Acedes Holdings, LLC v Clive Sutton Ltd
| Jurisdiction | England & Wales |
| Judge | Hacon |
| Judgment Date | 07 August 2023 |
| Neutral Citation | [2023] EWHC 2005 (IPEC) |
| Court | Intellectual Property Enterprise Court |
| Docket Number | Case No: IP-2022-000036 |
[2023] EWHC 2005 (IPEC)
HIS HONOUR JUDGE Hacon
Case No: IP-2022-000036
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY ENTERPRISE COURT
Rolls Building
Fetter Lane
London, EC4A 1NL
Guy Hollingworth (instructed by Mishcon de Reya LLP) for the Claimants
Michael Hicks and Antony Craggs (solicitor advocate) (instructed by Lewis Silkin LLP) for the Defendants
Hearing date: 4 July 2023
Approved Judgment
This judgment was handed down remotely at 10.30 on 7 August 2023 by circulation to the parties or their representatives by email and released to the National Archives .
HIS HONOUR JUDGE Hacon
Introduction
. This is an action about the right to use the sign “Cobra” for cars. In 1962, at the instigation of the American racing driver Carroll Shelby and his team in Los Angeles, an engine provided by The Ford Motor Company (“Ford”) was installed in the modified chassis of a car produced by a firm called AC Cars at its factory in Thames Ditton, Surrey. The resulting sports car, or roadster, was run at Silverstone in January 1962 and then shipped without an engine to Los Angeles. Subsequently, cars with the AC Cars chassis and a Ford engine went into production under the name “Cobra”, chosen by Mr Shelby.
. For the most part the cars were made to the order of Mr Shelby's company, Shelby American, Inc, with the car bodies being shipped from Thames Ditton to California where they were fitted with Ford engines and sold by Shelby American as “Shelby Cobras”. Some, though, were fitted with engines in England and were sold in this country and elsewhere in Europe as “AC Cobras”.
. In 1996 the first claimant (“Acedes”) acquired some of the assets of AC Cars' business, including intellectual property rights and goodwill relating to “AC Cobra”. Since 2016 the second claimant (“AC Cars”) has made cars in the UK and sold them under the name “AC Cobra”. Acedes has registered UK trade mark no. 905883806 in the form of the words AC COBRA (“the AC Cobra Mark”).
. The first defendant (“CSL”) markets cars in the UK. The second defendant (“Mr Sutton”) is CSL's sole director and shareholder. Since 2021 CSL has imported and sold cars made by an American company, Superformance LLC (“Superformance”). They are replicas of the Shelby Cobra cars of the 1960s and have been sold under the sign “Shelby Cobra”.
. The claimants complained to CSL and on 13 May 2022 issued the claim form in these proceedings, alleging infringement of the AC Cobra Mark. The defendants denied infringement and counterclaimed for a declaration that the AC Cobra Mark was invalidly registered and an order for revocation of the AC Cobra Mark for non-use.
. On 6 June 2023 the claimants served a notice of discontinuance of their infringement claim, so the present trial was concerned only with the issues arising from the counterclaim.
The broad issues
. The broad issues are these:
(1) Whether AC Cobra Mark was invalidly registered pursuant to s.5(2) and/or (3) of the Trade Marks Act 1994 (“the 1994 Act”) having regard to two earlier registered trade marks owned by Ford.
(2) Whether the registration of the AC Cobra Mark stands to be revoked for non-use pursuant to s.46(1) of the 1994 Act.
The witness
. Given the abandonment of their allegation of infringement, the claimants took the view that little of the evidence filed was of relevance. They elected not to cross-examine the defendants' witnesses.
. The claimants' witness was cross-examined: Alan Lubinsky, who is the beneficial shareholder and the Managing Director of Acedes and the controlling shareholder of AC Cars. Mr Lubinsky was a good witness, giving clear and direct answers.
The law on trade mark validity
. Section 47(2)(a) of the Trade Marks Act 1994 (“the 1994 Act”) provides that the registration of a trade mark may be declared invalid if there is an earlier trade mark within the meaning of s.6 of the 1994 Act in relation to which the conditions set in any of s.5(1), ( 2) or (3) of the 1994 Act obtain.
. Ford is the proprietor of two trade marks which qualify as earlier trade marks. They are:
(1) Trade mark no. 893168 (“the first Ford Cobra Mark”) in the form of the word COBRA in respect of “Motor Land Vehicles”, filed on 14 April 1966.
(2) Trade mark no. 902055416 (“the second Ford Cobra Mark”), also in the form of the word COBRA in respect of goods which include “Motor Land Vehicles”, filed on 25 January 2001. It was filed as an EU trade mark and is now a UK comparable mark.
. By the time of the trial the defendants alleged that the conditions of s.5(2) and (3) obtain. Those subsections (and s.5(3A)) provide, so far as is relevant:
“( 2) A trade mark shall not be registered if because—
(a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or
(b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.
(3) A trade mark which—
(a) is identical with or similar to an earlier trade mark, and
(b) ….
shall not be registered if, or to the extent that, the earlier trade mark has a reputation in the United Kingdom … and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.
(3A) Subsection (3) applies irrespective of whether the goods and services for which the trade mark is to be registered are identical with, similar to or not similar to those for which the earlier trade mark is protected.”
. There are restrictions on the right to apply for a declaration of invalidity under s.47. First, the Trade Mark (Relative Grounds) Order 2007 (SI 2007/1976) (“the 2007 Order”) limits the right to apply for a declaration of invalidity of a later trade mark to the proprietor of the earlier trade mark and licensees under that mark. Secondly, s.47(2A) imposes requirements regarding the use of the earlier trade mark which must be satisfied before there may a declaration. Thirdly, there will be no declaration if the proprietor of the earlier trade mark has acquiesced in the use of the later trade mark.
The issues arising from the application for a declaration of invalidity
. The issues to be resolved in respect of the defendants' application for a declaration of invalidity of the AC Cobra Mark are:
(1) Whether CSL is a licensee under either of the Ford Cobra Marks.
(2) If so, whether the use conditions of s.47(2B) of the 1994 Act have been satisfied in respect of either or both the Ford Cobra Marks.
(3) If so, whether section 5(2) and/or 5(3) obtain.
(4) If so, whether Ford acquiesced in the use of the AC Cobra Mark within the meaning of s.48(1) of the 1994 Act.
Whether CSL is a licensee under the Ford Cobra Marks
The 2007 Order
. The 2007 Order provides in relevant part:
“ 2. The registrar shall not refuse to register a trade mark on a ground mentioned in section 5 of the Trade Marks Act 1994 (relative grounds for refusal) unless objection on that ground is raised in opposition proceedings by the proprietor of the earlier trade mark or other earlier right.
…
5. (1) Only the persons specified in paragraph (2) may make an application for a declaration of invalidity on the grounds in section 47(2) of the Trade Marks Act 1994 (relative grounds).
(2) Those persons are—
(a) in the case of an application on the ground in section 47(2)(a) of that Act, the proprietor or a licensee of the earlier trade mark or, in the case of an earlier collective mark or certification mark, the proprietor or an authorised user of such collective mark or certification mark; and
(b) in the case of an application on the ground in section 47(2)(b) of that Act, the proprietor of the earlier right.
(3) So much of section 47(3) of that Act as provides that any person may make an application for a declaration of invalidity shall have effect subject to this article.”
. Arts. 2 and 5 of the 2007 Order taken together are not as clear as they might be regarding proprietor and/or licensee, but leaving aside collective and certification marks I take them to mean that where the party seeking a declaration of invalidity of a later trade mark pursuant to s.47(2)(a) relies on the registration of an earlier trade mark, that party must be either the proprietor or a licensee of the earlier trade mark. That was the interpretation adopted by the parties at trial.
Statutory requirements of a trade mark licence
. The requirements of a trade mark licence are set out in s.28 of the 1994 Act, which provides so far as is relevant:
“ 28. Licensing of registered trade mark.
…
(2) A licence is not effective unless it is in writing signed by or on behalf of the grantor. Except in Scotland, this requirement may be satisfied in a case where the grantor is a body corporate by the affixing of its seal.
…
(4) Where the licence so provides, a sub-licence may be granted by the licensee; and references in this Act to a licence or licensee include a sub-licence or sub-licensee.
…”
Construction of a written licence
. Aside from complying with s.28, any written agreement relied on by the defendants has to give effect to the licence claimed. Where a written agreement is to be construed according to English law, the usual rules apply. They were recently summarised by Judge Pelling QC in Lamesa Investments Limited v Cynergy Bank Limited ...
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