On yer Bike ASSOS; the Own Name Defence
The Court of Appeal ("CoA") have reconsidered a case concerning a Community Trade Mark ("CTM"), "ASSOS", a specialist cycling wear business and a UK trade mark, "ASOS", which is the mark of a separate global online fashion business.
The CoA found that there was infringement under Articles 9(1)(b) and (c) of the CTM Regulation as use of the ASOS mark created a likelihood of confusion and weakened the distinctive character of the ASSOS mark. However, by a majority 2-1 decision, it held that the defendants could rely on the own name defence in Article 12(a) of the CTM Regulation which provides that "a Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade his own name or address provided he uses them in accordance with honest practices in industrial or commercial matters".
The CoA held that the High Court had failed to consider the notional and fair use of the mark in respect of all of the goods falling within the scope of the specification and had only considered the likelihood of confusion in relation to the actual use made by ASSOS.
Kitchin LJ resolved that ASOS had satisfied their duty to act fairly in relation to ASSOS' legitimate interests and had not conducted their business so as to compete unfairly with ASSOS. The practices complained of were in accordance with honest practices in industrial and commercial matters and ASOS were therefore entitled to the own name defence under Article 12(a).
In considering the application of the own name defence, the CoA considered among the relevant factors were the facts that:
- Both parties had adopted their names independently; ASOS had not intended to confuse the public or benefit from the goodwill associated with ASSOS' business;
- There had been no confusion in practice between their respective goods or services and there was no real likelihood of it occurring in the future;
- ASOS had not taken any steps towards ASSOS' business model and had actually taken steps to make sure that they did not sell cycling inspired fashion wear.
Interestingly, Sales LJ gave the dissenting opinion in which he stated the availability of the own name defence was affected by ASOS' failure to conduct reasonable trade mark checks. Had ASOS taken appropriate steps to check for others using marks which were similar to its "ASOS" sign it would have learnt that ASSOS was already using the "ASSOS" mark in the same market. As a matter of ordinary honest practices, to avoid interfering with ASSOS' existing interest and to avoid a likelihood of confusion, ASOS should have adopted a different sign to use in selling their own goods.
The 'own name' defence has generally been interpreted narrowly. Sales LJ's lengthy dissenting judgment on this point is a poignant reminder for brand owners to be diligent regarding the protection of their rights.
The test of honest practices will always be applied strictly and is dependant on the facts. In this instance the majority of the CoA was satisfied that ASOS had acted honestly and never intended to deceive. However, the CoA's rather lenient view on an established company such as ASOS failing to carry out trade mark clearance searches could well be revisited in the future.
The CoA's decision serves as a reminder to businesses that the failure to conduct any trade mark searches before starting use and investing in a brand may lead to costly and time-consuming litigation. The case demonstrates that abbreviations and acronyms of business names or products can create marks which may need to be removed from their original form if they conflict with third party marks.