Abanka DD v Abanca Corporacion Bancaria SA

Judgment on this appeal, which concerned the question of what, if any, use had been made of the appellant’s (“Abanka’s”) trade marks, international trade mark registrations nos 860632 and 860561, in the United Kingdom in the relevant period, was handed down on 6 October 2017 ([2017] EWHC 2428 (Ch)). I gave the parties a period of time to resolve the allowable specification in the light of that judgment. The parties have proposed specifications in correspondence and there is considerable divergence as to the appropriate scope.

Three issues are dealt with in this further judgment:

Abanka contends that the specification should be as follows:

In support of that specification, it argues that it fairly reflects the use found in the judgment and that a narrower specification would not be justifiable. In particular, it contends that a fair description of the primary services offered is “securities”, these were backed by a state guarantee and the other aspects of the specification reflect uses either held to have taken place or inherent in the provision of the service of issuing securities.

Abanca contends that the specification should be narrower and more specific, namely “issuing Eurobonds”. It contends that this reflects the limited use found to have taken place and that no wider specification would be fair in the light of the approach required by the authorities.

The principles applicable to determination of a specification of goods or services following proof of more limited use than that set out in an existing specification are well established. They were recently summarised by the Court of Appeal Merck v Merck Sharp & Dohme [2017] EWCA Civ 1834 at [242] where Kitchin LJ said:

“On the one hand, a proprietor should not be able to monopolise the use of a trade mark in relation to a general category of goods or services simply because he has used it in relation to a few of them. A mark should remain registered only for those goods or services in relation to which it has been used. On the other hand, a proprietor cannot reasonably be expected to use his mark in relation to every possible variation of all of the goods or services covered by his registration.”

Kitchin LJ referred to Maier v Asos [2015] EWCA Civ 220 and summarised the approach the court should adopt at [245]-[249]:

“245.

First, it is necessary to identify the goods or services in relation to which the mark has been used during the relevant period.

246.

Secondly, the goods or services for which the mark is registered must be considered. If the mark is registered for a category of goods or services which is sufficiently broad that it is possible to identify within it a number of subcategories capable of being viewed independently, use of the mark in relation to one or more of the subcategories will not constitute use of the mark in relation to all of the other subcategories.

247.

Thirdly, it is not possible for a proprietor to use the mark in relation to all possible variations of a product or service. So care must be taken to ensure this exercise does not result in the proprietor being stripped of protection for goods or services which, though not the same as those for which use has been proved, are not in essence different from them and cannot be distinguished from them other than in an arbitrary way.

248.

Fourthly, these issues are to be considered having regard to the perception of the average consumer and the purpose and intended use of the products or services in issue. Ultimately it is the task of the tribunal to arrive at a fair specification of goods or services having regard to the use which has been made of the mark.

249.

This approach does strike an appropriate balance. It gives effect to the clear intention of the EU legislature that marks must actually be used or, if not used, be subject to revocation. See, for example, Recital 9 of Directive 2008/95/EC (“the TM Directive”) and Recital 10 of Council Regulation (EC) No 207/2009 (“the TM Regulation”). It is also fair to proprietors for it does not require a proprietor to prove that he has used his mark in relation to all possible variations of the goods or services covered by its registration but only those which are sufficiently distinct to constitute coherent categories or subcategories. I am also satisfied that it gives appropriate protection to the legitimate interest of a proprietor in being able in the future to extend his range of goods or services within the scope of the terms describing the goods or services for which its mark is registered. The trader has ‘absolute’ protection under s.10(1) of the 1994 Act (corresponding to Article 5(1)(a) of the TM Directive and Article 9(1)(a) of the TM Regulation) in relation to those goods or services for which he has used the mark (and other goods and services which fall into the same category or subcategory). He also has protection in relation to other goods or services in so far as it is able to establish a likelihood of confusion or the other requirements set forth in s.10(2) and s.10(3) of the 1994 Act (corresponding to Article 5(1)(b) and (2) of the TM Directive and Article 9(1)(b) and (c) of the TM Regulation).”

In arriving at a fair specification, it is also necessary to bear in mind the considerations summarised in the judgment of Pumfrey J in West (t/a Eastenders) v Fuller Smith & Turner Plc [2003] EWCA Civ 48, by reference to Thomson Holidays, with which the other members of the Court of Appeal in West agreed, as follows:

“49.

There has been a difference of judicial opinion on the right approach to section 46(5). The question has now been considered by the Court of Appeal in Thomson Holidays Limited v Norwegian Cruise Line Limited [2002] EWCA Civ 1828. In that case, Aldous LJ, with whom Waller and Scott Baker LJJ agreed, have approved what is said in Decon v Fred Baker [2001] RPC 293.

50.

Aldous LJ sets out the principles to be followed in paragraphs 29-31 of his judgment:

'29 …Because of section 10(2) fairness to the proprietor does not require a wide specification of goods or services nor the incentive to apply for a general description of goods and services. As [counsel] pointed out to continue to allow a wide specification can impinge unfairly upon the rights of the public. Take for instance a registration for "motor vehicles" only used by the proprietor for motor cars. The registration would provide a right against a user of the trade mark for motor bikes under section 10(1). That might be understandable having regard to the similarity of the goods. However the vice of allowing such a wide specification becomes apparent when it is envisaged that the proprietor seeks to enforce his trade mark against use in relation to pedal cycles. His chances of success under section 10(2) would be considerably increased if the specification of goods included both motor cars and motor bicycles. That would be unfair when the only use was in relation to motor cars. In my view the court is required in the words of Jacob J to "dig deeper". But the crucial question is–how deep?

30.

Pumfrey J was, I believe, correct that the starting point must be for the court to find as a fact what use has been made of the trade mark. The next task is to decide how the goods or services should be described. For example, if the trade mark has only been used in relation to a specific variety of apples, say Cox's Orange Pippins, should the registration be for fruit, apples, eating apples, or Cox's Orange Pippins?

31.

Pumfrey J in Decon suggested that the court's task was to arrive at a fair specification of goods having regard to the use made. I agree, but the court still has the difficult task of deciding what is fair. In my view that task should be carried out so as to limit the specification so that it reflects the circumstances of the particular trade and the way that the public would perceive the use. The court, when deciding whether there is confusion under section 10(2), adopts the attitude of the reasonably informed consumer of the products. If the test of infringement is to be applied by the court having adopted the attitude of such a person, then I believe it appropriate that the court should do the same when deciding what is the fair way to describe the use that a proprietor has made of his mark. Thus the court should inform itself of the nature of [the] trade and then decide how the notional consumer would describe such use.'

51.

In deciding the scope of the restriction in the Decon case, I took into account the intended use of the proprietor's goods, the channels of trade through which they were sold, and the likely purchasers of the goods. The limitation which was eventually arrived at encompassed the whole of the use which had taken place. Too wide a specification of goods will affect the rights of the public.

52.

In the Thomson Holidays case, Aldous LJ pursued the Cox's Orange Pippins question when considering the judge's finding in paragraph 13 of his judgment in that case that 'cruises in the sense of cruise ship holidays and the ancillary services directly involved with such cruises form a distinct category of holiday product which differs both in kind and customer profit to land based package holiday products such as the Claimants' club Freestyle Package Holiday.' The mark in question was 'FREESTYLE' registered in respect of a range of services in classes 39 and 42. The specification of services in class 39 was 'arrangement and booking of travel, tours and cruises; escorting travellers and arranging the escorting of travellers; providing tourist office services: all included in Class 39'. Aldous LJ commented on the judge's finding as follows:

'36. There was ample evidence upon which the judge could have come to the conclusion that he did in paragraph 13 of his judgment, but that could not form the basis for his conclusion that the specifications should be limited to exclude only cruises. If he had been right then all the other segments such as safaris, city breaks and activity holidays should also have been excluded. To do that would result in limitation to perhaps two segments of the holiday trade. That would not be how the notional consumer would perceive the services that Thompson had provided.

37.

Professor Middleton's evidence was interesting, but was not directed to the correct question. It does not follow from the fact that tourism has distinct segments that the services offered by Thomson would not be referred to using a more general description. The fact that Cox's Orange Pippin apples are marketed in and directed at the eating apple market does not mean that the average consumer would not refer to them as apples.

38.

We were not directed to any evidence that would lead us to believe that there is a category of holiday referred to as 'land-based'. Further, such a categorisation of Thomson's use would not be apt as their holidays involved swimming in the sea and day cruises. I therefore reject the submission that the specification should be restricted to 'land-based holidays'.

39.

How would the average consumer describe the services provided by Thomson under the FREESTYLE mark? I believe that they would use the term "package holidays". That term is a fair description of the use made. I therefore would add to both specifications words to the effect that the services were all for package holidays…'

53.

The emphasis throughout this judgment is on a fair description which would be used by the average consumer for the products on which the mark has been used by the proprietor.”

A number of other cases were cited in argument before me in which different kinds of use has been held to support specifications of greater or narrower width. I have considered them but each case turns on its own facts and limited assistance can be derived from analogies from other situations, especially ones where a wider range of uses had been proven which were said to support a wider specification than is the case here. As Jacob J said in ANIMAL Trade Mark [2003] EWHC 1589 (Ch) at [20]:

Identification of goods or services in respect of which there has been use

In the earlier judgment, I held that use in the relevant period had been proven in relation to the services of issuing of Euro denominated bonds (see judgment at paras. [74]-[86]).

Abanka submits that it has been held that use has also been proved in relation to advertising of and providing information relating to issuing such bonds and in relation to managing issue of such bonds. That is not what the judgment held and it is not a necessary consequence of it. Although Abanka provided an Information Memorandum about the bonds, this does not constitute separate use of the mark in relation to a separate service. This is a form of use of the mark in relation to the issuing of the bonds themselves. It is artificial to say that every time a trader in goods or services X provides information about those goods in the course of attempting to sell X, that it is thereby providing a separate service of advertising X or providing business information about X or some similarly described service. While in some cases it may be appropriate to treat the provision of advertising materials and information relating to goods or services as provision of a separate service, that is not invariably the case and depends on the facts relating to use. In this case, Abanka was not shown to have been advertising bonds in general or providing information about bonds in general so that consumers would rely on the mark as denoting a source of advertising or information about bonds in general. Abanka merely described and promoted the bonds issued using the Information Memorandum. That is an aspect of the issue of these bonds. I do not think this can properly be regarded as the provision of a service of advertising or providing information about issuing of bonds.

Moreover, although the Information Memorandum described Abanka as a “manager” of this bond issue along with a number of other financial institutions, there is no evidence that it performed any management services with respect to this issue in or directed towards the United Kingdom or that it used the mark in relation to such services in the United Kingdom. The first time that attention was drawn to that reference in the documents was by the court at the hearing concerning the scope of specification and the point was not heavily pressed by Abanka. That was the right stance. The evidence is consistent with Abanka merely playing a role in managing the bond issue in Slovenia, which may have involved (for example) negotiating with the Government of Slovenia about the terms upon which it would be guaranteed or other activities. There was also no finding that there had been use in relation to guarantees and the fact that the bonds in question were guaranteed by the Republic of Slovenia does not mean that there was use by Abanka in relation to guarantees.

Category or sub-category

Counsel for Abanka is justified in submitting that issuing these bonds can be described at some level of generality as “issuing securities” or “raising capital via bonds…or securities”. He draws attention to the fact that the London Stock Exchange listing Form 1, which Abanka filled in, invites applicants to provide details for the purpose of the “Admission of Securities to Trading”. However, that form is of limited assistance, since the bonds are described in it in different ways and the form itself contemplates narrower classes of instruments than “securities”. Under the heading requiring a full description of each class of security for which application was made this particular bond is described as: “EUR 500,000,000 Floating Rate Notes due 2012 Guaranteed by the Republic of Slovenia”. The bonds were described by Abanka in the box as “Issuance of Debt Instruments”. Under the heading “Brief description of business/fund type” Abanka described its business and the instruments as: “Slovenian bank issuing Notes backed by the Government of Slovenia”. These are all ways of describing the bond at different levels of generality and do not determine the question of what the right way is for the purpose of the trade mark specification. Under the heading “Type of issue for which application is being made” the form also contains examples of a number of sub-categories of type of issue of financial instruments (“Bonus, Rights, Placing, Open Offer, Block listing, Eurobond, MTN Programme, Warrants”) illustrating that issuing securities is a diverse activity. It can be seen that there is no unique description of the bonds in question in this document. I prefer to rely on the evidence filed by Abanka before the hearing officer where they were described as “bonds” in the Second Statement of Barbka Krumberger, para. 13.

However, one important feature of these bonds is that they were issued to finance a private or listed company rather than being (for example) government bonds. These were corporate bonds. In my view, that is the appropriate sub-category, which is capable of being viewed independently. Although there is no evidence specifically directed to this issue and Abanka rightly says that it is impermissible to take account of matters set out in Abanca’s skeleton argument concerning the precise manner in which various securities are traded and the qualifications of those who may do so, it is a matter of common knowledge that there are bonds of different kinds, of which some are more commonly sold to ordinary consumers and others are more generally used as corporate financing instruments mainly directed at more specialised investors, of which corporate bonds form a well-recognised category. In this case, there is evidence of small sales of these bonds to institutions in this country and no evidence of retail sales. The Information Memorandum does not suggest that these were “retail” bonds in any sense.

There is no detailed evidence of the characteristics of the average consumer either. However, in making the evaluation, I have looked at the matter from the perspective of a person or undertaking with the characteristics indicated by the Information Memorandum, namely a prospective investor. The characteristics of such an investor indicated under the head “Risk Factors” in that document are sensible ones to apply. Such a person is assumed to be either a financial services professional or similar or expected to have consulted such professional advisors before making investment decisions. In my judgment, such a person would be likely to treat “issuing corporate bonds” as a sensible description of the kind of service provided by Abanka in this case and to treat this as the appropriate level of generality of description.

One of the difficulties in this case is that, unlike some other disputes, no specific evidence has been directed by either side as to how the average consumer would categorise services of this kind (cf Thomson Holidays and West). The court has to do its best on the limited materials available. That gave rise to some debate at the hearing as to where the burden lay of establishing whether use should properly be regarded as justifying a wider category or narrower sub-category. In principle, the burden might be said to remain on the proprietor on this aspect whose burden it is to justify continued registration of the mark through use more generally. That approach would also ensure that the interests of the wider public were not adversely affected by a tribunal giving a proprietor which directs no evidence to the issue the benefit of the doubt in permitting a wider category to remain registered, when evidence from the proprietor may have assisted in determining whether a wider class was justified at all.

However, notwithstanding the limited information, I do not think it is necessary to resort to deciding the issue on the basis of burden of proof in this case. The materials summarised above provide a sufficiently solid basis for the court to delineate an appropriate specification.

Immaterial variations, arbitrary limitation and the degree of specificity

Abanca contends that the right sub-category is narrower than “bonds” namely “issuing Eurobonds”. The term “Eurobonds” may itself not be a completely unambiguous description of the bonds in question in this context: it has been used as a description of these bonds which were denominated in Euros and issued on the London market.

The question is more whether there is any narrower category that would be appropriate delineated by reference to the currency of issue. In my view there is not. Although these particular bonds were denominated in Euros, I am not satisfied that there is a sensible sub-category of bonds which is limited by reference to the issue currency. That, to my mind would be too arbitrary in the Merck sense: for example, a Sterling denominated corporate bond issued in London would be an immaterial variation for trade mark purposes not, in essence, different from a Euro denominated corporate bond.

Fair specification

Finally, I must consider whether a specification of “issuing corporate bonds” is fair in all the circumstances. In my view, the points made in Merck, West and Animal support the conclusion that this specification would be fair. It is at the right level of generality of description of the kind of services in respect of which Abanka has proven use, it is not arbitrarily restrictive and it is not unfair to third parties.

In so concluding, I bear in mind that cases involving isolated “islands” of use of a mark for very specific goods or services may merit a different response to those involving “archipelago” use which can justify a broader class. Here, there has been use proven only for one specific item (in the language of Animal) out of a very wide range of financing instruments. This is not a situation akin to one in which there has been, for example, use for shirts, trousers, hats and socks, which may justify continued registration for “clothing” or one in which, for example, use for angling rods and nets justifies retention of a specification for “angling equipment” on the footing that that the specification is already rather narrow and rods and nets are the paradigm example of such (see Fox International v. Sensas O-082-12 Appointed Person, Prof Ruth Annand and see also STANDARD LITE O-208-08 Appointed Person, Ms Anna Carboni, in the context of financial services). In cases where only specific use has been proven, the tribunal deciding on scope of registration should also guard against allowing a broad specification which may arguably encompass goods or services in respect of which use has been held not to have been proven (compare here the attempt by Abanka to obtain a specification relating to “guarantees”). That, in my view, would be contrary to the approach required by West and Thomson Holidays.

I can deal with the other reasons for rejecting the wider specification in other respects briefly.

Abanka claims a broad array of services of varying degrees of generality: business information, sale, advertising, issuance, commissioning, raising capital, stock market listing, financial information and advice, information. I have dealt above with the appropriate narrower category.

The other services in respect of which Abanka claims to be able to maintain its registration are either services in respect of which no use has been proven, are not separate services or the specification is in any event too broad, given the proven use (see above) or which face more than one such objection. The wide specification claimed would not be fair to the public in the sense required by the authorities and would extend well beyond the use Abanka has established that has made of the mark in the United Kingdom.

I also agree with the submissions made on behalf of Abanca that a registration in class 35 for advisory, advertising and information services relating to the primary services would be inappropriate for reasons analogous to those summarised in the Trade Mark Registry Manual at pp63-64 which says, inter alia:

“Advisory and information services are similarly classified according to the subject content of the advice or information being provided e.g., business advisory services are in Class 35, insurance advice in Class 36, transport information falls in Class 39, weather information in Class 42 etc. This classification practice applies even if the consultancy, advice or information is provided by electronic means, e.g. by way of a computer database or over the telephone.”

That proposition was not much resisted by Abanka in any event. If the further services belong anywhere, they would belong in class 36 but, for the reasons given above, this point does not arise.

In my view, the appropriate specification for the mark on the basis of the use proven is:

“Class 36: Issuing corporate bonds”.

The marks in issue (International Trade Mark Registrations Nos 860632 and 860561) stand revoked for all other services.

The case will be remitted to the Registrar to determine the outstanding opposition on the basis of the specification set out above.

Abanca submitted that this court should undertake that exercise itself but I am not satisfied that this would be right, particularly given that no findings have been made by the Registrar on, for example, similarity of marks or services and whether there is any likelihood of confusion. These issues formed no part of the appeal. Abanka submitted with justification that were this court to attempt to deal with these matters it would also deprive the parties of a tier of appeal.

The parties agree that the costs of this appeal should be summarily assessed.

Both sides claim to have been victorious and seek payment of a substantial portion of their costs. Abanka contends that it has succeeded in maintaining at least some scope of registration with which to proceed with opposition, albeit it recognises that its lack of success on the majority of issues should be reflected in a substantial reduction in costs of up to 40-50%. It claims total costs of just over £33,000, subject to that percentage reduction. Abanca contends that it has been successful, save in relation to a very narrow class of services and that it has prevented continued registration of the mark for a wider range of financial services. It too recognises that there should be a small reduction to reflect the issue on which it was not successful. It claims costs of just over £69,000, subject to a small percentage reduction. These costs are higher than Abanka’s, partly because of more intense solicitor involvement on Abanca’s side, which Abanka says is unjustifiably high in terms of allowable time spent, allowable individuals involved and allowable hourly rates.

First, this appeal was akin to a preliminary issue. Whether the opposition based on the registration which has been upheld in part would succeed at all and, if so, to what extent remains to be determined. The issue of non-use is self-contained and has been treated in that way by both parties. On that issue, Abanca has been predominantly successful and that should be reflected by an overall award of costs in its favour, subject to a deduction in respect of the issue where it has been unsuccessful albeit with regard to the significance of that issue as a point which provides some basis for continuing the opposition. For the reasons given above, I consider that, as regards scope of specification, Abanca’s narrower approach is appropriate and I regard it as having substantially succeeded on this issue, even though I have not adopted its proposed specification unmodified. That required a separate hearing at which further costs were incurred which would have been avoided had Abanka agreed with Abanca’s proposal or a modest variant of it.

Second, there is merit in Abanka’s point that the question of what costs were reasonable and proportionate for Abanca to have incurred should, in this case, be assessed partly by reference to the costs Abanka incurred in maintaining the appeal, since these also involved specialist solicitors and counsel. Abanca was seeking to uphold the decision, essentially for the reasons given by the hearing officer. The skeleton arguments were approximately the same length. Counsel’s fees were broadly comparable and, as far as I can tell, this is a case in which counsel may have had a greater burden than solicitors in preparing the arguments for the appeal on each side.

Third, as is common in intellectual property cases, Abanca’s specialist solicitors’ hourly rates claimed are above the relevant guideline rates for costs recovery from an opposing party. This was a relatively short appeal albeit one that raised some points of approach and it was certainly justifiable to employ experienced solicitors and counsel. Nonetheless I take the guideline rates into account as well as the points made by Abanka that the amount of work for which costs are claimed is greater than that for which Abanka should be liable in costs.

Fourth, the goal in the summary assessment of costs is to arrive at a sum which is reasonable, proportionate and which fairly reflects the measure of success of the party claiming its costs. Precision is impossible with respect to any of the relevant factors. This is not a case in which the sums are so large or the information so clear that it makes sense to go through Abanca’s Schedule of Costs making rigid item-by-item reductions under the various entries and then applying a global percentage reduction. It is, moreover, somewhat arbitrary to attempt that with respect to the itemised solicitors’ costs in that work done by solicitors may have saved on work done by counsel. So that approach in this case would be no less open to question than taking a broader view, on the basis that it would purport to provide unrealistic precision.

It is, however, useful to range a global figure by taking account of those points and performing that exercise on a number of assumptions. I have done so using a rough range of assumed figures for allowable hourly rates, having regard to the guidelines, reductions in time allowable under various heads and percentage reductions reflecting measures of success considered in different ways. This yields sums in the range of about £20,000 to £40,000 depending on the figures used. Having regard to this analysis and looking at the matter broadly, an award of £30,000 to Abanca in costs is reasonable and proportionate in all the circumstances. It reflects Abanca’s substantial success, Abanka’s own costs and the points made on Abanca’s Schedule of Costs.

That sum should be paid within 14 days of the date on which this judgment is handed down.