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Company names and intellectual property rights

When is a descriptive word not just a descriptive word? When it’s used to brand two separate property agencies and, according to a judge, to confuse the public. Trademark lawyer Imogen Wiseman reports .

PROPERTYdrum

company-namesThe High Court’s recent decision in Fine & Country Limited v Okotoks Limited shows how the use of an apparently descriptive word can still fall foul of intellectual property rights.

Fine & Country brought the case after Okotoks (then known as Spicerhaart) rebranded from FINEHAART to FINE in 2009. Fine & Country claimed that the trade mark FINE was confusingly similar to FINE & COUNTRY. So, they argued, it infringed their trade mark registrations and amounted to passing off. In their defence, Okotoks argued that Fine & Country were trying to monopolise the use of an ordinary descriptive word and that there was no confusion in the marketplace.

The claim to trade mark infringement was based on UK and European trade mark registrations of FINE & COUNTRY combined with a logo:

The judge rejected Okotoks’ claims that the mark was too descriptive to be protected, finding that the registrations were valid. Even though the words FINE and COUNTRY separately were descriptive, the combination was sufficiently unusual to be able to distinguish the activities of one business from another.

fine-and-country-logo

In the judge’s opinion, Okotoks’ use of the word FINE in a similar style font amounted to trade mark infringement, on two fronts.

Firstly, the use of similar fonts meant that the two marks gave a similar overall impression and confusion was likely because the marks were being used on identical services.

Secondly, the judge found that because of Fine & Country’s reputation in their trademark, Okotoks were unfairly creating an association with Fine & Country’s name. According to the judge, it was likely that the attractiveness and power of Fine & Country’s brand would be compromised in the marketplace as a result of Okotoks’ use of FINE. One factor that seems to have persuaded the judge to find in Fine & Country’s favour on this point was Okotoks’ reputation for aggressive business practices.

Deliberately confusing?

In relation to the claim to passing off, Okotoks did not really dispute whether there was a real and enforceable goodwill in the FINE & COUNTRY brand. They did however challenge Fine & Country’s evidence of confusion amongst consumers, but the judge found that at least some of the evidence showed that people had been confused.

fine-logoAnother factor which also seems to have influenced the judge’s decision was the evidence suggesting that the FINE brand had been created to compete directly with  FINE & COUNTRY and that the Okotoks had adopted the brand in the knowledge that confusion was a possibility.

If you use a name or mark similar to one already in use, you run the risk of objection.

The judge found that potential customers would be deceived into confusing the two brands or assuming that there was a connection between them. He also found that there was a real risk that Fine & Country’s goodwill would be damaged by Okotoks’ use of FINE and that Okotoks’ use of FINE amounted to passing off.

The fact that Fine & Country’s business model involves the licensing of the FINE & COUNTRY trademark raised a number of interesting side issues in this case. Okotoks had tried to argue that the goodwill in the FINE & COUNTRY brand was in fact owned by the licensees (who were not part of the court action) and also that the FINE & COUNTRY trade mark was deceptive because of Fine & Country’s failure to properly control their licensees’ activities. These claims were refused by the judge, at least in part because Fine & Country had submitted evidence that they had exercised proper controls over their licensees and that the brand was used consistently.

Post case comment

A spokesman for Spicerhaart (now Okotoks) said, “Spicerhaart notes the decision of the court in the case brought by Fine & Country, which claimed that we could not use our own FINE brand as it was ‘passing off’ as Fine & Country. While the decision of passing off has gone against us, we are delighted that the judge did not rule against our use of the word FINE per se, only its branding style. FINE is a generic word that any estate agency can use. We never intended that our own upmarket brand FINE should be mistaken for Fine & Country. We are now preparing for the lengthy appeal process against the judge’s verdict. We have no further comment at this stage.”

Fine & Country’s CEO Matthew Pryke, formerly a partner and solicitor with law firm Wallace LLP, represented the company in court. He said, “We are delighted with the judgment to right this injustice and to protect the unknowing consumer from imitators in the marketplace. This has been a prolonged, hard fought and costly legal action and we are delighted to be able to move forward with confidence and focus on the next chapter of the brand’s exciting growth and development.”

The date for an appeal hearing is not yet known.

Avoid costly pitfalls

The case is a reminder that companies can obtain enforceable rights in words which appear to be descriptive or commonly used in the trade. If you use a name or mark that is similar to one already in use or registered, you run the risk of an objection from the owner. This may well result in you having to rebrand, which can involve unwanted cost, inconvenience and delay.

Any company considering a new brand or trading name can take simple steps to avoid getting into the kind of legal dispute that can cost a lot to resolve:

Conduct searches of the trade mark register and marketplace before launching a new brand to ensure that it is free for use.

If you are tempted to sail close to the wind and launch a brand that is similar to one which is already registered or in use, weigh up the commercial value of doing so against the cost of defending yourself in court – and potentially losing the case.

If in doubt, seek professional advice: Trade mark attorneys are experienced in helping companies clear brands for use and registration and in helping them navigate around potential problems.

Once a trade mark has been secured, make sure you have a clear, unambiguous contract drawn up before you attempt to set up any licences. Your trade mark attorney can advise you about putting effective trade mark licences in place to ensure that your rights are free from attack.

Imogen Wiseman is a registered trade mark attorney and a partner at Cleveland, a London-based firm of trade mark and patent attorneys. She is a member of the Council of the Institute of Trade Mark attorneys and chairs ITMA’s Law & Practice Committee.
email: I.Wiseman@cleveland-ip.com

There is more information about trade marks and registered designs on the ITMA website: www.itma.org.uk

November 9, 2012

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