Use of COMPASS and COMPASS LOGISTICS points to infringement

In Compass Publishing BV v Compass Logistics Ltd, the High Court of England and Wales has upheld the validity of the plaintiff's COMPASS Community trademark and has ruled that the defendant's use of COMPASS and COMPASS LOGISTICS was likely to infringe that mark. The court held that the defendant's earlier rights in its marks were of "mere local significance" in the European Union pursuant to Article 8(4) of the Community Trademark Regulation.

Compass Publishing BV (Publishing), a Dutch business consultancy operating worldwide that owns Community and UK trademark registrations for COMPASS, brought trademark infringement proceedings against Compass Logistics Ltd (Logistics) - a small management consultancy company specializing in the logistics and supply chain fields. Logistics brought a counterclaim, arguing that Publishing's UK and Community registrations were invalid on the grounds that it had earlier rights in the COMPASS mark.

The High Court upheld the trademark infringement claim in relation to the Community trademark registration, ruling that Logistics' use of the marks COMPASS and COMPASS LOGISTICS created a likelihood of confusion with Publishing's COMPASS mark in relation to business consultancy services, including specialist logistics services. However, the court allowed Logistics' counterclaim in part.

The court declared that Publishing's UK registration was invalid to the extent that it covered logistics consultancy services in the United Kingdom. It noted that Logistics had used the name Compass Logistics since May 1995, and it had acquired a valuable and protectable goodwill in that name for specialist consultancy services relating to logistics. Therefore, Logistics had established passing off rights by the date of registration of Publishing's 1996 UK trademark. Logistics was not so successful in its attempt to have Publishing's 1996 Community trademark declared invalid as it had failed to meet the requirements in Article 8(4) of the Community Trademark Regulation.

Article 8(4) provides, among other things, that the owner of a non-registered trademark of "more than mere local significance" can prohibit the registration of a Community trademark where its rights were acquired prior to the date of application. The court decided that the article relates to the validity or otherwise of Community rights and whether the rights are local is to be assessed from a Community perspective. It stated that any mark that is used within a part of the Community but not all of it may still be local use. It went on to conclude that a mark will have "mere local significance" if (i) its geographical spread is restricted to substantially less than the whole of the European Union, and (ii) it is of little significance in the Community market in relation to the goods and/or services in question.

In the case at hand, the court held that the geographical spread of Logistics' marks was restricted to substantially less than the whole of the European Union. At the date Publishing filed for its COMPASS Community trademark registration, Logistics had only built up goodwill and reputation in the logistics consultancy market in the UK among a small number of potential customers. Thus, from the perspective of the Community market in the logistics consultancy field, its presence was "microscopic".

Nick Rose, Field Fisher Waterhouse, London