West (t/a Eastenders) v Fuller Smith & Turner Plc

This is an appeal from the judgment of Mr Christopher Floyd QC sitting as a Deputy Judge of the Chancery Division, in which he rejected a challenge to the validity of the respondent’s (“Fullers”) United Kingdom registered trade mark number 1341510 "E.S.B.", but ordered its revocation in respect of all goods except bitter beers. He ordered the revocation to take effect from 21 September 1995, which is five years from the date on which the procedure for registration had been completed. Fullers cross-appeal against the order for partial revocation.

As granted, the mark was registered in respect of ‘beers included in class 32’ as of 15 April 1988 ("the date"). It was registered under the provisions of the Trade Marks Act 1938, and was originally placed in class B after evidence of use and advertisement before acceptance. I can take the history of the use of the mark from the judgment of the judge, which was not challenged on this point.

In 1969, Fullers started brewing a beer known as Winter Bitter. This beer was brewed only from October to March, and it was a strong ale. It was successful and in 1971 Fullers decided to produce it all the year round. It was renamed Extra Special Bitter, which was soon abbreviated to E.S.B. on brewing records, cask labels and pump clips. While brewing records and cask labels are of concern only to the brewer and the publican, pump clips identify the beer to the public. The beer quickly won recognition as an outstanding strong ale. Between 1978 and 1988 it had won the ‘Best Strong Ale’ class at the Great British beer Festival on seven occasions. It won the ‘Best Beer’ class three times during the same period.

The manner in which the mark has been used has changed over the years. In 1989, the full stops after the initials were removed, and the initials were surrounded by gold circles and other material including the mark ‘Fullers’. The current mark is somewhat different from this, but retains the gold circles and the ‘Fullers’ mark.

The use of the mark has been restricted to bitter. The beer has been sold throughout Fullers’ tied estate, which is located in the South of England, but the judge found that it had by the date acquired a degree of national renown.

The mark was attacked only on the so-called ‘absolute’ grounds found in section 3 of the Trade Marks Act 1994. By the amended Particulars of Claim, the claimant alleged that the mark offended against subsections (1)(b), (1)(c) and (1)(d) of section 3 of the Act. The pleaded grounds of objection were (1) that the mark comprises three common letters that are devoid of any distinctive character and that other traders are likely to wish to use in the course of their own business (2) that the letters are a common abbreviation or descriptor for a recognised category of ales, viz. Extra Strong (or Special) Bitter, and the mark accordingly consists exclusively of signs or indications which may serve in trade to designate kind, quality and intended purpose of goods, and (3) the mark consists exclusively of signs or indications which have become customary in the current language or in the bona fide practices of the trade.

The claimant particularly relied on the sale of extra strong or extra special bitter before the date of the application for registration by five named breweries, and on the use of ‘ESB’ by two breweries before the date, Mitchells of Lancaster Limited and the Big Lamp Brewery.

Finally on the question of distinctiveness, the claimant alleged that the mark had not since registration acquired distinctiveness. On the question of ‘acquired distinctiveness’, as I shall call it, passages from a number of publications, and the use of ESB by Mitchells of Lancaster and the Big Lamp Brewery in the United Kingdom, and numerous breweries in the United States, were relied on.

The claimant also made an allegation of non-use. It was said (and accepted) that the mark had only ever been used on bitter beer, and that the scope of the registration should be reduced by revoking the mark in part under section 46 of the 1994 Act so as to limit it either to bitter beers or ‘so as to specifically exclude lager or pils or any other beers which are not similar to bitter beer’.

The objections under 3(1)(b), (c) and (d) all go to the distinctiveness of the mark, and it is convenient to deal with them together. The judge held that the use of the mark by Fullers had been extensive. He said that the use was ‘in a distinctive and trade mark manner, to indicate their beer in contradistinction to others’, and he considered that the consumer would understand that the mark was used by Fullers as a trade mark. He found that between 1973 and 1996 (when they stopped selling the product) Mitchells of Lancaster had sold about 20,000 barrels of their beer, mainly to their 50 tied houses in Lancaster and Cumbria, and he found also that Mitchells had not actually abbreviated their ‘Extra Special Bitter’ name to E.S.B until some time in 1988, and that the use before that date had been by customers, any use before 1988 being very localised and limited. The judge found that the Big Lamp Brewery had used ESB from a date in 1987–9, selling the beer through a corner public house in Gateshead called the Wheatsheaf and some other outlets until 1995 at the rate of some 50 barrels a year, but that on the balance of probabilities the sign ESB had not been used on this beer before the registration date, and the same went for a beer sold infrequently by Marston Moor brewery between 1988 and 1992. It followed that it was not established that ESB had been used in the trade except by Fullers and to some extent by Mitchells before the date of registration.

Both parties called expert evidence. The judge found that the evidence of the claimant’s experts was influenced by their experience of the use of ‘ESB’ in the United States, where it is widely used, and he preferred the evidence of the defendant’s experts. His grounds for doing so are not criticised. He rejected the claimant’s contention, advanced on the basis of his experts’ views, that ESB or Extra Special Bitter designated a recognisable style of beer in the United Kingdom.

The judge also found that the defendant’s experts were right to accept that ‘at times, people used the terms E.S.B. and Extra Special Bitter interchangeably’. He continued

The judge’s conclusion on distinctiveness was as follows:

The judge went on to consider whether ‘ESB’ was a customary term for beer. For this purpose, he considered for a second time every alleged instance of use of the abbreviation relied on. He concluded that it was wrong to draw the inference that there had been any customary use of the initials. In the particular cases of Ann Street, Simpkiss and Blue Anchor (Extra Special Bitter) and Smiles (Extra Strong Bitter), where there was no suggestion of the use of initials alone, but only of the descriptive phrase, he found that on the evidence it would be wrong to suppose that there was a likelihood that the trade or public had abbreviated the phrase. He accordingly rejected the objection.

The 1994 Act was passed to implement the provisions of Council Directive of 21 December 1988 to approximate the laws of the Member States relating to trade marks (89/104/EEC) (‘the Directive’). Section 3 corresponds closely to the provisions of Article 3 of the Directive and provides as follows, so far as relevant:

Section 3 has been the subject of a number of domestic decisions, of which the most important relied on before us is that of the Court of Appeal in Healing Herbs v Bach Flower Remedies Ltd (‘BACH FLOWER REMEDIES’) [2000] RPC 513. As a domestic provision implementing the provisions of the Directive, section 3 must be construed in conformity with the provisions of the Directive. This is not quite an end of the matter, as the provisions of Council Regulation 40/94 of 20 December 1993 on the Community Trade Mark are in substantially identical terms, and are the subject of a number of important decisions of the Court of First Instance and the Court of Justice on appeal from the European Trade Mark Office (the Office for the Harmonisation of the Internal Market (Trade Marks and Designs), or OHIM). The relevant provisions of the Directive are as follows.

In the 1994 Act, the proviso to section 3(1) deals with marks which have acquired distinctiveness before registration, and section 47(1) deals with distinctiveness acquired after registration:

Mr West’s grounds of appeal on the issue of distinctiveness may be summarised as follows.

The judge erred in his approach to the question whether a mark was ‘devoid of any distinctive character’. Once he had found that consumers might abbreviate ‘Extra Special Bitter’ to E.S.B., he should have found that the mark was incapable of distinguishing the superior product of one brewer from the superior product of any other.

The judge erred in his approach to the question whether or not a mark consisted ‘exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity etc. ’. Extra Special Bitter is such a mark. As the term ‘Extra Special Bitter’ was used descriptively by a significant body of persons, and since some of those persons would abbreviate that term to E.S.B., the mark was to some consumers descriptive. Such a descriptive meaning had to be displaced if the mark was not to fall foul of section 3(1)(c) – see the Bach Flower Remedies case. Section 3(1)(c) erects a substantial hurdle to marks which may be understood descriptively by some consumers, since it refers to marks which may serve in trade to indicate the kind &c of the goods.

The judge erred in his approach to the question whether the mark consisted ‘exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade.’

Mr Bloch QC, for Mr West, submits that at the date of registration the mark was distinctive ‘in vacuo’ but that by that date the use made of it by Fullers had rendered it incapable of distinguishing the products of Fullers from those of any other brewery. He relies in particular upon the results of his cross-examination of certain of Fullers’ witnesses, in which he sought to draw a distinction between the impact of the mark E.S.B. in (for example) ‘Arundel E.S.B.’ on the one hand from the impact of the mark ‘Cortina’ in ‘BMW Cortina’ on the other. The former coining is not inappropriate, he submits, while the latter is obviously incongruous. He submits that this simple example shows that ‘Cortina’ is an example of a mark possessing distinctive character, whereas E.S.B. is an example of a mark devoid of any distinctive character. I do not think that this example is helpful. Marks can vary widely in the impact they make upon the interested public. Some may be very much stronger than others, without the less strong being open to the objection of being devoid of any distinctive character. To contrast E.S.B. with a strong mark and conclude that it is less strong does not lead to the conclusion that it cannot function as a mark at all.

In many cases, there is substantial overlap between the objection established by section 3(1)(b) and that of section 3(1)(c). ‘Perfection’ for soap is perhaps an example of a mark objectionable under 3(1)(b), and ‘Orlwoola’ for textiles an example of a mark objectionable under 3(1)(c). If at the date of registration, the mark served as a trade mark to the interested public (as the judge held it did in fact) then I do not see how it can be regarded as devoid of any distinctive character, particularly since Mr Bloch accepts that in vacuo (as he put it) the mark possessed distinctiveness at the date. The judge correctly held that the mark would only offend against section 3(1)(b) if it were devoid of any distinctive character in 1988, and this would only be the case if the average consumer knew that the sign E.S.B. was used exclusively as an indication of the kind or quality of the goods or was in common use. In this context, the word ‘devoid’ is construed strictly, as the decision in Case C-383/99P Procter & Gamble v OHIM (BABY-DRY) (below) makes clear, and the concession that the mark possesses distinctiveness in vacuo seems to me to be fatal to the objection.

The real discussion in this case therefore turned on the objection under section 3(1)(c) and to a lesser extent that under section 3(1)(d). The scope of the objection under section 3(1)(c) has been extensively discussed in the ECJ, and before turning to the cases I should briefly mention the matter of infringement. The rationale of the objection under section 3(1)(c) (and a fortiori section 3(1)(b)) is that individual traders should not be able to monopolise as trade marks terms which all traders should be allowed to use. But the defences available to an allegation of infringement are also, in part, designed to protect traders who make use of descriptive terms, geographical designations and the like. The question which has concerned the ECJ is whether the availability of these defences should affect the approach which is taken to the registrability of these marks.

The defences to the action for infringement, so far as relevant, provided by section 11 of the 1994 Act which is derived from Article 6 of the Directive, are as follows.

Section 3(1)(c) thus finds its echo in section 11(2)(b). Although the desirability of allowing marks with a substantial descriptive component on to the register and requiring traders to establish in legal proceedings that the nature of their use of such marks is such as to provide them with a defence is disputable, it is now the law that the existence of the defence is material to the scope of the prohibition on registration contained in sub-section 3(1)(c). In the BABY-DRY case, Case C-383/99P Procter & Gamble v OHIM [2002] ETMR 22, the Court of Justice considered the corresponding question under Articles 7(1) and 12 of Council Regulation 40/94, which are (so far as relevant) in terms identical to Articles 3 and 6 of the Directive and stated:

It is notorious that this used not to be the approach under the Trade Marks Act 1938: see Bailey & Co v Clark, Son & Morland (‘Glastonbury’s’) (1938) 55 RPC 253 (HL) and Re Yorkshire Copper Works’ Application (‘Yorkshire’) (1954) 71 RPC 150 (HL). The approach taken in those cases (which were geographical marks) was closer to that articulated by the Court of Justice before the BABY-DRY decision in Joined Cases C-108/97 and C-109/97 Windsurfing Chiemsee [1999] ECR I-2779, [1999] ETMR 585 (the references in this case are to the provisions of the Directive):

I think that it is likely that in the BABY-DRY case the Court of Justice has departed from what it said in Windsurfing Chiemsee, but the former is the most recent authority on the approach to be taken. The decision of the Court of First Instance in Case T-193/99 Wm Wrigley Jr Company v OHIM (‘DOUBLEMINT’) judgment of 31 January 2001 [2001] ETMR 623 is illustrative of the manner in which the principles are applied in practice (it precedes the BABY-DRY case but is cited with approval by Advocate General Jacobs in paragraphs 19ff. of his Opinion):

The Doublemint case is of course a case on its own facts, but it is important in providing a concrete example of the approach taken by the Court of Justice to Article 3(1)(c) of the Directive, and thus of the correct approach to section 3(1)(c). The basic message is that section 3(1)(c) does not present a high hurdle for the applicant to surmount.

The judge summarised the principles to be derived from the cases in four propositions.

Before the judge, and before this court, Mr Bloch QC submitted that it was not sufficient that the mark had some distinctive capacity. He submitted, basing himself on the Bach Flower Remedies case (above), that the descriptive content of the mark must be ‘displaced’, by which he meant that the descriptive sense must have been lost to the interested public, who must either consider that the mark has a purely distinctive signification or must attach no meaning to the mark when they see it in use. He said that the evidence that persons might use the initials ‘E.S.B.’ in ordinary speech in referring to ‘Extra Special/Strong Bitter’ meant that the mark had such a descriptive signification, which was not displaced.

The principal ground of decision in the Bach Flower Remedies case was that a mark might be objectionable under section 3(1)(a) of the Act if it did not satisfy the definition of ‘trade mark’ in section 1(1), that is ‘any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings’. The judge had failed to consider whether E.S.B. satisfied the requirement that it should be ‘capable of distinguishing’ Fullers’ beer from that of other brewers, as those words were interpreted in the Bach Flower Remedies case.

In the Bach Flower Remedies case, the judge had found that at the date of registration and thereafter the expression ‘Bach Flower Remedies’ and the word ‘Bach’ would have been used and understood in a generic sense. Morritt LJ observed that the averagely informed, observant and circumspect consumer must know the sense in which the word Bach was used and understood and that sense was generic. In paragraph 39 of his judgment, he concludes

In dealing with a submission that provided the mark is distinctive to a significant proportion of the relevant class it does not matter that it is not distinctive to the rest, Morritt LJ said this (paragraph 44 of his judgment):

Chadwick LJ put the matter slightly differently, again in the context of the objection under section 3(1)(a) and the non-applicability of the proviso to section 3(1):

I do not understand Chadwick LJ’s formulation to be different as a matter of substance from that of Morritt LJ, as it is plain that he considers that the requirement cannot be met if a ‘significant proportion’ of consumers considered the words to be generically descriptive.

Since the Bach Flower Remedies case was decided, the ECJ has decided the Philips Three-Headed Razor case, Case C-299/99 Koninklijke Philips Electronics NV v Remington Consumer Products Limited (Judgment of 18 June 2002). This was a reference by this Court to the ECJ, and the first question referred was ‘Is there a category of marks which is not excluded from registration by Article 3(1)(b), (c) and (d) and Article 3(3) of [the Directive] which is none the less excluded from registration by Article 3(1)(a) of the Directive as being incapable of distinguishing the goods of the proprietor from those [of] other undertakings?’ The answer was in the negative, the Court holding that

Both counsel suggested that it is not possible for the principal ground of decision of this court in the Bach Flower Remedies case to stand with this decision, a suggestion which I accept. The effect of the judgment of the ECJ is that the second half of the definition of ‘trade mark’ in section 1(1) of the Act (corresponding to Article 2 of the Directive) must be viewed as imposing no distinctiveness requirement separate from that imposed by Articles 3(1)(b), (c) and (d) and 3(3). Thus, there is no requirement that the mark be both ‘capable of distinguishing’ and ‘not devoid of any distinctive character’.

Mr Bloch contends, however, that the logic of the Bach Flowers Remedies is equally applicable to marks which naturally may have a descriptive meaning to some. Whether or not this contention is sound, it is not relevant to the present case. In the Bach Flower Remedies case, the mark had been used for many years in a wholly descriptive sense. It was conceded that at the date of registration it offended against section 3(1)(c). As Mr Wyand QC submitted, it was tantamount to an attempt to register the word ‘bread’ for bread. The judge in the present case found that while the mark had, for some, a descriptive connotation, it had in addition a distinctive character. Descriptiveness and distinctiveness in fact are not mutually exclusive. A mark may be both distinctive (in that it communicates a message as to the trade origin of the goods to which it is applied) while simultaneously conveying a clear description of those goods. Such marks (an example from the cases under the 1938 Act is ‘Weldmesh’ for steel mesh in roll or sheet form made from wire or rods, said to be ‘100% distinctive in fact’) have a substantial advantage in trade, since they have the enormous advantage of combining both distinctive and descriptive significations.

I have quoted the judge’s conclusion on distinctiveness in fact in paragraph 13 above. For the reasons I have given, I consider that this finding is determinative of this appeal so far as the objection under section 3(1)(c) is concerned. It is irrelevant that the initials E.S.B. may also have a descriptive connotation to some, and the appeal against the judgment on section 3(1)(c) must fail.

The judge set out his approach to the objection under section 3(1)(d) in the following passage:

Given the evidence to which I have referred that the terms ‘Extra Strong/Special Bitter’ might be abbreviated to ‘E.S.B.’, the judge accepted that if there was evidence that they were customary, and if there was evidence that they were likely to be abbreviated to E.S.B., then that would be a customary term. The judge found that in the light of the uses proved it would be wrong to infer a likelihood that the abbreviation would be used. Other material such as dictionaries, guides and the like did not help. The defendant failed to establish that the initials were a sign or indication customary in the current language or established practices of the trade. The judge accordingly rejected this ground of objection.

The circumstances in which the Court of Appeal will interfere with a finding of fact of this kind are discussed in a number of cases. The reluctance of the Court of Appeal to interfere will of course depend on many factors, identified in the speech of Lord Hoffmann in Biogen v Medeva [1997] RPC 1, 45:

The determination which the judge made in the present case is a good example of a ‘multi-factorial’ determination where the evidence of witnesses has been assessed by an experienced tribunal.

Nothing relied on persuaded me that the judge had made any error in his assessment of the facts and this ground of opposition must equally fail.

In my judgment, the judge’s conclusion that the mark was not objectionable under section 3(1) in 1988, and that the proprietors did not have to rely upon the proviso to section 3 to obtain registration was sound. Nonetheless, he undertook what he rightly described as the artificial exercise of identifying those parts of the evidence which would support a contention that the mark had, through use, acquired distinctiveness by that date. He also considered the facts relevant to the question of distinctiveness acquired after registration (the second sentence of section 47(1)).

I have no doubt that in the same way that a mark can gain distinctiveness after registration, so also it can lose distinctiveness because of the use which is made of it by the proprietor. Where the mark is not objectionable under section 3(1), nonetheless if the proprietor’s acts render the mark a common name in the trade for a product in respect of which it is registered, or if it misleads the public, it may be revoked to that extent (section 46(1)(c) and (d)). These objections are narrower than the objections under section 3(1)(c) and (d) but it must be remembered that the latter are available only at the date of registration. Section 46(1)(c) and (d) are not relied on in this case. The judge concluded that the use that Fullers had made of the mark might have served to displace the objections under section 3(1)(c) and (d), having considered the (admittedly statistically non-significant) survey evidence advanced by Fullers. He also noted that Fullers always used ‘E.S.B.’ or ‘ESB’ in combination with ‘Extra Special Bitter’ and ‘Fullers’, which was accepted to be a strong house mark. Mr West also placed great store by a remark made by one of Fullers’ brand advisers, Media Solutions Group, in 1997, that ‘E.S.B.’ was a generic:

The judge rightly did not attach too much weight to this comment: it would have been true in North America, that its author was influenced by North American experience, and that it was not supported by the other evidence in the case.

I think it might be fairly said that the evidence of the use of the mark made after registration could throw light on the questions arising under section 3(1), although care must be exercised if it is used for that purpose. The judge evidently thought that it helped, rather than hindered, the mark, and I can see no reason to disagree with him.

It was accepted that the mark had only ever been used by Fullers in respect of bitter beer. The question was whether it was for that reason vulnerable to revocation under section 46(1), which provides, so far as relevant, as follows.

The mark is registered in respect of ‘beer’. The question is whether it is right to restrict this specification. The judge held that the mark ought to be revoked save in respect of ‘bitter beer’. The cross-appeal raises the question whether he took the right approach, and, if he did, whether there was evidence to support the restriction that he considered appropriate.

There has been a difference of judicial opinion on the right approach to section 46(5). The question has now been considered by the Court of Appeal in Thomson Holidays Limited v Norwegian Cruise Line Limited [2002] EWCA Civ 1828. In that case, Aldous LJ, with whom Waller and Scott Baker LJJ agreed, have approved what is said in Decon v Fred Baker [2001] RPC 293.

Aldous LJ sets out the principles to be followed in paragraphs 29-31 of his judgment:

In deciding the scope of the restriction in the Decon case, I took into account the intended use of the proprietor’s goods, the channels of trade through which they were sold, and the likely purchasers of the goods. The limitation which was eventually arrived at encompassed the whole of the use which had taken place. Too wide a specification of goods will affect the rights of the public.

In the Thomson Holidays case, Aldous LJ pursued the Cox’s Orange Pippins question when considering the judge’s finding in paragraph 13 of his judgment in that case that ‘cruises in the sense of cruise ship holidays and the ancillary services directly involved with such cruises form a distinct category of holiday product which differs both in kind and customer profit to land based package holiday products such as the Claimants’ club Freestyle Package Holiday.’ The mark in question was ‘FREESTYLE’ registered in respect of a range of services in classes 39 and 42. The specification of services in class 39 was ‘arrangement and booking of travel, tours and cruises; escorting travellers and arranging the escorting of travellers; providing tourist office services: all included in Class 39’. Aldous LJ commented on the judge’s finding as follows:

The emphasis throughout this judgment is on a fair description which would be used by the average consumer for the products on which the mark has been used by the proprietor.

The judge followed Jacob J’s suggestion in Minerva TM that it was relevant to enquire whether the specification of goods included ‘commercially quite different sorts of articles’ from those in respect of which the proprietor has actually used the mark, and also whether ‘non-use in respect of a significant [and, I would add, identifiable] sub-set’ of the specification of goods was established. He appears to have determined the question of the width of the specification of goods in part as a question of the perception of the average reasonably informed consumer:

Because the decision of the Court of Appeal in the Thomson Holidays case was not known at the date of the hearing before us, the parties were invited to make further submissions in writing in the light of the judgment in that case. Both parties availed themselves of the opportunity so provided. Mr Wyand QC submitted that in the light of Thomson Holidays the judge applied the wrong test. He submits that not only are the terms ‘lager’ and ‘bitter’ ill defined, but that in fact they are merely segments of the market in beer. All bitter is sold side-by-side with lager in pubs and bars. He says that the natural word that the average consumer would use (and which is the global term used by the Good Beer Guide), is ‘beer’ and the judge was wrong to revoke the mark to the extent he did.

My Wyand further observes that there is no clear dividing line between different types of beer: lagers, pilsners, ales, bitters, stouts, porters and so on are not clearly defined categories but are on the contrary to some extent arbitrary. There are no commonly agreed criteria for deciding between them, and it is largely a matter of what the brewer decides to call his particular beer. Obviously, Mr Wyand said, the channels of trade are the same for all of them, and even on the approach which commended itself to him the judge should not have found on the evidence that ‘bitter’ constituted a defined sub-class. The point on ‘repertoire drinking’ was much narrower, turning upon some evidence relating to the propensity of some drinkers not to limit themselves to certain classes of drink in particular circumstances. But, says Mr Wyand, the judge was in error in limiting the specification of goods to a single segment only of the class of goods naturally described as ‘beer’.

Mr Bloch submits that in fact the judge did exactly what Aldous LJ says should be done. He informed himself of the nature of trade, and then decided what in ordinary language the goods were on which the proprietor had used the mark. There was nothing wrong with the judge’s approach in principle. Every case depended on its own facts, and in limiting the registration to ‘bitter beer’ the judge recognised a class of beer well-known to the interested public. In contrast, no consumer can ever have referred to ‘land-based holidays’, to which the judge had limited the registration in the Thomson Holidays case.

In my judgment there is no difference of substance in the test applied by the learned judge and that set out by Aldous LJ in the Thomson Holidays case. While the judge concentrated on whether the different classes of beer had distinct groups of consumers, I consider that his finding in paragraph 61 of his judgment in respect of the habits of the relevant body of consumers is important:

In the result, I would dismiss both the appeal and the cross-appeal.

I agree with the judgment of Pumfrey J but add a few words of my own as this is the first opportunity which this court has had of expressing a view of the effect of the decision of the European Court of Justice in Koninklijke Philips Electronics NV v Remington Products Ltd, Case C-299/99, 18 June 2002 (the Philips case) on the decision of the Court of Appeal in Healing Herbs Ltd v Bach Flower Remedies Ltd [2000] RPC 513 (the Bach case).

Accordingly, I turn to the issue of distinctiveness. The words “extra special bitter” on their face are descriptive and they are not inherently distinctive. But, the findings of the judge, following a careful review of the evidence, were that, by the date of registration of the trademark “E.S.B”, those initials would have had a distinctive meaning to the average consumer as denoting the product of the respondent. Accordingly, on the judge’s findings, this is not a case where, to use the words of Chadwick LJ in the Bach case, the consumer would know “that the words … are widely used in a generic or descriptive sense.” (page 535). Thus, the trademark was not rendered invalid by virtue of the absolute grounds in section 3(1)(b) to (d) of the Trade Marks Act 1994. Despite the detailed submissions of Mr Michael Bloch QC, for the appellant, I see no basis on which the judge’s findings can be disturbed by this court.

The judge did not have to consider section 3(1)(a) of the Act of 1994. His decision preceded in time the decision in the Philips case. That decision supersedes the decision of the Court of Appeal in the Bach case on the question of the interpretation of section 1(1) in conjunction with section 3(1)(a) of the 1994 Act. The words in question in section 1(1) are “capable of distinguishing the goods and/or services of one undertaking from those of other undertakings”. These words reproduce equivalent wording in article 2 of the First Council Directive 89/104 of December 21 1988, which the 1994 Act was designed to implement. In the Philips case, the European Court of Justice adopted a purposive construction of the Directive, holding that article 2 established a general proposition, that a trademark must serve to distinguish the proprietor’s product, but that that proposition did not extend the boundaries of the grounds for refusal or invalidity separately covered by article 3. In other words the relevant words in article 2 are merely epexegetical of the grounds in article 3(1)(b) to (d) and article 3(3). Thus the answer given by the European Court of Justice in the Philips case on this issue states:-

Neither article 3 of the Directive nor the propositions of law set out by the judge in paragraph 16 of his judgment (and contained in paragraph 27 of the judgment of Pumfrey J) define the point at which a mark is outside article 3(1)(b) to (d) (the equivalent of section 3(1)(b) to (d) of the 1994 Act), for example, because it is “devoid of any distinctive character”. The test applied by the judge is that of the average consumer. This is the correct test: see, for example, the Bach case. This test has its roots in the proviso to article 2. Accordingly, if the mark passes section 3(1)(b) to (d) (as the case may be) on that test, it is “capable of distinguishing the goods or services of one undertaking from those of other undertakings” for the purposes of section 1(1) and 3(1)(a) and properly registrable. At least where a sign is not inherently distinctive but only becomes distinctive by use, the court has to consider whether the average consumer test is passed on the basis of the position in fact.

I thus agree with Pumfrey J that, in the light of the answers given by the European Court of Justice in the Philips case, the critical words in section 1(1) are now to be interpreted:

In this passage, Pumfrey J refers to the provisions of the Directive contained in the relevant answer of the European Court of Justice (see above). It follows that the provisions of the 1994 Act which must now be read as imposing no separate distinctiveness requirement from those imposed by section 3(1)(b) to (d) are sections 1(1) and 3(1)(a), and in addition the provisos to sections 3(1) and 47(1) of the 1994 Act, which are designed to implement article 3(3) of the Directive. The conclusions which I have expressed are in line with tenor of the solutions to the primary question, the subject of the reference in the Philips case, preferred in the current edition of Kerly, Law of Trade Marks and Trade Names (2001) (13th ed), which was published after the reference to the European Court of Justice in the Philips case but before that decision was announced.

Even though the decision of the Court of Appeal in the Bach case on the point identified above has been superseded by the decision of the European Court of Justice, the rest of the decision is unaffected. I refer in particular to the observations of the court on the average consumer test and the usefulness of survey evidence.

The instant appeal goes further than Proctor & Gamble Company v Office for Harmonisation in the Internal Market (Trade Mark and Design) [2002] ETMR 3 (the Baby-Dry case). In that case the two words in question, “baby” and “dry”, were also descriptive of the product (disposable nappies) on the face of it. In the Baby-Dry case, the European Court of Justice held that the words had a “syntactically unusual juxtaposition” and constituted a “lexical invention”. This conclusion has been the subject of criticism by the Advocate General in Koninklijke KPN Netherlands NV v Benelux-Merkenbureau, Case C-363/99, 31 January 2002, (the KPN case). As the judge in this case noted, the Advocate-General regarded the conclusion of the European Court of Justice as (on the facts) “over academic” since the words “baby” and “dry” can be used in a normal English sentence (“this product keeps my baby dry”). In this case the words which the initials represent have not been combined in any unusual way. Nor are the initials themselves particularly distinctive. They do not require the degree of mental effort required to deduce the significance of “doublemint” (see Wm Wrigley Co v Office for Harmansation in the Internal Market (Trade Marks and Designs) [2001] ETMR 58 (the Doublemint case). But the judge’s finding was that by the date of registration the initials had become capable of distinguishing the respondent’s product from beverages produced by other brewers, i.e. had become distinctive by use (see paragraph 38 of the judgment, and in particular the last sentence thereof).

On the judge’s findings, the initials possess a secondary meaning additional to the purely descriptive meanings attaching to the words which the initials represent. It would be impossible to displace the descriptive meaning of the words entirely, and in my judgment, Community law does not require that that should be shown.

To a much greater degree, this case illustrates the break with our domestic past brought about by the 1994 Act. The words for which the first two initials stand are merely laudatory words, the mark consists purely of initials and the words connoted by the initials are mere descriptors. This concatenation of features would have made it difficult for this mark to survive the present attack under our pre-1994 Act domestic law. If King Canute had been a trade mark agent, the waters of Community law, which Lord Denning depicted as rushing up our native shores, would surely have overwhelmed him by now. As the respondent submits, one has to start by forgetting the preconceptions of pre-1994 Act trade mark law. The territory that can be occupied by registered trade marks has been significantly enlarged by the 1994 Act, and traders who use such marks without consent must increasingly rely on the limits as to the effect of a registered trade mark, set out in section 11 of the 1994 Act.

Accordingly, I would dismiss the appeal on the distinctiveness point.

On the cross appeal on non-use, I agree with the judgment of Pumfrey J and have nothing to add.

I agree with both judgments.