E-Accounting Solutions Ltd T/as Advancetrack v Global Infosys Ltd T/as GI Outsourcing
| Jurisdiction | England & Wales |
| Judge | Tindal |
| Judgment Date | 04 August 2023 |
| Neutral Citation | [2023] EWHC 2038 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: IL-2021-BHM-000001 |
[2023] EWHC 2038 (Ch)
HIS HONOUR JUDGE Tindal
(Sitting as a Judge of the High Court)
Case No: IL-2021-BHM-000001
IN THE HIGH COURT OF JUSTICE
BIRMINGHAM BUSINESS AND PROPERTY COURT
INTELLECTUAL PROPERTY LIST (ChD)
SHORTER TRIALS SCHEME
Birmingham Civil Justice Centre
Bull Street,
Birmingham
Mr Nick Zweck (instructed by Brindley Twist, Tafft and James LLP) for the Claimant
Mr Michael Smith (instructed by Richard Slade and Company) for the Defendant
Hearing dates: 4 th and 5 th July 2023
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HIS HONOUR JUDGE Tindal
HHJ
Introduction
The Dispute
This case principally concerns alleged trade mark infringement through Google ‘keywords’ and internet advertising. It involves the deliberate use of a sign resembling the trade mark of a competitor as a ‘keyword’; then the allegedly inadvertent use of that sign in the internet adverts themselves; and how these two ‘uses’ are analysed slightly differently in trade mark law. Since this largely derives from EU Law, I will also consider the impact of Brexit on ‘infringement’, especially as the Retained EU Law (Revocation and Reform) Act 2023 is now on the statute books. This is an important issue which may affect many small businesses considering using Google internet advertising.
The Claimant, E-Accounting Solutions Ltd, was founded by its Managing Director, Mr Vipul Sheth. The Claimant trades as ‘Advance Track’ and in October 2010 registered a trade mark for it in various classes, such as ‘Class 35 ‘Accountancy Services’, including outsourcing of services from accountants, which is the main model Claimant provides. So does the Defendant, Global Infosys Ltd, trading as ‘GI Outsourcing’, run by its Director, Mr Tariq Husain.
In a nutshell, on 23 rd March 2021, the Defendant's marketing consultant ‘JE Consulting’ (‘JEC’), at the behest of Mr Husain, included ‘advancetrack’ as a keyword in the Defendant's Google AdWords campaign. The phrase ‘Advancetrack’ was then included in the Defendant's internet adverts accessed by that keyword. The Defendant says this was an error by JEC, which is disputed by the Claimant. In any event, Mr Sheth saw the adverts within days and requested Google to remove them. Following the Claimant's solicitors' letter of 13 th May 2021, the Defendant stopped the adverts on 24 th May 2021. The Defendant's evidence is that in the short time in which its ‘Advancetrack’ adverts were actually running, it made no sales and contends the Claimant lost nothing. The Claimant maintains financial loss need not be proved on infringement and in any event, loss is a matter for a future quantum trial.
On 15 th September 2021, the Claimant issued this High Court claim in the Business and Property Court claiming losses of up to £500,000. The Particulars of Claim alleged infringement by the Defendant of the Claimant's ‘Advance Track’ trade mark between April and May 2021, both in its use as a Google ‘ad word’ and in the text of the adverts; and alleged it caused the Claimant to lose custom. It was alleged that the Defendant had infringed the Claimant's ‘Advance Track’ trade mark by the use of an identical sign for identical services in breach of s.10(1) Trade Marks Act 1994 (‘ TMA’); and/or by use of a confusingly similar sign for identical services in breach of s.10(2) TMA; and/or by use of a sign detrimental to the distinctive character and/or taking unfair advantage of the Claimant's trade mark with a reputation in the UK in breach of s.10(3) TMA. In the alternative, the Claimant alleged the Defendant had committed the tort of ‘passing off’. It sought an injunction and damages.
On 29 th November 2021, the Defendant filed a Defence and Counterclaim. In the Defence, it denied any infringement of the Claimant's trade mark, which it pointed out was ‘Advance Track’ as two words, not the one word ‘advancetrack’ it had used. It contended this use was neither identical, nor confusingly similar or unfair/detrimental to the Claimant's trade mark. Moreover, the Counterclaim contended that the trade mark was invalid under ss.3 and 47 TMA on the basis that the words ‘Advance Track’ consisted exclusively of signs or indications which designated the characteristics of the services, namely ‘advance tracking’ contrary to s.3(1)(a) TMA; and/or which have become customary contrary to s.3(1)(b) TMA; and/or should be partially revoked under s.46 TMA for non-use for over five years in some of its registered categories, namely financial services (class 36), computer services (class 42) and legal services (class 45).
There followed a Reply from the Claimant on 13 th December 2021 contesting the Defence and denying the Counterclaim (save as to the registration of the trade mark in classes 42 and 45 which it was conceded could be revoked) The Particulars of Claim were then amended on 27 th January 2022 (‘APOC’) pursuant to the order of DJ Talog-Davies on 14 th January 2022 and each party also asked the other questions under CPR 18. On 24 th June 2022, DJ Singh dismissed the Defendant's Security for Costs application. On 12 th July 2022, DJ Phillips granted the Defendant permission to file an Amended Defence, which it did in July 2022 (‘ADef’) and transferred the case to the Shorter Trials Scheme
Consistent with that scheme under CPR PD 57AB, the case was originally allocated to HHJ Worster who on 26 th August 2022 set directions for a 2-day trial on liability planned for April-May 2023. By agreement with myself, HHJ Worster re-designated me as the trial judge and I listed disclosure cross-applications before me on 28 th April 2023 when I set this trial date on 4 th–5 th July. I also made more limited disclosure orders than initially requested, as the Defendant expressly conceded it was vicariously liable for the conduct of JEC.
Whilst the case probably would have been suitable for trial in the IPEC Multi-Track, no application was made for transfer. Indeed, as I have said, the parties specifically requested the BPC Shorter Trials Scheme. Indeed, I note that p.2. 2 CPR P57AB envisages this scheme may be appropriate for infringement proceedings with a trade mark revocation counterclaim, as here. In my view, the case is similar to Lappett v Rassam [2023] FSR 3, which Adam Johnson J said could be appropriately tried either in the IPEC or in the BPC Shorter Trials Scheme. However, I am conscious that unlike the IPEC, there is no cap on costs (nor even a budget) in the Shorter Trials Scheme, which is relevant on costs.
Of course, I cannot claim to have the huge expertise and experience in intellectual property of HHJ Hacon or one of his IPEC colleagues. However, one of the reasons HHJ Worster transferred the case to me was that I have some background in EU Law, on which trade mark law is based (as I will discuss in a moment). Moreover, I was fortunate enough to have expert Counsel in front of me – Mr Zweck for the Claimant and Mr Smith for the Defendant. At the previous hearing I directed detailed submissions in advance which I was very grateful to receive in good time to feed into my own pre-reading and research. This meant I was able to refer Counsel in advance to a couple of cases myself, particularly on the current state and applicability of EU Law.
The Legal Context
ss.1, 2, 3, 9, 10, 11, 14, 46 and 47 TMA state (so far as material to this case):
“ 1(1) In this Act “trade mark” means any sign which is capable— (a) of being represented in the register in a manner which enables the registrar and other competent authorities and the public to determine the clear and precise subject matter of the protection afforded to the proprietor, and (b) of distinguishing goods or services of one undertaking from those of other undertakings. A trade mark may, in particular, consist of words (including personal names), designs, letters, numerals, colours, sounds or the shape of goods or their packaging…
2(1) A registered trade mark is a property right obtained by the registration of the trade mark under this Act and the proprietor of a registered trade mark has the rights and remedies provided by this Act.
(2) No proceedings lie to prevent or recover damages for the infringement of an unregistered trade mark as such; but nothing in this Act affects the law relating to passing off.
3(1) The following shall not be registered—
(a) signs which do not satisfy the requirements of section 1(1),
(b) trade marks which are devoid of any distinctive character,
(c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services,
(d) trade marks which consist exclusively of signs or indications which have become customary in the current language or in bona fide and established practices of the trade…
9(1) The proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent. The acts amounting to infringement, if done without the consent of the proprietor, are specified in subsections (1) to (3) of section 10.
10(1) A person infringes a registered trade mark if he uses 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.
(2) A person infringes a registered trade mark if he uses in the course of trade a sign where because— (a) the sign is identical with...
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