South Cone Inc. v Bessant and Others (t/a Reef)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Robert Walker,Lord Justice Buxton,Lord Justice Clarke
Judgment Date28 May 2002
Neutral Citation[2002] EWCA Civ 763
Docket NumberCase No: A3/2001/1851

[2002] EWCA Civ 763





Royal Courts of Justice


London, WC2A 2LL


Lord Justice Robert Walker

Lord Justice Buxton and

Lord Justice Clarke

Case No: A3/2001/1851

Bessant & Others
South Cone Incorporated

Mr Roger Wyand QC (Instructed by Forbes anderson) for the appellant

Mr Christopher Morcom QC (Instructed by Ashurst Morris Crisp) for the Respondents

Lord Justice Robert Walker



This is a second appeal in proceedings about the registration of a trade mark. Trade mark law is a fairly specialised area and it may be helpful to begin with some background material. The law is to be found in the Trade Marks Act 1994 ("the 1994 Act"), the purpose of which (as appears from its long title) was to implement Community legislation and other international obligations in relation to trade marks, including in particular Council Directive 89/104/EEC to approximate the laws of the Member States relating to trade marks ("the Directive").


The 1994 Act repealed and replaced the whole of the Trade Marks Act 1938 ("the 1938 Act") and made substantial changes in the law. But the 1994 Act left largely untouched the official infrastructure for registration of trade marks which has existed since 1875. The full official title of the Registrar of Trade Marks is the Comptroller-General of Patents, Designs and Trade Marks. In practice it is the Assistant Comptroller who has special responsibility for registration of trade marks, and where an opposed application for registration becomes the subject of opposition proceedings under section 38(2) of the 1994 Act, hearings are conducted before the Assistant Comptroller or a Principal Hearing Officer (acting in either case as the authorised delegate of the Registrar). Hearing officers are usually very experienced in the practicalities of trade mark registration but are not normally qualified lawyers. Under sections 69 and 78 of the 1994 Act and the Trade Mark Rules 2000 ( SI 2000/136) evidence in opposition proceedings is given by affidavit or statutory declaration. Orders for cross-examination of deponents are permissible but have been rare in the past (although counsel suggested that there may be a trend towards their becoming rather less rare).


An appeal from a decision of the Registrar lies (in England) to the Chancery Division of the High Court or to an 'appointed person' (sections 76 and 77 of the Act). The appointed person is in practice usually drawn from a small panel of Queen's Counsel practising in the Chancery Division and having special experience of trade mark law – in effect a specialised deputy judge. In the case of an appeal to the Chancery Division a further appeal lies (but only with the permission of this court under section 55 of the Access to Justice Act 1999) to this court. In this case the first appeal was heard by Pumfrey J and it is his order dated 25 July 2001 from which an appeal has been made to this court.


This background material will help any non-specialised reader to understand the way in which this appeal has reached this court. It also has some relevance to the first issue in the appeal, which is a general issue as to the nature of an appeal under s.76 of the 1994 Act, and the function of the appellate judge (whether High Court judge or appointed person) in hearing it. The second and third issues are whether the appellate judge, even if he approached his task correctly, erred in his decision to reverse the Registrar's decision to dismiss the opposition to the application on one ground, but not to differ from it on another ground.


The application had been made by Mr Jack Bessant, Mr Dominic Greensmith, Mr Kenwyn House and Mr Gary Stringer, trading as Reef. They are the members of a very successful pop group of that name, and I shall refer to them as "the group". They applied on 10 January 1996 to register the word mark REEF for the following classes of goods:

Class 25: 'T-shirts, sweat shirts, jackets, hats and headbands; all being promotional or souvenir articles relating to a music group' and

Class 26: 'Badges, buckles and ornaments all for wear; tie clips; buttons'.

The group (who have been represented throughout by Mr Roger Wyand QC) were successful before the Registrar but unsuccessful before the judge; they are the appellants in this court.


Opposition to the application was put forward by South Cone Inc ("South Cone") an American company based in San Diego, California. It is (and was before the group's application, and indeed before the coming into force of the 1994 Act) the registered proprietor of the word mark REEF BRAZIL, registered for 'Footwear included in Class 25'. Its best-known and most successful products were and are surfers' sandals, although its product lines have been diversified. South Cone (which has been represented throughout by Mr Christopher Morcom QC) was successful before the judge and is the respondent in this court.

The statutory provisions and the hearing at first instance


Part I of the 1994 Act contains (in implementation of the Directive) 'absolute' and 'relative' grounds for refusal of registration in sections 3 and 5 respectively. South Cone's opposition put forward one absolute ground, that the application was made in bad faith (section 3(6)). This ground failed both before the Registrar and before the judge and it has not been relied on in a respondent's notice in this court. It is not therefore necessary to go far into this ground. But it is worth noting that the allegation of bad faith turned on the proposition that the group did not intend to use the REEF mark as a trade mark (that is, an indicator of trade origin) but as a means of promotion of the group as a pop group.


The relative grounds relied on were those in section 5(2)(b) and section 5(4)(a) of the 1994 Act. Section 5 (as supplemented by the definition of "earlier trade mark" in section 6) implements article 4 of the Directive, and it is best to set out the whole section in order to see its fairly complex structure:

"(1) A trade mark shall not be registered if it is identical with an earlier trade mark and the goods or services for which the trade mark is applied for are identical with the goods or services for which the earlier trade mark is protected.

(2) A trade mark shall not be registered if because –

(a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or

(b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected.

there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.

(3) A trade mark which –

(a) is identical with or similar to an earlier trade mark, and

(b) is to be registered for goods or services which are not similar to those for which the earlier trade mark is protected,

shall not be registered if, or to the extent that, the earlier trade mark has a reputation in the United Kingdom (or, in the case of a Community trade mark, in the European Community) and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.

(4) A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented –

(a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade, or

(b) by virtue of an earlier right other than those referred to in subsections (1) to (3) or paragraph (a) above, in particular by virtue of the law of copyright, design right or registered designs.

A person thus entitled to prevent the use of a trade mark is referred to in this Act as the proprietor of an "earlier right" in relation to the trade mark.

(5) Nothing in this section prevents the registration of a trade mark where the proprietor of the earlier trade mark or other earlier right consents to the registration."

It is common ground that South Cone's REEF BRAZIL mark is an earlier trade mark.


It is also common ground that under section 37 of the 1994 Act (examination of application) the Registrar no longer has any discretion (as he had under the 1938 Act) about registration of a mark. He has to make a straightforward decision, one way or the other, on the material placed before him by the applicant and any opponent.


The hearing before the Principal Hearing Officer (Dr W J Trott) took place on 25 September 2000 and his written decision was given on 14 November 2000. There were a number of statutory declarations before the hearing officer, the bulk of these having been made on behalf of South Cone: they included evidence from Mr Peter Caldwell, the managing director of The Watersports Company Ltd, which was said to be the sole United Kingdom importer of South Cone's goods, and from Mr Chris Thompson, South Cone's chief financial officer.


The hearing officer noted that there were very significant inconsistencies between the figures for United Kingdom sales given by Mr Caldwell and Mr Thompson respectively. Parts of the written evidence put in on behalf of South Cone were struck out as inadmissible as evidence in reply. The statutory declaration of Mr Christopher Gilks, the group's manager since October 1996, contained a lot of material about its success as a pop group which the...

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