Wood Trade Marks and Design Limited

A few months ago I mentioned the Vodkat case.  Diageo (owner of KETEL vodka) had brought a case for passing off against the owners of VODKAT, alleging that there was goodwill in “vodka”, that it had specific traits and that the use of the term where the product did not share those qualities would be misleading.  They were successful.

The owners of VODKAT appealed, arguing that where you wish to allege passing-off rights in a generic term, it must be niche or luxury compared to the market (such as was the case in the CHAMPAGNE cases a good number of years ago).  The UK Court of Appeal disagreed with these arguments and rejected the appeal unanimously.  In doing so, however, one judge (Rix LJ) expressed regrets that this was the case in the face of a product which was clearly not vodka, which only idiots would think was vodka, when there were labelling laws to protect mislabelling.

I can see Rix LJ’s point.  I suspect that Diageo have “pulled a fast one” and that whilst the alcohol industry may approve of the outcome, the judgment actually sets a precedent which they will use to beat their competitors.  If they do, then well done to them for a clever move - cheers!

Trade marks are a difficult beast – some try to use them to stop their competitors commenting on their behaviour.  We see this in many forms:

1. Trade mark owners trying to seize back domain names which have the trade mark in the name when they are being used for criticism sites;

2. Trade mark owners trying to suggest that competitors cannot use their trade marks when they criticise them; and

3. Trade Mark owners trying to use trade marks to stop people using the marks in Adwords.

All three situations are difficult, as there is inherently nothing wrong in commenting and using trade marks where the use is to identify the competitor.  The test is whether the use is in accordance with honest business practices, however, and if you go to far then you stray outside the realms of acceptable practice.  Whether it is acceptable practice or not may be difficult to assess – some will be put off by receiving threatening letters even when they have a “gut” feeling that they should be able to keep using the mark.

Further problems arise where someone has a logo – are you going too far if you use the logo?  If you could quite easily identify them just by the word part (think ESSO) then it may well be that using the logo may go too far.

In the case of AdWords, there may be a difficult “squeeze” involved.  If you want to say that JOHN SMITH vodka is made by underpaid child labour, you may want to use the trade mark JOHN SMITH as an AdWord and also say in the text “Read here how JOHN SMITH is made by child labour”.  The problem comes that Google will routinely reject the advert (and take it down if complained about) on the basis that the trade mark is in the advert text.  This is in their terms of service, so it’s a matter of Google’s terms with advertisers rather than a legal requirement.  If you don’t make the advert clear, however, then the trade mark owner may suggest that you are conducting a “bait and switch” site, attracting people by suggesting that the site is real/official/authorised.  If they successfully argue that then you may find yourself on the wrong side of a trade mark case.

The centre ground would appear to be to use wording which makes it clear that it is not official – something like “Read the truth about child labour that they don’t want you to read!”.  It seems unlikely that anyone would be confused, and you have made it clear what they will find.  Nevertheless, you should probably expect to have to explain your actions at some point.

By the way, in case anyone is in ANY doubt, nothing on this blog constitutes legal advice – don’t simply rip off my comments and think I’ve given you “proper” watertight legal advice!

Perfume houses do it…  Clothing manufacturers do it… even car manufacturers do it…

Free.

Businesses that give away some product as a marketing exercise, with the express hope that it will lead to extra sales.  What rights does the brand owner have over those products that it gives away, however?

A recent case gave some insight.  Coty manufactures and markets a ranger of perfumery, including the DAVIDOFF brand.  They provided companies in their distribution system in Singapore with testers, which are the bottle used by sellers to allow you to try the fragrance and are not intended to be sold.  In the case in issue, Coty had said that ownership of the testers never actually passed to the distributors – they were Coty product throughout.  Somehow, some of these bottles made their way onto the European market for sale.

The European court decided that in the present case it could not be said that Coty had consented to the testers being sold into Europe and had reserved their rights.  However, it underlined that it is possible to come to the conclusion that the products could be sold into Europe where the trade mark owner didn’t warn the first trader of the limits on their rights, where the products do not bear any warning against resale into Europe and where full title to the products passes.  It isn’t relevant that the purchaser in Europe does not know that the product was not to be sold into Europe, nor that somewhere along the commercial path someone forgot to tell the eventual exporter into Europe that the goods should not be sold there.

SO.. if you are buying products be careful as to whether they should be sold into Europe (the products can be seized and you can be found to be an infringer) and if you are providing products to a company outside Europe that you do not want to come into Europe make sure that you make that clear in discussions with the purchaser (and put a notice on the products).