Burges Salmon LLP - UK
The parties to the proceedings were Affinity Leasing Limited and Total Motion Limited. Both companies operate in the vehicle brokerage and leasing industry.
The context surrounding the appeal was unusual as proceedings were initially brought by Leasing, which opposed an application by Total Motion to register the mark TOTAL MOTION AFFINITY SCHEME in the United Kingdom. The opposition was based on one of Leasing’s earlier UK marks for AFFINITY, registered in 2016. The hearing officer held that Leasing was not entitled to object to the registration of Total Motion’s mark on the basis that the marks were not sufficiently similar to cause confusion. There was no appeal in this regard.
However, as part of its defence to Leasing’s opposition, Total Motion challenged the validity of the earlier AFFINITY mark by arguing that the mark did not comply with Sections 3(1)(b) (distinctiveness), 3(1)(c) (descriptiveness) and 3(1)(d) (customary in trade) of the UK Trademarks Act 1994. Total Motion’s challenge was upheld in accordance with Sections 3(1)(d) and 3(1)(b), although no assessment was given with regard to Section 3(1)(c).
Leasing was therefore not only unsuccessful in its opposition against Total Motion’s mark, but also lost its AFFINITY trademark registration, which had been used as the basis for the opposition. Leasing suffered a further blow as Total Motion subsequently applied to invalidate its other UK trademark registration for AFFINITY LEASING. Total Motion succeeded in this action on equivalent grounds.
Leasing appealed the invalidity decisions in an attempt to restore the registration of its trademarks.
Section 3(1)(d) and the customary requirement
The main focus of the appeal was on Section 3(1)(d) and whether the hearing officer was right to hold that the marks AFFINITY and AFFINITY LEASING had become customary in the current language or in the bona fide and established practices of the trade to designate the registered goods or services.
The appointed person’s decision provided three takeaway points in respect of the evidential threshold required for an action to succeed on this ground:
- The mark as a whole, and not just one element of it, must be assessed and must have become customary in relation to the goods or services.
- It is not sufficient that the average consumer understands the term in a descriptive sense; it must have become customary.
- The threshold for successfully invalidating a mark is fairly high. The evidence provided must specifically demonstrate that the mark is customary.
The above approach was favourable for Leasing. The appointed person found that the evidence provided was too broad as it referred to the term ‘affinity’ generally and not specifically relating to the services for which the mark was registered. Further, where the evidence was more specific, it only depicted the term ‘affinity scheme’ to mean a group saving scheme offered in relation to car leasing and purchasing. Therefore, the appointed person held that Total Motion’s evidence “came close” to hitting the target but it did not show that the term ‘affinity’ had become customary “across the board”.
The hearing officer’s decision was deemed to be incorrect in relation to this ground. However, unfortunately for Leasing, this was not the end of the matter.
Section 3(1)(b) is not a catch-all provision and Section 3(1)(c) should also be considered
The first-instance decision was atypical in that the hearing officer had decided the case on Sections 3(1)(d) and 3(1)(b) and had declined to consider the Section 3(1)(c) claim. The appointed person’s decision set out guidance highlighting that each of the sub-Section 3(1) claims should have been analysed, since: “The case law, especially from EU tribunals, emphasizes that these are each distinct heads of objection requiring separate analysis – one cannot just go to section 3(1)(b) and use it as a catch-all for marks that have questionable distinctiveness .”
The appointed person indicated that in cases such as this, where descriptiveness is a primary issue, Section 3(1)(c) should in fact be considered first. If the mark is registerable on the grounds that it is not descriptive, it will be more difficult to prove that despite this it does not qualify for registration under Section 3(1)(b).
The parties agreed that the appointed person could consider and decide the Section 3(1)(c) issue rather than remitting this back to the registrar, which they did in Total Motion’s favour. After considering the factual evidence and the factual findings of the hearing officer, the appointed person confirmed that the term ‘affinity’ displayed the necessary characteristics of descriptiveness in respect of Section 3(1)(c).
Overall, the appointed person commented that the hearing officer’s approach – namely, jumping to an analysis of distinctiveness without first considering descriptiveness – was “sub-optimal in a case where the real issue is descriptiveness”. Despite this, the hearing officer’s application of the relevant principles had been consistent with the approach adopted in the appeal with regard to the analysis of the mark’s descriptiveness and it was right for the marks to be invalidated. The appointed person therefore dismissed the appeal.
The decision provides a number of helpful pointers for right holders and practitioners when considering opposition and invalidation actions:
- It is of paramount importance that rights holders consider the vulnerability of their earlier rights before opposing third-party marks; otherwise, they may find themselves open to counter attack and may ultimately risk losing their earlier rights.
- Arguments and evidence presented under Section 3(1)(d) must show with clarity and precision how the mark as a whole has become customary to designate the relevant goods or services; a finding on this ground will not be made lightly.
- When considering actions under Section 3, sufficient regard should be given to all alleged grounds of invalidity, particularly descriptiveness if this is pertinent to the case. It is not sufficient to rely solely on the broad remit of distinctiveness under Section 3(1)(b).