In April of this year the Court of Appeal handed down its Judgment in the latest instalment of the long-running trade mark dispute between Assos, a high-end specialist cycling and sportswear brand, and Asos, the popular online retailer of casual and on-trend clothing. Although the ASSOS trade mark has been in use for decades, both companies have sold goods under their respective marks for a number of years concurrently with little or no confusion on the part of consumers between the two marks.Despite – or perhaps, because of – this seemingly peaceful coexistence, there has been intense litigation at all levels of the European courts. The recent Court of Appeal ruling is likely to fan the flames further.
The Court of Appeal’s decision is lengthy (running to over 45,000 words) but we have summarised below the main issues which arose and the outcome. IntroductionThe two conflicting marks in issue here were:The word mark ASSOS, registered as a Community Trade Mark (“CTM”) since 2005 for, among other things, “clothing, footwear and headgear” in class 25The word mark ASOS registered as a UK trade mark since 2009 for a wide range of goods and services, including “articles of clothing” in class 25.At first instance, Asos was found not to have infringed the ASSOS mark, and the validity of its UK mark ASOS was upheld. However, the High Court held that the specification of the ASSOS mark should be narrowed as there had not been genuine use of the mark across the whole spectrum of goods for which it was registered. Both parties appealed the decision. Decision of the Court of AppealPartial revocation of the ASSOS CTMThe Court of Appeal found that the High Court was correct in its decision to narrow the specification of the ASSOS CTM. Although it had been registered widely in class 25 for “clothing, footwear, headgear”, including “casual wear”, there had only been genuine use of the mark on specialist clothing for cyclists and a small, connected range of branded casual wear.
The Court held that genuine use is not limited to the precise goods that the mark has been used for, but also extends to those which the average consumer considers as belonging to the same subcategories – the so-called “notional use” of the mark. Applying this principle, the registration for Assos’ CTM was narrowed so that it only covered “specialist clothing for cyclists; track-suits, t-shirts, polo shirts, shorts, caps and jackets”.It should be noted that Sales LJ, in his dissenting Judgment, considered that “casual wear” was a category which could not be sensibly divided into subcategories without the division being an arbitrary one, and was in favour of allowing the ASSOS mark to retain protection over the whole of that category. Infringement by Asos of the ASSOS CTMDisagreeing with the High Court, the Court of Appeal found that Asos did infringe the ASSOS CTM. As the marks were similar (as opposed to identical) Assos also needed to demonstrate that there was a likelihood of confusion. The Court found that the ASSOS and ASOS marks were visually and aurally similar and there was similarity between the goods sold by ASOS and those covered by ASSOS’ CTM. In this regard, the Court of Appeal held that the Judge at first instance had been wrong only to consider whether a likelihood of confusion existed in respect of the goods for which the ASSOS mark had actually been used. The correct approach was to consider the question in light of the notional and fair use of the mark in respect of the full breadth of its specification.
Adopting this approach, the Court found that a likelihood of confusion did exist and consequently that infringement had occurred. The Court also found that Asos’ use of the ASOS brand further infringed by diluting the distinctive character of the ASSOS CTM. The “own name defence”Although Asos had, on the face of it, infringed the ASSOS CTM, the Court held (by a majority) that Asos could rely on the ‘own name defence’, which provides that a registered trade mark is not infringed by the use of a person of his own name or address, provided the use is “in accordance with honest practices in industrial or commercial matters”. In the Court’s view, the ASOS mark was adopted honestly and was derived from the Defendant’s former name – “As Seen On Screen”. Asos had not conducted business so as unfairly to compete with Assos, and there was no evidence of actual confusion among consumers. Asos could therefore continue to use its ASOS mark. Partial invalidity of the ASOS UK trade markThe final part of the Court’s judgment focused on the validity of Asos’ own UK trade mark for the word ASOS.
Assos challenged the validity of the ASOS mark based on a likelihood of confusion with its earlier ASSOS CTM registration. The Court ruled that the Judge at first instance should have considered the likelihood of confusion based on a notional and fair use of each mark (as opposed to how they had been actually used in the past), including in circumstances where they could compete with each other, for instance on the internet. Applying that test, the Court considered that there was a real likelihood of confusion and therefore the ASOS mark was found to be invalid for, among other things, goods within Class 25 (covering “articles of clothing” etc). Impact of this caseThe case illustrates the delicate balance between affording brand-owners adequate protection through the registration of trade marks for goods and services which they offer (or genuinely intend to offer) under that mark, and the need to avoid overly wide specifications which do not genuinely reflect the use of the mark and thus have the potential unfairly to restrict trade. As we can see from the dissenting Judgment of Sales LJ, there is still some disagreement over where that line should be. If the case goes to the Supreme Court, this is likely to be one of the key points of contention.
Nonetheless, the case does demonstrate that the courts will limit the scope of registered trade marks where appropriate. The ASSOS mark has been restricted to a few categories of clothing and the ASOS mark has been stripped of protection in its most important class, the end result being that both parties may now find it more difficult to enforce their respective marks against third party infringers.Another crucial lesson to be learnt from this case, particularly for new businesses which may be looking to launch a new brand, is the importance of carrying out appropriate trade mark clearance searches before starting to use a new mark.
The entire costly episode, including the crucial loss of Asos’ UK mark for clothing, may have been avoided if such checks had been carried out.Finally, a note of caution about the ‘own name defence’: although Asos was successful in pleading it in this case, the Court placed a lot of emphasis on the Asos’ innocent adoption of the mark and its honest business practices. The defence is unlikely to apply to a business deliberately trading under a name similar to that of a competitor. BACK TO NEWS
