Chapter 14 - Infringement and parties to infringement actions

14.03 The law in relation to infringement is contained in ss 9 and 10 of the Trade Marks Act 1994 ('TMA 1994') for UK trade marks and in Art 9 of the Community Trade Marks Regulations ('CMTR') for CTMs. Both are derived from Art 5 of the Directive^[1] although there are some differences in precise wording. As many cases now refer to the provisions of the Directive (it being the governing legislation), this chapter will do the same, so the wording of provisions quoted in this chapter is taken from the Directive. However, the equivalent provisions of the TMA 1994 and the CTMR will also be identified.

14.04 In summary, under trade mark legislation:

14.05 Much of the wording of the infringement provisions is the same as wording in the provisions governing the relative grounds for a refusal to register a mark. This is hardly surprising. Both involve asking whether a particular sign or mark is or would be too close to another existing mark. For this reason, many of the issues that arise in relation to infringement have already been considered in Chapter 5 when considering the relative grounds for refusing registration of a mark.

14.12 The first condition is that to infringe, there must have been use of a sign by a third party.

14.13 The meaning of the word 'sign' has already been considered^[11]. As will be seen in relation to condition (iv), it is necessary to identify with some precision the particular sign said to have been used.

14.14 There must have been 'use' of this sign. For these purposes, the legislation provides a non-exhaustive list of the sort of uses that might infringe^[12]. They include:

14.15 The concept of 'use' is intended to be very broad. Further, the TMA 1994 provides that the use of the sign may be otherwise than by means of graphic representation^[13]. This means that the oral or other non-visual use of a sign may constitute infringement. However, the use must be more than merely incidental or ephemeral, as to which see the comments below concerning the Trebor Bassett case^[14] where the coincidental appearance of the proprietor's mark was found not to constitute use of the types listed above.

14.16 In L'Oréal SA v eBay International AG^[15], it was noted that for the purposes of Art 5 of the Directive, the operator of an online marketplace (such as eBay) does not itself 'use' a sign which appears on its own website when its customer's offer for sale of goods bearing the mark is displayed. The operator's customer may well be using the sign but the fact that the operator is providing the service which enables its customer to make that display does not mean that the operator is using the sign.

14.17 The L'Oréal case also considered whether there could be 'use' of a sign for the purposes of Art 5(1)(a) when a trader buys and uses an internet search engine keyword corresponding to a trade mark. Such keywords operate so that when an internet user carries out a search on a search engine such as Google using that keyword, an advertising link to that trader is displayed. In its judgment, the Court of Justice made clear that in such a case the trader is indeed 'using' the sign. Accordingly, if that sign corresponds to a trade mark, there is the requisite 'use of a sign' for the purposes of Art 5(1)(a). This is also the case where the keyword is bought for the trader by the operator of an online marketplace such as eBay. Such an operator may well be using the sign both in relation to its own service of providing an online marketplace and also in relation to the goods of its customer. For the purposes of Art 5, the requisite use can be use in relation to the goods or services of another (ie of eBay's customer)^[16].

14.18 The use must, of course be use in the territory covered by the trade mark – the area for which the proprietor has exclusive rights. Thus, for example, where the server of a website offering goods or services under the trade mark is located in another territory, that offer may constitute use within the territory of the proprietor's exclusive rights^[17] provided it is targeted at consumers within that territory. However, the mere fact that the website is accessible to consumers within the territory of the exclusive rights is not of itself enough to show that the offer is targeted at those consumers^[18]. Whether an offer is targeted at consumers within the relevant territory is a matter for the national courts to determine on the facts of each case. However, a factor of particular importance in whether the offer is accompanied by details of the geographical areas to which the seller will despatch the product in question^[19].

14.19 As mentioned above, 'use' can include the importing of goods under the sign. In this regard, trade mark law gives the proprietor the exclusive right to control the initial marketing of goods under the mark in the relevant territory (the EU for CTMs and the UK for UK trade marks). In other words, the proprietor can prevent importation into that territory of legitimate goods from outside that territory^[20]. This is so even though, because the goods are genuine goods, no damage is done to the essential function of the trade mark (of indicating origin)^[21]. In determining whether goods have been imported, the issue is essentially whether those goods have been introduced into the territory for the purpose of putting them on the market in that territory. Thus, for so long as goods are not released for free circulation in the territory and the requirements of customs-approved treatment and use are satisfied, there has been no importation even though the goods in question are physically in the territory^[22].

14.20 An act cannot be an infringement unless it is an act done in the course of trade^[23]. Accordingly, use of a sign in a domestic, social or other non-trading manner will not constitute an infringement. For example, where an individual sells a product bearing a trade mark using an online marketplace (such as eBay) and the transaction does not take place in the context of any wider commercial activity, there is no infringement of that trade mark. Of course, if an individual by reason of the volume, frequency or other characteristic of the sales made goes beyond what may properly be seen as the 'realms of a private activity', then that individual may well be acting in the course of trade^[24].

14.21 In the One in a Million case^[25], it was held that use 'in the course of trade' meant use in the course of a business; it did not require use as a trade mark. Thus use of a trade mark in the course of a business of a professional dealer for the purpose of making domain names more valuable and extracting money from the trade mark owner was a use in the course of a trade. Similarly, internet advertising using a keyword to trigger the display of an advertisement is 'use in the course of trade'^[26].

14.22 Whether the trade mark proprietor has consented to the use made of the sign is a question of fact in each case. The meaning of consent is considered later in the context of the concept of exhaustion of rights^[27]. Most difficulty arises where it is alleged that a proprietor has impliedly consented to the use in question and, in particular, where the proprietor has stood by and not objected to the use such as to indicate some form of tacit consent to the use in question^[28]. It seems, however, that mere inactivity should not be sufficient to constitute consent.

14.23 To show infringement under Art 5(1)(a), the sign must be identical to the mark. The meaning of 'identical' here is the same as in Art 4(1) which governs the relative grounds for refusing to register a mark and has been considered in that context – see paras 15.13–15.16. In summary, having identified the particular sign being used by the third party, the court must ask whether through the eyes of the average consumer that sign is identical to the trade mark in question.

14.24 Under this head of infringement, the use must be use in relation to goods or services which are identical to those for which the proprietor's trade mark is registered. Again the meaning of 'identical goods or services' is the same as in the provisions governing the relative grounds for a refusal to register a mark and has been considered in that context – see paras 5.28–5.31 above.

14.25 The requirement that the defendant must have used the sign 'in relation to' the relevant goods or services' can be satisfied even where the defendant has not used his sign upon the goods or services themselves. It will be sufficient if the sign has been used otherwise than by physically affixing or applying it to the goods or services.

14.26 However, although there is no requirement that the sign must be physically affixed to the goods, and even though the use does not have to be 'in a trade mark sense', the phrase 'in relation to' does require the use to be other than merely incidental or ephemeral. In the Trebor Bassett case^[29], the Football Association's three lions trade mark appeared on the defendant's cards because the reproduction of the photograph of an England football player on the cards necessarily incorporated the logo which appeared on the football shirt being worn by that player. Rattee J held that it was not even arguable that such incidental use by the defendant could amount to using the plaintiff's trade mark 'in relation to' the cards.

14.27 In relation to the internet, where a trader uses a keyword that is identical to another's trade mark so that an advertisement for that trader's goods or services is displayed when a search is conducted against that word, then that constitutes use of a sign in relation to that trader's goods or services. This is so even if the sign selected as a keyword does not appear on the face of that advertisement^[30].

14.28 The decision in L'Oréal v eBay is also of interest. In that case, eBay was using signs corresponding to the L'Oreal trade marks as keywords to promote both its own online marketplace and also to promote goods bearing the L'Oréal mark which its customers were offering for sale on that online marketplace. Both uses were uses in relation to goods or services. However, the former did not satisfy this condition because although it was use in relation to eBay's service (its online marketplace), that service was not identical (or even similar) to the goods or services for which the mark was registered^[31]. By contrast, the latter use did satisfy the condition. The use was in relation to the goods because it raised the possibility of buying those customers' goods through eBay. There was a clear link between the sign and those goods and those goods were, moreover, identical to those for which the mark was registered^[32]. The Court of Justice made clear that there was no requirement that the goods or services in relation to which the sign was used were those of the person using the mark (ie, of eBay).

14.29 The meaning of the words 'in relation to' is also relevant to, and mentioned in, the context of revocation proceedings for non-use in Chapter 12^[33].

14.30 The Court of Justice has stressed on a number of occasions that, for the purposes of Art 5(1)(a), use can only infringe the proprietor's exclusive rights if it has an adverse effect on one of the functions of the trade mark. This is despite the fact that the recitals to the Directive state that the protection afforded by a registered trade mark 'should be absolute in the case of identity between the mark and the sign and the goods or services'^[34].

14.31 Although it has been said that this condition concerns, 'in particular', the essential function (ie, the function of guaranteeing the origin of the goods or services)^[35], the Court of Justice has repeatedly emphasised that for the purposes of Art 5(1)(a), the adverse effect can be in respect of any of the trade mark functions – the function of indicating origin, the function of guaranteeing quality, or the functions of communication, investment or advertising^[36].

14.34 Turning to the advertising function; in Interflora the Court of Justice has made it very clear that the use by a competitor in an internet referencing service (such as Google's 'Adwords') of a sign identical to a trade mark does not have an adverse effect on the advertising function of the trademark^[48]. This is so, even though such use might have repercussions on the advertising use of the mark – by, for example, causing the proprietor to pay more in order to ensure that when an internet user carries out a search using that sign, the proprietor's advertisement would be displayed more prominently than that of its competitor. The mere fact that a proprietor may have to pay more to maintain or to enhance its profile with consumers does not constitute an adverse effect on the advertising function. It is, rather, the effect of competition. The Court concluded that internet advertising on the basis of keywords corresponding to trade marks is legitimate competition in that it ensures that consumers are offered alternatives^[49].

14.35 It should be remembered, however, that other trade mark functions might be adversely affected even when the advertising function is not.

14.36 The investment function was described by the Court in Interflora, as the use of a trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Although this function overlaps with the advertising function, it has its own distinct purpose in that a trader may use a variety of techniques to acquire or preserve a reputation – only one of which is advertising^[50]. Hence, when use by a third party of a sign identical to a trade mark substantially interferes with the proprietor's use of its mark to acquire or preserve a reputation capable of attracting customers or retaining their loyalty, the investment function has been adversely affected^[51].

14.37 The Court in Interflora referred^[52] to its earlier decision in L'Oréal v eBay as an example of damage to the investment function. In L'Oréal the Court had ruled^[53] that a person who resells goods (in that case perfumes, cosmetics and hair care products) having removed those goods from their original packaging, might be infringing the trade mark under Art 5(1) if the removal from the packaging damaged the image and therefore the reputation of the trade mark.

14.38 In Interflora itself, the Court reiterated what it had said in relation to the advertising function, namely that the proprietor could not object to fair competition. The mere fact that the competitor's actions meant that the proprietor had to adapt its efforts in order to acquire or maintain a reputation was not sufficient to show the requisite adverse effect. Nor was the fact that some consumers might switch to the competitor's goods or services^[54].

14.41 These conditions are the same as those which apply in relation to double identity infringements under Art 5(1)(a) and are dealt with above:

14.42 The test as to when a sign is identical to a mark is considered at paras 5.13–5.16 above. Whether a sign is similar to a mark is discussed at paras 5.17–5.27 above.

14.43 Whether goods or services are identical is considered at paras 5.28–5.31 above. Whether they are similar is considered at paras 5.32–5.36 above. The meaning of the words 'in relation to' is considered at paras 14.24–14.26 above.

14.44 The test for establishing whether or not there is the requisite likelihood of confusion is considered in great detail at paras 5.37–5.62 above.

14.48 These conditions are the same as those which apply to infringement cases under Art 5(1)(b).

14.49 This condition has been considered in detail in paras 5.66 to 5.74 above. In summary, it is not a particularly onerous requirement^[58]. A mark has a 'reputation' if it is known either by the public at large or by a significant part of the public concerned by the product or services covered by that mark. It need not have a reputation throughout the territory^[59].

14.50 In relation to this condition, the Court of Justice has stated^[60] that:

And that:

14.51 Condition (viii) is that the use made by the defendant is such as to cause:

The meaning of each of these has already been considered.

14.52 If the use of the sign does not satisfy condition (vi) (ie,if it does not create in the mind of the average consumer a link with the mark), then it is unlikely that condition (vii) will be satisfied. Indeed, it has been said that the more immediately and strongly the earlier mark is brought to mind by the later mark, the greater the likelihood that the current or future use of the later mark is taking unfair advantage of, or is detrimental to, the distinctive character or the repute of the earlier mark. However, the existence of a link in the mind of the average consumer between the sign and the mark is not sufficient, in itself, to show that condition (vii) is satisfied^[62].

14.53 The condition that, to infringe, the use must have been without due cause has been considered at paras 5.86–5.88 above.

14.55 Obviously, a person who actually uses a trade mark in one of the ways discussed above can be sued for infringement.

14.56 In English law, accessories to trade mark infringement can also be sued on the basis that they are joint tortfeasors. The relevant authorities were reviewed by Arnold J in L'Oreal v eBay^[63]. A joint tortfeasor is someone who had not carried out the actual act of infringement but had in some way combined with another to secure that the act was carried out^[64]; or who had been so involved in the act or who had in some way made the act of infringement his own such that he should be held liable for it^[65]. It is usually someone who had been party to a common design to carry out or who had procured the relevant act^[66]. Mere assistance (even knowing assistance) is not enough, nor is the fact that a person had had the means (but not the duty) to prevent the infringement^[67].

14.57 A director or shareholder of a company which infringes trade mark may be liable as a joint tortfeasor. To be jointly liable with the company, a director must have done more than merely carrying out his constitutional role in the governance of the company (ie, voting at board meetings). Similarly, a shareholder must have done more than merely vote at general meetings and appoint directors. The question remains whether such person intends and procures and shares a common design that the infringement should take place^[68]. In this regard, the court will ask by whom the decision to carry out the act was made and who gave the instructions. It is clearly easier to show that the director or shareholder in a small company is liable on this basis^[69].

14.58 It appears that the imposition of liability on joint tortfeasors under English law is not contrary to the European Trade Marks Directive. However, the position in relation to a CTM is unclear. In such a case, 'the effects' of the CTM are governed solely by the provisions of the CTMR whilst, in other respects, infringement is governed by the law of the relevant member state^[70]. It might, therefore, be argued that there is no jurisdiction to impose liability on an assessor as it would amount to an extension of the effect of the CTM beyond the scope as defined in Arts. 9 to 14 of the CTMR^[71].

14.59 Under s 10(5) of the TMA 1994, a person who applies a registered trade mark to material which is intended to be used:

is deemed to be a party to any use of the material which infringes the registered trade mark provided at the time of applying the mark to the relevant material, that person knew or had reason to believe that the application of the mark was not authorised by the proprietor or a licensee.

14.60 The fact that s 10(5) only applies to those who know or have reason to believe that the application of the mark was not duly authorised means that the innocent use of a trade mark for labelling, packaging etc, is not caught by this subsection. However, where a mark is well-known, it may be more difficult for a person to argue that he believed the use to be properly authorised in circumstances where he is not obviously dealing with the proprietor or an ostensible agent or licensee of the proprietor. It would, therefore, be prudent for printers, publishers, packaging manufacturers and others potentially exposed to liability under this section to make reasonable enquiries and/or obtain suitable warranties and indemnities from those with whom they are dealing.

14.61 The exclusive rights are conferred on the proprietor who may therefore sue for the infringement of those rights.

14.62 Under s 23(5) of the TMA 1994, infringement proceedings may be brought by any co-proprietor of a registered trade mark. However, one co-proprietor may not without the leave of the court proceed with that action unless each other co-proprietor is either joined as a claimant or added as a defendant, except in the case of an application for interlocutory relief. Where a co-proprietor is added as a defendant, he will not be liable for any costs in the action unless he takes part in the proceedings^[72].

14.63 The position of trade mark licensees in relation to infringement proceedings has already been considered – in relation to UK trade marks at paras 13.38–13.42 above and in relation to CTMs at paragraphs 13.62–13.63 above.