The case of Och-Ziff Management Europe Ltd and Anor v OCH Capital LLP & Others  EWHC 2599 (Ch) is an excellent illustration of the approach to the assessment of liability in trade mark cases under English and European Union law. The judge, Mr Justice Arnold, also grapples with the fascinating topic of initial interest confusion.
The claimants (“Och-Ziff”) operated a successful hedge fund founded by Mr Och and claimed trade mark infringement and passing off by OCH Capital in relation to financial services. The defendants were Mr Ochoki (pronounced “Oh-hots-ki”), a stock-broker and his business. He claimed the “own-name” defence and that the claimant’s registrations were invalid because they had been filed in bad faith.
- Community trade mark registration 6595573 OCH-ZIFF, applied 18 January 2008, registered 13 February 2009
- Community trade mark registration 8646631 OCH, applied 28 October 2009, registered 8 June 2010
Both marks were protected for, inter alia, “financial services” and regulated by Council Regulation 207/2009 (the Regulation).
Och-Ziff complained about the use of six different signs:
- OCH CAPITAL
- ochcapital and ochcapital.co.uk
- Och Capital
- OCH Capital
All had been used externally by the defendants apart from the first which had been used only in internal email correspondence.
The validity of the OCH Trade Mark – Bad Faith
The first issue to consider was whether Och-Ziff had acted in bad faith when it filed its OCH trade mark application. If it did then the registration would be cancelled and treated as if it had never existed.
Article 52 of the Regulation states:
1. A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings,
(b) where the applicant was acting in bad faith when he filed the application for the trade mark.
The law relating to bad faith was considered by the Court of Justice of the European Union in Case C-529/07 Chocoladenfabriken Lindt & Sprüngli AG v Franz Haüswirth GmbH  ECR I-0000, which said:
In order to determine whether the applicant is acting in bad faith …, the national court must take into consideration all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of the sign as a Community trade mark, in particular:
– the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought;
– the applicant’s intention to prevent that third party from continuing to use such a sign; and
– the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought.
…it does not constitute bad faith for a party to apply to register a Community trade mark merely because he knows that third parties are using the same mark in relation to identical goods or services, let alone where the third parties are using similar marks and/or are using them in relation to similar goods or services. The applicant may believe that he has a superior right to registration and use of the mark… Even if the applicant does not believe that he has a superior right to registration and use of the mark, he may still believe that he is entitled to registration…
[nor] …does it amount to bad faith if what the applicant seeks to register is not the actual trade mark he himself uses but merely the distinctive part of his trade mark, the other part of which is descriptive or otherwise non-distinctive, and third parties are also using the distinctive part with different non-distinctive elements…
Arnold J held that the fact that Och-Ziff had a perfectly legitimate interest in seeking to monopolise the use of OCH in relation to financial services. The defendants’ counterclaim for invalidity was rejected.
Trade mark infringement
Article 9 of the Regulation provides as follows:
1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;
(b) any sign where, because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;
(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.
Infringement of an identical mark under Article 9(1)(a)
Following the authority of the CJEU in LTJ Diffusion SA v Sadas Vertbaudet SA  ECR I-2799 and the English Court of Appeal’s strict interpretation of this in Reed Executive plc v Reed Business Information Ltd  EWCA Civ 159,  RPC 40, the judge held that only the first sign OCH was identical to the second registration. In all of the other signs, none of the additional components were regarded as being “so insignificant that they would go unnoticed by the relevant average consumer“.
The key question was whether the internal use of the first sign constituted use “in the course of trade“.
The Court of Justice has repeatedly held that “in the course of trade” means “in the context of commercial activity with a view to economic advantage and not as a private matter“: Case C-206/01Arsenal Football plc v Reed  ECR I-10273 at ; Case C-48/05 Adam Opel AG v Autec AG  ECR I-1017 at ; Case C-17/06 Céline Sàrl v Céline SA  ECR I-7041 at ; Case C-533/06 O2 Holdings Ltd v Hutchison 3G Ltd  ECR I-4231 at ; Case C-62/08 UDV North America Inc v Brandtraders NV  ECR I-1279 at ; and Joined Cases C-236/08 to C-238/08 Google France SARL v Louis Vuitton Malletier SA  ECR I-0000 at  (see iPit post here).
Taking guidance from Google France, Arnold J noted that for infringement to occur, the use must be in the course of a business’s own commercial communications. In addition, the decisions given in relation to genuine use in Ansul and Radetzky held that internal and private use of a trade mark is insufficient to maintain a registration. By aligning the reasoning in these cases, Arnold J found that OCH Capital’s use of the sign “OCH” in internal emails did not constitute “use” of the sign within the meaning of Article 9(1)(a) at all; but if it did, it was not use “in the course of trade” because the use was “as a private matter”.
Infringement of a similar mark under Article 9(1)(b)
Arnold J considered the law of likelihood of confusion as interpreted by the CJEU in Case C-251/95 SABEL BV v Puma AG  ECR I-6191, Case C-39/97 Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc  ECR I-5507, Case C-342/97 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV  ECR I-3819, Case C-425/98 Marca Mode CV v Adidas AG  ECR I-4861, Case C-120/04 Medion AG v Thomson Sales Germany & Austria GmbH  ECR I-8551.
He referred to the summary by Geoffrey Hobbs QC sitting as the Appointed Person in La Chemise Lacoste SA v Baker Street Clothing Ltd (O/330/10):
(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a great degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion.
Initial Interest Confusion
One of the most interesting issues considered was the concept of initial interest confusion, which allows for a finding of liability where a plaintiff can demonstrate that a consumer was confused by a defendant’s conduct at the time of interest in a product or service, even if that initial confusion is corrected by the time of purchase.
The Northern Irish case of BP Amoco plc v John Kelly Ltd  FSR 5 illustrates the issue well:
BP was the proprietor of a registered trade mark for the colour green as applied to the exterior surface of the premises used for the sale of the goods, which was registered for goods which included lubricants and fuels in Class 4. The first defendant adopted a petrol station design which featured the colour green. The Court of Appeal of Northern Ireland upheld the claim for trade mark infringement.
…[W]hen a motorist travelling at speed sees a green station, at a distance at which the logo cannot be made out, and starts to make preparations to turn off into the station, he is liable to continue his manoeuvre even though he may descry the logo as he nears the station and appreciate that the petrol on sale is that of the respondents and not of BP. As he put it, the antidote to the bane has not been applied and that is a customer lost. We consider that there is force in this contention.
In double identity cases in the European Union, a likelihood of confusion is presumed (as required by Article 16(1) of the Agreement on Trade-related Aspects of Intellectual Property Rights). In general, it is therefore immaterial whether there is a likelihood of confusion in fact, although the jurisprudence of the Court of Justice does require that there be an effect on the one of the functions of the trade mark (see in particular Case C-487/07 L’Oréal SA v Bellure NV  ECR I-5185).
However, where the marks are not identical, can there be infringement where there is no confusion as to origin at the point of sale?
Arnold J found that there could. The likelihood of confusion must be assessed at the moment when the advertisement is viewed, whether or not it leads to a sale and whether or not there is any confusion at the time of the sale. The question is whether there is a likelihood of confusion not actual confusion. This is because although there may be no diversion of sales, the confusing advertisement may:
- Affect the reputation
- Erode the distinctiveness of the mark
Authority for this is found in Article 5(3) of the Harmonisation Directive, which provides that use of a sign in advertising constitutes infringement i.e. no sales are required, and the CJEU’s consistent judgments in Google France, Die Bergspechte and Portakabin (see the series of iPit posts here).
Infringement under Article 9(1)(b)
Arnold J held that:
i) OCH and OCH-ZIFF are highly distinctive for financial services
ii) CAPITAL is descriptive or non-distinctive for financial services
iii) OCH plays an independent and distinctive role in the OCH-ZIFF mark
iv) the services are identical
v) the average consumer of financial services is moderately to highly attentive
vi) overall, the differences between the marks are insufficient to overcome the strong similarities
vii) a likelihood of confusion exists in respect of the use of marks 2-6.
The defendants therefore infringed the OCH and OCH-ZIFF marks under Article 9(1)(b).
Infringement under Article 9(1)(c)
Notwithstanding the finding of infringement under Article 9(1)(b), Arnold J considered whether there was infringement under Article 9(1)(c).
Firstly, he noted that protection for a trade mark with a reputation extended not only to similar goods but also dissimilar goods as directed by the Court of Justice in Case C-292/00 Davidoff & Cie SA v Gofkid Ltd  ECR I-389 and C-408/01 Adidas-Salomon AG v Fitnessworld Trading Ltd  ECR I-12537.
To succeed under Article 5(2), the proprietor of the earlier mark must show:
- that the trade mark has a reputation – Case C-375/97 General Motors Corp v Yplon SA  ECR I-5421. Reputation in one member state may be sufficient for a CTM – Case C-301/07 PAGO International GmbH  ECR I-9429
- a link in the mind of the average consumer – Case C-252/07 Intel Corp Inc v CPM United Kingdom Ltd  ECR I-8823
- then also one of the following kinds of injury described in L’Oréal v Bellure:
- detriment to distinctive character and a change in economic behaviour (“dilution” or “blurring”);
- detriment to reputation and a change in economic behaviour (“tarnishment”); or
- unfair advantage of the mark’s distinctive character or reputation (“parasitism” or “free-riding”).
Dilution or blurring occurs when the
mark’s ability to identify the goods or services for which it is registered is weakened, since use of an identical or similar sign by a third party leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so.
when the goods or services for which the identical or similar sign is used by the third party may be perceived by the public in such a way that the trade mark’s power of attraction is reduced. The likelihood of such detriment may arise in particular from the fact that the goods or services offered by the third party possess a characteristic or a quality which is liable to have a negative impact on the image of the mark.
relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation…
Arnold J held that there was no free-riding as there was no transfer of image and there was no evidence of tarnishing. However, there was dilution of the OCH mark because the defendants’ use would reduce the distinctiveness of the OCH mark and this was likely to change the economic behaviour of consumers. No dilution was found in respect of the OCH-ZIFF mark.
The defendants therefore infringed the OCH mark under Article 9(1)(c).
The defendants claimed the own-name defence.
Article 12 of the Regulation states:
A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:
(a) his own name or address…
provided he uses them in accordance with honest practices in industrial or commercial matters.
Arnold J found that the defendants’ use was not in accordance with honest practices for several reasons and in particular because:
- he knew of Och-Ziff’s business from an early stage
- he failed to conduct a trade mark search and take legal advice before adopting the trading name
- he should have been aware that there was actual confusion
For any student or practitioner of trade marks law, this judgment is an excellent summary of the principles in play during a typical claim for trade mark infringement. The clear analysis and reliance on recent authorities is extremely helpful and a superb illustration of the remarkable level of expertise available to those who enforce their intellectual property rights through the English judicial system.
The case is a stark reminder that the courts do not consider a failure to conduct proper trade mark clearance searches as an adequate excuse for adopting a sign similar to one in which a party has rights.