Case law: Prior local goodwill in a name can invalidate its registration as a trade mark by another business
Businesses in a registered trade marks dispute should consider whether the ability to prove pre-existing goodwill in the proposed marks created by someone else in a particular locality only, could mean the registration is invalid, and constitute a defence to an infringement claim.
This update was published in Legal Alert - January 2018
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The owner of registered trade marks comprising the word mark 'Caspian' and a device mark featuring the word 'Caspian', used those marks in relation to its pizza restaurant in Birmingham. It claimed a business operating in Worcester, which had been using the name 'Caspian Pizza' under an informal franchise agreement, had infringed its marks by continuing to use the name after the agreement had ended.
The Worcester business claimed that:
- The owner's marks were invalid. It argued that they should not have been registered because registration of a mark in the UK is liable to be prevented if a rule of law (particularly, passing off) is available to protect an identical or similar pre-existing, unregistered mark. As the business had established sufficient goodwill in the marks (before the owner applied to register them) to qualify for protection in passing off proceedings, the application should have failed.
- It had a defence to any infringement claim. If it could show it had established goodwill in the marks in an identifiable geographical area, sufficient to qualify for protection in passing off proceedings, this was a defence to the owner's claim. It argued that the identifiable area could be a locality such as Worcester – it was not necessary for the goodwill to have been generated throughout the whole, or even a significant part, of the UK.
The trade mark owner relied on previous case law, arguing that the business needed to prove it had goodwill in the mark either UK-wide, or in a significant part of the UK, and the business had failed to do so.
The Court of Appeal agreed with the business on all counts. It found that the words 'Caspian Pizza' had already been in use by the business at the time the owner of the marks had registered them, and by that time the business had generated sufficient goodwill in the name to enable it to bring a passing off action in the courts against the word mark owner. It ruled that the goodwill generated by the business did not have to be UK-wide, or even in a significant part of the UK. It was enough that it had developed a reputation within the particular locality of Worcester, sufficient to bring a claim against the mark owner for passing off. The Court therefore ruled that the word mark had not been validly registered.
It also found that the word 'Caspian' was an essential feature of the device mark, which meant the validity of both marks should be considered together. Since the word mark Caspian was invalid, so was any device mark of which that word formed an essential feature.
- Businesses registering trade marks, and those alleging such marks are invalid, should consider whether the ability to prove pre-existing goodwill in the proposed marks in a particular locality - falling short of goodwill in the whole UK, or a significant part of it - could mean the registration is invalid, and constitute a defence to an infringement claim
Case ref: Caspian Pizza Limited and others v Maskeen Shah and Malvern Hills Estates Limited  EWCA Civ 1874
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.