Who: JW Spear &Sons Ltd, Mattel Inc and Mattel UK Ltd v Zynga and Roger Maier and Assos of Switzerland SA v Asos Plc and Asos.com Ltd
Where: Court of Appeal
When: 27 March 2015 and 1 April 2015
Law stated as at: 6 May 2015
The Court of Appeal recently pronounced judgment on two trade mark disputes involving global brands, both of which involved brands differing by a single letter.
Scrabble vs Scramble
Mattel owns CTMs for the word marks SCRABBLE and SCRAMBLE and a figurative mark featuring the word SCRABBLE.
Zynga, the online social gaming company, subsequently started using SCRAMBLE and SCRAMBLE WITH FRIENDS in respect of games sharing the essential elements of the game Scrabble. A stylised logo used by Zynga consisted of the word “Scramble” in which the letter “m” was twisted.
Mattel sued Zynga for trade mark infringement and passing-off.
At first instance, the judge held that although Mattel’s CTM for SCRAMBLE had been infringed, the CTM was invalid and liable to be revoked on the grounds of it being descriptive and generic (Regulation 207/2009 (7)(1)(c) and 7(1)(d)).
Peter Smith J also held that Mattel’s SCRABBLE registrations were not infringed by Zynga’s use of the non-stylised word SCRAMBLE and that there had been no passing off.
Mattel’s only success at first instance was the judge’s finding that Zynga’s use of the stylised word Scramble with the twisted letter “m” made the word as a whole look like “Scrabble” and thereby constituted infringing use of Mattel’s SCRABBLE CTM because the twisted letter “m” looked like the letter “b”.
Both sides appealed but in the Court of Appeal Mattel was almost completely successful.
Although the appeal judges still declined to find that SCRAMBLE and SCRAMBLE WITH FRIENDS infringed Mattel’s SCRABBLE CTM or amounted to a passing off, they held that the judge had erred in finding that the SCRAMBLE CTM was descriptive. Accordingly the SCRAMBLE CTM was reinstated and held to be infringed by Zynga’s use of the non-stylised sign SCRAMBLE.
Zynga’s only consolation was that the Appeal Judges reversed Peter Smith J’s finding that Zynga’s use of the stylised SCRAMBLE sign with the twisted letter “m” did not infringe Mattel’s SCRABBLE CTM.
Assos vs Asos
In this case the claimants, a successful specialist worldwide cycling gear company, started trading in the 1970’s in Switzerland and in 2006 obtained a CTM for ASSOS in classes 3, 12 and 25. The class 25 registration covered “clothing, footwear and headgear.”
The defendant, the fashion retail company, Asos Plc, started trading under the ASOS sign in 1999 and in December 2012 registered ASOS as a UK trade mark for a wide range of goods, including in class 25, and some services.
In December 2011, the claimants sued Asos for infringement of their CTM and for passing off and the defendants counterclaimed for revocation of the ASSOS CTM for non-use.
At first instance, the judge held that the claimant’s ASSOS CTM registration should be partially revoked due to non-use so that it only covered “specialist clothing for racing cyclists and casual wear including track suits, t-shirts, polo shirts, caps and jackets.”
The judge also rejected the arguments on infringement (Article 9(1)(b) and 9(1)(c) CTM Regulation) and passing off by the defendants, since she found no risk of confusion in respect of the type of goods sold by the defendants and no detriment to the reputation of the ASOS CTM. In light of this she did not go on to consider the defendant’s “own name” defence.
The Court of Appeal overturned the judge’s decision on likelihood of confusion and damage to distinctive character.It considered that the judge had erred by only considering the likelihood of confusion with respect to the actual use made of the ASSOS CTM by the claimant and not with the notional and fair use of the mark across the breadth of the very wide specification.
However none of this helped ASSOS as the majority also held that the defendants could rely on the “own name” defence as their actions conformed to honest practice.
The Appeal Court also held that the specification of goods in class 25 covered by the ASSOS registration should be further limited.
Why this matters:
SCRABBLE vs SCRAMBLE
It is surprising that Mattel’s mark SCRABBLE was held not to be infringed by use of the sign SCRAMBLE, the only difference being one letter.
ASSOS vs ASOS
Although an appeal by ASSOS to the Supreme Court seems likely, the lengthy appeal judgment and the numerous issues covered show the difficulties that can arise where two closely similar brands have co-existed for several years.
Also noteworthy is the appeal finding that when considering likelihood of confusion under Article 9 (1) (b) the actual use of the claimant’s trade mark should be ignored in favour of the notional and fair use based on the goods and services specified in the registration.
Of interest also was the dissenting appeal judge’s opinion that the defendants ASOS should have carried out the appropriate trade mark checks before launching ASOS and had they done this they would have come across the mark for ASSOS, and therefore should have avoided the likelihood of confusion of the public. That’s not to mention the huge costs and diversion of management time of complex litigation that has now been in progress for well over 4 years and looks to have a way to go yet.