Meemi Ltd v Wardrobe (Beautiful Clothes) Ltd

This is an appeal from a decision of the hearing officer for the Registrar, the Comptroller-General, dated 14 May 2012. The hearing officer dismissed an application by the Appellant, Meemi Limited (“Meemi”), to invalidate a registered trade mark owned by the Respondent, Wardrobe (Beautiful Clothes) Limited (“WBC”). He also partly allowed an application by WBC to invalidate two registered trade marks owned by Meemi in that he limited the registrations to certain specifications of goods. Meemi now appeals against the hearing officer’s decision on both applications.

WBC is the owner of the registered word mark: WARDROBE. It is registered for limited types of goods: bags for women, suits, jackets, trousers, evening wear, knitwear, shoes, headgear: all for women. The trade mark application was filed on 16 June 1997 and, after overcoming some initial doubts of the examiner at the Trade Marks Registry, was registered on 17 December 1999.

The two registered trade marks belonging to Meemi are a word mark and a device mark. For the purposes of this judgment I shall refer to these trade marks as the Meemi trade marks. The word mark is: MY-WARDROBE.COM. The device mark is:

Wardrobe is the name under which WBC carries on business at retail premises in Conduit Street, London W1. The shop sells haute couture clothing of various different brands; it also offers beauty treatment and a clothing consultancy. The shop undoubtedly caters for the expensive end of the market. The hearing officer found that at one time WARDROBE had been used as a trade mark for goods, although this was evidently a minor aspect of the business; the principal business had always been retail selling of branded clothes and style advice. In any event, the hearing officer was satisfied that use of this mark for goods had formed no part at all of the business for some 20 years. There was no evidence of use of WARDROBE in relation to goods since 1990.

Within its sector of the market the WARDROBE shop has clearly built up a good reputation. It is, however, a traditional shop. Although it does have a website, it does not sell goods online or by mail order. Customers have to go to the shop, and the hearing officer found that there was no evidence of the shop attracting persons from outside the Home Counties or, even, generally within London.

As for the business of Meemi, it is, as its trade marks suggest, that of an online retailer. It sells a broad variety of male and female clothing and accessories.

As noted, the hearing officer dismissed Meemi’s challenge to the validity of the WARDROBE registered trade mark. He acknowledged, of course, that the word Wardrobe is an ordinary English word. It is one which may bear different shades of meaning. First, of course is the meaning of a (commonly wood) item of furniture used for storing clothes. In addition, the word is often used to denote a collection of clothing as in, for example, a person’s “spring wardrobe”. It is the existence of the latter kind of use which led Meemi to challenge WBC’s registration. For Meemi Mr Engelman relied heavily on what the hearing officer noted at paragraph 78 of his decision:

Section 47(1) of the Trade Marks Act 1994 provides:

The hearing officer held that WARDROBE was not devoid of any distinctive character. He referred to the judgment of the European Court in Develey Holding GmbH Beleiligungs KG v OHIM [2008] ETMR 20 which explained that the requirement of distinctive character referred to the requirement that a mark must be capable of identifying a product as coming from a particular source. He went on to hold:

As for the challenge based on section 3(l)(c) of the 1994 Act, the hearing officer held that it was inapplicable in the present instance. He referred to an observation of the Court of First Instance in Metso Paper Automation oy v OHIM [2007] ETMR 2 at [25] (which he erroneously attributed to another judgment):

WBC challenged the two Meemi registrations under both section 5(2)(b) and section 5(4)(a) of the 1994 Act. However, its challenge under the former subsection failed because it could not demonstrate genuine use of its trade mark on goods in the 5 years prior to the Meemi registrations. Nevertheless, the hearing officer found for WBC under section 5(4)(a) so that he substantially reduced the specification of goods for which the Meemi trade marks could be registered.

By virtue of section 47(2)(b) of the 1994 Act the registration of a trade mark may be declared invalid on the ground:

In the present case, the hearing officer concluded that in all cases where there was a potential overlap in the type of goods being supplied, for example clothing, use by Meemi of the Meemi trade marks would result in passing off. WBC had a substantial goodwill in its business name. Although this goodwill might be geographically limited, its area would be included within that covered by the Meemi trade marks, i.e. the whole of the United Kingdom. There was a misrepresentation by Meemi in using the Meemi trade marks, and this would cause damage to WBC.

The hearing officer rejected a number of arguments advanced on behalf of Meemi. Whilst the name WARDROBE was a descriptive name, “for the customers of WBC and certain, if not all, persons in the fashion industry, WARDROBE means the business of WBC”. MY-WARDROBE.COM was likely to be taken as an internet address of WBC. In the view of the hearing officer:

Whilst there was currently not an absolute common field of activity, there were many goods and services where there was an overlap. Although there was no firm evidence of any confusion as yet, damage was in the hearing officer’s view likely:

In the result the hearing officer upheld the arguments for WBC as regards passing off.

For Meemi Mr Engelman submitted that the hearing officer was in error on both aspects of his decision. He should have found both (1) that section 3(1) of the 1994 Act was engaged as far as the mark WARDROBE was concerned and (2) there was, and would be, no passing off by reason of use of the Meemi trade marks so that there was no reason to limit the specifications for which they were registered.

Mr Engelman drew no real distinction for the purposes of the present case between section 3(1)(b) and section 3(1)(c) of the 1994 Act and concentrated upon the latter sub-section. In support of his submission he relied heavily on the statement of the European Court of First Instance in Metso Paper Automation oy v OHIM [2007] ETMR 2 at [25] to which I have already referred; he described this as “the Paperlab test”. In Mr Engelman's submission the Court had in mind two distinct possibilities for the invalidity of a trade mark under Article 7(1)(c) of the Community Trade Mark Regulation, which uses the identical language to section 3(1)(c) of the 1994 Act. The first possibility was that the invalid trade mark constituted a description of the goods or services as a whole. The second possibility was that it constituted a description of a characteristic of the goods or services. Meemi had never suggested that WARDROBE describes a characteristic of items sold by WBC. However, it is a word descriptive of the kind of goods or services sold by WBC as a whole. Once the hearing officer had correctly found that the word WARDROBE may be used to describe a collection of clothing, it necessarily followed that the trade mark fell foul of what Mr Engelman called the first arm of the Paperlab test.

In support of his submission Mr Engelman also drew attention to the use of the word WARDROBE in numerous third party trade mark registrations and applications, as well as to disclaimers on the Register in relation to some trade marks for use of WARDROBE on its own. He also relied upon the original reaction of the Registry which had been to refuse registration for WARDROBE on the basis that the word was simply an alternative for “clothes”.

In summary it was Mr Engelman’s case that the hearing officer had wrongly failed to appreciate that there were two distinct arms in the Paperlab test. WARDROBE plainly came within the first arm although it had never been suggested that it came within the second arm which referred merely to the individual characteristics of goods or services.

On the hearing officer’s conclusions about passing off, Mr Engelman made two principal submissions in oral argument. First, the hearing officer had failed to have regard to the totality of the evidence and consider whether there was a real likelihood of deception. The question should be asked particularly in the light of the inherently descriptive nature of the word WARDROBE and what Mr Engelman called the Office Cleaning principle. Furthermore, the answer to the question had to be regarded in the light of the regional extent of WBC’s goodwill. WARDROBE’S goodwill was simply that of a London retail shop, and WBC had no national reputation. Thus, there would be no confusion with a national online retailer like Meemi.

The hearing officer’s second type of error was, on Mr Engelman’s case, that he was guilty of procedural unfairness. He found that, although WBC had not used the mark WARDROBE in relation to goods for some 20 years, there would nevertheless be some residual goodwill in the mark. Mr Engelman complained that the question of residual goodwill had never been argued or even suggested at the hearing so that he had never had an opportunity of addressing it. Moreover, there had been no consideration at all at the hearing about the matter of damage, an essential ingredient of the tort of passing off. The hearing officer had simply come up with his conclusions about the prospect of damage “on the hoof", and Mr Engelman had not had the opportunity of addressing him on that aspect of the case. This was another instance of procedural unfairness.

Mr Malynicz at the forefront of his submissions for WBC drew my attention to the approach to be adopted on an appeal from a hearing officer. Such an appeal is by way of review, not rehearing. The authorities demonstrate that the Court should be reluctant to interfere in the absence of an error of principle: see, for example, Bessant & Ors v South Cone Inc [2003] RPC 5 especially at [28] - [29] per Robert Walker LJ. As an example of a reluctance to interfere Mr Malynicz referred to a decision of Daniel Alexander QC, sitting as a Deputy High Court Judge, in Digipos Store Solutions Group Ltd v Digi International Inc [2008] RPC 24 where an appeal was dismissed even though Mr Alexander QC expressly stated that he had real doubts over the decision. Furthermore, insofar as the present was a case where the decision depended on the hearing officer’s overall evaluation and value judgments, the Court should be particularly reluctant to interfere as was demonstrated by well-known decisions such as Biogen Inc v Medeya [1997] RPC 1 and Designers Guild Ltd v Russell Williams (Textiles) Ltd [2000] 1 WLR 2416.

As regards the challenge to WBC’s trade mark, Mr Malynicz invited me to have regard to what section 3(l)(c) of the 1994 Act actually says. It refers to, and only to, certain specified and any other characteristics of goods or services. There is, Mr Malynicz submitted, no room for Mr Engelman’s suggested distinction between two separate arms of the Paperlab test.

Mr Malynicz submitted that it is not a characteristic of, say, a jacket that it is a person's entire collection of clothing or even that it is a seasonal collection. The meaning of the word WARDROBE is collective, necessarily implying a range of different items such as belts, shirts, jackets, sweaters, scarves and so on. It cannot be said of any individual item of clothing that WARDROBE may refer to it or to any of its characteristics.

As for the other points made by Mr Engelman, they were of little weight. In particular, the treatment of other trade marks, when one did not know the background facts, was not helpful.

Finally, on this aspect of the case Mr Malynicz agreed with Mr Engelman that on the facts here the challenge under section 3(l)(b) of the 1994 Act depended on the challenge under section 3(l)(c). If the latter failed, then so must the challenge under the former.

Turning to the case on passing off, Mr Malynicz pointed out that the hearing officer had identified numerous facts from which substantial goodwill in the WARDROBE name could be demonstrated. There was no challenge to this. Indeed, the existence of goodwill was not in dispute.

Mr Malynicz also referred me to the judgment of Jacob LJ in Phones4U Ltd & Ors v Phones4u.co.uk Internet Ltd & Ors [2007] RPC 5 not only for the caution required before appellate intervention on questions of fact and value judgments but also for his reference to the difference between the distinctiveness necessary for trade mark registration and that for the law of passing off. Jacob LJ pointed out at [25] that there were several examples in the case law of successful passing off actions based on quasi-descriptive names.

Mr Malynicz finally submitted that the complaints of procedural impropriety were fanciful. WBC’s goodwill was firmly in issue, as was the history of WBC’s trading over the years. The current state of WBC’s goodwill was obviously material in consideration of the “classical trinity” required for any successful claim in passing off. In any event, WBC’s goodwill specifically and solely attaching only to the supply of goods under the WARDROBE mark was a peripheral matter. What mattered in passing off was the goodwill attaching to the WARDROBE name generally. As for damage, again Mr Malynicz submitted that there could be no basis for the allegation of procedural impropriety. Damage, like goodwill, was part of the same “classical trinity” and was an obvious matter in issue.

I agree with Mr Malynicz that, leaving aside procedural unfairness, I should only interfere with the decision of the hearing officer if I conclude that he went wrong in principle. It would be wrong for me to allow an appeal simply if I were to take a different view on matters of evaluation, impression or value judgment. As Robert Walker LJ, as he then was, put it in Bessant & Ors v South Cone Inc [2003] RPC 5 at [28] when pointing out that the hearing officer did not hear oral evidence:

The correct application of Article 7(1)(c) of the CTM Regulation, and hence section 3(l)(c) of the 1994 Act, was recently considered by Arnold J in Starbucks (HK) Ltd & Ors v British Sky Broadcasting Ltd & Ors [2012] EWHC 3074 (Ch) at [91]:

The principles to be applied under Article 7(1)(c) of the CTM Regulation were conveniently summarised by the CJEU in Case C-51/10P Agencja Wydawnicza Technopol sp. z o.o. v OHIM [2011] ECR1-0000, [2011] ETMR 34 as follows:

“33.

A sign which, in relation to the goods or services for which its registration as a mark is applied for, has descriptive character for the purposes of Article 7(l)(c) of Regulation No 40/94 is - save where Article 7(3) applies - devoid of any distinctive character as regards those goods or services (as regards Article 3 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1), see, by analogy, Case C-265/00 Campina Melkunie [2004] ECR I-1699, paragraph 19; as regards Article 7 of Regulation No 40/94, see Case C-191/01 P OHIM v Wrigley [2003] ECR I-12447, paragraph 30, and the order in Case C-l50/02 P Streamserve v OHIM [2004] ECR I- 1461, paragraph 24).

36.

... due account must be taken of the objective pursued by Article 7(l)(c) of Regulation No 40/94 . Each of the grounds for refusal listed in Article 7(1) must be interpreted in the light of the general interest underlying it (see, inter alia, Joined Cases C-456/01 P and C-457/01 P Henkel v OHIM [2004] ECR I-5089, paragraph 45, and Case C- 48/09 P Lego Juris v OHIM [2010] ECR I-0000, paragraph 43).

37.

The general interest underlying Article 7(1)(c) of Regulation No 40/94 is that of ensuring that descriptive signs relating to one or more characteristics of the goods or services in respect of which registration as a mark is sought may be freely used by all traders offering such goods or services (see, to that effect, OHIM v Wrigley, paragraph 31 and the case-law cited).

38.

With a view to ensuring that that objective of free use is fully met, the Court has stated that, in order for OHIM to refuse to register a sign on the basis of Article 7(1)(c) of Regulation No 40/94, it is not necessary that the sign in question actually be in use at the time of the application for registration in a way that is descriptive. It is sufficient that the sign could be used for such purposes (OHIM v Wrigley, paragraph 32; Campina Melkunie, paragraph 38; and the order of 5 February 2010 in Case C-80/09 P Mergel and Others v OHIM, paragraph 37).

39.

By the same token, the Court has stated that the application of that ground for refusal does not depend on there being a real, current or serious need to leave a sign or indication free and that it is therefore of no relevance to know the number of competitors who have an interest, or who might have an interest, in using the sign in question (Joined Cases C-108/97 and C-109/97 Windsurfing Chiemsee [1999] ECR I-2779, paragraph 35, and Case C- 363/99 Koninklijke KPN Nederland [2004] ECR I-1619, paragraph 58). It is, furthermore, irrelevant whether there are other, more usual, signs than that at issue for designating the same characteristics of the goods or services referred to in the application for registration (Koninklijke KPN Nederland, paragraph 57).

46.

As was pointed out in paragraph 33 above, the descriptive signs referred to in Article 7(1)(c) of Regulation No 40/94 are also devoid of any distinctive character for the purposes of Article 7(l)(b) of that regulation. Conversely, a sign may be devoid of distinctive character for the purposes of Article 7(1)(b) for reasons other than the fact that it may be descriptive (see, with regard to the identical provision laid down in Article 3 of Directive 89/104, Koninklijke KPN Nederland, paragraph 86, and Campina Melkunie, paragraph 19).

47.

There is therefore a measure of overlap between the scope of Article 7(l)(b) of Regulation No 40/94 and the scope of Article 7(1)(c) of that regulation (see, by analogy, Koninklijke KPN Nederland, paragraph 67), Article 7(1)(b) being distinguished from Article 7(1)(c) in that it covers all the circumstances in which a sign is not capable of distinguishing the goods or services of one undertaking from those of other undertakings.

48.

In those circumstances, it is important for the correct application of Article 7(1) of Regulation No 40/94 to ensure that the ground for refusal set out in Article 7(1)(c) of that regulation duly continues to be applied only to the situations specifically covered by that ground for refusal.

49.

The situations specifically covered by Article 7(l)(c) of Regulation No 40/94 are those in which the sign in respect of which registration as a mark is sought is capable of designating a ‘characteristic’ of the goods or services referred to in the application. By using, in Article 7(1)(c) of Regulation No 40/94, the terms ‘the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service’, the legislature made it clear, first, that the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service must all be regarded as characteristics of goods or services and, secondly, that that list is not exhaustive, since any other characteristics of goods or services may also be taken into account.

50.

The fact that the legislature chose to use the word ‘characteristic’ highlights the fact that the signs referred to in Article 7(1)(c) of Regulation No 40/94 are merely those which serve to designate a property, easily recognisable by the relevant class of persons, of the goods or the services in respect of which registration is sought. As the Court has pointed out, a sign can be refused registration on the basis of Article 7(1)(c) of Regulation No 40/94 only if it is reasonable to believe that it will actually be recognised by the relevant class of persons as a description of one of those characteristics (see, by analogy, as regards the identical provision laid down in Article 3 of Directive 89/104, Windsurfing Chiemsee, paragraph 31, and Koninklijke KPN Nederland, paragraph 56).”

In my view it is clear on their wording that Article 7(1)(c) and section 3(1)(c) of the 1994 Act are referring to some, expressly identified or more general, characteristic of goods or services which may be designated by a trade mark. They do not refer to designations of goods or services as such. In this respect I agree with the submissions of Mr Malynicz and the view of the hearing officer.

I do not consider that the Paperlab test as put forward by Mr Engelman provides support for a view of section 3(l)(c) which the actual language would not support. There are no two distinct arms within the sub-section. In my view, when the Court refers to “a description of the goods and services in question or [emphasis added] one of their characteristics” the Court is referring to the perception of the public rather than the language of Article 7(1)(c). The Court is not intending to say that the Article bears a meaning which is simply unwarranted by the language used.

Of course, as Mr Malynicz pointed out, there may be instances where a description of goods or services as a whole may also designate a characteristic of those goods or services. Thus, to designate something as a jacket would not only describe the object as a whole but would also designate the object’s characteristic of being worn as a jacket. But this does not mean that WARDROBE can be considered as a characteristic of items of clothing sold by WBC. Given that it was not suggested that in this case invocation of section 3(1)(b) of the 1994 Act could succeed when section 3(1)(c) does not apply, I agree with the conclusion reached by the hearing officer and must dismiss the appeal on the distinctiveness point.

The general law applicable to the tort of passing off is not controversial. It was summarised by Lord Oliver in the ‘ Jif' lemon case, Reckitt & Colman Products Ltd v Borden Inc and Ors [1990] RPC 341 at 406:

I address firstly Mr Engelman’s complaints of procedural impropriety in that he had not addressed the hearing officer on the matter of residual goodwill or the specific way in which damage to WBC was analysed by the hearing officer. In my view there is little force in Mr Engelman’s complaints on this account. It is true that the hearing officer did apparently consider the possibility of residual goodwill attaching to WARDROBE as a mark specifically for goods. At first sight this may seem somewhat surprising when, as the hearing officer found, it had not in fact been used as a mark for goods for some 20 years. But, in any event I do not consider that there can have been any prejudice to Mr Engelman in not having specifically addressed any point on the existence of some residual goodwill. There is no doubt that the extent of WBC’s goodwill was firmly at centre stage in the proceedings. But it was essentially the goodwill attaching to the WARDROBE business, a continuing and thriving business, which mattered. Any separate goodwill attaching to a historical use of WARDROBE as a mark simply for goods was highly peripheral. As for the kinds of damage found by the hearing officer, assuming a misrepresentation, it is obvious that damage would have had to be addressed in any analysis of passing off. Damage generally is plainly an element in passing off on which Mr Engelman had the opportunity to address the hearing officer. I agree with Mr Malynicz that the hearing officer’s conclusions on damage, always assuming the misrepresentation, are not surprising: cf. the Phones4U case, cited above, at [14]. I do not believe that there was any unfairness in the hearing officer’s conduct of the proceedings before him.

I now turn to what in my view is at the heart of this case as far as passing off is concerned. This is the matter of misrepresentation. For the purpose of the analysis it is to be taken that, as has never been in dispute, the business of the WARDROBE shop has generated a substantial goodwill. Nevertheless, serious questions arise as to whether in reality use of the Meemi trade marks will give rise to a misrepresentation. At the forefront of Mr Engelman’s argument was the fact that WARDROBE is an ordinary English word in common use descriptive of a collection of clothes. Any trader who adopts for his business some standard English word descriptive of the nature of the business is likely to run a risk of diminished exclusivity. As Lord Wright said in the well known case of Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 at 43:

In the present case, of course, the Meemi trade marks are certainly not identical to the simple WARDROBE, although I do bear in mind what the hearing officer said about the marketing ploy of using “my” before a business name. But, there are also other notable features of this case. First, WBC and Meemi, at least at present, operate in different spheres. WARDROBE is a conventional haute couture shop, whereas Meemi is an online retailer as the .COM behind its registered word mark suggests. Second, WARDROBE has a geographically limited goodwill, for the hearing officer found that there was no evidence of the shop attracting persons from outside the Home Counties or, even, generally within London. Third, during the albeit limited time during which the Meemi trade marks have been used there has, to my mind unsurprisingly, been no evidence of any confusion with WBC’s goods or business having in fact occurred.

I am very conscious that I should not interfere with the hearing officer’s decision merely because I myself might well have come to a different view on the facts which he found. Moreover, it is right to say that the hearing officer did address each of the above points in his decision and rejected each of them as a reason for not finding passing off. The hearing officer was clearly aware of the elements of the tort of passing off. He expressly referred early in his decision to the speech of Lord Oliver in the Jif lemon case. Also, he did on occasion expressly discuss matters in terms of misrepresentation: see, for example, paragraphs 89-90 of the decision.

Despite the above, it must be borne in mind that deception lies at the heart of the tort of passing off. Whilst the hearing officer did address each argument raised by Mr Engelman in turn, he appears never to have stood back and considered the overall picture in terms of misrepresentation. I consider that not to have done so was an error of principle. I fully accept that on each individual point the hearing officer may well have been entitled to find as he did. There may be a possible answer to each point in isolation. However, in my view the cumulative effect of all the points is such that realistically use of the Meemi trade marks for the goods in respect of which they are registered would not involve misrepresentation and, hence, not passing off.

For the reasons set out, I dismiss the appeal against the refusal to declare WBC’s registered trade mark invalid. However, I allow the appeal against the limitation of Meemi’s registrations. I will, of course, hear the parties on any consequential matters.