When is it legitimate to use a third party’s trade mark?

A trade mark proprietor is unable to prevent a third party from using its trade mark in all circumstances especially if it is being used to communicate a characteristic of a service or good to the public. For instance, a third party can inform the public that it repairs BMW cars or sells products which are better than a particular branded product. Such uses are descriptive.

In a recent case involving BMW, the Court of Appeal considered if the use of various BMW word and logo marks by a vehicle repair garage ("the BMW Marks") were being used to inform the public about a characteristic of the service or if they were being used to falsely suggest that there was a commercial relationship between them. 

Background

There is a specific defence under the trade mark legislation which means that a third party will not infringe a trade mark where its use is "necessary to indicate the intended purpose of a product or service…" or the mark is "concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or of rendering of the service, or other characteristics of the goods or service". Such use must be in accordance with honest practices in industrial or commercial matters.

BMW came before the Court of Appeal to appeal a decision of a lower court (known as the IPEC) which dismissed its claims for trade mark infringement and passing off in respect of some uses of the BMW Marks.

Decision

The first defendant, Technosport London Limited, repaired and maintained cars; mostly BMWs and Minis. The second defendant, Mr Agyeton, is the sole director of the first defendant.

Logos

BMW complained that the defendants had made use of three of its trade marks. It therefore brought a claim for trade mark infringement and passing off. In particular, the defendants had used the BMW roundel logo on a facia board on the exterior of its former business premises, adjacent to a reception panel, on a banner in the interior of its new business premises, on the outside of a van, on its website, and on business cards distributed to customers.

The judge at the IPEC concluded that these were acts of infringement and there was no appeal from this decision. Using the logos seemed to go beyond descriptive use and suggested a commercial relationship between the parties.

BMW word marks

The other allegations of infringement concerned the use of the BMW word mark with the trading name, Technosport. For instance, the BMW word mark appeared on a t-shirt with the word Technosport, in a twitter account namely "@technosportBMW", and with the word Technosport on a van. In other words, the BMW word mark had been used together with the business name.

The defendants argued that the use of the BMW word mark "did no more than accurately convey the message that TLL [the first defendant] was a garage specialising in the maintenance and repair of BMW cars" and there was a defence available under the relevant legislation (as highlighted above).

The judge in the first instance rejected BMW's claims based on the word marks. In particular, he said that "I find that TLL's use of its BMW signs did not convey to the average consumer any implication of TLL being an authorised dealer". He said that BMW did not produce sufficient evidence to support its claims in this regard, as BMW was required to provide more evidence including evidence from actual consumers.

BMW therefore appealed the IPEC's decision that there was no infringement of the BMW word mark in these circumstances.

The Court of Appeal considered these issues and held:

(i) After considering the evidence,"….one cannot start, in a case such as this, from the proposition that any use of the BMW mark in the course of a business specialising in the repair of BMW, would be an infringement. Use of the mark is necessary and legitimate in order to explain to the public what the business in question actually does. Thus, by way of example, BMW rightly took no objection to the use by TLL of the slogan "The BMW specialists" on the facia of their old premises ...". Equally, you cannot start from the proposition that use of the BMW mark in relation to a car or related service can never be an infringement.

(ii) The distinction is between use which conveys a true message about the service and repair of BMW cars or provision of genuine parts, and use which conveys the false message that the service is commercially connected with BMW. Deciding which side of the line the use falls on requires a close consideration of the detail and context of the use. The judge referred to the former use as "informative use" and the later as "misleading use".

(iii) After considering the approach of the judge at first instance, the Court of Appeal found that he made an error of principle. In particular, by focusing on the need for evidence of the reaction of consumers to the use of the BMW word mark, he failed to appreciate that the use was intended to convey a message about the identity of the business and services provided. This was in contrast to the BMW roundel logo which might require special knowledge as to what is conveyed by the use of this logo. There was no need to obtain evidence from consumers and the judge should have come to a conclusion without it.

(iv) The judge at first instance lost sight of the need to consider each of the uses in the context in which they occurred. The Court of Appeal said that had the judge done so, "he would inevitably have had to come to the conclusion in relation to each of the uses that use of the Technosport BMW signs was more than informative use and carried the risk that it would be understood as misleading use".

(v) In considering the use of the sign on the van, the Court of Appeal said that, following the Specsavers decision, the Court should have considered all facts (not just compare the mark to the sign), and, as such, it should have found infringement because the public would have understood the business to be an authorised dealer especially given the use of the roundel logo. Even if the roundel logo had not been used, the Court of Appeal still thought it was an infringement. In particular, the BMW word mark with the Technosport name was not being used informatively. This is in contrast to the terms "BMW repair specialist" which were being used descriptively.

(vi) With respect to the t-shirts used at the premises by the defendants' staff, this too was misleading given the use of the roundel logo at the premises. However, even without the roundel logo, the court did not consider it to be informative use. The judge in the Court of Appeal said "To my mind, it is simply a trading style which conveys the impression of authorisation by BMW…"

(vii) The twitter account also infringed because the BMW word mark was used within a trading name. It therefore gave the impression that it was authorised by BMW.

(viii) Therefore the appeal was successful and BMW succeeded in all its claims in respect to the BMW logos and word marks.

Summary

This case demonstrates that the use of another company's trade mark is only going to be permitted if it is necessary to convey information about a characteristic of a product or service. The defence is very narrow and, if the defendant goes further than this, by perhaps incorporating the trade mark in its company name, domain name, twitter account or using a logo, it risks the possibility of infringing the company's trade mark rights. If you are a reseller of products or provide repair services it would be advisable to review your website and marketing material to assess if your use of another company's mark falls into any of these categories of uses.

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