Monster Energy has failed in its attempt to persuade the English High Court to overturn a UK IP Office opposition decision favouring Red Bull. The High Court's decision helps to clarify what evidence is needed to prove free riding where there has been no use of the junior mark.
What has happened?
- In June 2020, Monster filed a UK trade mark application for the words RED DAWG covering "non-alcoholic beverages" in class 32.
- Red Bull opposed the application on the basis of its earlier RED BULL rights covering energy drinks (and a further right in a mark combining the word RED with a bull logo). The opposition was based on a likelihood of confusion and taking unfair advantage of the reputation of Red Bull's earlier marks (free riding).
- Monster initially denied that Red Bull had a reputation in its marks for energy drinks and put Red Bull to proof of that reputation. However, at the hearing, Monster admitted that the RED BULL marks have a reputation for energy drinks.
- In August 2021, the UK IP Office held that, although consumers were not likely to confuse the trade marks (either directly or indirectly), they would "certainly be reminded" of RED BULL and there was a risk of unfair advantage being taken of the "very strong reputation" that Red Bull had in its RED BULL marks.
- Monster appealed that decision. Red Bull did not cross-appeal the finding on confusion. In August 2022, the High Court upheld the original decision and subsequently ordered Monster to pay Red Bull £23,500 in costs.
- Whilst there is the option of appealing a High Court decision to the Court of Appeal (unlike UK IP Office appeals taken to the Appointed Person, which cannot be appealed), Monster did not appeal this decision, which is now final.
- In its ruling, the High Court clarified that proving subjective intention to take advantage had not been necessary for Red Bull to win, and there was no need to show even "diffuse" intention. While unfairness is more likely to be found if there is evidence of an intention to benefit, it is enough if the objective effect is likely to give that benefit.
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Having decided that there was no likelihood or confusion, the UK IP Office hearing officer held that the mark RED DAWG "would be able to attract more consumers to purchase goods offered under it than would be the case if the [RED BULL] mark was not brought to mind." This was on the basis that consumers would "no doubt" be reminded of Red Bull and this would give Monster an "unfair economic advantage".
The key ground of Monster's appeal was that the UK IP Office should not have come to this conclusion in the absence of evidence of such damage being likely to arise. It also argued that the hearing officer had conflated two separate legal steps and thereby failed to consider the second step properly and on a standalone basis. The first step was his finding that consumers would make a "link" between the marks (RED DAWG thereby seeming "instantly familiar" for an energy drink). The second step was the finding that there was unfair damage. Monster's complaint was that there was no evidence of advantage or unfairness, nor of any intention to cause harm. Monster argued that this intention could be express, direct or even "diffuse" (ie "having an eye on" the senior mark), but it needed to be proven with evidence.
The case unusually involved much consideration of what evidence was missing, rather than what was present. In particular:
- Red Bull had submitted no evidence to show that it was or would be easier for Monster to establish its RED DAWG mark and sell energy drinks bearing that name – Red Bull's position was that no such evidence of this could exist since Monster had not started any use.
- Monster had submitted no evidence to explain why the name RED DAWG had been chosen – whilst Monster remained silent on this, Red Bull had invited the hearing officer and the Court to draw an adverse inference from this absence.
In dismissing the appeal, the judge held that the hearing officer's conclusions were ones which he was entitled to reach, namely:
- Monster obviously chose the RED DAWG mark with a view to it having brand significance and an impact on consumers (ie making its drink more attractive to consumers).
- Monster's general intention of having this effect was apparent from the fact that it tried to register RED DAWG as a trade mark in the first place.
- This effect was also intended to influence the economic behaviour of consumers of Monster energy drink products (ie to make them buy more).
- RED DAWG would be given a free ride and gain an unfair commercial advantage from this use.
- All this applied regardless of whether this was Monster's subjective intention vis-à-vis Red Bull's mark (and also even though consumers are unlikely to be confused).
In the appeal, the judge made it clear that proving subjective intention to take advantage had not been necessary for Red Bull to win, and there was no need to show even "diffuse" intention. Drawing on the earlier Jack Wills v House of Fraser (2014) case, he reaffirmed that unfairness is more likely to be found if there is evidence of an intention to benefit, but it is enough if the objective effect is likely to give that benefit.
What does this mean for brand owners?
This decision serves as a good reminder of the risks when choosing a new brand, where there are earlier similar well-known brands in the same field. Having a genuine wish to avoid confusion is not enough.
When weighing up and trying to reduce or avoid the risks, it is also not enough to be able to truthfully say you have no intention to free ride or take advantage of the well-known brand. Indeed, you may be positively planning for the two brands not to be confused. What matters is whether, on an objective analysis, there is a real risk that consumers would, on seeing your new brand, think of the well-known senior mark and whether, in practice (whatever your intention), you thereby get a marketing boost (ie higher sales with less need to spend money on your own marketing).
This case makes it clear that the risks apply just as much for big brand owners. They may have every intention of spending huge sums to promote a new brand. However, any marketing boost derived from similarity to a senior mark risks being objectively assessed to be an unfair advantage.
Taylor Wessing acted for Red Bull before the UKIPO and High Court.
This article was co-authored by Senior Brand Protection Paralegal, Elena Glengarry.
