Frank Industries Pty Ltd v Nike Retail BV
| Jurisdiction | England & Wales |
| Judge | Mr Justice Arnold |
| Judgment Date | 25 July 2018 |
| Neutral Citation | [2018] EWHC 1893 (Ch) |
| Court | Chancery Division |
| Date | 25 July 2018 |
| Docket Number | Case No: IP-2018-000030 |
[2018] EWHC 1893 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
INTELLECTUAL PROPERTY LIST (CHANCERY DIVISION)
INTELLECTUAL PROPERTY ENTERPRISE COURT
Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Arnold
Case No: IP-2018-000030
Douglas Campbell QC and Georgina Messenger (instructed by Osborne Clarke LLP) for the Claimant
James Abrahams QC and Jessie Bowhill (instructed by DLA Piper UK LLP) for the Defendants
Hearing dates: 12–13 July 2018
Judgment Approved
Contents
| Topic | Paragraphs |
| Introduction | 1–3 |
| The Trade Marks | 4 |
| The signs complained of | 5–6 |
| The witnesses | 7–8 |
| Factual background | 9–59 |
| Frank and its business | 9–48 |
| Nike and their business | 21–28 |
| Abbreviations in contemporary language | 29–30 |
| LDN | 31 |
| The genesis of the Campaign | 32–46 |
| Nike's trade mark search | 47 |
| Elements of the Campaign | 48–59 |
| Nike LDNR award | 49 |
| Social media | 50 |
| The Film | 51–52 |
| Half-term events | 53 |
| X Box | 54 |
| Nike stores | 55 |
| Nike website and app | 56 |
| Premier League Football matches | 57 |
| Google adverts | 58–59 |
| Key legislative provisions | 60–61 |
| Relevant dates for assessment | 62–63 |
| The average consumer | 64 |
| Validity of The Trade Marks | 65–87 |
| The law | 66–76 |
| Article 4(1)(c) of the Directive/Article 7(1)(c) of the Regulation | 66–67 |
| Acquired distinctive character | 68–76 |
| Assessment | 77–86 |
| Article 4(1)(c)/Article 7(1)(c) | 77–86 |
| Acquired distinctive character | 87 |
| Infringement under Article 10(2)(b) of the Directive/Article 9(2)(b) of the Regulation | 88–117 |
| The law | 88–93 |
| Use in relation to goods or services | 89–90 |
| Comparison of goods and services | 91 |
| Likelihood of confusion | 92 |
| Contextual assessment | 93 |
| Assessment | 94–117 |
| The distinctive character of the Trade Marks | 94 |
| Comparison of the Trade Marks and the signs | 95–96 |
| Comparison of goods and services | 97 |
| Use in relation to clothing | 98–108 |
| Has there been actual confusion? | 109–116 |
| Overall assessment | 117–118 |
| Conclusion | 119 |
| Infringement under Article 10(2)(c) of the Directive/Article 9(2)(c) of the Regulation | 120 |
| Defence under Article 14(1)(b) of the Directive/Article 14(1) of the Regulation | 121–132 |
| The law | 122–128 |
| Signs or indications concerning characteristics of goods or services | 122 |
| In accordance with honest practices | 123–128 |
| Assessment | 129–132 |
| Sign or indication concerning a characteristic of the goods | 129 |
| In accordance with honest practices | 130–131 |
| Conclusion | 132 |
| Passing off | 133 |
| Summary of principal conclusions | 134 |
Introduction
The Claimant (“Frank”) owns a UK Trade Mark and an International (EU) Trade Mark consisting of the letters LNDR registered in respect of “clothing” including “sportswear” (“the Trade Marks”). Frank uses the Trade Marks in uppercase lettering. On 11 January 2018 the Defendants (“Nike”, which includes other relevant members of the Nike group of companies) embarked on a new advertising campaign in the UK (“the Campaign”) in which Nike used the sign LDNR in uppercase letters, and devices which include those letters in combination with other elements. Frank contends that Nike have thereby infringed the Trade Marks and committed passing off. Nike deny infringement and counterclaim for a declaration that the Trade Marks are invalidly registered.
Although the dispute raises, like so many trade mark cases these days, a considerable number of issues, the key questions are how the average consumer would perceive the signs LNDR and LDNR in context. Context is often important in trade mark cases, and for the reasons explained below in this case it is critical. As it happens, my own first, largely acontextual reaction to the sign LNDR when reading Frank's skeleton argument was to think of a railway (cf. LNER); but neither side's sign or usage has anything to do with railways.
Frank commenced the claim on 19 February 2018, having sent a letter before action on 26 January 2018. On 2 March 2018 HHJ Hacon granted Frank an interim injunction and directed an expedited trial of the claim. On 13 March 2018 the Court of Appeal substantially upheld that decision, although it varied Judge Hacon's order in one respect. Although the effect of the injunction was to bring the Campaign to a halt, and Nike have not yet decided whether they wish to resume the Campaign, they want to establish that they are lawfully entitled to do so, in whole or in part, if they so wish.
The Trade Marks
Frank is the registered proprietor of the following Trade Marks:
i) UK Trade Mark No. 3095285, a series of two marks, the word LNDR and a barely stylised word consisting of LNDR in a plain font, registered in respect of goods and services in Classes 3, 14, 18, 25, 35 and 42 including “clothing … sportswear” in Class 25 with effect from 19 February 2015; and
ii) International Trade Mark (EU) No. 1318062, the word LNDR registered in respect of goods in Class 25 including “clothing … sportswear” with effect from 10 March 2016.
The signs complained of
Frank complains of Nike's use of the following signs:
i) LDNR in plain text, primarily as part of the phrases “Nothing beats a LDNR” and “Show you're a LDNR”;
ii) the following device (referred to as “the Lock-up”):
iii) the following device (which I shall refer to as “the NBAL Lock-up”):
Frank complains of Nike's use of these signs in a variety of different contexts. In principle, as counsel for Nike pointed out, the Court is required to make a separate assessment in respect of each sign in each context. It would be burdensome to do so exhaustively, and I do not believe that it is necessary. I propose to make findings in respect of what I consider to be a representative selection of uses.
The witnesses
Frank's principal witness was Joanna Turner, Frank's sole shareholder and director. Frank also called Daniel Cliff and Marsha Chambers as witnesses who are said to be have confused by Nike's use of the signs complained of. In addition, Frank adduced a witness statement from Katia Kazakevica, who is also said to have been confused, under a hearsay notice since she was abroad at the time of the trial. Counsel for Nike made no criticisms of Frank's witnesses.
Nike's sole witness was Jamie McCall, the Senior Marketing Director for Nike UK & Ireland, who has worked for Nike in various marketing roles since 2006. Although counsel for Frank was critical of certain aspects of Mr McCall's evidence, he did not suggest that any of Mr McCall's evidence was untruthful.
Factual background
Frank and its business
Frank is a small Australian company with an establishment in the UK. Ms Turner and her colleagues Sarah Donnelly (now Sarah Scott-Hunter) and Donna Harris created the LNDR brand in 2015. Their concept was to create a range of clothing to target the premium activewear market. Frank's objective is to grow LNDR into a global brand by creating the best activewear products on the market.
Ms Turner came up with the name LNDR by accident in January 2015. She had had the idea of using the name Launder, as a reference to care instructions and quality. She saved a document and took the vowels out of the name to make it shorter. She thought LNDR looked good as a brand name, and was better than Launder because it was not a real word.
When Frank came to register the UK Trade Mark in February 2015, Ms Turner carried out trade mark, Google and social media searches for LNDR and found nothing in respect of clothing or any other goods. The only other use she was able to find, apart from some individuals using LNDR on social media as their own initials, was lndr.com, an Australian business which lent lawn mowers (in that context, it would appear that it was an abbreviation for lender).
Frank started talking to buyers about the brand in April 2015. Ms Turner and her colleagues were often asked how to pronounce the name and what it meant, and still are to this day. Their response to the first question is that it is pronounced “L-N-D-R”. Their initial response to the second question was to explain about the derivation from Launder. They soon realised that they could also say that LNDR was reference to Londoner, although they appreciated that removing the vowels from LONDONER would give LNDNR. This explanation suited the brand since it was based in London and inspired by the active lifestyle of a big city. For a time, Frank's “Brand Bio” gave both explanations. Subsequently, in April 2016, Frank decided to streamline the message by removing the Launder explanation. From then until the commencement of this litigation Frank made statements to retailers and others such as:
“The abbreviation of LNDR is a wink to the brand's DNA: although team members are from different corners of the globe, each is now a proud ‘Londoner’.”
The first LNDR products were marketed in the UK in late 2015. Since then Frank has sold a range of ladies' activewear clothing in the UK and elsewhere in the EU and the rest of the world. It intends to launch a mens' range later this year. Many of its products are prominently branded with LNDR and its goods are now sold in a number of high-end and exclusive outlets in 20 countries across the EU and the rest of the world, from its own website at www.lndr.uk and from a number of major premium online retailers.
Frank's turnover in the UK and EU in its first three and a half years of business has grown very quickly, more than tripling between 2016 and 2017 to reach wholesale total sales of over £475,000 in the UK, over £308,000 in the rest of the EU and over £1.25...
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