Och! Initial interest confusion sufficient to establish infringement

In Och-Ziff Management Europe Limited v Och Capital LLP ([2010] EWHC 2599 (Ch), October 20 2010), the High Court has found that 'initial interest confusion' was sufficient to establish infringement under the Community Trademark Regulation (207/2009).

Initial interest confusion is a concept imported from US trademark law: infringement can be found in circumstances where consumers may be confused initially as to the source of goods or services, but not at the time of making the purchase. An example would be where an advertiser uses an online advertisement that suggests a connection between the advertiser and brand X, but when the internet user clicks through to the advertiser's website, it is apparent that the site is not connected with brand X. In this case, there would be no confusion at the time of purchase and, within the European Union, it has generally been understood that a likelihood of confusion under Article 9(1)(b) of the regulation requires a likelihood of confusion at the time of purchase. This has proved frustrating to trademark owners trying to prevent others from using misleading signs to attract customers seeking the trademark owners' goods or services.

Claimant Och-Ziff Management Europe Limited is a well-known hedge fund and the proprietor of Community registrations for the marks OCH and OCH-ZIFF for "financial services". The claimant objected to the use of 'Och' by defendant Och Capital LLP, arguing that:

The court first considered the meaning of "in the course of trade", noting the interpretation of the Court of Justice of the European Communities (ECJ) as "in the context of commercial activity with a view to economic advantage, and not as a private matter". The defendant argued that, as the sign OCH had been used solely in internal emails, it was a "private matter". Referring to the recent keywords decision in Google France SARL v Louis Vuitton Malletier SA (Joined Cases C-236/08 to C-238/08) (although the court noted that the ECJ's guidance was "not entirely easy to follow"), the court held that the "internal use [of a trademark] is not 'use' of [a] trademark at all". Consequently, the defendant's use of OCH in internal emails could not be infringing.

The court then considered whether OCH and OCH CAPITAL were identical under Article 9(1)(a). Article 9(1)(a) applies where the marks and the goods/services are identical, in which case the claimant is not required to show a likelihood of confusion. The court acknowledged that the word 'capital' was entirely descriptive for financial services, but the term was not so insignificant that it would "go unnoticed by the average consumer". The court thus held that OCH CAPITAL was not identical to the OCH mark for the purposes of Article 9(1)(a).

In contrast, Article 9(1)(b) applies where the marks are similar and requires that the claimant demonstrate a likelihood of confusion. With regard to Article 9(1)(b), the court held that initial interest confusion was sufficient for there to be infringement. The defendant's sign, which was found to have generated only initial interest confusion, were nonetheless found to infringe the claimant's registrations for OCH under Article 9(1)(b).

For the purposes of its assessment of 9(1)(c) (taking unfair advantage of, or being detrimental to, the distinctive character or reputation of a mark), the court made a theoretical assumption that it had not already found that there was a likelihood of confusion. The claimant, however, did not succeed in its claim under Article 9(1)(c), as it was the mark OCH-ZIFF that had reputation, rather than the 'Och' element covered by the claimant's CTM.

The claimant's passing off claim was also successful:

The court also dismissed a counterclaim by the defendant that the claimant's CTM for OCH was invalid, as it had been filed in bad faith. The defendant argued that the claimant had sought to monopolise a term that encompassed not only its intended use of 'Och', but also pronunciation of the initials OCH. The court found, quite rightly, that the claimant had a legitimate interest in seeking to register the mark OCH, regardless of the potential dual significance of this mark.

In its defence, the defendant argued that Mr Ochocki, who had established Och Capital, had used his own name in accordance with honest practices under Article 12(a). The court found that, regardless of whether OCH constituted Ochocki's name, the defendant's use had not been in accordance with honest practices as:

The defendant had thus been given an opportunity to reconsider its options, but had decided to press ahead with its use of OCH.

This judgment is good news for trademark owners, as many instances of alleged infringement occur when unscrupulous advertisers seek to attract customers who are seeking the trademark owner's goods, but where the identity of the advertiser is clear at the time the goods are purchased. It is also worth noting that the court referred to the "complexity and uncertainty of current European trademark law" in this respect.