UK
The Court of Appeal has ruled that online clothing retailer Asos is entitled to use an ‘own name’ defence. Claudia Rabbitts of D Young & Co reports

The UK’s Court of Appeal has held that use of the mark ‘ASOS’ did create the likelihood of confusion, and damage the registered trademark ‘ASSOS’. But, by a majority of 2:1, it was also decided that Asos could rely on a defence to trademark infringement: the ‘own name’ defence. This led to a favourable outcome for Asos, which may continue to use its ‘ASOS’ mark.

What happened?

The claimants in this case (Maier and another v ASOS and another, 1 April 2015) were Assos of Switzerland, founded in the 1970s, and the son of the company’s founder. Assos manufactures and sells cycling products (including clothing), at the specialist and top end of the market. The vast majority of the products are sold through distributors who sell the items in-store. Assos does not encourage the sale of the items on the internet, and does not have an online store. Assos has various registered trademarks, including the Community trademark (CTM) ‘ASSOS’ registered for various goods, including clothing, footwear and headgear.

Asos, the defendant in this case, was founded in 1999 under the name ‘As Seen On Screen’. It has developed into a global online fashion and beauty retail business. In contrast to Assos, Asos’s business has always been conducted purely online, and it began with selling only other companies’ clothing products. The acronym ‘ASOS’ was adopted in 2002, and from that time, it has been used as the name on its website and also in various logo forms. Around 2004, Asos started to sell its own brand of clothing under the name of ‘ASOS’, for which the company has a UK registered trademark for a long list of goods, including clothing.

Assos alleged that the activities of Asos in selling clothing, footwear and headgear in the EU via the internet, and under and by reference to the sign ASOS, constituted infringement of its CTM, and passing off, and that Asos’s UK trademark was partially invalid.

Asos counterclaimed for partial revocation of Assos’s CTM on the basis that it had not been used in relation to any of the goods within the specification, save specialist cycling clothing, accessories and ancillary products. It also argued that, by the date of the application for the CTM and any relevant priority date, it had already acquired significant goodwill and reputation in and under the mark ‘ASOS’ in connection with the sale and supply of clothing, footwear and headgear. It contended that ‘ASOS’ was its corporate and trading name and that it had been adopted honestly, without any reference to ‘ASSOS’, and that there had been no customer confusion. Asos also that in any event, it should be entitled to rely on an ‘own name’ defence.

The judge at first instance, UK High Court Justice Vivien Rose, partially revoked the CTM and ordered that the CTM’s specification be limited to “specialist clothing for racing cyclists; jackets, t-shirts, polo shirts, track-suit tops, track-suit bottoms, casual shorts, and caps”. Two members of the Court of Appeal agreed with this, except for the deletion of the word ‘racing’.

Justice Rose found that while the CTM and the sign ‘ASOS’ were similar, there was no likelihood of confusion, and that the use of the sign ‘ASOS’ had not diminished or otherwise damaged the distinctive character, or repute, of the CTM. Justice Rose did not need to examine the possibility of the ‘own name’ defence.

Both parties appealed the first instance decision.

Infringement

The Court of Appeal held that the judge at first instance fell into error when assessing the likelihood of confusion between the CTM and the sign ‘ASOS’.

It found that the judge had been correct in finding that there was no evidence of actual confusion, and due to the fact that the parties had traded in parallel for many years, it was likely that any actual confusion would already have come to light.

The Court of Appeal held, however, that the High Court judge had erred by focusing on actual confusion (or lack there of) and that the court was also required to examine ‘notional’ and fair use of the registered mark on casual wear and—following the cutting down of the specification—particular items of casual wear. The Court of Appeal carried out this examination: it accepted that neither mark had a conceptual meaning to the average consumer, and it rejected the notion that ‘ASOS’ is recognised as an acronym.

Further, the marks are visually and aurally very similar. It was found that there does exist a likelihood of confusion on the part of the public, at least in relation to Asos’s casual wear and the provision of its retail services in relation to casual wear. It also felt that the High Court judge should have found that this aspect of the infringement was made out, subject to any applicable defences and attacks on the CTM registration.

The Court of Appeal also considered whether use of the sign ‘ASOS’ took advantage of, or was detrimental to, the distinctive character or repute of the CTM. For this ground to succeed, the use of the sign must call to mind the CTM, which must therefore have a reputation. The judge at first instance found no infringement, however, the Court of Appeal again disagreed.

In its view, the allegation of infringement under this ground had been made out, on the basis that Assos had succeeded in providing evidence that the ASSOS mark has: (i) a reputation; (ii) that use of the sign ‘ASOS’ will give rise to a relevant link with the mark ‘ASSOS’ in the mind of the average consumer; and (iii) that the ability of the mark ‘ASSOS’ to identify at least some of the goods for which it is registered as being the goods of Assos has, in some circumstances, been weakened.

In this limited respect, it could be said that the mark ‘ASSOS’ has suffered an injury against which this ground of infringement provides protection, or that there is a risk that such an injury will occur in the future, and that use of the sign has been, or will be, detrimental to the distinctive character of the mark ‘ASSOS’.

‘Own name’ defence

One aspect of the case on which not all the Court of Appeal judges agreed was: if infringement was found, could Asos rely on the ‘own name’ defence?

The ‘own name’ defence allows a third party (including legal or natural persons) to use, in the course of trade, its own name or address, provided it uses them in accordance with honest practices in industrial or commercial matters. The key question was whether the use that Asos had made of the sign ‘ASOS’ has been in accordance with honest commercial practices. The facts of this case are such that the name ‘ASOS’ arose honestly from the original ‘As Seen On Screen’ concept in about 2002.

In 2005, the ‘ASOS’ logo was simplified. This move was made without any knowledge of Assos, and the evidence showed that Asos did not carry out any proper checks to see whether ‘ASOS’ or any similar mark was already in use.

Several factors were examined, including the intentions of Asos, whether they conducted sufficient trademark searches prior to adopting the name, the development of the businesses over the years, and any evidence of problems in the market place.

In conclusion, taking into account the circumstances, the majority of the judges found that the activities complained of were, and are, in accordance with honest practices, it had not conducted its business so as to unfairly compete with Assos, and Asos has established that it is entitled to benefit from the ‘own name’ defence.

Dissenting view

The dissenting view in this case came from Lord Justice Philip Sales. He disagreed with the majority view on two points: (i) the scope of the limitation of the ‘ASSOS’ CTM specification; and (ii) whether Asos is able to avail itself of the ‘own name’ defence.

In relation to the first point, the judge examined the specific function of a trademark and the requirement for the protection of trademarks, and identified that the primary objectives of trademark registration, and protection, may be undermined if an unduly narrow formulation of the category of goods for which the ‘ASSOS’ CTM protection is applied. In his view, if a proprietor of a CTM has made genuine use of a CTM within the relevant period as set out by law, albeit narrower use than originally registered, it is entitled to a measure of continued protection for use of the mark in future, which shall allow the functions of the trademark to be fulfilled, as the law intended.

Lord Justice Sales felt the court must be careful not to “freeze the protection of the CTM for the future by precise reference to what the proprietor has done in the past”. For these reasons, he considered the limitation to the specification to be too narrow, and considered that the appropriate formulation for the present and future scope of the protection accrued by Assos’s CTM is “specialist clothing for racing cyclists and casual wear”.

When examining the availability of the ‘own name’ defence in this case, the judge again considered the objectives of trademark protection as a whole. In his view, where the defence applies, it offers an inroad to the primary objectives of CTM protection. However, the court does not grant a person the absolute right to use its ‘own name’ either. Instead, a balance must be struck between the two rights.

The judge’s view, in contrast to the majority of the Court of Appeal judges, was that the law requires the interests of the CTM proprietor and the relevant public to be given significantly more weight than was given by the other two Court of Appeal judges, and accordingly the ‘own name’ defence was not available to Asos in this case.

What does it mean?

Although Asos was able to rely (perhaps somewhat controversially) on the ‘own name’ defence, this case again highlights the importance of conducting full trademark searches before adopting a brand, even if this brand name is an acronym or abbreviation of an existing name. Google searches alone are not sufficient to ascertain whether a new brand may be confusingly similar to a third-party mark, as not all third parties have a large internet presence, so may not be caught in the search, as was the case here.

It also provides interesting, and contrasting, views on the extent of a trademark specification and highlights the balance that must be struck when registering trademarks, to ensure that they are specific enough for the goods and services used, but also broad enough to allow for organic growth of the business.

Ultimately, however, as this case shows, if the specification is too broad, and evidence of use cannot be shown, it may be vulnerable to attack.

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