In other news – a round up of other key UK and EU developments

EU developments

New EU design package published in Official Journal

The new EU Design Regulation and Directive were published in the Official Journal on 18 November 2024 and came into force on 8 December 2024.

The new legislation broadens the definition of 'product' so as to encompass virtual designs and the spatial arrangement of interior or exterior environments (such as shop layouts) and broadens the definition of 'design' to include movements, transitions and animations. 3D printing has also been listed in the activities that can be prohibited by the owners of registered EU designs.

Defences to infringement have been expanded to include referential use, comment, critique and parody for registered and unregistered EU designs. Changes have also been made to make it easier for third parties to repair products without infringing any design rights in those products.

The Regulation will start to apply after four months, and Member States will have 36 months to transpose the Directive into their national systems. For more on the changes, see our article here.

EU General Court holds Volvo's headlight registrable as a 3D shape mark

The EU General Court has held that Volvo's headlight (depicted below) is registrable as a 3D shape mark.

The question was whether the headlight departed significantly from the norms and customs of the relevant sector. The Court noted that headlights have become an essential component in vehicle designs and differentiate both brands and car models from each other. The fact that headlights can be seen from afar, both in daylight and at night, makes them particularly effective as carriers of distinctive character.

The Court noted the "Y" shape of the mark which it considered would capture the average consumer's attention and enable it to distinguish the mark from other headlights on the market. The mark therefore satisfied the 'departs from the norms and customs of the sector' test.

EU General Court says weak common element does not rule out a likelihood of confusion

The EU General Court has annulled an earlier ruling that SANITIX and SANITIEN are not confusingly similar to SANYTOL.

According to the General Court, there is nothing to suggest that the trade marks in issue would be broken down to "sanit" and "ix" or "ien" and "sanyt" and "ol" - considering the font and the syllabic division, the words would not be split in this way. This is particularly so as "ix", "ien", and "ol" have no meaning. Each of the marks must therefore be considered as an indivisible whole. Unlike the Board of Appeal, the General Court assessed them to be visually, phonetically and conceptually similar to an average degree.

Considering the similarities between the marks, the enhanced distinctive character of the earlier mark, and the interdependency principle, a likelihood of confusion could not be ruled out. This was despite the fact that the shared element between the trade marks was weakly distinctive (with "sanit" and "sanyt" alluding to the "sanitary" nature of the goods in classes 3 and 5).

The is a further decision which emphasises that there can still be a finding of a likelihood of confusion where the only similarity between two marks is a relatively weak descriptive element. This is particularly so where the earlier right has an enhanced distinctive character through use and the goods/services are identical or closely similar. It can be contrasted with the Athleta UK decision (below) where a shared weakly distinctive element meant there was no likelihood of confusion.

EU General Court says KINGSBURY and FINSBURY are confusingly similar: Borco-Marken-Import Matthiesen v EUIPO

Overturning a decision of the Board of Appeal, the EU General Court has held that there is a likelihood of confusion between the marks KINGSBURY and FINSBURY, both covering Class 33 goods. The marks, considered as a whole, had at least an average degree of visual and aural similarity. They would have no conceptual meaning in eg Spain. This, together with the identity of the goods, compelled a finding of a likelihood of confusion. The decision should be contrasted with the UK's MOTUS/LOTUS ruling (more here).

EUIPO Grand Board of Appeal rules on conversion

The EUIPO Grand Board of Appeal has ruled that an EUTM application that is withdrawn during the time limit for an appeal can proceed to conversion to a national application. The owner need not file an appeal before withdrawing the application and then apply to convert. This confirms what the board itself had said in the Nightwatch case – and goes against what the EUIPO guidelines say on the issue. It means that:

• A decision does not become final until the time limit for appeal expires. 

• Where an appeal is filed (or an EUTM application or dispute is withdrawn) during the appeal period, the original decision never becomes "final" and will never produce effects (operational or substantive). It simply stays on the public file for the record. 

• Therefore, if an EUTM application is withdrawn (eg following refusal) during the time limit for an appeal, the refusal never becomes final. A conversion application can then be filed.

• It should be cheaper and quicker to file a conversion request (as no appeal is required). 

• It should not matter if the EUIPO issues a "final" refusal of an EUTM application. It is not in fact final until the time limit for appeal expires. Therefore, responding to a provisional refusal (with the risk that the EUIPO could then issue a "final" refusal) won't deprive the applicant of the chance to convert. 

UK developments

Court of Appeal upholds ruling on "crowded market": Lifestyle Equities v Royal County of Berkshire Polo Club

The Court of Appeal has upheld this important ruling which found no infringement largely on the basis that there was a crowded mark containing numerous clothing brands using images of polo players on horseback. The existence of such a crowded market meant that the trade marks alleged to be infringed had a lesser degree of distinctive character "…which in turn meant that there was less scope for there to be a likelihood of confusion." This is because, "…consumers have learnt that the presence of a horse and rider motif is generic for such brands such that they must rely on other aspects of the branding and in particular the name as indicating origin. … In a crowded market it is harder for one mark to stand out." The case is a reminder that as well as inherent and acquired distinctiveness, distinctiveness as a result of the state of the market can also be relevant. 

Like the High Court, the Court of Appeal also held that, while coexistence agreements could not determine whether the public was likely to be confused or not, they might form part of the factual background against which the court made its assessment, provided that that any conclusions were cautiously drawn. This small risk (of a co-existence being brought into evidence) should be borne in mind when drafting co-existence agreements.

Court of Appeal says High Court was wrong to overturn UKIPO hearing officer decision

In Extreme Networks v Extreme E, the Court of Appeal has held that the High Court was wrong to overturn a decision of a UKIPO hearing officer that the organisation of shows is similar to the booking of tickets for shows in Class 41. The Court of Appeal confirmed the correct approach for determining whether services are similar and held that, "It is common for hearing officers when assessing the similarity of goods or services to express their reasoning in highly compressed form", citing numerous reasons for this.

Having not failed to consider all relevant factors, the hearing officer had made no error of principle. It was not therefore open to the High Court to overturn the hearing officer's decision. The ruling is a further reminder that appellate bodies in the UK will not overturn first instance decisions lightly – getting evidence and arguments right first time around is therefore key.

High Court finds limited infringement: Athleta v Sports Group Denmark

The High Court has ruled on whether the use of the sign ATHLECIA, infringes the claimant's ATHLETA trade mark registrations, both used and registered for various clothing items. The Court held that the mark/sign were highly similar visually, aurally and conceptually, but the common element was descriptive and had low distinctiveness so that there was no likelihood of a significant proportion of average consumers being confused.

However, the defendant also used the word ATHLECIA with a roundel logo. The roundel appeared in various places including on top of - and to the left of - the word ATHELCIA. When the word ATHLECIA was combined with a roundel placed to the left, the overall mark was sufficiently similar to the Claimant's roundel registration (both depicted below) to increase the likelihood of confusion – but only where the goods were identical. There would be no likelihood of confusion where the left roundel was used in relation to similar goods only or where the roundel was positioned on top of the word ATHLECIA.

This should leave the defendant free to continue to use its ATHLECIA sign, as long as the roundel is not placed on the left. The decision illustrates the fine line between what is and is not infringing, especially where the earlier mark is of low distinctiveness.

High Court makes first finding of accessory liability following Lifestyle v Ahmed

The High Court (IPEC) in Morley's v Jeyatharini Sivakumar & Ors has held that directors are liable as accessories for trade mark infringements committed by franchisees of their company since they had the requisite knowledge. 

Following the Supreme Court decision in Lifestyle v Ahmed, for a person to be liable as an accessory, they must have procured an infringement or joined in a common design to infringe and have "knowledge of the essential facts which make the act done wrongful" (more here). 

The High Court held that the directors had such knowledge as there had been a prior settlement agreement between the parties. This is the first case following the Supreme Court ruling in which accessory liability has been found.

High Court considers recovery of costs in appeals from trade marks registry

In Unicorn Studios v Veronese, the judge considered whether it was appropriate to award costs outside the registry scale where a registry decision is appealed to the High Court. The decision is a reminder that costs can be considerable where registry disputes are appealed to the High Court as opposed to the Appointed Person.

Appeals can be brought before either the Appointed Person or the High Court and there is a huge discrepancy between the costs recoverable under both. In appeals before the Appointed Person, costs awards are limited to the registry scale. In appeals before the High Court, the costs awarded are the same as in any other litigation unless an order is made under CPR 52.19.

There are circumstances in which fairness would require the High Court to direct that any costs awarded in the proceedings should be on the same basis as if the appeal had been brought before the Appointed Person. Otherwise, there would be a risk that decisions to appeal to the High Court would be taken tactically as a means of putting unfair pressure on the Respondent.

However, the judge found that no such circumstances existed here. The Respondent did not make an application under CPR 52.19 to limit the costs to the registry scale. In any event, the judge concluded the costs were proportionate and he was satisfied as to the importance of the case to the Appellant. The brand was central to its business, and it had already had to fight off cancellation and opposition actions from the Respondent in the EUIPO.

UK suggests it will consult on new designs and exhaustion of rights regimes

There are suggestions that the UKIPO will consult on two key issues next year – firstly on the UK's design regime and secondly on the current exhaustion of rights regime. If correct, this will be welcome news to brand owners. In particular, the UK design regime will be out of sync with the regime applied by EU member states when the EU's design reforms apply in 36 months' time.

This year, there is also an expected consultation on the interplay between copyright and Artificial Intelligence. Indications are that the proposals will allow creators to opt out of the use of their works for AI training, and that there will be remuneration and transparency provisions.