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Spare parts and intellectual property: the distinction between "informative use" and "misleading use"

01 August 2017. Published by Georgia Davis, Of Counsel and David Cran, Head of IP & Tech

The Court of Appeal has allowed an appeal against a decision of the Intellectual Property Enterprise Court ("IPEC") that a repair company had not infringed certain BMW trade marks

Background

The claimant, Bayerische Motoren Werke Aktiengesellschaft (more commonly known as BMW) is a German luxury vehicle, motorcycle and engine manufacturing company and is one of the best-selling luxury car makers in the world. It is the registered proprietor of numerous trade marks, including the following EU trade marks:

  • The text "BMW" in respect of maintenance and repair of cars, motors, engines and parts, cleaning of automobiles; and installation services (the "BMW mark"); and

  • A figurative mark incorporating the text "BMW" and registered for the same services.

The first defendant – Technosport London Ltd ("Technosport") – was an independent BMW and MINI specialist garage which provided servicing and maintenance and was, in its own words, "a high quality alternative to BMW franchised dealer garages for over 15 years". It had no formal connection to BMW other than as a purchaser of BMW manufactured spare parts. The second defendant was Technosport's sole director.

The defendants used the Logo and the BMW mark: (i) on their website; (ii) on business cards; (iii) on a facia board on the exterior of its former business premises; and (iv) on the interior of its new business premises.

The defendants also used the BMW mark alongside the defendants' trading name "TECHNOSPORT" in respect of several trading channels, namely: (i) on shirts worn by the mechanics; (ii) on a van owned by the defendants; and (iii) on their Twitter account, which had the user name "@TechnosportBMW".  The van also displayed the Logo underneath the words "Technosport – BMW".

The claimant sued the defendants in the IPEC, alleging trade mark infringement. At first instance, the IPEC found that each of the first four uses infringed the claimant's trade marks. However, in respect of the three uses alongside the "TECHNOSPORT" name, the IPEC held that such use did not amount to trade mark infringement.

The claimant appealed in respect of the three uses of the BMW mark alongside the "TECHNOSPORT" name, arguing that defendants' uses resulted in a likelihood of confusion or, in the alternative, such uses took unfair advantage of the BMW mark.  

The decision

It was common ground that the issues before the Court of Appeal fell to be decided under Article 9(1)(b) of the EU Trade Mark Regulation (207/2009/EC) because the TECHNOSPORT BMW signs were not identical to the BMW mark. It was therefore necessary for BMW to show that, because of the similarity between those signs and the BMW Mark, there existed a likelihood of confusion on the part of the public.

The Court of Appeal agreed with the claimant and found that there was a likelihood of confusion in respect of the defendants' use of the BMW mark. The IPEC was found to have made an error of principle in rejecting the claimant's case on the basis that it should have presented further evidence to establish that the juxtaposition of the BMW mark with the dealer's name would suggest that the defendants were authorised. Nor should the claimant be expected to provide evidence from actual consumers as the judge had suggested.

For ordinary consumer products, the court was not normally assisted by individual consumer evidence (as per Marks & Spencer v Interflora [2012] EWCA Civ 1501). Instead the court should make its own assessment, taking into account all relevant circumstances. The IPEC had erred by focusing on the absence of certain types of evidence.

Instead, with reference to remarks made in an earlier CJEU decision (Case C-63/97 Bayerische Motorenwerke AG and another v Deenik [1999] ETMR 339), the Court of Appeal explained that the question was whether the use of "TECHNOSPORT BMW" by the defendants gave the impression that their business "provides a service which repairs BMWs or uses genuine BMW spare parts" – an informative use – or instead suggested that "my repairing service is commercially connected with BMW" – a misleading use.

The Court of Appeal found that, when considering each of the three uses by the defendants, in the context in which they occurred, each use of the "Technosport BMW" sign exceeded informative use and gave rise to a risk that they would be understood as the misleading use. Further, even in the absence of the Logo from the van (a point on which the parties specifically disagreed), the Court of Appeal held that there was nothing to suggest that the sign "TECHNOSPORT – BMW" was being used informatively.

As a result, there was no need to decide the issue of unfair advantage as the claimant had only advanced a case on Article 9(1)(c) if it was wrong on Article 9(1)(b).

Comment

The original judgment of the IP Enterprise Court demonstrates the difficulty that judges sometimes have – even after the Interflora decision - in deciding whether the court is able to make its own mind up on the likelihood of confusion or whether consumer or expert evidence is required in order to allow it to assess the position.

The distinction between "informative use" and "misleading use" adopted by the Court of Appeal in this case may provide useful guidance for likelihood of confusion cases concerning the provision of services in future.