A recent decision handed down by the High Court highlights the difficulty of enforcing trademarks registration in respect of 3D shape marks.
The claimant, the London Taxi Company (LTC), was proprietor of trademark registrations (UK and CTM) for the shape of the exterior of three of its models of taxi: the Fairway and the TX1/TX2 taxis. LTC accuses the defendants of trademark infringement with the new model of London taxi called “Metrocab”.
Expectedly the defendant denied this accusation and called the trademarks not worthy to be registered because of the lacking distinctiveness.
The judge assessed who should be regarded as the ‘average consumer’ in this case. LTC submitted that there were two average consumers: 1) taxi drivers; and 2) members of the public who hire taxis. LTC’s case appeared to focus primarily on the second of these two options. However the judge didn’t see people who hire taxis as consumers of taxis but of taxi services.
Validity: inherent distinctiveness
Before assessing trade mark infringement, the judge examined whether the trademarks had been validly registered.
While making his assessment, the judge was mindful that the average consumer is not in a habit of making assumptions about the origin of products on the basis of their shape, in the absence of any graphic or word element.
In the judge’s view, the trademarks would be seen as a variation of the typical shape of a taxi by the average consumer of taxis as simply. Further, even if the shape was regarded as departing significantly from the norms and customs of the sector, it would not have been perceived as identifying the origin of the goods. His conclusion therefore was that the trademarks were devoid of distinctive character whether the ‘average consumer’ would be a consumer of the taxi or taxi services.
Validity: substantial value
Importantly for shape marks, the law says that marks should not be registered if they consist exclusively of a shape which gives substantial value to the goods.
In examining this cause of action, the judge stated that it was key that trademarks are not used to indefinitely extend the time-limited protection of other IP rights. Taking all factors into consideration, including that it was implicit to LTC’s case that the trademarks would be recognised as the ‘iconic’ London taxi, the judge found that the shape of the trademarks did add substantial value to the goods.
Validity: acquired distinctive character
This aspect of the case focused on the proposition that the trademarks had become distinctive to a significant proportion of consumers of taxi services in the UK. However, the judge had already concluded that the relevant average consumer is a taxi driver, not a consumer of taxi services. However, in light of this argument, the judge considered both.
In relation to the average taxi driver, the judge felt that nothing had been done to educate consumers that the shapes of these taxis denoted the source of the taxis, and therefore they could not be said to indicate origin.
In respect of consumers of taxi services, LTC argued it should be seen as having become distinctive of the source of taxis because: 1) it had a de facto monopoly of taxis having a similar appearance in London for decades; 2) the absence of anything other than shape which could indicate trade origin; 3) it had a policy to preserve the distinctive appearance of their taxis through successive models; and 4) the steps it had taken to educate the public.
In the judge’s view, none of these factors justified the inference that consumers of taxi services identified the source of LTC’s taxis from the shape of its taxis. Plus, there is no reason why consumers of taxi services should care about the origin of the taxis driven by taxi drivers. Provided it is a licensed London taxi, and it conforms to preconceptions, the identity of the manufacturer is surely a matter of indifference.
Trade mark infringement
The judge’s view was that LTC’s pleaded case amounted to a concession that there would be no likelihood of confusion on the part of the taxi drivers between the trademarks and the Metrocab. Since he found a low degree of similarity and a low distinctive character between the both, there was no likelihood of confusion.
LTC also argued that Metrocab infringed their trademarks on the basis that the trademarks had a reputation, and that the Metrocab was ‘taking unfair advantage of or was detrimental to the distinctive character or the repute of the trademarks’. The judge noted that the Metrocab was sufficiently similar to the trademarks to remind the average consumer of the trademarks, whilst also appreciating that it differed from them. He found that there was no detriment to the mark’s distinctive character, and the nature of association which the average consumer would make would be simply that all three shapes were a species of the London taxi. Unfair advantage was not established as there was no evidence the defendant intended to exploit the reputation of LTC’s marks.
The judge also commented that the defendants would (although it was not necessary) be able to rely on a defence which prevents a trademark owner from prohibiting a third party from using indications concerning the kind, quality, or other characteristics of goods or services in accordance with honest commercial practices.
The passing off claim also failed because the judge did not agree with LTC that they had acquired sufficient goodwill to establish that the shape of the taxis denoted the source of the taxis. Finally there was no misrepresentation as there was no evidence that the shape of the Metrocab was likely to lead consumers of taxi services to believe that it came from the same source as LTC as opposed to just being a licensed London taxi.
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