Easynet Group Plc & Anor v Easygroup IP Licensing Ltd

This is an appeal from a decision of the Comptroller's Hearing Officer Mr. David Landau given on 8th March 2006. In that appeal he dismissed two grounds of opposition to the registration of easy.com as a trade mark. The applicant was, after an assignment, easyGroup IP Licensing Limited, and the opponent was Easynet Group Plc and Easynet Limited. Two of the grounds of opposition were under sections 3(1)(b) and 3(1)(c) of the Trade Marks Act. Other grounds were dropped before the hearing.

The specification seeks to apply the mark to a wide range of services ranging from printed matter, books, wrapping material, advertising, business administration, office functions, through auctioneering, financial services, electronic mail services, various transport related activities, to electronic communication related matters and leisure matters, including hairdressing (to name but some). The opposition on those two grounds failed. It was held that the mark was neither descriptive nor distinctive.

The decision describes the dispute between the parties as follows (in paragraph 3):

"Easynet claims that the trade mark is devoid of any distinctive character and/or consists exclusively of signs or indications which may serve, in trade, to designate the kind, quality, intended purpose, value or other characteristics of goods and services."

The judgment recites that there was evidence heard by the Hearing Officer but the opponents did not rely on its evidence, and easyGroup relied on its evidence only in a very limited way. The judgment sets out that evidence generally but the Hearing Officer held that nothing in his hearing turned on it. Nothing in this appeal turns on it either and I do not need to refer to it further.

The relevant part of the decision starts by setting out the relevant provisions of section 3. I shall do so later on in this judgment. It then records that it was necessary to consider subsections (1)(b) and (c) separately, as to which there is no dispute. It then goes on to consider section 3(1)(c) first.

At the heart of this appeal is the extent to which a mark made up of descriptive elements is descriptive or not descriptive within the meaning of section 3(1)(c). The Hearing Officer's consideration of that provision starts with a citation of various paragraphs of the European case Koninklijke KPN Nederland NV v Benelux Merkenbureau [2004] ETMR 57 ("KPN"). The Hearing Officer sets out paragraphs 56 to 58 of that decision; I do not need to do so. However, he also sets out paragraphs 97 to 99. They are important paragraphs in relation to this appeal and it will be convenient if I refer to them in their actual terms at this point.

"97.

It is not necessary that the signs and indications composing the mark that are referred to in Article 3(1)(c) of the Directive actually be in use at the time of the application for registration in a way that is descriptive of goods or services such as those in relation to which the application is filed, or of characteristics of those goods or services. It is sufficient, as the wording of that provision itself indicates, that those signs and indications could be used for such purposes. A word must therefore be refused registration under that provision if at least one of its possible meanings designates a characteristic of the goods or services concerned (see to that effect, in relation to the identical provisions of Article 7(1)(c) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p.1), Case C-191/01 P OHIM v Wrigley [2003] ECR I-0000, paragraph 32).

98.

As a general rule, a mere combination of elements, each of which is descriptive of characteristics of the goods or services in respect of which registration is sought, itself remains descriptive of those characteristics for the purposes of Article 3(1)(c) of the Directive. Merely bringing those elements together without introducing any unusual variations, in particular as to syntax or meaning, cannot result in anything other than a mark consisting exclusively of signs or indications which may serve, in trade, to designate characteristics of the goods or services concerned.

99.

However, such a combination may not be descriptive within the meaning of Article 3(1)(c) of the Directive, provided that it creates an impression which is sufficiently far removed from that produced by the simple combination of those elements. In the case of a word mark, which is intended to be heard as much as to be read, that condition must be satisfied as regards both the aural and the visual impression produced by the mark.”

The Hearing Officer then refers to two more cases in paragraph 29 of his decision, namely, BioID AG v Office for Harmonization in the Internal Market (Trade Marks and Designs (OHIM) Case C-37/03 P ("BioID"). He also referred to a case SAT.1 SatellitenFernsehen GmbH v Office for Harmonization in the Internal Market (Trade Marks and Designs) (OHIM) Case C-329/02 P ("SAT.1").

He then rejects the submissions of Mr. Alexander QC, who appeared before him and who appears before me for the appellants and opponents, to the effect that a distinctive whole arising from the combination of non-distinctive elements can still be nullified by the non-distinctiveness of the separate elements. He does so by reference to SAT.1 and to other cases. All the citations which the Hearing Officer made from those cases referred to the need to consider the mark as a whole when considering the question of whether it falls within section 3(1)(c). So far as necessary, I will return to detailed citations later in this judgment.

The Hearing Officer then concludes as follows at the end of paragraph 29 of his decision:

"My reading of the case law is that an analysis of the individual elements of a trade mark is acceptable; often it will be necessary. However, once that analysis has been made it is the overall impression that must be taken into account. Of course, the analysis of the individual elements may well influence decision (sic) as to what the overall impression of the trade mark is in relation to the relevant goods and/or services."

In paragraph 30 the Hearing Officer goes on to record that it is necessary to consider the trade mark in relation to the goods and services in respect of which the application is made. He considered a submission by Mr. Alexander that the word "easy" was a descriptive word like "cheap" and said it was partly but not wholly true. It was not necessarily descriptive of all the goods and services in the specification. However, the Hearing Officer went on to consider the position as if it were true, making that assumption in favour of the opponents.

The Hearing Officer then considers the effect of adding ".com" to that word. In answer to the submission that it adds nothing by way of material distinctiveness, he says:

"I consider that it is not a matter of what it adds but what it creates, it is part of a whole and ultimately the whole must be considered."

He records that Mr. Alexander had relied on a practice amendment circular PAC 14/00, which referred to the effect of adding ".com" or ".co.uk" to an otherwise non-distinctive element in a mark. He observes that it looked to section 3(1)(b) and not section 3(1)(c) and that it seemed to take an approach which, in the Hearing Officer's view, came dangerously close to not considering the mark as a whole, contrary to settled law.

Then he comes to what is probably the meat of his reasoning in the latter half of paragraph 30:

"Mr. Hollingworth commented upon the basis of the pleaded grounds in relation to section 3(1)(c) of the Act in the following terms:

'As I say, in my submission, it is a large leap to suggest that easy.com describes characteristics of goods or services such as playing cards, writing instruments or indeed any other of the services or the goods for which registration is sought. Just to illustrate that, in my submission, it would require three discrete stages of assumption before you could make that assumption. The average consumer would have to see first of all that this is an allusion to an internet web address, which I submit they would do. Secondly, they would have to make a connection between that web address and the goods or services on which the mark is used. That is quite a leap. Thirdly, that connection must somehow be related to easiness or ease of use and they must be able to understand from that connection that that tells them something about the goods or services concerned. There are three steps. In my submission, that is far too vague and indeterminate, to use the wording from the European case law. There is certainly no direct and immediate connection.'

In relation to section 3(1)(c) I do not consider that the test relates to the average consumer. Section 3(1)(c) is fundamentally about trade, hence the public interest issue behind it is the need to leave free, and the reference to trade in the section. However, aside from this I am in agreement with Mr. Hollingworth. It seems to me that the pleaded case of Easynet requires a convoluted approach to the trade mark; one that is more suited to the world of the cryptic crossword than that of trade mark law. Mr. Alexander's approach at the hearing seemed to be centred on treating the trade mark effectively as the word easy. He described the application as an attempt to seek a trade mark monopoly in the word easy. Such an attempt would only be a feasible analysis of the application if one accepted Mr. Alexander's argument that the .com element is effectively to be ignored. So the basis of his claim is his own proposition. Mr. Alexander also referred to the public interest aspect of the case, the need to leave free. However, his argument was that there is a public interest in not allowing the trade mark easy on its own to be registered. It is a reasonable argument that for certain goods and services the word easy should be left free; in the terms of earlier days that it should be left as part of the great common of the English language and not enclosed. However, the granting of rights in easy.com is not the granting of rights in easy. The rights subsist in the trade mark as a whole. I agree with Mr. Hollingworth that there is no need to leave easy.com free for other traders to use."

Having thus concluded, he then expresses the formal conclusion in paragraph 31 in these terms:

"Taking the trade mark as a whole I cannot see what characteristics of the goods and services of the application that easy.com designates. The pleaded grounds seem to me contrived and convoluted, the arguments of Mr. Alexander rest upon not considering the trade mark as a whole. The ground of opposition under section 3(1)(c) of the Act is dismissed."

The Hearing Officer then turns to deal with section 3(1)(b) briefly. He dismisses that ground of opposition as well. It is common ground that nothing turns on that today and the principal matter for me to consider is the Hearing Officer's conclusion in relation to section 3(1)(c).

There is no material dispute between the parties in relation to this. It is well established that this appeal is a review and not a full rehearing. It is not for me to evaluate the questions before the Hearing Officer and to form my own view unless, I suppose, I came to the view that his view was fundamentally flawed. I can only reconsider the matter if there is something in the nature of an error of principle, an error of approach or a serious procedural irregularity. Authorities have laid down the respect to be accorded to the judgment of hearing officers in circumstances such as these.

At this point it will be convenient to set out the wording of section 3(1) of the Trade Marks Act 1994 so far as relevant to the matter before me. Section 3(1) provides:

"3.-(1) The following shall not be registered –

….

(b)

trade marks which are devoid of any distinctive character,

(c)

trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services …."

As I have already indicated, it is paragraph (c) that is essential to this appeal. The appeal arises out of the fact that it is said – and, I think, accepted – that the mark easy.com contains two elements each of which are capable of falling within paragraph (c) if taken by themselves and they are for those purposes descriptive.

Mr. Alexander described this appeal as raising a point of principle and he described the point as being this. Where there is a mark composed of two very descriptive elements, is it right to register it without a finding that there is something special about the combination? Applying that to this case, he says that this is a case where there are two descriptive elements of the mark – "easy" and ".com" – and the Hearing Officer did not find anything special or unusual in their combined effect. He says that the point of principle should be answered in the negative, that is to say it should not be registered without a finding that there is something special or unusual about the combination, and, accordingly, the Hearing Officer should have found that the mark as a whole was descriptive within the meaning of section 3(1)(c) and the Hearing Officer should therefore have refused registration.

Mr. Alexander bases this submission on two of the paragraphs from the KPN case which I have set out above, that is to say paragraphs 98 and 99, together with paragraph 100 (which the Hearing Officer did not cite). Paragraph 98 contains a reference to "unusual variations", but the relevant sentence reads as follows:

"Merely bringing those elements together without introducing any unusual variations, in particular as to syntax or meaning, cannot result in anything other than a mark consisting exclusively of signs or indications [which are descriptive]".

Mr. Alexander stresses that reference to "unusual variations".

Paragraph 100 contains another reference to something which is "unusual". It reads as follows:

"Thus, a mark consisting of a word composed of elements, each of which is descriptive of characteristics of the goods and services in respect of which registration is sought, is itself descriptive of those characteristics for the purposes of Article 3(1)(c) of the Directive, unless there is a perceptible difference between the word and the mere sum of its part: that assumes either that, because of the unusual nature of the combination in relation to the goods and services, the word creates an impression which is sufficiently far removed from that produced by the mere combination of meanings lent by the elements of which it is composed, with the result that the word is more than the sum of its parts, or that the word has become part of everyday language and has acquired its own meaning, with the result that it is now independent of its components."

Again, Mr. Alexander emphasizes what he says is a requirement of an "unusual nature of the combination" before a mark comprising of two descriptive words can escape the clutches of section 3(1)(c). Mr. Alexander's submission is that the proper approach to adopt is a structured approach and he submits that that is sound in principle and in practice. He says one first looks at the individual elements making up up the mark. If they are descriptive, one looks to see whether the combination has achieved something unusual in the sort of terms referred to in paragraph 100 of KPN. If it has not, then the overall mark is merely descriptive and an application to register it will fail under section 3(1)(c). He says this structured approach is justifiable in practice because it provides a practical way of going about the task and it coincides with and gives effect to the policy underlying section 3(1)(c), which is to keep descriptive terms free for use by all traders. He points out that the policy behind section 3(1)(c) is reflected in paragraphs 52 to 61 of the KPN judgment.

He also claims that the approach is supported by various cases, and in particular the BioID case, to which I have already referred, and also Eurohypo AG v OHIM Case T-439/04. Even though they do not explicitly adopt the usualness test, in fact Eurohypo sets out, verbatim, part of the judgment in KPN to which I have already referred.

Mr. Alexander then goes on to say that, if one applies that sort of test to the decision in issue in this case, one finds that the Hearing Officer did not apply it. He did not at any stage refer to the need to finding something unusual in the combination or an unusual variation or anything like that. Therefore, he says, the Hearing Officer erred and the matter falls to be reconsidered. When reconsidered, he says, it is plain that easy.com is nothing more than a combination of two descriptive terms, nothing extra is added and the mark overall is descriptive.

Mr. Hollingworth for the respondent disputes the existence of Mr. Alexander's principle. He says that the important point is to look at the whole mark. A domain name itself can be a trade mark – something which is not in dispute – and Mr. Hollingworth says the Hearing Officer applied the right test and reached a right result.

I am prepared for these purposes to assume that the mark in this case is made up of two elements each of which taken by itself could be treated as being descriptive and thus falling foul of section 3(1)(c). It is true that the Hearing Officer did not in terms consider whether the combination of those two descriptive terms produced something unusual or out of the ordinary in the manner which is said to be required by Mr. Alexander. The first question for me is whether he erred in doing so. I find that he did not.

The authorities show that the true approach is not that formulated by Mr. Alexander but a broader one of looking at the mark as a whole in order to see whether the mark as a whole is descriptive within the meaning of the section and, in particular, to see whether the mark as a whole produces something which is more than the mere sum of the parts. In the course of that exercise it is permissible, although probably not obligatory, to consider the descriptive nature of the separate elements, but it is an overall assessment that matters. That assessment is not qualified by such concepts as unusualness. It is a qualitative judgment as to the degree of descriptiveness of the term and the extent to which it goes beyond that which arises out of the conjunction of the two or more elements which make it up, and it does not depend on compliance with any particular adjectives of the nature of usual, unusual, ordinary or extraordinary.

Several of the cases on this topic turn on the provisions of section 3(1)(b) or its European equivalent and not section 3(1)(c), but the principles are the same for these purposes. The first is the SAT.1 case to which I have already alluded. In paragraphs 34 and 35 the ECJ considers a decision of the Court of First Instance in that particular case and the European Court holds as follows.

"34 Finally, the Court of First Instance considered, in paragraphs 49 and 50 of the contested judgment, that that conclusion would be invalidated only if concrete evidence, such as, for example, the unusual way in which the various elements are combined, were to indicate that the compound trade mark was greater than the sum of its parts. The Court of First Instance held that the term 'SAT.2' was not combined in an unusual fashion and that ‘the appellant's argument that the trade mark applied for, considered as a whole, has an element of imaginativeness, [was] irrelevant’.

35 It is clear from paragraphs 31 to 34 of the present judgment that the Court of First Instance assessed whether the term 'SAT.2' had a distinctive character essentially by means of a separate analysis of each of its elements. To that end, it based itself on the presumption that elements individually devoid of distinctive character cannot, on being combined, present such a character instead of, as it should have done, on the overall perception of that word by the average consumer. It examined the impression as a whole produced by the term only secondarily, refusing to give any relevance to aspects such as the existence of an element of imaginativeness, which ought to be taken into account in such an analysis."

Those paragraphs indicate the nature of the exercise required and nothing in that reasoning supports some requirement of unusualness as a separate and discrete requirement. True it is that the Court of First Instance seem to have sought to find something about the "unusual way" in which the elements were combined, but that is given only as an example and not as a description of the overall exercise to be performed. Mr. Alexander gains, in my view, no support from that case.

BioID was a case which went the other way on its particular facts. Paragraph 29 contains the test to be applied:

"29 Thirdly, as regards a compound mark, such as that which forms the subject-matter of the present dispute, any distinctive character may be assessed, in part, in respect of each of the terms or elements, taken separately, but that assessment must, in any event, be based on the overall perception of that trade mark by the relevant public and not on the presumption that elements individually devoid of distinctive character cannot, on being combined, present such character (see SAT.1 v OHIM, cited above, paragraph 35). The mere fact that each of those elements, considered separately, is devoid of distinctive character does not mean that their combination cannot present such character (see, by way of analogy, case C363/99)".

Then there is a reference to the KPN case as well as another case.

Paragraphs 31 to 33 of that case contrasted the approach of the CFI in that case with the approach of the CFI in the SAT.1 case and it dealt with the matter in these terms:

"31 In paragraph 27 of the judgment under appeal, the Court of First Instance rightly held that, for the purposes of assessing the distinctive character of a compound mark, it is not inconsistent with a successive examination of the different composite elements of the mark to consider that mark as a whole.

32 Admittedly, in paragraph 42 of the judgment under appeal, having taken the view that the different elements of the trade mark applied for were devoid of distinctive character, the Court of First Instance found that the trade mark itself should also be presumed to be devoid of such character.

33 However, contrary to the situation in SAT.1 v OHIM (SAT.2), cited above, that finding did not, in this case, affect the Court of First Instance's analysis on that point since it did not restrict itself to examining the overall impression produced by the trade mark applied for as a secondary matter, but directed part of its reasoning to considering, in relation to a compound mark, the sign's distinctiveness as a whole."

Again, it can be seen from those paragraphs that the test is one of overall impression and it is not a test which is confined to a need, in terms, to find something "unusual" or "out of the ordinary" or "extraordinary" in order for a compound mark made up of descriptive elements to escape the effects of section 3(1)(b).

The third case – the Eurohypo case – might at first sight be thought to lend some support to an explicit requirement of unusualness. In paragraphs 54 and 55 of that case the CFI said as follows:

"54 Since the word sign EUROHYPO is a compound word, it must still be determined whether the descriptiveness, established in respect of the elements of which it is composed, also exists in respect of the compound word itself. It is clear from the case-law that a mark consisting of a word composed of elements, each of which is descriptive of characteristics of the goods or services in respect of which registration is sought, is itself descriptive of the characteristics of those goods or services unless there is a perceptible difference between the word and the mere sum of its parts: that assumes either that because of the unusual nature of the combination in relation to the goods or services the word creates an impression which is sufficiently far removed from that produced by the mere combination of meanings lent by the elements of which it is composed, with the result that the word is more than the sum of its parts, or that the word has become part of everyday language and has acquired its own meaning, with the result that it is now independent of its elements. In the latter case, it is then necessary to ascertain whether a word which has acquired its own meaning is not itself descriptive for the purposes of the same provision (Koninklijke, KPN Nederland, paragraph 44 above paragraph 104).

55 In the present cases the word sign EUROHYPO is a straightforward combination of two descriptive elements, which does not create an impression sufficiently far removed from that produced by the mere combination of the elements of which it is composed to amount to more than the sum of its parts. The applicant has not shown that that compound word had become part of everyday language and had acquired a meaning of its own. It argues, to the contrary, that the word sign EUROHYPO has not become part of everyday German for describing financial services."

However, on analysis, I do not think it introduces the requirement referred to by Mr. Alexander. The wording of paragraph 54 is a regurgitation of the relevant paragraphs of KPN but I do not think it is adopting that as being the necessary formulation. What the cases overall indicate is that an overall assessment of the question is required going beyond a mere assessment of the constituent descriptive parts. It is the whole mark that has to be considered. If it remains purely descriptive, then it falls foul of section 3(1)(c). If it remains no more than a combination of two descriptive words, then the combination will be descriptive. If it manages to achieve more than that, it is capable of being non-descriptive. Whether it achieves that is probably a question of degree. That is the test and that is how it works. The reference to unusualness in Eurohypo in paragraph 54, which is, as I have said, a repetition of the language of KPN, is an attempt to show how the combined expression might become more than the sum of its parts. It is an attempt to explain the metaphor. In its reference to unusualness, it is not imposing a separate requirement but merely reflecting one way in which on might look at the matter in the course of performing a required assessment.

Not only is this in accord with principle but it also avoids certain difficulties that will arise if Mr. Alexander is right about his test. His test requires a judgment as to usualness or unusualness, but against what has that to be measured? What is to be taken to be usual in these contexts? There can be no satisfactory answer to that question. It seems to me for that reason as well that Mr. Alexander's analysis fails.

Having come to that conclusion, I turn to consider the decision. This is an easy task. It is true that the Hearing Officer did not approach the matter in the way in which Mr. Alexander's submission says he should have approached it but in doing so he did not err. It is apparent from his citation of authority that the right points were in the Hearing Officer's mind. It is quite clear that he expresses himself as being obliged to consider the overall impression and it is quite clear that he had in mind the need to consider whether or not the mark is more than simply the effect of the aggregate of its two descriptive elements. It is quite clear that he considered the relevant points in paragraph 30 of his judgment in accepting Mr. Hollingworth's submission as there recorded on the question of descriptiveness and overall impression.

It therefore seems to me to be clear that the Hearing Officer applied the correct reasoning and applied the correct criteria and arrived at a result at which he was entitled to arrive. His decision is not flawed and is entitled to the respect which the authorities say must be accorded to it. Accordingly, that line of the appeal fails.

The argument of Mr. Alexander that I have hitherto described is the only one that he advanced orally. His skeleton argument contains a couple of other lines of argument, although he did not address those before me. For the sake of completeness I will deal with them. Mr. Alexander's skeleton argument criticises the Hearing Officer's decision for saying that the practice amendment circular to which I have referred comes close to being contrary to settled law. He says that the Hearing Officer ought to have found it was consistent with the approach of the ECJ in cases like BioID and KPN and that the addition of a domain name would not make the combination distinctive.

This argument does not add anything significant to the appeal. The Hearing Officer seems to have been prepared to proceed on the footing that adding ".com" to "easy" does not, merely by virtue of its addition, create something new and non-descriptive. That must be right, but he identifies the correct question as being not what it adds but what it creates and that a view must be taken of the mark as a whole. I have already set out the relevant sentence of his decision and there is no apparent error there.

Next, the skeleton also criticises the decision for rejecting Mr. Alexander's argument that one should start by performing an analysis of the individual parts in order that one can then reach a conclusion as to whether the whole mark is distinctive. Presumably the same point would be made if the word "descriptive" was substituted for "distinctive". It may be that in rejecting the argument the Hearing Officer mischaracterized it when he said that it meant that non-distinctive elements could nullify what would otherwise be the distinguishing quality of the whole, but that has no material effect on his decision. It is plain that the decision is based on an assessment of the mark as a whole and that the Hearing Officer was correct in adopting that approach.

For those reasons, therefore, I reject this appeal so far as it challenges the decision in relation to section 3(1)(c). That being the case, it is accepted that no separate point arises in relation to section 3(1)(b) and I do not need to say anything more about it. In the circumstances I therefore dismiss this appeal.