Wheels come off insurance company's trademark application

A hearing officer at the Trademarks Registry has allowed insurance provider Direct Line Insurance PLC's (DL) opposition against its competitor esure Insurance Ltd's application to register an image of a computer mouse with eyes and wheels as a trademark for insurance services in Class 36 of the Nice Classification. DL opposed the application based on its earlier marks consisting of a telephone on wheels (including two marks registered in the colour red) registered for identical services.

The hearing officer first examined the question of confusion under Section 5(2) of the Trademarks Act 1994. He noted that the unusual juxtaposition of wheels attached to (albeit plainly different) electronic communication devices in both parties' marks gave rise to a recognizable similarity between them. At the date of the application, the inherent distinctiveness of DL's mark had been enhanced through extensive exposure and education of the public to the point where the mark had acquired a huge reputation in the financial services market and was extremely distinctive, even in black and white. When seen in its customary red livery the mark was even more distinctive of the services of DL.

The identity of services and the highly distinctive character of the earlier mark combined to reduce the degree of similarity required for there to be a likelihood of confusion between the respective marks. The detailed differences (including, in particular, the fact that both marks were based on well-known and easily recognized desktop communication devices which consumers were able to tell apart) meant that there was no likelihood of direct confusion. However, the modest degree of visual similarity between the marks (the wheels and vehicular appearance) was enhanced by the degree of conceptual similarity. The visual and conceptual similarities between the dominant and distinctive features of the marks would have greater impact on the average consumer than the detailed visual differences.

Further, in the absence of a proposal for esure's mark to be registered in any particular colour, the hearing officer accepted DL's submission that he should consider that esure's normal and fair use of the mark could encompass all colours, including red. Based on this, the hearing officer reasoned that, at the date of the application, the use of the mark applied for in the colour red would have been likely to cause indirect confusion with DL's earlier mark. Therefore the objection under Section 5(2)(b) must succeed.

Turning next to the issue of dilution under Section 5(3), the hearing officer stressed that a mark which calls to mind and attaches itself in the public's recollection to a famous mark used by another insurer is liable to benefit commercially from the fame of that mark. It amounts, in effect, to hitching a ride on the coat tails of the famous mark by using the link with that mark in order to stimulate lasting recognition for itself. The fact that esure's mark represented a more modern interpretation of the communication device on wheels did not mean that the initial linkage with DL's mark ceased to benefit esure.

The evidence showed that one of esure's television advertisements (using the mouse on wheels) had been intended 'to make a dig' at DL. The success of the dig depended on consumers bringing to mind DL's mark in a way that afforded esure a commercial advantage. This advantage was subsequently reinforced by esure's investing in its mark. The hearing officer concluded that the link created to DL's mark was parasitic in nature, and thus unfair.

The hearing officer also upheld DL's argument that esure's mark would dilute or blur the distinctive character of DL's mark based on the strength of its earlier mark and the similarity between it and esure's later mark. However, he felt that there was no evidence to support DL's contention that its mark was liable to be tarnished, dismissing its argument that it would lose the means to control its own reputation due to the link that the public would make between the parties' respective marks.

The hearing officer also rejected DL's claim that esure's mark fettered its opportunities to further exploit the commercial value of its mark. He stated that this was not an independent head of damage, since it would fall foul of the principle that a trademark registration protects only existing rights.

Accordingly, despite dismissing some of DL's dilution claims, the hearing officer accepted its opposition on the basis of Sections 5(2) and (3) of the Trademarks Act.

Tamsin Holman, Ashurst, London