Re American Greetings Corporation's Application
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,SIR DENYS BUCKLEY,THE MASTER OF THE ROLLS |
| Judgment Date | 28 April 1983 |
| Judgment citation (vLex) | [1983] EWCA Civ J0428-1 |
| Date | 28 April 1983 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 83/0170 |
[1983] EWCA Civ J0428-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (GROUP B)
(MR. JUSTICE WHITFORD)
Royal Courts of Justice.
The Master of the Rolls
(Sir John Donaldson)
Lord Justice Dillon and
Sir Denys Buckley
83/0170
1982 No. 1577
In the Matter of the Trade Marks Act 1938
and
MR. ROBIN JACOB, Q.C. and MR. MICHAEL SILVERLEAF (instructed by Messrs. Slaughter & May) appeared on behalf of the (Applicant) Appellant.
MR. GERALD PATERSON (instructed by the Treasury Solicitor) appeared on behalf of the Respondent Registrar of Trade Marks.
This is an appeal by the American Greetings Corporation against a decision of Mr. Justice Whitford given on the 29th October, 1982. By that decision the learned judge dismissed an appeal by the present appellants against the refusal by the Assistant Registrar, Mr. Myall, acting for the Registrar, on the 2nd April, 1982 of twelve applications by the appellants to register the mark "Holly Hobbie" as a trade mark in Classes 3, 8, 11, 14, 16, 18, 20, 21, 24, 25, 27 and 28.
The appeal raises an issue of trade mark law which is both of considerable general importance and to me novel.
The appellants are an American company based in Cleveland, Ohio, who have for many years carried on business as designers and producers of greetings cards. In 1967 one of their designers produced a drawing of a little girl in a patchwork pinafore and billowy bonnet to whom they gave the name of "Holly Hobbie". The drawing and the name have proved remarkably popular with the American public. They have been used extensively by the appellants on or in relation to their greetings cards and the other goods in a relatively small range which the appellants themselves manufacture or have manufactured for them. It is not in dispute that the appellants are properly entitled to be registered as the proprietors of the mark "Holly Hobbie" in respect of those goods, but the twelve applications with which this appeal is concerned are not in respect of such goods.
The activity known as character merchandising has for many years been common in America and known, if less common, in this country. A person who has a popular fictional character to exploit, for instance, a fictional character from a film or television series or book or drawing, does so by granting licences to use the character, its name, and relevant copyright material, usually on a royalty basis, to licensees who wish to promote their own goods by using the fictional character in association with those goods. The appellants were approached by manufacturers in the fashion trade who wanted to use "Holly Hobbie" on their products, and so the appellants entered on the activity of character merchandising, and they have been so successful at it that, on their own promotional literature, their licensees now produce over 400 products, from T-shirts and lamps to towels and dolls and other toys and including cakes, biscuits and other foods.
The appellants desire to have the protection of trade mark registration of the name "Holly Hobbie", as a name only without the drawing, in respect of the various classes of goods which the appellants' licensees want to produce. The sense of this from the appellants' point of view is obvious; there is no copyright in the mere name of a fictional character and there are decisions, at any rate at first instance, to the effect that the inventor of a fictional character cannot bring a passing off action against a person who chooses to use the name of that character to promote his business in some field of commercial activity in which the inventor of the character has never engaged. It is said that there has to be a common field of activity to support a passing off action. This is the background to the twelve applications which came before the Assistant Registrar and the question for the court is whether what the appellants want is permissible under trade mark law. The Assistant Registrar and the judge have held that it is not.
Trade mark law is now governed by the Trade Marks Act 1938. The relevant sections for present purposes are sections 17(1), 22, 28 and 29(1). The 1938 Act involves considerable changes to the previous law. The most relevant changes for present purposes are that by section 22 the previous restrictions on the assignment of trade marks were relaxed, and by section 28 a new system was introduced for the licensing of registered users of trade marks.
By section 17(1) it is provided that any person claiming to be the proprietor of a trade mark used or proposed to be used by him who is desirous of registering it must apply in writing to the Registrar in the prescribed manner for registration.
By section 29(1) it is provided, so far as material, that no application for the registration of a trade mark in respect of any goods shall be refused nor shall permission for such registration be withheld on the ground only that it appears that the applicant does not use or propose to use the trade mark…(b) if the application is accompanied by an application for registration of a person as a registered user of the trade mark and the tribunal is satisfied that the proprietor intends it to be used by that person in relation to those goods and. the tribunal is also satisfied that that person will be registered as a registered user thereof immediately after the registration of the trade mark.
It is common ground that as the twelve applications before this court are all concerned with goods to be made by licensees under the appellants' character marketing activities and not with goods to be made by or for the appellants themselves, the appellants cannot rely on section 17 unaided by section 29(1). The appellants neither use nor propose to use the mark themselves in respect of any of the twelve classes of goods. Each of the twelve applications is therefore supported by a registered user agreement with the relevant licensee and by an application for the registration of the licensee as a registered user under section 28. It is common ground, and here is the nub of the case, that if the registered user agreements fall foul of section 28, and in particular of subsection (6) of section 28, and cannot be accepted by the Registrar, the rejection of the applications for registration of the mark "Holly Hobbie" in these twelve classes must follow.
The registered user agreements are in substantially common form. Each is terminable on relatively short notice and each contains, in form at least, comprehensive provisions for the exercise by the appellants of quality control over the goods of the licensees marketed under the mark "Holly Hobbie". In particular the licensee undertakes to use the mark only so long as the goods are manufactured in accordance with standards, specifications and instructions submitted or approved by the appellants, the appellants reserve the right to inspect the goods on which the trade mark is to be used and the methods of manufacturing such goods, and the appellants have the right to approve all packaging and advertising of such goods and the licensee undertakes to amend any packaging or advertisements which are not approved.
The relevant provisions of section 28 are subsections (1) (2), (4), (5) and (6) which are in the following terms:
"(1) Subject to the provisions of this section, a person other than the proprietor of a trade mark may be registered as a registered user thereof in respect of all or any of the goods in respect of which it is registered (otherwise than as a defensive trade mark) and either with or without conditions or restrictions. The use of a trade mark by a registered user thereof in relation to goods with which he is connected in the course of trade and in respect of which for the time being the trade mark remains registered and he is registered as a registered user, being such as to comply with any condition or restriction to which his registration is subject, is in this Act referred to as the 'permitted use' thereof.
(2) The permitted use of a trade mark shall be deemed to be use by the proprietor thereof, and shall be deemed not to be use by a person other than the proprietor, for the purposes of section twenty-six of this Act and for any other purpose for which such use is material under this Act or at common law.
(4) Where it is proposed that a person should be registered as a registered user of a trade mark, the proprietor and the proposed registered user must apply in writing to the Registrar in the prescribed manner and must furnish him with a statutory declaration made by the proprietor, or by some person authorised to act on his behalf and approved by the Registrar—
(a) giving particulars of the relationship, existing or proposed, between the proprietor and the proposed registered user, including particulars showing the degree of control by the proprietor over the permitted use which their relationship will confer and whether it is a term of their relationship that the proposed registered user shall be the sole registered user or that there shall be any other restriction as to persons for whose registration as registered users application may be made;
(b) stating the goods in respect of which registration is proposed;
(c) stating the conditions or restrictions proposed with respect to the characteristics of the goods, to the mode or place of permitted use, or to any other matter; and
(d) stating whether the permitted use is to be for a period or without limit of period, and, if for a period, the...
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