• IN THE REGISTRY

    Visa Condoms Denied Protection

    The recent decision of the Appointed Person in an appeal from a UK Trade Marks Registry decision is the first case at this level where a trade mark proprietor has been successful in preventing, by means of Section 5(3) of the Trade Marks Act 1994, the registration of an identical or similar trade mark in respect of dissimilar goods.

    The case had its roots in an action in 1995 by Visa International Service Association (“Visa International”) - owner of UK registrations for the mark Visa in relation to financial services and particularly credit card services - to revoke a UK trade mark registration for the mark Visa registered in the name of C A Sheimer (M) Ddn Bhd (“Sheimer”) for rubber contraceptive devices (principally condoms). The revocation action was based on the grounds that there had been no genuine use of Sheimer’s registration in the UK in the 5 years prior to the action being brought and no proper reasons for such non-use.

    Almost immediately after commencement of the revocation action, Sheimer filed a fresh application to register Visa for condoms and contraceptive devices and, some sixteen months later during the course of the revocation action, surrendered its original registration. The new application was accepted by the UK Trade Marks Registry and proceeded to advertisement at which point Visa International filed opposition to the application. This article concentrates on one ground of the opposition, that under s.5(3) of the Act, and the appeal from the decision on that ground.

     

    The Opposition Decision in the Registry

    Section 5(3) of the Act provides for the refusal of a trade mark that is identical with or similar to an earlier trade mark in relation to goods or services that are not similar to those for which the earlier trade mark is protected where:

    • the earlier trade mark has a reputation in the UK, and

    • use of the later mark, without due cause, would take unfair advantage of or be detrimental to, the distinctive character or repute, of the earlier trade mark.

     

    Evidence of the scale of use shown by Visa International of its mark Visa in relation to credit card services, the reputation that resulted from that scale of use, and the wide variety of consumer products in connection with which that use was made, all combined to create a situation where the Registrar concluded that a substantial number of the public would be likely to have cause to wonder whether there was a connection between Sheimer’s products and the opponent’s services. Whether or not any deception had been intentional on the part of Sheimer, the Registrar’s conclusion on those grounds was sufficient to find that Sheimer’s use of Visa for condoms would take unfair advantage of the reputation of Visa International’s earlier mark.

    In the event that he was wrong on the unfair advantage point, the Registrar considered whether use of Visa for condoms would be detrimental to the distinctive character of Visa International’s earlier mark. Here he noted that, being a mark used in relation to credit card services, Visa International’s mark was to a certain extent dependent on being able to function in shop windows and at the point of sale as a recognisable indication of the card’s acceptability in that shop. If the Visa trade mark were to become known as a mark for condoms then the opponent’s trade mark would be less effective in its function of indicating acceptability of the card in certain outlets and this outcome would be detrimental to Visa International’s trade mark. The opposition was therefore successful under s.5(3).

    The Appeal Decision

    The Appointed Person, Mr.Hobbs, upheld the Registrar’s finding under s.5(3) of the Act but only as far as detriment was concerned.

    According to Mr Hobbs’ earlier decision in Corgi TM (see Make Your Mark Spring 1999), for an opponent to be successful under s.5(3) it is not necessary to show that there is a likelihood of confusion, a view which was endorsed by the ECJ in the Chevy judgement (reported at page 1 of this issue of Make Your Mark).

    In the present case, the Appointed Person held that the opponent’s earlier mark was a mark which was well known with a strong distinctive character and reputation in the UK and therefore the requirement for existence of a reputation under the first limb of the s.5(3) test was satisfied.

    In considering whether use of Sheimer’s mark would take unfair advantage of the distinctive character or reputation of Visa International’s mark, the finding was that it would not. Here the Appointed Person differed from the Registrar. Although Sheimer’s mark may capture the distinctive character of Visa International’s mark, would it positively exploit the earlier mark by taking unfair advantage of that distinctive character and reputation? This was an important question to consider as taking unfair advantage of an earlier mark is very different from just gaining attention by reminding potential customers of the earlier mark. The distinction was drawn that Sheimer would clearly gain attention for its goods by utilising the fame of the earlier Visa mark, but in order to gain anything more, the marketability of Sheimer’s goods would need to be increased by the perceived connection with the distinctive character or reputation of the earlier mark. Such positive exploitation was needed in order for an unfair advantage to be taken under s.5(3) and in this case it was felt that Sheimer’s use of Visa did not gain sufficiently from the reputation of the opponent’s mark for a finding of unfair advantage to result.

    On the question of whether use of Sheimer’s mark would be detrimental to the distinctive character or reputation of Visa International’s mark, the finding was that it would. The Appointed Person stated that if a trade mark proprietor was himself free to decide how he could make (or break) the reputation of his trade mark, then he should also be able, by means of s.5(3), to prevent others from using his mark in a way which would carry connotations detrimental to the distinctive character or repute of the mark. According to Mr Hobbs, this point was at the very heart of the case.

    In reaching his decision on detriment, Mr Hobbs referred to three non-UK cases,

    • A Benelux case where use of Klarein for an all-purpose cleanser was prevented by the owner of the phonetically identical earlier mark Claeryn for high quality gin,

    • A German decision, where use in relation to condoms of a picture of a Mars chocolate bar with the words Will liven you up for sex - sport and play was found to impair the advertising power of Mars for confectionery and thereby ruin the chocolate product’s popular image, and

    • A US case where, American Express was able to prevent use of the slogan Never leave home without it, again in relation to condoms, because there was a likelihood of tarnishment of their business reputation.

     

    In the Appointed Person’s view, use of Sheimer’s mark would have the same kind of detrimental effect on the opponent’s mark as was considered objectionable in these three non-UK cases. Such use would associate the earlier Visa mark with birth control and sexual hygiene, an association that could have a negative impact on the reputation of a financial service provider. There could be no justification for allowing Sheimer’s application to proceed in these circumstances.

     

    Comparison with other cases under s.5(3)

    As mentioned above, the Visa case is the first in which an opponent has been successful, at appeal level, under s.5(3). What were the special factors that led to the opponent’s success in this case? In order to identify them, let us consider four earlier Section 5(3) cases that were decided by the Registrar but not appealed.

     

    Adidas AG v. Inlima SL

    Adidas owned UK trade mark registrations in Class 25 for footwear, the mark being a device referred to as the Three Stripes Device (TSD) which consisted of three equally spaced stripes of the same colour and width appearing on the outside of the uppers of footwear. On the basis of these registrations Adidas opposed an application to register in Classes 32 and 33 a 3-dimensional trade mark being a bottle in the shape of a football boot and having three equally spaced stripes giving an appearance very like Adidas’ TSD mark. Adidas was able to show many years use of the TSD mark with significant sales and substantial reputation in relation to sports shoes. It was noted that such shoes were not limited in their sales to those involved in sporting activities; they were also worn by a significant number of the general public as casual or leisure footwear. The Registrar therefore accepted that the TSD mark had the necessary “reputation”.

    Having established reputation, the next limb of the test was to see whether use of the 3-dimensional mark gave Inlima either an unfair advantage in commerce or inflicted some harm to Adidas’ TSD mark. If either of these elements was satisfied then the grounds under Section 5(3) would be made out. In fact, the Registrar found that both elements were satisfied.

    Inlima’s Class 32 specification embraced isotonic drinks that are regularly advertised with a sporting connection. If the Inlima mark were to be used in relation to such drinks then the average customer might believe that there was a connection between the parties and this, in the Registrar’s view, clearly amounted to “taking unfair advantage”.

    Inlima’s Class 33 specification covered alcoholic drinks and use of Inlima’s mark in relation to alcohol was, in the Registrar’s view, detrimental to the distinctive character and repute of Adidas’ mark. The opposition therefore succeeded under Section 5(3).

     

    Ever Ready Plc v. Oasis Stores Limited

    An application by Oasis Stores Limited to register the mark Eveready in Class 10 for condoms was opposed by Ever Ready Plc on the basis of their numerous earlier registrations for Ever Ready in various forms in Classes 9 and 11 for batteries and related items such as torches, bulbs, lamps, etc. The opponent was found to have a reputation, but this was said by the Registrar to be restricted primarily to batteries.

    It was held that use of Eveready for condoms might call to mind the opponent’s mark but that this alone does not amount to taking “unfair advantage” of the earlier mark. Ever Ready’s position was hampered to a certain extent because the mark Ever Ready consists of dictionary words which carry an allusion to the goods (batteries) and where this is the case it was felt the Registrar should be cautious in arriving at a finding of unfair advantage being taken of the mark through use by another of the same dictionary words for unrelated goods. In such a case, the calling to mind of an earlier mark is no more than word association and no commercial advantage through use of a similar mark can be presumed.

    The mark Every Ready was not unique in the marketplace (there being other “ever ready” marks in various areas of commerce) and the opponent’s reputation in its mark was really as a “one-product” mark. It was therefore considered that the value of Ever Ready’s mark would not be reduced by the use of Eveready on condoms and the opposition failed under Section 5(3).

     

    Audi AG v. Audi Medical Devices Ltd

    This case was reported in the Autumn 1998 edition of Make Your Mark. Audi AG, well known in the UK for their quality motor cars, opposed an application by Audi Medical Devices Limited to register Audi-Med for hearing aids in Class 10, on the basis of their registrations for Audi covering motor land vehicles. As in the Ever Ready case, Audi was hampered, in trying to make out a case under Section 5(3), because their reputation was confined to the motor car business. The reputation was again therefore in a “one-product” mark. Furthermore, Audi was a word having some reference to the hearing aids of Audi Medical Devices Limited. Use of Audi-Med for hearing aids could therefore have no effect on the distinctiveness of Audi (either by taking unfair advantage or by causing detriment) in respect of the goods and services for which Audi enjoyed a reputation. The opposition failed under Section 5(3).

     

    La Chemise Lacoste v. Wilhelm Kaimann

    La Chemise Lacoste (“Lacoste”) own a number of registrations for a Crocodile Device with and without the accompaniment of the word Lacoste for which they have an established reputation in the clothing, sport and fashion area. On the basis of these registrations, Lacoste opposed an application to register a device mark containing a picture of a crocodile and the applicant’s surname Kaimann for a range of plumbing and heating goods. Since both marks contained ordinary representations of crocodiles and the applicant’s mark had the addition of a device plus the word Kaimann, the Registrar found that taking the marks as a whole, they were not similar marks. In the event that he was wrong on this point, he went on to consider other grounds of opposition, in particular Section 5(3). It was held that because Lacoste’s mark had a limited area of reputation and consisted of or contained an ordinary representation of a crocodile, the use of another ordinary representation of a crocodile together with additional matter for totally unrelated goods could not take unfair advantage of or cause detriment to the distinctive character or repute of Lacoste’s mark. The opposition therefore failed under Section 5(3).

     

    Comment

    The main points of interest to emerge from these UK Registry cases are:

    • The opponent does not need to prove confusion in order to succeed under Section 5(3).

    • Reputation to support a Section 5(3) ground of opposition does not need to extend beyond the goods or services of the opponent’s business, but the effect of that reputation on the outcome of the opposition will be considerably enhanced if:

    - The opponent’s mark is highly distinctive.

    - The later trade mark is not an appropriate choice of mark for the later goods and therefore there is no reasonable explanation for the choice of the later mark.

    - There is some link which will be readily perceived by the public between the opponent’s area of business and the later goods/services (e.g. Visa credit cards being used to pay for a wide range of goods/services which can include condoms and Inlima’s isotonic drinks having a sporting connection with Adidas’ footwear).

    • For unfair advantage to be taken of a mark’s distinctive character or reputation, there must be more than a mere calling to mind of the earlier mark. There needs to be some demonstrable, tangible advantage, usually some potential for increased marketability, to support a finding of unfair advantage being taken under Section 5(3). The cases reviewed seem to indicate that there needs to be some sort of perceived connection or association between the parties arising as a result of use of the later mark. This connection can, however, fall short of a likelihood of confusion. This positive exploitation of the opponent’s mark would appear to be a more difficult ground to make out than the negative exploitation of detriment.