ABP Technology Ltd v Voyetra Turtle Beach, Inc.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Miles |
| Judgment Date | 19 November 2021 |
| Neutral Citation | [2021] EWHC 3096 (Ch) |
| Docket Number | Case No: IL-2020-000114 |
| Court | Chancery Division |
[2021] EWHC 3096 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Miles
Case No: IL-2020-000114
Chris Aikens (instructed by AA Thornton & Co) for the Claimant
Benet Brandreth QC (instructed by Bird & Bird LLP) for the Defendants
Hearing dates: 9 and 10 November 2021
Written submissions on 17–18 November 2021
APPROVED JUDGMENT
Handed down remotely by email to the parties and by publication on Bailii at 10.30 am on 19 November 2021.
Introduction
This is a trade mark claim. The companies on both sides sell computer gaming accessories, including audio headsets for use on gaming platforms.
The claimant is the registered proprietor of two UK registered trade marks for STEALTH and STEALTH VR (the latter in stylised form), both registered in relation to “audio headsets for playing video games”.
The defendants have also used the sign STEALTH in the UK in relation to video game headsets.
In November 2020 the claimant brought proceedings against the defendants for infringement under ss. 10(1) and 10(2) of the Trade Marks Act 1994 (“the TMA”) on the basis that the defendants (a) have used in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered; and (b) have used in the course of trade a sign where, because the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.
In their defence served on 2 February 2021 the defendants relied on the defence of honest concurrent use of the STEALTH mark.
The claimant has applied for summary judgment for the entire claim.
The defendants now seek to amend their pleadings to advance a second string. They wish to plead that the first defendant has recently acquired an earlier registered trade mark for the word STEALTH (pre-dating the claimant's marks) from a third party. They seek to deploy the earlier mark as a sword and a shield: to contend that the claimant has infringed the earlier mark, that the claimant's trade marks are invalid, and as a defence to the claimant's claim for infringement.
There are therefore two applications: the claimant's for summary judgment, and the defendants' for permission to amend their defence and counterclaim to enable them to rely on the earlier STEALTH trade mark.
Factual background
The claimant is an English company in the business of selling computer gaming accessories, in particular audio headsets for use on multiple platforms. Such products are sold under the names STEALTH and STEALTH VR.
The claimant is the proprietor of UK Trade Mark Nos 3211021 for STEALTH VR and 3476958 for STEALTH (with the registration for STEALTH VR being in stylised font), which are both registered in relation to “audio headsets for playing video games”. Mark 3211021 was registered with effect from 6 February 2017 and mark 3476958 with effect from 24 March 2020.
The first defendant is a company incorporated and existing under the laws of Delaware, USA. It is a global gaming accessory manufacturer headquartered in New York state. It designs, manufactures, markets and sells gaming headsets for multiple platforms. As of 2017 it claimed to have c.42% of the world market share in the manufacture and supply of gaming headsets. The second defendant, an English company, is the exclusive distributor of the first defendant's gaming headsets and accessories in the UK and Ireland.
The present claim is the continuation of a previous dispute between the claimant and the first defendant in the UK Intellectual Property Office (“IPO”). That concerned the registration of the trade mark STEALTH. On 8 June 2018 the first defendant applied under s. 47 of the TMA for a declaration that the claimant's registration of STEALTH VR was invalid. The claim was made under s. 5(4)(a) of the TMA: the first defendant claimed that, as a result of its sales of headphones and headsets in the UK under the sign STEALTH, it had acquired a goodwill attached to that sign, that the use of the STEALTH VR mark by the claimant would be a misrepresentation to the public resulting in damage to that goodwill, and therefore that the claimant's use of the STEALTH VR mark could be prevented by virtue of the law of passing off.
The first defendant had also itself filed, on 16 March 2018, an application to register STEALTH as a trade mark in respect of inter alia “headsets for use with computers; headphones”. The claimant filed an opposition against that application. The first defendant's application for a declaration of invalidity and the claimant's opposition were heard and determined together. It was common ground that if the first defendant's application for a declaration of invalidity failed the claimant's opposition would succeed.
The IPO rejected the first defendant's application for a declaration of invalidity; and the claimant's opposition therefore succeeded. The first defendant's appeal of both decisions to the Appointed Person was dismissed in a written decision dated 17 June 2020.
The consequence was that the claimant owned a UK trade mark registration for STEALTH VR and the first defendant did not own any trade mark registration consisting of or containing the word STEALTH. The IPO Hearing Officer's decision turned on findings that (a) the first actionable use of the STEALTH mark in relation to headphones in the UK by the claimant's predecessor-in-title was in early to mid-2014 and (b) this pre-dated the earliest date on which the first defendant had generated goodwill in the UK attached to the sign STEALTH.
Following an exchange of pre-action correspondence, the current claim for infringement was issued on 24 November 2020. The claimant's application for summary judgment was issued on 31 March 2021.
It is helpful at this stage to set out some of the main undisputed events chronologically:
| Mid 2014 | The first external use of the STEALTH sign by the claimant's predecessor in title. |
| Aug/Oct 2014 | The defendants used the name STEALTH in the UK through sales of headphones to major UK retailers. (The parties dispute whether this happened in August or October but this does not matter for present purposes.) |
| February 2015 | The claimant used the name STEALTH in consumer sales of headsets. |
| April 2015 | The second defendant first learned of the claimant's use of STEALTH in relation to headphones through Argos. The defendants' evidence is that this was not escalated to the first defendant at that stage because the claimant's product was not seen as a commercial threat. |
| 6 Feb 2017 | The claimant filed its application for the STEALTH VR mark. |
| Late 2017/early 2018 | The first defendant's CEO, Mr Stark, first learned of the claimant's use of the STEALTH sign. He says he was annoyed and spoke to the defendants' legal department to see whether any legal action could be taken. |
| 16 Mar 2018 | The first defendant filed its application to register STEALTH. |
| 26 Apr 2018 | The first defendant sent a letter before claim alleging passing off against the claimant by its use of STEALTH. |
| 8 June 2018 | The first defendant filed its application in the IPO for a declaration that the claimant's STEALTH VR mark was invalid. |
| 15 Aug 2018 | The claimant filed its opposition to the first defendant's STEALTH application. |
| 16 Sep 2019 | Hearing Officer's decision. |
| 17 June 2020 | Appointed Person's decision. |
| 24 Nov 2020 | Claim form issued in this action. |
| 2 Feb 2021 | Defence. |
I now turn to the events leading up to the recent acquisition by the first defendant of the earlier registered STEALTH mark.
As already explained, the proposed amendments concern the acquisition by the first defendant of UK trade mark no. 2014250. This was registered on 17 May 1996 for “Hi-fi apparatus, instruments and loudspeakers; parts and fittings for all the aforesaid goods” (which I shall call “mark-250”). The proprietor of mark-250 from November 2013 to 28 January 2021 was a company called REL Acoustics Limited (“REL”).
On 28 January 2021 REL assigned mark-250 to a company called Name Creations Ltd (“NCL”) for £8,500.
There was uncontroverted evidence before me that NCL is controlled by a firm called Bishop IP Investigations, which acts as an anonymous agent for its clients, often acquiring trade marks and domain names. The claimant's evidence (which was not contradicted) was that NCL purchased the trade mark for the defendants. The claimant's solicitors asked the defendants to explain the nature of the relationship between Name Creations Ltd and the defendants. Their solicitors' response was that the issue was irrelevant. During the hearing counsel for the defendants stated that NCL acted on the instructions of the defendants in acquiring mark-250 from REL; that it was always intended from 28 January 2021 that mark-250 would be eventually transferred to the first defendant; and that at some unidentified stage the defendants paid NCL the price paid by NCL to buy mark-250 from REL.
The Defence was served on 2 February 2021. It was verified by Mr Stark of the defendants on 1 February 2021.
Paragraph 4 of the Defence responded to paragraph 7 of the particulars of claim (which alleges that the defendants were joint tortfeasors). Paragraph 4 stated as follows:
“The First Defendant is the parent company of the Second Defendant. The...
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