EU trade mark

On 1 November the England & Wales Court of Appeal upheld a High Court decision (by Mr Justice Arnold) that two trade marks for the shape of a London taxi were invalid.

The marks at issue were EUTM 951871 registered as of 5 October 1998 for “motor vehicles, accessories, for motor vehicles; parts and fittings for the aforesaid” in class 12, and UK trade mark 2440659 registered as of 1 December 2006 for “cars; cars, all being taxis” also in class 12. The dispute was between London Taxi Corporation (LTC), which owned the trade marks, and rival manufacturers Frazer-Nash Research and Ecotive.

The judgment, written by Lord Justice Floyd, addressed issues including who is the average consumer, inherent distinctiveness and acquired distinctiveness, substantial value, revocation for non-use, infringement and passing off.

Here are some of the key passages in the judgment:

Average consumer

Although he decided he did not need to reach a conclusion on the point, the judge said he was inclined to hold that taxi hirers are “not excluded in principle from consideration as a relevant class of consumer”:

In principle, therefore, and in the absence of any authority cited to us which is directly in point, I would consider that the term average consumer includes any class of consumer to whom the guarantee of origin is directed and who would be likely to rely on it, for example in making a decision to buy or use the goods. Against that background, I would not have thought it mattered whether a user was someone who took complete possession of the goods, or someone who merely hired the goods under the overall control of a third party (paragraph 34)

Inherent distinctiveness

The Court of Appeal followed the first instance judge in finding that the marks did not depart significantly from the norms and customs of the sector (as set out in the CJEU Freixenet cases) and therefore did not have inherent distinctive character. Floyd LJ said there are three steps in deciding this:

The first step in the exercise is to determine what the sector is. Then it is necessary to identify common norms and customs, if any, of that sector. Thirdly it is necessary to decide whether the mark departs significantly from those norms and customs (paragraph 45)

UK trade mark

However, the judgment also found that the question whether “departs significantly from the norm or customs of the sector” is a necessary and sufficient test for inherent distinctiveness is not clear and would have had to be referred to the CJEU if it were critical to the appeal.

Acquired distinctiveness

This was the main area of dispute in the case, and again the Court of Appeal upheld the first instance ruling, finding that the evidence was not adequate to establish that taxi hirers had come to perceive the shape of the taxi as denoting vehicles associated with LTC and no other manufacturer. Floyd LJ wrote:

Firstly, one must remember, as always in the case of a shape mark, that the public are not used to the shape of a product being used as an indication of origin. Secondly, even though I would not, as I have said, necessarily exclude hirers as a class of average consumer, they constitute a class of consumer whose focus will be on the provider of the services being supplied more than on the manufacturer of the vehicle in which they are travelling. It will be hard to interest them, far less educate them, in the topic of whether the shape of the taxi is an indication of a unique trade source. Thirdly, the hirer is aware of the regulation of London taxis and that taxis of the shapes shown in the registrations can be relied on to be licensed London taxis. One must be careful therefore to distinguish this message admittedly conveyed to them by the shape, from that which is necessary to show that the mark has acquired trade mark significance.

In these circumstances it is particularly important to see evidence from which it can be deduced that consumers have come to understand that there is only one manufacturer of taxis of that shape. Whilst I might not have expressed myself in quite such absolute terms about the tip-up seat material, I see nothing in the materials which we were shown which persuades me that the judge, overall, came to an incorrect conclusion on this issue, or one with which we could properly interfere (paragraphs 66-67)

Substantial value

In the light of the findings on distinctiveness, the question of whether the signs consisted of the shape which gives substantial value to the goods did not need to be decided. However the judge said:

Despite this existing guidance, I do not regard as entirely clear cut the question of whether, in addressing substantial value, one should take into account or ignore the fact that consumers will recognise the shape as that of a London taxi. On one view, at least, to take account of that fact would not be to decide the issue by reference only to "the shape itself". I would also put in the same category the question of the relevance of the presence or availability of design protection in fact. These are questions on which, had they been critical to the decision, I would have sought the opinion of the CJEU on a preliminary reference (paragraph 76)

Read the decision in full here and the first instance judgment here. There is also a post about the case on the IPKat blog by Rosie Burbridge here.