Passing off and trade mark infringement

Background to Equisafety Ltd v Battle, Hayward and Bower Ltd and Dewey

This recent decision in the equestrian sports sector has shown the dangers of launching new brands without checking the brands already present in that market, leading to an award of damages. It also shows that there can still be trade mark infringement and/or passing off when the 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 label “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.

Trade mark infringement decision

Trade mark infringement: Battle had infringed Equisafety’s mark as the Court found that “Mercury” was an important part of Battle’s label and there was a likelihood of confusion between Battle’s mark and Equisafety’s mark as it would be seen as “moderately similar” to it by the average customer in this sector – the court pointed out that “HyViz”, “Silva” and “Reflective” were all descriptive terms and so did not distinguish it from Equisafety’s mark “Mercury”. 

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 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 to undermine Battle’s goods.

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 label (due to marketing campaigns, including with an equestrian celebrity), and also that the elements of misrepresentation and damage were proved. 

Damages: in an intellectual property infringement case, a claimant has the option of either (i) claiming the damages that it had suffered or (ii) recovering the profits made by Battle’s infringement of its rights. Here, Equisafety chose the latter and the Judge found (on the evidence of sale volumes and the high profile of the “Mercury” mark that the use of the infringing signs 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 from the case

  1. Prior searches – before launching any new brand, do check whether there are existing brands being used for competing goods/services – even when these brands are not identical, rights may be infringed leading to damages;
  • Paper trail – keep a record of the searches carried out and reasons why a particular brand has been used: in this case, Battle provided no explanation behind its use of “Mercury” in its sign and the court inferred that it was already aware of the “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 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 mark is taking “unfair advantage” of it;
  • 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 and its use, he would also have been personally liable for the damages awarded.

How Moore Barlow can help

We can help you with any queries in relation to trade mark applications, trade mark infringement or passing off – please contact us. John Warchus is a partner and Arnab Ray Chaudhuri a solicitor in the Commercial & Technology team at Moore Barlow.