Can brand owners rely on both registered trade mark infringement and passing off in order to prevent third parties from registering companies which incorporate their brand?

On 12 May 2011, Mr Whitehouse incorporated a UK company under the name BMW Associates Limited (BAL). BMW wrote to Mr Whitehouse alleging trade mark infringement and passing off.

The background

Mr Whitehouse claimed that “BMW” stood for his name, “Benjamin Michael Whitehouse”.  He said he was a one-man telecom railway company, carrying out telecommunications and signalling works.  He also stated that he did not advertise his company, but used it for invoice purposes only.

BMW took the view that litigation would be disproportionate, and BAL and BMW (but not Mr Whitehouse himself) entered into a co-existence agreement in March 2012.  Under the terms of that agreement, BMW undertook not to pursue its complaint and in return BAL made several undertakings.  These included undertakings not to use the word “BMW” in relation to any goods or services except as part of its company name, and/or as part of its trading name BMW Associates, to be used solely in relation to its railway transport services and/or telecommunication routing and junction services.

In December 2017 Mr Whitehouse incorporated another UK company, giving it the name BMW Telecommunications Limited (BTL).  This was not a breach of the co-existence agreement since Mr Whitehouse was not a party to it.

In July 2018 BMW issued proceedings for trade mark infringement and passing off on the basis that by incorporating BTL, Mr Whitehouse had equipped himself with an instrument of fraud.  In the Court of Appeal case of British Telecommunications Plc v One in a Million [1999], One in Million Limited had applied for various domain names incorporating well-known brands, including Marks & Spencer.  In reaching the decision that the mere registration of a domain name was an act of passing off, it was observed that those who consult the domain register would conclude that One In A Million Limited must be connected or associated with Marks & Spencer Plc.  The One in a Million decision has since been applied in the case of Halifax Plc v Halifax Repossessions concerning the defendant’s registration of a company which included the name Halifax.

The decision

BMW secured summary judgment in respect of its claim for trade mark infringement and passing off arising out of the registration of this UK company under the BMW name. 

In respect of the claim for passing off, the Judge held that the case was fully analogous with One in a Million and that there was no real prospect of the defendants (BTL and Mr Whitehouse) establishing that not even a significant proportion of those consulting the UK Companies Register would believe that there is an association between the first defendant and BMW.  The Judge therefore granted summary judgment in relation to BMW’s passing off claim.

The Judge came to the same view in respect of trade mark infringement, but he did say he would need to be satisfied that the incorporation of the company itself either led to a sufficient likelihood of confusion, or a sufficient likelihood that the requirements of Article 9(2)(b) of the Trade Mark Regulations are met.  Ultimately, the Judge was satisfied that the Court of Appeal’s observation in One in a Million in relation to the likelihood of confusion amongst those who consult the UK Companies Register in the context of passing off would apply equally to the likelihood of confusion within the meaning of Article 9(2)(b) of the Trade Mark Regulations.

Why is this important?

This decision reinforces the position that brand owners can rely on both registered trade mark infringement and passing off in order to prevent third parties from registering companies which incorporate their brand, even though that company does not trade at all or trades under a different name.

It would also appear that the litigation in 2017 could have been avoided had Mr Whitehouse been a party to the original co-existence agreement.   

Any practical tips

To avoid litigation, ensure that directors of companies are signed up to co-existence agreements where they are essentially the controlling mind of the company, and make sure that all the relevant parties have signed up to a co-existence agreement generally.