Speechworks Limited V. Speechworks International Incorporated
| Jurisdiction | Scotland |
| Judge | Lord Nimmo Smith |
| Date | 14 July 2000 |
| Docket Number | A1933/00 |
| Court | Court of Session |
| Published date | 02 August 2000 |
| OUTER HOUSE, COURT OF SESSION | |
| A1933/00
| OPINION OF LORD NIMMO SMITH in the cause SPEECHWORKS LIMITED Pursuers; against SPEECHWORKS INTERNATIONAL INCORPORATED Defenders: ________________ |
Pursuers: Mackenzie; Masons
Defenders: McLean; Maclay Murray & Spens
14 July 2000
[1]The pursuers are a limited company incorporated under the Companies Acts. They have their registered office at Coatbridge Business Centre, 204 Main Street, Coatbridge. The defenders are a company incorporated under the laws of the State of Delaware and have their principal offices in Boston, Massachusetts, USA. They have a place of business at Knyvett House, The Causeway, Staines, Middlesex. The directors of the pursuers are David Robertson and his wife Angela Robertson. Both parties spell the first word of their names as "SpeechWorks" (with a capital W). In terms of a registration certificate under the Trade Marks Act 1994 ("the Act") the mark "SPEECHWORKS" has been registered under No.2186182 as of 14 January 1999 in the Trade Marks Registry in the name of David Robertson in respect of Class 09:
"Computer software; computer programmes; encoded programmes for computers and for data processing apparatus; computer software and publications in electronic format supplied online from databases or from facilities provided on the Internet; electronic apparatus and instruments adapted for speech recognition; electronic apparatus and instruments adapted to receive audio commands; parts and fittings for all of the aforesaid goods; all included in Class 9."
Although the mark appears in capital letters in the certificate, the pursuers prefer to use the spelling "SpeechWorks". In terms of a licence agreement between David Robertson and the pursuers, the pursuers are exclusive licensees of this registered trade mark: see section 29 of the Act. During the hearing it was referred to as the pursuers' trade mark, and for convenience I shall do likewise. I should, however, point out that I was not addressed on section 30(4) of the Act, and have accordingly not yet decided whether or not the pursuers should be allowed to proceed with the action unless Mr Robertson is either joined as a pursuer or added as a defender. In terms of the conclusion to the summons the pursuers seek interdict against the defenders from infringing their exclusive right to use their trade mark by using any mark whether alone or in combination which is identical with or a colourable imitation of their trade mark in relation to any speech recognition software applications or similar software applications; and interdict ad interim. The pursuers have enrolled a motion for interim interdict in terms of this conclusion. After sundry procedure to enable the defenders to obtain representation and provide information I heard the motion on 6 and 7 July 2000. Having heard submissions from Mr Mackenzie, solicitor-advocate for the pursuers and Mr McLean, counsel for the defenders, I continued the motion until today so that I could consider what my decision should be.
[2]The solicitor-advocate for the pursuers opened his submissions by arguing that the pursuers had a prima facie case and that the balance of convenience favoured the granting of interim interdict. He referred to the registration certificate and the licence agreement relating to the trade mark in terms of which the pursuers are exclusive licensees of the trade mark. Both of these documents have been produced. The licence agreement, although signed, is undated except for the year 2000. I was informed that it was signed shortly before 24 May 2000 when Form TM50 was sent to the Patent Office Trade Marks Registry. By letter dated 21 June 2000 the Trade Marks Register Administrator stated that the pursuers would be entered in the register as a licensee of the trade mark with effect from 1 January 2000. It is appropriate to mention at this stage section 72 of the Act which provides inter alia that in all legal proceedings relating to a registered trade mark the registration of a person as proprietor of a trade mark shall be prima facie evidence of the validity of the original registration and of any subsequent assignment or other transmission of it; by section 102 in the application of the Act to Scotland "assignment" means assignation. The solicitor-advocate submitted that the pursuers stand in effect as owners of the registered trade mark and have indeed been trading under the name "SpeechWorks" since their name was changed on 26 January 1999, shortly after they were incorporated. Prior to that David Robertson traded under that name. During the course of the hearing I allowed the solicitor-advocate to amend an averment in Article 3 of condescendence, which after amendment reads:
"Since on or about 18 October 1998 the said David Robertson and the pursuers in succession to him have traded in Scotland using the name SpeechWorks."
This Article goes on to aver inter alia that the pursuers develop speech recognition software, that they specialise in providing custom-built solutions using state-of-the-art technologies, and that they develop speech recognition solutions for desktop computing, networked systems, e-commerce and internet applications, telephony and telecommunications, access technology, home automation and consumer electronics.
[3]The solicitor-advocate went on to submit that the pursuers' case was that the defenders had come to the United Kingdom using the name "SpeechWorks". He referred to Article 4 of condescendence, in which it is averred inter alia that the defenders' corporate profile on their website states that they are developers of automated speech recognition software for large scale, customer services solutions and speech enabled e-commerce. On or about 25 October 1999 they announced their intention to establish a European headquarters in Staines. The pursuers were not aware of that announcement, but events in December 1999 and February 2000 made them aware that there was another company using the name "SpeechWorks". Reference was made in particular to e-mail received by the pursuers at their Internet domain www.speechworks.co.uk, but relating to the trading activities of the defenders. This domain name is registered in name of the pursuers, but no web-site has yet been published on it. The solicitor-advocate submitted that the defenders were using a mark identical with that of the pursuers as a means of promoting goods and services identical with those of the pursuers. Reference was made to section 10(1) of the Act, which provides that a person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered. Having regard to the instances of confusion between the two companies, reference was made to section 10(2), which provides that a person infringes a registered trade mark if he uses in the course of trade a sign where because inter alia (a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark. In the circumstances there was a prima facie case of infringement by the defenders under either of these provisions.
[4]Turning to the balance of convenience, the solicitor-advocate submitted that one factor to be taken into account was the relative strength of the pursuers' case, which was clear-cut (see Toynar Limited v Whitbread & Co plc 1988 S.L.T. 433 and NWL Limited v Woods [1979] 1 W.L.R. 1294 per Lord Fraser at p.1310). The pursuers had taken steps to protect their rights and had gone through the United Kingdom registration process in respect of their trade mark. There were indications in the affidavit lodged by the defenders (which I discuss below) that the defenders knew of the existence of the pursuers more than one year ago, in June 1999, before they opened their branch in Staines. In the expression adopted by Lord Hamilton in Thistle v Thistle Telecom Limited 2000 S.L.T. 262 at p.266F, they had taken a calculated risk. They had chosen to come to the United Kingdom, knowing of the existence of the pursuers, and had chosen to do nothing about it. Under reference to Dash Limited v Philip King Tailoring Limited 1988 S.C. 92, the solicitor-advocate advanced three submissions. Firstly, the defenders already had a number of different trade marks which they used for a number of products. Whatever they might prefer, it was open to them to change the brand name which they used in the United Kingdom. This was entirely practical. Secondly, any damages for the loss suffered by the pursuers by reason of the infringement would be difficult to quantify and could be substantial. Any damages to which the defenders would be entitled should it subsequently be held that interim interdict had been wrongfully obtained would be restricted to the cost of re-branding. This was in the context that the defenders had known of the existence of the pursuers at the time of starting to trade in the United Kingdom. Thirdly, in assessing any loss, there were difficulties in discriminating between losses arising from legitimate competition and losses arising from wrongful use of the mark.
[5]Finally, under reference to a passage in the affidavit relating to a trade show called Voice Europe to be held in London from 31 October to 3 November 2000, which the defenders are to attend, the solicitor-advocate said that the pursuers would be prepared, if interim interdict was granted, to agree to its suspension until the end of the trade show. This was to take account of the expense to the defenders of changing their name before then. The pursuers recognised that the defenders should be given an opportunity to go through the process of re-branding. They accepted that...
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