Who: Okotoks Limited (formerly Spicerhaart Ltd) & another vs. Fine & Country Limited & others
When: May 2013
Where: Court of Appeal (Civil Division)
Law stated as at: 14 June 2013
The Court of Appeal, in upholding the judgment of the High Court, found that the defendant’s use of the word ‘FINE’ combined with the appearance of its logo amounted to both passing off, and trade mark infringement, of the claimant’s name and logo ‘Fine & Country’.
The claimant, Fine & Country Ltd (“F&CL”), provides a “marketing umbrella and vehicle” which independent estate agencies may licence for their own use. F&CL’s licenced franchisees provide high end estate agency services. F&CL holds both a figurative European Community Trade Mark (CTM) in respect of real estate agency services, and a national device mark in respect of real estate affairs. The logo is illustrated below.
In 2009 the defendants, Spicerhaart Group, launched the ‘FINE’ brand and logo with the help of a former employee of F&CL. The branding agency engaged at the time expressed concern that the design was becoming “too much like Fine & Country”. The FINE logos are illustrated below and were accompanied by the strapline “selling fine homes throughout the country”.
F&CL claimed that the defendants had passed off or attempted to pass off their services as those of F&CL’s, and that their logo and strapline amounted to trademark infringement.
What the High Court said
The High Court, applying the classic Jif Lemon test for passing off, found that goodwill had accrued to the claimants’ services, rather than to individual licensees. To establish passing off there must be: goodwill or reputation attached to the goods or services; misrepresentation leading or likely to lead the public to believe the goods or services offered are those of the claimant; and, damage to the claimant as a result of the misrepresentation. The FINE marks were found to be “confusing and deceptive and/or likely to confuse and deceive”, and that “there was a realistic risk of damage in the future… [being] the erosion or dilution of the “Fine & Country” brand”.
The judge found that the concept, the name and logo had “plainly attractive force” which “brings in custom and generates good will”.
With regard to the validity of the registered trade marks, the High Court found that the F&CL Marks were “sufficiently distinctive to have warranted and continue to warrant registration” and that the mark had a “recognised separate existence apart from the descriptive and laudatory nature of the words themselves.” The judge concluded that the CTM was infringed both on a “likelihood of confusion” basis (Article 9 (1) (b) CTMR / section 10 (2) TMA) and on a “detriment to distinctive character/unfair advantage” basis (Article 9 (1)(c) TMR / section 10 (3) TMA).
The judge found that the Chief Executive of FINE was “well aware of the resemblance, and the possibility that customers would mistake one for the other, if that was not his intention, he was certainly aware of the risk, and consciously decided to live dangerously.”
The defence raised under Article 12(b) / section 11 (2)(b) was held to have failed. These provisions state that a registered trade mark cannot be used by a proprietor to prohibit a third party from using indications as to the characteristics of goods or services. This was rejected as the word ‘FINE’ was not being used by the defendants as an adjective, but was used as a brand or quasi trade mark.
What the Court of Appeal said
The Court of Appeal dismissed all of the appellants’ grounds of appeal and upheld the judgment of the High Court. They found that the use of the word ‘FINE’, the logo and the accompanying strapline amounted to both passing off and infringement of the claimant’s trade marks. The main issues raised in the appeal are summarised below.
Goodwill and title to sue
With regard to passing off, the appellants argued that F&CL as a mere licensor of the F&CL brand was not capable of being attributed goodwill. This was rejected, as the brand’s ability to attract licence fees was clear evidence of goodwill and, if the brand is damaged, its ability to attract license fees will also be damaged.
Misrepresentation and descriptive words
The Court rejected the appellants’ submission that the claim amounted to an attempt to monopolise the descriptive word ‘fine’. The Court held that Hildyard J had not merely considered the use of the word ‘fine’, rather, had taken a holistic consideration of the design and the process which led to the graphic form of the logo. The Court was reluctant to interfere with Hildyard J’s finding that a passing off had been established by “the combination of the name, the font, the capitalisation, the underlining, the use of the gold, the strap line and the overall impression”. The conclusion of misrepresentation was therefore upheld.
The Court rejected the submission that the class of persons deceived was too wide as it encompassed prospective customers or ultimate consumers of goods and services supplied.
Hildyard J found that no damage had been caused but felt that it may occur in the future. This was held to be a reasonable prediction based on evidence and was therefore upheld.
The Court rejected the submission that the judge should have applied rigorous rules of evidence to certain e-mail material as per the Marks & Spencer v Interflora (Marks & Spencer plc v Interflora Inc  EWCA Civ 1501  2 All ER 663 and Interflora Inc v Marks & Spencer plc  EWCA Civ 319). Although the e-mails were anecdotal and were responses to a questionnaire, they were admitted to evidence without objection from the defendants at first instance, and the judge made clear the relative lack of weight he afforded them in his consideration.
Trade mark infringement
Were they validly registered?
The Court dismissed issues of validity raised by the appellants under articles 3(1)(b) and (c) as the ‘Fine & Country’ mark was held to have become distinctive, both in terms of inherent distinctiveness and acquired distinctiveness. While the judge at first instance had employed some “rolled-up reasoning” by not considering inherent and acquired distinctiveness separately, the Court of Appeal concluded that no fundamental error of principle had occurred.
Were the marks infringed?
The Court of Appeal concluded that there was a likelihood of confusion for the purposes of Article 9(1) (b) CTMR / section 10 (2). This was particularly so in circumstances in which the judge at first instance had made a finding of fact that confusion was caused in relation to passing off.
Descriptive words and the defence under article 12(b) / section 11 (2)(b)
These provisions state that a trade mark is not infringed by “the use of indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services”. The Court rejected this defence, holding that the defendants had been using the word ‘Fine’ as a “quasi-brand” and not as an indication of the characteristics of the goods and services for the purposes of these provisions.
Why this matters:
It is noteworthy that F&CL as franchisor was found to possess title to the goodwill in issue despite having a wholly different business (collecting licence fees) to the business by which the goodwill was ultimately generated (estate agency services).
The word ‘Fine’, although to an extent laudatory and descriptive of the goods and services, was held not to be monopolised by the trade mark. The FINE & COUNTRY mark had acquired distinctiveness through use as a brand and its being associated with the F&CL business. The use of ‘FINE’ by the appellants, when considered in combination with the similar logo and the strapline of the claimants, amounted to both passing off and trade mark infringement. This illustrates the broad scope with which a court will consider claims of passing off and trade mark infringement.
Ultimately, this was not a case about a monopoly granted to a common descriptive word, but a case about a trade mark which had acquired distinctiveness, and which was infringed by the logo of another business which was found to be too similar to the trade mark in question. The case is a reminder to all businesses that, when rebranding or considering any marketing campaign, “living dangerously” by too closely emulating a competitor’s brand can have consequences.
Sara McDiamond and Jonathan Mayner