Luxury London hotel Claridge’s has convinced a division of the England & Wales High Court that candles produced by a small UK retailer infringe its trademarks, but lawyers warn that the decision shows that IP owners cannot always rely on wide-ranging registrations if they are unable to then prove genuine use.
In a judgment handed down this week the Intellectual Property Enterprise Court said retailer Claridge Candles’ products were likely to cause confusion and that the public may believe the products came from the same “economically-linked undertakings.”
The presiding judge, recorder Douglas Campbell QC, found that the Claridge’s trademark and Claridge Candles’ applied-for mark, ‘Claridge’, were visually and aurally almost identical. It also agreed with the hotel that there was a high degree of conceptual similarity.
Reputation v use
Claridge’s – a hotel in London’s upmarket Mayfair district – filed a claim for infringement on the basis that its mark has a reputation. This is distinct from infringement based on likelihood of confusion yet Campbell noted that likelihood of confusion was one of the relevant factors.
The hotel’s trademark is registered in classes covering a variety of goods and services including toiletries, hotel, restaurant, and health and spa services.
But while lawyers note that the decision illustrates the broad level of protection enjoyed by IP owners whose marks have a significant reputation, they add that is not as clear-cut as first thought.
Robert Guthrie, partner at Osborne Clarke, notes that the court made interesting observations on whether use of the Claridge’s mark on toiletries available in the hotel was sufficient to amount to genuine use and maintain trademark registration for these goods.
Despite ruling in favour of Claridge’s overall, Campbell found that the hotel’s use of the mark in toiletries was not sufficient. According to the court, Claridge’s “does not create or preserve a market for toiletries because the [hotel] never marketed its toiletries.”
Guthrie notes that although this was not ultimately detrimental to the case, the approach suggests that the provision of ancillary goods and services by trademark owners as an “add-on to their main product offering” may often not be sufficient to maintain registrations.
He adds that trademark owners should ensure they review their portfolio and consider whether new applications may be appropriate to take advantage of the initial five-year period during which trademark registrations are not vulnerable to revocation for non-use.
Gina Lodge, solicitor at Marks & Clerk in London, says Claridge’s argued that toiletries were offered in association with its hotel services, promoted in their own right on its website (though not available to purchase) and constituted a factor in the decision of consumers to choose its hotel.
“There was therefore a real commercial purpose to the hotel’s provision of toiletries which should be sufficient to maintain its registration for toiletries. The recorder, however, was not persuaded by this argument, reiterating that genuine use required the creation or preservation of a market for toiletries.”
She adds: “When it comes to genuine use, the old adage ‘use it or lose it’ stubbornly persists.”
However, Benjamin James, partner at McCarthy Denning, says that when a mark is well known, as is the case with the Claridge’s registration, it is still given a great deal of protection, even for goods and services where a trademark is not held.
An extra layer of protection can be obtained with a passing off defence, which protects goodwill in a mark and prevents someone from profiting from it unfairly, he says.
No fish too small
Megan Jefferies, partner at UK firm Thrings, says businesses of all sizes should never assume they are too small for big companies to worry about.
Jefferies says that firms should do their due diligence before adopting a brand which is so similar to another.
“This is the case even where you consider the predominant reputation of the established brand to be in one area (hotels) and your business to be in another (candles and reed diffusers).”
Jefferies adds that small business owners, particularly sole traders or owner-managed companies with a sole director and shareholder, cannot be confident that they can “rely on the veil of incorporation to avoid personal liability.”
“The judgment makes clear that Ms Shepherd [the owner of Claridge Candles] was personally liable for infringement of the Claridge’s trademark, not because she was a director of the defendant company, but because she, as a natural person, committed an infringement.”
Despite finding Claridge’s had not proved use in all classes, Campbell found that Claridge Candles’ use of the term enabled it to charge higher prices.
Campbell added: “As such it has an effect on the economic behaviour of their customers. This is not merely a commercial advantage but an unfair one.”
Georgina Messenger, instructed by Urquhart-Dykes & Lord, acted for Claridge’s, while Aaron Wood, of Wood IP, represented Claridge Candles.
