High Court confirms that 'own name' defence is available in respect of trading name

In Stichting BDO v BDO Unibank Inc ([2013] EWHC 418 (Ch), March 4 2013), the High Court has held that BDO Unibank Inc and others (the defendants) were not liable for the infringement of the Community trademark (CTM) BDO (No 2,419,778), registered in the name of Stichting BDO in respect of a wide range of goods and services in Classes 9, 16, 35, 36, 41 and 42 of the Nice Classification, and held on behalf of the other claimants (collectively the claimants). 

The claimants are part of an international network of accountancy, financial and professional services firms, all trading under the trademark BDO and the following logo:

BDO Unibank is a leading bank in the Philippines. It trades and advertises its services under the word mark BDO and the following logo:

Whilst it does not operate directly in the United Kingdom, it has tie-up arrangements with the other defendants, whereby these offer a remittance service called ‘BDO Remit’ to individuals owning bank accounts held by BDO Unibank, enabling overseas workers (in this case, Filipinos) to transfer part of their earnings to their dependants back home. 

The claimants objected to the following:

• BDO Unibank’s use of the mark BDO in a series of advertisements relating to services identical to those protected by the CTM BDO (eg, "trust services" in Class 36), contrary to Article 9(1)(a) of the Community Trademark Regulation (207/2009) (ie, double identity); and
• The other defendants’ use of ‘BDO Remit’ in relation to remittance services, pursuant to Articles 9(1)(b) and 9(1)(c) of the regulation. This was because, respectively:

1. there existed a likelihood of confusion on the part of the relevant public by virtue of the other defendants’ use of a sign similar to the CTM BDO in relation to similar services; and
2. the other defendants’ use of ‘BDO Remit’ was detrimental to the distinctive character of (or ‘diluted’) the CTM, which had a reputation in the European Union in respect of accountancy, audit and tax. 

The defendants counterclaimed for a declaration that the CTM BDO was partially invalid (counterclaim later abandoned) and, alternatively, that it should be partially revoked. Further, BDO Unibank relied on the ‘own name’ defence pursuant to Article 12(a) of the regulation. 

Arnold J held that:

• only three of BDO Unibank’s advertisements were prima facie trademark infringement, but BDO Unibank could benefit from the ‘own name’ defence;  
• both claims in respect of the use of ‘BDO Remit’ failed;
• the counterclaim for partial revocation succeeded in part; and
• the counterclaim for partial invalidity had been correctly abandoned.

The following points are of particular interest to practitioners:

• Dates for assessing the infringement claims - Arnold J was asked to identify the date(s) for the assessment of ‘likelihood of confusion’ in relation to different types of use of ‘BDO’ by the defendants. He concluded that ‘likelihood of confusion’ is to be judged "at the date the sign in question began to be used in the particular manner and context complained of". This is because the assessment is influenced by the different context in which the allegedly infringing sign is used (see O2 Holdings v Hutchinson (Case C-533/06)).
  
  Further, Arnold J was asked to consider the effect of the successful counterclaim for a declaration of partial revocation on the dates for the assessment of continuing infringement claims. The judge held that, insofar as any of the infringing acts continue after the date of revocation, the court should re-assess the claim(s) taking the partial revocation into account.



• Use of the sign within the European Union - with regard to the ‘double identity’ claim, Arnold J considered what factors to look for to determine whether BDO Unibank’s print advertisements constituted use of the sign BDO within the European Union. He reviewed decisions of the Court of Justice of the European Union dealing with offers for sale and online advertisements targeted at consumers within the EU (L’Oréal v eBay (Case C-324/09) and Pammer and Alpenhof (Joined Cases C-585/05 and C-144/09) and concluded that he needed to:

1. look at ‘the objective effect’ of the advertiser’s conduct viewed from the perspective of the average consumer. Paraphrasing what Kitchin J stated in Dearlove v Combs ([2007] EWHC 375 (Ch)) in relation to online advertising and the UK public, the question is whether the average consumers in the European Union would regard the advertisement as being aimed and directed at them; and
2. consider the same indicators in L’Oréal minus those relating specifically to the online environment, including: the nature of the publications (eg, language and readership), the circulation figures, the nature of the services advertised, mentions of the advertiser’s location and, more generally, all expressions of the advertiser’s intention to ‘solicit the custom’ of customers within the European Union.

• ‘Own name’ defence - in assessing the ‘own name’ defence raised by BDO Unibank, Arnold J confirmed that this was available in respect of the trading name (eg, BDO), as well as the corporate name, of a company, applying the Court of Appeal’s decision in Hotel Cipriani ([2010] EWCA Civ 110). Further, to determine whether BDO Unibank’s use of its own name was ‘in accordance with honest practices’, he considered the list of factors identified by him in his earlier decision in Samuel Smith v Lee ([2011] EWHC 1879 (Ch)). This analysis is very fact specific and it is difficult to draw conclusions of general application, other than the court is likely to consider (1) whether a defendant knew of the earlier trademark and (2) what due diligence it carried out prior to its use of the infringing sign, which brings home the vital importance of trademark clearance investigations.

Cam Gatta, Redd Solicitors LLP, London