IN THE UK OFFICE

Trade Mark Dilution In The UK

Trade mark dilution is the erosion of the uniqueness of a trade mark in the market place, usually as the result of someone else adopting and using a similar trade mark in a particular way. Of course, in order for dilution to occur, the trade mark has to have a certain uniqueness in the first place and must be what is termed a mark with a ‘reputation’ being well recognised and known among the purchasing public for the goods or services in question. For example, in the area of photography Kodak would be a trade mark with a reputation, in the area of engineering a mark such as Rolls-Royce would be a mark with a reputation, and in the area of soft drinks Coca-Cola would provide an obvious example. However, a mark does not have to be the subject of such international fame, as are these three examples, in order to have a reputation.

In the UK, Section 5(3) of the Trade Marks Act 1994 provides the means for an earlier trade mark owner to prevent registration of a later trade mark which he believes dilutes the distinctiveness and exclusivity of his trade mark. Correspondingly Section 10(3) provides recourse for the owner of an earlier trade mark registration to sue for infringement against use of a later mark under the same terms.

Registration of a trade mark may be refused under Section 5(3) if that mark is similar to an earlier trade mark and seeks registration for goods or services dissimilar to those covered by the earlier trade mark where the following factors exist:

(a) the earlier mark has a reputation, and
(b) use of the later mark, without due cause, would:
(i) take unfair advantage of, and/or
(ii) be detrimental to the distinctive character or reputation of the earlier trade mark.

Some recent opposition cases heard before the UK Trade Mark Office demonstrate the applicability of Section 5(3) and show how the concept of trade mark dilution is developing in the UK. The facts in these cases were as follows:

• An application for Nit Nurse by R. Conroy covering oils and shampoos for controlling head lice in Class 3 was opposed under Section 5(3) by SmithKline Beecham on the basis of their earlier registration for Night-Nurse in Class 5 covering decongestants for relief of respiratory conditions. Night-Nurse was shown to have a wide reputation in the specific area of oral decongestants and to enjoy a unique position in that market as no other product in that area was referred to as a “nurse”. There was no evidence that any unfair advantage to the applicant would be gained through use of Nit Nurse but it was held that there would be detriment to Night-Nurse. The detriment identified was that of tarnishment occurring to the reputation of Night-Nurse, a long established oral medicine, through use of a similar mark as a treatment for “blood-sucking insects”. Additionally it was held that there would also be detriment to Night-Nurse through a diminishing or dilution of that mark’s distinctive character as this product was currently unique in being called a “nurse”. As a defence of “due cause” the applicant pleaded that he had coined the name based on the connection with the now obsolete “nit nurses” who used to visit schools to check children’s hair for head lice. It was felt that this term had now passed into history and was one with which most purchasers of the product (parents of young children) would be unfamiliar. The explanation was not sufficient for the saving provision of due cause to apply and the opposition succeeded.

• An application for TNT (slightly stylised) by Turner Network Television Inc. for cable television and broadcasting services in Class 38 was opposed under Section 5(3) by TNT on the basis of its earlier registrations for TNT in Class 38 for mail postal services and in Class 39 for transportation and storage services. The marks were held to be very closely similar and the services of the parties dissimilar. The evidence filed by TNT Ltd was sufficient to show that their mark enjoyed a reputation and this was in part assisted by the nature of their industry and the fact that they were a significant player with relatively few competitors. Moving on to unfair advantage or detriment, the only argument put forward was that of detriment through dilution of the uniqueness of TNT Ltd’s marks. An important consideration in assessing this was that the marks at issue were essentially 3-letter marks which are not themselves of high inherent distinctiveness. The distinctiveness of TNT Ltd’s mark was therefore more closely tied in to its field of activity where its reputation lay and so was less likely to suffer dilution by use of a similar mark in another field, since customers were unlikely to make any connection between the two marks and parties. Whilst the later mark in use may remind people of TNT Ltd’s mark, that was not sufficient. It must be shown that there would be a material effect on the distinctiveness of the earlier mark. The opposition failed.

• An application for Atomic by Meridian (Luton) Ltd. for golf clubs in Class 28 was opposed under Section 5(3) by Atomic Austria GmbH on the basis of its registration of Atomic for ski and toboggan goods in Class 28. The marks were found to be identical and the goods dissimilar. The required reputation was held to have been shown by Atomic Austria and of significance in achieving this was that there were a limited number of brands used for ski equipment in the UK. In these circumstances, it is easier for any one of those brands to be known by a significant part of the relevant public. Skis are a technical item purchased with care, thus making a knowledge of the limited number of brands even more likely among the relevant public. Moving on to unfair advantage or detriment, the main basis for Atomic Austria’s claim was that of dilution. In order for there to be any detriment it was necessary for the relevant public to form some kind of connection between the marks and goods, in this case between golfing and skiing equipment. It was noted that for skiing equipment Atomic was an inherently strong trade mark and it is accepted that the stronger the distinctiveness of the earlier trade mark the easier it is to establish detriment. However, looking at all surrounding circumstances, Atomic is not an unusual or a foreign word and the relevant public was not used to seeing it used on a wide range of goods or even on other sporting goods. Its use on golf clubs may therefore be seen as nothing more than coincidence and, without a sufficient connection being formed between the two products, there could be no detriment through dilution. The opposition failed.

• An application for Digitall Inside (stylised) by Digitall Inc. for coin-operated apparatus and systems in Class 9 was opposed under Section 5(3) by Intel Corporation on the basis of its registrations for Intel Inside in Class 9 and other classes for a wide range of goods and services. There was no doubt from the evidence that Intel Inside had the required reputation for Section 5(3). It was shown to be a particularly well-known mark for microprocessors. The marks of the two parties were held to be similar, it being noted that the Digitall element in the applicant’s mark was weak for the goods in question. The goods to be considered for Section 5(3), coin-operated apparatus and systems as compared with microprocessors were held to be dissimilar. Moving on to consider unfair advantage and detriment, factors specific to Intel’s reputation were borne in mind by the Registrar, in particular that Intel Inside not only had an extremely extensive reputation but that that reputation had constant post-sales reinforcement through purchasers seeing the mark each time they used their computers. The ungrammatical construction of both marks plus the low distinctiveness of Digitall was also important as was the use of “ingredient marketing” by Intel – the idea of using the word Inside to indicate that an Intel microprocessor was inside a computer bearing the mark. Ingredient marketing was seen as unusual for electrical equipment.

 

Taking all surrounding circumstances into consideration, the Registrar found that consumers would have a strong belief of a connection between Digitall Inside and Intel Inside. Because of the extensive reputation of Intel any such connection could only lead to enhanced sales for Digitall which would constitute an unfair advantage and the opposition was therefore successful. Dilution was not specifically considered, but the Registrar did note that as well as the grammatical format of Intel Inside being unusual, the inclusion of the word Inside in that format was unique to Intel in its market sector. It is therefore likely that if dilution had been considered it would have been found because of the uniqueness of Intel’s mark, the extent of its reputation and the strong connection the public would make between the two marks which would surely result in erosion of the exclusivity of Intel’s mark.

Comment

It would appear that proprietors who will be best placed to succeed in an action under Section 5(3) are those who have:

- a highly distinctive trade mark (particularly a non-dictionary word),

- of longstanding use and strong promotion,

- which is unique in its market sector,

- and enjoys a prominent market share as compared to competitors,

- in a fairly specialised market,

- where goods/services are selected by customers with care,

- and where notice and recognition of the mark is reinforced in some way such as after-sales service or unusual marketing techniques, and

- where there is some common ground with the goods and/or trade circumstances of the later mark.

By contrast, those proprietors least likely to succeed in an action under Section 5(3) are those who have:

- a mark of low distinctiveness,

- used in a general consumer market,

- where there are many competing brands,

- and where the circumstances are such that the trade mark does not stand out in any way to the public at which the goods are aimed.

In between these two extremes lie the majority of trade marks. It will rarely be possible to satisfy all or even most of the attributes of a mark best placed to succeed in Section 5(3) or Section 10(3) proceedings, but with careful management it should be possible to increase one’s chances of success in such an action.