Is innocent infringement a mythical beast under UK trade mark law?

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The opportunity to purchase a product which is ostensibly the same as a leading brand but significantly cheaper can be very tempting.  And nowadays consumers are not the only ones looking for a bargain.  Retailers are too.  But is there a defence for businesses which unwittingly sell infringing goods?  What about businesses which suspect something may be amiss but “turn a blind eye”?

In the UK, the law tends to take the view that retailers have an obligation to confirm the provenance of the products they deal in and so should take responsibility for infringement where they , objectively speaking, ought to have known better.

Avoiding legal liability for selling infringing goods: can it be done?

Firstly, let’s consider what constitutes infringement, which obviously depends on the IP right in question.

Trade marks

In relation to counterfeit products, we need to look to the test for double identity infringement in Article 5(1)(a) of Directive 89/104/EEC (the Harmonisation Directive) as interpreted by the Court of Justice of the European Union:

A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered, without the owner’s consent in the course of trade and the use is liable to affect one of the functions of the trade mark, in particular its essential function to guarantee the origin of the goods or services but also the functions of communication, investment and advertising (see Holterhoff v Freiesleben, Arsenal v Reed, Celine, O2 v Hutchison 3G and Interflora v Marks and Spencer (iPit post here)).

Basically any use of the same mark on the same type of goods is going to attract liability.  But what constitutes use?

Article 5(3) of the Harmonisation Directive states that trade mark use includes where a business in the course of trade:

(a) affixes the sign to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market or stocks them for those purposes under the sign, or offers or supplies services under the sign;

(c) imports or exports goods under the sign; or

(d) uses the sign on business papers or in advertising.

It is quite clear from this legislation as well as the Court of Justice’s guidance in Google France (iPit post here) and the English High Court’s decisions in, for example, Och Ziff (iPit post here), that no sale is required.  The goods need not ever get anywhere near a consumer for their to be trade mark infringement.  The fact that they have been imported to the UK or are sat in a warehouse is enough.

Passing off

So often the dancing partner of trade mark infringement is passing off.  The “Classic Trinity” from Lord Oliver in Reckitt & Colman Products Ltd v Borden [1990] RPC 341 HL for liability under the common law tort is:

  • Goodwill in a sign attaching to goods or services which the public associate with the business;
  • A misrepresentation made by the defendant which is likely to lead the public to believe that the goods or services offered are the goods or services of the claimant; and
  • Damage (or a likelihood thereof) to the goodwill as a result of the misrepresentation.

Is there a defence of innocent infringement?  In short, no the tort is one of strict liability and focuses on the economic damage of the defendant’s actions.  It is therefore irrelevant whether the misrepresentation is made innocently or is a literal truth.  What is important is whether consumers were (or may be) deceived.  So-called “innocence” will not preclude the defendant from being ordered to pay damages (see County Sound plc v Ocean Sound Ltd [1991] FSR 367; Gillette UK v Eden West Ltd [1994] RPC 279).

Summary

In summary therefore, there is no provision for a defence of innocent infringement to a claim of trade mark infringement or passing off under English or UK law.  The law clearly takes the view that if you are going to try and benefit from trade you must also bear the burden of the risk if it goes wrong.  The obligation is squarely on the business to ensure that the goods it is purchasing for resale are genuine.   Caveat vendit!

IP right

Is there a defence of innocent infringement?

Trade mark registration

No

Passing off

No

4 responses to “Is innocent infringement a mythical beast under UK trade mark law?

  1. Good post! However and despite the infringement per se which is undeniable, dont you think that is possible to argue that if not innocence but “bad faith” must have any impact on the amount of damages?

  2. Yes Jorge, I do. Once liability is established the defendant’s behaviour is likely to be taken into account in deciding the amount of damages. A party which has held its hands up and co-operated is more likely to be indulged than one which has scrapped over every legal point. In that case, the Claimant may be better pursuing an account of profits if it thinks the damages awarded are likely to be low.

  3. Hi Robert; are the County Sound or Gillett UK decisions available to read online? I haven’t been able to track them down anywhere.

  4. Not that I can find. These decisions were pre-online publication and don’t appear to be important enough to have been made freely available. You could request they are archived by BAILII? If you have success, do please let me know.

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