Factual and Procedural Background
This opinion concerns an appeal against a judgment delivered after a ten-day trial, in which the trial judge found the defendants liable for passing off and for infringing both a community trade mark (CTM) and a national trade mark. The dispute arises in the estate agency sector, involving competing brands "Fine & Country" and "Fine". The claimants operate a licensing business under the "Fine & Country" brand, providing a marketing umbrella for local estate agents targeting the upper residential property market. The defendants, part of a group previously trading under a different name, rebranded to "FINE" in an attempt to establish a premium business and adopted branding visually similar to the claimants'. The trial judge found the defendants' use likely to confuse customers and cause deception, and granted injunctions and other remedies. The defendants appealed with multiple grounds challenging findings on goodwill, confusion, distinctiveness, infringement, and defences.
Legal Issues Presented
- Whether the claimants had goodwill capable of protection in passing off given their licensing business structure.
- Whether the defendants’ use of the sign "FINE" constituted passing off and/or trade mark infringement.
- Whether the registered trade marks were valid, considering descriptiveness and acquired distinctiveness.
- Whether the defendants’ use of the sign was in accordance with honest practices under trade mark law defences.
- The appropriate scope and class of persons to consider in assessing confusion and deception.
- The correctness of the trial judge’s evaluation of evidence on confusion and damage.
- The appropriateness of the remedies granted by the trial judge.
Arguments of the Parties
Appellants' Arguments
- The claimants had no business with goodwill capable of protection, as the companies owning the marks were dormant and the actual estate agency businesses were those of licensees.
- The words "fine" and "country" are descriptive or laudatory, so confusion arising from their use should be tolerated as a matter of public policy.
- The trial judge erred by considering too wide a class of persons and wrongly assessing the average consumer.
- The evidence of confusion and deception was insufficient and improperly weighted.
- No actual or likely damage to goodwill or trade was established.
- The trade marks lacked distinctiveness and should have been revoked.
- The judge misapplied legal tests on similarity, link, unfair advantage, and use without due cause.
- The defendants’ use was honest and in accordance with trade mark law defences, including descriptive use.
Respondents' Arguments
The opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Erven Warnink BV v Townend & Sons (Hull) Ltd [1979] AC 731 |
Elements of passing off: misrepresentation, trade context, prospective customers, injury to goodwill, and damage. |
Used to define the essential characteristics of passing off and to caution against over-extension of the cause of action. |
| Dawnay Day & Co Ltd v Cantor Fitzgerald International [2000] RPC 669 |
Franchisor’s entitlement to sue in passing off for goodwill in the franchised brand. |
Applied to confirm that the claimants’ licensing company had standing to sue for passing off. |
| Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 |
Significance of descriptive words in passing off and risk of tolerated deception. |
Referenced to explain the public policy limits on monopolising descriptive words. |
| Phones4U Ltd v Phones4u.co.uk Internet Ltd [2006] EWCA Civ 244 |
Tolerated deception in passing off and distinction between passing off and trade mark infringement tests. |
Used to support the principle that some confusion is tolerated with descriptive marks. |
| British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 |
Distinctiveness and acquired distinctiveness in trade mark law. |
Guided the court’s analysis on the distinctiveness of the registered marks. |
| Windsurfing Chiemsee Produktions- und Vertriebs GmbH v Boots- und Segelzubehör Walter Huber [2000] Ch 523 |
Interpretation of descriptive signs under EU trade mark law and acquired distinctiveness. |
Applied extensively to assess the marks’ descriptiveness and acquired distinctiveness. |
| Koninklijke KPN Nederland NV v Benelux-Merkenbureau (C-363/99) |
Public interest in keeping descriptive signs free for use by all undertakings. |
Used to reinforce the principle that descriptive elements generally cannot be monopolised. |
| Gerolsteiner Brunnen GmbH & Co v Putsch GmbH (C-100/02) |
Scope of defence under article 12(b) for use of descriptive or geographical indications in accordance with honest practices. |
Applied to reject the trial judge’s narrow view of the defence and to clarify the correct legal test. |
| Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd [2008] EWHC 3032 (Ch) |
Principles for assessing honest practices defence under trade mark law. |
Followed in the assessment of whether the defendants’ use was honest and fair. |
| Smith New Court Securities Ltd v Citibank NA [1997] AC 254 |
Standard of appellate review on findings of fact. |
Applied to emphasize the appellate court’s reluctance to overturn factual findings absent error. |
Court's Reasoning and Analysis
The court began by affirming the trial judge’s findings of fact and the legal framework applicable to passing off and trade mark infringement. It accepted that the claimants’ licensing company generated goodwill in the "Fine & Country" brand, sufficient to maintain a passing off claim, despite the dormancy of some group companies and the licensees’ independent trading.
The court analysed the defendants’ rebranding as a deliberate attempt to emulate the claimants’ successful brand for up-market estate agency services. The defendants’ chosen sign "FINE" closely resembled the claimants’ marks in font, colour, capitalisation, and use of the word "country" in the strap line, creating a real risk of confusion and deception among potential customers.
The court reviewed the evidence of confusion, including witness testimony and correspondence. While some evidence had limitations, the judge was entitled to rely on the more persuasive live witness evidence and his own impressions. The defendants were found to have knowingly taken the risk of confusion, which was likely to cause damage to the claimants’ goodwill.
On trade mark validity, the court applied EU and domestic law principles distinguishing inherent and acquired distinctiveness. It found the marks sufficiently distinctive at registration and through use, supported by factors including market share, geographical spread, advertising investment, and recognition by the relevant public. The descriptiveness of the words "fine" and "country" was acknowledged, but the marks as a whole had acquired distinctiveness.
In assessing infringement, the court accepted the trial judge’s overall impression test, recognizing that although differences existed, the visual similarity and overall impression were likely to cause confusion. The defendants’ use was therefore infringing under the relevant provisions.
The defence under article 12(b) and section 11(2)(b), which allows use of descriptive signs in accordance with honest practices, was rejected. The court held that the defendants’ use was not genuinely descriptive but functioned as a brand, and that the use was unfair and not in accordance with honest practices, given the deliberate imitation and resulting confusion.
On appeal, the court emphasised its limited role in interfering with factual findings and value judgments made by the trial judge. It found no error in principle or misapplication of the law that would justify overturning the judgment.
Holding and Implications
The Court of Appeal UPHELD the trial judge’s decision in all respects.
The defendants were held liable for passing off and for infringement of both the community trade mark and the national trade mark. The injunctions and orders granted below were confirmed, including prohibitions on passing off, infringement, and use of confusingly similar marks, as well as domain name transfer and an inquiry into damages or account of profits.
This decision enforces protection of goodwill in franchised brands and confirms that descriptive or laudatory words may be protected as trade marks only if they have acquired sufficient distinctiveness. It also clarifies that deliberate imitation of trade mark get-up that causes confusion is not tolerated under the honest practices defence. No new legal precedents were established; rather, the appeal court reaffirmed existing principles and the trial judge’s application of them.