Virgin Enterprises Ltd v Casey

This is an appeal from the decision of Mr Mark Bryant (the Hearing Officer acting for the Registrar) in the Intellectual Property Office given on 3 August 2010. It is brought under Section 76 of the Trade Marks Act 1994 (“the 1994 Act”). As such it is an appeal by way of a review (and not a re-hearing). Therefore the decision of the Hearing Officer should be confirmed unless it is wrong in law or unjust because of a serious procedural irregularity. It is not open to challenge as regards the facts found. I should display a degree of reluctance to interfere with the decision of the Hearing Officer in the absence of a distinct and material error of principle (a less than adequate summary of the approach made out in REEF [2002] EWCA Civ 763 at paragraphs [17]-[30]).

On the instant appeal it is accepted that an error of law must be shown. VEL does not say that the Hearing Officer did not know the law. His summary of the relevant law was accepted as accurate (although disparagingly referred to as a “cut and paste job”). The heart of the appeal lies in the argument that having correctly summarised the law the Hearing Officer then failed to apply it to the material before him.

Michael Casey applied to register the word mark “CARBON VIRGIN” in that form on 9 May 2008. The mark was applied for in relation to goods and services within class 35 namely:-

“Advertising; electronic data storage; advertising services provided via the internet; production of television and radio advertisements; accountancy; auctioneering; trade fairs; opinion polling; data processing”.

The appellant (“VEL”) opposed the registration. It asserted:-

The Hearing Officer did not find that any of those grounds of opposition were made out. His findings and holdings under arguments (a) and (d) are accepted. As to his findings and holdings on arguments (b) and (c) on this appeal VEL say that he made six errors of law. During the hearing I expressed the view that VEL seemed to be arguing that it could appropriate the ordinary English word “virgin” for its exclusive use in connection with its products and services (save perhaps in the context of “virgin wool” and “virgin olive oil”): but I was assured that that certainly was not what VEL was attempting, and that this appeal had a narrower technical base.

The first error is said to be that in considering whether the mark “CARBON VIRGIN” was similar to VEL’s earlier marks the Hearing Officer treated VEL’s marks as having only a dictionary definition as to their conceptual meaning, by which VEL means that the Hearing Officer treated the mark “VIRGIN” as being capable of only one conceptual meaning when used alone, and of having that meaning irrespective of context.

Section 5(2)(b) of the 1994 Act addresses the problem of a likelihood of confusion by reason of similarity to an earlier mark. The Hearing Officer had to consider the extent of the similarity between VEL’s mark “VIRGIN” and Mr Casey’s mark “CARBON VIRGIN”. In the former the word “VIRGIN” stood alone: whereas in the latter it was the second part of a compound expression.

The requirement of “similarity” looks at the overall impression of the mark assessed by reference to a global appreciation of several factors – visual, aural and conceptual. A “global appreciation” is required because the average consumer perceives the mark as a whole and in general does not subject its component parts to separate analysis.

In the instant case the Hearing Officer chose the VEL mark closest to Mr Casey’s proposed mark and (having referred to a whole range of material) found that there was a reasonable level of visual and aural similarity. When he came to assess conceptual similarity he found:-

In my judgment that analysis does not betray any error of principle, and a finding that essentially different concepts were involved is one that was open (and proper) on the evidence. This evidence the Hearing Officer had reviewed in paragraphs [35] to [58] of his determination. There was plenty of evidence that VEL exploited the risque allusion to sexual intercourse. There was none suggesting that in offering its services VEL was alluding to naivety or inexperience. The Hearing Officer did not say that as a matter of law the word “VIRGIN” used alone had only one conceptual meaning: he said that used alone it had a primary or dominant meaning which was the meaning in fact exploited by VEL and which was different from the meaning exploited by Mr Casey. So I reject this ground of appeal.

The second ground of appeal is that the Hearing Officer determined the conceptual meaning of the marks without reference to the services for which they were registered, and in so doing fell into an error of law. This ground is unsustainable.

First, paragraph [35] of the determination began a section headed “Comparison of Services” (which included a table comparing the services of Mr Casey’s application with the services of VEL’s marks). This led into a section (at paragraph [54]) in which he sought to identify who was the average consumer of “the services at issue”. It is fanciful to suggest that these were abstract exercises unrelated to the immediately following section headed “Comparison of Marks” and that that section was conducted on an acontextual basis by reference only to dictionary definitions and divorced from the findings of fact made in the preceding sections.

Second, the Hearing Officer plainly did not make the alleged error of law in relation to the arguments on Section 5(2)(a) where he held:-

“…it is clear to me that the consumer will see the mark as a distinctive whole rather than the distinctive word VIRGIN preceded by the purely descriptive word CARBON. Certainly this will be the case in respect of the services covered by Mr Casey’s application…”.

There is no reason to think that the understanding that this was the correct approach deserted the Hearing Officer when he came to consider the arguments under Section 5(2)(b) of the 1994 Act.

Third, when considering the Section 5(2)(b) arguments the Hearing Officer plainly understood the connection between the concept embodied in a mark and the services in respect of which that mark was used. He said of the argument that “CARBON VIRGIN” would create in the mind of the average consumer a figure of the Virgin Mary made of graphite:-

“…when used in respect of the relevant services this meaning is much less likely to be identified in the minds of the consumer…”.

Further, he said (of VEL’s argument that the word “CARBON” simply functioned as a description of the services apparently offered by “VIRGIN”) that VEL’s services could not be described as “CARBON” in the way that there were goods sold under the name “EDGE” that could be described as “digital” (a reference to a comparable case).

VEL submits that notwithstanding those matters a correct understanding deserted the Hearing Officer when he came to assess VEL’s marks, and that he failed properly to appreciate (for example, in connection with the mark “VIRGIN GREEN FUND”) the understandable linking between the environmental concepts of “Green Fund” and the innocence/untouched aspects of “Virgin”. But this argument has nothing to do with the services to which the mark relates. It is a re-running of the argument about the primary or dominant meaning of “VIRGIN” in the marks as used by VEL and the understanding the ordinary consumer will have gathered from that use. So I reject this ground of appeal.

The third ground of appeal is that it is said to be an error of law to have treated conceptual similarity as determinative (or alternatively so to treat it without consideration of why it was the sole relevant consideration). The short answer to this ground is that that is not what the Hearing Officer did. As I have briefly summarised, the Hearing Officer separately considered visual, aural and conceptual similarity, made a global assessment of them in order to measure what overall impact the mark (viewed as a whole) would make on the reasonable consumer of the relevant services, with a view to making a judgment about the likelihood of confusion. There was no error of process or analysis. He did not regard any factor as determinative. The weight to be given to each of the many factors relevant to the decision was pre-eminently a matter for him, and cannot be challenged on appeal. His conclusion that there was a moderate level of overall similarity which would not in fact be likely to cause confusion is one that betrays no error of law.

The fourth ground of appeal is that it is said that the Hearing Officer (in concluding that that there was no likelihood of direct confusion) appears to have thought that there could only be direct confusion where the marks were identical.

This challenge is based on the language of paragraph [77] of the determination. In that section the Hearing Officer is considering the likelihood of confusion (taking a global approach, and taking into account that in the process of comparison the consumer will rarely have a perfect recollection of the comparator mark). The Hearing Officer has selected what he considers to be the strongest case: a comparison of “VIRGIN” in the context of advertising services and “CARBON VIRGIN” also in the context of advertising services. He recalls that although there is a reasonable level of visual and aural similarity there is only a very low level of conceptual similarity (since the “VIRGIN” mark makes a risqué sexual reference whereas the “CARBON VIRGIN” mark alludes to inexperience or naivety). He then says:-

“This different concept is sufficient to differentiate the marks in the mind of the consumer, even taking account of imperfect recollection. Certainly there is no likelihood of direct confusion where the mark is mistaken for the other because I have rejected VEL’s argument that CARBON serves in a totally descriptive way and that…the…distinctive element…is the word VIRGIN”.

A careful reading of that passage (recording an argument and his rejection of it) discloses that VEL’s criticism of the Hearing Officer is misplaced. The Hearing Officer is not saying that there can only be direct confusion where the marks are identical. He is expressly considering marks which are not identical. Notwithstanding that the marks are only to some degree similar (not identical) he is then still asking himself about the likelihood of confusion in the imperfectly recollecting mind of the reasonably informed and observant consumer of the relevant service. He has held that “VIRGIN” means one thing to a consumer and “CARBON VIRGIN” means another: and he here finds that the difference between the two is sufficiently great that services provided by Mr Casey are unlikely to be thought by the consumer to have been provided by VEL: they are “sufficient to differentiate the marks…even taking account of imperfect recollection”. In reaching that answer he has, in my judgment, adopted the correct legal approach.

VEL say that there is an error of law because in Medion v Thompson [2002] ETMR 13 it was held:-

“[32] The finding that there is a likelihood of confusion should not be subject to the condition that the overall impression produced by the composite sign be dominated by the part of it which is represented by the earlier mark.

[33] If such a condition were imposed the owner of the earlier mark would be deprived of the exclusive right…even where the mark retained an independent distinctive role in the composite sign, but that role was not dominant”.

I do not consider that anything which the Hearing Officer said or did runs counter to this principle. He did not say that in view of his decision that the word “CARBON” was not purely descriptive it must follow that in the composite expression “CARBON VIRGIN” the word “VIRGIN” was not dominant in the overall impression created by Mr Casey’s mark, and that since the word “VIRGIN” was not the dominant part of Mr Casey’s mark (even though it might have an independent distinctive role in the composite mark) there was no possibility in law of confusion. That (which would have been an error of law running counter to Medion) is simply not the process he went through. So I reject this ground of appeal.

The remaining challenges to the determination concern the application of Section 5(3) of the 1994 Act. This addresses the reputation of the VEL marks in the United Kingdom and says that “CARBON VIRGIN” may not be registered if its use “would take unfair advantage of, or be detrimental to, the distinctive character or the reputation” of the VEL marks.

VEL says that although the Hearing Officer accepted that VEL had a broad reputation identified by its various “VIRGIN” marks he erred in finding that the use of the mark “CARBON VIRGIN” would not lead the average consumer to believe that there was a link with VEL because the level of conceptual similarity was such that, confronted with the respective marks, the consumer would not make the necessary link.

The fifth ground challenges in the context of s.5(3) the Hearing Officer’s approach to the level of conceptual similarity. I have dealt with that same argument in the context of s.5(2)(b) in paragraphs 6 to 10 above. I reject the challenge.

The final ground of appeal says that the Hearing Officer made an error of law in misapprehending the nature of the link which Section 5(3) requires. VEL says that the Hearing Officer was looking for the consumer to make an economiclink to VEL: whereas the true link that has to be made is to the earliermark (not to its proprietor) and the link consists of calling the earlier mark to mind.

I do not believe that the Hearing Officer made any such error in deciding whether “the necessary link” had been established in this case. In paragraph [85] of his determination he had correctly directed himself (having referred specifically to Adidas-Salomon [2004] ETMR 10, Intel Corporation [2009] RPC 15 and L’Oreal [2010] RPC 1) that:-

So the Hearing Officer did not commit the error of which he is accused. He did not think that the link was to the proprietor (and not to the mark): and he did not think that the link must be economic. The “springboard” for VEL’s argument is not available.

Using the supposed error of law as a springboard VEL invites me (as an Appellate Judge) to re-evaluate the weight given to the various factors by the Hearing Officer when undertaking the “iterative process” (or applying the “principle of interdependence”) (see e-sure Insurance v Direct Line Insurance [2008] EWCA Civ 842) to which the Hearing Officer adverted in paragraphs [86](e) and (f) of the determination.

This I decline to do. Whether there is a “link” between “VIRGIN” and “CARBON VIRGIN” had to be assessed by the Hearing Officer globally taking into account all factors relevant to the circumstances of the case, and applying the principles of interdependence to the various questions he had to answer. This is the classic multi-factorial evaluation undertaken by a specialist tribunal to which an appellate court must show real respect: see REEF [2003] RPC 5 at paragraph [28].

Finally, VEL says that although the Hearing Officer correctly directed himself his conclusion demonstrates that he must have misapplied the test because the existence of visual and aural similarities (particularly in the inherently distinctive common element) will clearly serve to establish a “link”, will bring the VEL marks to the mind of the average consumer (even if that consumer ultimately remains aware that CARBON VIRGIN is not VEL or connected to VEL): the true question is therefore whether Mr Casey took unfair advantage, and it is not the question the Hearing Officer asked or answered. It is said that Mr Casey would thereby obtain an unfair advantage because he would gain from the promotion of VEL’s marks without having to pay for it.

If this argument does not assert that VEL can appropriate the word “VIRGIN” for exclusive use in connection with its products and services it comes within a hair’s breadth of doing so. I reject it.

Questions of the existence of a link and of the existence of unfair advantage are not matters of mere assertion or argument: they are matters to be properly substantiated by evidence of exploitation or “free riding” or an attempt to trade upon the reputation of a famous mark: see Spa Monople [2005] ETMR 109 at paragraphs [51] and [53]. The state of the evidence before the Hearing Officer shows that the point taken on appeal was not where the burden of the argument lay before him. (That is why, if I was willing to enter upon the re-evaluation process (which I am not), I can only be asked to “take a view” or to remit the argument to the Hearing Officer so that VEL can have another go before him). I will not adopt that course. The Hearing Officer was entitled to find on the evidence before him that the necessary “link” was not proved: it was therefore unnecessary for him to embark upon the second stage of the analysis.

For these reasons I dismiss the appeal. I do not expect attendance of legal representatives when I formally hand down judgment.

My provisional order as to costs is that VEL shall pay Mr Casey’s costs of the appeal because nothing in the material before me suggests that I should depart the general rule set out in CPR 44.3(2). If either party does not agree with this provisional ruling I will reconsider the matter entirely afresh by means of a procedure which I will notify to the parties when either informs me of the non-acceptance of this provisional view.