Tesco fails to register CLUBCARD marks

United Kingdom

The UK Intellectual Property Office (IPO) has issued written grounds on the decision to refuse applications filed by Tesco Stores Limited to register the word mark CLUBCARD and the figurative mark CLUBCARD, depicted below, in relation to certain goods and services in Classes 9, 16, 35 and 36 of the Nice Classification, including credit and encoded cards, mobile software applications, printed matter, organisation of promotional incentive schemes, reward schemes, loyalty programmes and issuing of tokens of value. 

The applications were acceptable for other goods and services in Classes 9, 35, 39 and 41, including educational software applications, advertising and marketing services, travel and booking agency services, entertainment services and arranging of conferences, seminars and competitions (Cases 0-450-13 and 0-451-13, December 16 2013).

Both of the applications filed by Tesco met with objections from the IPO under Section 3(1)(b) of the Trademarks Act 1994 on the basis that the marks were considered devoid of any distinctive character for goods and services relating to a customer loyalty scheme. The examiner also referred to a number of third-party websites showing use of 'club card' (in two words) to support the objection that the marks could not indicate trade origin. Although it was not a relevant issue for the IPO’s decision to refuse the two applications, interestingly, observations were filed with respect to both of the applications by an individual, described as an “entrepreneur”, who submitted to the IPO that the sign 'clubcard' was too generic to be eligible for registration as a trademark; this individual also referred to uses of 'clubcard' on third-party websites. 

Evidence of acquired distinctiveness through use was filed by Tesco and a hearing took place. Although the reported cases do not give information on the evidence in great detail, it was stated that the CLUBCARD marks have been used continuously since 1995, and that “active” users of the Tesco clubcard totalled nearly 16 million in 2010. 

The hearing officer did not dispute that Tesco is “one of the largest providers of a loyalty scheme in the United Kingdom”. However, she did not consider the evidence to be sufficient to overcome the objection raised. Much of the use of CLUBCARD was in combination with the trademark TESCO and the slogan “Every little helps”, and the materials showing use of the CLUBCARD mark (eg, application forms and leaflets) would have been circulated to consumers who were already aware that the origin of the service was Tesco so that 'clubcard' would be seen as a descriptive term rather than an indication of origin. She questioned whether any level of use alone would be sufficient to prove that the average consumer (confirmed as the general public) would consider CLUBCARD to indicate origin. It was relevant that, if registration of CLUBCARD was granted, this would mean third parties would not be able to use the descriptive term with respect to loyalty schemes and other rewards programmes.

In relation to the use of CLUBCARD in combination with the trademark TESCO, although cases have shown that a second mark can retain its independent character when used alongside another distinctive sign (see HAVE A BREAK (C-353/03)), that second sign will not be considered distinctive if it has not been used in a way that indicates to the public that it is a sign of origin. Furthermore, that mark may not be able to identify origin if it is not itself sufficiently distinctive. 

It will be interesting to see whether Tesco appeals in connection with both applications.

Jackie Johnson, D Young & Co LLP, London

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