Supreme Court trade mark decision clarifies post-sale confusion approach

Emily Swithenbank, intellectual property expert at Pinsent Masons, was commenting after the Supreme Court handed down its judgment in the case of Iconix Luxembourg Holdings SARL v Dream Pairs Europe (43 pages/473 KB), clarifying the legal approach to assessing trade mark similarity and consumer confusion.

The case centred on a dispute between Iconix, the owner of the iconic Umbro sportswear brand, and Dream Pairs Europe Inc, a footwear company that sold products in the UK bearing a logo known as the ‘DP sign’. Iconix alleged that the DP sign infringed its registered Umbro trade marks, specifically its well-known ‘double diamond’ logo used on football boots in the UK since 1987. Iconix claimed the DP logo infringed trade mark rules and issued proceedings under section 10(2) and s10(3) of the Trade Marks Act 1994 (TMA). 

The High Court initially dismissed Iconix’s claim, finding that the DP sign bore only a “very faint” resemblance to the Umbro trade marks and that there was no likelihood of consumer confusion. However, the Court of Appeal reversed that decision, ruling that the High Court’s assessment was irrational and that the logos were moderately similar when considered in a “post-sale” context – that is, when a consumer sees the product being worn by someone else. This meant that there was a likelihood of consumer confusion.

In a unanimous decision, the Supreme Court has now reinstated the High Court’s original ruling, concluding that the trial judge’s finding was not irrational and that the Court of Appeal had overstepped its role by substituting its own evaluation of similarity and confusion.

The issues before the Supreme Court were how similarity of a trade mark and allegedly infringing sign should be assessed, and the nature of post-sale confusion in trade mark infringement proceedings. The Supreme Court held that in assessing similarity between a mark and sign, and the degree of that similarity, “realistic and representative post-sale circumstances” can be taken into account. This means that a court is not confined to considering the intrinsic features of the mark and sign on a side-by-side analysis, leaving out of account any realistic and representative viewing angles in the post-sale environment. 

Gill Dennis, brand protection expert at Pinsent Masons, said: “The need to consider realistic and representative post-sale circumstances could introduce significant complexity into the assessment of whether a sign is similar to the trade mark it is alleged to infringe. Exactly which circumstances need to be taken into account will be entirely fact dependent and could be numerous in any given case resulting in increased uncertainty on the question of similarity and, therefore, whether there is infringement in fact. Conducting clearance searches prior to launching a new brand could become more difficult too as a side by side comparison between the proposed new brand and any existing marks will no longer suffice when assessing risk around similarity. A more contextual assessment of similarity will need to made, taking into account how any existing marks and the new brand are or will be used. However, this information may not be readily available to a trade mark applicant, and it will require a certain amount of guesswork and future gazing.”

The Supreme Court rejected Dream Pairs’ argument that post-sale confusion should not amount to actionable infringement under s10(2) of the TMA, unless the confusion affects the essential function of the mark as a guarantee of origin at the point of a subsequent sale.

Dennis said, “The Supreme Court has confirmed the status of post-sale confusion as a free-standing basis for infringement by confirming that this type of confusion does not require a post-sale confused consumer to themselves make a confused purchase. To hold otherwise would have begged the question of the relevance of post-sale confusion at all if point of sale confusion would always be required.”

Jeremy Harris, intellectual property expert at Pinsent Masons, said: “This case reinforces the importance of the similarity assessment when deciding whether to bring infringement proceedings in respect of logo marks - there needs to be more than a mere passing resemblance in order to succeed in a claim. The case also highlights that post-sale circumstances will be a really powerful tool for brand owners going forward and may, in the right circumstances, provide sufficient evidence of confusion, or a likelihood of it occurring, to support a 10(2) infringement claim.”

However, the Supreme Court did overall allow Dream Pairs’ appeal holding that the High Court judge applied the correct test in assessing similarity and confusion. It held that the High Court judge did correctly consider post-sale circumstances and was nonetheless justified in concluding that the similarity between the Umbro double diamond mark and DP sign was “very faint indeed” and that there was, therefore, no likelihood of confusion. 

This “highlights the difficulties inherent in successfully appealing a multi-factorial assessment such as that made by the High Court judge in this case”, said Dennis. 

Swithenbank said: “Despite the disappointing result for Iconix, the guidance on the relevance of post-sale confusion will be helpful for brand owners. Post-sale confusion has been confirmed as a tool for the benefit of trade mark owners only - to have a second bite of the cherry to establish infringement where a side-by-side comparison does not quite get over the threshold. Defendants on the other hand cannot rely upon the real-world appearance of the goods to counter a likelihood of confusion on paper.”

The Supreme Court decision that there is no need to show that confused consumers have seen the infringing product in use and consequently made a purchase is "significant and must be correct", said Swithenbank. "This reduces the evidential burden for brands resulting in a greater likelihood of post-sale confusion arguments being advanced. As the Supreme Court itself recognised, use of a brand does, of course, extend beyond the initial sale as post-sale it continues to hold an advertising function and consequently this element of the ruling is compelling."