Divergent approaches render action unsuitable for summary judgment

United Kingdom
In Daimler AG v Sany Group Co Ltd ([2009] EWHC 1003 (Ch), May 14 2009), the Chancery Division of the High Court of England and Wales has dismissed Daimler AG's application for summary judgment.
 
Daimler owns two figurative trademarks consisting of the well-known three-pointed star device, which are each protected by UK and Community trademark registrations for goods in Classes 7 and 12 of the Nice ClassificationSany Group Co Ltd used a sign broadly consisting of a three-pointed element within a circle. It applied to register this sign in combination with the word 'Sany' as a UK trademark in respect of a number of goods in Classes 7 and 12.

Daimler brought proceedings for trademark infringement and passing off against Sany and applied for summary judgment. Daimler sought to restrain Sany from using its sign, with or without the additional word element 'Sany', relying on:
  • Section 10(2)(b) of the Trademarks Act 1994 (Article 5(1)(b) of the EU Trademarks Directive (2008/95/EC)) – use of a similar mark in relation to identical or similar goods where there is a likelihood of confusion; and
  • Section 10(3) of the act (Article 5(2)) of the directive) – taking unfair advantage of, or being detrimental to, the distinctive character or repute of the protected marks without due cause.
Sany acknowledged that it had sold and intended to sell construction machinery (including self-propelled and truck-mounted construction machines) in the United Kingdom under and by reference to its mark. However, it argued that there was no liability because there was too low a degree of similarity between:
  • its mark and Daimler's marks; and
  • its goods and those for which Daimler's marks could legitimately be retained.
Sany also counterclaimed for part-cancellation of Daimler's marks on the grounds of non-use, seeking to ensure that the goods for which the marks had actually been used were precisely defined in the lists of goods for which the marks were registered. Daimler accepted that there had been no use in relation to some of the goods specified, but argued for the minimum reduction to the scope of the specifications.

The court observed that the degree of precision with which lists of goods must be identified in trademark specifications had yet to be authoritatively defined by the European Court of Justice. In this instance, there was a real issue about the degree of precision with which Daimler's registrations may need to be redefined. The process of revision to the specifications was also affected by the way in which the existing specifications should be interpreted. In this connection, the court noted the different approach taken by the UK Intellectual Property Office (IPO) and the Office for Harmonization in the Internal Market (OHIM) to the classification of goods/services for the purposes of registration at the national and EU levels, respectively.

The practice at OHIM is that the use of class headings constitutes a claim to all goods and services falling within the relevant class, and the use of a general indication constitutes a claim to all of the particular goods/services falling under the general indication. However, a stricter approach is taken by the UK IPO: if a class heading is used as a specification, only the stated goods or services will be covered, and not all the goods or services which fall within the class as a whole.

The court stated that it did not believe that there was room for such divergent approaches to interpretation to coexist within the framework established for the coordinated protection of trademarks at the domestic and EU levels. In the present case, there was a question as to whether the wording from the class headings for Classes 7 and 12 was, and should remain, in the specification of Daimler's marks. 

Daimler sought to simplify matters by applying for summary judgment on the basis that there was a sufficient degree of similarity between the parties' respective marks to justify a finding of infringement in relation to the goods which would remain registered. However, the infringement issues involved an assessment of the likelihood of confusion which, in turn, involved an assessment of the degree of similarity between the goods in question. The evidence relating to the extent to which Daimler had used its marks, and in relation to what goods, was open to question. Therefore, the definition of goods for which Daimler's marks should remain registered could not be determined at this stage. Similarly, there was an open question as to whether the similarities between the marks were outweighed by the differences between them so as to exclude the likelihood of confusion, and the evidence was incomplete in this regard. Accordingly, these were not matters fit for summary determination and the application was dismissed. 

It remains to be seen whether, and if so how, the court proposes to deal, at a full trial of the action in due course, with the divergent national and EU level approaches.

Tamsin Holman, Ashurst, London

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