Date: 21 May 2018
Although shapes are theoretically capable of registration as a trade mark, actually registering and enforcing shapes as trade marks can be a bumpy ride where such marks consist of the shape of the product itself, even when those shapes are recognised by the public as iconic designs.
The London Taxi Corporation Ltd (LTC) manufactures the majority of the black cabs that are bought or rented by licensed cab drivers. In 2013, LTC acquired intellectual property rights relating to various models of black London cab, including a 3D Community trade mark that depicts the Fairway (introduced in 1989), registered in respect of “motor vehicles, accessories for motor vehicles; parts and fittings for the aforesaid” in Class 12 (“the CTM”; shown below left). LTC is also the registered proprietor of a 3D UK trade mark which depicts the TX1 (manufactured and sold between 1997 and 2002, and followed by later day versions culminating in the present day TX4), registered for “cars; cars, all being taxis” in Class 12 (“the UKTM”; shown below right).
The first defendant, Frazer-Nash Research Limited (“FNR”), carries out research and testing of new solutions for transportation. The second defendant, Ecotive Limited (“Ecotive”), manufactures and sells motor vehicles. Some years ago, the defendants began to develop the “Metrocab”. The first version of the Metrocab was launched in 1986, and the design then evolved through various iterations to arrive at the new Metrocab (shown below).
LTC claimed that the similar design of the Metrocab would confuse drivers and consumers, and alleged trade mark infringement and passing off.
At first instance, Judge Arnold concluded that LTC’s UKTM and CTM were devoid of distinctive character, and invalid. He also concluded that LTC’s CTM should be revoked for lack of genuine use. Even if LTC’s marks had been valid, Arnold J found that they were not infringed by the new Metrocab, and that the defendant’s marketing was in accordance with honest practices. He also dismissed a claim founded on the common law tort of passing off.
No less than 26 grounds of appeal were considered but, as Lord Justice Floyd agreed that the judge had been right to find that LTC’s marks were invalid for lack of distinctive character, the Court of Appeal's conclusions on the additional points were obiter. The following issues debated in this appeal are of particular interest:
The Court of Appeal agreed that the High Court had been correct to find that LTC’s UKTM and CTM were devoid of distinctive character.
The identity of the average consumer
Who was the end user of a taxi: was it the person driving the taxi or could it also include the person who rode in the back? Although it was common ground that taxi drivers and others who purchased taxis were to be treated as consumers of taxis, FNR and Ecotive submitted that taxi passengers, who merely hired and rode in taxis, were not.
The Court of Appeal found that the term “average consumer” included any class of consumer to whom the guarantee of origin was directed and who would be likely to rely on it, for example in making a decision to buy or use the goods. Against that background, it did not matter whether a user was someone who took complete possession of the goods, or someone who merely hired the goods under the overall control of a third party. The guarantee of origin which the mark provided was directed not only at purchasers of taxis but also at members of the public, such as hirers of taxis. The hirer is a person to whom the origin function of the vehicle trade mark might matter at the stage when he or she hired the taxi. The hirer was also a user of taxi services, so that any dissatisfaction with the taxi or its performance was likely to be taken up with the taxi driver or his company. Although the court did not have to reach a concluded view on this issue, the fact that it lent towards including people who use but do not buy the product as the relevant consumer is a welcome development for brand owners of certain goods.
The Court of Appeal found that, when considering whether a mark in the shape of a product departed significantly from the norm or customs of the sector, the test comprised the following three questions:
Applying this three stage test in the present case, the sector was not limited to London licensed taxi cabs; it included private hire taxis, which could be any model of saloon car within reason, and not just models in production at the date of the application, but also those on the road and those which the average consumer could be expected to have seen.
When compared with the basic design features of the car sector (including, amongst other things, a superstructure carried on four wheels, a bonnet, headlamps, sidelights and parking lights and front grille), the court concluded that the marks at issue were no more than a variant on the standard design features of a car. The High Court judge had therefore been right to hold that the marks did not have inherent distinctive character.
With regard to acquired distinctive character, the Court of Appeal considered the appropriate test for acquired distinctiveness, namely it was not enough for a trade mark owner to show that a significant proportion of the relevant class of persons recognise and associate the mark with its goods. Instead, it must be shown that they perceive goods labelled with the mark as originating from a particular business and no other.
Although LTC had made an attempt to educate the public as to the trade mark significance of the shape – for example, by including adverts on the folding seats in the taxi to identify the manufacturer – the Court noted that members of the public were not used to the shape of a product being used as an indicator of origin. Also, even if taxi passengers were included as a class of average consumer (as well as the taxi drivers themselves), their focus would be on the provider of the taxi services (the driver) more than on the manufacturer of the vehicle. The High Court judge had been right to find that there was insufficient evidence from which it could be deduced that relevant consumers would perceive the shape of LTC’s taxis as denoting vehicles associated with LTC and no other manufacturer.
In the present case, the consumer’s perception was key; mere association was not enough to get LTC safely home. In contrast to design rights, three dimensional shape marks have the potential to last indefinitely and, therefore, it is perhaps not surprising that the threshold of distinctiveness is set at a high level by the UKIPO and EUIPO, as well as the courts, in order to lessen the possibility of inappropriate monopolisation of shape marks. Accordingly, it is important when applying for a shape mark to highlight the distinctive elements of the shape; for example, by filing photographs rather than technical drawings in some cases.