Digipos Store Solutions Group Ltd v Digi International Inc.

JurisdictionEngland & Wales
Judgment Date12 March 2008
Neutral Citation[2008] EWHC 3371 (Ch)
Docket NumberCase No: CH/2007/APP/0336
CourtChancery Division
Date12 March 2008

[2007] EWHC 3371 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Daniel Alexander Q.c.

sitting as a Deputy High Court Judge

Case No: CH/2007/APP/0336

Between
Digipos Store Solutions Group Limited
Appellant/Applicant for Registration
and
Digi International Inc.
Respondent/Opponent

Richard Arnold QC (instructed by Stevens & Bolton LLP) for the Appellent/Applicant for Registration

James Mellor QC and Fiona Clark (instructed by Burges Salmon LLP) for the Respondent/Opponent

Approved Judgment

Hearing date: 4 th December 2007

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.

DANIEL ALEXANDER QC

DANIEL ALEXANDER QC

A. INTRODUCTION

1

This is an appeal from a Decision of Mr George Salthouse, the Hearing Officer for the Registrar, the Comptroller-General, dated 14 th May 2007 whereby he upheld the opposition to registration of the Appellant's marks set out in the Decision at paragraph 1. The grounds of opposition were based primarily on the Respondent's prior registrations, which are set out in paragraph 2 of the Decision. The Hearing Officer held that the opposition succeeded under section 5(2)(b) of the Trade Marks Act 1994 (“the Act”) against all of the Appellant's applications in all classes.

The marks in question

Key Opponent's/Respondent's marks

2

Although all of the marks identified in the Annexes to this judgment are relied on as a basis for opposition it is convenient to undertake the analysis by reference to two of the Respondent's marks namely

(i) UK registration 1577042

registered in class 9 in respect of “Microcomputer hardware and microcomputer software programs for use in communications between digital electronic devices; all included in class 9.” and

(ii) UK registration 1577044

DIGI INTERNATIONAL (word mark)

registered in class 9 in respect of “Microcomputer hardware and software for data communications”.

Key Applicant's/Appellant's mark

3

The central analysis on this appeal can be undertaken by reference to one of the Appellant's marks namely UK application 2358343

DigiPos (word mark)

applied for in class 9 in respect of “Computer hardware, computers, servers, point-of-sale terminals, communications and networking systems, keyboards, display terminals, printers, proofing and encoding apparatus, document scanners, bar code scanners, computer software for use in the retail industry.”

4

I deal with the other marks at the end of this judgment.

B. APPROACH TO THIS APPEAL

5

It is important at the outset to bear in mind the nature of appeals of this kind. It is clear from Reef Trade Mark [2003] RPC 5 (“ Reef”) and BUD Trade Mark [2003] RPC 25 (“ BUD”) that neither surprise at a Hearing Officer's conclusion nor a belief that he has reached the wrong decision suffice to justify interference by this court. Before that is warranted, it is necessary for this court to be satisfied that there is a distinct and material error of principle in the decision in question or that the Hearing Officer was clearly wrong ( Reef). As Robert Walker LJ (as he then was) said:

“…an appellate court should in my view show a real reluctance, but not the very highest degree of reluctance to interfere in the absence of a distinct and material error of principle” ( Reef, para. 28)

6

This was reinforced in BUD, where the Court of Appeal made it clear that it preferred the approach of the appellate judge but nonetheless held that there was no error of principle justifying departure from the Hearing Officer's decision. As Lord Hoffmann said in Biogen v. Medeva [1997] RPC 1 at 45, appellate review of nuanced assessments requires an appellate court to be very cautious in differing from a judge's evaluation. In the context of appeals from the Registrar relating to section 5(2)(b) of the Act, alleged errors that consist of wrongly assessing similarities between marks, attributing too much or too little discernment to the average consumer or giving too much or too little weight to certain factors in the multi-factorial global assessment are not errors of principle warranting interference. I approach this appeal with that in mind.

C. OUTLINE OF THE MAIN ARGUMENTS

Appellant's arguments

7

The Appellant contends that the Hearing Officer made ten errors. These may be summarised as follows.

(1) Failure to take into account the Respondent's admissions against interest. It is said that the Hearing Officer ought to have had regard to points made in correspondence on behalf of the Respondent during prosecution of the marks relied on, concerning the limited scope of protection which marks of this kind should be afforded. This point is related to point (3) below in that, if the Hearing Officer was wrong not to assess the degree of distinctiveness of the mark and should have done so, it is contended that the material from the prosecution file is relevant to the assessment.

(2) Taking into account an expired trade mark. This point has fallen away because the challenge to registration founded on the expired mark is not said to add anything of substance to the overall argument.

(3) Failing to consider the degree of distinctiveness of the Respondent's trade mark. It is said that the Hearing Officer failed adequately (or at all) to consider the degree of distinctiveness of the Respondent's prior marks and, in particular, the descriptive nature of the term DIGI. The Appellant contends that the Hearing Officer should have held that the Respondent's marks relied on were only entitled to a narrow scope of protection.

(4) Failing to construe the Respondent's specification of goods. It is said that the Hearing Officer construed the specification of UK registration 1577042 too widely.

(5) Wrongly holding that the Appellant's services were for the same specialised purpose as the Respondent's goods. The nub of the complaint here is that the Appellant's goods are specialised goods for use in retailing and services associated with them but the Respondent's goods are different, being network connectivity products and that the Hearing Officer should not have held that their purposes were the same.

(6) Wrongly holding that neither mark had a conceptual meaning. This point is related to point (3) above in that it is said that the Hearing Officer should have concluded that DIGI would be understood as an abbreviation of DIGITAL both in the Appellant's and in the Respondent's marks and accordingly held that it was a mark of low distinctiveness. The Hearing Officer's assessment in this respect is said to be plainly wrong.

(7) Wrongly ignoring the evidence of third party use of DIGI- marks. Here, the central argument is that the Hearing Officer should not have dismissed the numerous other registered marks which have DIGI- as a prefix as mere “state of the register” material entitled to no weight. He should have held that this was evidence that other traders did consider the prefix DIGI- to be appropriate for use for digital apparatus of various kinds and actually intended to use such marks. This point is also related to point (3) in that it is said that the Hearing Officer should have analysed this material more carefully had he properly assessed the “weakness” of the mark.

(8) Reef It is alleged that the Hearing Officer ought to have paid greater attention to the decisions particularly of OHIM and the CFI both for reasons of consistency and because they supported the contentions as to the weak distinctiveness of DIGI. Again, this point is also related to point (3) for the same reasons as point (7).

(9) Wrongly assessing the degree of care. The nub of the argument here is that it is said that the Hearing Officer was inconsistent in the standard of care which would be applied in selecting goods of the relevant kind.

(10) Wrongly dismissing the evidence of honest concurrent use. Here is it said that the Hearing Officer should not have treated the evidence of side by side trading without confusion so shortly.

Assessment of distinctiveness of the mark

8

It is convenient first to address the issue of law relating to the assessment of distinctiveness of the respective marks and the factual assessment of distinctiveness in the light of the relevant law. That involves consideration mainly of points (3), (6), (7) and (8) together. In that context, it is convenient also to deal with the issue of what account should be taken of the representations in the file which are relied upon (point (1)) since it is said that these should have featured more prominently in the assessment of distinctiveness of the mark and the scope of protection of the earlier Respondent's marks. I deal separately with the other points: (4), (5), (9) and (10).

9

Of the arguments, it seems to me that point (3) lies at the heart of this appeal. Before evaluating the arguments relating to it, it is convenient to summarise the Appellant's and Respondent's positions on this point more fully.

The Appellant's main argument on distinctiveness

10

The Appellant (represented by Mr Richard Arnold QC) contends that the Registrar is obliged, as a result of the judgment of the ECJ in Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc. (Formerly Pathe Communications Corporation) Case C-39/97 [1998] ECR I-5507, [1999] RPC 117 (“ Canon”) and other cases, to assess not only whether the earlier mark enjoys enhanced distinctiveness, and therefore enhanced protection, as a result of its use but, conversely, whether there are features about the prior mark which diminish its distinctive character and therefore reduce its scope of protection.

11

In a case where the strength of the earlier registered mark is in issue, the Appellant contends that the Hearing Officer is obliged to consider whether the prior mark consists of, or...

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