Case No. IP-2020-000081

42.The point at issue under s.10(2) was whether the use of UEPM’s “Urban Evolution” sign was likely to cause confusion with the URBANBUBBLE Trade Mark. Attention was focussed on the similarity between the Trade Mark and the sign since the identicality or similarity of services provided by UEPM and the Claimants was admitted. The law 43.One dispute was whether the evidence of confusion, if there was any, should be ascribed to a failure on the part of those concerned to realise that there had been a transition from the Claimants to UEPM as managers of buildings owned by Elliot and not to any similarity there may be between mark and sign. The Claimants argued that in law it makes no difference if other factors contributed to the confusion, provided that the similarity of the Trade Mark and UEPM’s sign was an operative cause of the confusion. 44.I was referred to Neutrogena Corporation v Golden Limited [1996] RPC 473. The plaintiffs alleged that the defendants’ marketing of skin and hair care products under the name NEUTRALIA infringed the plaintiffs’ NEUTROGENA trade marks and constituted passing off. Morritt LJ, with whom Ward and Kennedy LJJ agreed, considered the evidence of confusion and said (at p.497):“In my judgment all this evidence demonstrates confusion caused by the use of the mark in the sense that it was an operative, though not necessarily the only, cause.”45.Morritt LJ also discussed the evidence given by a category of witnesses (at p.497):“Each of them was confused and the similarity of the name was an operative cause of that confusion even if other causes operated as well; the fact that such initial confusion was clarified by subsequent examination of the label is immaterial to the allegation of infringement of trade mark.”46.I will return to the question of initial confusion. At this stage I am concerned with whether the similarity between mark and sign being a partial source of confusion is sufficient. At pages 504-505 Morritt LJ analysed the evidence of several witnesses and said, at p.505:“I do not regard the [fact] that in many of those cases there were also other causes of confusion or that such confusion as was initially caused by the name was subsequently dispelled by the packaging or a much closer look as negating the overall effect of that evidence. Each of these individuals was fairly representative of the public at large. Each of them demonstrated their confusion in circumstances typically faced by consumers at large.”47.Thus, if it is proved on the evidence that the similarity between trade mark and sign was an operative cause of confusion, infringement of the trade mark is established even if there were other simultaneous causes of the confusion. This is subject to the point made by Morritt LJ (here put into the context of the 1994 Act rather than the Trade Marks Act 1938 with which Neutrogena was concerned) that proved instances of confusion occurred under circumstances typically encountered by the average consumer.48.Consistent with this, the relevance of the circumstances in which confusion takes place was discussed by the Court of Appeal in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 27. Kitchin LJ said;“[87] In my judgment the general position is now clear. In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer’s mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context.”49.A further point arose regarding the necessary characteristics of confusion, as that term is used in s.10(2) of the 1994 Act. The law of passing off draws a distinction between what is sometimes categorised as “deception”, as opposed to “confusion”. Both counsel made reference to this distinction, not just in relation to passing off but also in the context of trade mark infringement.50.The passing off distinction was explained by Jacob LJ in Phones 4U Ltd v Phone4U.co.uk.internet Limited [2006] EWCA Civ 244:“[16] The next point of passing off law to consider is misrepresentation. Sometimes a distinction is drawn between ‘mere confusion’ which is not enough, and ‘deception,’ which is. I described the difference as ‘elusive’ in Reed Executive Plc v Reed Business Information Ltd [2004] R.P.C. 40. I said this, [111]:‘Once the position strays into misleading a substantial number of people (going from “I wonder if there is a connection” to “I assume there is a connection”) there will be passing off, whether the use is as a business name or a trade mark on goods.’[17] This of course is a question of degree – there will be some mere wonderers and some assumers – there will normally (see below) be passing off if there is a substantial number of the latter even if there is also a substantial number of the former.[18] The current (2005) edition of Kerly contains a discussion of the distinction at paras 15–043 to 15–045. It is suggested that:‘The real distinction between mere confusion and deception lies in their causative effects. Mere confusion has no causative effect (other than to confuse lawyers and their clients) whereas, if in answer to the question: “what moves the public to buy?”, the insignia complained of is identif‌ied, then it is a case of deception.’[19] Although correct as far as it goes, I do not endorse that as a complete statement of the position. Clearly if the public are induced to buy by mistaking the insignia of B for that which they know to be that of A, there is deception. But there are other cases too – for instance those in the Buttercup case. A more complete test would be whether what is said to be deception rather than mere confusion is really likely to be damaging to the claimant’s goodwill or divert trade from him. I emphasise the word ‘really.’”51.The Buttercup case was Ewing v Buttercup Margarine Co Ltd [1917] 2 Ch 1; (1917) RPC 232. The Court of Appeal found it likely that the defendant, which had adopted the registered name the “Buttercup Margarine Company, Limited”, would be perceived by the public to be a branch of the plaintiff’s retail Buttercup Dairy Company business, established by the plaintiff for a move into the margarine market. That qualified as passing off.52.The law on confusion in the context of s.10(2) and equivalent articles of European legislation was explained in Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [216] EWCA Civ 41. “[31] Turning to condition (vi), this court explained the general approach to be adopted to the assessment of the likelihood of confusion in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24; [2012] F.S.R. 19 at [51]–[52]. We endorsed at [52] the following summary of the key principles developed by the Trade Marks Registry as being sufficient for the determination of many of the disputes coming before it:‘52. …(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;(k) if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion.’[32] In Maier [2015] F.S.R. 20 we explained (at [76]) that to this summary should be added the further guidance provided by the Court of Justice in Canon [1999] F.S.R. 332 (at [29]) that the risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion for the purposes of the provision.”53.Items (i) and (k) in the Trade Mark Registry’s list have particular relevance here. If the average consumer’s reaction to the accused sign goes no further than bringing the trade mark to mind, that does not qualify as confusion. If the association between the mark and the sign causes the average consumer to believe that the respective services come from the same or economically-linked undertakings, that qualifies as confusion within the meaning of s.10(2).54.The key characteristic of confusion identified in Specsavers is a belief on the part of the average consumer that the services of the trade mark proprietor and alleged infringer come from the same undertaking or economically-linked undertakings. It would seem to follow that it is not enough that the average consumer believes this to be a possibility, or even a likely possibility. On the other hand, the evidence need only show on the balance of probabilities that there is a risk that the average consumer might hold a fully-formed belief. I infer that the risk must be significant, not trivial.55.There may or may not be any practical distinction between this test and the deception as opposed to confusion test of passing off. But concepts of English common law cannot be imported into EU-based law which continues to have application in this jurisdiction. When considering the likelihood of confusion within the meaning of s.10(2) criteria familiar from the law of passing off are best avoided.56.One final point arose on the law in relation to s.10(2). As will be discussed in the following section of this judgment, there were two average consumers to be considered. Counsel for the Defendants emphasised that both were professional business people. The point she made was that the decision of each of them when considering services offered under the accused sign would be taken with more care then would be the case, for instance, of a decision by an average consumer purchasing an inexpensive item from a supermarket. Counsel for the Claimants did not disagree with this. But it raises a related issue. The distinction drawn by counsel for the Defendants is likely to matter only if confusion at the point of sale is what matters. A professional business person may be as liable to be taken in by initial confusion as any other person but professional caution and/or awareness of the higher stakes involved in a sale could intervene before the sale is complete.57.In Neutrogena Morritt LJ implied that initial confusion is enough, at least in a supermarket context under the Trade Marks Act 1938. The Court of Appeal addressed initial confusion in the modern law in Interflora Inc v Marks & Spencer plc [2014] EWCA Civ 1403. Kitchin LJ, giving the judgment of the Court, said:“[154] … initial interest confusion is an expression which derives from US trade mark law and has been used to encompass a range of situations, and the doctrine it identifies is highly controversial. … [It has been defined] … as confusion on the part of the public as to the trade origin of the goods or services in relation to which the impugned sign has been used arising from use of the sign prior to purchase of those goods or services, and in particular confusion arising from use of the sign in promotional or advertising materials. …[155] In our judgment it is not helpful to seek to import the doctrine of initial interest confusion into EU trade mark law, at least so far as it applies to the use of a sign the same as or similar to a trade mark as a keyword in an internet referencing service, and it has the potential positively to mislead. We say that for the following reasons. The Court of Justice has already enunciated in clear and unambiguous terms the test that must be applied under the Directive and the Regulation in determining whether the accused sign has an adverse effect on the origin function of the trade mark. ……[157] Returning now to the doctrine of initial interest confusion, it is, as the judge recognised, highly controversial and, as he also recognised, it has been applied to a range of situations in which a sign which is the same as or similar to a registered trade mark is used by a third party in advertisements for goods or services for which it is registered. They extend from, at one end of the spectrum, initial attraction of consumers based upon some kind of association of advertised goods or services with those of the trade mark proprietor or even mere diversion, to, at the other end of the spectrum, initial confusion which gives rise to a real risk that consumers will actually buy the advertised goods or services even though they know they are not the goods or services of the trade mark proprietor. Secondly, and significantly, it does not incorporate the checks and balances to which we have referred.[158] In our view the doctrine of initial interest confusion is therefore an unnecessary and potentially misleading gloss on the tests the Court has articulated and we think it should perform no part of the analysis of our national courts in claims of the kind before us. … ”58.Thus, the likelihood of confusion on the part of the average consumer falls to be assessed at the point of an economic transaction involving goods or services in relation to which the accused sign is used. The average consumer 59.In Interflora (cited above) Kitchin LJ drew a parallel between the average consumer of the Unfair Commercial Practices and the same figure found in the EU law of trade marks, specifically, in the context of the facts of Interflora, an internet user:“[124] … in referring to ‘the average’ member of the group at which a practice is specifically aimed, we do not believe the legislature had in mind anything so formalistic as a mathematical average and consider it was instead referring to a hypothetical person within that group who represents an appropriate normative standard. …[126] … we think it makes no difference whether the question is asked and answered from the perspective of the single hypothetical well-informed and reasonably observant internet user or whether the hypothetical person provides the benchmark or threshold for the purposes of identifying the population of internet users whose views are material.”60.Counsel were agreed that there were two categories of relevant consumer. First there were freeholders of buildings who would require the management services of the type provided by the Claimants and UEPM. These individuals could typically be property developers like Elliot Lawless. Secondly there were investors, owners of one or more units within a building who would rent the property to others for business or residential use and who would use the services of a property management company. It was also agreed that the average consumer was not someone who pays rent to occupy a unit from which to run their business or in which they live. Both types of average consumer were professional business persons.61.Where, as here, there is more one type of relevant consumer, the court must consider more than one type of hypothetical average consumer. In London Taxi Corp Ltd v Frazer-Nash Research Ltd [2017] EWCA Civ 1729, Floyd LJ, with whom Kitchin LJ agreed, referred to the judgment of Briggs J in Schütz (UK) Ltd v Delta Containers Ltd [2011] EWHC 1712 (Ch) which was concerned with intermediate bulk containers (“IBCs”) which were purchased by an industrial concern, staffed by individuals described as “fillers”, who would fill the bottles with liquid and supply them to customers, described as “end users”, who would use the IBCs to dispense the liquid. Floyd LJ said this about the Schütz judgment:“[30] It was submitted for the defendant that the relevant class of consumers was the fillers, because the end users’ indifference to the identity of the manufacturer of the IBC ‘hardly qualified them with the attributes of the average consumer’. They were not consumers of the IBC in the relevant sense: they were consumers of the contents and not its packaging. Briggs J first explained that he did not think that the average consumer test required the court to find a notional average consumer with perceptions somewhere between those of the fillers on the one hand and the end users on the other. Rather he said:‘… The test requires the court to identify the relevant perception of consumers within any relevant class who are neither deficient in the requisite characteristics of being well-informed, observant and circumspect, nor top performers in the demonstration of those characteristics. That is in substance what “average” means.’[31] I agree with Briggs J that the notion of an average consumer requires the court to consider any relevant class of consumer, and not to average them. I believe that conclusion to be consistent with the approach taken by this court in Interflora v Marks & Spencer [2015] F.S.R. 10.”62.In the present case I must consider two average consumers, the notional investor and the notional property developer. I understand Floyd LJ to have meant in his paragraph 31 that the likelihood of confusion on the part of either average consumer would satisfy the relevant criterion of s.10(2). As it turned out, attention was focussed on the notional investor. Similarity of mark and sign 63.The Defendants submitted that if there had been no evidence of alleged confusion the allegation of trade mark infringement would have been given short shrift. The Defendants admitted that their sign Urban Evolution had been used in relation to services identical or similar to those in respect of which the Trade Mark is registered, but the only point of similarity between mark and sign is the word Urban which, it was argued, is highly allusive to the services provided by both sides, namely the management of urban buildings. Save for that allusive word, there is no visual, oral or conceptual similarity between the Urban Evolution sign and the Trade Mark.64.I think there is something in that submission, but not to the extent that the possibility of confusion is so preposterous – because the average consumer is bound to dismiss the possibility that “Urban” could serve as a badge of origin – that the evidence of alleged confusion should be summarily rejected. In my view, if the evidence of confusion were sufficiently compelling then it would show that in practice a sign containing “Urban” used for property management can be sufficiently similar to the Trade Mark to lead to a likelihood of confusion and does so in the present case. However, particular care is required to make sure that an operative cause of confusion was such similarity and that confusion occurred in circumstances typical of those in which the average consumer would see the “Urban Evolution” sign.65.The Claimants suggested that the word “Evolution” in the Defendants’ sign would be perceived by average consumer to be descriptive of an evolved type of property management. Mr Tumilty was invited to consider this in the witness box and went along with the idea to a limited extent. I do not believe that Mr Tumilty’s speculations, such as they were, proved anything. There was no other evidence to support the Claimants’ suggestion and I doubt that it is justified.66.Another point made by the Claimants was that the Trade Mark is sometimes used as two words: Urban Bubble. That seems to me to be irrelevant. The Trade Mark is URBANBUBBLE. The comparison to be made is between the Trade Mark as registered and the sign. The relevant likelihood of confusion on the part of the public is that caused by any similarity between the Trade Mark as registered and the sign. The evidence of confusion 67.None of the examples of alleged confusion relied on by the Claimants came from them. They have apparently experienced no instances. The main examples were emails provided by the Defendants, either in correspondence before the action started or annexed to the Defence. I need mention only three. The first two are the instances which counsel for the Claimants described as the best examples of confusion.68.On 4 October 2018 Mr El Paraiso, as managing director of UEPM, sent an email to Cameron Whyte, the owner of a commercial unit in the Artesian building. Mr Whyte fell into the “investor” category of average consumer. Mr El Paraiso explained the services offered by UEPM and said that “Urban Evolution” had been instructed by Elliot to prepare for the handover of management of Mr Whyte’s unit to UEPM for the remainder of the rent assurance period. The email then made a pitch for UEPM to manage the unit after the end of the rent assurance period, due to expire on 6 November 2018. Mr Whyte replied on the same day:“Thank you for your email regarding unit 9 Artesian, which I am the owner of.I have been looking at your terms and fees and realise that I do not need your services.I presume that Urban Evolution is part of Urban Bubble and if so, I have not been overly impressed with them.I am talking to my solicitor regarding the future letting agreement etc, so I will get back to you in due course.”69.Mr El Paraiso responded on 5 October 2018 acknowledging Mr Whyte’s refusal, adding that “Urban Evolution” had “no relationship, of any kind, with Urban Bubble”.70.In argument the Claimants emphasised Mr Whyte’s use of the word “presume”; the Defendants emphasised “if so” in the same sentence. Taking the email as a whole, it does not seem to me that the sentence indicates a fully-formed belief that UEPM is part of the Claimant group of companies, but a view that it seemed likely.71.The second alleged instance of confusion was on the part of another investor, Chris Peirson. Mr Peirson had been sent a management agreement by UEPM and on 23 October 2018 sent Mr El Paraiso a signed copy. Later on the same day Mr El Paraiso sent a parking space agreement and provided information about rent payments. There followed exchanges, all on 23 October 2018. Mr Peirson said:“Thanks so much for the info. Agreement attached seems in order. Are you affiliated to Urban bubble who are doing the present administration? Think this is where the confusion may be coming from.”72.It is not clear from the emails in the trial bundle what confusion Mr Peirson had in mind. Mr El Paraiso replied:“We are an entirely separate company from Urban Bubble. We have no affiliation or ties to the[m] what so ever.”73.Mr Peirson responded:“So Sorry, I thought you were the same company and transitioning the leases and management … no worries and sorry for the confusing mails regarding the rent etc.”74.It seems to me that Mr Peirson’s state of mind was similar to that of Dr Whyte. Despite the words used in his final email, Mr Peirson cannot have gone from wondering whether UEPM was affiliated to the Claimants to a conviction that this was the case between the two emails. Taking the exchanges as a whole I think he was not sure, but thought it likely.75.The other email I need mention was the only other instance of alleged confusion pleaded in the Particulars of Claim. On 19 October 2018 Mr El Paraiso sent an email to Dr Amar Marrar, an investor who owned a flat in the Artesian building and rented it to a tenant. Mr El Paraiso’s email is apparently a continuation of a discussion about rent paid by the tenant, which was now being paid to UEPM. Mr El Paraiso said that UEPM was obliged to send this to the developer, Elliot. Dr Marar replied later on 19 October 2018:“Thanks Scott – are you working with the Urban Bubble or Elliot. Why are you obliged? I am the owner of this Flat and I would like to collect my rent directly from the Tenant.”76.Mr El Paraiso’s response bears no date but I assume it was sent shortly after Dr Marar’s email:“Just one point, for clarity. Although our company name is similar to Urban Bubble and we do work in close proximity, We have no ties, association or any involvement, of any kind, with Urban Bubble. We are an entirely separate entity.”77.It seems that Dr Marar did not assume but thought it possible that UEPM was working with either the Claimants or Elliot.78.Mr El Paraiso gave unchallenged evidence that he had received 25 to 30 phone calls from people wanting confirmation that UEPM had nothing to do with Urbanbubble and was not a scam by Elliot Lawless. These were referred to as instances of confusion but in the end not pressed to be such by the Claimants. The likelihood of confusion 79.Counsel for the Defendants submitted that even if there was relevant confusion on the part of Mr Whyte and Mr Peirson, there was no reason to suppose that it was due to the similarity between the Trade Mark and UEPM’s sign and that had not been established. More likely it was because UEPM were performing the same property management task in place of the Claimants in the same building.80.Both Mr Whyte and Mr Peirson thought it likely that the services from UEPM were coming from the Claimants or an undertaking economically linked to the Claimants, though neither was sure. Both fall into the investor category of average consumer but neither can be taken to be the notional and composite average consumer by reference to whom the likelihood of confusion is to be assessed. They were presented by the Claimants as providing the two best examples of confusion, so they represent the top end of the possibility of a belief in the mind of the average investor consumer of there being an economic link between the Claimants and UEPM.81.Mr Whyte’s alleged confusion did not occur at the point of an economic transaction. He was going to consult a solicitor before that would happen. It is likely that Mr Whyte would have taken further steps to find out whether there was a connection between the Claimants and UEPM before paying for the services.82.Mr Whyte and Mr Peirson are two investors out of many. In my view the foregoing evidence does not establish that there was a risk that the use of the Urban Evolution sign would create a fully formed belief in the mind of the average investor consumer that there was an economic link between UEPM and the Claimants. At most there was a risk that the average consumer would regard it as a likely possibility. That does not seem to me to satisfy the test for the likelihood of confusion set out in Comic Enterprises.83.I would add that if I had concluded that there was a likelihood of confusion, that conclusion would have been qualified. Both the best instances of (here assumed) confusion happened in the context of UEPM contacting Mr Whyte and Mr Peirson to say that UEPM would be carrying out the same role in the same building as had the Claimants. As discussed above, all the circumstances of a defendant’s use of his sign that are likely to operate in the average consumer’s mind must be taken into account. Usually, the relevant circumstances are such as to decrease the likelihood of confusion. In Specsavers, for example, it was relevant that the accused signs were used within straplines with other wording and in the context of posters and other material. In the present instance it is the other way around: the circumstance of UEPM replacing the Claimants for the same role in the same building and acting on the instructions of the same property developer, Elliot, increased the likelihood of confusion. Assuming the similarity between trade mark and sign would have been an operative cause of the confusion, which I think is likely, the confusion would have depended also on that set of circumstances. Without those circumstances, there could probably have been no likelihood of confusion.84.This would have affected the scope of an inquiry as to damages or account of profits and the scope of an injunction, had they been appropriate. Conclusion in respect of s.10(2) 85.The Defendants have not infringed the Trade Mark pursuant to s.10(2)