WHG (International) Ltd (A Gibraltar Company) and Others v 32 Red Plc (A Gibraltar Company)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Etherton,Lord Justice Kitchin,Lord Justice Toulson |
| Judgment Date | 24 January 2012 |
| Neutral Citation | [2012] EWCA Civ 19 |
| Docket Number | Case No: A3/2011/0781, 0792 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 January 2012 |
[2012] EWCA Civ 19
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE HENDERSON
HC09C00662
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Toulson
Lord Justice Etherton
and
Lord Justice Kitchin
Case No: A3/2011/0781, 0792
Mr Henry Carr QC and Giles Fernando (instructed by Linklaters) for the Appellant
Mr Michael Silverleaf QC and Mr Tom Moody-Stuart (instructed by McDermott Will & Emery) for the Respondents
Hearing dates : Monday 5th December 2012
Introduction
This is an appeal from an order of Mr Justice Henderson dated 7 March 2011 in a trade mark dispute between online gaming and casino operators.
The respondent, 32Red plc (which the Judge called "32Red"), sued the first and second defendants ("William Hill Online") for infringement of three registered trade marks: a UK mark for the number 32 ("the 32 number mark"), a Community mark for the word "32Red" ("the 32Red mark") and a Community mark for a 32Red device consisting of a stylisation of 32Red in a roulette ball ("the 32Red device mark"). All of the respondent's trade marks are registered in respect of, among other things, online casino services (which include roulette).
The alleged infringements were the use of the sign "32Vegas" and various device marks ("the Vegas signs") for an online casino that actively operated from 31 December 2008 to 3 August 2009. The Judge held that the use of the Vegas signs was an infringement of the respondent's Community trade marks ("the Community marks"). He dismissed the respondent's claim that "32Vegas" was an infringement of the 32 number mark. He also dismissed William Hill Online's counterclaim that the respondent's trade marks were invalidly registered.
William Hill Online appeals from the Judge's findings that (1) the 32 number mark was valid, (2) the 32Red mark was valid, and (3) the Community marks were infringed.
The respondent cross-appeals from the finding that the 32 number mark was not infringed.
Factual context
I have gratefully taken the following brief factual summary from the Judge's account in his judgment.
The online casino industry began in the mid-1990s and developed rapidly. The respondent and William Hill Online both trade in online gaming services, principally online casino gaming. The respondent is a Gibraltar-registered company which first started to operate an online casino under the 32Red brand in 2002. It has always traded under the same brand name, and has sought to establish a distinctive reputation in that brand coupled with a reputation for excellent customer service. In comparison with the largest operators in the field, the business of the respondent, although substantial, is of no more than medium size. In 2009 it had approximately 25,000 active casino players who placed over 130 million bets with a value of around £170 million, generating gross revenue for the respondent of some £11 million. About 74 per cent of that income was derived from players based in the UK.
On 6 May 2004 the respondent was registered as the owner of the 32Red mark. On 3 January 2006 the respondent was registered as the owner of the 32Red device mark. Each registration was made for a range of goods and services in Classes 9, 16 and 41 of the Nice Classification, including (in Class 9) "Computer software relating to games, gaming and gambling", and (in Class 41) "Casino services; … gaming services; gambling services; … casino, betting, gaming, gambling and bookmaking services provided by means of electronic media, the internet …".
In December 2005 the domain name "32vegas.com" was registered by an Antiguan company called Crown Solutions Gaming Limited ("Crown Solutions"). In 2006 an online casino began to operate under the name "32Vegas". That casino had no connection with the respondent, and its ultimate ownership is unknown. It was regulated first in Antigua and then in the Canadian Mohawk Territory of Kahnawake. It was prohibited from advertising in the UK by the regulatory regime set up under the Gambling Act 2005.
On 24 May 2006 a "cease and desist" letter was sent to Crown Solutions by the respondent's lawyers in Gibraltar. The respondent took no steps to implement or follow up its threat, and the matter was allowed to rest.
In October 2008 the William Hill Group entered into a joint venture with Playtech, one of the two leading providers of gaming software. The joint venture involved the purchase of an established online gaming business run by an entity called Uniplay, whose assets included the unregistered mark "32Vegas" as well as several other brands owned by Crown Solutions. From the point of view of the William Hill Group, the acquisition by the joint venture of the 32Vegas mark and the online casino business carried on under it was a small and relatively insignificant part of a much larger operation which was designed to expand and re-launch William Hill Group's presence in the online gaming sector. When the joint venture was announced on 20 October 2008 the business of Crown Solutions was described as having "multiple low-key brands", one of which was 32Vegas.
Pursuant to the joint venture a licence to use the domain name "32vegas.com" together with associated marks (whether registered or unregistered) was granted to William Hill Online, which comprises two Gibraltar-registered companies. William Hill Online carries on all aspects of the William Hill business that involve online gaming. That business is known as "William Hill Online".
Under the joint venture William Hill Online is owned as to 71 per cent by William Hill Organisation Limited, the main trading company within the William Hill Group. William Hill Organisation Limited is a wholly-owned subsidiary of the third defendant, William Hill Plc, which is registered in England and Wales and is listed on the London Stock Exchange.
The practical result of the joint venture is that the 32Vegas online casino, instead of being a shadowy Antiguan-owned and Canadian-regulated business which could not advertise its services in the UK, on pain of committing a criminal offence, became a Gibraltar-owned and regulated business which formed part of William Hill Online and was free to compete with the respondent on equal terms in its home market.
On 19 January 2009, less than 3 weeks after William Hill Online had begun trading, the respondent's solicitors sent it a "cease and desist" letter.
On 27 February 2009 the respondent filed an application with the Intellectual Property Office for the registration of the 32 number mark. The application was successful, and the registration was made on 5 June 2009. The registration was for use in connection with the following services in Class 41: "Casino services; betting services; gambling services; bookmaking services; casino, betting, gaming, gambling and bookmaking services provided by means of electronic media, the internet, telecommunications, telephone, wireless or offshore telephone, or television."
Following William Hill Online's refusal to back down in response to the "cease and desist" letter, the claim form in these proceedings was issued. It was served with the particulars of claim on 3 July 2009.
The alleged infringing signs
The infringing Vegas signs consist of three text signs and three devices. Each of them has been used by William Hill Online in the course of trade, although not before 31 December 2008, in relation to casino, gaming and gambling services provided by means of the internet.
The three text signs are "32vegas.com", "32Vegas" and "32v".
The largest of the three devices displays the 32Vegas sign running obliquely across a black and white bordered rhomboid or lozenge shape. The "32" is written in large bold characters with a gold star between the teeth of the figure 3. "VEGAS" is written in smaller white capital letters, with the "V" interlocking with the "2". The interior of the lozenge is coloured bright red on the left, where it sets off the 32; the shading then becomes progressively darker, and is almost black at the right hand end. The Judge detailed the general impression as evoking a neon sign of the type one might expect to see on the Strip in Las Vegas.
The other two devices are smaller in size and display the gold 32 and interlocking white "V" from the larger device, including the gold star. In one of the devices the "32V" is placed diagonally across a thin white square and slightly overlaps it. The interior of the square is shaded red at the bottom verging into purple at the top. In the other device the "32V" is placed obliquely across a thin gold circle, and again slightly overlaps it. The interior of the circle is coloured a uniform black. The strong visual impression created by both of these signs is of the gold 32 set against, respectively, a red/purple and a black background. The interlocking white V, although clearly visible, is smaller in size (as it is in the larger device) and much less prominent.
The legal framework
The relevant provisions of the Community and UK legislation are set out in the Appendix to this judgment.
The proceedings
The particulars of claim alleged infringement by William Hill Online of the Community marks and the 32 number mark under (respectively) Articles 9(1)(b) and (c) of the Community Trade Mark Regulation ( Council Regulation (EC) No. 207/2009 of 26 February 2009...
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