Case No. EWHC-11-(IPEC)

79.The Defendants allege that the Mark is invalid under section 3(3)(b) of the TMA and/or liable to revocation under section 46(1)(d) of the TMA. Invalidity pursuant to section 3(3)(b) of the TMA 80.Section 3(3)(b) of the TMA states: “A trade mark shall not be registered if it is- … (b) of such a nature as to deceive the public (for instance as to the nature, quality or geographical origin of the goods or services).” 81.There are materially identical provisions in Article 3(1)(g) of Directive 2015/2436 and Article 7(1)(g) of Regulation 2017/1001, and their predecessors Directives 89/104/EEC and 2008/95/EC and Regulations 40/94 and 207/2009. 82.Section 3(3)(b) sits in the TMA under the heading “Absolute grounds for refusal of registration”. The Defendants submitted that the relevant date for assessment of invalidity was either the date of application (12 May 2016) or the date of registration (2 September 2016) but that it did not matter which for the purposes of this case. 83.The Defendants submitted that the section was engaged because of the use that has been made of the Mark by the Claimant and the First Defendant since 2003. As a result, the Defendants alleged that there has been at least a partial separation of goodwill from the ownership of the Mark, and hence the Mark can no longer represent a single undertaking. The Mark has therefore become misleading. CORMETON is now perceived by the public as relating to separate businesses run by each of the Claimant and the First Defendant. 84.I can deal with this point briefly. Whilst passionately argued, the Defendants’ position is untenable at law as well as on the facts of this case. 85.First, in relation to the law, as I have already noted, section 3(3)(b) is in the part of the TMA which deals with absolute grounds of refusal. Absolute grounds are those that pertain to the mark itself – for example, marks devoid of distinctive character, marks which denote kind or quality, certain types of shape marks, and marks contrary to public policy. That is already a clear guide to the interpretation of section 3(3)(b) – it is clearly not aimed at preventing registration of marks in which a third party may own rights. 86.Next, the section itself lists, albeit non-exclusively, examples of types of mark which may deceive the public – “for instance as to the nature, quality or geographical origin of the goods or services”. Counsel for the Defendants submitted that this list is not closed, and I accept that submission. But the examples given are all absolute grounds examples, concerned with deception about the nature of the goods or services on offer. None of the examples given relates to the message that may be conveyed about the business origins of the goods or services provided under the mark. 87.Third, this position is entirely consistent with the limited case law on section 3(3)(b) and its equivalents in the EU instruments I have referred to above: i) In Case C-259/04 Elizabeth Florence Emanuel v Continental Shelf 128 Ltd [2006] ETMR 56, Ms Emanuel, a famous dress designer, had sold the goodwill in her business along with earlier trade marks and applications protecting her name. The new owner sought to register another trade mark for ELIZABETH EMANUEL, which Ms Emanuel opposed under the EU equivalent of section 3(3)(b). She failed, the Court of Justice noting: At paragraph 48: “even if the average consumer might be influenced in his act of purchasing a garment bearing the trade mark ELIZABETH EMANUEL by imagining that [Ms Emanuel] was involved in the design of that garment, the characteristics and the qualities of that garment remain guaranteed by the undertaking which owned the trade mark.” At paragraph 49: “Consequently, the name Elizabeth Emanuel cannot be regarded in itself as being of such a nature as to deceive the public as to the nature, quality or geographical origin of the product it designates.” At paragraph 50: even if there were “an intention on the part of the undertaking which lodged the application to register that mark to make the consumer believe that Ms Emanuel is still the designer of the goods bearing the mark or that she is involved in their design”, that, whilst possibly fraudulent, “could not be analysed as deception for the purposes of Article 3 of Directive 89/104.” ii)In Melly’s Trade Mark Application [2008] ETMR 41, Mr Geoffrey Hobbs QC sitting as the Appointed Person was asked to assess under section 3(3)(b) trade marks for the names of the three largest political parties in the Republic of Ireland, which had been applied for by someone unconnected with the political parties. Referencing Emanuel, he said at paragraph 43 of his decision: “Section 3(3)(b) prevents registration on the basis of “absolute” rather than “relative” deception. That is to say, it strikes at misrepresentations as to what is being made available rather than misrepresentations as to who is responsible for making it available”. iii)In Sworders Trade Mark (Case O-212-06), Mr Allan James on behalf of the Register of Trade Marks said the following: “22. … The purpose of the provision is consumer protection – see paragraph 46 of the judgment of the ECJ in Case C-259/04, Elizabeth Florence Emanuel v Continental Shelf 128 Limited – rather than the protection of earlier unregistered rights. 23. Put simply, section 3(3)(b) cannot be used as a legal basis for objections based on earlier unregistered trade marks, which fall to be considered solely under section 5(4)(a) of the [TM] Act.” iv)In Case C-689/15 WF Gözze Frottierweberei v Verein Bremer Baumwollbörse [2017] Bus LR 1795, the Court of Justice rejected an application to invalidate a mark under the EU equivalent of section 3(3)(b) where the proprietor had failed “to ensure, by carrying out periodic quality controls at its licensees, that expectations relating to the quality which the public associates with the mark are being met”. The Court referred to the mark needing to create “per se such a risk” of deception (at paragraph 55). These four decisions speak with one voice – section 3(3)(b) of the TMA refers to per se or absolute grounds. 88.Fourth, if the Defendants are right, their interpretation would drive a coach and horses through the relative grounds provisions in section 5 of the TMA. All an earlier right owner would need to do would be to allege public deception, without first having to comply with the requirements for identical or similar marks, identical or similar goods/services, or ownership of a mark with reputation. This cannot be what the legislature intended. 89.Therefore, in my judgment, section 3(3)(b) of the TMA is not engaged where the only “deception” is as to who is using the mark to provide goods or services. That sort of deception is remediable under the relative grounds for refusal of registration to be found in section 5 of the TMA. The Defendants’ application for invalidity under section 3(3)(b) fails. 90.If I am wrong in that, and this ground of invalidity is open to the Defendants as a question of law, then the Defendants also fail on the facts. The bulk of the First Defendant’s use was licensed by the Claimant, and therefore the Claimant held the relevant goodwill. As a result, the Mark cannot be misleading. No claim was made that the non-licensed use had rendered the Mark misleading. The Defendants’ invalidity claim therefore also fails on the facts. Revocation pursuant to section 46(1)(d) of the TMA 91.Section 46(1)(d) of the TMA provides: “The registration of a trade mark may be revoked on any of the following grounds – … (d) that in consequence of the use made of it by the proprietor or with his consent in relation to the goods or services for which it is registered, it is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services.” 92.Section 46(1)(d) implements provisions of equivalent scope in Article 20(b) of Directive 2015/2436 (also found in Article 12(2)(b) of previous Directives 2008/95 and 89/104). Equivalent provisions can also be found in Article 58(1)(c) of Regulation 2017/1001 (also found in Article 50(1)(c) of Regulation 40/94 and Article 51(c) of Regulation 207/2009). 93.The Claimant submitted that the date for assessment was the date of the application for revocation, in this case, the date of the Defendants’ counterclaim (8 August 2019). 94.The Defendants submitted that the deceptiveness arises from the permission granted by the Claimant prior to 2003, under the terms agreed in 2003, and the otherwise uncontrolled licensing of the Mark (before and after its registration) such that the public has come to regard the Mark as representing two separate businesses – those of the Claimant and the First Defendant. Even if the Mark was not deceptive under section 3(3)(b) at the time of application or registration in 2016, the Defendants submitted that it had become so by 2019 as a result of the further use made of the Mark. 95.Again, I can deal with this point briefly. In Emanuel, the Court of Justice, having considered the EU equivalent of section 3(3)(b), was asked to consider the EU equivalent of section 46(1)(d). For ease, I have substituted the section numbers of the TMA into the following excerpt from the Court of Justice’s judgment at paragraph 53: “53. Since the conditions for revocation laid down by [section 46(1)(d)] are the same as those for the refusal of registration under [section 3(3)(b)], analysis of which has formed the subject of the reply to the first two questions, the reply to the last two questions must be that a trade mark corresponding to the name of the designer and first manufacturer of the goods bearing that mark is not, by reason of that particular feature alone, liable to revocation on the ground that that mark would mislead the public, within the meaning of [section 46(1)(d)], in particular where the goodwill associated with that mark has been assigned together with the business making the goods to which the mark relates.” 96.Counsel for the Defendants relied on the decisions of the Court of Appeal and House of Lords in Scandecor Development AB v Scandecor Marketing AB [1999] FSR 26 and [2002] FSR 7. I do not consider that those judgments assist the Defendants. The House of Lords was unable to reach a concluded view, and referred various questions to the Court of Justice for a preliminary ruling. The dispute settled prior to the Court of Justice giving that ruling, so the referred questions were never answered. The learned authors of Kerly’s Law of Trade Marks and Trade Names, 16th ed (2018) note at paragraph 12-170: “The facts in Scandecor [2002] FSR 7 were complicated. Due to the fact that the case settled before the questions referred by the House of Lords to the ECJ were considered, it is somewhat difficult to predict what the outcome would have been. The case does not really shed much light on s.46(1)(d) other than emphasising that it raises an issue of fact.” 97.Further, the judgments in Scandecor pre-date the clear statement of the Court of Justice in Emanuel, which I have set out above. 98.In my judgment, for the same reasons as I have set out above in relation to section 3(3)(b) of the TMA, section 46(1)(d) of the TMA is not engaged where the only “deception” is as to who is using the mark to provide goods or services. That sort of deception is remediable under the relative grounds for revocation of a registration. The Defendants’ application for revocation under section 46(1)(d) also fails. 99.Again, if I am wrong in my findings on the law, the Defendants again fail on the facts for the same reasons as are set out at paragraph 90 above.