Best Buy Company Inc. and Another v Worldwide Sales Corporations Espana SL
|England & Wales
|THE HON MR JUSTICE FLOYD,Mr Justice Floyd
|08 July 2010
| EWHC 1666 (Ch)
|Case No: HC0900448
|08 July 2010
 EWHC 1666 (Ch)
IN THE HIGH COURT OF JUSTICE
Before The Hon Mr Justice Floyd
Case No: HC0900448
IAIN PURVIS QC (instructed by Field Fisher Waterhouse LLP) for the Claimants
PETER PRESCOTT QC and JONATHAN HILL (instructed by Kuit Steinart Levy LLP) for the Defendant
Hearing date: 28 th June 2010
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.
Mr Justice Floyd:
This is an action for threats of proceedings for infringement of trade mark. The first claimant, a United States corporation and its UK subsidiary the second claimant (which I shall refer to together as “Best Buy US”) planned to open a series of consumer electronics shops in the UK and in other countries in Europe under the Best Buy name, a name which the first claimant has used extensively for that purpose in the United States. Since the alleged threats complained of they have gone ahead with the opening of these shops, at least in the UK. The defendant is a Spanish corporation which owns a number of national and Community registered trade marks including the words Best Buy in combination with devices and other matter. I shall call the defendant “España”, as did Mr Peter Prescott QC and Mr Jonathan Hill who appeared for them. Mr Iain Purvis QC appeared for Best Buy US.
On 28 th August 2008, Field Fisher Waterhouse (“FFW”) wrote on behalf of Best Buy Enterprises Services Inc. (“BBES”), a US company related to Best Buy US, to Maria Virtudes Gonzales Gomez, a trade mark attorney acting on behalf of España. The background to the letter was that BBES had applied for a Community trade mark incorporating the words “Best Buy”, and España had opposed it. The opposition was based on two Community trade mark registrations owned by España, numbers 970707 and 3565348, each of which combined the words “Best Buy” with other wording and a logo including five stars. It is relevant to note that CTM 970707 is in respect of products in Class 9. I shall refer to these marks as “the España CTMs”. BBES had filed a revocation action against CTM 970707 on the grounds of non use.
The letter of 28 th August 2008 claimed that BBES had a “significant reputation for the retail services that it provides under or by reference to the Best Buy mark”. FFW pointed out that the results of some investigations in relation to the geographical coverage of España's use of its marks, had led them to believe that this use was predominantly within Spain. The letter went on to say this:
“Notwithstanding the above background, and without prejudice to our clients' rights in the “Best Buy” name, our client believes that there may be scope for co-existence within the European Union between their business of retail services and your client's products branded under their Best Buy and Star Device mark. Indeed, there may even be commercial opportunities between our clients' respective businesses.
In the circumstances, and to avoid any unnecessary expense within the opposition proceedings our client would be prepared to agree to an extension of the cooling-off period to allow further time within which to discuss the terms of a possible co-existence agreement. We enclose an extension request. If you agree to extend this period please have this signed and sent to OHIM by the deadline of 29 August 2008.
We would be grateful if you could confirm that your client would be interested in discussing this further and look forward to hearing from you at your earliest opportunity”
The letter was followed up by a chaser on 9 th September 2008 in which FFW asked again whether España were prepared to discuss possible terms of a co-existence agreement. The reply came from Clifford Chance S.L. Abogados who are Spanish lawyers instructed by España. This is the alleged threatening letter of which complaint is made. I shall call it “the CC letter”. The first paragraph of the CC letter began by saying that the letter was in relation to the earlier communications from FFW in the context of the opposition to BBES's CTM application, and that it was for the purposes of replying to those communications “as well as making the following statements”. The letter then set out particulars of a number of España's Spanish trade marks and the España CTMs.
The key features of the letter are the following:
i) España had learned from several press articles that BBES was planning to expand into the “European market including the Spanish one” in the near future;
ii) The use by BBES of the Best Buy trade mark “in Europe and in particular in Spain, as well as in advertising and in the media, as at present, represents a conflict with the intellectual property rights duly registered by my client in Spain and Europe which would entitle it to take the appropriate legal action to defend its interests”;
iii) España's various Best Buy trade marks had been used on the Spanish and European markets so that Best Buy had become a distinctive and reputed brand;
iv) in relation to the application to revoke CTM 970707 for non-use, there had been used of the trademark in Spain and therefore in the EU;
v) the use by BBES of the Best Buy trade mark “on the European market … would cause confusion and lead to an unacceptable association with my client's products causing irreparable and irreversible damage which would undoubtedly entail the cessation of its activity”. Examples were given of how the coexistence of Best Buy shops “in Spain and other European countries” with products sold by España under the Best Buy label would lead to confusion in Spain, and the extinction of España's business.
The last three paragraphs of the CC letter read as follows:
“If, taking into account the above, [BBES] were to remain interested in using the BEST BUY trademark in Europe my client would be prepared, taking up the proposal made by your client in your facts of 28 August 2008, to reach a negotiated solution which would enable your client to do so while at the same time compensating my client for the cessation of its activity that this would undoubtedly entail.
Until a negotiated solution is reached, we hereby request that your client refrain from using the BEST BUY trademark in Europe, issuing any press articles or making any announcements of its imminent activities in Europe (news that has already caused confusion and concern among my client's customers).
In order to ensure that my client is able to protect its rights in a proper fashion, we hereby request that, within a term of fifteen (15) calendar days as of the date of receipt of this letter, you reply to us in writing confirming (i) [BBES'] willingness to start a negotiation process with my client in order to attempt to find a negotiated solution to the conflict; or (ii) your client's undertaking to not use the BEST BUY trademark in Europe, or issue any news in the press or make any announcements of any imminent activity in Europe, or indeed use such trademark in any other way.”
In a letter dated 8th October 2008, FFW replied stating that their client was willing to commence a negotiation process in an attempt to resolve the matter amicably. The second paragraph of that letter reads as follows:
“Notwithstanding the above, for the avoidance of doubt any negotiations are without prejudice to our client's position [is] that its use of the BEST BUY Mark would not infringe your client's rights on the basis that, among other things, our client's proposed use is not confusingly similar to your client's registered marks and the words BEST BUY as depicted in your client's logos are not distinctive.”
The letter requested details of certain matters referred to in the letter of 23 September 2008 “to enable [BBES] to properly assess the position for the purposes of negotiations”. Clifford Chance S.L. replied on 16 October. Amongst other things the letter provided copies of correspondence between España and its customers to support the suggestion that damage was being caused by the rumoured entry of BBES into the Spanish market. The documents were provided solely for the purposes of “these negotiations” and were to be kept confidential.
Discussions ensued about a date and venue for a meeting. A meeting was held but did not produce an agreement. So, on 13 February 2009 the claimants issued the present proceedings in this court without any prior warning, and subsequently served them.
The issues which arise are therefore these:
i) Was the CC letter threatening “proceedings for infringement” of the España CTMs?
ii) If so, was the threat made in relation to an infringement which is excluded from the operation of section 21(1) of the Trade Marks Act 1994 (“the Act”)?
iii) If a non-excluded threat was made, is evidence of it inadmissible by virtue of the “without prejudice” rule?
iv) Are the claimants “persons aggrieved” by the making of a non-excluded and admissible threat?
v) If so, are the claimants entitled to relief?
Section 21 of the Act provides as follows:
“(1) Where a person threatens another with proceedings for infringement of a registered trade mark other than—
(a) the application of the mark to goods or their packaging,
(b) the importation of goods to which, or to the packaging of which, the mark has been applied, or
(c) the supply of services under the mark,
any person aggrieved may bring proceedings for relief under this section.
(2) The relief which may be applied for is any of the following—
(a) a declaration that the threats are unjustifiable,
(b) an injunction...
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