Special Effects Ltd v L'Oréal SA
| Jurisdiction | England & Wales |
| Judge | THE CHANCELLOR OF THE HIGH COURT,The Chancellor |
| Judgment Date | 17 March 2006 |
| Neutral Citation | [2006] EWHC 481 (Ch) |
| Docket Number | Case No: HC05C01224 |
| Court | Chancery Division |
| Date | 17 March 2006 |
[2006] EWHC 481 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Chancellor Of The High Court
Case No: HC05C01224
Mr Richard Meade (instructed by Pinsents) for the Claimant
Mr Henry Carr QC and Miss Jacqueline Reid (instructed by Baker & McKenzie) for the Defendants
Hearing dates: 28 th February, 1 st and 2 nd March 2006
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 Chancellor :
Introduction
On 30th June 2000, in accordance with s.32 Trade Marks Act 1994, David Charles Jones and his wife Jennifer Ann Jones applied to the Comptroller-General of Patents, Designs and Trade Marks as the registrar for the purposes of the Trade Marks Act 1994 ("the Registrar") for the registration of the mark SPECIAL EFFECTS for goods in class 3, namely conditioners and hair lotions and services in class 44, namely beauty and cosmetic therapies. After acceptance and publication pursuant to ss.37(5) and 38(1) TMA, on 23rd November 2000 notice of opposition was given by L'Oréal SA, a company incorporated in France. It objected to the proposed registration on grounds for which ss. 3(1)(a), 3(3)(b), 5(2)(b) and 5(4)(a) TMA provide. The opposition was heard by Mr Allan James for the Registrar on 8th August 2002. By his decision dated 22nd August 2002, for reasons to which I shall refer in greater detail later, he dismissed the opposition. Consequently SPECIAL EFFECTS ("the Mark") was registered in the name of Mr and Mrs Jones under s.40(1) TMA on 25th October 2002. (It was assigned by them to their wholly owned company and the claimant in these proceedings, Special Effects Ltd, on 8th May 2003.)
On 9th July 2004 solicitors for Special Effects Ltd ("the Claimant") wrote to L'Oréal (UK) Ltd, the second defendant, claiming that it had infringed the Mark by the use of its brand SPECIAL FX. Such contentions were denied by solicitors for L'Oréal SA, the first defendant, in a letter dated 17th August 2004. In addition they contended that the registration of the Mark was invalid and ought to be revoked. After a good deal of intermediate correspondence the claim form in this action was issued by the Claimant on 13th May 2005 against L'Oréal SA and L'Oréal (UK) Ltd ("the Defendants") seeking injunctions and associated relief to restrain such infringement. In its particulars of claim dated 16th May 2005 the Claimant relied not only on the primary allegations of infringement but also on the course of the opposition proceedings which, it claimed, precluded the Defendants from challenging the validity of the Mark on grounds of estoppel, cause of action or issue, and abuse of process. In their defence and counterclaim the Defendants did indeed contend that the registration of the mark was invalid. In addition the Defendants raised various specific defences under Article 6 ECHR and ss.11(3) and 46 TMA.
On 6th October 2005 Peter Smith J ordered that the following preliminary issues be determined:
(1) Whether either or both Defendant(s) is/are precluded by cause of action estoppel, issue estoppel, or abuse of process from challenging the validity of the Claimant's registered trade mark No. 2,237,923 on some or all of the grounds relied upon by them;
(2) Whether either or both Defendant(s) is/are precluded by cause of action estoppel, issue estoppel, or abuse of process from alleging use of the marks complained of herein before the application for the said registered trade mark (a) as part of the basis for a defence under section 11(3) of the Trade Marks Act 1994; (b) as part of the basis for a counterclaim for passing off;
(3) Whether the United Kingdom or England and Wales is capable of being a particular locality for the purposes of section 11(3) of the Trade Marks Act 1994;
(4) Whether, in the event that the Claimant is successful on the preliminary issues above (excluding (3) above), paragraph 14 of the Defence and Counterclaim must necessarily be struck out in consequence; and
(5) On the assumption (for the purpose of this issue only) that the Defendants can establish the facts to establish a case in passing off (as pleaded in the Defence and Counterclaim herein), should the claim under paragraph 14 of the Defence be struck out/summary judgment given in relation thereto due to the fact that the period of five years following the date of completion of the registration procedures of United Kingdom Trade Mark No 2 237 923 has not yet lapsed.
In addition Peter Smith J ordered that there be determined at the same time the claimant's application that:
(6) the Defendants' defence under Article 6(1) of the European Convention on Human Rights be struck out as having no reasonable prospect of success, or alternatively that summary judgement against the Defendants be given in relation to the said allegation.
Those are the issues I now have to determine. Before considering them it is necessary to describe in more detail the underlying facts including but not limited to the opposition proceedings, the pre-action correspondence and the details of the pleadings in this action.
The Facts
The Defendants are members of a well known group of companies making and selling cosmetics. The First Defendant holds and administers the intellectual property rights of the Group. The Second Defendant is the company through which the Group trades in cosmetics within the UK. The Group had and has a number of different marks and has sold its products under a number of different names. The marks with which this case is concerned are FX and device and FX STUDIO LINE and device registered in the name of L'Oréal SA on various dates between March 1995 and October 1997. Those are the names under which the Second Defendant has sold these products in the UK.
In 1999 Mr Jones, who had recently sold his practice as a chartered accountant, and his wife, who was undergoing an intensive one year course in beauty therapy, decided to collaborate in the development of a range of cosmetic products. They investigated various products, such as rose water, and considered various brand names such as 'Aquatoner'. In due course they lit upon the name SPECIAL EFFECTS. They thought it an 'ideal and catchy name'. After investigating its availability, on 30th June 2000, they applied for its registration for the classes which I have already specified. The Defendants have abandoned the allegation formerly made by them in paragraph 27(4) of their defence and counterclaim that the Joneses adopted the Mark in bad faith.
S.3 TMA contains a number of grounds, known as absolute grounds, on which registration must be refused. They include the following:
(a) the sign is not capable of distinguishing goods or services of one undertaking from those of another (s.3(1)(a)),
(b) the mark is devoid of any distinctive character (s.3(1)(b)),
(c) the mark consists exclusively of signs which serve, in trade, to designate characteristics of the relevant goods or services, such as kind, quantity, purpose, value or geographical origin (s.3(1)(c)),
(d) customary signs (s.3(1)(d)).
Though these grounds overlap they are treated separately. S.3(2) excludes shapes of various descriptions. S.3(3)(b) prohibits registration of a mark "of such a nature as to deceive the public" and s.3(4) excludes marks the use of which is prohibited in the UK by any rule of law.
S.5 contains a number of grounds, described as relative grounds, on which registration must be refused. They include marks which because of identity or similarity of the mark or the goods in respect of which it is to be used is likely to give rise to confusion on the part of the public (s.5(2)(b)). Similarly a mark the use of which is liable to be prevented by virtue of a rule of law protecting an unregistered trade mark shall not be registered. Application for registration of a mark is dealt with in sections 32 to 34. Ss. 37 to 41 deal with the procedure for registration and opposition thereto. This is the procedure the First Defendant adopted in 2000.
The notice and grounds of opposition were served by the First Defendant on 23rd November 2000 pursuant to s.38(2). There were four grounds, namely:
(1) The words SPECIAL EFFECTS when used in connection with cosmetics would be recognised by the public as connoting make-up which produced a special effect —as in films and television. As such it would not be capable of distinguishing the goods of one undertaking from those of another and would offend against s.3(1)(a).
(2) The mark applied for suggests that the products to which it is to be applied will produce a special effect. Accordingly the mark is laudatory and not distinctive. Further if the products do not produce such an effect the public will be deceived as to the purpose of the product. For these reasons registration would be contrary to s.3(1)(a) and s.3(3)(b).
(3) Since September 1995 the Defendants use in the UK of the letters FX in connection with their hair products has generated substantial reputation and goodwill in the letters FX. They have also used their trade mark in the form SPECIAL FX. Accordingly registration of SPECIAL EFFECTS is precluded by s.5(4)(a) because the use of such mark is liable to be prevented by the Defendants passing off claims based on its reputation in the letters FX.
(4) The Defendants' marks and the goods to which they are applied and the mark for which the Claimant sought registration and the goods and...
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