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In One Fell Swoosh: Nike's London headache

Date: 27 September 2018

 

In one fell swoosh, we go from stripes and bounding cats to a recent UK court case (Frank Industries Pty Ltd v Nike Retail BV [2018] EWHC 1893 (Ch)), involving the small Australian company Frank Industries, which owns a UK and EU word mark for LNDR registered for “clothing” including “sportswear”. The marks related to a range of ladies’ premium activewear clothing.

 

In January 2018, the American multinational sportswear company Nike embarked on a new advertising campaign entitled “nothing beats a Londoner” aimed at young London based customers, which used the sign LDNR in conjunction with its well-known “Swoosh” mark and also in conjunction with the words “Nothing beats a”.

 

lndr1_231_01     lndr2_224

 

A fortnight after the launch of the advertising campaign, Frank wrote to Nike, complaining that the LDNR composite signs infringed its LNDR marks. However, Nike carried on using the signs, and launched a YouTube video in the following week, which appeared on television and in cinemas.

 

Understandably teed off, Frank began proceedings against Nike, claiming (i) an injunction restraining Nike from infringing the marks and from passing off and; (ii) an order for delivery up of infringing material. The High Court granted Frank an interim injunction.

 

Eleven days after the hearing, the Court of Appeal had to consider whether the judge was wrong to make the order that accompanied the prohibitory injunction, which required Nike to delete the signs LDNR, LNDR, LDNER and LNDER from its social media accounts, including Twitter, Facebook, Instagram and YouTube.

 

The Court of Appeal concluded that the High Court ruling disregarded the fact that:

 

  • Deleting Instagram posts would cause the whole conversation to disappear, and that it would be impossible to restore the comments of those people who had joined in the conversations.
  • Deleting a post on Twitter (a “Tweet) would lose not only the post itself but all the likes and re-Tweets.
  • Amending a YouTube video was not as simple as the judge had envisaged – it would actually entail its removal and reposting (with a different URL) - and Nike would lose all the comments, shares and likes, which at the time of the appeal hearing had reached the level of millions.

 

The Court of Appeal accepted that Instagram posts did not have to be deleted, but could instead be archived so as to remain in existence but invisible to the public and resurrectable post-trial, should Nike be found not to have infringed the marks. It also accepted that the title of a video on YouTube could be changed without affecting the content or URL address, and that there was a YouTube facility that allowed blurring or pixilation of the signs at issue.

 

However, the Court of Appeal was particularly concerned by Twitter, as it considered deleting existing posts would have irreversible and far-reaching consequences for Nike and it would not be right to deprive Nike of the benefit of continuing conversations between young Londoners. Although it considered that the prohibitory injunction would rightly stop Nike from adding any more posts that featured the offending signs before the trial, it did not want to stop Nike from responding to queries arising out of existing Tweets.

 

Accordingly, the Court of Appeal reversed the High Court ruling that the signs be deleted from Nike’s Twitter feed and ruled that Nike would be able to archive Instagram posts rather than simply deleting them. It also said that the YouTube video didn’t need to be removed provided the offending signs were blurred.

 

In this particular case, the Court of Appeal seemed to be more aware than the High Court of the potential of social media to be a valuable commodity to trade mark holders - as Lord Justice Lewison said, “the dialogue between Londoners, evidenced especially by Twitter, was also an important part of Nike’s ambition to connect with young Londoners” – as well as understanding the potential damage inflicted on the alleged infringer by the consequences of deleting all existing social media postings.

 

After the terms of the order were agreed, the next stop for the dispute was the IP Enterprise Court, where the key question was how the average consumer perceived the signs LNDR and LDNR in context.

 

Many of Frank’s products were prominently branded with LNDR and its range of ladies’ activewear clothing was sold in a number of high-end and exclusive outlets in 20 countries across the EU and the rest of the world, including premium online retailers such as Net-a-Porter and premium stores such as Harrods.

 

On the other hand, Nike said it had been using the abbreviation LDN “for approximately 6 – 8 years”. It was common ground that LDN was a recognised abbreviation for London, as evidenced by use of the brand BBC LDN by BBC LONDON, the top-ten hit song called LDN released by the singer Lily Allen and common use in social media, including in the form of the hashtag #LDN.

 

The use of LDNR by Nike was first proposed in a meeting in May 2016, and mock-ups of the logo which included LDNR with Nike’s Swoosh were created in June 2017. Nike admitted that they had carried out a trade mark search in July 2017 and had found Frank’s LNDR marks. The only clothing supplied by Nike which bore the LDNR composite sign was approximately 130 T-shirts given out to Nike LDNR award winners and brand ambassadors. Somewhat surprisingly, 65 of those T-shirts bore ® symbols next to both LDNR and the Swoosh. One such t-shirt is modelled by Sir Mo Farah, below.

 

lndr3_828

 

Nike claimed that Frank’s LNDR mark was inherently descriptive but were unable to point to any dictionary or other reference (even of an online variety) which defined LNDR as Londoner, and failed to establish that LNDR would have been perceived as meaning Londoner when used in respect of clothing (e.g. on a swing ticket or label or embroidered on the chest of a T-shirt) in the absence of some context suggesting that meaning.

 

The judge found LNDR was inherently distinctive in relation to clothing and rejected Nike’s attacks on the validity of Frank’s marks.

 

The judge then considered whether Nike had infringed the marks and found that:

 

  • LDNR was visually and aurally similar to LNDR;
  • There was a high degree of conceptual similarity because those who perceive LDNR as meaning Londoner would be likely to perceive LNDR as meaning the same thing.

 

But, had Nike used any of the signs in relation to clothing? Frank’s strongest case was use of the LDNR composite sign on the t-shirts mentioned above.

 

The judge found that:

 

  • There was no context to inform a consumer seeing someone wearing a T-shirt of the meaning of LDNR except that, in all probability, the person in question would be in London;
  • Of the people who perceived LDNR to mean Londoner, some would also think it was a brand name, particularly in the case of the T-shirts that bore ® symbols.

 

The judge concluded that Nike had used LDNR “in relation to” clothing. Furthermore, there was evidence of actual confusion on the part of consumers who, having seen Nike’s advertising campaign, hadn’t noticed that Nike were using LDNR rather than LNDR and mistakenly thought that there either was or might be a collaboration or tie-in between Frank and Nike.

 

Bearing all of the above in mind, the judge concluded that there was a likelihood of confusion due to the use of each of the signs at issue. Accordingly, the judge held that Nike had infringed Frank’s trade marks. Frank’s claim for passing off also succeeded. The speed of these proceedings (7 months from the launch of Nike’s advertising campaign to judgment) was due to the interim junction and a swift trial in the IPEC, and shows how fast the court system can just do it when needed.

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