Tread Bentley when expanding your product offering
The High Court held that luxury car manufacturer Bentley Motors infringed BENTLEY clothing firm's trade marks.
The parties were established businesses, both of which had been using "Bentley" trade marks for several decades. This case concerned whether the Defendants' use of a particular mark constituted trade mark infringement of the Claimants' (arguably less well-known) trade marks.
The Claimants were Bentley 1962 Limited and Brandlogic Limited, collectively known as 'Bentley Clothing'. The Second Claimant sells clothing under the BENTLEY brand as the exclusive licensee of the First Claimant, which holds the relevant intellectual property rights. The companies are closely linked, also sharing the same directors.
Bentley Clothing was acquired by the Claimants from a line of predecessors, having begun trading in 1962. Bentley Clothing has three UK registered trade marks for BENTLEY dating back to 1982, including a word mark for BENTLEY and the 'Lozenge' mark – both individually and as a series mark - as depicted below:
By the time the relevant period began in November 2011, registrations for both the BENTLEY Series Mark and the Word Mark had been granted to Bentley Clothing.
The Defendant was Bentley Motors - the famous manufacturer of luxury cars. Since around 1987, Bentley Motors began to market a variety of goods under its name and logos, including clothing and headgear (and allegedly was unaware of Bentley Clothing when the decision was taken to sell clothing and headgear).
In 1998, Bentley Clothing contacted Bentley Motors to advise them of their rights and negotiations followed with little result. The parties had subsequently engaged in litigation over the 'BENTLEY' name in the UK and European Intellectual Property Offices and now in the High Court.
The main questions for the Court were:
1. whether Bentley Motors had infringed any of Bentley Clothing's marks by using the 'Combination Mark' - a combination of a 'B-in-Wings device' and the word Bentley – during the relevant period from November 2011 to November 2017, as seen below:
2. whether Bentley Motors' use of the Combination Mark constituted use of BENTLEY alone.
The Court found that Bentley Motors had infringed both Bentley Clothing's Series and Word marks. In reaching its decision, the Court considered the following key issues in detail:
(1) Issue Estoppel – whether Bentley Motors' Combination Mark was one sign or two?
Bentley Clothing argued that this question had already been decided by the UK Intellectual Property Office. However, the Court decided that the Hearing Officer did not consider whether the average consumer would have perceived the Combination Mark to be one or two and consequently there was no finding which created an issue estoppel. For the purposes of these proceedings it was agreed that the average consumer is "a member of the public who buys clothing and/or head gear."
(2) The Combination Sign – One sign or two?
The Court noted that from the evidence provided, the distinction between one sign and two was of no concern to Bentley Motors up until 2014. In fact swing tags from 2005, terms and conditions dated 2012, and licences granted up until January 2014 suggested that Bentley Motors' own view was that the Combination Mark consisted of two marks used together.
The Court therefore concluded that the average consumer would perceive the Combination Mark to be two distinct marks. As a result, use of the Combination Mark constituted use of BENTLEY alone, amounting to infringement of Bentley Clothing's Word and Series Marks pursuant to section 10(1) of the Trade Mark Act 1994 (the 1994 Act).
(3) Likelihood of Confusion under s.10(2) of the 1994 Act
Bentley Clothing had argued that, if the Combination Mark was considered a single mark, its use would still amount to infringement under s.10(2) of the 1994 Act. Although the Court had decided that s.10(1) infringement had occurred, it nevertheless decided to consider this argument in case it was wrong about s.10(1) infringement.
The Court considered that there was no doubt that the dominant component of the Combination Mark was the word BENTLEY. With that in mind and when applying the principles set out by the Court of Appeal in Maier v ASOS Plc , there was a likelihood of confusion between the Combination Mark and Bentley Clothing's Word and Series marks for BENTLEY.
(4) Transitional Provisions of the 1994 Act
Bentley Motors relied on two defences, the first of which concerned the entitlement of a party to continue acts which were lawful under the Trade Marks Act 1938 but which then ceased to be lawful under the 1994 Act, on the basis that, until October 1994, Bentley Motors was selling jackets, silk ties, caps and scarves. The evidence produced indicated that BENTLEY was not used on the goods themselves at that time but they were advertised in a catalogue under the heading "The Bentley Selection".
In the Court's view, Bentley Motors did have a continuing right to sell garments of the type sold before November 1994 under the banner "The Bentley Selection". However, the question was then whether the transitional provisions provided a wider defence, covering a greater scope of clothing and headwear.
Bentley Motors submitted that they did and that the defence applied even if the manner of use of BENTLEY by Bentley Motors had varied. The court disagreed. It did not believe that Parliament intended the provisions to extend so widely. As a result, whilst Bentley Motors was entitled to continue selling jackets, silk ties, caps and scarves, the right did not extend to other types of clothing or headgear.
(5) Honest Concurrent Use
Bentley Motors' second defence was honest concurrent use. However, the Court found that this defence was not available, as they had engaged in a policy of "grandmother's footsteps" whereby they made a conscious decision to develop the prominence of the BENTLEY sign in incremental stages, to try to avoid provoking Bentley Clothing.
(6) Exclusive licence
Finally, Bentley Motors sought to argue that the Second Claimant was not the exclusive licensee of the First Claimant as the agreement between them was a management or agency agreement and this was briefly considered by the Court. Whilst the agreement was a management agreement, the commercial arrangements between the parties meant that the Second Claimant exclusively carried out all acts in relation to the BENTLEY brand and so was best construed as an exclusive licence.
Whilst it is natural for famous brands to want to expand beyond their established offering into other goods and services and take advantage of the cachet afforded to their name, this decision demonstrates that even well-known, established brands need to tread carefully to avoid falling foul of earlier rights.
In this case, it would have been prudent for Bentley Motors to carry out trademark searches before launching its products and to develop its products in a manner which avoided infringement. Both parties clearly had existing rights and one can't help thinking that early engagement and a well-drafted co-existence agreement could have saved both parties a lot of cost and pain.