Alert 345 United Kingdom - Finding of passing off can automatically follow trade mark invalidation


The High Court of England and Wales has granted summary judgment against Focal Point Fires (‘FPF’) in a claim for passing off brought by a partnership trading as ‘Firecraft’ (‘the Partnership’). The FIRECRAFT trade mark that FPF was using had already been declared invalid by the UK Intellectual Property Office (UK IPO) on the ground that the Partnership could prevent use of that mark by a claim for passing off. The High Court held that FPF could not argue the point again.

Facts
On receiving a clear search from its trade mark attorney, in February 2000 FPF applied for and ultimately obtained a registration for the word mark FIRECRAFT. FPF sold its first FIRECRAFT-branded product in May 2001.

Five years later, the Partnership applied to invalidate FPF’s trade mark registration at the UK IPO. It asserted that it had an earlier right in passing off against FPF which would have entitled it to stop FPF using the FIRECRAFT mark at the date of FPF’s trade mark application. Extensive evidence was filed by both parties and witnesses on both sides were cross-examined. On 18 November 2008, the UK IPO decided that the registration was invalid. FPF did not appeal the decision.

Soon after the UK IPO decision, the Partnership issued proceedings for passing off in the High Court. It applied for summary judgment on the ground that as primary liability for passing off had already been established by the UK IPO, it would be quite wrong to require it to prove and establish that again. The UK IPO was a relevant tribunal and had made its decision on a final basis.

The Judgment
Peter Smith J found that FPF had no prospect of success in defending the passing off action because it would be prevented by the principles of cause of action estoppel, issue estoppel and abuse of process.

Cause of action estoppel applied because a court of competent jurisdiction, i.e. the UK IPO, had finally determined that the Partnership had a cause of action in passing off against FPF. Issue estoppel applied because the UK IPO had already determined all issues required to be fulfilled in order to establish passing off.

Finally, as the UK IPO had had the benefit of substantial evidence and cross-examination, and the circumstances had not changed between the decision and the summary judgment hearing, it would be an abuse of process to allow FPF to re-litigate the passing off allegation before the High Court. Issues relating to remedies were reserved for a subsequent hearing.

Our Comment
This judgment must be distinguished from that in Special Effects v L’Oreal, in which the Court of Appeal held that a party which had been unsuccessful in opposition proceedings in the UK IPO could assert invalidity against the same mark in subsequent High Court proceedings. Unlike the UK IPO invalidity decision here, the opposition decision in Special Effects was not final, so the estoppel and abuse principles did not apply.

That said, this judgment will undoubtedly affect brand owners’ entire strategy relating to earlier mark searches, registration and disputes before the UK IPO. In particular, common law searches will become more important. A properly done, clear common law search at the date of application should assist the applicant to show that no third party had passing off rights at that date (or reveal a problem early on). The judgment will also increase the need to defend invalidity proceedings where liability for passing off is asserted seriously, and to appeal against unfavourable decisions more often. Failure to do so could be disastrous.

For more information, email Chris Aikens on caikens@iprights.com.