Intellectual Property Enterprise Court

Claim No: IP-2022-000086 - [2024] EWHC 1430 (IPEC)

Fecha: 19-Jun-2024

Acquired distinctiveness

Acquired distinctiveness

121.

The Claimant submits that even if the Court is not with it on inherent distinctiveness, the Marks are not so descriptive that they are incapable of acquiring distinctiveness through use, and it submits that all of the Marks have acquired a distinctive character through substantial promotion and use by the Claimant.

122.

Mr Howe asks me to assess the evidence of use and acquired distinctiveness in the context of these marks being presented to the market as a linked ‘family’ of marks with BUILDER at the core, reinforcing the message that BUILDER is being used as an indication of trade origin. However, I have found that BUILDER is descriptive and non-distinctive, and I accept the Defendants’ submission that a family of marks cannot be established for the purposes of supporting the existence of a likelihood of confusion, when the common component, ‘Builder’ in this case, is itself a non-distinctive, descriptive word. As the Court of First Instance in Miguel Torres v OHIM, cited at [234] of W3 Ltd v easyGroup and set out in my summary of the law, made clear at paragraph 80, “According to that case law [BAINBRIDGE and Il Ponte Finanziaria], there can be said to be a series or a ‘family’ of marks when either those earlier marks reproduce in full the same distinctive element with the addition of a graphic or word element differentiating them from one another, or where they are characterised by repetition of the same prefix or suffix taken from an original mark…” (my emphasis). BUILDER is neither a prefix nor suffix but is the entirety of the Builder Word Mark or the Builder Home Mark, so in order to found a family of trade marks, it must be a “distinctive element” to which a differentiating graphic or word element is added. The reason for this is found from a full reading of paragraph 80, which finishes: “…When there is ‘family’ or a series’ of trade marks, the likelihood of confusion results more specifically from the possibility that the consumer may be mistaken as to the provenance or origin of goods or services covered by the trade mark applied for and considers erroneously that that trade mark is part of that family or series of marks (Il Ponte Finanziaria, paragraph 63).” If the common component is not distinctive itself, by definition (per Arnold J in Kit Kat I at [40]) it cannot be effective to identify the origin of the goods or services to which it is applied, and the purpose of establishing the family of marks simply falls away.

123.

The Claimant seeks to rely on the UK sales figures and UK advertising spend figures that Ms Gupta adopts in her witness statement, but I have found those cannot assist me because of the discrepancies that I have identified. Accordingly I have no evidence of sales at all under or by reference to the Marks, I am unable to calculate the market share held by goods bearing the Marks, and I have very little reliable evidence of the scale of investment by the Claimant in promoting the Marks. I do have some evidence of marketing spend, as I am satisfied with the figures that Ms Gupta has given me for the Rugby League sponsorship and the Platinum Jubilee campaign.

124.

The Claimant submits that sums spent on marketing as a proportion of the overall market is an irrelevant criterion in establishing acquired distinctiveness, which I accept, as Arnold J at [43] of Kit Kat I makes clear it is the investment in marketing that matters, not how that investment compares to the size of the market. However the market share held by goods bearing a trade mark is relevant evidence to the Court’s assessment of whether that mark has acquired distinctive character.

125.

Even if I was able to accept Ms Gupta’s sales figures, which I have found that I cannot, she only gives those in respect of BUILDER CLOUD and BUILDER STUDIO. As the Defendants submit, and I accept: the Claimant does not assert a trade mark for BUILDER STUDIO which is different to BUILDER STUDIO PRO; those figures provide no evidence at all of sales under or by reference to BUILDER or BUILDER.AI, whether as a word mark or in stylised form; and the lack of documentary evidence relating to those figures means the Court cannot assess what marks or signs those sales were made under. I have also found that on Ms Gupta’s sales figures, the UK sales achieved is an insignificant amount in the context of the overall UK market for no-code app development software. The Defendants submit that this is insufficient to demonstrate that BUILDER CLOUD has acquired a distinctive character through use, but of course if I did have reliable evidence of market share, which I do not, that is only one of the factors which would go into the assessment of acquired distinctiveness (per Arnold J at [43] of Kit Kat I).

126.

Mr Lomas produced in advance of trial annexed to his skeleton argument a document entitled “Annex 3 – analysis of evidence”, which describes the documentary evidence of use contained in Ms Gupta’s first exhibit to her witness statement, against each of the Marks, which Mr Howe also referred to, and augmented, in closing. I have considered their submissions in relation to this, which were detailed.

127.

The first thing to be said is that this document highlights how much of the documentary evidence relied on by the Claimant relates to use after the relevant date for acquired distinctiveness. In closing, Mr Howe accepted that I should only look at those that are dated up to 2 February 2023.

128.

Secondly, it highlights that the Claimant has put forward no evidence of use of the Builder Studio Pro Mark, the Builder Now Mark or the Builder Cloud Mark.

129.

Thirdly, it highlights that a number of social media and website posts of the Claimant relate to events which have taken place out of the UK, without any metrics to enable an assessment of whether they were seen within the UK, or any evidence that they were targeted at the UK. Accordingly they are of little assistance to me when seeking to assess how intensive, geographically widespread and longstanding the use of the remaining Marks has been in the UK.

130.

In relation to the press coverage spreadsheet disclosed by the Claimant, the Defendants submit that the ‘reach’ and AVE figures it contains are unrealistically high. Mr Howe for the Claimant submits that these may be surprising, but are conventionally used in the advertising industry and amount to evidence of how the Marks were presented, which I accept. He submits there is always the problem in assessing the impact of advertising, of knowing what has actually been seen and read, by how many people, and where. I will come back to that.

131.

Mr Howe submits for the Claimant:

there is evidence of substantial use of the Builder Word Mark in the UK up to the relevant date in LinkedIn posts and in posts on C’s website. I do not agree. A significant number of uses relied on appear to have taken place abroad or relate to events abroad without relevant metrics showing they were seen in the UK or targeted at the UK. Some of the uses are not of Builder solus (for example where it is incorporated into a different logo on a gilet worn by somebody in a photograph of a marketing event). I have found that the quantitative data relied on by the Claimant relating to Google searches does not support Ms Gupta’s written evidence that UK consumers use the word “Builder” to search for the Claimant using search engines;

ii)

there are two examples in the bundle of the Builder Home Mark being used solus up to the relevant date. I accept there are, in a blog post and a LinkedIn post, each from 2019. The LinkedIn post has 61 reposts and 2 comments and there are no metrics for the blog post. However, there is no evidence whether any of those who interacted with these were in the UK, or whether they were targeted at the UK;

iii)

there is evidence of substantial use of the Builder.ai Figurative Mark. The majority of the uses relied on as set out in Annex 3 post-date the relevant date for assessment of acquired distinctiveness and so I do not take them into account. I accept that there is evidence of prominent use of the mark on the Claimant’s conference stands at two events in the UK before the relevant date, although I have no details about the footfall of those events. Some posts on the Claimant’s LinkedIn page refer to events abroad, and I repeat the same point is made about those in relation to use in the UK. Mr Howe provided me with references for a further four blog posts on the Claimant’s website, but the use of the Builder.ai Figurative Mark that I could see on those posts is mainly just that which sits on the frame of the website. There are one or two additional uses. However I have no metrics about those posts and no evidence about whether they were targeted to UK users. The evidence of the most significant use of the Builder.ai Figurative Mark, in my judgment, is that made in the perimeter advertising in the Rugby League sponsorship, and in the Platinum Jubilee campaign. I accept the evidence that the latter caused c.6,600 engagements with the Claimant (albeit I have no information about whether those emanated from the UK and the quality of those engagements) but I have no information about the effect of the Rugby League sponsorship or details of viewing figures, etc, as mentioned previously;

iv)

the use of the Builder.ai Figurative Mark is also use of the Builder.ai Word Mark and the Builder Home Mark and contributes to the acquired distinctiveness of those marks. I accept that submission;

there is evidence of substantial use of the Builder.ai Word Mark in the 2022 press coverage and in the URL of the Claimant’s website. On the latter point, the Claimant has provided me with no metrics at all, for example about the number of unique visitors from the UK per year, page impressions from the UK, etc. This is very surprising and seems to me to be a wasted opportunity by the Claimant to provide the Court with some evidence that could have assisted it on the subject of acquired distinctiveness. On the former point, I accept that in 2022, there were 35 pieces of UK media coverage, of which 11 were articles in the UK national press, in which the Builder.ai Word Mark was used.

vi)

a clickthrough rate over 40% on ads from UK Google searches of “Builder.ai” (bearing in mind some searchers will click on the non-sponsored link) tends to suggest that they found what they were looking for. I accept this shows that there are thousands of people in the UK who have, since 2019, absorbed Builder.ai as being the identifier of the Claimant’s website, searched it and gone to it. I have looked at that data carefully. Although I do not accept the Defendants’ submission that a search on ‘Builder.ai’ would lead to a near 100% clickthrough rate as I agree many searchers will click the non-sponsored link, I have found that the data provides only very limited support to the contention that ‘Builder.ai’ has strengthened as a brand in the UK from 2019 to early 2023. Once the data is cut off at the relevant date of 2 February 2023 (as it extends to May 2023), that support is likely reduced slightly further;

vii)

The Court should draw an inference from the fact that D2 was bidding on keywords ‘builder.ai’ and ‘builder ai’ in India that the Claimant’s repute had spread not only in the UK where they were mainly based, but also into India sufficiently that their keywords were attractive enough to bid on. I decline to do so. I have heard evidence about other trade mark -related proceedings between the parties in India resulting from the Claimant bidding on Appy Pie keywords there, and the poor relationship between them which has resulted. Mr Girdhar’s evidence was that D2 bid on those key words really as a ‘tit for tat’. I have no reason to disbelieve him. It is not relevant in my assessment of acquired distinctiveness, in my judgment

132.

Turning to my overall assessment of the relevant evidence, then, and looking at the categories of evidence set out at [43] of Kit Kat 1 so far as they are relevant:

I have no reliable evidence of the UK sales or market share held by goods or services bearing any of the Marks. I do have some evidence about the very sizeable UK market for no-code app development tools from Gartner, however, as previously described.

ii)

I have very little reliable evidence of the amount invested by the Claimant in promoting any of the Marks, save that I am satisfied I can rely on the figures provided in respect of the Platinum Jubilee campaign and Rugby League campaign featuring the Builder.ai Figurative Mark in 2022. Those come to around £165,000.

iii)

I have limited evidence about how intensive and geographically widespread the use of any of the Marks has been in the UK because the Claimant has put forward so little evidence of metrics relating to the use relied on.

iv)

I have some evidence of how long-standing the use of the Marks is, inasmuch as the Claimant only started trading in the UK in 2019.

I have very little evidence about the proportion of the relevant class of persons who, because of any of the Marks, identify the goods and services as coming from the Claimant, save that I have some evidence that between 2019 and the relevant date around 3800 Google searches on ‘builder.ai’ have been carried out per year in the UK. That figure has likely risen somewhat in the first two months of 2023. However because that figure has otherwise remained static since 2019, the first year that the Claimant was trading in the UK, it does not provide any significant support for the acquired distinctiveness of the Builder.ai Figurative Mark or the Builder.ai Word Mark, in my judgment.

vi)

Of the awards I have been informed about, the only one which I am satisfied on the evidence before me relates to the UK within the relevant period is ‘Scale Up of the Year’ at the 2022 Europas Hottest Tech Start Up Awards for UK and Europe. I have not been provided with any evidence by the Claimant about how that was promoted or what effect, if any, it had on sales or engagement with consumers.

133.

My conclusion, after stepping back and taking all relevant matters into account, is that I find that none of the Marks have acquired distinctiveness. The evidence is simply lacking. The effect of my findings is that I find that all of the Marks are invalid for lack of distinctive character pursuant to s.3(1)(c) to the extent pursued by the Defendants, i.e. as set out in the emphasised specifications above. The Builder House Mark and Builder Word Mark are also invalid to the same extent pursuant to s.3(1)(d).

134.

With regards to the balance of the specifications, I accept the Defendants submissions, and find that the Marks are prima facie not incapable of acting as an indication of origin for the goods and services described therein, but do so as ordinary English words with, in the case of the stylised Marks, weak and unmemorable stylisation.