High Court holds that Europcar's 'e' logo infringes Enterprise's 'e' device mark

United Kingdom

The High Court has held that Europcar's use of a logo comprising a stylised lower case 'e' on a green background infringed Enterprise's Community trademark (CTM) registration for a lower case 'e' device, registered on a black background (but commonly used against a green background), based on the likelihood of (and actual) confusion between the two. Enterprise was also successful in its related claim for passing off.

In a lengthy 227-paragraph judgment, Arnold J considered the use of survey evidence and its reliability, the effect of the existence of similar logos in the market, important principles for determining likelihood of confusion and Enterprise's claims in relation to reputation, detriment to distinctive character and unfair advantage (Enterprise Holdings Inc v Europcar Group UK ([2015] EWHC 17 (Ch), January 13 2015)).

The business impact and key points of the decision are as follows:

  • Arnold J's decision highlights the importance of the context in which a mark is used. When adopting a new mark (or updating an existing logo), one must bear in mind that the context of use may result in a likelihood of confusion - even for marks with a low degree of similarity.

  • Arnold J dismissed Europcar's criticisms of the surveys undertaken by Enterprise, which were the subject of a separate (costly) decision on admissibility. Arnold J did not comment on the 'real value' of the survey, but concluded that the results were 'confirmatory' of what he would have otherwise concluded.

  • Arnold J noted that, as well as the usual considerations in relation to the likelihood of confusion, in considering the context of this particular case (including the fact that Enterprise made extensive use of green in its branding), the risk that consumers might believe that Europcar was "connected with" Enterprise by use of its new logo had an important bearing on establishing the likelihood of confusion between the two marks. As part of this analysis, the relevant public could include residents of a foreign country - for trademark infringement, as well as passing off.

  • Had he found that there was no likelihood of confusion between the logo and the trademark, Arnold J noted that he would not have found there was any detriment to the distinctive character of the mark. This was on the basis that there was no evidence of a change in economic behaviour of the average consumer, or a serious likelihood of this occurring.

  • Similarly, Arnold J also held that, in the absence of a likelihood of confusion, there would be no unfair advantage. He distinguished this from the Jack Wills v House of Fraser (2014) on the basis that there was less conceptual similarity between the signs in question, Europcar's logo was used with other advertisement or branding, and the undertakings were competitors of similar strength (rather than a "retailer trying to boost sales by adopting a feature of branded goods").

Enterprise and Europcar are both big players in the UK car rental market, collectively representing over 50% of that market in 2012 (Europcar with a 26% share and Enterprise with 31%). Since 1994, Enterprise has used a lower case letter 'e', stylised as a dual carriageway against a green background, on its own, as well as with the word 'Enterprise', in the form set out below:

http://sites.herbertsmithfreehills.vuturevx.com/57/8811/_images/e-logo-1.png 

http://sites.herbertsmithfreehills.vuturevx.com/57/8811/_images/enterprise-logo-1.jpg

Enterprise registered the logo as a CTM in black and white.

In 2012 Europcar adopted a new logo in the form of a lower case 'e', also stylised (although differently) and shown against a green background. The Europcar logo was used on its own, in combination with other words and in combination with the word 'Europcar'.

Enterprise claimed that Europcar's use of its 'e' logo infringed Enterprise's CTM registration under Articles 9(1)(b) and (c) of the Community Trademark Regulation (207/2009), and that its use also amounted to passing off. Arnold J held that Enterprise's claim under Article 9(1)(b) - on the basis of likelihood of confusion -  was successful, as well as its claim for passing off.

Four surveys were undertaken in relation to the case:

  1. a pilot OHIM survey, carried out for the purposes of opposition proceedings between the parties;

  2. a full OHIM survey;

  3. a pilot court survey, carried out for these proceedings; and

  4. a full survey for the court proceedings. Enterprise adduced the survey results as evidence of the distinctive character of its trademark.

Arnold J made the following points in relation to the surveys:

  • As permission to introduce survey evidence was successfully sought in previous proceedings, this case served to show that the result of the procedure prescribed in Interflora I and Interflora II was to put the parties to the cost of a two-day hearing in advance of trial, which did not save any costs at trial and resulted in consideration of the survey's criticisms twice.

  • Arnold J dismissed Europcar's criticism that the surveys were artificial, on the basis that this was often necessarily the case and this did not mean they could not be relied upon. He also dismissed arguments that the surveys were carried out one to two years after the relevant date in issue (the date that Europcar started using the allegedly infringing logo), on the basis that: (i) there was more than one relevant date at issue; and (ii) there was no material change in position or circumstance between the relevant dates and the time the surveys were carried out.

  • The OHIM surveys questioned "Have you ever seen this [picture of the Enterprise trademark] in relation to vehicle rental services?", while the court survey questioned "What can you tell me about what you are looking at?". Arnold J rejected arguments that the former was leading and the latter lacking in context. Although he suggested that the latter argument was the stronger, he found no issue with either question on the basis that - even in the latter survey - a substantial proportion of interviewees mentioned Enterprise.

  • It was reasonable for the sample to comprise only people who had rented cars in the last 10 years or would consider doing so in the future, rather than a broader group.

  • The results demonstrated that a significant proportion of the relevant public recognise and associate the registered trademark with Enterprise; there was no reason to think this did not evidence distinctiveness.

In his conclusion, Arnold J stated the survey was "confirmatory of the conclusion which [he] would in any event be minded to reach". This rather begs the question as to whether the survey added any real weight, especially given its cost, despite Arnold J's clear defence of it.

Europcar attempted to show that there is common use of marks comprising a lower case in the vehicle rental sector in the United Kingdom, by introducing the results of searches for trademarks including a stylised or other device resembling a lower case 'e'. The results returned nearly 4,000 registrations.

However, Arnold J found that Europcar did not consider which of these trademarks were in the relevant Class 39 (which includes "vehicle rental services" and "vehicle leasing services"), or whether any of the trademarks were used by significant competitors of Europcar. In fact, other evidence showed that in almost all cases the owners were not vehicle rental providers or were commercially insignificant.

As a consequence, Arnold J held that the evidence showed neither common use of lower case 'e' trademarks in the vehicle rental sector in the United Kingdom, nor common use of 'e' logos on a green background. Instead, it confirmed that until Europcar adopted its 'e' logo, Enterprise was the only company in the sector which used a lower case 'e' logo on a green background.

In addition to setting out general principles in relation to likelihood of confusion, as approved by Kitchin LJ in Specsavers v Asda (2012), Arnold J highlighted and relied on a number of other principles, including:

  • Canon v MGM (1998): "the risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion";

  • Comic Enterprises v Twentieth Century Fox (2014): "wrong way round confusion", (ie, consumers familiar with the defendant's sign wrongly thinking that the claimant's services were connected with the defendant as a result of seeing the claimant's trademark). Arnold J found examples of wrong way round confusion in this case and accepted that, at the least, this is evidence that the logo and the trademark were sufficiently similar to be mistaken for each other; and

  • The context in which the logo was used must be taken into account, as per O2 v Hutchison 3G (2008). As such, it was relevant that, although the trademark was registered in black and white, in practice it had been used against a green background.

Further, Arnold J considered that Enterprise's trademark had acquired a reputation in the European Union, based on its market share, how intensive, geographically-widespread and longstanding the use of its logo was and the amount invested in promoting the mark (among other things).

Regarding detriment to distinctive character, Enterprise argued that its mark had been diluted, on the basis that the introduction of Europcar's logo lessened the distinctiveness of its own logo and its ability to identify Enterprise's services. However, Arnold J found that, in the alternative event that there was no likelihood of confusion (such that he would be required to reject the claim under Article 9(1)(b)), he could not accept this argument as there was no evidence of a change in economic behaviour of the average consumer, or a serious likelihood of this occurring.

Enterprise also argued that Europcar's use of its logo took unfair advantage of the distinctive character and repute of the registered mark. In doing so, Enterprise relied on Jack Wills. However, Arnold J distinguished this case on the basis that:

  1. there was a lesser degree of conceptual similarity between the marks;

  2. most of the time, the Europcar logo was used with other Europcar branding;

  3. Europcar advertises and promotes its services, unlike House of Fraser in Jack Wills; and

  4. the context was different - in the present case Europcar was a leading competitor in the same market, rather than a "retailer trying to boost sales by adopting a feature of branded goods"; he concluded that, in the absence of a likelihood of confusion, there was no advantage - let alone unfair advantage.

Joel Smith, Victoria Horsey and Simon Reed, Herbert Smith Freehills LLP, London

Get unlimited access to all WTR content