JW Spear & Sons Ltd and Others v Zynga Inc. (a corporation incorporated under the law of the State of Delaware in the United States of America)

JurisdictionEngland & Wales
JudgeThe Honourable Mr Justice Peter Smith,Peter Smith J
Judgment Date01 November 2013
Neutral Citation[2013] EWHC 3348 (Ch)
Docket NumberCase No: HC12B01387
CourtChancery Division
Date01 November 2013

[2013] EWHC 3348 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Peter Smith

Case No: HC12B01387

Between:
(1) J.W. Spear & Sons Ltd
(2) Mattel, Inc (a corporation incorporated under the law of the State of Delaware in the United States of America)
(3) Mattel UK Ltd
Claimants
and
Zynga Inc (a corporation incorporated under the law of the State of Delaware in the United States of America)
Defendant

Mr Simon Thorley QC & Jeremy Heald (instructed by Bird & Bird) for the Claimants

Mr James Mellor QC & Philip Roberts (instructed by Olswang LLP) for the Defendant

Hearing dates: 15, 16, 17, 20, 21, 22, 23, 24 May, 6, 7, 13 June, 8, 11, and 12 July 2013

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.

The Honourable Mr Justice Peter Smith Peter Smith J

INTRODUCTION

1

This is a dispute between 2 large US companies over the launch by the Defendant of an online game on 5 th January 2012. The game is called " Scramble With Friends" and/or " Scramble". The game is for use on an Apple iPhone and iPad, as well as Android devices, and it is available for download from Apple iTunes and the Google Play Store where it is listed under the name " Scramble With Friends". The game can be located by users of the iTunes and Google Play Store by performing a search for the word " Scramble".

2

Whilst the game is available as a free advertising supported version there is also a paid-for advertisement-free version which costs £0.69 to users.

3

The Claimants (called together "Mattel") contend that the Defendant ("Zynga") in producing the game infringes the following:-

i) Community Trade Mark no. 401737 for the word mark SCRABBLE registered in respect of inter alia "computer programs" in class 9 "toys, games and play things" in class 28 and "education", "entertainment" and "organisation of competitions" in class 41 with effect from 2nd October 2001.

ii) Community Trade Mark no. 401489 for the figurative mark depicted below registered in respect of inter alia "computer programs" in class 9 "toys, games and play things" in class 28 and "education", "entertainment" and "organisation of competitions" in class 41 with effect from 25 th October 1996.

iii) United Kingdom registered trade mark no. 2154349 for the 3 dimensional mark depicted below in respect of computer game adaptions of board games in class 9, "board games" in class 28 and "organisation of competitions and exhibitions, all relating to board games" in class 41 with effect from 23 rd December 1997.

iv) There is a separate registration in respect of the word "SCRAMBLE" being Community Trade Mark no. 6223077 for that word registered in respect of inter alia "computer software" and "computer games programs [software]" in class 9, "Games and playthings" in class 28 and "Education" and "entertainment" in class 41 with effect from 23rd August 2007.

4

Mattel claim that Zynga's game infringes those trade marks.

5

In addition Mattel claims that in view of its goodwill the Defendant's use of the signs " Scramble", " Scramble With Friends" and/or " the Scramble With Friends device" in relation to the game constitutes passing off of the game as being that of Mattel. Mattel contends that the misrepresentation is calculated to lead to the deception of a substantial number of members of the public to that effect. The particular features relied upon relate to games featuring the use of square tiles bearing a single upper case letter and a number between 1 and 10 or electronic representations thereof, the use of the Scramble icon and the fact that the game uses such tiles.

6

It will be realised that the passing off claim is somewhat limited as to its extent. In particular there is no allegation of "get up" of the form of the game so as to give rise to a claim for passing off vis-à-vis Mattel's game. The sole claim is in relation to the use of the words above, the use of tiles and the Scramble icon.

7

The question of the tile registration was the subject matter of a decision by Mr Justice Arnold on 28 th November 2012 when he acceded to Zynga's application for summary judgment on its counterclaim that the tile trade mark did not comply with article 2 of the Trade Mark Directive. Mattel appealed that decision. It was heard this term and the Court of Appeal has dismissed Mattel's appeal ( [2013] EWCA Civ 1175). Nothing in that judgment the parties agree has any relevance to the issues before me.

8

Zynga counterclaims for a declaration against the Scramble trade mark that it is invalid on the grounds of (1) lack of distinctive character (2) descriptiveness (3) common usage, bad faith and revocation for genericism. The allegation of bad faith was not proceeded with and the IP Translator counterclaim was not proceeded with ultimately during the course of the trial.

9

There are also apparently proceedings between the parties in both France and Germany.

10

On 2 nd April 2012 Zynga applied to the OHIM for a declaration that the Scramble trade mark is invalid. That application has been stayed by consent of the parties pending the outcome of this action.

MATTEL

11

Mattel is said to be one of the most successful toy and game manufacturers in the world. One of its most successful and well known games is said to be Scrabble. At some stage it was described as being "the jewel in the crown" but as the trial proceeded that position was retreated from as it represented 0.5% of its business. Barbie turned out to be more important (with or without Ken). Mattel owns the rights in Scrabble worldwide save for the USA and Canada where Hasbro own the rights. Scrabble has been sold in the EU since about 1954. It has been sold in over 100 countries and in more than 50 languages. It was reported in 2010 that 53% of all households in Great Britain owned a Scrabble game.

12

It is fair to say that Mattel produces Scrabble mostly in the form of a hard board game. The sales are significant. Confidential details were given to me at trial. They were not disputed by Zynga.

13

Mr Nelkon gave evidence about the creation of Scrabble which apparently started with a game in 1931 under the name " Criss Cross Words", which changed to " Scrabble" and then began to be sold extensively from around 1955. These were all physical versions of Scrabble. Mr Nelkon set out the large number of different kinds of physical versions of the Scrabble game.

14

Mattel moved into the electronic version somewhat late around 2009 with an iPhone Scrabble app. As Mr Karamanos said in his confidential witness statement significant downloads of that app from its introduction in 2009 occurred.

ZYNGA'S SCRAMBLE APP

15

Zynga only does electronic games. It does not market physical board games itself. Scramble With Friends (the one under challenge) was launched on 5 th January 2012.

16

There is an oddity in this case. Although Mattel was quick off the mark when this version of Scramble With Friends was launched that contrasts to the molasses like speed (or in fact non existent speed) with which it reacted to other launches by Zynga. This was not Zynga's first use of the word Scramble. It first launched " SCRAMBLE" in late 2007 or early 2008. It was apparently a Facebook game in that it could only be played on Facebook.

17

Its second launch was " SCRAMBLE LIVE" which was launched in March 2009. It was a mobile app version of the Facebook game which meant that it could be downloaded on to users' phones and played independently of Facebook. A Google Images search for Scramble Live shows a version with a turquoise background with the name Scramble Live on it with rounded touch pads.

18

The third called " SCRAMBLE 2" and " WORD SCRAMBLE 2 BY ZYNGA" was launched in September 2009. It was apparently an updated version of " Scramble Live". A Google Image search provided by Mr Karamanos shows a radical change. Instead of the turquoise background the background is a blend of red and orange.

19

The fourth called " SCRAMBLE CHALLENGE EDITION" and " WORD SCRAMBLE CHALLENGE EDITION" was launched sometime in 2010. A Google Images search produced images which were similar to the previous version of Zynga's games.

20

Mattel did not complain about any of these earlier games and does not assert in these proceedings that those earlier games either infringed any of its trade marks or amounted to wrongful passing off. This in my view is a significant piece of evidence as shall be set out further in this judgment. It is clear (see below) that some Mattel employees were not only aware of these games but actually played them either between themselves or with third parties.

21

This means that even if Mattel won the present action it could not by its decision stop Zynga "reviving" their game. It is likely any action on these would be challenged as an abuse.

ZYNGA'S 5TH VERSION

22

The 5 th version launched on 5 th January 2012 is as I have said called " SCRAMBLE WITH FRIENDS" and the images are attached to this judgment.

23

The green colour has come back and there are rectangular tiles with letters and numbers in. The logo is " Scramble With Friends". The m appears in a different form and it is possible (as some of the evidence showed) that a quick casual look would give the impression that the word is not " Scramble" but " Scrabble" with a B on its side. However no serious claim is made by Mattel that that is passing off (see below however). Its case stands or falls simply on the use of the word Scrabble or Scramble as set out in my summary of the claims above. Equally although this was raised at various times by Mr Thorley QC during the course of the trial as I have said there is no claim in relation to...

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1 firm's commentaries
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1 books & journal articles
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    • 1 January 2017
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