OAO "Alfa-Bank" v Alpha Bank AE

This is an appeal from the Decision, dated 25^th March 2011, of Mr Mark Bryant sitting as Hearing Officer in the UK IPO in opposition proceedings arising out of an application by the Appellant OAO Alfa-Bank for registration of the trade mark shown below in respect of financial services under Class 36. The opponent, and Respondent to this appeal, is Alpha Bank AE. Its opposition is based upon sections 5(2)(b), 5(3) and 5(4)(a) of the Trade Marks Act 1994 (“the Act”). The Respondent succeeded under the first and third of those provisions, but not the second.

Section 5(2)(b) of the Act provides that a trade mark shall not be registered if because:

“it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,

there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.”

Section 6(A) of the Act provides, so far as is relevant, as follows:

“(1)

This section applies where—

(a)

an application for registration of a trade mark has been published,

(b)

there is an earlier trade mark in relation to which the conditions set out in section 5(1), (2) or (3) obtain, and

(c)

the registration procedure for the earlier trade mark was completed before the start of the period of five years ending with the date of publication.

(2)

In opposition proceedings, the registrar shall not refuse to register the trade mark by reason of the earlier trade mark unless the use conditions are met.

(3)

The use conditions are met if—

(a)

within the period of five years ending with the date of publication of the application the earlier trade mark has been put to genuine use in the United Kingdom by the proprietor or with his consent in relation to the goods or services for which it is registered, or

…

(4)

For these purposes—

(a)

use of a trade mark includes use in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered, and

(b)

…

…

(6)

Where an earlier trade mark satisfies the use conditions in respect of some only of the goods or services for which it is registered, it shall be treated for the purposes of this section as if it were registered only in respect of those goods or services.”

On 8^th May 1987 the Respondent filed an application for registration of its earlier mark “ALPHA” in respect of insurance and financial services in Class 36. Its mark was registered on 24^th July 1992. Accordingly, the Respondent was required to satisfy the use conditions in section 6A in respect of its earlier mark, in order to make good its opposition under section 5(2). Most of the argument before the Hearing Officer, and all the argument on this appeal, was directed to the following three issues:

The approach of this court to appeals from the Trade Marks Registry is now well settled. The appeal is a review rather than a rehearing. The appellant must satisfy the court either that there is a distinct and material error of principle in the decision of the Hearing Officer, or that he was clearly wrong. As Robert Walker LJ said in Re Reef Trade Mark [2003] RPC 101, at paragraph 28:

“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.”

Mere surprise at a Hearing Officer’s conclusion, or the appeal court’s preference for a different conclusion are, of themselves, insufficient for that purpose. Where the Hearing Officer is required to make a multi-factorial global assessment in relation to a matter in issue, assertions by the Appellant that he attributed too much or too little weight to particular factors are unlikely to be of assistance, in the absence of an error of principle.

The Appellant is an Open Joint Stock company based and registered in Russia. It was founded in 1990 to provide a range of financial services (including but not limited to retail banking services) to its customers. In 2000 the Appellant set up a London office with a view to attracting UK investment into companies in Russia and the CIS countries, seeking as its UK customers institutional investors such as high street banks, investment banks and pension funds. It has used the name “ALFA-BANK” in the UK since 1999.

The Respondent is one of the largest banks in Greece, having been founded in 1879. Its activities in the UK can be traced back to 1922. The Respondent has its own branch in London, but banking activities are also carried on in the UK by two London based subsidiaries of the Respondent, Alpha Bank of London Limited (“ABL”) and Alpha Credit Group plc (“ACG”). ABL also has a wholly owned subsidiary ABL Independent Financial Advisers Limited (“ABLIFA”) which, although now largely dormant, has in the past offered investment products to customers as part of the banking activity of the Respondent’s group, making use of the name Alpha for that purpose..

The Respondent and its subsidiaries carry on business in the UK mainly from two London branches, one in Mayfair and the other in the City. The group’s UK customer base consists mainly (although not exclusively) of Greek nationals resident or carrying on business in the UK, or companies mainly owned or controlled by such persons.

As I have noted, the Respondent has been the registered proprietor of the word mark “ALPHA” since July 1992 pursuant to an application for registration filed in May 1987.

The Hearing Officer found (and this is not challenged) that the Respondent had used the mark “ALPHA” during the five year period preceding the publication of the Appellant’s application, namely between 10^th November 2002 and 9^th November 2007, not on its own, but as part of phrases which he described as fairly typified by “ALPHA BANK LONDON” and “ALFA BANK AE”. He therefore had to decide whether, for the purposes of section 6A(4)(a) of the Act the use of the mark ALPHA in the differing forms which included the additional words BANK LONDON or BANK AE was a use which altered the distinctive character of the mark ALPHA as registered. He concluded that it did not. Having summarised the relevant legal principles by reference to Budejovicky Budvar Narodni Podnik v. Anheuser-Busch Inc (Bud) [2003] RPC 25, Re Nirvana Trade Mark (BLO/262/06) Re Mus Trade Mark (BLO/061/08) and Orient Express Trade Mark (BLO/299/08), he concluded, at paragraph 45 of the Decision as follows:

“The addition of the word BANK LONDON to the mark Alpha appears to fall into the category of variant use that enables ABAE (the Respondent) to adapt its mark to the marketing and promotion requirements of the services concerned. The addition of the descriptive words BANK LONDON does not change the distinctive character of the mark as registered. Similarly, the addition of the word BANK AE merely describes the nature of the services and, whilst the precise meaning of AE will not be known by the average UK consumer, it will nonetheless be seen as indicating some nature of the company in the same way as “ltd” or “plc” may do.”

Mr Malynicz for the Appellant made no criticism of the Hearing Officer’s citation and summary of the relevant legal principles in relation to this issue. He submitted however that the Hearing Officer had failed to apply them to the facts, basing himself on the following extract from the decision of Richard Arnold QC sitting as Appointed Person in the Nirvana case, at paragraph 34:

“The second question is whether that sign differs from the registered trade mark in elements which do not alter the latter’s distinct character. As can be seen from the discussion above, this second question breaks down in the sub-questions, (a) what is the distinctive character of the registered trade mark (b) what are the differences between the mark used and the registered trade mark and (c) do the differences identified in (b) alter the distinctive character identified in (a)?”

Mr Malynicz submitted that the Hearing Officer failed to carry out the three stage analysis called for by that passage (albeit that it was cited in full in paragraph 39 of the Decision). He said that the Hearing Officer had simply failed to ask himself what was the distinctive character of the registered trade mark, and proceeded straight to the second and third stages of the test. He said that all could be found in the Decision about the first stage was (in paragraph 41):

“The registered mark is the word ALPHA in ordinary typeface. There is no embellishment or additional material and it follows that its distinctive character resides in the word alone.”

Mr Malynicz said that the Hearing Officer should have asked himself what degree of distinctiveness was conveyed by the word ALPHA, so as to be able to decide whether the different use which he had identified at stage (b) altered that distinctive character. He submitted that the word ALPHA has a very modest distinctive character, such that it would be prima facie easily altered by the addition of the phrase BANK LONDON or BANK AE.

I am wholly un-persuaded by that submission, for two reasons. First, it is wrong to regard the three stage analysis in the Nirvana case as tantamount to some statutory code which must be followed slavishly in every case. It is a perfectly sound and authoritative unpicking of the test laid down in section 6(A)(4)(a) of the Act and, for that purpose, a good servant, but not a master. There are bound to be cases, and the present is in my view one of them, where it is clear that, whatever the distinctive character of a word mark as registered, the addition of a further word or words would not alter it. The Hearing Officer’s examples of ltd or plc illustrate that point precisely.

My second reason is that, having taken the trouble to cite the three stage analysis in Nirvana in full, the analysis reflected in paragraphs 41 to 45 of the Decision was, on its face properly compliant with it, and discloses no error or principle. The Hearing Officer first looked at the distinctive character of the mark as registered, then at the different forms of the mark as used, and then asked whether they altered the distinctive character of the mark as registered.

I would add, although it is by no means necessary to my decision, that I have found the Hearing Officer’s analysis to be persuasive, and regard it as correct. The additional words BANK LONDON and BANK AE are descriptive in the way that the Hearing Officer describes. To an average customer seeking banking services, it seems to me that the addition of BANK adds nothing. LONDON merely describes the actual geographical location of the Respondent’s main places of business in the UK. For the reason given by the Hearing Officer, the expression AE adds nothing of substance either.

The Respondent’s earlier mark was registered for “Insurance and financial services”. The Hearing Officer concluded (and this is not challenged by the Respondent) that this formulation comprised a wider range of services than that for which the Respondent could, on the evidence, satisfy the use conditions. The result was that, under section 6A(6) of the Act, the Hearing Officer had to identify an appropriate specification of services in respect of which the Respondent had used the earlier mark.

At paragraphs 46 to 48 of the Decision, the Hearing Officer set out the relevant legal principles in considerable detail, by reference to Thomson Holidays Limited v. Norwegian Cruise Lines Limited [2003] RPC 32, Animal Trade Mark [2004] FSR 19 and Reckitt Benckiser (España) SL v. OHIM (Aladdin) Case T-126/03. No criticism is made of that summary, save that the Hearing Officer did not expressly identify the burden of proof in relation to use as lying on the Respondent, as proprietor of the earlier mark: see section 100 of the Act.

The Hearing Officer’s conclusion, at the end of paragraph 52 of the Decision, was that it would be appropriate to limit the Respondent’s specification of services for which use had been demonstrated to the following:

“Retail banking services: investment bank services; property loans.”

On appeal, no criticism is made of the identification of retail banking services, and property loans is only criticised indirectly, in the sense that it is said that the Hearing Officer gave the Respondent the benefit of the doubt as to the type of customers for that service. Nothing turns on that. The real criticism pursued by Mr Malynicz was that the Hearing Officer’s inclusion of investment bank services was wholly unsupported by the evidence.

The Hearing Officer’s reasoning in this respect is to be found entirely within paragraph 51 of the Decision as follows:

“Finally, ABAE provides evidence illustrating that it is involved in the issue of “Euro Medium Term Notes” and a “Euro Medium-Term-Note Programme”. At the hearing Ms Maddox argued that these relate to the normal activities of a high street retail bank and refers to no more than the bank’s activities of depositing the money from its retail client’s accounts in order for it to be able to pay interest to its customers and to be able to generate income for itself. On the other hand, Mr Hill argued, on behalf of ABAE, that such activities are clearly investment bank services. He points to the “Offering Circular” at Exhibit MJW4 that refers to a number of dealers that such notes can be issued. These dealers are all well known investment banks such as JP Morgan, Deutsche Bank and Morgan Stanley. Whilst I am no expert in this field, it does seem to me that as dealers are listed that are external to the Alpha group of companies, this does point to ABAE providing these “notes” as part of some type of investment banking activity.”

The Respondent served a Respondent’s Notice in relation to this issue, to the effect that if the Hearing Officer was wrong to include investment bank services within the specification, he should nonetheless have included “financial services” in general and the following list of additional more narrowly defined services:

“Corporate, commercial, offshore and private banking services; financial services comprising or relating to asset management, bills of exchange, bonds, capital markets, correspondent banking, documentary credits, equity investments, foreign exchange, guarantees, international settlements, letters of credit, money markets, portfolio management, real estate, and syndicated loans.”

This list was taken almost verbatim from ABL’s entry in the 2008 edition of the Bankers Almanac. During the hearing of the appeal I permitted Miss Bowhill for the Respondent to amend the Respondent’s Notice by adding, at the end of that list, the following:

“Brokerage services, the arrangement of investments and providing investment information and advice.”

The amendment was based upon the evidence which had been both before the Hearing Officer and this court on the appeal, and caused no prejudice or other unfair disadvantage to the Appellant.

Counsel’s competing submissions on this issue necessitated a detailed review of the evidence. The material relied upon by the Hearing Officer for his decision to include investment bank services consisted of offering circulars and associated material relating to a substantial amount of business (in terms of value) during the relevant period which consisted of ACG acting as issuer and the Respondent acting as issuer and guarantor of Euro Medium Term Notes in respect of which well known investment banks, such as Lehman Brothers, Morgan Stanley and Deutsche Bank acted as arrangers and dealers. The evidence did not demonstrate that this activity of the Respondent’s group took place within the UK. Although the notes referred to the possibility that they would be listed on unspecified stock exchanges, the only identified exchange for each of them was the Luxembourg Stock Exchange.

The Hearing Officer appears to have taken the view that evidence demonstrating the issue of note programmes of that type, through the investment banks acting as intermediaries, of itself demonstrated that the Respondent group was itself thereby providing an investment bank service. I have to say that I disagree. Many kinds of substantial business enterprises, not limited even to banks, seek to raise finance by the issue of notes or bonds of that type, without thereby being, or providing the services of, an investment bank. That is indeed why they commonly engage the services of investment banks as arrangers and dealers.

Miss Bowhill sought to rescue this part of the Decision by reference to evidence which showed that ABLIFA itself acted as broker and independent financial adviser in relation to various forms of investment bonds issued by other institutions (including banks) for which purpose it was regulated by the Financial Services Authority. Literally speaking, acting as financial intermediary and financial adviser in relation to investment bonds is characteristic of the provision of an investment banking service but, having regard in particular to the modest amount of minimum subscription required, the activity disclosed by the evidence seems to me to lie at the periphery rather than the core of the provision of investment bank services, and to be more typical of the activities of a private bank. In my view the Hearing Officer was right not to rely upon this evidence in support of his conclusion that the Respondent group provided investment bank services.

Turning to the Respondent’s Notice, I am by no means satisfied that the mere inclusion of the list to be found in the Bankers Almanac for 2008 (a period later than the relevant period in any event) constitutes sufficient evidence to show use within those specifications. Nonetheless it seems to me that the evidence which I have just described of ABLIFA using the earlier mark in connection with acting as broker, arranger and independent financial adviser in relation to investment bonds does justify including within the specification those services, as identified in the amendment to the Respondent’s Notice. That is of course both a narrower and different specification from the provision of an investment bank service.

The Appellant’s application for registration of its mark related to financial services. The Hearing Officer therefore had to decide, for the purposes of section 5(2)(b) of the Act, first, whether financial services were identical with or similar to the specification of the services of the Respondent which he had identified, and secondly whether there existed a likelihood of confusion on the part of the public. His task was complicated by the fact that the Appellant’s advocate Ms Maddox requested that, were he to find against the Appellant in relation to a registration for financial services, he should also consider registration restricted to services identified by two alternative fallback specifications, namely:

Having, in the passage from paragraph 51 of the Decision which I have quoted above, expressed some hesitancy in relation to his inclusion of investment bank services in his specification, due to his lack of expertise in the field, the Hearing Officer was careful at every stage in his analysis of the confusion issue to address the question upon the basis of a specification for the Respondent’s services which included, and in the alternative excluded, investment bank services: see in particular paragraph 63 and 79 of the Decision.

On appeal Mr Malynicz did not seek to challenge the Hearing Officer’s conclusion that, regardless of the correct specification of the Respondent’s services, registration of the Appellant’s mark in respect of “financial services” meant that, for the purposes of section 5(2)(b) of the Act, the services were identical. Rather, he concentrated his attack on the Hearing Officer’s rejection of the alternative case based on the fall-back specifications (a) and (b).

Again, the Hearing Officer provided a detailed summary of the legal principles applicable to this part of the case, in paragraphs 54 to 60, 64 to 65, 71 to 72 and 74 of the Decision, no part of which was subjected by Mr Malynicz to significant criticism. His only point in relation to legal principle was that the Hearing Officer should have directed himself, in addition, by reference to the following dictum of Jacob J in Avnet v. Isoact [1997] ETMR 562 [1998] FSR 16, at 19:

“In my view, specifications for services should be scrutinised carefully and they should not be given a wide construction covering a vast range of activities. They should be confined to the substance, as it were, the core of the possible meanings attributable to the rather general phrase.”

Mr Malynicz next focused his criticism of the Decision on paragraph 79, which immediately followed the Hearing Officer’s description of fall-back specifications in (a) and (b):

“Considering such specifications, I am still of the view that there is a likelihood of confusion. Even if I am wrong in my assessment of ABAE’s evidence insofar as it relates to investment banking, the provision of retail banking services alone would, to my mind, be sufficient for a finding of indirect confusion with OAO’s services as detailed in the above paragraph. It is not uncommon for banking institutions to provide both retail bank services and investment bank services or for such services to be provided by economically linked undertakings. Therefore, even in respect of these limited services, I find that the average consumer will believe that the respective services are provided by the same or economically linked undertakings.”

That approach, said Mr Malynicz, involved an illegitimate failure to focus on the core, rather than the periphery, of retail banking services. I disagree, and I am in any event by no means persuaded that the Hearing Officer’s analysis of this point discloses any error of principle, still less that it is clearly wrong. At the highest, paragraph 79 of the Decision may be said to have used the unfortunate phrase “investment bank services”, when the relevant comparators for the purposes of the Appellant’s fall-back specifications included “brokerage services” and the “provision of information and advice on, securities …”

Furthermore, my conclusion that the Respondent is correct in its amended Respondent’s Notice that the Hearing Officer ought to have included in the specification of its services the provision of brokerage services, the arrangement of investments and providing investment information and advice leads inescapably to the conclusion that there was both the necessary similarity between the competing services, and a clearly sufficient basis for the conclusion that the average consumer would believe that they were provided by the same or economically linked undertakings if provided under the parties’ respective marks.

There is in particular nothing in the point that the Appellant’s present business consists in providing brokerage services and the provision of financial advice about investments in Russia and the CIS countries, rather than elsewhere. As the Hearing Officer himself put it, in a slightly different context, at paragraph 63:

“Both types of products will compete with each other for the customer’s money.”

The final part of the Appellant’s case on appeal was directed to a challenge to the Hearing Officer’s rejection of the case advanced before him, namely that there was sufficient evidence of prolonged side by side trade without confusion to undermine his affirmative decision that there was a reasonable likelihood of confusion.

The parties had indeed traded side by side in London for at least six years. The Respondent adduced, in particular in the second affidavit of Mr Waghorn, evidence of a small number of instances of actual confusion, while the Appellant’s witnesses advanced general assertions as to its absence, albeit from a standpoint in Russia which did not on its face appear to confer significant weight upon those assertions as evidence.

The Hearing Officer’s analysis at paragraph 83 of the Decision was that concurrent use or coexistence of the marks within the UK would only give rise to evidence probative of the absence of confusion if he could be:

“satisfied that the effect of concurrent trading has been that the relevant public has shown itself able, in fact, to distinguish between services bearing the marks in question i.e. without confusing them as to trade origin. That implies that both parties are targeting an approximately similar, or at least overlapping, audience. This is not the case here. As Ms Maddox was at pains to point out, OAO is only actually trading as a broker of Russian and CIS countries’ securities where its customers are institutional investors such as high street banks, investment banks and pension funds. On the other hand, I have found ABAE is providing retail banking, investment services and property loans. As ABAE makes clear, the majority of its customers are Greek nationals in the UK. Even in respect of ABAE’s investment bank services, the evidence does not show any overlap with OAO’s narrowly defined customer base. There is no evidence that ABAE has any institutional customers of the type that utilise OAO’s services.”

Mr Malynicz offered no persuasive challenge to that analysis. It was fully supported by the evidence, and I consider that the Hearing Officer was entitled to treat the absence of any overlapping audience as a sufficient reason to reject the concurrent use defence being advanced by the Appellant. The confusion issue which section 5(2) of the Act requires to be answered depends upon a comparison between the competing marks, and a comparison between the specification for which registration is sought, and the specification established by way of genuine use by the proprietor of the earlier mark, under section 6A(6). It is in that respect no answer for the applicant for registration to say that its existing customer base is limited to a class which excludes the opponent’s existing customers.

I have examined each of the issues in respect of which this appeal has been pursued, and concluded that the criticisms of the Hearing Officer’s Decision are not made out in respect of any of them, save only for his inclusion of investment bank services within the fair specification to be attributed to the Respondent’s use of its existing mark. For the reasons given, that had no consequential effect upon the Hearing Officer’s overall conclusion, because he was thereafter careful to address the case in the alternative, upon the basis that investment bank services ought not to be included. It follows that, notwithstanding that limited element of success, the appeal must nonetheless be dismissed.