Factual and Procedural Background
This opinion concerns a trade mark dispute between two online gaming and casino operators, referred to here as Plaintiff and Defendants. Plaintiff, a Gibraltar-registered company operating under the brand "32Red" since 2002, claimed to have established a distinctive reputation in its brand and customer service. Plaintiff owned registered European Community word and figurative trade marks incorporating "32Red".
In 2005, a domain name "32vegas.com" was registered by Company A, an Antiguan entity, and an online casino operated under the name "32Vegas", which was unrelated to Plaintiff. Initially regulated offshore and prohibited from advertising in the UK, this casino later became part of a joint venture between Defendants and a gaming software provider, Playtech. The domain and associated marks were licensed to two Gibraltar-registered companies within the Defendants' group, collectively referred to as William Hill Online, which operated online gaming services including the 32Vegas casino.
In January 2009, Plaintiff sent a cease and desist letter to William Hill Online alleging infringement of its intellectual property rights, particularly its Community trade marks. William Hill Online denied infringement and challenged the validity of Plaintiff's marks. Litigation ensued with claims for infringement under Community Trade Mark Regulation and the Trade Marks Act 1994. The third Defendant was stayed from proceedings and did not participate in the trial.
Evidence was presented from multiple witnesses for both Plaintiff and Defendants, including executives, regulatory officials, and expert witnesses addressing the online gaming industry, marketing, reputation, and likelihood of confusion. The trial took place in October 2010.
Legal Issues Presented
- Whether William Hill Online's use of the "Vegas signs" infringed Plaintiff's registered Community trade marks under Article 9(1)(b) and (c) of the Community Trade Mark Regulation.
- Whether the Community marks and the UK registered mark "32" were valid, including challenges based on lack of distinctiveness, descriptiveness, and bad faith.
- Whether Plaintiff's UK mark "32" was infringed by William Hill Online.
- Whether there was a likelihood of confusion or association between the Plaintiff's marks and the Defendants' use of the "Vegas signs".
Arguments of the Parties
Plaintiff's Arguments
- Plaintiff argued that its Community marks "32Red" and the figurative logo had acquired a strong reputation and distinctiveness since 2002.
- It contended that the Defendants' use of signs including "32vegas.com", "32vegas", and "32v" were similar and used in identical services, causing a likelihood of confusion and association.
- Plaintiff relied on evidence of actual confusion from customers and online sources to support the claim of infringement.
- It rejected Defendants' claims that the marks lacked distinctiveness or were descriptive, emphasizing the acquired distinctiveness through use.
- Plaintiff maintained that the UK mark "32" was validly registered and infringed, although this claim was less developed.
Defendants' Arguments
- Defendants denied that Plaintiff had a reputation in the marks and denied infringement.
- They contended that the "Vegas signs" were used as part of a portfolio of brands under a "carousel" business model, where individual brand reputation was less important.
- Defendants challenged the validity of the Community marks and the UK mark on grounds including lack of distinctiveness, descriptiveness, and bad faith in registration.
- They argued that the UK mark "32" was not distinctive and that Plaintiff's use of it was insufficient to give rise to infringement or confusion.
- Defendants highlighted the regulatory compliance and quality of their casinos, including 32Vegas, and downplayed the significance of complaints.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Case C-292/00 Davidoff v Gofkid [2003] 1 WLR 1714 |
Article 9(1)(c) of CTMR applies to identical or similar goods/services. |
Confirmed that Article 9(1)(c) covers identical or similar goods, supporting overlapping claims. |
| Case C-251/95 Sabel BV v Puma AG [1997] ECR I-6191 |
Assessment of similarity and likelihood of confusion between marks. |
Guided the court on assessing visual, aural, and conceptual similarity and overall impression. |
| Case C-342/97 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV [1999] ECR I-3819 |
Clarified the "average consumer" test and imperfect recollection. |
Supported the approach to likelihood of confusion through the eyes of an average consumer. |
| Case C-39/97 Canon Kabushiki Kaishi v Metro-Goldwyn-Meyer Inc [1998] ECR I-5507 |
Trade mark protection principles. |
Referenced in setting out the principles of trade mark comparison. |
| Case C-425/98 Marca Mode CV v Adidas AG [2000] ECR I-4861 |
Trade mark law principles. |
Used as part of the jurisprudence on trade mark infringement. |
| Case C-3/03 Matratzen Concord GmbH v OHIM [2004] ECR I-3657 |
Trade mark distinctiveness and descriptiveness. |
Applied in assessing distinctiveness of the marks. |
| La Chemise Lacoste SA v Baker Street Clothing Ltd (O/330/10) |
Summary of trade mark infringement principles. |
Adopted to guide the court's assessment of likelihood of confusion. |
| Reed Executive Plc v Reed Business Information Ltd [2004] RPC 40 |
Interpretation of the "average consumer" test and likelihood of confusion. |
Applied in assessing the factual likelihood of confusion. |
| Case C-363/99 Koninklijke KPN Nederland NV v Benelux Merkenbureau [2006] Ch.1 ("Postkantoor") |
Interpretation of Article 7(1)(c) CTMR on descriptiveness and registrability. |
Guided the court on whether the marks were descriptive or devoid of distinctiveness. |
| Case C-191/01 P OHIM v Wm Wrigley Jr Co (DOUBLEMINT) [2004] RPC 18 |
Trade mark descriptiveness and registrability. |
Supported the principle that a sign must be refused if it designates a characteristic of goods/services. |
| Case C-421/04 Matratzen Concord AG v Hukla Germany SA [2006] E.T.M.R. |
Consideration of consumer perception in distinctiveness. |
Applied in assessing perception of the marks by relevant consumers. |
| Hotel Cipriani SRL v Cipriani (Grosvenor Street) Ltd [2009] EWHC 3032 (Ch) |
Bad faith in trade mark registration under section 3(6) Trade Marks Act 1994. |
Used to assess whether registration of the UK mark was in bad faith. |
| Case C-529/07 Chocoladefabriken Lindt & Sprüngli AG v Franz Hauswirth GmbH [2010] Bus LR 443 |
Clarification of bad faith and trade mark registration principles. |
Guided the court's overall assessment of bad faith. |
| Joined Cases C-53/01 to C-55/01 Linde AG v Deutsches Patent-und Markenamt [2003] R.P.C. 45 |
Definition of distinctive character in trade marks. |
Applied to confirm that the Community marks served as badges of origin. |
| Case C-517/99 Merz & Krell GmbH & Co [2002] E.T.M.R. 231 |
Interpretation of Article 7(1)(d) CTMR on customary usage. |
Applied to reject claim that the marks had become customary in trade language. |
Court's Reasoning and Analysis
The court began by examining the use and reputation of Plaintiff's Community marks, finding them to be inherently distinctive and well-established through continuous use and extensive marketing, including sponsorships and affiliate programs. The marks combined the number "32" with the word or colour "Red", which had a general gambling association and a specific allusion to roulette, albeit not universally recognized.
The Defendants' "Vegas signs" were found to be visually, aurally, and conceptually similar to the Community marks, sharing the dominant element "32" followed by a gambling-associated word or letter, used in identical services. The court applied established trade mark principles, emphasizing the perspective of the average consumer with imperfect recollection, and the overall impression of the marks as wholes.
On infringement under Article 9(1)(b), the court concluded there was a likelihood of confusion and association between the Community marks and the Defendants' signs, reinforced by the similarity and the reputation of Plaintiff's marks. Evidence of actual confusion, including customer communications and witness testimony, supported this conclusion.
The court also addressed infringement under Article 9(1)(c), finding that use of the Vegas signs was detrimental to the distinctive character and reputation of the Community marks, causing a risk of false association with a brand of inferior reputation. It found that changes in economic behaviour, such as customer switching, were likely and supported by evidence.
Regarding validity challenges, the court rejected arguments that the Community marks were descriptive, devoid of distinctiveness, or customary in trade language at the time of registration. It held that the marks had inherent distinctiveness and acquired distinctiveness through use. The UK mark "32" was also held valid, despite initial scepticism, as numbers can be distinctive trade marks.
The court rejected the allegation of bad faith in registration of the UK mark, finding the application was made in good faith for tactical reasons related to the litigation and protection of Plaintiff's position.
On infringement of the UK mark, the court found that Plaintiff had not made significant use of the mark in isolation by the relevant time, and thus the claim for infringement failed due to lack of reputation and likelihood of confusion.
The court critically examined the evidence of witnesses and experts, noting some partisan tendencies but generally accepting the reliability of key factual witnesses. It found the regulatory complaints against Defendants' casinos were significant and had been addressed, while acknowledging the competitive and complex nature of the online gaming market.
Holding and Implications
The court's final decision is as follows:
1. The claims by Plaintiff for infringement of the Community marks under Articles 9(1)(b) and 9(1)(c) of the Community Trade Mark Regulation succeed in respect of all the "Vegas signs" used by Defendants.
2. The challenges by Defendants to the validity of the Community marks fail and are dismissed.
3. The challenges to the validity of the UK mark "32" fail, and it was validly registered.
4. The claim for infringement of the UK mark by Plaintiff fails due to lack of significant use and reputation in the mark alone.
The direct effect of this decision is that Plaintiff is entitled to relief for infringement of its Community marks by Defendants' use of the "Vegas signs". The ruling does not establish new legal precedent but applies existing trade mark law principles to the facts of the online gaming market. It clarifies the importance of reputation and distinctiveness in complex branding environments and highlights the challenges of protecting marks in highly competitive, multi-brand sectors.