Changing down a gear: prestige brand opts for bargain basement court

Bayerische Motoren Werke AG v Coley (trading as BMW Mini Gearbox Centre) is an extempore ruling of Judge Hacon in the Intellectual Property Enterprise Court of England and Wales (IPEC), issued in July 2014.

The ruling follows earlier unreported proceedings in which Bayerische Motoren Werke AG (BMW) succeeded in persuading the court that Coley was infringing its Community and UK trademarks BMW and MINI by using them in his business' domain name and on his website, and in the means which he employed in order to attract consumers to his website, as well as passing his business off as being connected to that of BMW.

Coley had traded under the names BMW Mini Gearbox Centre and Mini One Cooper Gearbox, and also operated a website with the URL 'www.minigearbox.co.uk’. BMW initially obtained default judgment plus an injunction ordering Coley to stop such use, including the use of BMW's Mini wings logo. Coley tried to set aside this decision, arguing that the trading name of his business had in fact been ‘Mini One Cooper Gearbox’ and not ‘BMW Mini Gearbox Centre’ - the name of which BMW had complained. The court then held that that did not make any practical difference, as the actual trading name was just as infringing as the other one and, therefore, equally objectionable. Coley did not dispute the fact that he had used the Mini wings logo and the word ‘Mini’ in various ways, but argued that he was entitled to do so as he had used the relevant signs descriptively.

In the application at issue here, which BMW commenced in preference to seeking an order of committal for contempt of court, BMW sought declarations that the mark's continued use in Coley's trading name Mini One and Cooper Gearbox, the use of MINI and COOPER in five expressions in relation to products on Coley's website, the use of Coley's specific domain name and the use of the expression sales "@minigearbox.co.uk" on that website constituted trademark infringement. In this application, BMW relied on its MINI trademark and the goodwill associated with it for its passing-off claim, and argued that:

• the goodwill it had in the sale of cars and their parts had been used by Coley in his business;
• Coley's use of its domain name was an instrument of fraud;
• an average consumer would believe that Coley's business was part of BMW's or was closely linked to it;
• Coley was taking unfair advantage of the MINI mark (it could be inferred that he had adopted the sign to benefit from its power and prestige without paying any compensation to BMW);
• Coley's use of the mark MINI was detrimental to the mark's distinctive character and reputation as there was a serious likelihood that it would change the economic behaviour of the average consumer; and
• Coley's use of the mark was without due cause.

Although Coley submitted that he had subsequently revised his website, evidence of that had not been provided to BMW and was not before the court either.

Judge Hacon stated that all of the grounds invoked by BMW actually boiled down to a single point: would the average consumer, looking at the website, see the use of the sign MINI and think that the website was either an official BMW website or that of a business that presented itself as somehow linked to BMW?

In reality, held the court, it was not self-evident that the average consumer would be bound to take the view that the website was BMW's official website or a website that was otherwise licensed or approved of by BMW. The decision in the earlier trial might have been coloured by uses of BMW's trademarks other than those complained of here, and the use of signs complained of always had to be seen in context.

Here, there was a genuine risk that the website ‘www.minigearbox.co.uk’ would be perceived as either an official BMW website or as having been licensed or authorised: the fact that the website was accessed through its specific domain name might colour the view of the average consumer. It was unfortunate that ‘Mini One Cooper Gearbox’ was plainly situated above the statement "Welcome to Independent Gearbox Centre" in smaller print: if that had been the other way around, so that the trading name was clearly ‘Independent Gearbox Centre’ and it had stated below it that the website offered reconditioned gearboxes suitable for Mini One and Cooper cars, no doubt the use of the sign MINI would have fallen on the right side of the law. Unfortunately, Coley had not done that: his use of MINI fell on the wrong side of trademark and passing off law in relation to all of the uses of which BMW now complained - including use in his domain name.

In practical terms, Judge Hacon noted that it would take very little effort for Coley to adjust the use of the sign MINI so as to make it clear that his business offered reconditioned gearboxes for Mini One and Cooper cars; if that were done, BMW could not object. He also recommended that Coley show BMW the revised website, which might lead to an agreement with BMW under which it could use the sign MINI without any further objection.

Apart from the fact that it is cheaper to litigate in the IPEC than other courts in the jurisdiction, in this case the court also offered practical suggestions to the losing defendant as to how he might avoid further legal trouble and reach a modus vivendi with BMW - a company that has not been timid about litigating to protect its rights.

However, one may wonder why BMW did not go straight for the jugular and seek a fine or imprisonment for contempt of court, a step that might deter both Coley and others from treading on its trademarks and which might thereby boost consumer confidence that businesses bandying around the BMW marks and insignia do indeed have some connection with the manufacturer.

Jeremy Phillips, IP consultant to Olswang LLP, London