects of the defenders' proposed development which are directly in competition with those of the pursuer. No other business using "Gleneagles" as part of its name appears to be in this position. The facts are very different from what they were in Pebble Beach, which related on the one hand to a golf course in California and on the other to whisky. It is by their own choice that the defenders have associated themselves with the pursuer's name, out of the many names with Scottish associations from which it was open to them to choose. In terms of their own literature, the defenders seek to borrow something of the pursuer's stellar qualities to add lustre to their own enterprise. I am not persuaded at this stage that this is not capable of being regarded as "tarnishing" rather than reflected glory. In my opinion the pursuer has made out a prima facie case for trade mark infringement under both of the sub-sections relied upon.
22. The pursuer also avers that in the circumstances it is reasonably apprehensive that actual and potential customers of the pursuer will be deceived into thinking that the development proposed by the defenders involving said services will be those of the pursuer. There is further likely to be confusion between the defenders' development and the Gleneagles West development which are both in the planning process. There is a substantial similarity between the concept of the defenders' sign and the eagle device and name used by the pursuer. The defenders' actings involving the use of this name and sign amount to, and are calculated to amount to, a passing off of the services provided by, and the business operated by, the defenders as those of the pursuer to the prejudice of the pursuer's legitimate business interests. These averments are denied by the defenders, who aver in their turn that there is no material risk of any relevant confusion in the minds of the public. There is, further, no common field of activity between the first defenders' film studios and any of the activities which the pursuer either carries on itself or has licensed others to carry on under reference to the word "GLENEAGLES".
23. The pursuer thus invokes the concept of passing off, in respect of which I quote from the speech of Lord Oliver in Reckitt & Colman Products Limited v Borden Inc [1990] 1 WLR 491 at p.499:

"The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. 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 believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reasons 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."

Later in his speech, at p. 508, Lord Oliver said that the "essence of the action for passing off is a deceit practised upon the public". I refer also to William Grant & Sons Limited v Glen Catrine Bonded Warehouse Limited 2002 SLT 1419. Counsel for the defenders referred to Lego System Aktieselskab and Another v Lego M Lemelstrich Limited [1983] FSR 155 and contrasted the pursuer's hotel and golf business with the proposed film studios. The plaintiffs in the Lego case made children's toys, while the defendants were an old-established Israeli company which manufactured irrigation equipment.

24. I am satisfied that in the present case the pursuer has averred a relevant case of passing off, as above defined. The comments I have made about the prima facie trade mark infringement case apply equally here. The defenders here, on the face of it, seek deliberately to attract the attention of the public by borrowing the pursuer's name and its associated goodwill. There is no indication that the defenders would have chosen to use the name "GLENEAGLES" if it had not been for the already established business of the pursuer under that name.
25. The remaining issue is the balance of convenience. There is a dispute between the parties as to what Mr Lederer may have said at the meeting in January 2003. I have already referred to his affidavit. It is not easy to see how he, on behalf of the pursuer, would have agreed to give away part of what is a valuable asset of the pursuer. Although there will no doubt be more detailed evidence in due course, I think that it is open to me to proceed at this stage on the basis that the name "GLENEAGLES" is recognised in Scotland and elsewhere as applying to the Hotel and associated facilities operated by the pursuer, rather than to the original Glen Eagles. Although the trade mark has comparatively recently been registered, the business is long-established. By contrast, the first defender was incorporated on 22 June 2000 and has an issued share capital of £2.00. I was told that it has substantial backers, and a fairly substantial sum of money has already been spent, but clearly its business has got little further than being a "vision". No reason has been given to me why the word "GLENEAGLES" has been chosen by the defenders, except to borrow light from the pursuer. This appears to me to be a clear case in which the status quo should be preserved, and the established business should not ad interim have to suffer potential damage by the means set out here.
26. In the circumstances I shall refuse the defenders' motion for recall of the interim interdict which I have previously granted.