Wood Trade Marks and Design Limited

When is a vodka drink not vodka?  When it’s a blend.  There is a large market in blended products, be they ready-to-drink products (alcopops) or the various other types of alcoholic mixes (licqueurs and “light spirits” being some of those products).

If you are marketing a vodka mix, is it wrong to use the mark VODKAT?  How about if you also use imagery connected with VODKA?  what about if you add the word IMPERIAL (which is common on vodka)?

Diageo have obtained a ruling this morning that the VODKAT product  was “passed-off” as vodka.  Vodka is one of the spirits mentioned in European Regulations relating to the definition and labelling of spirits, so there was clearly a known meaning of the term “vodka”. 

It was probably the right decision, but it was a lot of work to get things sorted.  Diageo (who own the SMIRNOFF, KETEL ONE and CIROC vodka brands) established that VODKAT was costing them approximately 3% of sales of SMIRNOFF.  Given that a legal case of this size would have probably cost at least £900k to bring (and I would expect costs of well over a million given the amount of evidence and expert opinion), it was probably worth bringing since from a mathematical point of view you would need about £30M in sales to make the case “break even”.  Diageo must have been achieving £30M across their vodka brands from UK sales.

Interestingly, VODKAT changed their packaging in August 2009 – presumably with an eye to the outcome of the case and having seen the evidence.  So given that the court said that VODKA has a meaning (a protectable meaning) whereas some other terms (such as schnapps) do not, what is VODKAT described as now?  You guessed it… schnapps.  For VODKAT however, their new get-up was deemed not to have overcome the spectre of passing-off, so we should see VODKAT off the shelves, at least for a while.  Time for a rebrand?

For many years, advisors have said that trade mark cases before the UK trade mark office (UKIPO) are cheap alternatives to “proper” cases at the High Court.  The costs are generally much less, and the typical costs (i.e. what you have to pay the other side on top of any legal costs you have already spent) if you lose are about £2-3000; this is not cheap, but it is much cheaper than High Court proceedings, where the legal costs can easily reach ten times that amount.

Over the last few years, however, there has been a slow movement to recognise that proceedings before the UKIPO should be binding on the parties where they are not appealed.  This is essentially what happened in the case of Evans and Evans T/A Firecraft v. Focal Point Fires Plc (http://tinyurl.com/ykael5l).  Focal Point had a registration for the mark FIRECRAFT.  Firecraft applied to have the registration cancelled on the basis that they had acquired unregistered (“passing-off”) rights in the mark FIRECRAFT prior to Focal’s application.  They were successful.

Firecraft then brought a case before the High Court for passing-off and asked for summary judgment on the basis that Focal could not defend the case.  The court agreed, finding that the decision of the UKIPO could not be challenged and that as a result Focal could not argue that their use did not pass themselves off as Firecraft’s business.

This case underlines how very important it is that cases before the UK registry are handled properly – just because they are often less expensive, and just because it can be easier to prove a case than before the High Court does not mean that you can make less effort – the case may have very important consequences.  It may also provide a small company with the means to bring a case much more cost effectively than before the High Court.