Mattel's lack of action held to be 'destructive' of its case against Zynga

On November 1 2013 the Honourable Mr Justice Peter Smith handed down his judgment in the case of JW Spear & Sons Ltd v Zynga Inc ([2013] EWHC 3348 (Ch)), finding that Zynga Inc had not infringed Mattel's SCRABBLE trademarks. 

JW Spear & Sons owns the rights to produce and market the board game Scrabble outside North America and is owned by US toy manufacturing company Mattel (together 'Mattel'). Zynga is a developer of social games for mobile platforms, including Farmville, Zynga Poker and Words With Friends.

This dispute related to Zynga's mobile app game Scramble With Friends, which is similar to Boggle and involves players finding as many words as possible in a jumbled 4x4 grid of letters by connecting adjacent letters within two minutes. 

Mattel alleged that the words 'Scramble With Friends' and the 'Scramble With Friends' logo infringed the following trademarks:

• SCRABBLE (CTM No 401737) in Classes 9, 28 and 41;
• SCRABBLE and device (CTM No 401489) in Classes 9, 28 and 41;
• UK trademark registration No 2154349 for a three-dimensional 'tile' mark in Classes 9, 28 and 41; and
• SCRAMBLE (CTM No 6223077) in Classes 9, 28 and 41.

Mattel also alleged passing off, although there was no passing-off allegation in relation to the 'get up' of the game, only in relation to the words, the use of tiles and the 'Scramble' icon. However, a summary judgment of November 28 2012 found that the tile registration was invalid as it was not a "sign" in line with Article 2 of the Trademarks Directive (2008/95/EC). An appeal by Mattel was dismissed by the Court of Appeal in October ([2013] EWCA Civ 1175).

Zynga counterclaimed for a declaration that the SCRAMBLE trademark was invalid on the grounds of lack of distinctive character, descriptiveness, common usage, bad faith and revocation for genericism (it has also applied to the OHIM for a declaration of invalidity). Proceedings are also ongoing between the parties in France and Germany. 

Zynga has been producing electronic games since 2007 with its first version of the disputed game launched as Scramble around late 2007. Scramble With Friends is the fifth edition of the game and was launched in January 2012. The 'Scramble With Friends' logo consists of rectangular tiles containing letters and numbers, similar to Scrabble tiles. Further, the 'M' in 'Scramble' is stylised and, on a quick glance, looks similar to a letter 'B' on its side. Mattel first produced an electronic version of Scrabble around late 2009.  

Mattel had been aware of the earlier versions of Scramble but had not made any complaints, nor was it asserted in the proceedings that any of the earlier games infringed or passed off Mattel's trademarks. In his witness evidence, Mattel's vice president of global marketing stated that, although he was "furious" upon finding out about the Scramble With Friends app in 2012, earlier versions of the Scramble app "did not register with the management". Another Mattel witness commented that, in relation to earlier forms of Scramble With Friends, she "did not see the need or it did not call out to me to be similar enough to Scrabble to warrant a conversation with the legal department".

Significantly, Mattel had pitched to Zynga for a licence to make physical versions of its games in January 2012. This included making a physical version of Scramble With Friends, the game which Mattel would later allege was in breach of their rights. It was only when Hasbro (rights holder for Scrabble in North America) won the licence that Mattel initiated infringement proceedings. In his evidence, Mattel's vice president of global marketing accepted that it was highly unlikely that proceedings would have been brought had they won the licence and that, in reality, Mattel was only interested in producing board games rather than apps. 

However, in internal emails, Zynga had acknowledged that there was a possibility that Scramble may be confused with Scrabble.  

In Smith J's view, the lack of activity in relation to the previous four versions of the game was destructive of Mattel's case. He found that Mattel internally well knew of Zynga's use of the word 'Scramble' for many years but had decided to do nothing about it. No explanation was given for this, but the conclusion drawn was that Mattel did not perceive use of the word 'Scramble' as an infringement of its rights. This view was supported by Mattel's lack of action prior to the proceedings in relation to a large number of other apps containing 'Scramble'. Indeed, Mattel had brought proceedings against other games such as Scrabulous, which suggested that in not bringing proceedings earlier, Mattel had been unconcerned about the use of the word 'Scramble'. 

It followed that, prior to 2012, Mattel did not perceive there to be any confusion by anyone who used the word 'Scramble', and that the only reason it pursued Zynga was because of the failure to secure the board games licence. Further, Smith J found that, whilst people in Zynga thought they may benefit by using 'Scramble' but were sailing close to the wind, they did not intend to deceive in a way which was actionable. 

Regarding infringement of the SCRABBLE marks, in his view Smith J had no clear evidence to assist him in determining whether there was a likelihood of confusion, either on the basis of a substantial proportion of the relevant public potentially being deceived (passing off) or whether there was a potential for deception of the average consumer who is deemed to be reasonably well informed and reasonably observant and circumspect (trademark infringement). In particular, he stated that the survey evidence provided by Mattel held no evidential weight whatsoever, nor did the large amounts of documentary evidence provided by Mattel. However, his view was that Mattel did not believe that there was any realistic prospect of confusion between the words 'Scramble' and 'Scrabble'. Therefore, he concluded that, although the 'Scramble' element of the logo looked similar to 'Scrabble' at first glance, the word 'Scramble' on its own, or with 'With Friends', did not infringe the SCRABBLE trademarks as it was not similar or likely to cause confusion.

In relation to infringement of the SCRAMBLE mark, there was no doubt that the use of 'Scramble' prima facie infringed Mattel's rights. However, in the view of Smith J, the word 'Scramble' is an ordinary word, descriptive of the game and which had become a common name for such games. Accordingly, the SCRAMBLE CTM was held to be invalid on the grounds of Article 7(1)(c) and (d). For this reason, there was no infringement. 

There are two main lessons to be taken from this case. Firstly, infringement action should be taken as soon as a trademark owner is aware of a potentially infringing mark, as adverse inferences may be drawn from a lack of action when assessing the likelihood of confusion. Secondly, this case once again highlights that, unless survey evidence is likely to be of real value and that likely value justifies the cost, it will not be given any evidential weight by the court. 

Leighton Cassidy, Field Fisher Waterhouse, London