The dangers of launching new brands
The recent decision in Equisafety Ltd v Battle has shown the dangers of launching new brands into a market without first checking the likely competing brands. It also shows that there can still be trade mark infringement and/or passing off when the names/brands are, on first impression, quite different.
Equisafety makes high visibility equestrian safety products using the mark “Mercury”. Battle started selling mobile phone holders, gilets and jackets under the name “HyViz Silva Mercury Reflective”. When Battle refused to stop selling its equestrian products under its label, Equisafety issued legal proceedings for passing off and trade mark infringement.
The courts decision
Trade mark infringement
The Court found that Battle had infringed Equisafety’s mark as “Mercury” was an important part of Battle’s name and there was a likelihood of confusion with Equisafety’s mark as it would be seen as “moderately similar” to it by the average customer in this sector – a key point according to the court was that “HyViz”, “Silva” and “Reflective” were all descriptive terms and so did not distinguish it from “Mercury” in a trade mark sense as these words were not distinctive.
The court rejected Battle’s defence that the application for registering the “Mercury” trade mark was in “bad faith because it was only made after finding out that Battle was using its unregistered brand: the Claimant had used its brand before Battle started using its brand and in relation to different goods, therefore the Claimant had no improper motive.
Passing Off
The court also decided that Battle was liable for passing off as Equisafety had acquired goodwill in the “Mercury” mark before Battle started using its name (due to marketing campaigns, including one with an equestrian celebrity), and also that the elements of misrepresentation and damage were proved.
Damages
In an intellectual property infringement case as here, a claimant has the option of either (i) claiming the damages that it has suffered or (ii) recovering the profits made bythe defendant’s infringement of its rights. Equisafety chose the latter option and the Judge found (on the evidence of sale volumes and the high profile of the “Mercury” mark) that the use of the infringing name by Battle contributed 60% of its gross profits. As not all sales made by Battle were caused by use of “Mercury”, the judge allowed a small proportion of Battle’s total overheads to be deducted from its gross profit figure and then awarded Equisafety damages of 60% of that adjusted gross profit figure, plus interest during the infringing period.
Key Takeaways
- Prior searches
Before launching any new brand, do check whether there are existing brands being used for competing goods/services – (searches can vary from quick online checks to more detailed trade mark searches); even when the names look quite different on a first impression, rights may be infringed leading to damages. - Paper trail
Keep a record of any searches carried out and the reasons why a particular brand/name has been used: in this case, Battle provided no explanation for its use of “Mercury” in its name and the court inferred that it was already aware of the existing Mercury mark. - Apply for trade marks
As it is harder to succeed on a passing off claim than a trade mark infringement claim, we strongly advise clients to apply for a trade mark registration for any brands that they wish to protect. - Easier to protect trade marks that have a reputation
This case illustrates that Claimants will have an enhanced position where they can show that their mark has a reputation in its market as the court is more likely to decide that the defendant’s later mark is taking “unfair advantage” of it. - Potential Personal Liability of Owners/Directors for IP infringements
Battle’s director was also a joint defendant in these proceedings and if Equisafety had been able to show that he had been actively involved in the decision to use the Battle sign, he would also have been personally liable for the damages awarded together with the company.
How Moore Barlow can help
We can help with any queries in relation to trade mark applications, trade mark infringement or passing off – please contact John Warchus in the Commercial & Technology team at Moore Barlow.
