esure Insurance Ltd v Direct Line Insurance Plc

On an appeal from a trade mark opposition decision, the appellate court must respect the hearing officer’s findings and evaluative judgments. Intervention is justified for a distinct and material error of principle, including taking account of an irrelevant matter, omitting a relevant matter, or reaching a conclusion which no properly directed tribunal could reasonably reach.

Under Article 4(1)(b), similarity is assessed globally by reference to the visual, aural and conceptual impressions of the competing marks, the relevant goods or services, the average consumer and the principle of interdependence. A low threshold of relevant similarity must be crossed before likelihood of confusion is assessed. Association alone is insufficient.

Under section 5(3), a non-hypothetical future risk of unfair advantage or detriment, together with the necessary link between the marks, is sufficient; proof on the balance of probabilities is unnecessary.

esure appealed against a Hearing Officer’s decision refusing registration of its computer mouse on wheels mark for insurance and financial services. Direct Line opposed registration under section 5(2)(b), section 5(3) and section 5(4)(a) of the Trade Marks Act 1994. The passing-off objection was not pursued before the Hearing Officer.

The Hearing Officer accepted that the marks had a recognisable similarity and found indirect confusion in normal use, including use in red. He also found unfair advantage and detriment under section 5(3). He rejected survey evidence because subsequent advertising had rendered it unreliable.

The appeal concerned the proper appellate approach, the effect of the Registrar’s preliminary view, the threshold for similarity, likelihood of confusion, the evidential effect of the surveys, unfair advantage and detriment, colour, and alleged fettering and tarnishment.

1. Disposition. The appeal succeeded under Article 4(1)(b) and section 5(2)(b), because no relevant likelihood of confusion had been proved. It failed under section 5(3), so the Hearing Officer’s ultimate refusal to register the mark stood.
2. Appeal standard. The Hearing Officer’s evaluative decision deserved substantial respect, particularly because it involved extensive evidence and contested oral testimony. Intervention was permissible for a distinct and material error of principle, including taking account of something irrelevant, omitting something relevant, or reaching a conclusion that no properly directed tribunal could reasonably reach ([11]).
3. The Registrar’s preliminary view under rule 13B of the Trade Marks Rules 2000 was reached before evidence and argument and was not an appealable decision. It would have been a serious error of principle to give it weight ([13]-[15]).
4. For Article 4(1)(b), similarity is an autonomous European-law concept requiring a global assessment of visual, aural and conceptual similarity, overall impression, distinctive and dominant components, the relevant services, marketing circumstances and interdependence. The average consumer normally perceives a mark as a whole. A low threshold must be crossed before the tribunal is obliged to assess likelihood of confusion ([20]-[31]).
5. The threshold was crossed here. Nevertheless, the marks’ visual differences and their different conceptual messages—telephone contact and online computer contact—supported the conclusion that consumers would see the parties as rival providers. The evidence did not establish direct or indirect confusion. The Hearing Officer therefore erred in principle in finding confusion after rejecting the survey evidence ([55]-[60]).
6. Under section 5(3), the required standard was a real, non-hypothetical future risk of unfair advantage or detriment, not proof on the balance of probabilities that the consequence would occur. The necessary Additional Link between the marks was established by the similarity, identity of services and evidence of association. Confusion was not required ([64]-[66]).
7. The Hearing Officer was entitled to accept evidence that use of the mouse on wheels would exploit Direct Line’s reputation and blur the distinctive character of its mark. Fettering was not an independent head of damage. Tarnishment required evidence of a non-hypothetical risk; speculation that esure might provide poor services was insufficient ([65]-[68]).
8. No reference to the European Court of Justice was necessary. The refusal of registration remained in force ([71]-[72]).

1. High Court (Chancery Division). Appeal from the Hearing Officer’s decision released on 13 December 2006. The appeal succeeded on section 5(2)(b) but failed on section 5(3), leaving the refusal of registration in place.