Deutsche Telekom Ag v E! Entertainment Television Inc

This is an appeal from the decision of the Hearing Officer (M Foley) dated 16^th June 2005 whereby he rejected Deutsche Telekom AG’s (“the Appellant”) opposition to the registration of the mark “E! ONLINE” by E! Entertainment Television Inc. The opposition was based on the Appellants earlier United Kingdom and Community trademarks in respect of “T-ONLINE” (“the T-ONLINE earlier marks”).

An appeal from the Registry proceeds by way of review rather than re-hearing see REEF trademark [2003] RPC 101 per Robert Walker LJ at page 109. The principles are summarised :-

“28It is not suggested that he was not experienced in this field, and there is nothing in the Civil Procedure Rules to diminish the degree of respect which has traditionally been shown to a hearing officer’s specialised experience. (It is interesting to compare the observations made by Lord Radcliffe in Edwards v Bairstow [1956] AC 14, 38-9, about the general commissioners, a tribunal with a specialised function but often little specialised training.) On the other hand the hearing officer did not hear any oral evidence. In such circumstances an appellate court should in my view show a real reluctance, but not the very highest degree of reluctance, to interfere in the absence of a distinct and material error of principle.

29.

The appellate court should not treat a judgment or written decision as containing an error of principle simply because of its belief that the judgment or decision could have been better expressed. The duty to give reasons must not be turned into an intolerable burden: see the recent judgment of this court in English v Emery Reimbold & Strick Ltd (and two other appeals heard with it) [2002] EWCA Civ 605, 30 April 2002, para 19: ”

“... the judgment must enable the appellate court to understand why the Judge reached his decision. This does not mean that every factor which weighed with the Judge in his appraisal of the evidence has to be identified and explained. But the issues the resolution of which were vital to the Judge’s conclusion should be identified and the manner in which he resolved them explained. It is not possible to provide a template for this process. It need not involve a lengthy judgment. It does require the Judge to identify and record those matters which were critical to his decision.

30.

The judge did not go into these matters in detail and he is not to be criticised for not having done so. I have gone into them only because they figure prominently in the grounds of appeal. I am not persuaded that the judge did not set out with the right general approach to his task.”

The appeal in this case is based upon alleged errors of law and principle and Mr Carr QC who appears for the Appellant does not seek to challenge any of the factual findings.

On 14^th July 1997 the Respondent applied to register the word marks E! ONLINE and “E! Online” as a series of two trademarks in relation to a variety of goods and services in classes 9, 16 and 41.

The Appellant opposed the application as registered proprietor of various trade marks.

The opposition was brought under :-

An opposition was also based under section 56 (1) but that has been abandoned before me.

Both parties filed evidence and elected to have a decision made without an oral hearing.

As appears from paragraph 6 of the decision, the Hearing Officer noted that neither side took up an offer of an oral hearing and that his decision was after a careful study of the evidence and the written submissions provided.

Before going on to consider the evidence and its analysis by the Hearing Officer I will set out how he addressed himself as to the law.

After setting out the sections in paragraphs 23 and 24 he then in paragraph 25 set out the matters which in his view required to be considered. The paragraph is as follows:-

“25 I take into account the well established guidance provided by the European Court of Justice (ECJ) in Sabel BV v Puma AG [1998] E.T.M.R. 1, Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc [1999] E.T.M.R. 1, Lloyd Schuhfabrik Meyer & Co. GmbH v Klijsen Handel B.V. [2000] F.S.R. 77 and Marca Mode CV v Adidas AG [2000] E.T.M.R. 723. It is clear from these cases that:

(a)

the likelihood of confusion must be appreciated globally, taking account of all relevant factors; Sabel BV v Puma AG, paragraph 22;

“(b)

the matter must be juged through the eyes of the average consumer of the goods/services in question; Sabel BV v Puma AG, paragraph 23, who is deemed to be reasonably well informed and reasonably circumspect and observant – but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind; Lloyd Schuhfabrik Meyer & Co, GmbH v Klijsen B.V. paragraph 27;

(c)

The average consumer normally perceives a mark as a whole and does not proceed to analyse its various details; Sable BV v Puma AG paragraph 23;

(d)

the visual, aural and conceptual similarities of the marks must therefore be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive dominant components; Sabel BV v Puma AG, paragraph 23;

(e)

a lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods, and vice versa; Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc, paragraph 17;

(f)

there is a greater likelihood of confusion where the earlier trade mark has a highly distinctive character, either per se or because of the use that has been made of it, Sabel BV v Puma AG, paragraph 24;

(g)

mere association, in the sense that the later mark brings the earlier mark to mind, is not sufficient for the purposes of Section 5 (2); Sabel BV v Puma AG, paragraph 26;

(h)

further, the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; Marca Mode CV v Adidas AG, paragraph 41;

(i)

but if the association between the marks causes the public to wrongly believe that the respective goods come from the same or economically linked undertakings, there is a likelihood of confusion within the meaning of the section; Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc, paragraph 29”.

In paragraph 26 he stated that in any analysis it was inevitable that reference would be made to elements of a mark and rightly so for the case law required consideration to be given to the distinctiveness and the dominance of the component parts. However, he reminded himself that a consumer does not embark on a forensic analysis of the trade marks and it is the marks as a whole that must be compared (this is items b-c referred to in his summary).

He then (paragraph 28 through to 31) analysed the two marks and his conclusions are summarised in paragraph 31:-

“The stylisation to the remaining mark is no more than a series of five small squares bisecting T Online and in my view make little difference to the distinctive character of that mark. I do not know whether the letter T has any relevance for the goods or services for which the earlier marks are registered; there is no evidence either way. On the facts before me I have to say that prima facie I see nothing that would make the letter T in the opponents’ marks distinctive in its own right. The earlier marks are therefore a combination of two elements that are individually devoid of distinctive character. However, the combination has no meaning that I can see and is capable of individualising the opponents’ goods and services”.

He returned to this reasoning in paragraph 41 with his conclusions:-

“Adopting the “global” approach advocated and weighing all of the similarities, eg, in the goods/services and market against the differences in the respective marks, I find that on the balance of probability that use of the marks applied for in a trade in respect of the goods/services for which the applicants eek registration would not cause the public to wrongly believe that the goods/services are those of the opponents or come from some economically linked undertaking. Consequently there is no likelihood of confusion and the opposition under Section 5(2)(b) fails accordingly”.

The Hearing Officer considered this in his judgment. In paragraphs 8 and 9 he summarised the Appellant’s evidence. Some of that evidence related to evidence after 1997 and is therefore not relevant as to establishing its reputation as at 1997 which is the relevant date. For example the reference in paragraph 8 to 13,400,000 registered customers for the Appellant derives from 2004.

In paragraph 9 he referred to the entirety of the Appellant’s evidence. He points to a number of articles appearing in the Guardian and Independent and comments correctly that they are written after the relevant date and provide no information that casts light back to an earlier date. He then refers to the key exhibit “JMS3” being a directors’ report for the financial year 1996. The original of this is in unbelievably small print but it is important to appreciate that this is the financial report of the operations of the Appellant entirely. T-Online is only one of four of its operations. He correctly identifies that in that report it is described as the “biggest online service in Germany”. He fails to identify but it is clear that he must have read it that by the year end of 1996 a total 1,400,000 T-Online subscribers had signed up for that service. He comments that it is not clear when the UK subsidiary came into existence and is accordingly not possible to say that at the relevant date the opponents were using the mark T-Online in the UK. This is one of the major criticisms of the Appellant namely that the wording in the judgment suggests that the Hearing Officer concentrated solely on requiring the Appellant to establish a reputation in the United Kingdom and that he failed to address that it was possible for a reputation outside the United Kingdom to be sufficient to show that a significant number of the persons in the UK were likely to know of the Appellant’s use of the mark T-Online.

Having reviewed the evidence in paragraphs 8 and 9 in this aspect, he pronounced his opinion in paragraph 32 where he said:-

“The evidence of the opponents’ use of the mark is limited and much of what there is cannot be placed as relating to use in the UK and/or prior to the relevant date. Mr Stacey says that T-Online has been a “key business unit” of the opponents’ “since at least as early as 1996”, but not whether this is in relation to operations in the UK; the evidence provided no assistance. Nor is it possible to ascertain the number of subscribers or scale of access from persons in the UK. On the basis of the evidence before me I cannot say that at the relevant date the opponents had used the mark T-Online to an extent that it had become more distinctive, or that they had a reputation in the name”.

Having come to those conclusions he decided (paragraph 42) that his decision under section 5 (2)(b) effectively decided the matter because there is no distinctive character or repute of the Appellant’s marks to justify invoking that section. He indicated however that had he been required to make a decision he did not see that the Appellants marks would have faired any better they having failed to establish they had a reputation bearing in mind his finding that they were different marks and consequently had no goodwill that afforded the basis for opposition under section 5 (3).

There are in effect 3 criticisms. First, he wrongly concluded that trading activity in the United Kingdom is a prerequisite to demonstrating reputation in the United Kingdom and that he accordingly wrongly disregarded evidence of use. It is submitted that what he should have been addressing was whether bearing in mind the international nature of the business “a significant number of persons in the UK were likely to know of the Appellant’s use of the mark T-Online prior to the relevant date” (Appellant’s skeleton paragraph 13).

If the Hearing Officer did so act then I accept that he failed to take into account the authorities which establish that a party can acquire a reputation without carrying on a business within a jurisdiction see Pete Waterman Ltd v CBS United Kingdom Ltd [1993] EMLR 27; Nasa Trade Mark (US Government v Higgins) (unreported) (Chancery Division) 15^th December 2001 (Pumfrey J) and Cutty Sark Trade Mark (Imperial Tobacco Ltd v Berry Brothers and Rudd Ltd) (unreported) (Chancery Division) (31^st October 2001) (Jacob J).

However I accept the submissions of Mr Thorley QC in this regard that it is natural that one looks first for evidence of reputation within the UK. None was adduced by the Appellant. That could have been adduced by showing evidence of its operations within the UK or if it had no operations within the UK access by people within the UK to its service operated in Germany or evidence of people within the UK who would be aware of its operation and reputation. The difficulty facing the Appellant in my view is that they confuse the reputation of the Appellant generally and the reputation needed to be established in respect of the mark T-Online.

In this context it is important to understand what the service covered by that trade mark is. In this context I should say that I reject the fact that institutional and individual investors might have been interested in investing in the Appellant’s listing in 1996 (which was a big first for Germany) brings with them knowledge of the operations of T-Online. Nor do I accept that if they had knowledge of those operations that is sufficient knowledge for the purposes of a submission that that offering would be such that he would be entitled to conclude that there would be a significant number of persons in the UK who were likely to know of Deutsche Telekom’s use of the mark T-Online.

The difficulty with all of this is, in my view the confusion of the Appellant and T-Online.

The T-Online service is accessible only in the German language. It is difficult to see that the fact that a German broadcasting company offers an online service in German only is something that has any realistic prospect of becoming readily known by implication to potential subscribers in the UK. It is important to appreciate that the Appellant adduces no direct evidence to establish the alleged reputation in respect of T-Online. It asked the Hearing Officer to infer it by producing the financial material in respect of the Appellant which had a one line reference of 1,400,000 customers in Germany. They are disappointed because the Hearing Officer did not imply the substantial reputation and conclude that it would be known to a significant number of persons in the UK.

It is not like the two decisions of Nasa and Cutty Sark. One can well see in the case of Nasa and (for whisky drinkers at least) Cutty Sark why the reputation abroad would be evidently well known to people within the UK directly or indirectly. The Hearing Officer had no oral submissions. Quite how the Appellant was requiring him to draw implications from the evidence that it supplied was not made clear to him.

His conclusion in paragraph 32 in my view given the weakness of the evidence put before him was inevitable. I do not accept that in paragraph 32 it can fairly be said that he wrongly applied the principles he set out in paragraph 25.

Mr Carr QC’s submissions in my view bordered on the over elaborate analysis which the courts in the REEF case and in other areas (see e.g. Flannery v Halifax Estate Agents [2000] 1 WLR 377 said should not happen. The appeal is not a re-hearing. Even if looking at the material I would have come to a different conclusion that is not a ground for allowing the appeal. The only basis for an appeal is that the Hearing Office either applied the wrong law (which I have rejected) or alternatively he came to a conclusion on the evidence which was so utterly unreasonable his decision cannot stand or alternatively he gave no sufficient reasons. It is clear in my view that whilst paragraph 32 is short, he had come to a conclusion having summarised the evidence earlier that there is no reputation. I do not see in respect to the nature of the material provided to him he needs to say anymore.

If I am wrong in that and it is possible for me to reconsider the position I would have come to precisely the same conclusion. Evidence of the floatation and the business operations in a generalised way of the Appellant in 1996 go nowhere near establishing that it can be implied that there would be significant numbers of consumers who will be aware of the Appellants use of T-Online. The reality is that the Appellant has no positive evidence. Take one example. The easiest way of proving that there was such a substantial number of customers would have been to identify the precise numbers of subscribers within the UK that subscribe to the service as at 1996. As I have said no such evidence has been adduced. Evidence could have been adduced even of German residents who would have used the service when visiting the United Kingdom. No such evidence was adduced. All of this material is of course available to the Appellant because it must know where their subscribers are. Its omission in my view is significant.

It follows therefore that I reject the Appellant’s criticism of the Hearing Officer’s finding of no reputation in Germany that would be known to a substantial body of persons in the UK being likely to know of the Appellant’s use of the trade mark T-Online.

This is the second criticism of the decision. In my view the Hearing Officer considered the reputation of the Appellant but thought that it was of no significance in deciding whether or not on a global basis there was a likelihood of confusion. I do not accept that he excluded that reputation; he merely gave it minimal significance and in my view he was right so to do.

It is said that the Hearing Officer wrongly dissected the marks. This is the third criticism.

Once again in my view this involves an over elaborate dissection itself of the judgment. I refer to the emphasis in paragraph 29 in the REEF decision above. In my view approaching his judgment in the light of his directions to himself in paragraph 25 the subsequent analysis is not an over elaborate dissection. He assessed the marks. He identified the separate elements of the respective marks and it is clear that he was in accordance with the case law identified by him simply identifying the dominant and distinctive aspects of the marks in particular those aspects that were likely to be noticed by the average consumer. He was as is submitted by Mr Thorley QC, on behalf of the Respondent correct to appreciate that in the concept of goods and services the word “online” in the modern world would have very little distinctive character and thus the average customer when coming across the mark as a whole would take the word online as a reference to the type and/or availability of the goods and services. Therefore as a result the average consumer would be focused on the first (more distinctive) element of the marks. Nevertheless, it is quite clear from paragraph 28 of his determination that he drew everything together to look at the position of the consumer as a whole.

Mr Carr QC was driven to say that in the first part of the judgment the Hearing Officer set out the law simply for paying lip service and then completely disregarded them. I think that is an unfair criticism. Reading the determination as a whole the Hearing Officer set out correctly the law, correctly summarised and identified the evidence and then applied the evidence in accordance with those principles. His application was clear concise and accurate.

There is in my judgment therefore no basis for criticising the Hearing Officer’s judgment in his conclusion that “taken as a whole I would say the marks are dissimilar”.

I would not have come to any other decision.

Accordingly the Appellant’s challenge to the Hearing Officer’s determination under section 5(2)(b) fails completely.

In view of my decision under section 5(2)(b) there is no basis for challenging the Hearing Officer’s decision that the Appellant has no prospects under section 5(3). There was some debate before me as to whether there might be a need to remit a determination under section 5(3) but that does not arise because of my decision to uphold the reasoning of the Hearing Officer in his determination entirely.

Accordingly any appeal under section 5(3) is bound to fail just as it failed in front of him for the same reason.

Accordingly I dismiss the Appellant’s appeal.