Roger Maier and Another v Asos Plc and Another

JurisdictionEngland & Wales
CourtChancery Division
JudgeMrs Justice Rose
Judgment Date19 Sep 2013
Neutral Citation[2013] EWHC 2831 (Ch)
Docket NumberCase No: HC11C04453

[2013] EWHC 2831 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Hon Mrs Justice Rose

Case No: HC11C04453

Between:
(1) Roger Maier
(2) Assos of Switzerland SA
Claimants
and
(1) Asos PLC
(2) Asos.Com Limited
Defendants

Mr. Roger Wyand QC and Mr. Benet Brandreth (instructed by Bird &Bird LLP) for the Claimants.

Mr. Daniel Alexander QC and Mr. Andrew Lykiardopoulos (instructed by Dechert LLP) for the Defendants

Hearing dates: 18, 19, 20, 21, 24, 25, 26 June 2013

Mrs Justice Rose

I. BACKGROUND

The parties' businesses

1

The First Claimant ('Roche Maier') is the Chief Executive Officer of the Second Claimant ('Assos') and the owner of the Community Trade Mark No 4580767. He is the son of the founder of the Assos business Anton Maier, known as Toni. Toni Maier was a keen cyclist. He began designing and making clothing for cyclists in the late 1970s having discovered that the type of clothing worn could make a big difference to the aerodynamics of the rider and bike and hence to the rider's speed. In collaboration with a designer of clothing for the Swiss skiing team, Assos produced the first pair of lycra cycling shorts — a significant improvement on the woollen shorts then commonly worn by cyclists.

2

In the early days, the clothes were made by hand at the Maier family home near Winterthur in northern Switzerland. In 1985 the business expanded and moved to Lugano in Switzerland where there was skilled sewing labour available. Roche Maier took over the business in 1995. Although the genesis of the brand was in cycling shorts, Assos developed a range of clothing for both men and women to include jersey tops, all-in-one body suits, tights (that is long, skin-tight leggings) and jackets.

3

Assos' main range of clothes — what was referred to in the course of the trial as their 'hardcore' cycling kit — is called the Campionissimo range. It includes a number of kinds of shorts (including bibshorts which have a pair of straps extending like braces from the waist over the shoulders), all-in-one body suits, tights, body insulators and warmers, jackets, hats and socks. Many of these items are described as 'heavily engineered' which means that the cut, construction and fabric is carefully designed to balance the competing needs for the garment to be comfortable (particularly through padding in critical areas), lightweight, durable, waterproof and aerodynamic. Some of them, particularly the bib shorts and skin-tight body suits, are not garments that a man or woman could expect to wear walking down the street without causing heads to turn. Others, particularly the tops, although equally carefully designed, are similar in superficial appearance to other less technical garments.

4

The extent to which Assos' product lines have extended beyond this hardcore range of clothing is one of the key issues in the case and I will discuss that later in this judgment.

5

Assos now sells its clothing in 37 countries worldwide. Within the European Union it sells its goods in 15 Member States including France, Germany, Italy, the Netherlands, Spain, Portugal and the United Kingdom. It primarily sells through a distributor which is appointed for each territory and granted the exclusive right to distribute the goods to retailers in that territory. Assos goods are available from over 150 stores in France, over 140 in Germany and over 150 in Italy. The vast majority of retailers selling Assos clothes are specialist cycling stores. Thus of the almost 900 retailers currently selling Assos clothes, fewer than ten are stores which are not purely cycling goods stores. Those ten are not general clothing stores but sell other types of sporting or outdoor activity wear.

6

Assos primarily advertises its goods in the specialist cycling press — about 80 per cent of its advertising spend is in magazines such as Cycling Weekly, Procycling and Cycling Active in the United Kingdom and similar publications in other European countries. Its estimated annual marketing spend in the EU for 2011 was about €1.6 million. Assos keeps a close eye on the content and placing of advertising by its distributors in the exclusive territories. In addition to paid-for advertising, Assos enjoys substantial positive editorial comment in these magazines and publicity through photographs of well-known cyclists wearing Assos kit. Assos provides in-store display units and point of sale material for its dealers and it exhibits its goods at trade and consumer cycling shows in the United Kingdom and elsewhere in Europe.

7

Assos has not encouraged sales on the internet and prefers its distributors to sell through retail stores. Those retail stores do, in some cases, have an ancillary online business and may sell Assos clothing by that means. However, as Assos' main witness put it, although Assos recognises the internet as an important sales channel, they "need to try to ensure that the end consumer's purchasing experience is consistent with the high quality brand image of ASSOS (for example, via trusted website security and a user-friendly website)". To this end it has chosen a small number of Assos internet dealers who are listed as possible outlets on the www.assos.com website.

8

Assos' business has flourished. In the year 2000 the value of wholesale sales to distributors in the EU amounted to £1.1 million. It has grown steadily year on year to £13.8 million in 2011.

9

The word 'Assos' means 'the best' in Greek and signals that Assos' cycling clothes occupy the very top end of the ranges of cycling apparel in terms of quality and price. Assos recognises that all its hardcore products are very expensive, even when compared to other similarly technical, highly engineered clothing. A pair of Assos shorts costs about £200 and the jackets and other items are commensurately more expensive. Assos' corporate strategy was summed up by Mr Erwin Groenendal, the Marketing & Design Director, in the following terms:

"I would say the company creed at Assos is always to aim higher. Assos prides itself on the very high quality of ASSOS clothing. Research and development activity is a big part of Assos's business. Roche Maier, the Assos CEO, goes out every day on the bike to test prototypes of new clothing Assos is developing. When Roche returns from his ride the clothing designers go and take notes of his feedback. From conception to shop floor, it takes a long time for Assos to come out with new clothing. Assos might go through 70 or 80 prototypes for a new model of shorts. Once the clothing is finalised, the final version is put in a glass cabinet known as the 'fridge' so that the product development team is not tempted to tinker with it further. Assos mainly tends to bring out a new clothing item having developed a new fabric or found a way to make the clothing fit even better than before. Where the clothing item is very popular and there is no improvement for it, Assos tends to keep making and selling it season after season (e.g. some pair of shorts do not change for several seasons).

In my experience people tend to think Assos is a bigger company than it is because of the power of the brand. In terms of numbers of employees Assos is a fairly small, family-owned company, but the ASSOS brand gives Assos a really strong advantage. Toni Maier told me someone once said to him: "Where are you in the pyramid? You're not in the pyramid, you are on the point of the pyramid." The high quality of ASSOS clothing and the premium nature of the ASSOS brand means Assos is able to sell a high volume of clothing despite the very high prices."

10

Assos has provided clothing to a number of cycling teams over the years including the Kazakh and Brazilian national cycling federations in 2006/2007 and currently to the Russian cycling federation. Assos sponsors the Swiss cycling federation and has produced specific kit for the members of the Swiss federation team. Over 250 cyclists who have achieved gold medals in Olympic and other international championships since the mid 1970s have done so wearing Assos clothing.

11

The First and Second Defendants (together 'ASOS') operate a global online fashion and beauty retail company aimed at fashion-conscious twenty-something year olds. The word 'ASOS' is an acronym of the original name of the business 'As Seen On Screen'. That name reflected the idea behind the business which started in 1999 when one of ASOS' founders read an article in the trade press reporting that an American television network had received 28,000 calls from people wanting to buy a lamp seen in the apartment of a character in the popular TV show 'Friends'. The idea of As Seen On Screen was to source clothing, accessories and other items worn or displayed in photographs of celebrities or on TV shows and films. Thus, one of the earliest items sold by ASOS was an exact replica of the leather jacket worn by Brad Pitt in his portrayal of the character Tyler Durden in the 1999 film 'Fight Club'. The First Defendant was incorporated in June 2000 and was initially called AsSeenOnScreen Holdings plc. It changed its name to Asos plc in August 2003.

12

ASOS has always been and is now purely an online internet retailer with no bricks-and-mortar shop. Between 2000 to 2003, ASOS' main offering fell into two categories: 'as seen on' products which were identical to products seen on television or film and 'in the style of' products that were more affordable versions of what was seen on television or film. During 2003, ASOS started to move away from 'as seen on' products to more 'in the style of' products and then began to move away entirely from the link between the product and television/film to become a more general fashion retailer. In 2004 or 2005 (the precise date is a matter of dispute between the parties) ASOS started to design and sell its own-brand range...

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