Daimler Ag v Sany Group Company Ltd

This is an action for infringement of registered trade mark and passing off. The Claimant, Daimler AG, relies on the rights to which it is entitled by registration and through use of two figurative trade marks:

In relation to the first of the trade marks shown above, the Claimant relies on the protection conferred by two national registrations and one Community trade mark registration:

In relation to the second of the trade marks shown above the Claimant again relies on two national registrations and one Community trade mark registration:

I have referred only to the goods for which the protected trade marks are registered in Classes 7 and 12 on the basis that they are the classes which matter for present purposes. Those classes form part of the international system established for the purpose of aligning national practices on classification. The International Union for the Protection of Industrial Property agreed on an international classification system in 1934. (Footnote: ¹⁰) Later initiatives at the international level resulted in the Nice Agreement concerning the International Classification of Goods and Services for the purposes of the Registration of Marks of 15 June 1957 (as revised and amended from time to time).

In the United Kingdom the practice under the Trade Marks Act 1938 was, and the practice under the Trade Marks Act 1994 is, to classify goods (and services) in accordance with the prevailing international classification for the purposes of registration at the national level. This has also been the practice of the Community Trade Marks Office with regard to the registration of trade marks at the Community level under the Community Trade Mark Regulation. (Footnote: ¹¹) However, the practice in the Community Trade Marks Office differs substantially from the practice in the United Kingdom with regard to the effect of using wording from the class headings of the international classification when listing goods (or services) for the purposes of registration, as I go on to explain in paragraphs 13 to 16 below. The class headings indicate in broad terms the nature of the goods/services which fall within each class. They are supplemented by a detailed list of goods/services in alphabetical order identifying for each listed item the class into which it falls. In my annotations to the Class 7 and Class 12 specifications of the Claimant’s registrations, I have identified the instances where the wording comes from the class headings of the classes concerned. In Chapter 5 of the seventh edition of Kerly’s Law of Trade Marks and Trade Names published in 1951 it was observed that the wording of a specification ‘may, and often does, follow the words of the title to one of the classes’. The implications of that statement are not clear. It was omitted from the corresponding paragraph of the eighth edition published in 1960.

The Defendant, Sany Group Co. Ltd, is using the following sign as a figurative trade mark in various countries around the world:

On the basis of that declaration and in the light of various other materials relating to the Defendant’s present and proposed trading activities, the Claimant maintains that the Defendant is selling or threatening and intending to sell ‘vehicles’ such as cranes, excavators and truck-mounted pumps under and by reference to the figurative mark shown in paragraph 6 above, with and without the verbal element SANY. It seeks to prevent the Defendant from using that mark with and without the verbal element in the marketing of such goods in the United Kingdom on the basis that such use is or would be an infringement of the rights conferred by the registrations of the protected trade marks:

for giving rise to the existence of a likelihood of confusion (Footnote: ¹⁵) in breach of Section 10(2)(b) of the Trade Marks Act 1994 (Article 5(1)(b) of the Trade Marks Directive (Footnote: ¹⁶)) and Article 9(1)(b) of the Community Trade Mark Regulation;

for taking unfair advantage of, or being detrimental to, the distinctive character or repute of the protected trade marks without due cause in breach of Section 10(3) of the Trade Marks Act 1994 (Article 5(2) of the Trade Marks Directive) and Article 9(1)(c) of the Community Trade Mark Regulation.

The Defendant acknowledges that it has sold and intends to sell construction machinery (including self-propelled and truck-mounted construction machines) in the United Kingdom under and by reference to the marks in question. There is nevertheless an issue between the parties as to how far the Defendant is presently intending to commercialise its marks across the full width of the range of goods specified in its United Kingdom trade mark application. The principal line of defence is that on a ‘real world’ assessment of the factors germane to the question of liability, the claims for infringement and passing off should be rejected. In that connection the Defendant maintains that there is too low a degree of similarity between its marks and the protected marks, and too low a degree of similarity between its goods and those for which the Claimant’s registrations can legitimately be retained, for there to be a finding of liability. By counterclaiming for part-cancellation on the ground of non-use, it seeks to ensure that goods of the kind for which the protected marks have actually been used are identified with the required degree of precision in the lists of goods for which the trade marks are registered.

The required degree of precision has not yet been authoritatively defined by the European Court of Justice. (Footnote: ¹⁷) In three decisions of the Court of First Instance (Footnote: ¹⁸) it has been indicated that the outcome should be a specification expressed in wording which covers no independent sub-category or sub-categories of goods other than the one(s) within which the relevant trade mark can be taken to have been used. In the most recent of these decisions (Footnote: ¹⁹) it was emphasised that the chosen wording should reflect the purpose and intended use of the relevant goods. I have previously expressed the view that the aim should be to arrive at a fair specification by identifying and defining not the particular examples of goods for which there has been genuine use, but the particular categories of goods they should realistically be taken to exemplify. (Footnote: ²⁰) That appears to me to be consistent with the case law in England (Footnote: ²¹) and also with the case law of the Court of First Instance. However, it is possible that the case law in England may not fully accord with the case law of the Court of First Instance, as noted in the decision of Mr. Richard Arnold QC sitting as the Appointed Person in EXTREME Trade Mark (Footnote: ²²). It is sufficient for present purposes to say that there is a real issue as to the degree of precision with which the goods of the Claimant’s registrations may need to be re-defined in response to the Defendant’s counterclaim for part-cancellation.

The Defendant presently envisages that all except the following goods will be removed from the Claimant’s Class 7 specifications: ‘motors and engines (except for land vehicles)’; and that all except the following goods will be removed from the Claimant’s Class 12 specifications: ‘passenger cars’, ‘vans’, ‘coaches’, ‘buses’, ‘trucks’ and ‘truck chassis’. The Claimant accepts that there has been no use of the protected trade marks in relation to the following goods in Class 7: ‘vacuum cleaners’, ‘electric drills’, ‘incubators for eggs’ and ‘boilers for use in agriculture’; and that they have not been used in relation to ‘bathchairs’ in Class 12. It maintains that the Class 7 and Class 12 specifications should, with those goods deleted, be kept in place and that no further reductions in the scope of the wording of the specifications would be appropriate.

It thus appears to be common ground that the Claimant’s registrations are to a greater or lesser extent vulnerable to an order for part-cancellation. In principle, there should be part-cancellation to the extent that the goods for which the protected trade marks have actually been used are not identified with sufficient precision in the registrations as they currently stand. The process of revision is liable to be affected by two issues of law. Both concern the way in which specifications should be interpreted for the purposes of the Trade Marks Directive and the Community Trade Mark Regulation.

The first issue relates to the dates as of which the wording of the specifications should be interpreted (both before and after any revisions that may be required) in order to give effect to the law relating to infringement and part-cancellation for non-use. In Reed Executive Plc v. Reed Business Information Ltd (Footnote: ²³) the Court of Appeal held that the relevant date is the date with effect from which protection was originally secured rather than the date of the use in respect of which protection is subsequently claimed. (Footnote: ²⁴) If that approach is applied to the national and Community registrations in issue in the present proceedings, it will in each case require the use relied on by the Claimant to be in relation to goods within the wording of the existing specification, interpreted according to the coverage of the applicable Class at the time when protection was originally obtained. That may not be an entirely straightforward exercise in relation to the older registrations in issue.

The second issue interacts with the first. It relates to the way in which the specifications should be interpreted with reference to goods identified using wording from the class headings for Classes 7 and 12 of the international classification. According to the practice of the Community Trade Marks Office (Footnote: ²⁵), the requirement for the lists of goods and services in applications and registrations to be ‘worded in such a way as to indicate clearly the nature of the goods and services and to allow each item to be classified in only one class of the Nice Classification’ can be satisfied by adopting the wording of pertinent class headings:

This approach was applied by the Court of First Instance in Case T-186/02 BMI Bertollo SRL v. OHIM (Footnote: ²⁶):

At the national level in the United Kingdom (and other Member States) a stricter approach is applied as explained in paragraph 4.1.9 of Chapter 2 of the United Kingdom Trade Marks Registry Work Manual:

These divergent approaches to interpretation have given rise to debate and concern. (Footnote: ²⁷) I do not think that there is room for them to co-exist within the framework established for the co-ordinated protection of trade marks in the Member States and at the Community level. However, it is sufficient for present purposes to say that there is a real issue as to the effect, both upon the reach of the claims for infringement and the reach of the claim for part-cancellation, of permitting wording from the class headings for Classes 7 and 12 of the international classification to remain in the specifications of the Claimant’s registrations. That goes to the substantive effect of the relevant entries in the relevant public registers. I do not accept that it is an issue which the Claimant can avoid simply by electing on an ad hoc basis not to rely on the broader approach to interpretation in support of its claims for infringement in the present inter partes proceedings.

The action is currently listed for trial in July 2009 with an estimated duration of 3 to 5 days. In an attempt to simplify its position the Claimant has applied for summary judgment under CPR 24 upon the basis that the degree of similarity between the Defendant’s marks and the protected trade marks is so great as to be clearly sufficient to justify a finding of infringement by reason of the existence of a likelihood of confusion in relation to such of the Defendant’s goods as can and should be correlated with those of the kind for which the protected trade marks will remain registered in Class 12. This is a pragmatic narrowing of its claim for infringement rather than the identification of a discrete claim or issue arising in the context of the proceedings as a whole.

CPR 24.2 provides as follows:

In Doncaster Pharmaceuticals Group Ltd v. The Bolton Pharmaceutical Company 100 Ltd (Footnote: ²⁸) Mummery LJ emphasised the need for the court to be satisfied that justice can be done without recourse to a trial:

The central question in an action for infringement presented upon the basis encapsulated in the application for summary judgment is whether X times Y equals Z, with X representing the degree of similarity between the marks in issue, Y representing the degree of similarity between the goods in issue and Z representing the existence of a likelihood of confusion. In contrast to the position in registration proceedings, the relevant assessment must be made in the light of the specific circumstances characterising the allegedly infringing uses. (Footnote: ²⁹) The need for evidence directed to the ‘similarity’ of the goods in issue was emphasised in the judgment of the European Court of Justice in the Canon case (Footnote: ³⁰):

As between goods which are not identical, the criteria for determining whether there is ‘similarity’ conducive to the existence of a likelihood of confusion continue to be somewhat loosely defined. In Canon at paragraph 23 the European Court of Justice stated:

… In assessing the similarity of the goods or services it will be helpful to have regard to the factors suggested by the United Kingdom and French Governments.

According to the United Kingdom Government, the following type of factors should be taken into account in assessing the similarity of goods or services:

the uses of the respective goods or services;

the users of the respective goods or services;

the physical nature of the goods or acts of service;

the trade channels through which the goods or services reach the market;

in the case of self-serve consumer items, where in practice they are respectively found or likely to be found in supermarkets and in particular whether they are, or are likely to be, found on the same or different shelves;

the extent to which the respective goods or services are in competition with each other: that inquiry may take into account how those in trade classify goods, for instance whether market research companies, who of course act for industry, put the goods or services in the same or different sectors.

Whilst recognising that that list of factors is not exhaustive, the United Kingdom Government observed at the hearing that it nevertheless indicates a common denominator which should be present in all factors taken into account in assessing the similarity of goods or services: namely that the factors are related to the goods or services themselves.

The French Government likewise considers that, in assessing the similarity of the goods and services, the factors to be taken into account should include the nature of the goods or services, their intended destination and clientele, their normal use and the usual manner of their distribution.

By applying such criteria the decision taker can assess the relatedness of the particular areas of trading activity involved in the comparison. That is a matter which has a bearing on the likelihood or otherwise of confusion. It is ultimately a matter of perception. Evidence of the kind envisaged by the Court in Canon goes to the plausibility of the claim that people in the market for goods (or services) of the kind in issue would be likely to attribute responsibility for them to a single undertaking or economically linked undertakings if they were marketed under the same trade mark or distinctively similar trade marks. Liability is clearly not confined to situations in which the parties are (or will be) traders engaged in a common field of activity under the mark(s) in issue. Quite how far beyond that a claim for protection against the likelihood of confusion can extend consistently with the requirement for ‘similarity’ between the goods (or services) in issue is a matter on which there is room for more than one view. It is sufficient for present purposes to say that the degree to which the goods (or services) in issue are dissimilar is material to the determination of liability and may in connection with the required determination be material to an extent which ought properly to be assessed at trial rather than by way of summary adjudication.

In this case there are, as I have said, issues concerning the specifications of goods for which the Claimant’s trade marks should remain registered and also with regard to identification of the goods for which the Defendant’s marks have been or will be used in the United Kingdom. The Claimant seeks to marginalise those issues by focusing its application for summary judgment upon the use of the Defendant’s marks ‘in relation to truck mounted concrete pumps, truck mounted concrete stationary pumps, concrete truck mixers, excavators, hydraulic crawler cranes and truck mounted cranes’. (Footnote: ³³) At the hearing before me it was proposed that ‘truck chassis’ should be added to the list. The contention is that within the areas represented by the listed items there is enough convergence between the actual trading activities of the Claimant and the actual and proposed trading activities of the Defendant to make the degree of similarity between the marks in issue fully determinative of the claim for protection against the existence of a likelihood of confusion. In order to press that point home, Exhibit GB32 to the second witness statement of the Claimant’s chief trade mark counsel, Mr. Gerhard Bauer, shows a truck mounted mixer with an example of the Defendant’s figurative mark used as a badge on the front of the driver’s cab and on the mixer drum and a similar truck mounted mixer with an example of the Claimant’s figurative mark used as a badge on the front of the driver’s cab. The Claimant also relies on the use that has been made of the protected marks in relation to a highly versatile form of vehicle called the Unimog. This is a wheeled vehicle engineered for on-road and off-road use. It is designed and adapted to serve as a platform and power base for multifarious forms of ancillary equipment. The use of the protected marks in relation to a workhorse of this kind is put forward by way of reinforcement for the point about convergence within the range of listed items.

It is clear that the protected marks have been used in relation to commercial vehicles, including trucks and truck chassis. It is also clear that the commercial vehicle usage extends to use in construction industry contexts. However, the extent to which the protected marks have actually been used in relation to truck mounted machinery and equipment so as to function as an indication of trade origin in relation to the assembly as a whole is open to question on the evidence before me. Just as use of a trade mark for flour may stop short of being use in relation to bread (Footnote: ³⁴) and use of a trade mark for yarn or fabric may stop short of being use in relation to clothing (Footnote: ³⁵), so may use of a trade mark for the vehicular elements of an assembly stop short of being use in relation to the assembly as a whole. The dispute over that is part of the wider dispute between the parties concerning the degrees of similarity and dissimilarity between the various goods in issue. I do not think that the matters in dispute are immaterial to the existence or otherwise of a likelihood of confusion. Nor do I think that they should be finally resolved by way of summary adjudication on the basis of what I take to be incomplete evidence.

It is also an open (and heavily contested) question whether the similarities between the marks in issue are outweighed by the differences between them so as to exclude the existence of a likelihood of confusion in relation to some or all of the goods in issue. No evidence has been given of any incidents of apparent confusion. However, there have been findings in registration proceedings in Germany and France to the effect that the marks in issue are too similar to be used concurrently in the market place for Class 12 goods without giving rise to the existence of a likelihood of confusion. The Claimant does not contend that these decisions should be regarded as binding inter partes in the present infringement proceedings in the United Kingdom. The decisions seem to reflect a ‘normative’ or ‘regulatory’ approach to protection within the general parameters set by the wording of the opposing specifications of goods (Footnote: ³⁶), which might not lead to the same outcome as an ‘empirical’ assessment of the specific circumstances characterising an allegedly infringing instance of use. (Footnote: ³⁷) The decisions in Germany and France also differ from those in other countries, including New Zealand, where the marks in issue have been assessed for distinguishability. That said, it is not appropriate to embark upon anything in the nature of a review of the relative merits of the decisions in other countries.

The evaluation of similarity which must be made for the purpose of determining the claim based on the existence of a likelihood of confusion appears to me to be indissociable from the evaluation of similarity that must be made for the purpose of determining whether the use of the Defendant’s marks is in any event liable to be prevented by reference to broader considerations of unfair advantage or detriment under Section 10(3) of the Trade Marks Act 1994 (Article 5(2) of the Trade Marks Directive) and Article 9(1)(c) of the Community Trade Mark Regulation. The latter determination is rightly not regarded as appropriate for summary adjudication. I believe that the required assessment will in all relevant respects be more soundly based if it is made in the light of the whole of the evidence intended to be adduced at trial.

For the reasons I have given the Claimant’s application for summary judgment under CPR 24.2 will be dismissed. I will hear submissions as to any directions that might usefully be given with regard to the further conduct of the proceedings.