At the request of Direct Line, the Trade Mark Registry has blocked a bid by rival eSure for a mouse on wheels trade mark. DL said this was confusingly similar to its telephone on wheels. Really? Veena Srinivasan runs a critical eye over the verdict.
Topic: Trade Mark
Who: Direct Line Insurance Plc and esure Insurance Limited
Where: The Trade Marks Registry
When: December 2006
A trade mark application by esure Insurance Limited ("esure") to register the shape and appearance of a computer mouse on wheels as a trade mark was successfully opposed by its competitor Direct Line Insurance Plc ("Direct Line") based on its earlier trade mark, consisting of a telephone on wheels.
Back in September 2004, esure applied to register a three dimensional shape of a computer mouse on wheels as a trade mark in Class 36. The specific services sought by esure were "Insurance, financial and monetary services: provision of information, advice and consultancy relating to insurance, financial or monetary services."
Grounds of opposition
In January 2005, Direct Line filed a notice of opposition on the following grounds:
1. Section 5(2)(b) of the Trade Marks Act 1995 (the "Act"). This provides that:
"A trade mark shall not be registered if because it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark."
Direct Line argued that, as the proposed trade mark is similar to six of Direct Line's registered marks (4 UK and 2 Community Trade Marks), five of which are two dimensional representations of a telephone on wheels and one which is a three dimensional representation of a telephone on wheels, there was a likelihood of confusion, including the likelihood of association, on the part of the public.
2. Section 5(3) of the Act:
"A trade mark which is identical with or similar to an earlier trade mark shall not be registered if, or to the extent that, the earlier trade mark has a reputation in the United Kingdom (or, in the case of a Community trade mark,[…] in the European Community) and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.
Direct line argued that the proposed mark is likely to take unfair advantage of, and/or cause detriment to the distinctive character and repute of Direct Line's registered trade marks.
3. Section 5(4)(a):
"A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented by virtue of any rule of law (in particular the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade."
In arguing this, Direct Line relied on the basis that its registered marks have been in use since the 1980s and have, thus, acquired good will. Therefore, esure's use of the proposed trade mark, would amount to passing off.
esure did not accept that the marks were similar nor that there was any likelihood of confusion between its and Direct Line's marks. However, it did accept that the red telephone on wheels is well known to the public in the context of insurance.
Direct Line's solicitors conducted two mini surveys and a full scale public survey including four groups of between 500 and 578 people in 40 locations across the UK. The survey's findings were that almost 50% of the survey participants, who were shown a red computer mouse on wheels similar to the esure mouse, associated it with DL and less than 5% associated it with esure. Over 70% of the respondents associated Direct Line's own red mouse on wheels with Direct Line.
However, Mr Allan James, for the Registrar, decided that the survey evidence was of no assistance on the basis that Direct Line's intensive promotion of its own red computer mouse on wheels and the related advertising had introduced too high a level of uncertainty to the survey results. Therefore, he considered public opinion at the time of the survey to be uncertain.
In order to establish grounds for opposition under 5(2)(b) and 5(3) of the Act, it is necessary to show that the proposed trade mark is "similar" to the earlier registered marks.
Mr James explained that the requirement for similarity is satisfied whether there is any visual, aural, or conceptual similarity between marks which is likely to be recognised as such by an average consumer. He added that:
"A distinctive feature of both marks is the unusual juxtaposition of wheels attached to (albeit recognisably different) electronic communication devices. I find that this gives rise to a recognisable similarity between the marks."
In deciding this, Mr James took the view that, in this case, the degree of similarity required for there to be a likelihood of confusion between the two marks was reduced for the following reasons:
a) The identity of the services. esure's trade mark application seeks to register its mark for services identical to those set out in and Direct Line's registration of a three dimensional shape of a telephone on wheels; financial services and insurance.
b) Highly distinctive character of the Direct Line's mark. This is based on what Mr James described as the unusual juxtaposition of a telephone and wheels. In Mr James' opinion, this inherent distinctiveness had been enhanced through its extensive exposure.
Mr James found that at the date of the application, the use of esure's mark in the colour red would have been likely to cause indirect confusion between esure's mark and Direct Line's earlier mark. If esure's application to register the trademark had been successful, it would have been able to use the mark in any colour, including red. This would have been an example of normal and fair use of the trade mark. As such normal and fair use of esure's mark would lead to indirect confusion between the two marks, Mr James held that the objection under 5(2)(b) to be successful.
Mr James listed the following applicable legal principles:
a) "Reputation" means that the earlier trade mark is known by a significant part of the public, who are concerned with the products and services covered by that trade mark.
b) It is sufficient that the similarity between the marks causes the relevant public to establish a link between the earlier mark and the later mark; it is not necessary to the show that the similarity gives rise to a likelihood of confusion between them.
c) The nature of this link should cause real and not just theoretical effects.
d) This section is not aimed at every sign whose use may stimulate the relevant public to recall a trade mark, which enjoys a reputation with them.
e) The stronger the earlier mark's distinctive character and reputation, the earlier it will be to accept that detriment has been caused to is.
f) There is detriment to the distinctive character of the earlier mark where it is not longer capable of arousing immediate association with the goods or services for which it is registered. There is detriment to the reputation of the earlier mark where the goods or services for which the later mark is used appeal to the public's senses in such a way the earlier mark's power of attraction is diminished.
g) Unfair advantage is taken of the distinctive character of the repute of the earlier mark where there is clear exploitation and free-riding on the coat-tails of a famous mark or an attempt to trade upon its reputation.
The link between the two marks was established because of their visual, aural and conceptual similarity (as set out under the heading "Similar" above). This link was further strengthened because the marks relate to identical services. In addition, esure had used its mark in an advertisement, which in Mr James' view, was intended to have a dig at Direct Line. In his view:
"It is not possible to convey the message "Don't go to them: come to us" without the means of bringing DL to mind".
In Mr James' view, the stronger the reputation and distinctive character of the earlier mark, the easier it should be to accept that a later mark takes unfair advantage of it. Mr James found that Direct Line's mark was extremely distinctive and had a very strong reputation with the relevant public.
A mark which calls to mind and attaches itself in the public's recollection to a famous mark used by another, is liable to commercially benefit from the fame of the famous mark. Mr James accepted that this was the case here and that this effect was parasitic in nature and, therefore, unfair.
Detrimental to the distinctive character or repute of the earlier mark?
In deciding this, Mr James explained that blurring or dilution of the distinctive character of a mark, are matters of degree. In order to asses whether any dilution will be detrimental and not just theoretical, it is necessary to consider the exclusiveness of the earlier mark in the relevant market. Mr James accepted that at the date of esure's application, Direct Line's telephone on wheels mark was the only mark in the insurance market with the conceptual identity of a communication device on wheels. He went on to say that the co-existence of both the esure mark and Direct Line's mark would reduce the uniqueness of Direct Line's mark. Further, he referred to applications by esure to register a computer keyboard on wheels and a computer screen on wheels, both of which were withdrawn, as illustrations of how esure's proposed application represent a real threat to the preservation of the distinctive character of Direct Line's telephone on wheels mark.
The Registry was not asked to consider whether esure had due cause to use the mark, therefore, Mr James only addressed the point in the context of comparative advertising. He held that although The Comparative Advertising Regulation is intended to permit a competitor to use the trade mark of a third party in order to make effective and fair comparisons between his goods and services and those distinguished by the registered trade mark, the Regulation does not permit competitors to incorporate distinctive feature of earlier trade marks into their own marks.
Based on these conclusions, Mr James held that Direct Line's objection under section 5(3) was also successful.
Mr James did not reach a conclusion on this third ground of opposition.
Why this matters:
This decision highlights the dangers of a brand owner including any element of a competitor's trade mark in its own, even where the element is merely conceptual. In this case, it was the inclusion of wheels on an "easily recognisable desktop communication device".
In deciding this matter, Mr James placed a great deal of emphasis on the "inherent distinctiveness" of Direct Line's mark and the mark's reputation in the financial services market and, arguably, was less concerned with the actual similarity between the two marks; esure's mark is a computer mouse, with eyes, which has the appearance of a modern racing car, on wheels and Direct Line's mark is an old-fashioned telephone on wheels. He did, however, accept that there was no likelihood of confusion between the two marks.
In any event, we have not heard the last on this matter, as esure appears set to fight this out in an appeal.
We will let you know who wins the "battle of the recognisable desktop communication devices on wheels"!