Maier & Anor v ASOS Plc & Anor

The application notice in this matter is dated 8th November 2012 and it is an application by the claimants, Mr. Maier and Assos of Switzerland SA. They seek directions in respect of a witness collection exercise and a survey which the claimant intends to conduct. More specifically they seek permission to contact entrants to a "Win a Trip to Paris with Assos" prize draw published in the Guardian on 6th October 2012, such contact to be made in accordance with the procedure detailed in the third witness statement of Mr. Peter Brownlow and to be at liberty to apply to rely at trial on the witness statements obtained as a result of that process. They also seek permission to conduct a survey at the London Bike Show between 17th and 20th January 2013 in accordance a specimen survey exhibited to Mr. Brownlow's third witness statement and, thereafter, consequential amendments to the order of Master Bragg made on 13th June 2012 in order to change the dates for service of experts' reports and the disclosure of the matters relevant to the surveys and the witness collection exercise.

The defendants originally did not oppose this application in relation to the prize draw on the basis that they accepted that had they could not say at this stage that any evidence produced would clearly be valueless and that it was not the role of the court to micro manage the script which it was proposed to use at the interview of those contacted. Nor did they oppose the survey at the Bike Show. They objected to surveys elsewhere but that proposal has now been dropped. However, since the judgment in the Court of Appeal in Marks and Spencer PLC v. Interflora Inc and Interflora British Unit [2012] EWCA Civ. 1501 which was handed down the day before the hearing, the defendants now do oppose those applications.

In simple summary this is a dispute in relation to passing off and a trade mark infringement arising as a result of the similarity of the claimants' mark, ASSOS, and the defendants', ASOS. The claimants are owners of a community trade mark in their mark registered in relation to the clothing, footwear and head gear. They are a Swiss company and they sell clothing, particularly cycling clothing and accessories through other outlets. The defendants sell clothing aimed at younger consumers using the ASOS mark over the internet and they have a considerable turnover. I was informed that it was approximately £500 million in the year to March 2012.

In particular, I was referred by Mr. Brandreth on behalf of the claimants to the amended Particulars of Claim in this matter in order to have some perspective. At paragraph 5 he referred me to the allegation there that the claimants had generated a substantial reputation of goodwill in the sign ASSOS which has come to mean the goods of those claimants and none other. At paragraph 6 it is pleaded that the defendants offer for sale via the internet clothing, footwear and head gear and other fashion accessories under their mark, ASOS. At paragraph 7 thereby infringing the claimants' mark so as to create a likelihood of confusion, including likelihood of association. At paragraph 9(a) of the pleading there is reference to the infringing mark being so as to cause detriment to the distinctive character and repute of the claimants' mark. At paragraph 10 the allegations relating to passing off are set out.

Mr. Brandreth also took me to the amended Defence, particularly at paragraphs 2 and 6 where it is denied that the claimants trade outside the cycling market and at paragraph 7 where it is accepted that there is limited goodwill as far as claimants go but that it is limited to the cycling fraternity. I was also referred to paragraph 12 of the amended Defence where it is pleaded that the defendants have used their mark without any confusion arising with goods bearing the claimants' mark and paragraph 19 where there is a denial of the passing off or the trade mark infringement.

In this regard I was also referred to Kerly's Law of Trade Marks and Trade Names, 15th edition and I must at this point say that I am extremely grateful to Mr. Tappin QC for having lent a copy of that text book. In relation to trade mark infringement Mr. Brandreth referred me to paragraphs 14-094 where there is reference to section 10(3) of the Trade Marks Act 1994 as amended and article 9(1)(c) of the Community Trade Mark Regulations. It permits a proprietor to prevent third parties from using, in the course of trade without consent, any sign 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 the sign without due cause takes unfair advantage of or is detrimental to the distinctive character or the repute of the community trade mark.

Mr. Brandreth was making clear therefore that it was necessary to prove that the mark has reputation. He also referred me to page 468 of Kerly's where the three classes of injury with which article 9(1)(c) is concerned are set out. He noted that requisite damage may be suffered where the ability of the mark to hold the attention of the public is reduced by way of dilution.

In relation to passing off, I was referred to paragraph 18-005 of Kerly where the elements of the cause of action in passing off are set out and, in extremely short summary, they are goodwill, misrepresentation by the defendant to the public and damage as a result.

At paragraphs 18-016 to 18-018 other matters are set out all of which are a question of fact. Those are, whether there is evidence of actual confusion, which is important; the effect on actual consumers which has to be proved and the damage, the effect of putting the brand in question before the public.

Mr. Brandreth then took me to the judgment of Lewison LJ in the Marks and Spencer v. Interflora case to which I have already referred. The case was concerned with whether trade mark proprietors should be allowed to call the evidence of witnesses identified by means of a witness-gathering exercise where the proprietor does not intend to rely upon the survey or questionnaire by means of which the witnesses were identified. The case was concerned with the fact that Marks and Spencer advertise their flower delivery service (or did) on the internet and one means of this is by way of ‘add words’ purchased from Google. Marks and Spencer purchased Interflora as a key word, Interflora being a registered trade mark. As a result when the user entered Interflora in the search engine, in addition to displaying the organic or natural results the computer also displayed the sponsored link including an advertisement for Marks and Spencer for goods and services covered by the trade mark. It is this, it was said, that amounted to an infringement. This was explained in much more detail at paragraphs 7 and 8 of Lewison LJ's judgment. At paragraph 144 of that judgment Lewison LJ states:

Mr. Brandreth submitted that the stricter test does not apply where the evidence is as to confusion as a result of real world usage, was not applicable in a passing off case as opposed to infringement of trade marks and did not apply where the court would need to be educated in relation to consumers in a specialised market sector. He contended that that applied in relation to the cycling fraternity. He pointed out that the Interflora case was concerned with trade marks and not passing off and in the context of trade marks the test was understandable because the question with which the court was concerned related to the hypothetical average consumer. In particular he referred me to sub-paragraphs 24(iv) and (v) of Lewison LJ's judgment which sets out the argument being put to the Court of Appeal. Sub-paragraph 24(iv) is as follows:

In reliance on paragraph 135 Mr. Brandreth submitted that Lewison LJ's strict test for the administration of evidence was confined to trade marks cases and does not apply to passing off which has a different legal basis. In this regard he also specifically referred me to paragraph 137(v) which is in the following form:

So he says the situation is different in passing off where one is not concerned with legal construct but the effect on actual consumers. He also said that here the defendants say that consumers were never confused and so it is a central issue on the pleadings as to whether or not there was confusion. He says the evidence that is proposed to be used would be a real world response to a real world scenario and in these circumstances is useful and probative.

He went on also to rely on paragraph 137(iii) of Lewison LJ's judgment which sets out that other considerations may apply where:

I now turn to what Mr. Brandreth says about the two types of exercise in relation to which permission is sought. The first is what I call the prize draw. This was an advert placed in the Guardian, as I say, on 6th October 2012 and it features a model wearing the claimants' products and mark and it says, "Win a Trip to Paris with ASSOS". The recipients are asked to answer two questions at a website address. The first is: Can you tell us what you think of ASSOS, giving examples of what you like and do not like? The second question is: What, if anything, have you bought from us in the past?

Mr. Brandreth has shown me a table containing 147 responses to the prize draw advertisement which used, as I say, the claimants' own mark and he says that the responses show confusion. His clients want to contact certain of the respondees and separately will seek permission for the admission of any witness statements which are gleaned by that process if they are so advised. At this stage, what I am concerned with is the permission limited to contacting some of those respondees to the prize draw.

In relation to the responses there is a draft script in relation to which the respondees will be questioned. Mr. Brandreth referred me back to paragraph 113 of Lewison LJ's judgment where there is reference to the Neutrogena case. That was a passing off and trade mark infringement case and a question arose in relation to evidence of confusion in that case. One of the devices used was to set up in 22 chemist shops a "buy one get one free" board which referred to Neutrogena which was the claimant's mark and get up. The market researchers waited to see which customers picked up which product, whether the claimant's or the defendant's, Neutrogena or Neutralia. Mr. Brandreth also took me to paragraph 136 and I will read that paragraph:

The paragraph goes on but that is the part upon which Mr. Brandreth relies. He says that this exercise in relation to the prize draw is spontaneous. Also he relies in particular on the sentence in paragraph 136 that if there is evidence of consumers who have been confused in the real world then there can be no objection to calling that evidence. He says the exercise was spontaneous and it shows confusion in the real world, it would give the court a fuller picture and the claimants will give the defendants all the details with which they would be able to challenge the exercise should they wish to do so.

He also referred me back to paragraph 45 in the judgment of Interflora where it said: "If Interflora cannot prove its case without calling evidence from internet users that would be a powerful reason for allowing such evidence to be adduced."

With regard to the cost there is evidence before the court that the cost of the proposed prize draw exercise would be £7,000 plus VAT and Mr. Brandreth drew attention to this in the context of the likely defendant's costs of the action which are estimated to be in the region of £760,000. He also points out that this is nothing like the £250,000 which was the cost of the proposed exercise in the Interflora case.

In relation to the Bike Show survey I also take account of the fact that what is sought is permission to conduct the survey itself. Mr. Brandreth says that the survey falls within the guidelines for surveys set out by Whitford J in Imperial Group plc v Philip Morris Ltd [1984] RPC 293. Those guidelines are set out at paragraph 61 of Lewison LJ's judgment in the Interflora case. He says that it is a comprehensive survey and addresses confusion within the biking market. He says it is relevant to passing off and damage for the purposes of article 9(1)(c). He also says that the cost of the exercise is low, being in the region of £13,000 plus VAT.

In summary Mr. Tappin QC's submissions on behalf of the defendants are as follows. He submits that after Interflora the test to be applied is the more stringent one, that is even if the evidence is technically admissible I should not let it in unless I am satisfied that (a) it will be valuable and (b) the likely utility of it justifies the cost involved. He says that the Court of Appeal's approach applies to both trade marks and passing off and he says that that is clear not only from the overall structure of Lewison LJ's judgment but also to the reference to various provisions in the CPR, including the positive duty of the court under CPR 1.42 to engage in active court management to consider whether there are likely benefits of taking a particular step and justifying the cost of taking it.

He referred me to paragraph 141 of Lewison LJ's judgment where he also refers to CPR 32.1 and paragraphs 139 and 142. He says even at the interim stage, therefore, the judge who is asked for permission to adduce such evidence, should evaluate it carefully in order to see whether it will be a real utility and whether the utility justifies the cost.

He not surprisingly agreed with Mr. Brandreth as to the relevance of the average consumer for the purposes of trade mark infringement and as to the three elements relevant to passing off cases. He also accepted that for passing off what was relevant was whether there was a deception amongst a substantial number of the public. However, he says whether for the purpose of trade marks or passing off, evidence of witnesses drawn from a survey are of no assistance unless the survey is statistically valid. He referred me back again to paragraph 135 of Lord Lewison LJ's judgment, to which I have already referred.

He goes on to say that in relation to the prize draw, I think he said it is spontaneous but the reaction is in fact to the claimants' own mark and not to that of the defendant and so it is not of any use because it is the wrong mark which has been put before the respondees.

In relation to the proposed survey he says that is not spontaneous and in this case, although it is intended to use the defendants' mark, it is using that mark completely out of context. He says context is everything when seeking to establish whether there is a misrepresentation as a result of that defendants' mark in the public mind.

He referred me to the extract from the judgment of Kitchin LJ in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ. 24 which is set out at paragraph 37 of Lewison LJ's judgment in the Interflora case in which Kitchin LJ was considering the use of a sign in the case of an alleged trade mark infringement and he commented that it should not be considered when stripped of its context.

Going to paragraph 137 of the Interflora judgment where Lewison LJ considered the circumstances in which different considerations would be relevant, Mr. Tappin says that this situation does not fall under (i) because the process will not produce a spontaneous reaction in relation to the alleged infringing sign.

He says it is not the application of a reliable survey for the purposes of (ii) because, he says, the survey was not reliable.

In relation to (iii), which is: "The goods or services in question are not goods or services supplied to ordinary consumers and are unlikely to be within the judge's experience" he says these are ordinary consumer goods, it is not an esoteric market to which a judge will be unlikely to have experience, and he gave the example of fighter jets.

He referred me back to paragraph 42 of the Interflora judgment where Lewison LJ was considering a passage in judgment of Chadwick LJ in the Bach and Bach Flower Remedies Trade Marks case where it said that evidence might be helpful as evidence of what consumers knew especially where the judge might be unfamiliar with the relevant goods or services, but absent special circumstances it does not generally help the court to call members of the public simply to say that they would or would not have been confused.

As to (iv) of paragraph 137 of the Interflora judgment he says that that is not relevant here because we are not concerned with whether the trade mark had acquired distinctiveness. He accepts that in (v), passing off is a different question.

To summarise, in relation to the prize draw Mr. Tappin's primary point is that it is not the correct issue which is being addressed because it ought to be the effect of the defendants' mark and name in context which is being tested and the prize draw used the claimants' mark and name so it is not on point. He suggested it was not statistically valid or spontaneous. He says that one cannot rely by analogy on the experiments in Neutrogena because they were the other way around. Here the advert is for the claimant, whereas there it was the correct test which was used, which was the defendant's name. He says, how can it be helpful in proving that anyone was deceived by the use of the defendants' mark in a way which will damage the claimants' goodwill if in fact in the prize draw you are putting forward the claimants' mark itself?

He then also took me back to paragraph 152 of Lewison LJ's judgment which is concerned with the necessary elements where permission is sought to call witnesses and, of course, in this case that stage is not something with which I am concerned. He points out that there it is made clear by Lewison LJ that one needs the witness statements themselves to be provided to the court in order that the decision can be made and it is necessary to demonstrate that they will be of real value in deciding the issues in question and he says that inevitably here they would not be.

Thirdly, it is necessary to disclose how the witnesses will be selected as at the moment we do not know. Then, the cost is important. He says that the suggestion that the prize draw exercise would only cost £7,000 plus VAT is fanciful and he says it takes no account of costs of the review by the defendants of the materials, the extra cost at trial and the time of dealing with the other responses other than those of the individuals who are contacted.

In relation to the survey he says it is intended to present the defendants' mark in the survey to those who are surveyed but completely out of context so he says it is of no help. It is out of context and for passing off it is of no assistance because you have to show that a substantial number of people are deceived by the defendants' use of the defendants' mark. He says it is not a specialist market anyway but the survey does not address that and it seems merely to be the reaction to a name on a card and that takes the matter no further forward.

He referred me back to paragraph 151 of the Interflora judgment about what the court should be provided with if permission is sought to do a survey. Those were set out at paragraph 151 of Lewison LJ's judgment he said in relation to that:

He says there is no pilot survey. The evidence, he says, will not comply with the Whitford J guidelines and the cost would be £38,000. I think I referred to a lower figure earlier on but the cumulative cost I think it is accepted is £38,000, Mr. Brandreth says no, well, in any event put it this way Mr. Tappin submitted that the cumulative cost was £38,000. He says it nevertheless takes no account of the defendants' cost and the costs of dealing with the responses of the other witnesses and the general extra cost of the entire exercise.

In response Mr. Brandreth appeared, I think, to accept that the Interflora judgment and the test set out there, may relate to both trade marks and passing off and that the key question was whether the evidence was relevant and probative. In relation to the prize draw he said it was intended to come back to ask for permission in relation to the witness statements and so we were at an earlier stage in the process. He said it had delivered spontaneous evidence of confusion and would do so and the answers in the schedule show confusion relating to the defendants' mark. The evidence of damage for the purposes of passing off and article 9 were, he said, indicative of those responses because those responses show that the claimants' mark was no longer producing the same effect and was being watered down. He says that the costs in fact of the whole exercise are very small in comparison with the probative effect.

In relation to the survey he says the defendants' sign is being used, the context is that of an internet business and therefore one just types in in any form that mark in a search engine, but that the claimants would be happy to replace the mere typesetting of the defendants' mark with an actual picture of a clothing tag with the defendants' mark on it if that satisfied any concern in relation to context.

He says it will be evidence of a spontaneous reaction to an infringing sign in accordance with what was being considered in paragraph 137(i) of Lewison LJ's decision in Interflora and he says that it costs little.

My conclusions in this regard are as follows. First of all does the Interflora test apply? As I say, it appeared from Mr. Brandreth's reply that he did not seriously contend that the test in Interflora do not apply after all. In my judgment, although it cannot be denied that Interflora was a case concerning trade mark infringement, after all Lewison LJ expressly says so in paragraph 1 of his judgment, and throughout makes the distinction between the situation and the legal tests in relation to trade marks and that which is applicable in passing off cases, nevertheless he considers a full range of cases, both trade marks and passing off, and one Australian case which is concerned with competition. It seems tom e that he does so in relation to and in the context of witness collection exercise and the use of surveys generally.

In this regard I accept Mr. Tappin's submissions that the consideration of this type of evidence is in general and in that regard I put particular emphasis upon paragraphs 137 to 142 and in particular paragraphs 137 and 138 of Lewison LJ's judgment. I also rely on the fact that Lewison LJ put emphasis on the duty and powers of the court under the CPR and that he referred to those at paragraphs 139 to 141 of his judgment in relation to the use of evidence where it is nevertheless technically admissible. I also rely upon the conclusions which he reached at paragraph 142 which he, in my judgment, made in general, that the judge must evaluate carefully whether (a) the evidence of real utility and (b) whether that likely utility justifies the cost before accepting and admitting whatever evidence in relation to which permission is sought.

So, in my judgment the test, albeit that the underlying legal test may be different for the different causes of action, appears to me to be a general one.

Does the prize draw satisfy that test? First of all will it be valuable? In this regard I bear in mind that it is the contact for which permission is sought and it is intended that further permission be sought in relation to the admission of any witness statement at a later date. In this regard I prefer Mr. Brandreth's submissions. The answers in the schedule, to which I was referred, suggest that it is likely that there was confusion here and that this, in my judgment, is evidence, or may be when the further exercise is carried out, of confusion in the real world. In this regard, I place further reliance on the passage in paragraph 136 of Lewison LJ's judgment where he says evidence of confusion in the real world is something in relation to which there can no objection to calling evidence. At this stage it seems to me that it is likely to be valuable to take the further step in relation to the issue of confusion and this issue is one which is raised full square on the pleadings.

Also I am encouraged in this regard by the fact that the prize draw seems to me as analogous to the experiments in the Neutrogena case, the ‘buy one get one free’ experiment where it was the claimant's product that the billboard related to and then the market researchers saw which of the two products, whether the claimant's or the defendant's, was chosen by the consumer. In that case at least, therefore, it was the claimant's name rather than the defendant's name which was being put forward in order to determine whether there was confusion.

Although the objection may be valid in relation to passing off because that it is not the effect of the defendant's advert in my judgment it may prove valuable as to confusion for the purpose of the trade mark even though in that case the test relates to the legal construct of the average consumer.

In any event, as I say, the issue of confusion is four square between the parties on the pleadings and therefore is relevant. I take account also that at this stage all that is being sought is permission to contact potential witnesses and that the claimants will have to come back to court to seek separate permission as to use of any witness statements upon which they may want to rely. Overall therefore at this stage for this limited purpose and on the basis that the responses which I was shown in the schedule do appear, on the face of them, to show confusion I am satisfied that this will be a valuable exercise as far as it goes.

Of course, as part of that test I am also asked to consider the second element which is: Would the likely utility of that evidence justify the cost? Mr. Brandreth says that that is really modest and it is only £7,000 plus VAT compared with the costs of the action for the defendant alone, which are estimated to be in the region of £750,000. Mr. Tappin says it is very hard to believe that it can be only £7,000 and does not take account in any event the costs of dealing with these issues which would be incurred by the defendants and the cost of dealing with all of the responses rather than just a few which may be picked out.

I have to say that I find it difficult to accept that the costs will be as little as £7,000 even for the claimant alone. However, given the relatively modest cost in any event and the fact that this relates at present only to going back to some of the respondees, I am not in a position to decide that it is not justified on the basis of cost, given the importance of the evidence as I see it in relation to confusion.

In relation to the prize draw in my judgment both elements of the test are satisfied and the permission should be granted.

I go on, therefore, to the second element of the application which is the survey. Does the survey satisfy the test? What the claimants' are seeking is permission to carry out the survey, no more, no less. First of all, will be it valuable? First in this regard it is said that the survey is to be conducted at the London Bike Show and it will be useful because it would address the issue of whether in fact there is a distinct and specialist market segment which may be outside the judge's experience. In this regard, I prefer Mr. Tappin's submissions. It seems unlikely to me that the judge would need assistance on the cycling sector as a sufficiently specialist sector of the market. As Mr. Tappin pointed out it is hardly fighter jets.

Mr. Tappin also points out at paragraph 151 of the Interflora judgment that where one seeks permission to rely upon a survey one should provide the results of a pilot survey but it seems to me not realistic in the light of the fact that this is intended to take place at a specific event in January 2012 and the decision in Interflora is only matter of days old, that any permission in this regard should fail on the basis that a pilot survey has not been carried out.

The proposed survey does seek to test the use of the defendants' sign and it is accepted that that is the correct test. Given the fact that the context is an internet business it seems to me, in my judgment, that as long the mark and get up are used in the form of the clothes tag, which is what was proposed during his submissions by Mr. Brandreth, as opposed to the mere typeset of the defendants' mark, which is how it appears in the exhibits to Mr. Brownlow's witness statement in this matter, in my judgment there can be no objection on the grounds of lack of context given.

For the purpose of the survey the evidence must be that the survey will comply with the Whitford guidelines in that regard and I am reading from paragraph 151(ii) in the judgment of Lewison LJ in the Interflora case and it clearly must do so and it is on the basis that it does do so and that any survey can proceed. I can see no reason at this stage however why the survey would not be valuable for determining whether a substantial number of people would be deceived and, therefore, it would be relevant both for passing off and damages for the purposes of article 9 and in establishing confusion on the basis of the limited goodwill in the cycling market which the defendants contend in fact that the claimants have.

So, therefore, in my judgment the survey is likely to be probative and valuable although of course it must be determined when the entire matter is further put before the court if it is used as a witness-gathering process.

Once again I go on, as part of the determination of whether permission should be given, to consider the cost element of the test. Here it is suggested that likely cost will be, well, at least by Mr. Tappin, that it would be in the region of £38,000 plus VAT, although Mr. Tappin says that this takes no account of the defendants' costs and the additional cost at trial. Once again in my judgment this amount is proportionate to the likely use and probative finding of the exercise and I consider that to be the case even if one takes account of the likely cost of dealing with that matter which is likely to be incurred by the defendant. Accordingly, I give permission in the form which is sought.