Re 12 Applications by American Greetings Corporation to Register the Trade Mark Holly Hobbie
| Jurisdiction | England & Wales |
| Judge | Lord Diplock,Lord Fraser of Tullybelton,Lord Scarman,Lord Bridge of Harwich,Lord Brightman |
| Judgment Date | 26 January 1984 |
| Judgment citation (vLex) | [1984] UKHL J0126-4 |
| Date | 26 January 1984 |
| Court | House of Lords |
[1984] UKHL J0126-4
House of Lords
Lord Diplock
Lord Fraser of Tullybelton
Lord Scarman
Lord Bridge of Harwich
Lord Brightman
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brightman. I agree with it, and for the reasons he gives I would dismiss this appeal.
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend Lord Brightman, and I agree with it. Like him, I am quite willing to accept that character merchandising has become a widespread practice in various countries, including the United Kingdom, and that it is perfectly harmless. But it is, in my opinion, reasonably clear that the appellants' proposals for exploiting the "Holly Hobbie" Trade Mark would facilitate "trafficking" in the mark, and would indeed themselves constitute trafficking. Parliament has seen fit to legislate against such trafficking in section 28 of the Trade Marks Act 1938, and it is not open to the registrar or the courts to disregard the provisions of that section. They have therefore rightly refused the appellants' application in this case.
I would dismiss the appeal.
My Lords,
I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brightman. For the reasons he gives I would dismiss the appeal.
My Lords,
I find myself constrained to agree that this appeal must be dismissed, but I do so with undisguised reluctance.
There came a point in the argument when the question was posed by my noble and learned friend, Lord Diplock: "If this is not trafficking in trade marks, what is?" To that question, despite Mr. Jacob's valiant efforts, no satisfactory answer has been forthcoming. Likewise, I can find no ground to quarrel with the meaning ascribed by my noble and learned friend, Lord Brightman, to the expression "trafficking in a trade mark" as "dealing in a trade mark primarily as a commodity in its own right and not primarily for the purpose of identifying or promoting merchandise in which the proprietor of the mark is interested." But these considerations lead to the conclusion that the phrase "trafficking in a trade mark" in section 28(6) of the Trade Marks Act 1938 and parallel expressions found in the report of the Goschen Committee (Cmnd. 4568 of 1934) which preceded the Act are precisely apt descriptions of the commercial activity now widely known as "character merchandising".
I can well understand that this activity, which I assume was little known, at all events on this side of the Atlantic, in the 1930s never entered the consideration of the legislators in 1938 nor of the members of the Goschen Committee on whose recommendations they acted. They were concerned that the public should not be hoodwinked and to this end set their faces against allowing the reputation for quality attaching to a trade mark to be used deceptively by a mere purchaser of the right to use the mark.
But character merchandising deceives nobody. Fictional characters capture the imagination, particularly of children, and can be very successfully exploited in the marketing of a wide range of goods. No one who buys a Mickey Mouse shirt supposes that the quality of the shirt owes anything to Walt Disney Productions.
Many marks will, of course, be protected by copyright. But when a mark consists simply in a name, it will be unprotected. It would seem from examples shown to your Lordships in the course of the argument that not a few marks in the character merchandising field have already been accepted by the registrar under section 28 before the present very large group of applications thrust the trafficking issue to the forefront. I do not pause to consider whether marks already registered which ought not to have been will be open to challenge. It will be bad enough, in my view, that the whole field of character merchandising will now be wide open to piracy. The protection, if any, of the original inventor of the character will lie in the uncertain remedy of a passing off action. This situation seems likely to generate a mass of difficult and expensive litigation which cannot be in the public interest.
In short, though I can find no escape from section 28(6) of the Act of 1938, I do not hesitate to express my opinion that it has become a complete anachronism and that the sooner it is repealed the better.
My Lords,
This appeal relates to a commercial activity commonly called "character merchandising". The expression is used to signify the exploitation of a well-known invented name, whereby the author or promoter of the name licenses or purports to license its use on the goods of traders who have no other connection with the licensor. If the invented name is a registered trade mark of the licensor in respect of certain classes of goods, the licensor may wish to protect his position by obtaining registration of the mark in respect of the goods of the licensee. The question is whether, on the facts of the case before your Lordships, applications for the registration of the trade mark "Holly Hobbie" in respect of the goods of certain licensees were properly refused by the registrar on the ground that registration would tend to facilitate trafficking in a trade mark contrary to subsection (6) of section 28 of the Trade Marks Act 1938.
The applicants, American Greetings Corporation, who are the appellants, are an American company. They carry on business as designers and producers of greetings cards. Some years ago one of their designers produced a drawing of a child dressed in a pinafore and bonnet to whom the name "Holly Hobbie" was given. "Holly Hobbie" captured the imagination of the American public. The drawing and name are extensively used by the appellants on or in connection with greetings cards and a small range of other goods which the appellants manufacture or buy in and market. No difficulty would arise upon an application to register the trade mark in regard to those goods.
The appellants however desire to exploit the name "Holly Hobbie" in a wider field, by licensing other traders to make use of the name in relation to the goods of the licensees, being goods in which the appellants do not and never have traded. The procedure is that after the grant by the appellants of a licence to a trader who wishes to use the name "Holly Hobbie", the appellants apply to the registrar for the registration of the mark in respect of that class of goods, and for the registration of the licensee as the registered user thereof.
The majority of trade mark applications are made under section 17 of the Act. Under this section a person claiming to be the proprietor of a trade mark "used or proposed to be used" by him may apply for the registration of the mark in the register of trade marks. Clearly such an application could not be made by the appellants in respect of the goods of the licensees, since the mark is not used or intended to be used by the appellants in relation to such goods. Those goods are produced by or for, and until sale remain the exclusive property of, the licensees. A non-user of a trade mark may, however, apply for registration in the cases specified in section 29(1) of the Trade Marks Act 1938. Paragraph (a) of that subsection deals with the case of the applicant who wishes to assign the trade mark to a company which is about to be formed, with a view to the use of the mark in relation to that company's goods. Paragraph (b) deals with the case of a licensee. There are three conditions. First, the application by the proprietor of the mark is to be accompanied by an application for the registration of a person (the licensee) as a registered user of the mark. Secondly, the proprietor must intend the mark to be used by the proposed registered user in relation to the goods in question. Thirdly, the "tribunal" (presumably the registrar or the court) must be satisfied that the proposed user will in fact be registered as a registered user of the mark immediately after the registration of the mark. The last of these conditions brings section 28 into play. Section 28 is devoted to the subject of registered users. This was a new concept. The section enables a person other than the proprietor of the mark to be registered as a registered user thereof. The section proceeds (subsection (2)) on the basis (shortly stated) that use of a mark by a registered user thereof shall be deemed to be use by the proprietor thereof. Under subsection (4), the application for the registration of a person as a registered user must be made jointly by the proprietor and the user, and particulars must be given (a) of the relationship existing or proposed, between the proprietor and the proposed registered user, and (b) showing the degree of control by the proprietor over the permitted use which their relationship will confer. Under subsection (5), if the registrar is satisfied that the use of the mark in relation to the proposed goods by the proposed registered user will not be contrary to the public interest, the registrar may register the proposed registered user as a registered user in respect of the goods in question. There is no problem in the instant case in relation to the requirements of subsections (1) to (4), and it is to be assumed for present purposes that no problem arises in...
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