Pinterest Inc v Premium Interest Ltd & Anor

This is a dispute over the trade mark PINTEREST. The Claimant (“Pinterest”) is currently using the trade mark in relation to a social networking website and to applications. The First Defendant (“Premium Interest”), or more accurately its predecessor in title, applied to register the trade mark as a Community Trade Mark shortly before Pinterest did. As a result, there are cross-oppositions pending before the Office for Harmonisation in the Internal Market (Trade Marks and Designs). Furthermore, Pinterest has brought a claim in this Court for passing off against Premium Interest. Pinterest alleges that the Second Defendant, Alex Hearn, who is Premium Interest’s sole shareholder and director, is jointly liable for such passing off. There are two applications before me. First, Pinterest has applied to strike out, alternatively for summary judgment dismissing, two issues raised by the Defendants’ Defence. Secondly, the Defendants have applied for a stay of these proceedings pending the final determination of its CTM application.

The following account of the factual background is derived primarily from the parties’ statements of case, supplemented by evidence filed by the parties on the stay application.

Pinterest is a provider of online and mobile social networking services through its website and applications (for e.g. Apple iOS and Android mobile devices), specifically by providing an on-line tool which allows users to gather images and other content and organise them into themed collections. Each piece of content posted on Pinterest is known as a Pin. Users post content to Pinterest from their own collections or other websites by Pinning it to a themed collection called a board. As users browse the billions of Pins and boards available on Pinterest, they can Pin the content they find onto their own boards, and follow the users and boards they find most useful or inspiring. Pinterest therefore provides a way for people to express themselves, discover new things, and engage with the people who create them.

It appears that Pinterest established its business in late 2009. It registered the domain name pinterest.com on 26 November 2009 and a beta version of its website went live at www.pinterest.com shortly afterwards. A fully functional version of the website was launched in March 2010. Pinterest claims to have extensively promoted and marketed its services throughout the world, including in the United Kingdom, since March 2010. In particular, it claims that by January 2012 more than 11 million people had visited its website, making it the fastest ever standalone website to surpass 10 million unique visitors. It also claims that between March 2010 and 31 January 2012 there were approximately 396,000 UK visitors to the website, approximately 30,000 new accounts created by UK users of the website and approximately 91,700 copies of the iOS application downloaded by UK users to their mobile devices. It is common ground that in August 2012 the website was ranked by Experian Marketing as the third most popular social networking site behind Facebook and Twitter.

It is also common ground that Pinterest had been the subject of substantial media coverage in the UK, including articles in the Daily Mail, the Daily Telegraph, the Financial Times, TheGuardian, The Independent and the International Herald Tribune by the end of January 2012. Pinterest claims that by the same date a number of substantial and prestigious UK businesses and organisations, such as Harrods and the Royal Shakespeare Company, had joined and maintained a presence on the website, with others following shortly afterwards.

Mr Hearn is an entrepreneur and inventor who has founded and run a number of businesses since 2002. In 2009 Mr Hearn set up AH Innovation Ltd (“AHI”) as “an incubator for new projects up to the point where they are spun off into their own companies”. According to the Defence, “[i]n or around 2010” Mr Hearn had an idea for a news aggregation platform that linked news with up to date trending information across the internet. News content would be displayed on the screen of a computer or mobile device. The news content displayed on the screen would be ranked by the platform not according to editorial choice, but according to the popularity of content viewed on the internet. A news story’s ranking would be calculated using an algorithm. The application of the algorithm to a news story would result in a score. The higher the score, the further up the screen the story would be displayed, and the larger the content box that the story would be displayed in. At some point Mr Hearn decided to call this platform Premium Interest.

According to the Defence, “[a]t the end of 2010” Mr Hearn coined the term PINTEREST as a name for the score used to rank news stories on the platform by eliding the words PREMIUM and INTEREST. According to the Defendants’ evidence on the stay application, however, Mr Hearn coined the term “[i]n or around December 2009”. This inconsistency does not matter for present purposes.

The Defendants claim that AHI entered into an agreement with an unidentified third party to acquire the domain name premiuminterest.com in March 2011 and this domain name was transferred to AHI in May 2012. Premium Interest took over the business from its incorporation on 2 April 2012. From July 2012 to September 2014, or later, Premium Interest claims to have run a beta version of the news aggregation platform from its website at www.premiuminterest.com. Subsequently the Defendants put Premium Interest’s business on hold pending the resolution of its dispute with Pinterest.

As I understand it, it is common ground that, to date, the Defendants have not in fact used the sign PINTEREST in the course of trade anywhere in the world.

It is admitted by the Defendants that, by 31 January 2012, Mr Hearn was aware of Pinterest’s existence. The Defendants says that Mr Hearn’s impression of Pinterest at that date was that it was a non-commercial, invitation-only fashion blog featuring images and documents with a geographical focus on the United States of America and no meaningful presence in the UK. He derived this impression from internet searches he had conducted for the name PINTEREST. Shortly before 29 January 2012 he joined Pinterest’s waiting list, which was acknowledged by Pinterest in an email dated 29 January 2012.

On 31 January 2012 AHI filed Community Trade Mark Application No. 10,605,749 to register the word PINTEREST in respect of “education; providing of training, entertainment; sporting and cultural activities” in Class 41 and “legal services; security services for the protection of property and individuals; personal and social services rendered by others to meet the needs of individuals” in Class 45 (“the Defendants’ CTM Application”). The Defendants’ CTM Application was published on 8 February 2012. Shortly after 2 April 2012 the Defendants’ CTM Application was assigned to Premium Interest.

On 10 February 2012 Pinterest filed Community Trade Mark Application No. 10,633,981 to register the word PINTEREST in respect of goods and services in Classes 9, 35, 38, 42 and 45 (“Pinterest’s CTM Application”).

On 8 May 2012 Pinterest filed Opposition No. B2,009,309 to the Defendants’ CTM Application (“Pinterest’s Opposition”) contending inter alia that, under the English law of passing off, it had acquired an earlier right to the sign PINTEREST within Article 8(4) of Council Regulation 207/2009/EC of 26 February 2009on the Community trade mark (codified version) (“the Regulation”).

On 10 July 2012 Premium Interest filed Opposition No. B2,044,561 to Pinterest’s CTM Application (“Premium Interest’s Opposition”) relying upon the Defendants’ CTM Application as an earlier trade mark within Article 8(1)(a) and (b) of the Regulation.

On 22 October 2012 Mr Hearn wrote on behalf of Premium Interest to Pinterest. In the letter Mr Hearn explained about his idea for the Premium Interest news aggregation platform and his coinage of the term PINTEREST. Having referred to the OHIM oppositions and to trade mark applications filed by Premium Interest in Australia, Brazil, India, Japan, South Korea, Malaysia, New Zealand, Philippines, Russia and Turkey, and having acknowledged Pinterest’s priority in relation to the USA, Mr Hearn proposed a geographical delimitation agreement between the parties.

On 16 November 2012 Pinterest’s solicitors wrote to the Defendants in response to Mr Hearn’s letter dated 22 October 2012 alleging passing off and threatening to apply for an injunction. The letter requested the Defendants to withdraw the Defendants’ CTM Application, to withdraw Premium Interest’s Opposition and to confirm that they would not use the trade mark PINTEREST by 30 November 2012.

On 28 November 2012 the Defendants’ then solicitors replied denying passing off and stating:

On 4 December 2012 Pinterest’s solicitors replied stating:

On 5 November 2013 the OHIM Opposition Division issued its decision on Pinterest’s Opposition. The Opposition Division rejected Pinterest’s opposition in its entirety, holding in essence that Pinterest had not proved that it owned substantial goodwill in the trade mark PINTEREST in the UK as at 31 January 2012. Pinterest subsequently appealed against this decision.

On 11 February 2014 Pinterest’s solicitors wrote to the Defendants’ solicitors referring to “several public statements” issued by Premium Interest after the Opposition Division decision “that confirm your client’s intent to use the PINTEREST mark in the UK in relation to services that are confusingly similar to those provided by our client”. The letter went on to demand that the Defendants give an undertaking not to use the trade mark in relation to any services which were the same as or similar to those offered by Pinterest.

Although not specifically referred to in this letter, Pinterest’s Particulars of Claim pleads four media reports of the statements in question. One of the reports, published on 8 January 2014 on www.telegraph.co.uk under the headline “Pinterest could be forced to ‘change its name’”, includes the following passage:

On 18 March 2014 the Defendants’ solicitors replied saying that the Defendants had nothing to add to their letter of 28 November 2012.

On 31 July 2014 Pinterest commenced these proceedings and at the same time made an open offer of £75,000 for the purchase of Premium Interest’s trade mark applications. On 3 September 2014 the Defendants served their Defence, which alleged that “the First Defendant had and still has no intention of using the Defendants’ CTM Application, at least in the European Union, in relation to any of the services in its specification unless and until the Defendants’ CTM Application is registered as a Community Trade Mark”. The Defence went on to offer an undertaking not to use PINTEREST in the course of trade in relation to any of the services covered by the Defendants’ CTM Application unless and until the Defendants’ CTM Application proceeded to registration.

On 8 October 2014 the Defendants stated that, if the parties were not able to settle the dispute, they intended to apply for a stay of these proceedings pending the final determination of the opposition to the Defendants’ CTM Application. In November 2014 the parties attended an unsuccessful mediation. On 22 December 2014 Pinterest issued its strike out/summary judgment application. On 5 February 2015 the Defendants again proposed a stay pending the determination of the opposition proceedings. On 9 March 2015 the Defendants issued their application for a stay.

On 24 February 2015 the OHIM Second Board of Appeal issued its decision in Case R 102/2014-2 on Pinterest’s appeal in respect of its Opposition. By its decision the Board of Appeal annulled the Opposition Division’s decision and remitted the case back to the Opposition Division for further prosecution, holding that the Opposition Division should have admitted evidence which was filed late by Pinterest and admitting additional evidence filed by Pinterest during the appeal proceedings. Premium Interest has announced its intention to appeal to the General Court against the Board of Appeal’s decision.

By its application Pinterest applied to strike out two paragraphs of the Defendants’s Defence on the basis that they did not raise reasonable grounds for the defence of the claim, alternatively for summary judgment on the issues raised by those paragraphs.

The first issue fell away during the course of the hearing for the following reasons. As is common ground, Pinterest’s claim is a quia timet one. It is also common ground that, given that the claim is a quia timet one, the date for assessment of the claim is the date on which the relevant threat was made.

Pinterest relies upon the Defendants’ CTM Application filed on 31 January 2012 as constituting a threat to use the trade mark PINTEREST in relation to the services listed in the specification. Although the Defendants’ CTM Application was filed by AHI, it is common ground that Premium Interest now stands in the position of AHI as assignee.

Pinterest’s Particulars of Claim also pleaded reliance upon certain later events, such as Mr Hearn’s letter dated 22 October 2012. Counsel for Pinterest explained that the purpose of these pleas was to show that Premium Interest was intending to use the trade mark, and thus to forestall any contention by the Defendants that the Defendants’ CTM Application did not constitute or evidence any threat by Premium Interest to use the trade mark. As counsel for Pinterest pointed out, it appears at present to be the law that an applicant for registration of a Community Trade Mark does not have to intend to use the trade mark, although the contrary is arguable (see Red Bull GmbH v Sun Mark Ltd[2012] EWHC 1929 (Ch). [2013] ETMR 53 at [158]).

During the course of the hearing, however, counsel for the Defendants accepted that the Defendants’ CTM Application constituted a threat by Premium Interest to use the trade mark PINTEREST in relation to the services listed in the specification. In those circumstances, it was agreed that the relevant date for assessing Pinterest’s claim was 31 January 2012.

In paragraph 10(b) of the Defence the Defendants had asserted that, in the event that the Defendants’ CTM Application proceeded to registration, Pinterest could not rely on any goodwill generated by use of PINTEREST after 8 February 2012 because any use after that date would be an infringement of the Community Trade Mark. The basis for Pinterest’s application was that this plea was contrary to the decision of the Court of Appeal in Inter Lotto UK Ltd v Camelot Group plc[2003] EWCA Civ 1132, [2004] RPC 9. The Defendants had contended that that decision was distinguishable because the Regulation contains no counterpart to section 2(2) of the Trade Marks Act 1994. Pinterest had disputed this, relying in particular on Article 110 of the Regulation. For the reasons explained above, it is not necessary for me to resolve this dispute.

In paragraph 26 of the Defence the Defendants assert that registration of the Defendants’ CTM Application will confer on Premium Interest the right to use the mark PINTEREST in relation to the services for which the CTM is registered and that this will afford the Defendants a complete defence to Pinterest’s claim for passing off. Pinterest contends that this assertion is untenable. It is common ground that this issue is a pure question of law.

Counsel for Pinterest again relied on Inter Lotto v Camelot. At first instance Laddie J had understood the defendant to contend that a registered trade mark conferred a statutory right to use the mark which overrode other rights, and in particular rights in passing off. He rejected that argument. In the Court of Appeal Carnwarth LJ recorded at [32] that:

Counsel for the Defendants pointed out that, as can be seen from this, the point was not in issue before the Court of Appeal. He also submitted that the case was distinguishable because it did not concern the Regulation. As he properly drew to my attention, however, Inter Lotto v Camelot appears to have been followed by the Court of Appeal in Lumos Skincare Ltd v Sweet Squared Ltd [2013] EWCA Civ 671. In that case, the claimant was successful in its claim for passing off. When it came to deciding the form of order, the claimant sought a general injunction against passing off in the UK. The defendants resisted this, relying on the fact of their having obtained a Community Trade Mark for the mark use of which was the subject of the claim, and argued that the injunction should not restrain them from doing anything which would be the subject of the Community Trade Mark. Lloyd LJ delivering the judgment of the Court of Appeal dealt with the defendants’ argument very briefly at [4]:

Counsel for the Defendants nevertheless submitted that it was arguable that registration of a Community Trade Mark conferred a positive right to use it and hence provided a defence to a claim for passing off, and that the question should be referred to the Court of Justice of the European Union for a preliminary ruling. In support of this submission, he relied upon the following:

Dicta of Advocate General Jacobs in Case 2/00 Hölterhoff v Freiesleben [2002] ECR I-4210 at [33]-[34] and of the CJEU in Case C-376/11Pie Optiek SPRL v Bureau Gevers SA [EU:C:2012:502], [2012] ETMR 46 at [47] referring to the right to use a trade mark.

Article 9 of the Regulation and Article 17 of the Charter of Fundamental Rights of the European Union.

Commentaries from Bulgaria, Poland and Romania which suggest that a registered trade mark confers a positive right to use it as well as negative rights.

In my judgment it is acte clair that registration of a Community Trade Mark (a) confers no positive right to use that mark and (b) does not provide a defence to a claim for passing off or unfair competition. So far as point (a) is concerned, it is trite law that intellectual property rights are negative rights to exclude others. A Community Trade Mark is no different in this respect. This proposition is not undermined by showing that courts sometimes refer loosely to the trade mark proprietor having the “right to use” the mark, particularly when one bears in mind that one way in which the owner of a trade mark (or other intellectual property right) may use it is by licensing it. Still less is it undermined by anything in Article 9 of the Regulation or Article 17 of the Charter. As for the commentaries from Bulgaria, Poland and Romania, as counsel for Pinterest submitted, two of these appear to refer to domestic law prior to the Regulation, and in any event they do not address point (b).

As for point (b), I agree with counsel for Pinterest that this is clear from Articles 110 and 111 of the Regulation, which provide:

That this is the effect of Article 111 is confirmed by the decision of the CJEU in Case C-445/12Rivella International AG v Office for Harmonisation in the Internal Market (Trade Marks and Designs) [EU:C:2013:826], [2014] Bus LR 298. In that case Rivella opposed a Community trade mark application filed by Baskaya for the figurative mark BASKAYA, relying upon an earlier international registration of the figurative trade mark PASSAIA. When required to prove use of its mark, Rivella stated that it only relied on the German part of its international registration. Rivella relied on evidence of use of the mark in Switzerland and argued that an 1892 Convention between Germany and Switzerland had the effect that use in Switzerland was equivalent to use in Germany. The Opposition Division, Board of Appeal, General Court and CJEU all dismissed Rivella’s opposition. In dismissing one of Rivella’s arguments, the CJEU held as follows:

I would add that point (b) also receives support by analogy with Case C-561/11Fédération Cynologique Internationale v Federación Canina Internacional de Perros de Pura Raza [EU:C:2013:91], [2013] Bus LR 693.

As is common ground, Pinterest’s claim for passing off in these proceedings and Pinterest’s Opposition under Article 8(4) of the Regulation involve a common issue: did Pinterest have a protectable goodwill in the trade mark PINTEREST in the UK as at 31 January 2012 so as to entitle Pinterest to restrain Premium Interest’s use of that mark in relation to the services specified in the Defendants’ CTM Application on the ground of passing off?

As noted above, it is the Defendants’ position that Premium Interest does not intend to use the trade mark in the UK (or elsewhere in the EU) unless and until the Defendants’ CTM Application is registered as a Community Trade Mark. Counsel for the Defendants reinforced this by offering an undertaking to the Court to this effect. He also offered an undertaking that, to the extent that Premium Interest was unsuccessful in the Opposition, it would not use the trade mark in the UK at all.

In these circumstances the Defendants contend that these proceedings should be stayed until the determination of the Opposition proceedings. In support of this contention the Defendants rely upon the following main points. First, in the light of the Defendants’ undertakings, these proceedings will become unnecessary if Pinterest is successful in its Opposition. Indeed, they may become unnecessary because the Defendants change their plans, which become more likely the more time passes. Thus, if there is no stay, costs may be wasted.

Secondly, the Defendants contend that they will be prejudiced if there is no stay, because they are less able to afford the expense of these proceedings than Pinterest, whereas the Opposition proceedings represent a more economical and proportionate way of resolving the dispute between the parties.

Thirdly, the Defendants contend that a stay would not prejudice Pinterest. In support of this, the Defendants point to the fact that the Opposition proceedings were commenced over two years before these proceedings. Furthermore, the Defendants contend that it is evident from Pinterest’s solicitors’ letter dated 4 December 2012 that at that time Pinterest was content for the issue to be determined by OHIM. Pinterest only changed its mind after the decision of the Opposition Division, but that had now been annulled by the Board of Appeal decision.

Pinterest resists a stay of these proceedings. It relies on the following main points. First, it says that, for the reasons explained by its Deputy General Counsel Anthony Falzone in his witness statement, the existence of the dispute with the Defendants is giving rise to commercial uncertainty which is damaging to its business. In particular, Pinterest points to the Defendants’ public statements to the effect that, if Premium Interest is successful, Pinterest will be forced either to change its name or take a licence (see paragraph 21 above). As Mr Falzone explains:

Secondly, Pinterest points to the disparity in the expected duration of the two sets of proceedings. Directions for the trial of these proceedings have now been agreed, and accordingly a first instance decision should be available in about nine months and a decision of the Court of Appeal, if required, about a year after that. By contrast, it is the Defendants’ own evidence that the Opposition proceedings will not be concluded for at least seven years given the four instances potentially open to the parties (assuming that the Board of Appeal’s decision stands). Furthermore, if Pinterest is unsuccessful in its Opposition, the English proceedings will then need to be resumed.

Thirdly, Pinterest disputes that the Opposition proceedings are likely to be significantly cheaper than these proceedings once the various appeals are taken into account.

In considering these contentions, it is necessary first to be clear as to the position with respect to res judicata. Unsurprisingly, it is common ground that, if OHIM’s decision becomes final first, it will not give rise to any cause of action estoppel or issue estoppel which binds the unsuccessful party in this Court: compare Special Effects Ltd v L’Oréal SA[2007] RPC 15. Slightly less predictably, it is also common ground that, if the English decision becomes final first, it will not have any res judicata effect in the Opposition proceedings.

Counsel for Pinterest submitted, however, that the English decision would be likely to have persuasive effect in the Opposition proceedings. He also submitted that, if Pinterest succeeded in these proceedings, but Premium Interest succeeded in the Opposition proceedings, then in the event of a claim for infringement of its Community Trade Mark by Premium Interest in this country, Pinterest would be able to counterclaim for a declaration of invalidity, and in that context Pinterest could rely upon the previous English decision as res judicata.

Counsel for Premium Interest did not accept the correctness of either of these submissions, but advanced no reasoned argument to the contrary. Rather, he submitted that they demonstrated that Pinterest had brought these proceedings for an improper collateral purpose, namely to influence the outcome of properly constituted opposition proceedings before the only tribunal with the power to determine those proceedings. I do not accept this, for three reasons. First, as noted above, it is Mr Falzone’s evidence that Pinterest has brought these proceedings in order to try and achieve commercial certainty at least in this country. Secondly, the second consequence relied upon by counsel for Pinterest assumes that the English decision will not influence the outcome of Pinterest’s Opposition. Thirdly, I do not accept that it is improper to bring proceedings in this country with a view to obtaining decisions which may influence foreign tribunals: see TNS Group Holdings Ltd v Nielsen Media Research Inc[2009] EWHC 1160 (Pat), [2009] FSR 23 at [23]-[26].

Next it is important to be clear as to the applicable principles. It is common ground that the power to stay these proceedings derives from section 49(3) of the Senior Courts Act 1981, which gives the Court power to stay any proceedings before it “where it thinks fit to do so”. Counsel for Pinterest cited the recent summary of the principles concerning the exercise of this discretion by Asplin J in Isis Investments Ltd v Oscatello Investments Ltd[2013] EWHC 7 (Ch) at [19]-[23]. As I observed during the course of argument, however, it seems to me that there is an analogy, albeit an imperfect one, between the present application and an application for a stay of proceedings in this country pending the determination of parallel opposition proceedings in the European Patent Office.

The principles applicable to an application of that nature were recently reviewed by the Court of Appeal in IPCom GmbH & Co KG v HTC Europe Co Ltd [2013] EWCA Civ 1496, [2014] RPC 12 and re-stated by Floyd LJ at [68] as follows:

I shall refer to the relevant paragraphs in this guidance as “IPCom 5” etc.

Counsel for Pinterest submitted that (by contrast with IPCom 4), the possibility of concurrent proceedings was not inherent in the Regulation. I disagree with this. As Articles 110 and 111 of the Regulation make clear, and as discussed above, it is inherent in the scheme of the Regulation there may be concurrent proceedings in a national court brought by the proprietor of an earlier right, such as a right in passing off, to enforce that right against use of a trade mark and opposition proceedings before OHIM in which the proprietor of the earlier right seeks to rely upon that right to prevent registration of the trade mark as a Community Trade Mark under Article 8(4) of the Regulation.

Counsel for Pinterest also submitted that (by contrast with IPCom 7) the problems which arise in the case of concurrent patent proceedings due to the possibility of a European Patent being either amended or revoked by both the national court (with respect to the UK designation) and the EPO Opposition Division/Board of Appeal (with respect to all designations) had no counterpart in the present context. This I accept, which is why the analogy between the two situations is an imperfect one.

In my view the starting point in the present case is that it is inherently undesirable for the same issue to be litigated between the same parties in two different tribunals at the same time, with the consequent risk of wasted costs, and this factor favours the grant of a stay: compare IPCom 5 and Sears plc v Sears, Roebuck & Co[1993] RPC 385 (affirmed by the Court of Appeal, 26 November 1993, unreported). An additional factor which favours a stay is the prospect that the English proceedings will become redundant if Pinterest’s Opposition is determined in favour of Pinterest.

On the other hand, three significant countervailing factors are the prospect of commercial certainty being obtained in this country if the English proceedings are allowed to proceed, the possibility that this may promote a wider settlement between the parties and the relative timings of the two sets of proceedings: compare IPCom 8, 9 and 10. I consider that the relative timings of the two sets of proceedings is a particularly strong factor in the present case.

Counsel for the Defendants argued that determination of the English proceedings would not produce any worthwhile commercial certainly for Pinterest, since it would not affect the position with regard to the rest of the EU. As he himself pointed out, however, the same is true with regard to Pinterest’s Opposition, since, even if Pinterest is successful, Premium Interest will be able to convert its CTM Application into national applications in the other 27 Member States under Article 112 of the Regulation. Thus allowing the English proceedings to proceed will produce commercial certainty in the UK much more quickly than the Opposition proceedings will do.

Finally, I am unimpressed by the Defendants’ argument that they are less able to bear the costs of the English proceedings than Pinterest. The Defendants have not stated that they cannot afford to litigate in this Court, nor have they produced any evidence as to their financial means. Indeed, I was told that Premium Interest has recently sued Pinterest for trade mark infringement in Japan.

Taking all the circumstances into account, I decline to grant a stay of these proceedings.