Iconix v Dream Pairs: post sale confusion is enough for UK trade mark infringement

Background

Dream Pairs Europe Inc and Top Glory Trading Group Inc (together, “Dream Pairs”) is an online retailer of footwear and uses the following sign in relation to (primarily sporting) footwear:

(the “DP Sign”)

In 2018 Dream Pairs began advertising and offering footwear, including football boots and trainers, branded with the DP Sign for sale in the UK on Amazon's online marketplace at ‘amazon.co.uk' and on eBay at ‘ebay.co.uk'. An example of a shoe offered for sale on Amazon's UK website is below:

Iconix Luxembourg Holdings SARL (“Iconix”) owns the UMBRO brand and sued Dream Pairs for trade mark infringement, pursuant to sections 10(2) and/or 10(3) of the Trade Marks Act 1994 (“TMA”) relying on two registrations for its ‘double diamond' figurative trade marks (depicted below):

This was on the basis that the DP Sign was similar to, and likely to cause confusion on the part of the public with, the Umbro Marks.

First Instance Decision

In the High Court, Miles J dismissed Iconix's claim in its entirety. Miles J held that there was, at most, a very low degree of similarity between the DP Sign and the Umbro Marks (the “Marks”), no likelihood of confusion either at the point of sale or in a post-sale context amongst the average consumer and therefore, no infringement of the Umbro Marks by the DP Sign. To read more about the first instance decision click here.

Court of Appeal Decision

Iconix appealed the decision of the High Court only in relation to its section 10(2) TMA finding, and succeeded. The Court of Appeal held that i) the High Court's decision that there was a very low degree of similarity between the Marks was irrational when considering the DP Sign on footwear viewed from any angle other than straight on, ii) the High Court erred in principle by being unduly swayed by a side-by-side comparison of the Marks and in particular looking at graphic images rather than when applied to footwear, when assessing post-sale confusion, and iii)  the High Court erred in principle by failing to take into account that the average consumer would see the DP Sign from an angle, and from above, rather than sideways on in the post-sale context.

As a result, the Court of Appeal conducted the multifactorial assessment of similarity and confusion again, and held that there was a moderately high level of similarity between the Marks in the post-sale context, particularly when viewed by someone looking down at a pair of shoes worn by someone else and therefore there was a likelihood of confusion amongst a significant proportion of consumers.

Appeal to the Supreme Court 

Dream Pairs' appeal to the Supreme Court had two bases. Firstly it challenged the Court of Appeal's conclusion that the judge had reached an irrational conclusion or made any error of law or principle sufficient to entitle it to make the similarity and confusion assessment afresh. Second, it submitted that the Court of Appeal's approach in assessing similarity and confusion was incorrect in law.

Decision

In making its decision,  the Supreme Court looked at the conditions that must be satisfied for infringement under section 10(2)(b) TMA, according to the principles set out in Sky plc v Skykick UK Ltd [2018] EWHC 155 (Ch),  and determined that the dispute related to a) similarity of the Marks, and b) the likelihood of confusion on the part of the public.

The Similarity Issue

Dream Pairs argued that when assessing similarity of the Marks, and therefore the degree of similarity between them:

1. First, the court must assess, on a side-by-side comparison analysis (leaving out any viewing angles in a post-sale context), as to whether the Marks are intrinsically similar.
2. If the Marks are held to be dissimilar on a side-by-side comparison analysis, then the court must not proceed to make a global assessment of the likelihood of confusion (“global assessment”). However, if the marks are held to be similar, then the court can proceed to make the global assessment.
3. Where similarity is found, and the global assessment is considered, then in those circumstances the court can take into account the post-sale context of realistic and representative viewing angles to adjust its initial assessment as to the degree of similarity between the Marks.

Dream Pairs argued that the Court of Appeal erred in its assessment that the Marks had a “moderately high level of similarity” because the assessment was made based on the view of an onlooker in the post-sale context, when the DP Sign was viewed from head height at the feet of another person wearing footwear, rather than assessing similarity on a side-by-side comparison analysis. They argued further that even if at the stage of the assessment of similarity between the Marks the court can take into account the viewpoint of an onlooker in the post-sale context, then that assessment of similarity cannot be legitimate unless it is the only viewpoint from which the average consumer would ever encounter the DP Sign.

The Supreme Court dismissed both of these arguments, and clarified that post-sale context can be taken into consideration when assessing similarity. In coming to this conclusion the Supreme Court noted the following:

1. Post-sale context can be taken into account when establishing whether two signs are similar, and if they are, then also the degree of similarity between them.
2. Equivalenza (European Union Intellectual Property Office v Equivalenza Manufactory SL (Case C328/18 P)) is authority for the proposition that at the stage of assessing similarity between the marks at issue, post-sale circumstances cannot be used rule out similarities between them.
3. If Dream Pairs' submissions that the global assessment can only be considered if intrinsic similarity between marks in issue is established is correct, then this would prevent the global assessment being considered in circumstances where there is similarity between marks in issue in a post-sale context but not on a side-by-side comparison. This is irreconcilable with the requirement for a global assessment to be made even where there is a faint degree of similarity.
4. Provided the post-sale context is restricted to realistic and representative circumstances, the signs at issue can be sufficiently classified as similar or dissimilar.
5. Assessing how the mark in issue is perceived in a post-sale context is consistent with Equivalenza in which the CJEU stated that “comparison must be based on the overall impression made by those signs on the relevant public”.
6. Marketing conditions which counteract similarity will be taken into consideration in the global assessment.

The Confusion Issue

Dream Pairs argued that post-sale confusion between the Marks should not amount to actionable infringement under section 10(2)(b)TMA unless it involves confusion that affects or jeopardises the essential function of a trade mark as a guarantee of origin either a) at the point of a subsequent sale or b) in a subsequent transactional context. The Judge summarised this as: “for post-sale confusion to amount to actionable infringement it must result in damage at the point of sale or in a transactional context in the sense of influencing consumers when they make a choice with respect to the goods or services in question” (“Post-Sale Limitation”). Dream Pairs also argued that the Court of Appeal had erred in finding that it is possible for post-sale confusion to occur even if there is no likelihood of confusion at the point of sale.

The Supreme Court rejected Dream Pairs' submissions, noting the following:

1. No CJEU authorities supported Dream Pairs' submissions. Instead, they supported the propositions that i) a trade mark continues to identify origin even after sale such that it is possible for infringement to occur based on a likelihood of post-sale confusion; ii) perceptions of a sign post-sale which lead to confusion as to origin are not limited to perceptions at the point of a subsequent sale or in a subsequent transactional context; and iii) it can be relevant to take post sale context into account when considering trade mark issues.
2. There is no reason in principle for imposing the Post-Sale Limitation. 
3. The test for the likelihood of confusion is made by reference to “the public”, rather than “the purchasing public”.
4. Dream Pairs' argument is irreconcilable with section 10(4) TMA which outlines other uses of a sign, outside of a transactional context, which constitute “use” of a sign.
5. Neither point of purchase or a transactional context are mentioned in TRIPs or the Directives.
6. Damage to the origin function of a trade mark is complete if the average consumer is confused as to the origin of goods, no further damage is required.

Was the Court of Appeal entitled to re-make the decision?

The Supreme Court noted that the question of trade mark infringement under section 10(2)(b) TMA is a multifactorial assessment, involving the assessment of facts, the application of these to the relevant law or principles and coming to an evaluative decision. In coming to such conclusions, it is quite possible that reasonable minds, faithfully applying the relevant law and principles would come to different conclusions as to the multifactorial assessment.  In particular the Supreme Court noted that whilst an appellate court's decision takes precedence over that of a lower court, the English courts have intentionally imposed constraints to prevent parties appealing to higher courts if they do not agree with the decision of a first instance judge.

The Supreme Court then proceeded to assess each of Miles J's decisions which formed part of his ultimate multifactorial assessment that the Marks held a low degree of similarity, and that there was no likelihood of confusion at the point of sale or in the post-sale context. The Supreme Court held that Miles J had given careful consideration to the ways and angles in which the DP Sign would be viewed, including in the post-sale context and held that there were no matters such as irrationality or error of principle of law which had justified the Court of Appeal substituting their own (different) views as to the question of the multifactorial assessment.  

The Supreme Court therefore allowed Dream Pairs' appeal.

Comment

This is an important judgment for the doctrine of post-sale confusion, which has in recent years been deemed controversial. The decision confirms that an infringement action can be brought and won on post-sale confusion alone.  The controversy around the doctrine, in particular in some factual circumstances where it was hard to see how a trade mark owner could suffer any damage, appears to have been put to bed for good by the court's holding that damage to the origin function of a trade mark is complete if the average consumer is confused as to the origin of goods.

The decision will come as welcome news for, in particular, fashion brands for whom the real life context in which consumers engage with their brand (ie. the post-sale context) is just as important as the pre/point of sale context. However, this decision is not just significant for fashion brands, but all brand owners as it reinforces the ongoing importance of trade marks, not just at the point of sale, but the role they play thereafter (and the need to protect that). This is relevant for enforcement against copycat / lookalike products which may not cause confusion at the point of sale by virtue of the context in which they are bought, but in the post-sale context in which they are encountered be that on the street, or elsewhere. 

The judgment also serves as a cautionary tale to those considering appealing first instance decisions. Noting the judicial disapproval expressed at interfering with the High Court's multifactorial assessment, perhaps the Court of Appeal will be less inclined to interfere with the High Court's findings in future?

Authored by Grace Gladdle.