Esure Insurance Ltd v Direct Line Insurance Plc

Hearing dates: 22 nd, 23 rd and 24 th May 2007

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.

Mr Justice Lindsay:

Introduction

Direct Line sells insurance and financial services direct to the public, contact to and from the public largely being by way of online, email and telephone contact. In 1990 it began, in its advertisements, to use a device, a representation of a telephone on wheels. It has used that device ever since and has spent literally millions of pounds in drawing it to the public's attention in connection with its services. The device has become a very well known mark to “consumers” of insurance. Direct Line has long since acquired both national and Community marks consisting of the telephone on wheels device which, whilst the marks are almost invariably used in red and black in combination, are not marks limited to colour and include monochrome forms.

esure also sells insurance direct to the public in similar fashion to Direct Line (although its balance between online, email and telephone contact with the public may differ from that enjoyed at Direct Line). At all events, it competes head-on with Direct Line in all or parts of its business. On 10 ^th September 2004 it applied to register as a mark a device consisting of a representation of a computer mouse on wheels and on 18 ^th September 2004 it began to advertise using the mouse on wheels sign. On 26 ^th January 2005 Direct Line filed Notice of Opposition to the proposed registration. esure's use of the mouse on wheels had largely been in orange and blue but, as the registration which it had sought was in black and white form, the use of the mouse mark, were it to become registered, would, I apprehend, enable its use in any colours, including red and red and black in combination.

On 29 ^th March 2005 the Registrar made available to the parties the preliminary opinion that the rival marks were not similar and that there was no likelihood of confusion between them. However, Direct Line did not thereupon drop its opposition and accordingly evidence was filed and the matter went to a hearing before the Hearing Officer, Mr Allan James. It lasted 3 days: 9 witnesses called by Direct Line gave oral evidence, all being cross-examined on behalf of esure. At the hearing before him esure had been represented, as it was before me, by Mr Michael Silverleaf QC leading Mr James Mellor QC and Direct Line had been represented, again as before me, by Mr Geoffrey Hobbs QC and Mr Guy Hollingworth. The very comprehensive written judgment was released to the parties on 13 ^th December 2006. The Hearing Officer held that Direct Line had made good its objections to esure's registration of the mouse on wheels.

On 10 ^th January 2007 esure lodged its Appellant's Notice. Direct Line lodged a Respondent's Notice which, although it is undated in my copy, I do not understand to have been untimely.

The Hearing Officer's decision is spread over some 189 paragraphs on 43 pages, large slabs of which have excited no comment at all. He sets out the facts as he saw them in full detail. For the moment it suffices that I shall give only the short introduction which I have already done save to say that, after esure had applied for registration on 10 ^th September 2004, Direct Line, on 9 ^th May 2005, began a very extensive advertising campaign featuring its existing red telephone on wheels trade mark but then with its added “friend”, as it is described to me, a red computer mouse on black wheels, which appears in its advertisements alongside the red telephone. The chief immediate relevance of this telephone-cum-mouse device and its use by Direct Line has been the effect it was held to have had upon a professional survey of the public which Direct Line sought to rely upon in its assertion that, were esure's mark to be registered, a likelihood of confusion between the marks would arise. The effect of Direct Line's extensive use of a mouse on wheels, so held the Hearing Officer, was effectively to invalidate the survey upon which Direct Line had intended to rely as an important component of its evidence.

The Hearing Officer's decision included conclusions upon arguments raised under Article 4(1)(b), (3) and (4) of the First Council Directive 89/104 of December 21 ^st, 1988 but only later will I set out in detail the legislative provisions with which the Hearing Officer was concerned. Instead, I shall look first at a number of subsidiary issues before turning to the law. Then, but only after I have set out what I perceive to be the relevant law, will I describe the Hearing Officer's conclusions in more detail and turn to the various issues raised in the Appellant's Notice and the Respondent's Notice respectively. I shall come to conclusions under separate headings and finally come to an overall conclusion.

The proper approach on an appeal such as this:

The appropriate test is best discerned from a study of Reef Trade Mark [2002] EWCA Civ 763; [2003] RPC 5 in the Court of Appeal. The Reef pop group applied to register “Reef” for Classes 25 and 26 – e.g. T-shirts, badges, etc.. South Cone Inc opposed the registration as registered proprietors of “Reef Brazil” for the footwear which also was included in Class 25. The opponent's reputation was primarily amongst surfers. The Hearing Officer, having conducted what he called a “multi-factorial” comparison, had rejected the opposition based on the likelihood of confusion – para 13. The Hearing Officer had then gone on to consider section 5(4) of the Trade Marks Act 1994 (notional passing off). He held that surfers would not be confused about the source of products bearing the applicant's mark – para 16. On the appeal to him, Pumfrey J. had reminded himself of passages from judgments of Buxton LJ in Norowzian v Arks Ltd (No. 2) [2000] FSR 363 at page 370 and Pro Seiben Media AG v Carlton United Kingdom Television Ltd [1999] 1 WLR 605 at 612 9 (see Reef paras 18 and 19) and had stated his conclusions as to what was the proper approach – see Reef para 21. That summary was held by the Court of Appeal to be not wrong but to be “a rather meagre summary of what is quite a complex point”– Reef, para 23. Accordingly, whilst not persuaded that Pumfrey J. had not set out with the right general approach to his task – Reef at para 30 – the Court of Appeal set out more fully to state what was required of that correct approach.

If I may therefore attempt to summarise Reef and the cases cited therein, they indicate, so far as relates to the area with which I am concerned, as follows:—

(1) distinction may be required to be drawn between the lower Court's evaluation of and conclusions as to primary facts on the one hand and as to inferences therefrom on the other. The appellate Court may not improperly be less reticent about interfering with the fact-finder's conclusion as to the latter;

(2) moreover, even inferences from primary facts may be divisible into categories; they may be simple (“the smoking gun”) or of a kind itself involving a process of evaluation by the fact-finder;

(3) as for the appellate Court's approach to the fact-finder's evaluation of primary fact, there is no single standard appropriate to all cases; variables to be borne in mind include the nature of the evaluation required, the standing and experience of the fact-finder and the extent to which he had had to assess oral evidence;

(4) as for an assessment on appeal of a fact-finder's evaluation, it needs to be borne in mind that his findings are an inherently incomplete statement of the impression made upon him by the evidence; especially where there has been oral cross-examination there will be nuances he picked up from the evidence but which his words themselves do not adequately disclose;

(5) respect has traditionally been paid to the specialised experience of hearing officers – Reef, para 28- (notwithstanding – see Reef, para 1 – that they are not usually qualified lawyers);

(6) accordingly, a high degree of reluctance to interfere with a Hearing Officer's decision (in the absence of a distinct and material error of principle) is appropriate where, in the course of an evaluation, he had to weigh up many factors and where his decision has required assessment of contested oral evidence.

Mr Hobbs also referred to Hachette Filipacchi Presse SA v Saprotex International (Proprietary) Ltd [2007] EWHC 63 (Ch), unreported, 24 ^th January 2007 in which the Chancellor recently endorsed the continuing applicability of the Court of Appeal's judgment in Reef, supra.

In the case at hand the Hearing Officer was required to consider very many factors and his tasks included the evaluation of contested oral evidence. Mr Hobbs therefore puts this case into the category in which great respect should be paid to the experience of the Hearing Officer and in which there should be great reluctance in interfering with his decision. Mr Silverleaf, whilst willing to pay regard to the Hearing Officer's experience in general, sought to belittle it in relation to evaluation of contested evidence; he did that by reference to the small number of cases which, he said, Mr James had heard in recent years, relative to the numbers dealt with by his fellow hearing officers, to the small number of those cases that had involved...