Trademark

Boxing Brands Ltd v Sports Direct International plc and other companies: Chancery Division: 25 July 2013

The proceedings concerned a trademark dispute in respect of a mark ‘QUEENSBERRY’. Each side claimed rights in the mark. The claimant (BBL) was a company associated with F, a well-known boxing promoter. Also associated with BBL was R, the owner of the Planet Hollywood chain of restaurants. The defendants were all associated with Sports Direct, a well-known retailer. The second defendant was the successor to a boxing enterprise associated with L and G which started in Bedford in 2004 with the name ‘QUEENSBERRY’ or ‘QUEENSBERRY BOXING’. The third and fourth defendants had a licence from the second defendant.

The first defendant was a holding company. Each side was the owner of a number of registered trademarks comprising the word ‘QUEENSBERRY’ for various goods and services. Each side had UK registered trademarks and BBL also owned a community trademark. The major issue was about the rights to a clothing brand. Each side wished to sell clothing under that trademark. BBL alleged infringement of its UK registered trademark 2,485,784 (the 784 mark), registered inter alia in class 25 for ‘Articles of clothing; footwear; headgear’. The mark had been applied for on 8 May 2008.

In November 2012, the claimant, having learned that a clothing brand was being launched at a store in London, applied for an interim injunction. A judge granted the order and directed the case be tried on an expedited basis. The action included a claim for copyright infringement relating to a winged logo, for which BBL contended it owned the copyright. The defendants contended that BBL’s 784 mark was invalid either: (i) under section 5(4)(a) of the Trade Marks Act 1994 (the 1994 act) on the basis that as at 8 May 2008, L and G could have prohibited the claimant from using the mark under the law of passing off; (ii) under section 3(6) of the 1994 act on the basis that the mark had been applied for in bad faith in that applicant applied for it knowing that the mark really belonged to L and AG; or (iii) under section 46 of the act.

The defendants also contended that even if the mark was valid, any sales by them of clothing under the name would not infringe because they had a defence under section 11(3) of the act (use in a locality). The second defendant counterclaimed based on passing off.

BBL contended that it was entitled to use in relation to clothing and sports equipment or licence others to use it. The issues for consideration were: (i) whether the 784 mark was invalid under section 5(4)(a) of the 1994 act under the law of passing off; (ii) whether the mark was invalid under section 3(6) of the act on the basis that the mark had been applied for in bad faith; (iii) whether the defendants had a defence under section 11(3) of the act and, if the 784 mark was valid, would it be infringed by the sale of the third and fourth defendants’ clothing; and (iv) whether the claim for infringement of copyright had been established. There was no dispute that if the mark was valid, the clothing the defendants intended to sell, did or would infringe BBL’s 784 trademark. A further issue arose as to whether the specifications of UK registered trademark 2,499,451 and community trademark 7,376,395, insofar as they related to the goods in classes 16, 18 and 28, were valid.

The court ruled: (1) It was settled law that the law of passing off required three elements: (i) goodwill; (ii); misrepresentation; and (iii) damage. The test applicable under section 5(4)(a) of the act was whether, at the date of the application [to register the mark] normal and fair use of the mark in relation to the relevant goods and services could have been prevented by the persons alleging ownership of the mark by an action for passing off. Even if the owner of a protectable goodwill had not generated any goodwill outside the sphere of their business, it was possible that usage outside that field could lead to passing off (see [77], [94] of the judgment).

In conclusion on goodwill, it was accepted that L and G had a right, protectable in passing off, to prevent someone else opening a gym in Bedford and calling it QUEENSBERRY but their goodwill did not extend any further. They had no goodwill as a boxing agency and no goodwill in or relating to clothing. The question was whether the rights L and G had in May 2008 could have restrained sale of branded clothing in May 2008. On the facts, the answer was no; at 8 May 2008, L had had no right in the law of passing off to prevent anyone from using the word as a trademark in relation to articles of clothing, footwear or headgear (see [93], [94], [96] of the judgment).

The challenge to validity based on section 5(4) of the act would be rejected. The 784 mark was not invalid on that ground. The second defendant’s counterclaim based on section 5(4) of the act was dismissed. The counterclaim by the second defendant based on passing off would also be rejected (see [96], [131], [152] of the judgment). Lego Systems A/S v Lego M Lemelstrich [1983] FSR 155 applied; Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873 applied; Wild Child Trade Mark, Re [1998] RPC 455 applied.

(2) Section 3(6) of the act provided that a mark should not be registered if or to the extent that the application was made in bad faith. The test was conduct involving dealings which fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined (see [78] of the judgment). On the facts, the 784 trademark had been applied for in the knowledge that L and G had been using the sign in some way. However that alone was not sufficient to give rise to bad faith within section 3(6) of the 1994 act.

Applying settled law, the registration of the 784 mark for clothing was not done to stop L or G from continuing to use the sign as the name of a gym or a boxing agency. Moreover the degree of legal protection which L or G would have had at the time was only their rights available in passing off. All that they could have prevented was use of the word as the name of a boxing gym in Bedford. It followed that the application for the 784 mark was entirely acceptable commercial behaviour (see [98]-[100] of the judgment). The challenge to validity of the 784 mark on the ground of bad faith would be rejected (see [100] of the judgment). Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd [1999] RPC 367 applied; Chocoladefabriken Lindt & Sprungli AG v Franz Hauswirth GmbH: C-529/07 [2009] All ER (D) 114 (Jun) applied; Malaysia Dairy Industries Pte. Ltd v Ankenævnet for Patenter og Varemærker: C-320/12 [2013] All ER (D) 114 (Jul) applied.

(3) On the court’s findings, a defence under section 11(3) could not assist the defendants. On the facts, the defendants’ predecessors in title were not using the mark as a clothing mark on 8 May 2008 in any locality (see [101] of the judgment). There was nothing which impugned the validity of the 784 mark. In all the circumstances, the 784 mark was valid and would be infringed by the sale of the third and fourth defendants’ clothing (see [102], [152] of the judgment).

(4) On the facts, the defendants had shown no intention to use the winged logo and had made no threat to do so. Accordingly  the claim for copyright infringement would be rejected (see [132], [152] of the judgment).

(5) The specifications of UK registered trademark 2,499,451 and community trademark 7,376,395 insofar as they related to the goods in classes 16, 18 and 28 were invalid. The specifications had to be amended to remove those goods (see [152] of the judgment).

Iain Purvis QC and Anna Edwards-Stuart (instructed by Davenport Lyons) for BBL; Roger Wyand QC and Andrew Norris (instructed by Reynolds Porter Chamberlain) for the defendants.