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Writer's pictureRosie Burbidge

When are a 'crowded market' and earlier coexistence agreements relevant to trade mark infringement?


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In July 2023, we reported Mr Justice Mellor’s judgment in which he found no trade mark infringement or passing off in an English case concerning the Beverly Hills Polo Club trade marks: “Are consumers confused by polo marks?”.


The Court of Appeal upheld that judgment in July 2024 dismissing the Claimant, Lifestyle Equities’, appeal.


There were two grounds of appeal: (1) the judge wrongly relied on matter extrinsic to the trade marks and signs; and (2) he wrongly rejected reliance on the likelihood of post-sale confusion.


The judgment focused on point (1) and in particular two issues: the relevance of a crowded market and the relevance of coexistence agreements. Point (2) did not arise in light of his conclusions on (1).

 

Crowded market

Lifestyle Equities argued that the existence of a crowded market is, as a matter of law, irrelevant to likelihood of confusion. It relied in particular on CJEU Case C-145/05 Levi Strauss & Co v Casucci SpA, to claim that a crowded market does not affect the distinctive character of a trade mark. However, Lord Justice Arnold said:


“the issue here is not the impact of the defendant's use of its sign on the distinctive character of the trade mark, but the impact of third party use of other signs. There is no good reason to discount this. On the contrary, experience shows that third party use of similar signs does tend to diminish the distinctiveness of a trade mark. In a crowded market it is harder for one mark to stand out.”
The judge also considered whether the existence of a crowded market is relevant because it forms part of the context of the use of the sign when assessing infringement. He said the issue of how far context extends is difficult and best decided in a case where it actually matters: “It does not matter in this case, because the crowded market is relevant to the distinctive character of the Trade Marks regardless of how narrowly or broadly the context of the allegedly infringing use is drawn.” (emphasis added)

Finally on this point, Lifestyle Equities argued that the judge did not find that no significant proportion of consumers were unaware of the third party uses, nor was there any evidential basis for such a finding. But Arnold LJ said the judge made findings on distinctive character based upon all the available evidence, and there was no argument or evidence that there were distinct publics with different perceptions.

 

Trade mark coexistence agreements

The Court also rejected the claim that coexistence agreements are irrelevant.

Arnold LJ said:

Coexistence agreements may form part of the factual background against which the court or tribunal must make its assessment. In so far as they have effects on the relevant market, it may be necessary to take those effects into account. Even if they have no effect on the market, they may give some insight into what market participants consider to be acceptable or unacceptable. Provided that caution is exercised before drawing any conclusion from this, it may be appropriate to take it into account as part of the global assessment of the likelihood of confusion.” (emphasis added)

In this case, the judge considered two coexistence agreements but made no reference to them in his global assessment of the likelihood of confusion. He therefore made no error of law or principle.

 

What does this mean?

This judgment from the Court of Appeal fully upholds the first instance judgment and does not raise any new issues. Nevertheless, it is an important analysis of several important points by one of the leading trade mark judges in the UK.


The existence of a crowded market and of coexistence agreements are examples of factors that may be extrinsic to a trade mark dispute but which may be argued by one or other party. Arnold LJ’s judgment sets out when and how these factors may be relevant in court.


Get in touch if you would like more guidance on these issues and how they affect litigation strategy.


To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com

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