Bayerische Motoren Werke Aktiengesellschaft v Technosport London Ltd & Anor

The appellant (“BMW”) appeals against a decision dated 13 April 2016 of HHJ Hacon, sitting in the Intellectual Property Enterprise Court and his consequent order, by which he dismissed parts of the trade mark infringement and passing off action which BMW had brought against the respondents Technosport London Limited and Mr George Agyeton.

BMW is the well-known manufacturer of motor vehicles and is the registered proprietor of the following trade marks:

(1)

Community Trade Mark no. 000091835 in the form of the letters BMW (“the BMW Mark”), registered in respect of, among other things, the following services in Class 37: "maintenance and repair of cars, motors, engines and parts of these goods; cleaning of automobiles; installation services".”

(2)

Community Trade Mark no. 000091884 (“the Roundel”), a device mark in the following form:

The action in passing off was treated at trial and on appeal as standing or falling with the trade mark infringement action. It is not therefore necessary to consider it separately.

The first respondent, Technosport London Limited, is a company dealing in the repair and maintenance of cars, mostly BMW motor cars and Minis. Mr Agyeton, the second respondent, is the sole director and moving spirit of the company. I will refer to the respondents as TLL save where necessary to distinguish between them. Although TLL specialises in the repair and maintenance of BMW motor cars, it has no formal connection with BMW other than as purchaser and user of BMW manufactured spare parts.

BMW complained in the action that TLL had made use of all three of its registered trade marks in various aspects of its business. For example it had used the Roundel on a facia board on the exterior of its former business premises, adjacent to a reception panel and on a banner in the interior of its new business premises, on the outside of a van used to conduct the business and on business cards distributed to customers. In addition, BMW alleged that TLL had used the M Logo on its website. The judge concluded that the average consumer had come to believe that the Roundel and the M Logo would only be displayed in relation to businesses which were authorised by BMW, and that their use would therefore lead the average consumer to believe that TLL was an authorised dealer. There was, accordingly, infringement by use of these marks. There is no appeal from the judge’s conclusions on those issues.

BMW's allegations of infringement of the BMW Mark concerned the use of the mark in conjunction with TLL's trading name “Technosport”. There were three such instances:

The judge summarised the defence put forward by TLL, so far as now relevant, as being that its use of the signs “did no more than accurately convey the message that TLL was a garage specialising in the maintenance and repair of BMW cars.” Essentially the same point was put as a defence under Article 12(b) and 12(c) of the Council Regulation (EC) 207/209 (“the Regulation” (see below)), but the judge decided without objection from the parties to formulate the issue in this rolled-up form. Having rejected that defence in relation to the Roundel and the M Logo, the judge turned to the allegation of infringement of the BMW Mark by the Technosport BMW signs. BMW supported their case by reference to the fact that authorised BMW dealers tended to style themselves by using a trading name immediately followed by BMW. There were examples in Mr Agyeton’s evidence including “Stephen James BMW”, “Berry BMW Chiswick” and “Hexagon BMW”. The judge’s reasoning on this issue is contained in a single paragraph of his judgment, at paragraph 33:

“BMW's argument in relation to the BMW Mark was more subtle and to my mind more flimsy. It was based on the assertion that while the average consumer would not believe that “BMW” conveys any implication of authorised use in general, it does when immediately attached to a dealer's name. It also conveys that implication where used in a manner which, according to the strictures contained in the contracts with authorised dealers, is not permitted use – such as the manner of representation on Mr Agyeton's shirt. In my view, the burden of establishing that the average consumer's perception of BMW signs embraced such subtleties would require more evidence than BMW produced. It would probably need evidence from actual consumers. I find that TLL's use of its BMW signs did not convey to the average consumer any implication of TLL being an authorised dealer. ”

BMW also advanced a case under article 9(1)(c) of the Regulation based on the Roundel and the BMW mark. It was common ground that these marks were marks with a reputation within the meaning of that Article. The judge accepted that there was infringement of the Roundel on this basis, because TLL’s use took unfair advantage of the reputation of the Roundel, but rejected the Article 9(1)(c) case based on the BMW Mark.

BMW challenges both these conclusions on this appeal. Taking first the Article 9(1)(b) case, Mr Gwilym Harbottle, who appeared for BMW, submitted that the judge’s reasons for reaching his conclusion of non-infringement of the BMW Mark under Article 9(1)(b) were inadequate. When all the relevant circumstances were taken into account, and irrelevant matter ignored, the judge ought to have held that the average consumer would see the Technosport BMW signs as conveying the message that TLL was a BMW authorised dealer, or at least economically linked in some way to BMW. The Technosport BMW signs were a trading name or style which identified the business which was offering the repairing services, and did not merely describe what it did. If TLL wished to describe its services it could do so in a number of ways which did suggest an economic link. The judge had been wrong to require further evidence to reach this conclusion. His reference to the need for evidence from actual consumers meant that he had taken account of an irrelevant consideration: the court is not assisted by evidence of actual consumers (other than spontaneous examples of confusion) in a case concerning an ordinary consumer product. If the judge was correct, any independent repairer could incorporate the letters BMW into its trading name in the way TLL had done, without infringing the BMW mark. This was a consequence which was therefore of some importance to BMW.

Miss Charlotte Scott, who appeared for TLL, supported the judge’s reasoning when considered as a whole. The judge’s conclusions were essentially factual and evaluative ones which this court should not interfere with absent an error of principle.

Article 9(1) and (2) of the Trade Mark Regulation read at the material times as follows:

“1.

A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

(a)

any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;

(b)

any sign where, because of its identity with, or similarity to, the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;

(c)

any sign which is identical with, or similar to, the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.

2.

The following, inter alia, may be prohibited under paragraph 1:

(a)

affixing the sign to the goods or to the packaging thereof;

(b)

offering the goods, putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder;

(c)

importing or exporting the goods under that sign;

(d)

using the sign on business papers and in advertising.”

Article 12 limits the effect of the trade mark as follows:

“A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:

…;

(b)

indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or of rendering of the service, or other characteristics of the goods or service;

(c)

the trade mark where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts,

provided he uses them in accordance with honest practices in industrial or commercial matters.”

In Case C-63/97 Bayerische Motorenwerke AG and another v Deenik [1999] ETMR 339, the Court of Justice was asked by the Hoge Raad (Dutch Supreme Court), amongst other things, whether advertisements such as “Repairs and maintenance of BMWs”, constituted infringement of a BMW trade mark under the corresponding provisions of Directive 89/104 to approximate the laws of the Member States relating to trade marks (“the Directive”). The court answered that question in the following way at paragraph 64:

“In the light of the foregoing, the answer to be given to the fourth and fifth questions must be that Articles 5 to 7 of the directive do not entitle the proprietor of a trade mark to prohibit a third party from using the mark for the purpose of informing the public that he carries out the repair and maintenance of goods covered by that trade mark and put on the market under that mark by the proprietor or with his consent, or that he has specialised or is a specialist in the sale or the repair and maintenance of such goods, unless the mark is used in a way that may create the impression that there is a commercial connection between the other undertaking and the trade mark proprietor, and in particular that the reseller's business is affiliated to the trade mark proprietor's distribution network or that there is a special relationship between the two undertakings.”

By treating Article 5 to 7 of the Directive as a group, that formulation elides considerations which arise under Article 9 and 12 of the Trade Mark Regulation. Perhaps it was for that reason that neither side took any objection to the way in which the judge formulated TLL’s defence, namely as whether TLL’s use of the signs “did no more than accurately convey the message that TLL was a garage specialising in the maintenance and repair of BMW cars.” Another way of defining the issue would be to ask whether the use of Technosport BMW signs may create the impression that TLL's BMW repairing service was affiliated to BMW’s network or that there is a special relationship between them. In fact the judge went on in substance to ask this question in paragraph 33, quoted above.

It was common ground that the issues before us fell to be decided under Article 9(1)(b) because the Technosport BMW signs were not identical to the BMW mark. It was therefore necessary for BMW to show that, because of the similarity between those signs and the BMW Mark, there existed a likelihood of confusion on the part of the public. It is clear from authorities both in the CJEU and in this court that a risk that the average consumer may believe that the services come from the same or economically linked undertakings constitutes a likelihood of confusion for those purposes: see, most recently, Comic Enterprises v Twentieth Century Fox [2016] EWCA Civ 41 at paragraph 32.

BMW’s case before the judge was that the immediate juxtaposition of Technosport and BMW as a trading style gave rise to a risk that the average consumer might gain the impression that the businesses were commercially connected in some way. This impression was reinforced by the known practice of many authorised dealerships of using their name followed immediately by BMW.

An oddity of the way in which BMW presented its case before the judge was that it went to some lengths in its evidence to point out that the precise way in which the Technosport BMW signs were being used by TLL was different from that permitted by authorised BMW dealers under their agreements with BMW. However neither side now suggests that the average consumer would be aware of such refinements – the judge called them subtleties – and they are therefore of no assistance in deciding what message would be taken by the average consumer from the Technosport BMW signs.

I accept that one cannot start, in a case such as this, from the proposition that any use of the BMW Mark in the course of a business specialising in the repair of BMWs would be an infringement. Use of the mark is necessary and legitimate in order to explain to the public what the business in question actually does. Thus, by way of example, BMW rightly took no objection to the use by TLL of the slogan “The BMW specialists” on the facia of their old premises, separated from the name identifying the business, namely Technosport. Equally, one cannot start from the proposition that the use of BMW in relation to a motor car repairing service can never be an infringement. The mark is, after all, registered for that very service. The distinction is between uses which convey the true message “my business provides a service which repairs BMWs and/or uses genuine BMW spare parts” and those which convey the false message “my repairing service is commercially connected with BMW”. Which of these messages is conveyed depends on a close consideration of the detail and context of the use. For convenience I call the former message “informative use” and the latter “misleading use”.

The burden of paragraph 33 of the judgment is that BMW had failed to prove that the average consumer’s perception of the incorporation of the word BMW into the trading style of TLL was misleading use, and that BMW ought to have called more evidence, probably including evidence from actual consumers, to show that this was the case.

Miss Scott submitted that the judge’s reasoning can be more fully understood by considering the way in which he dealt with the Roundel. In the case of the Roundel he was able to conclude that the average consumer had come to believe that the Roundel would only be displayed on and in the premises of an authorised repairer. By contrast, there was no such evidence in relation to the close juxtaposition of the BMW Mark to the name of the dealer. The judge was justified in concluding that it could not be assumed by the average consumer that if the BMW Mark is used in juxtaposition to the trading name it indicates that the business is authorised.

If that was the judge’s reasoning, it seems to me that it fails to take any account of the differences between the case on the Roundel and the case on the BMW mark. There was an important distinction between these two cases, in that BMW’s case on the latter, but not the former, was that the use of the signs indicated that TLL was styling its business as Technosport BMW, i.e. it was using it as an identifier of its business and services, rather than as a description of what it did. It does not require special knowledge on the part of the average consumer to understand that the use of a trade mark as part of a trading style is intended to make a statement about the identity of the business and services it provides, and that it may indicate a connection between the business operated under that name and the proprietor of the mark. The display of the Roundel at various points on and in the premises, on the other hand, might plausibly require special knowledge as to what was conveyed thereby.

One is left, therefore with the reasoning in paragraph 33. If one takes out the discussion of the fact that the use was not precisely in accordance with that specified for authorised dealers, the judge’s rejection of the case hangs entirely on the conclusion that BMW ought to have adduced further evidence to establish that juxtaposition of BMW with a dealer’s name will convey the impression that the dealer is authorised.

By putting the matter in that way, I think that the judge made an error of principle. The judge had to decide whether the use of the Technosport BMW signs was informative use or misleading use. This did not require BMW to prove that all authorised dealers use the trading style “Dealer BMW”, far less that whenever the average consumer sees the dealer’s name juxtaposed in any context with the BMW Mark he assumes that it refers to an authorised dealer. The issue was whether that impression was conveyed by the sign Technosport BMW, or that there was a risk that it would be.

I also think the judge was wrong to say that it required evidence of actual consumers to establish BMW’s case. Where what is in issue is an ordinary consumer product the court is not normally assisted by the evidence of individual consumers to establish what impression is conveyed by a sign: see Interflora I [2012] EWCA Civ 1501 at [40] - [43]. The court has to make its own assessment, taking into account all relevant circumstances. Although Miss Scott identified some respects in which the evidence from BMW’s employees might have been improved, she was not able to identify what additional evidence from consumers the judge could legitimately have had in mind. She accepted that evidence of actual confusion is never a pre-requisite of success in an infringement or passing off action.

By focusing on the absence of evidence of particular kinds, it seems to me that the judge lost sight of the need to consider each of the uses in the context in which they occurred. Had he done so, I think that he would inevitably have had to come to the conclusion in relation to each of the uses that the use of the Technosport BMW signs was more than informative use and carried the risk that it would be understood as misleading use.

I take first the use on the van. The rear of the van displays the name or style TECHNOSPORT-BMW. The immediate context of that use is the Roundel, a telephone number and a website address. Plainly, in the light of the judge’s findings about the Roundel, the average consumer would understand the business designated as TECHNOSPORT-BMW to be an authorised distributor. However, Miss Scott submits that the relevant comparison is “mark for sign” and that it is therefore necessary to consider what work TECHNOSPORT-BMW is doing without assistance from the Roundel. I do not think that is correct. In Specsavers International Healthcare Ltd and others v Asda Stores Ltd [2012] EWCA Civ 24, Kitchin LJ (with whom the President of the Queen’s Bench Division and Black LJ agreed) said at paragraph 87:

“In my judgment the general position is now clear. In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context.”

I have, however, considered what message the van would convey in the absence of the Roundel, as that is the issue which now divides the parties. To my mind there remains an obvious risk that the average consumer will take the use of this trading style to indicate a commercial connection between the motor repair services offered and BMW. My reasons are as follows.

Firstly, there is nothing in the sign TECHNOSPORT-BMW to indicate that the sign is being used informatively. Whilst phrases such as “BMW repair specialist” clearly alert the average consumer to the nature of the business, the simple incorporation of BMW into the trading style does nothing of that kind. There is force in Mr Harbottle’s submission that if TLL simply wishes to convey the information that it specialises in the repair of BMWs, it would be easy for it to say that expressly, by the use for example of the phrase “BMW repair specialist”, in a manner which is visually distinct from the name Technosport. The juxtaposition of Technosport and BMW without more does not convey that information.

Secondly, on the assumption that it is relevant to consider the wider context of the use, Miss Scott points to the website address in the final line of the livery on the rear of the van and suggests that the average consumer would take the “technosport” in that address to be the trading name of the company, and thus understand the headline “TECHNOSPORT-BMW” in an informative sense. I think that this is unrealistic. The average consumer could equally, and I think more plausibly, understand that the name had been abbreviated in the website address.

Thirdly, whilst there are well-known questions about whether, in the case of a trade mark registered for goods, the name of a business is being used in relation to the goods sold by that business, there is normally no such problem in the case of a service mark. The name of the business as the provider of the services is much more readily, if not invariably, taken to be use in relation to the services offered.

Fourthly, the presence of a risk of the kind in question does not depend on it being the universal practice of authorised distributors to use that trading style, although of course many did. The risk exists because the use of a trade mark within a trading style in this way, and without further explanation, is naturally taken by the average consumer as an identifier of the business and the services it provides. It naturally carries the risk that it will convey the impression of a connection between Technosport and BMW which goes beyond the fact that BMW cars and spares are used in the business.

The use on the shirts which was established at the trial appears to have been limited to use at TLL’s premises. Again this was in a context where, as the judge held, there was use of the Roundel in such a way as to convey the impression that TLL was an authorised dealer. However, if one considers the shirts on their own, mark for sign, there is again no immediate context to indicate that it is merely informative use. To my mind it is simply a trading style which conveys the impression of authorisation by BMW.

Finally I turn to the Twitter account. Whilst this is perhaps not the strongest of BMW’s points, I conclude that the use here was an infringement as well. It is, to my mind, another example of the use of BMW within a trading name in a way which is prone to give the impression of authorisation, consistent with the use on the van and the shirt. It is not mere informative use.

BMW only advanced a case on Article 9(1)(c) if they were wrong on Article 9(1)(b). As I have concluded that they are right on Article 9(1)(b) it is not necessary to consider that case. Moreover, it raises some quite difficult questions as to whether a use which has been found, on this hypothesis, to be purely informative can nevertheless take undue advantage of a well-known mark. I would prefer to leave consideration of that issue, on which we have only heard brief argument, to a case in which it arises more directly.

I would therefore allow BMW’s appeal against the judge’s findings on Article 9(1)(b) in relation to the BMW Mark.

I agree.