[View without highlighting]
[Printable RTF version]
IN THE HIGH COURT OF JUSTICE
INTELLECTUAL PROPERTY ENTERPRISE COURT
||Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
B e f o r e :
HIS HONOUR JUDGE HACON
|| BURGERISTA OPERATIONS GmbH
||- and -
||BURGISTA BROS LIMITED
BURGISTA BROTHERS LIMITED
UK PROSPER LIMITED
HAMID REZA MOGHIMI
Thomas Jones (instructed by Fieldfisher LLP) for the Claimant
Ashton Chantrielle (instructed by Collyer Bristow LLP) for the Fourth and Sixth Defendants
Hearing date: 15 November 2017
HTML VERSION OF JUDGMENT
Crown Copyright ©
Judge Hacon :
- The Claimant ("BG") is a company in the burger restaurant business. It started in September 2012 as a restaurant run by the brothers Alexander and Oliver Platzl in Leonding, Austria. At that time the business traded under the name 'Burgers'. It expanded and in October 2014 the trading name was changed to 'Burgerista'. There are now eighteen restaurants in the chain, nine in Austria and nine in Germany.
- BG is the proprietor of EU Trade Mark No. 013318209 for the word BURGERISTA ("the Trade Mark") registered as of 1 October 2014 for, among other things, "Provision of food and drink; Restaurants, Canteens and Bars" in Class 43.
- The fourth defendant ("UPL") entered the burger restaurant business in September 2015 by opening its first branch in Shepherd's Bush. On 6 April 2015 UPL had entered into a franchise agreement with a Hong Kong company called Burgista Bros Ltd. UPL's restaurant was the first in Europe to be franchised. The agreement stated that UPL had the exclusive right to use the 'Burgista Bros' name for up to 20 restaurants, each of which would be allotted a territory surrounding the restaurant in which UPL would have the exclusive right to use the sign 'Burgista'. By the time of the trial UPL had four franchised restaurants in London, including a branch in Piccadilly.
- On 26 October 2015 BG started this action alleging infringement of the Trade Mark.
- BG obtained a judgment in default against the First to Third and Fifth Defendants, which and who have played no further part in the proceedings. The Sixth Defendant ("Mr Khetriyan") is the sole director and shareholder of UPL. Hereafter "the Defendants" will mean only the Fourth and Sixth Defendants. It was admitted by the Defendants that if UPL is liable for infringement of the Trade Mark, Mr Khetriyan is liable as a joint tortfeasor.
- BG relied on art.9(2)(b) and (c) of Regulation (EC) 207/2009 as amended by Regulation (EU) 2015/2524 ("the Regulation"). It does not ask for damages or an account of profits, but seeks an injunction to restrain further use of the Burgista sign and related relief.
- The Defendants have counterclaimed for a declaration that the Trade Mark is invalid pursuant to arts.52(1)(a) and 7(1)(c) of the Regulation.
- The Defendants argued that the Trade Mark is descriptive: that it consists exclusively of signs or indications which may serve, in trade, to designate a characteristic of the goods and services in respect of which it is registered.
- It was common ground that this was to be tested by reference to the understanding of the average consumer. In the present case this was an English-speaking person who may be interested in eating at a burger restaurant.
- Attention was paid only to the services referred to above. It was agreed that in the event that I were to find that the mark is descriptive in relation to these, the parties would make further submissions as to whether and how the registration could be amended to become valid.
- Descriptiveness falls to be assessed as of the date of filing of the application, here 1 October 2014, see Alcon Inc v OHIM C-192/03, EU:C:2004:587. The question was whether the average consumer would at that date have immediately perceived, without thought or explanation, that the word 'burgerista' designated a characteristic of restaurant services, see JW Spear & Sons Ltd v Zynga Inc  EWCA Civ 290;  FSR 19, at -.
- The Defendants' case was that the average consumer would have recognised burgerista to be composed of two parts: the word 'burger' and the suffix '-ista'. The meaning of '-ista' required some discussion and evidence. Ms Chantrielle said that it had three alternative meanings in English: either a maker of, a server of, or an enthusiast about, the thing to which it is a suffix. The main examples used were 'barista': a maker and/or server of coffee, and 'fashionista': an enthusiast about fashion. There were other examples of the use of -ista as a suffix, including one which emerged as part of BG's evidence of confusion, discussed below. It was not in dispute that at least 'barista' and 'fashionista' have entered common usage.
- The Defendants' argument was that burgerista was a word taken by the average consumer to mean a person who made burgers, alternatively a person who served them or a person who was very enthusiastic about burgers.
- To establish their case under art.7(1)(c), the Defendants did not have to show that burgerista designated any of the goods or services in the Trade Mark specification exactly. Designation of a characteristic will do and this includes ancillary characteristics. What this can mean was demonstrated by the CJEU in Case C-363/99, Koninklijke KPN Nederland NV v Benelux Merkenbureau  ECR I-1619;  3 WLR 649. A characteristic of a post office is that it sells items such as stamps; therefore POST OFFICE may not be registered for postage stamps or other goods characteristically sold in a post office, see the judgment at - and .
- I accept Ms Chantrielle's contention that if the average consumer perceived the word burgerista has any of the meanings suggested by the Defendants, art.7(1)(c) of the Regulation would be satisfied.
- Ms Chantrielle referred me to four online publications. The first was the online OED, which makes no mention of 'burgerista' but does define '-ista':
Informal. Forming nouns denoting a person associated with a particular activity, often with a derogatory force. 'fashionista'.
Origin: From the Spanish ending -ista, as in Sandinista."
- The second came from Oxford Advanced Learner's Dictionaries ("OALD"), published by Oxford University Press:
(in nouns) a person who is very enthusiastic about something
• fashionistas who are slaves to the latest trends"
- The third and fourth publications, taken from the web, had definitions of 'burgerista' itself. One was the Urban Dictionary:
"a person who works at a fast-food burger restaurant"
- The other definition of 'burgerista' came from Reverso, an online translation tool:
"like a barista (bar tender) for a fast-food burger restaurant"
- Neither the Urban Dictionary nor Reverso seems to me to be of any help. There was no evidence as to how they are compiled. Both counsel thought that anyone could post any definition they liked on either website. The definitions I was shown seem to have come from a single person in each case. The one in the Urban Dictionary was provided by 'ShadeyHillRanch' on 21 June 2014 and that in Reverso by 'agrigutz' six days later, on 27 June 2014. Assuming that agrigutz was not the person earlier posing as ShadeyHillRanch, these are two views, but both could be idiosyncratic. ShadeyHillRanch and agrigutz may live outside the EU. Neither's view can be taken as a reliable guide to what the English-speaking average consumer in the EU understood.
- On the other hand, I believe I am entitled to take judicial notice of the likelihood that the online OED is compiled with greater care and is thus more likely to reflect the contemporary understanding of the average consumer. I will assume that the same is true of the OALD. However, the print-out of the OED was dated 14 November 2017. The sheet I was given showing the page from the OALD had no date but I imagine it was taken from the web at about the same time. Neither was evidence of the definition of '-ista' in October 2014.
- The question whether a trade mark is descriptive is not binary. There is a continuous spectrum from totally non-descriptive signs to entirely descriptive ones. Jacob LJ on occasion used NORTH POLE for bananas to illustrate one end of the spectrum, with SOAP for soap at the other end. BURGERISTA for restaurant services falls somewhere between.
- It may be that a handful of people in the EU used it by October 2014 in one or more of the ways suggested by the Defendants. By that date the common use of barista and the use of fashionista, possibly less common, could have conferred on '-ista' the status of a suffix in the minds of some other English-speaking consumers.
- I think that in October 2014, if it had been explained to the average consumer that a burgerista is someone who makes, serves, or is very enthusiastic about burgers, this may have made some sense to him or her. I would put the position no higher. There was no evidence of commonplace use of the term. The Defendants' case on the meaning that would have been given to the word burgerista is weakened somewhat by the offer of three alternatives. And even as of November 2017 the online OED and OALD did not share exactly the same idea of what the suffix '-ista' means.
- In my view, in October 2014 the average consumer's understanding was a long way from an immediate perception, without thought or explanation, that burgerista had any of the three alternative meanings proposed by the Defendants. BG's mark was validly registered.
Infringement – art.9(2)(b)
- The allegation of infringement was raised against all four signs used by UPL. Two were word signs: BURGISTA and BURGISTA BROS. The other two were devices:
- I discussed the law on art.9(2)(b) in Skyscape Cloud Services Ltd v Sky plc  EWHC 1340 (IPEC);  FSR 6, at - (in that case the Regulation was applied in its pre-amended state, so reference is to art.9(1)(b)), referring to recent judgments of the Court of Appeal.
- Of the six elements of art.9(2)(b) identified by the Court of Appeal in Comic Enterprises Ltd Twentieth Century Fox Film Corporation  EWCA Civ 41;  ETMR 22, at , the only one in issue by the time of the trial was the sixth: whether UPL's use of its signs for restaurant services had given rise to a likelihood of confusion. I will begin with the word sign Burgista.
- The visual and aural similarities between 'Burgerista' and 'Burgista' are self-evident. They differ only in that two letters and one syllable removed from the middle of the trade mark will form the sign. Mr Jones submitted that there was conceptual identity because neither of the words meant anything. I don't think this argument works. To my mind the word burgerista has some descriptive and therefore some conceptual quality because it includes within it the word burger, a dominant feature of the mark. Burgista does not. I have rejected the submission that the average consumer would give '-ista' the meanings as a suffix for which the Defendants contended, at least when added to 'burger' or 'burg'. In my view there is no conceptual similarity between the trade mark and the sign.
- Michael Werner, Chief Executive Officer of BG, gave unchallenged evidence regarding a likelihood of confusion. It was presented as evidence of what is sometimes called 'wrong way round confusion', in other words confusion which had led the trade mark proprietor's business to be mistaken for the alleged infringer's. In Comic Enterprises the Court of Appeal ruled that 'wrong way round confusion' was admissible as part of the court's assessment of whether there is a likelihood of 'right way round confusion', at -.
- In fact, Mr Werner's evidence was not even of fully 'wrong way round confusion'. This was inevitable because BG has not traded in the United Kingdom and so has no reputation in this country; UPL's trading so far has only been in the UK. The local nature of a burger restaurant's reputation means that to date there has been no possibility of the two businesses being confused by consumers, whether the right or the wrong way around, or of the two businesses being perceived to be economically linked.
- Mr Werner did a number of things. First, he googled 'burgerista'. The second entry on the results page consisted of a map of London identifying three restaurants, with their contact details below, all of them UPL's Burgista restaurants. Secondly, he exhibited a page from a website called 'Ourvintage.Life' headed 'Burgista'. It was an entry about one of UPL's restaurants. There was a hashtag at the bottom: #burgerista. Thirdly there was an Instagram page from a blog of someone called Dimitar Popov. This featured a picture of food in a Burgista restaurant with hashtags that included #burgerista, #london and #burgista. Finally there were copies of pages from a blog by people who style themselves 'Londonistas'. It appears to be a guide to events and attractions in London. On 30 January 2017 two of them posted an item about UPL's Burgista restaurant in Baker Street. It was headed 'JANUARY: BURGERISTA'. The discussion included this (with original italics):
"We started the year off with a new burger joint we discovered in Baker Street: Burgerista…and well, we're the Londonistas so it seemed like the perfect place to start off this year's burgers.
Overall…a thumbs up for Burgerista! And it's literally round the corner from Baker St station…"
- Ms Chantrielle did not dispute that this was evidence of the names 'Burgista' and 'Burgerista' having been muddled. She submitted that there were three reasons why this did not help BG.
- First, BG had chosen a descriptive name so this type of muddle is inevitable and not relevant to a likelihood of confusion within the meaning of art.9(2)(b).
- Secondly, Ms Chantrielle relied on what Jacob LJ had said in Reed Executive plc v Reed Business Information  EWCA Civ 159;  RPC 40:
" Finally, although I agree with the judge's questioning of the Court's proposition of fact that 'there is a greater likelihood of confusion with very distinctive marks' there is some truth with the opposite proposition. The Court in Lloyd said:
'23. In determining the distinctive character of a mark, and accordingly in assessing whether it is highly distinctive, the national court must make an overall assessment of the greater or lesser capacity of the mark to identify the goods or services for which it has been registered as coming from a particular undertaking, and thus to distinguish those goods from those of other undertakings.
24. In making that assessment, account should be taken, in particular, of the inherent characteristics of the mark, including the fact that it does or does not contain an element descriptive of the goods or services for which it has been registered; …'
 The last sentence is an acknowledgement of a fact that has long been recognised: where a mark is largely descriptive 'small differences may suffice' to avoid confusion (per Lord Simonds in Office Cleaning Services v Westminster Window and General Cleaning (1946) 63 R.P.C. 30 at p.43). This is not a proposition of law but one of fact and is inherent in the nature of the public perception of trade marks.
 It is worth examining why that factual proposition is so – it is because where you have something largely descriptive the average consumer will recognise that to be so, expect others to use similar descriptive marks and thus be alert for detail which would differentiate one provider from another. Thus in the cited case 'Office Cleaning Association' was sufficiently different from 'Office Cleaning Services' to avoid passing off."
- The third argument was that the likelihood of confusion had to be considered in the context of UPL's use of its Burgista sign.
- Mr Werner's evidence supports BG's case that if it and UPL were to trade in the same locality respectively under their Trade Mark and sign, i.e. in the context that would matter, a significant proportion of relevant persons and thus the average consumer would be likely to confuse the two names.
- I have accepted that the Trade Mark has some descriptive quality, but I don't think that Reed helps the Defendants. In argument Ms Chantrielle said that the effect of Jacob LJ's judgment was that the scope of protection of a descriptive mark is narrow. That is true in a sense, but there is a danger of treating Office Cleaning and Reed as if they have established a rule of policy: owners of descriptive trade marks (not descriptive enough to be invalid) just have to put up with signs having only small differences and must live with a bit of confusion; the court must give a defendant an unidentified amount of leeway in an action to enforce such marks.
- I do not believe that this is what Lord Simonds had in mind in Office Cleaning or what Jacob LJ meant in Reed. Jacob LJ's paragraph 85 points out that in the real world the public will tend to focus on the non-descriptive parts of a mark and sign and use those parts to distinguish one trader from another. Those parts should therefore be accorded significance when assessing the likelihood of confusion.
- I would take this a little further. The court will be careful to discount confusion which, notwithstanding Jacob LJ's observation, has arisen solely because of the purely descriptive elements common to both the claimant's and defendant's marks – for instance, where some people have muddled the identity of two companies just because they both have 'office cleaning' in their names. This is not a matter of policy; it is simply that such confusion is irrelevant to the claimant's case. I discussed this in the context of passing off in Cranford Community College v Cranford College Limited  EWHC 2999 (IPEC);  ETMR 7, at -.
- I have taken the view that the features in common between the Trade Mark and the sign 'Burgista' are not descriptive. Therefore confusion cannot be dismissed as irrelevant because it was caused solely by a descriptive element common to both Trade Mark and sign. Office Cleaning and Reed have no application. Any confusion can be attributed to the Trade Mark and sign looking and sounding alike.
- In my judgment, that similarity of look and sound taken with the evidence provided by Mr Werner establish that there is a likelihood of confusion between the Trade Mark and the sign. UPL has infringed the Trade Mark by use of the that sign, pursuant to art.9(2)(b).
- The next question is whether BURGISTA BROS and the device signs also infringe. In my view they do. 'Burgista' is by far the dominant and distinctive element of all three signs. Use of those signs infringe for the reasons given above in relation to Burgista.
Infringement – art.9(2)(c)
- There are four express requirements for infringement by the use of an accused sign within the terms of art.9(2)(c);
(1) the trade mark is identical or similar to the sign;
(2) the trade mark enjoys a reputation in a substantial part of the EU;
(3) the use of the sign takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark;
(4) such use is without due cause.
- For the third requirement to be satisfied, there must be a link between the trade mark and the sign in the mind of the average consumer; the existence of the link is to be assessed globally, taking into account all factors relevant to the circumstances of the case, see Intel Corp Inc v CPM United Kingdom Ltd (C-252/07) EU:C:2008:655;  RPC 15, at - and . The necessity of a link was more firmly stated in Iron & Smith kft v Unilever NV (C-125/14) EU:C:2015:539;  ETMR 45, at .
- There is bound to be a link if a likelihood of confusion within the meaning of art.9(2)(b) has been proved, see Intel at , though a link may exist without the likelihood of confusion (Intel at ). A link will be established if the sign would call the trade mark to mind (Intel at ). The existence of a link, though necessary, is not sufficient to establish that the sign takes unfair advantage of or is detrimental to the distinctive character or repute of the trade mark (Intel at ).
- To satisfy the third requirement it is not necessary for the trade mark proprietor to demonstrate actual and present injury. Proof that there is a serious risk that such injury will occur in the future is enough, see Intel at .
- Proof of dilution requires evidence of a change in economic behaviour of the relevant average consumer consequent on the use of the sign, or a serious likelihood that such a change will occur in the future (Intel at ).
- The law with regard to art.5(2) of Directive 2008/95/EC, the equivalent to art.9(2)(c) of the Regulation, was more fully set out by the Court of Appeal in Comic Enterprises at -.
The matters left in issue
- Of the four express elements of art.9(2)(c), two remain in issue. No argument of due cause was advanced by the Defendants. I have found that the trade mark and sign are similar. That leaves reputation and injury.
- With regard to injury, in his skeleton argument and orally Mr Jones only pressed BG's case that it would suffer because of dilution of its trade mark.
- The Defendants' main argument in relation to art.9(2)(c) concerned reputation. Three points arose, two of law and one of fact. First, the time at which reputation is to be assessed; secondly, the extent of the reputation required for art.9(2)(c) to be engaged and thirdly, with those two points in mind, whether on the facts BG had sufficient reputation by the relevant date.
- Lest there be any doubt, the meaning of 'reputation' in art.9(2)(c) and its equivalent in Directive 2008/95 (formerly Directive 89/104), art.5(2), is the same as that in in art.8(5) of the Regulation and art.4(3) of the Directive (see Iron & Smith at ).
The relevant date
- In Levi Strauss & Co v Casucci SpA Case (C-145/05)  ETMR 71, the CJEU discussed the relevant date for assessing likelihood of confusion in the context of art.5(1) of Directive 89/104, equivalent to art.9(2)(b) of the Regulation:
" The Court has thus pointed out that, in order to ensure the essential function of a trade mark, which is to guarantee the identity of the origin of the marked product or service to the consumer or end-user by enabling him, without any possibility of confusion, to distinguish that product or service from others which have another origin, the proprietor must be protected against competitors wishing to take unfair advantage of the status and reputation of the trade mark by selling products illegally bearing that mark (see Case C-349/95 Loendersloot  E.C.R. I-6227, at , and Case C-206/01 Arsenal Football Club  ECR I-10273, at ). That must also be the case where, on the basis of a similarity between the signs and the mark in question, there is a likelihood of confusion between them.
 Member States must take measures which are sufficiently effective to achieve the aim of the directive and they must ensure that the rights conferred by it can be effectively relied upon before the national courts by the persons concerned (see Case 14/83 Von Colson and Kamann  ECR 1891 at , and Case 222/84 Johnston  ECR 1651 at ).
 The proprietor's right to protection of his mark from infringement is neither genuine nor effective if account may not be taken of the perception of the public concerned at the time when the sign, the use of which infringes the mark in question, began to be used.
 If the likelihood of confusion were assessed at a time after the sign in question began to be used, the user of that sign might take undue advantage of his own unlawful behaviour by alleging that the product had become less renowned, a matter for which he himself was responsible or to which he himself contributed.
 Article 12(2)(a) of Directive 89/104 provides that a trade mark is liable to revocation if, after the date on which it was registered, in consequence of acts or inactivity of the proprietor, it has become the common name in the trade for a product or service in respect of which it is registered. Thus, by balancing the interests of the proprietor against those of his competitors in the availability of signs, the legislator considered, in adopting this provision, that the loss of that mark's distinctive character can be relied on against the proprietor thereof only where that loss is due to his action or inaction. Therefore, as long as this is not the case, and particularly when the loss of the distinctive character is linked to the activity of a third party using a sign which infringes the mark, the proprietor must continue to enjoy protection.
 In the light of all the foregoing, the answer to the first and second questions must be that Art.5(1) of Directive 89/104 must be interpreted as meaning that, in order to determine the scope of protection of a trade mark which has been lawfully acquired on the basis of its distinctive character, the national court must take into account the perception of the public concerned at the time when the sign, the use of which infringes that trade mark, began to be used."
- Mr Jones argued that each act of infringement must be separately assessed. So where, as here, a defendant is alleged to infringe over a period of time, the reputation of the trade mark in question may vary over that period, with the consequence that he may infringe for only part of that period (if at all). Mr Jones referred to Stichting BDO v BDO Unibank Inc  EWHC 418 (Ch);  ETMR 31, at .
- Ms Chantrielle argued that Levi Strauss should be applied by analogy; the only relevant date is the date on which UPL first used the BURGISTA sign.
- I think Ms Chantrielle is right. In Stichting BDO Arnold J referred to the necessity of a new assessment of infringement where the defendant has embarked on a use of its sign in a materially different manner. Use of the same sign in relation to a new restaurant where it has already been used in relation to an existing restaurant is not use in a materially different manner.
- It is clear from the passage of the judgment in Levi Strauss which I have quoted above that although the CJEU was considering only the equivalent to art.9(2)(b), it reached its conclusion on the relevant date by reference to the equivalent of art.9(2)(c). The Court was especially concerned that once a trade mark proprietor has proved all the elements for establishing infringement, including reputation for the equivalent of art.9(2)(c), the proprietor should only lose the right to protect his mark in consequence of his own acts or inactivity, pursuant to art.12(2)(a) of the Directive (equivalent to art.51(1)(b) of the Regulation). His right should not be affected by the acts of a defendant which might deprive the trade mark of its reputation.
- The reputation of the Trade Mark in this case must be assessed as of the date on which UPL first started to trade under the Burgista sign.
The extent of the reputation required
- Mr Jones pointed out that Arnold J has more than once said that establishing reputation for the purpose of art.9(2)(c) (and its equivalents) is not a particularly onerous requirement, most recently in those terms in Enterprise Holdings, Inc v Europcar Group UK Ltd  EWHC 17 (Ch);  FSR 22, referring to General Motors Corp v Yplon SA (C-375/97) EU:C:1998:575;  E.T.M.R. 950 and PAGO International GmbH (C-301/07) EU:C:2009:611;  E.T.M.R. 5. Given the arguments in the present case, I must discuss this further.
- At one end of the scale it could be said that once a trade mark proprietor starts to trade under his mark, the mark is bound to acquire a reputation within the Union, if only in the local street.
- By way of an alternative view, it has been held that the reputation which art.9(2)(c) (and its equivalents) seeks to protect is the same as that of a well-known mark within the meaning of art.6bis of the Paris Convention for the Protection of Industrial Property, see Nigel Kelly v NGRID Intellectual Property Ltd  ETMR 21, at .
- It is true that in Alfredo Nieto Nunõ v Leonci Monilleó Franquet (Case C-328/06) EU:C:2007:704 the CJEU held (at ) that a trade mark being well-known within the meaning of art.6bis of Paris is a "kindred concept"' to reputation under art.5(2) of Directive 89/104 (equivalent to art.9(2)(c) of the Regulation). But it does not follow that that they are the same thing. The two were compared by Advocate General Jacobs in General Motors (EU:C:1998:408, at -). He said (at )
"… it is possible to conclude in my view that, although the concept of a well-known mark is itself not clearly defined, a mark with a 'reputation' need not be as well known as a well-known mark."
- Thus, when the CJEU in Nuño spoke of reputation in art.9(2)(c) being a kindred concept to a mark being well-known under art.6bis of Paris (la notion voisine in French), I interpret the Court to have meant that the factors which are relevant to the assessment of each are the same or very similar, but the threshold is different. It is lower in the context of a reputation under art.9(2)(c).
- It is not so low that a reputation going no further than the local street will be enough. The CJEU has most recently considered what 'reputation' means in Iron & Smith and Ornua Co-operative Ltd v Tindale & Stanton Ltd España SL(C-93/16) EU:C:2017:571;  ETMR 37. In Iron & Smith that company applied to register a national trade mark in Hungary. Registration was opposed by Unilever NV pursuant to art.4(3) of Directive 2008/95. Unilever relied on its similar EU trade mark, claiming that its mark had a reputation in the Union. There was evidence that Unilever's sales of products under its trade mark had 5% of the market in the UK and 0.2% in Italy. There was no evidence of any market share in Hungary. Having stated that 'reputation' in art.4(3) of the Directive means that same thing as in art.9(1)(c) of the Regulation (now art.9(2)(c)), the CJEU said:
" In that connection, as regards art.9(1)(c) of Regulation 40/94, the Court held that the concept of 'reputation' assumes a certain degree of knowledge amongst the relevant public, which must be considered to be reached when the Community trade mark is known by a significant part of the public concerned by the products or services covered by that trade mark (see judgment in PAGO International (C-301/07) EU:C:2009:611 at  and ).
 In examining this condition, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it (judgment in PAGO International (C-301/07) EU:C:2009:611 at ).
 Territorially, the condition as to reputation must be considered to be fulfilled when the Community trade mark has a reputation in a substantial part of the territory of the Community and such a part may, in some circumstances, correspond to the territory of a single Member State (see, to that effect, PAGO International (C-301/07) EU:C:2009:611 at  and ).
 Thus, if the reputation of an earlier Community trade mark is established in a substantial part of the territory of the EU which may, in some circumstances, coincide with the territory of a single Member State, it must be held that that mark has a 'reputation in the [EU]', within the meaning of art.4(3) of Directive 2008/95 , and the proprietor of that mark is not required to produce evidence of that reputation in the Member State in which the application for registration of the later national mark, which is the subject of an opposition, has been filed.
 Having regard to all the foregoing considerations, the answer to the first three questions is that art.4(3) of Directive 2008/95 must be interpreted as meaning that, if the reputation of an earlier Community mark is established in a substantial part of the territory of the EU, which may, in some circumstances, coincide with the territory of a single Member State, … it must be held that that mark has a reputation in the EU."
- The Court also ruled that the case law regarding 'genuine use' provided no guide to what is meant by 'reputation' (at - and the last sentence of , omitted above). I would add that I am not aware of any court having suggested that assessments in relation to infringement, the distinctiveness of a trade mark, or anything else, provide any guide either.
- Advocate General Wahl said:
" Indeed, in the final analysis, the question of reputation depends on the relevant market for the goods and services under consideration. The answer to the question of what constitutes a substantial part of the EU requires, therefore, a circumstantial analysis that only the national court dealing with the case can undertake. As the Court has noted, the market share held by the earlier trade mark, the intensity, geographical extent and duration of its use as well as the size of the investment made by the undertaking in promoting the mark are all factors to be taken into account in that analysis. In other words, reputation constitutes a knowledge threshold requirement, which must be assessed on the basis of quantitative criteria. To determine whether a specific trade mark has a reputation in a substantial part of the EU thus requires a combination of geographical and economic criteria. The significance of the relevant market for given goods or services therefore ought to assume a paramount role in the analysis.
 More specifically, as can be inferred from Pago International, the question of what constitutes a substantial part of the EU is necessarily – and this is a point that cannot be over-emphasised – dependent on the specific mark which is described as enjoying a reputation and accordingly, the public concerned. Given that it is proportion rather than absolute numbers that matters in this context, the fact that the relevant market may be of a limited overall size does not, as such, prevent a mark from acquiring reputation. While in my view the territory of a Member State (large or small alike) may indeed, as the case may be, constitute a substantial part of the EU, the analysis leading to that conclusion must nevertheless be conducted without consideration of geographical borders."
- Ornua concerned an EU trade mark and a sign which peacefully co-existed in one part of the EU and the consequences of that on the right to use the sign in another part of the Union. With regard to the meaning of 'reputation', the Court reiterated what it had said in PAGO and Iron & Smith.
- I draw the following from the judgments of the Court in PAGO and Iron & Smith and from the opinion of Advocate General Wahl in Iron & Smith:
(1) An EU trade mark has a reputation within the meaning of art.9(2)(c) if it was known to a significant part of the relevant public at the relevant date.
(2) The relevant public are those concerned by the products or services covered by the trade mark.
(3) The relevant date is the date on which the defendant first started to use the accused sign.
(4) From a geographical perspective, the trade mark must have been known in a substantial part of the EU at the relevant date.
(5) There is no fixed percentage threshold which can be used to assess what constitutes a significant part of the public; it is proportion rather than absolute numbers that matters.
(6) Reputation constitutes a knowledge threshold, to be assessed according to a combination of geographical and economic criteria.
(7) All relevant facts are to be taken into consideration when making the assessment, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by undertaking in promoting it.
(8) The market for the goods or services in question, and from this the identity of the relevant public, ought to assume a paramount role in the assessment.
(9) The territory of a single Member State (large or small) may constitute a substantial part of the EU, but the assessment must be conducted without consideration of geographical borders.
- In PAGO the market was for fruit drinks. The trade marks were known throughout Austria and this was sufficient for the mark to have a reputation. The Court said:
" As the present case concerns a Community trade mark with a reputation throughout the territory of a Member State, namely Austria, the view may be taken, regard being had to the circumstances of the main proceedings, that the territorial requirement imposed by Article 9(1)(c) of the regulation is satisfied."
- Though the CJEU is understandably wary of numbers, I will note in passing that the population of Austria is about 8.7 million, out of a total EU population of about 512 million.
- It was important that the relevant market in PAGO, fruit drinks, was a market which extended across the entire public, or as near as made no difference. (Economic criteria were not stated in the judgment.)
- It can be concluded that if the market for the goods or services for which a trade mark is registered is similarly broad and the mark is known throughout a Member State the size of Austria, this will constitute knowledge of the mark among a significant part of the public of the EU. The mark will qualify for the status of having a reputation in the Union.
- That said, it is very hard to be sure about where the knowledge threshold lies in such a case (or any case). One clue is that the Court and the Advocate General did not imply that knowledge throughout Austria was so self-evidently sufficient that the adequacy of the mark's reputation barely merited discussion. My impression is that if knowledge had been confined to limited parts of Austria, that might not have been enough.
- The Burgista sign was first used by UPL in July 2015. Although its first restaurant in Shepherd's Bush was not opened until September 2015, since July 2015 UPL has used the sign in its Instagram, Facebook and Twitter accounts. July 2015 is therefore the relevant date for the assessment of the reputation of the Trade Mark.
- The Platzl brothers opened their first restaurant in Leonding, a small city near Linz, in October 2012. By 2014 the chain had expanded to four restaurants, at this time still trading under the name 'Burgers'. Two were in Linz and one in Pasching.
- In May 2014 the Plastzls sold the business to Quadriga, an equity fund, although they remained officers.
- The first two restaurants to trade under the Trade Mark were opened in Vienna in December 2014. In the same month the trading name of the restaurants in Linz and Pasching were changed to 'Burgerista', but that of the Leonding restaurant remained 'Burgers'. A further restaurant was opened in Salzburg in June 2015. The first restaurant in Germany was opened in July 2015 in Mönchengladbach.
- Thereafter the chain continued to grow, today comprising nine in Austria and the same number in Germany.
- Mr Werner, the current CEO of BG, gave evidence of €8 million having been invested in promoting the Burgerista brand when the shares were acquired (which I take to be the acquisition by Quadriga) and a further €30 million some time since. He said that on average investments in the region of €1-1.5 million were required for what he termed the opening and rolling out of each new restaurant. As he put it:
"This is where the real marketing investment is – in the restaurants themselves, which are designed and built to reflect the Burgerista restaurant brand."
- Mr Werner's evidence was that BG is aiming to form part of what he described as a newly emerging premium burger market, distinguishing itself from the likes of McDonalds and Burger King. He referred to:
"…the real drivers behind this smaller, emerging market: namely a focus on product quality, overall experience and a 'local' and more intimate feeling."
- Turnover was a little over €4 million in 2014 and about €9¼ million in 2015, with a total of about 865,000 transactions in 2015. BG has two individuals who work on marketing. Marketing expenditure in 2014 was €1,229,000 and in 2015 €1,836,900 but this included the costs of trade mark registration, the fees of external marketing consultants and the costs and expenses of the marketing team. It is not clear how much was spent on advertising the brand. To the extent that it was spent, much or all of it went on using social media sites: Facebook, Twitter and Instagram, although Mr Werner's evidence did not state how much of this was done by July 2015.
- As of July 2015 BG had six restaurants trading under the Trade Mark in Austria and one restaurant opened in that month in Germany. Two were in Vienna, four were in the smaller cities of Linz, Salzburg and Mönchengladbach and one in Pasching (population 7,300). I have stated the sizes of these places to give some context, but on the present facts I think this is of very limited relevance. I cannot assume, for instance, that because BG had two restaurants in Vienna, the Trade Mark was known throughout Vienna. That seems to me unlikely. Mr Werner himself stated that BG was aiming for a local and intimate feeling to the restaurants. This suggests that they were not presented to the public as part of a chain, or at least it was not emphasised. The reputation of a restaurant is typically local to where it is located unless it has become very famous. I do not doubt that customers eating at the Burgerista restaurants included tourists, but there was no evidence that the restaurants were known outside their locales to any significant degree in July 2015 and quite possibly they are not even now.
- The budget of €1-1.5 million spent on each restaurant went largely on the designing and building of the restaurant itself, rather than on marketing.
- In July 2015 the Trade Mark was far from being known throughout Austria. It had not become known outside Austria, save possibly to a very limited extent in Mönchengladbach. It was known in two local areas of Vienna, two in Linz, one in Salzburg and one in Pasching. No figure has been attempted for the share of the European Union restaurant business held by the restaurants trading under the mark, but it must have been very small indeed, even if presented as a share of the burger restaurant business. Marketing was largely confined to social media sites, although it is not clear how much of this had been done by July 2015.
- In my view, although at the relevant date the Trade Mark had a reputation of some sort by dint of restaurants having traded under the Trade Mark, it did not have a reputation in the Union within the meaning of art.9(2)(c).
- Ms Chantrielle argued that there could be no dilution because assuming that the Trade Mark had a reputation, such reputation was only in Austria, whereas use of the sign was confined to the UK. BG had not produced any evidence of change in economic behaviour on the part of the average consumer and it could not because the trade mark's reputation was in one place and UPL's restaurants in another.
- As I have mentioned, Iron & Smith was about an opposition to an application to register a national mark pursuant to art.4(3) of Directive 2008/95. The second paragraph of the ruling was as follows:
"2. If the earlier Community trade mark has already acquired a reputation in a substantial part of the territory of the EU, but not with the relevant public in the Member State in which registration of the later national mark concerned by the opposition has been applied for, the proprietor of the Community trade mark may benefit from the protection introduced by art.4(3) of Directive 2008/95 where it is shown that a commercially significant part of that public is familiar with that mark, makes a connection between it and the later national mark, and that there is, taking account of all the relevant factors in the case, either actual and present injury to its mark, for the purposes of that provision or, failing that, a serious risk that such injury may occur in the future."
- Advocate General Wahl put it this way:
" … whereas the relevant public of the Member State in which the later trade mark has been applied for is not decisive in determining whether the earlier Community trade mark enjoys a reputation in the EU for the purposes of art.4(3) of the Directive, that public is – conversely – of paramount importance in determining whether the later national trade mark would take unfair advantage of, or be detrimental to, the earlier Community trade mark with a reputation. It must be borne in mind that the protection afforded to a national trade mark is circumscribed, as a matter of principle, by the territory of the Member State in which the mark is applied for. That is why, when dealing with grounds of refusal as regards national trade marks, it stands to reason that the relevant public for the purposes of determining the existence of detriment or unfair advantage must be that in that Member State."
- It appears from the judgment that Unilever, the owner of the earlier Community trade mark, had not shown any use of the mark in Hungary. However, on my understanding of the Court's ruling, if Unilever proved a genuine intention to market in Hungary and that in consequence there was a serious risk of injury to the mark in the future, it was entitled to succeed in its opposition.
- Translating this to the present facts, if I am satisfied that BG has a genuine intention to open restaurants in the London area in the foreseeable future and that this will lead to a serious risk of dilution of the Trade Mark, then the injury element of art.9(2)(c) would be satisfied (if there had been a relevant reputation to injure).
- Mr Werner said that it was BG's intention to open its restaurants across the European Union, including the United Kingdom. The company wishes to expand the business by franchising. In November 2016 it posted a notice on its website of its plans to franchise its name. It has received over 100 notifications of interest from potential franchisees, a list of which was exhibited by Mr Werner, including two notifications from potential franchisees in London.
- It seems to me credible that restaurants may be opened in the London area under the Trade Mark in the foreseeable future. It cannot be said whether such restaurants will be located near UPL's restaurants, but the evidence of a ready likelihood of confusion between the Trade Mark and Burgista demonstrated in the context of art.9(2)(b) suggests that confusion of this type would occur, particularly on social media.
- There would be two consequences. First, there would be a link between mark and sign in the mind of the average consumer. Second, there would be inevitable dilution. I do not believe that I needed evidence from Mr Werner anticipating a change in economic behaviour of relevant persons – customers going to this restaurant rather than that because of the confusion – to establish dilution.
- Had the Trade Mark had a reputation in the Union, I would have found that there was a likelihood of infringement in the future under art.9(2)(c).
- The Trade Mark is validly registered. There is a threat of infringement of the mark pursuant to art.9(2)(b) of the Regulation, but not art.9(2)(c). BG is entitled to an injunction against both Defendants and to related relief.
Copyright Policy |
Donate to BAILII