Enterprise Holding Inc v Europcar Group UK Limited & Anor

I have to deal with the specificity of the injunction to restrain infringement of 497 which should be granted in the present case. So far as that is concerned, I adhere to the views that I expressed in InterfloraIncv Marks and Spencer plc [2013] EWHC 1484 (Ch), [2014] FSR 2 at [14] to [24]. In particular, I adhere to the view that I do not think it would be appropriate for a first instance judge to depart from the established practice of this Court and that that is properly a matter for the appellate courts to consider. Although the matter was ventilated before the Court of Appeal in the same case, [2014] EWCA Civ 1403, [2015] ETMR 5 at [196]-[197], it does not seem to me that those paragraphs indicate that the practice of the court should be changed.

Accordingly, it seems to me that the starting point is that, ordinarily, an injunction should be granted in the general form. Nevertheless, the court has a discretion to impose a specific injunction in an appropriate case.

I see no factors in the present case that make it appropriate to grant a specific injunction as opposed to a general injunction. Accordingly, I will grant an order in the general form.

I have to deal with the question of whether the remedies which Enterprise should be granted, having regard to the findings of infringement in my judgment, should be confined to the United Kingdom or should extend throughout the European Union. When I say “remedies”, I refer both to the geographical scope of the injunction and to the geographical scope of the inquiry as to damages or, alternatively, an account of profits.

I have come to the conclusion that, in the particular circumstances of the present case, both remedies should be confined to the United Kingdom. My reasons are as follows.

The first relates to the judgment of the Court of Justice of the European Union in Case C-235/09 DHL Express France SAS v Chronopost SA [2011] ECR I-2801. In that case, Chronopost was the proprietor of a Community trade mark for the word WEBSHIPPING. DHL had been found to have infringed that Community trade mark through use of the signs WEBSHIPPING and WEB SHIPPING. My understanding is that that finding of infringement was made pursuant to Article 9(1)(a) of the Community Trade Mark Regulation. The Cour de Cassation referred questions to the CJEU regarding the nature and geographical scope of the injunction which should be granted pursuant to what was then Article 98(1) of the Regulation, now Article 102(1) of the codified version of the Regulation.

The Court of Justice ruled that a prohibition against further infringement or threatened infringement issued by a competent Community trade mark court must, as a rule, extend to the entire area of the European Union. The court gave two main reasons for that conclusion. The first was the unitary character of the Community trade mark and, accordingly, the need to ensure that it received uniform protection throughout the EU. The second was the risk of inconsistent decisions if successive actions were to be brought involving the same parties and the same acts of alleged infringement in different Member States.

The Court of Justice nevertheless recognised that there could be exceptions to the general rule. As it stated at [48]:

“Accordingly, if a Community trade mark court, hearing a case in circumstances such as those of the main proceedings, finds that the acts of infringement or threatened infringement of a Community trade mark are limited to a single Member State or to part of the territory of the European Union, in particular because the applicant for a prohibition order has restricted the territorial scope of its action in exercising its freedom to determine the extent of that action, or because the defendant proves that the use of the sign at issue does not affect or is not liable to affect the functions of the trade mark, for example, on linguistic grounds, that court must limit the territorial scope of the prohibition which it issues.”

It can be seen that the second of the two possibilities acknowledged by the Court is where the defendant proves that the use of the sign does not affect, and is not liable to affect, the functions of the trade mark. That makes perfect sense in a case where the claim is for infringement pursuant to Article 9(1)(a) of the Regulation, and if one interprets Article 9(1)(a) as throwing on to the defendant the burden of proving that the use of the sign does not affect and is not liable to affect the functions of the trade mark once it has been established by the trade mark proprietor that the first, second, fourth and fifth conditions for infringement pursuant to Article 9(1)(a) have been established. In that regard, see the judgment which I shall be delivering tomorrow in the case of Supreme Petfoods Ltd v Henry Bell & Co (Grantham) Ltd [2015] EWHC 256 (Ch).

In cases where the claim is made pursuant to Article 9(1)(b) or Article 9(1)(c) of the Regulation, however, the same logic is not applicable. On the contrary, under Article 9(1)(b) of the regulation, the onus lies upon the trade mark proprietor to establish a likelihood of confusion. The trade mark proprietor cannot rely upon any presumption of a likelihood of confusion, such as Article 16(1) of TRIPS requires in a double identity case. Likewise, in an Article 9(1)(c) case, the trade mark proprietor must establish that the use of the sign causes one of the three specified kinds of injury. The existence of a likelihood of confusion or one of those kinds of injury depends on factors such as the distinctive character of the trade mark and the similarity of the sign, both of which can vary from Member States depending, for example, the extent of use of the trade mark and linguistic factors. Accordingly, it would not, in my judgment, accord with the logic of the approach of the Court of Justice at [48]to require the defendant to bear the onus of proving that the use of the sign does not affect, and is not liable to affect, any of the functions of the trade mark in other Member States in an Article 9(1)(b) or an Article 9(1)(c) case.

I acknowledge straightaway, however, it is far from clear that interpretation of the law is correct having regard to the two factors which the Court relied upon for as supporting the general rule which it articulated, since those factors are equally applicable regardless of the basis of the claim for infringement.

On the other hand, the matter does not stop there, because the Court was only concerned with the geographical scope of the injunction. It was not concerned with the other remedies to which the trade mark proprietor might be entitled, and in particular the financial remedies for past acts of infringement. At [29]-[31] of its judgment in DHL, the Court was at pains to distinguish between the position under Article 102(1) of the codified version of the Regulation, dealing with injunctive relief, and the position under Article 102(2) of the Regulation, dealing with other forms of relief. Nevertheless, as a matter of logic, if a trade mark proprietor who has established infringement of his Community trade mark is entitled to injunctive relief on a pan-European basis for the reasons given by the Court of Justice, it is difficult to see why the trade mark proprietor should not also be entitled to financial remedies for past acts of infringement on a pan-European basis.

Consideration of financial remedies of past acts of infringement, to my mind, reinforces the proposition that the logic which the court enunciated in [48] cannot apply to an Article 9(1)(b) or an Article 9(1)(c) case, because that would mean that the defendant would have cast upon it the onus of proving that it had not committed acts which affect or are liable to affect the functions of the trade mark in order to escape financial remedies for past acts committed in Member States other than the forum State.

In his submissions to me this morning, counsel for Enterprise submitted, albeit with reference to the circumstances of the present case, that the position as to the geographical scope of financial remedies should stand or fall with that of the geographical scope of the injunction. I agree with that.

For the reason I gave earlier, I recognise that the provisional view of the law which I have just articulated is one which is very far from being acte clair. This is an issue upon which I have no doubt that a reference to the Court of Justice will at some point be required.

I turn, therefore, to my second reason, for which purpose I shall take the law as being as it is stated in DHL. In the present case, the procedural position is one where, in my judgment, the first exception recognised by the Court of Justice in [48] applies. Enterprise relies upon the undoubted fact that, as it has always been clear from its Particulars of Claim, it seeks a pan-European injunction. Counsel for Enterprise submitted, in essence, that that was sufficient to make it clear that Enterprise was not renouncing its right to seek relief extending beyond the United Kingdom. If it was purely a matter of the scope of the injunction claimed, I would agree with that. In my judgment, however, the position is not so simple.

As I noted in my judgment at [17], as originally pleaded, Enterprise’s case relied solely upon allegedly infringing acts committed by Europcar in the United Kingdom. On 2^d September 2014, Enterprise applied to re-amend its particulars of claim so as to allow acts of infringement by Europcar “in the UK and/or elsewhere in the EU”. On 30 September 2014, Morgan J gave Enterprise permission to amend its claim so as to allege acts of infringement “in the UK and/or France”, but not elsewhere, for the reasons given in his judgment of that date ([2014] EWHC 3169 (Ch)). Accordingly, he gave directions for the service of further evidence relating to France. After the conclusion of the evidence, however, Enterprise abandoned its reliance upon acts of infringement committed in France.

For present purposes, it is necessary to say a little more about the judgment of Morgan J. At [5]-[26] he considered the Particulars of Claim in their original form. The following points should be noted. First, he referred in [5] and [6] to paragraph 17 of the Particulars of Claim and the plea that the Trade Marks had enhanced distinctive character and/or a reputation as a result of the use that had been made of them both in the United Kingdom and elsewhere in the EU. He drew attention to the fact that it was there expressly pleaded that there was an enhanced distinctive character and a reputation elsewhere in the EU.

He then analysed paragraphs 18 and 19 of the Particulars of Claim, and concluded that the allegation of infringement was restricted to acts committed within the United Kingdom, save, possibly, the acts particularised in paragraph 19.7 of the Particulars of Claim, which he considered to be obscure.

He then referred to paragraphs 19.2 and 25 of the Particulars of Claim, and noted that they alleged threatened infringement which extended beyond the United Kingdom to the remainder of the European Union.

Accordingly, as Morgan J noted in particular at [26], he interpreted the original Particulars of Claim as drawing a distinction between what was pleaded with regard to past acts of infringement, which were confined to the United Kingdom, and the pleaded threat of future infringing acts throughout the European Union.

He then turned at [27] to [36] to consider the effect of some amendments which had been made to the Particulars of Claim in October 2013 by consent. As he explained, he considered that the effect of those amendments had been to introduce a mismatch between what was alleged in paragraph 18, which was infringing acts in the United Kingdom, and what was alleged in paragraph 19.2A, which included infringing acts in France. He concluded that the right course was to resolve that mismatch by allowing Enterprise to re-amend paragraph 18 so as to make it clear that the allegations of infringement related not just to the United Kingdom, but also to France.

In [37], however, he declined to permit Enterprise to rely upon infringing acts elsewhere in the European Union.

Accordingly, the position as at the date of Morgan J's judgment was that, notwithstanding the fact that Enterprise was seeking a pan-European injunction, the only infringing acts which it had pleaded were acts committed in the United Kingdom and France. Moreover, Morgan J had explicitly prohibited Enterprise from relying upon infringing acts elsewhere within the European Union. There was no appeal against that order.

As previously indicated, what happened at trial was that at the conclusion of the evidence, Enterprise abandoned its reliance upon infringing acts committed in France. Moreover, as can be seen from my judgment, although I found that Enterprise's claim was made out under Article 9(1)(b) with regard to Europcar's acts within the United Kingdom, I made no findings with regard to the position outside the United Kingdom. Not only that, but in addition two important elements of my reasoning were expressly confined to the position within the United Kingdom. Those were, first, the acquired distinctive character of the 497 Trade Mark in the form in which it had been used by Enterprise and, secondly, the evidence of actual confusion. I made no finding that there was acquired distinctive character in Member States other than the United Kingdom, nor did I make a finding that there was actual confusion in other Member States. I made no such findings because there was no evidence to support any such suggestion if it had been made. For example, there was no survey evidence relating to other Member States, nor was there evidence of actual confusion.

In all of those circumstances, it seems to me that the correct conclusion is that this is a case in which Enterprise restricted the territorial scope of its action. It did so by restricting the territorial scope of the past infringing acts upon which it relied.

My third reason is that, even if I am wrong in concluding that Enterprise restricted the territorial scope of its action, nevertheless, the second exception recognised by the Court of Justice in DHL at [48] applies. So far as that is concerned, it is right to say that the evidence before the Court as to the position in other Member States is not extensive. Indeed, in relation to many Member States, there is essentially no evidence at all. Even in relation to those Member States where there is any evidence, it is nowhere near as extensive as the evidence that relates to the United Kingdom. In the light of such evidence as there is, however, the conclusion that I would reach would be that Europcar's use of the e-moving logo does not affect, and is not liable to affect, the functions of 497 in any Member State other than the United Kingdom.

In making that statement, I should make a number of things clear. First of all, so far as the other member states of the European Union are concerned, if I were to make any finding in favour of Enterprise, it could only be with regard to Germany. While there is some evidence upon which an inference of acquired distinctiveness could be based with regard to Germany, I certainly do not think that there is any such evidence with regard to other Member States.

Secondly, it seems to me that it might be argued, although neither side did argue, that a distinction should be made between the three different categories of use described in my judgment. Thus, if I were asked to make a differentiation between the three categories of use, it seems to me that a line might be drawn between the first category of use (that is to say, solus use) and the other two categories.

The third observation is the most important of all, which is that this conclusion is only if I am wrong as to the second reason that I have given for confining the geographical scope of the injunction. The reason why I say that is that in my view, neither my judgment of 13 January 2015 nor my judgment today creates any res judicata with regard to the allegations of infringement of Enterprise's Trade Marks by Europcar in any other Member State.

My fourth reason concerns the position concerning financial remedies. As I have already observed, counsel for Enterprise made the submission that this should stand or fall with the geographical scope of the injunction. As I have said, I agree with that. As a matter of logic, it seems to me to be impeccable. In the present case, however, it seems to me to be entirely clear that, by contrast with its claim for an injunction, Enterprise's pleaded claim for financial relief has always been confined to, originally, the position in just the United Kingdom and, latterly, the position in the United Kingdom and France: see in particular paragraph 22 of the Re-Amended Particulars of Claim and paragraph 4 of the prayer.

That, in my view, is certainly decisive as regards the claim for financial remedies, but, for the reasons I have given I think the conclusion should be the same in respect of the injunction.

I have to deal with the costs of these proceedings. There is no dispute that the overall winner is Enterprise and, accordingly, the starting point is that Europcar should pay Enterprise's costs.

Europcar contends that a different order should be made having regard to three matters in particular. The first concerns the claim for infringement under Article 9(1)(c) of the Regulation. In particular, Europcar points out, correctly, that Enterprise made an allegation that Europcar had a subjective intention to take unfair advantage of the distinctive character or reputation of the Trade Marks which was abandoned shortly before trial. So far as this matter is concerned, it seems to me that it would be correct notionally to require Enterprise to pay Europcar's costs of the allegation of subjective intention.

The costs of the allegation more generally, however, it seems to me should not be treated differently to the overall costs of the proceedings. The reason for that is that the additional costs that were incurred by reason of the inclusion of the Article 9(1)(c) allegation, other than the costs attributable to the allegation of subjective intention, do not strike me as being significant. Moreover, as counsel for Enterprise points out, this was not an allegation on which Enterprise was unsuccessful, except in the contingent sense if it had not succeeded on its Article 9(1)(b) allegation.

The difficulty I have is in attributing any figure to the costs of the subjective intention allegation. It seems to me that there will have been some costs attributable to that allegation. In particular, I do consider that extra disclosure will have been necessitated by that allegation and a little extra evidence, but, on the other hand, I think much of the disclosure and evidence would have had to have been given anyway.

I turn then to the second main matter which is relied upon, which is the introduction and then abandonment of the allegations relating to France. Again, it seems to me that this is a matter where, notionally, Enterprise should be required to pay Europcar's costs. Again, the difficulty is quantifying the costs attributable to that allegation. I should make it clear that, in so far as Europcar is suggesting that I should in some way modify Morgan J's costs order, I do not consider that that would be correct. On the other hand, I do accept, as I have said, that the costs of the exercise other than the costs allocated by that order should be borne by Enterprise.

A particular matter that arises here is the costs attributable to the exercise carried out by Ms. Watchorn. So far as that is concerned, although it is true to say that I made no finding in the judgment about searches relating to France, it seems to me the reasoning in my judgment at [90]-[94] is equally applicable to those searches, and accordingly that that evidence is not evidence that Enterprise should be required to pay for.

The third major matter concerns the survey evidence. So far as that is concerned, reliance is placed by Europcar upon my conclusion at [198] that the surveys were confirmatory of the conclusion which I would, in any event, have been minded to reach in the light of all the other evidence in the case. It is therefore suggested that the surveys were not of real value, and accordingly that the costs of that evidence should lie where they fall.

I do not accept that contention. In my judgment, the surveys were of real value in confirming the conclusion which I would otherwise have been minded -- but only minded -- to reach. Moreover, the criticisms raised by Europcar were ones that I did not accept. Still further, this was overall an issue (that is to say, the issue with regard to acquired distinctive character) upon which Enterprise was successful. For all of those reasons, I consider that Enterprise should recover their costs in relation to the surveys.

Doing the best I can in the light of the conclusions that I have expressed in this judgment, but in the absence of any very satisfactory evidence to enable me to quantify the deductions that I consider it would be appropriate to make, it seems to me that a fair order overall would be to require Europcar to pay 90% of Enterprise's costs.

Enterprise asks for a publicity order under Article 15 of the Enforcement Directive. That is resisted by Europcar. As the Court of Appeal made clear in Samsung Electronics UK Ltd v Apple Inc. [2012] EWCA Civ. 1339, [2013} FSR 9, the making of such orders should not be regarded as in any way automatic. Whether such an order is appropriate will depend on the circumstances of the individual case.

Counsel for Enterprise submitted that this was an appropriate case in which to make such an order, because it would serve the two purposes identified in recital (27) to the Enforcement Directive, which states:

"To act as a supplementary deterrent to future infringers and to contribute to the awareness of the public at large, it is useful to publicise decisions in intellectual property infringement cases."

In addition to the general factors specified in recital (27), counsel for Enterprise particularly relied upon the finding in the judgment that there has been actual confusion on the part of consumers in the United Kingdom. I accept that that is a good reason for the making of a publicity order in the circumstances of the present case.

So far as the duration and terms of the order, it seems to me that in the present case a duration of three months, as suggested by Enterprise, rather than one month, as suggested by Europcar, is appropriate. The reason for that is the nature of the services in question. We are concerned here with vehicle rental services, which are sporadic purchases by consumers. Therefore, it seems to me that if the notice was only required to be displayed for one month, many consumers would never see it. Only if it is displayed for three months is there a reasonable chance of a reasonable number of consumers seeing it.

As to the wording, it seems to me that Europcar are correct to say that the notice should refer to "infringement of a logo trade mark", in order not to give the impression that some wider or other finding of infringement has occurred. I also accept that it should refer to a finding of infringement in the UK. I do not consider it necessary for there to be a link to both the main judgment and the judgment that I have delivered this morning, but that does prevent Europcar from adding a link to the second judgment.