How can a trade mark survive a challenge to its validity?
The IP Enterprise Court (IPEC) has enabled smaller businesses to fight back against perceived intellectual property (IP) injustices. Its simplified procedure, capped approach to costs recovery and tight case management make it a much more effective means of dispute resolution for the majority of IP claims.
A recent example of the IPEC in action looks at cryptocurrency. Wirex Ltd v Cryptocarbon Global Ltd & Ors concerns a UK trade mark registration for CRYPTOBACK. The trade mark was registered for financial and software services, amongst other things.
Wirex, the trade mark owner, operates a bitcoin-based credit card reward scheme. The defendants – companies who also run a cryptocurrency cashback service using the word “cryptoback” – argued that the trade mark was invalid. The defendants argued that (i) they had goodwill in “cryptoback” before the filing date and, (ii) Wirex knew about this goodwill and, consequently, they argued that the trade mark application was made in bad faith.
The judge said that a neologism such as cryptoback (a contraction of cryptocurrency cashback) could be descriptive, especially in relation to a new product or service. He laid out the classic example of linoleum which was a product only ever sold under the name linoleum (because the patent owner controlled distribution. When the patent expired, it had only every been known under that name. As the judge in that case put it "I want to know what they are to call it." No one could give him a satisfactory answer.*
Evaluating the claimed prior use by the defendants, the judge did not trust the witness evidence and relied mainly on the documentary evidence of prior use. This included email campaigns, online articles and FAQs, account summaries and invoices. However, this evidence did not prove that cryptoback was perceived as a trade name. Moreover, the service had also been presented by the defendants as “CcrbBack” and the judge said this increased the likelihood that “cryptoback” was seen as being used by the defendants a generic word and not as a sign which showed consumers the origin of the relevant services.
In the judge's view, the evidence therefore did not establish that there was goodwill associated with a trade name “cryptoback” at the trade mark filing date. As result, the allegation of invalidity failed, and the trade mark was valid and infringed.
One important factor in reaching this conclusion was the location where Cryptoback had been used - there was very limited evidence of use in the UK before the filing date (28 April 2018).
*This case dates back to 1878! Linoleum Manufacturing Company v Nairn  7 Ch. D. 834
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