Harrison v Teton Valley Trading Company Ltd
| Jurisdiction | England & Wales |
| Judge | Sir William Aldous,Lady Justice Arden,Lord Justice Pill |
| Judgment Date | 27 July 2004 |
| Neutral Citation | [2004] EWCA Civ 1028 |
| Docket Number | Case No: A3/2003/0009 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 July 2004 |
[2004] EWCA Civ 1028
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
MR JUSTICE PUMFREY, CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Right Honourable Lord Justice Pill
The Right Honourable Lady Justice Arden and
The Right Honourable Sir William Aldous
Case No: A3/2003/0009
Mr Michael Silverleaf (instructed by Marks & Clerk, Solicitors London WC2A 3LS) for the Appellant
Mr Mark Vanhegan (instructed by Field Fisher Waterhouse, London EC3N 2AA) for the Respondent
On 19th March 1999 Mr Karl Harrison, the applicant, applied to register the trade mark CHINA WHITE for "beers; mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for making beverages" in Class 32, and "alcoholic beverages (except beers) including cocktails" in Class 33.
On 7th October 1999 Teton Valley Trading Ltd opposed those applications. They have now gone into voluntary liquidation, but their rights have been assigned to Firstfind Limited which by order of this court has carried on these proceedings. There is no need to distinguish between them and I will refer to them as the opponents.
The opponents asserted that the registrations should be refused under section 5(4) (a) of the Trade Marks Act 1994 because use of the trade mark CHINA WHITE by the applicant would be liable to be prevented by virtue of a rule of law. They also asserted that registration would offend section 3(6) of the Act which states:
"3(6) . A trade mark shall not be registered if or to the extent that the application is made in bad faith."
The Trade Marks Act 1994 implements Council Directive 89/104/EEC of 21st December 1998. Although section 3(6) of 1994 Act differs slightly in wording to article 3(2) (d) of the Directive it must be construed as being consistent with that article.
The opposition came before Mr S.P. Rowan, a hearing officer acting for the Registrar of Trade Marks. In his written decision dated 22nd August 2002 he dismissed the section 5(4) (a) ground, but concluded that the objection under section 3(6) succeeded. He therefore refused the applications.
The applicant appealed and the opponents cross appealed. The appeal and cross appeal came before Pumfrey J in December 2002. In his judgment of the 19th December 2002 he dismissed both the appeal and the cross appeal.
With leave of this court, the applicant appeals. He submits that both the registrar and the judge had wrongly construed the words "bad faith". If they had applied the correct construction, they would have held that bad faith had not been established. In any case the evidence failed to establish bad faith of any kind. If those submissions were not accepted this Court should seek guidance from the European Court of Justice on the construction of article 3(2) (d) of the Directive.
The Facts
The hearing officer dealt with the evidence at length and made findings of fact. The judge held that the hearing officer's analysis of the facts "was extremely careful" and he went on to conclude that his findings of fact "were amply justified by the evidence which was before him". I agree and can therefore take the relevant facts from his decision.
The opponents occupy premises under the Café Royal Hotel in London. At this location the opponents' licensees run a night club named "CHINAWHITE". It has a capacity for about 414 people at any one time.
The name CHINAWHITE for the nightclub was chosen by the opponents in September 1998. It was first used as a name in November 1998 when the premises were used for private parties. Clearly the club was successful as on 4th May 1999 it received the Best New Club award. There were before the hearing officer numerous examples of the nightclub CHINAWHITE being mentioned in various press articles from November 1998 up to the date of the applications in March 1999. The hearing officer said that the number of such articles was very impressive, he concluded:
"All this coverage would in my view would have done more than establish a reputation amongst those who had visited the club CHINAWHITE. It seems to me that such consistency and presence in the press, including articles which make it clear that a celebrity has attended the nightclub 'CHINAWHITE', and those that are specifically about the club would have resulted in a wider reputation and goodwill for the nightclub CHINAWHITE."
In view of that evidence, the applicant accepted that at the date of his applications to register the trade mark the opponents enjoyed a reputation in a nightclub under the name "CHINAWHITE".
The need for a signature or house cocktail to be called CHINAWHITE to be served at their night club was discussed by the general manager of the opponents Mr Gouty and one of their directors Mr Keegan in August 1998. Early in October 1998 they instructed Mr Matt Rymer, as part of his duties as bar manager, to develop a recipe for a cocktail to be called CHINAWHITE. He was given some directions as to the cocktail namely that it should be white in colour and oriental in flavour. Mr Rymer and his team which included Mr Arnold de Fort worked on developing the cocktail. Mr Arnold de Fort came up with the fruit juices that were to be included in the drink. Early in December 1998 the drink was produced for Mr Gouty to taste. He liked it. From early December they started selling the drink in the nightclub under the name CHINAWHITE. Soon after the drink went on sale, Mr Rymer was informed that when the opponents came to bottle and exploit the drink he would be rewarded with bonus payments.
In December 1998 a confidentiality agreement was signed by Mr Rymer, Mr Arnold de Fort and two other members of the nightclub staff. The agreement sought to maintain confidential the recipe for the cocktail. None of the signatories could have thought that they owned the cocktail or the name.
Mr Rymer was the link between the opponents and the applicant. In November 1998 he approached the applicant. He told him that he had developed a premium cocktail called CHINAWHITE and a derivative of it was to be served at a new venue to be called "CHINAWHITE" which was to open in December. He would be working at the club as a barman, but was not bound by any formal contract. He prepared the drink for the applicant to taste.
The applicant was not cross-examined and therefore the hearing officer accepted the applicant's evidence that he believed that the drink was under the sole proprietorship of Mr Rymer. A working title of CHINA WHITE was chosen by the applicant. He then carried out trade mark and company searches. Nothing of importance was found and on 18th March 1999 he caused to be incorporated a company called China White Limited with Mr Rymer as a director, and also arranged for the trade mark applications to be filed.
Upon those facts the hearing officer concluded:
"102. … On the basis of the evidence before me, I find that the opponents have shown that Matt Rymer and others in employment at that time were told to develop a cocktail to be called CHINAWHITE which was to be served at the opponent's nightclub. This was as part of their employment. As such, I find that the idea to use CHINAWHITE as the name for the cocktail was that of the opponents. There is no evidence from Mr Rymer to contradict this. He is the only person who could have provided a different version of events. That is not to say that I question Mr Harrison's evidence. I accept that Matt Rymer represented to Mr Harrison that he, Matt Rymer, was the sole proprietor of the name and recipe, but on the evidence before me that was not in fact the case.
103. Whilst, Mr Rymer's bad faith is not strictly an issue before me, I think that his actions and the facts that lay behind them are important. He is the vital link between the opponents and the applicant. I cannot in my view consider the actions of Mr Harrison without considering the actions of Mr Rymer. Whilst I can only take a view on the evidence before me and that evidence is incomplete since I do not have any evidence from Mr Rymer himself, I can state that if the applicant had been Mr Rymer or if the applicant had been the company of which Mr Rymer was a director (or co-director) I would, on the basis of the evidence before me, have had no hesitation in finding that the application for this trade mark was made in bad faith. It seems to me that Mr Rymer was aware of his employer's interest in the name CHINAWHITE as a nightclub, he had been instructed to develop a cocktail of that name for use in that club, he was aware that the appellants intended to exploit the drink further by bottling it.
104. Even if he believed that the drink and name belonged solely to him, that was not the case, I have the applicant's own evidence that the drink was the result of a collaboration with at least one other person, Mr de Fort, and from the opponent's evidence, possibly others (Mr Gouty) . Mr de Fort's name is alongside Mr Rymer's on the confidentiality agreement that other bar staff were required to sign. They agreed to keep the confidence disclosed to them by Mr Rymer and Mr de Fort. Even if the drink and name did not belong to the opponents, it was not in the sole proprietorship of Mr Rymer."
As the applicant was not cross examined, the hearing officer concluded that he should accept his evidence when he said:
"I have little or no knowledge of Mr Keegan and his company and recognised no bad faith in my decision to develop and market the drink CHINA WHITE. Indeed, even though I am...
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