Digipos Store Solutions Group Ltd v Digi International Inc

On an appeal from a Registrar’s assessment under section 5(2)(b) of the Trade Marks Act 1994, the court must undertake a global assessment of the likelihood of confusion. That assessment must take account of a common element’s lesser capacity to distinguish where it is alleged to be descriptive or weak, as well as any enhanced distinctiveness. Weakness is relevant but not conclusive. The marks must still be compared as wholes, having regard to the average consumer, the goods or services and all relevant circumstances. Appellate intervention is justified only for a distinct and material error of principle or where the decision is plainly wrong. The Hearing Officer had considered the relevant factors, and the appeal was dismissed despite the judge’s doubts about the ultimate assessment.

Digipos Store Solutions Group Limited appealed against the decision of the Registrar’s Hearing Officer dated 14 May 2007. The Hearing Officer had upheld Digi International Inc’s opposition to registration of DigiPos and related marks under section 5(2)(b) of the Trade Marks Act 1994.

The appeal challenged the assessment of the distinctiveness of the earlier DIGI marks, the treatment of the DIGI- prefix, the comparison of the goods and services, the level of consumer attention, evidence of third-party use and co-existence, reliance on the trade mark prosecution file, and the weight given to parallel trading without confusion. The central issue was whether the Hearing Officer had made an error of principle or was plainly wrong.

1. Appellate approach. The court applied the cautious appellate approach stated in Reef Trade Mark [2003] RPC 5 and BUD Trade Mark [2003] RPC 25. A different view of a nuanced, multifactorial assessment is insufficient. Intervention requires a distinct and material error of principle or a plainly wrong conclusion. The principle was reinforced by Biogen v Medeva [1997] RPC 1.
2. Weak distinctive character. In a global assessment under section 5(2)(b), the tribunal must consider whether the earlier mark, or an element common to the marks, has a lesser capacity to distinguish because it is descriptive or otherwise weak. It must consider both the earlier mark and the mark applied for, since an element may be distinctive in one context but descriptive in another. This followed the reasoning derived from Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc. Case C-39/97, [1998] ECR I-5507, [1999] RPC 117, Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV Case C-342/97, [1999] ECR I-3819, and Reed Executive plc v Reed Business Information Ltd [2004] EWCA Civ 159, [2004] RPC 40.
3. Effect of weakness. Lesser distinctiveness is relevant to the global assessment because consumers are more likely to regard a descriptive common element as indicating the nature of goods or services rather than their trade origin. It is not a separate formulaic reduction of protection and is not conclusive. A weak earlier mark may still support a likelihood of confusion. The court explained L’Oreal SA v OHIM Case C-235/05P and the appeal in T.I.M.E. Art Uluslararasi Saat Ticareti ve Dis Ticaret AS v OHIM Case C-171/06P, [2007] ETMR 38, in that way.
4. Application to DIGI. The evidence gave substantial support to the view that DIGI-, used as a prefix in composite marks for digital or computer-related goods or services, was likely to be understood as meaning digital and had a limited capacity to distinguish. The evidence included third-party use, register material and OHIM decisions. However, the Hearing Officer had considered the issue and was entitled to reach the conclusion that DIGI had no conceptual meaning in the marks. That conclusion was not plainly wrong.
5. Prosecution file and other evidence. Reference to a trade mark prosecution file should generally be discouraged and is likely to provide only limited assistance. Clear admissions of primary fact may sometimes be relevant, but submissions or legal conclusions made in an earlier prosecution are unlikely to assist in later disputes. The statements relied on here were submissions rather than admissions. Evidence of side-by-side trading without confusion was only one factor and did not compel a different result.
6. Disposition. The Hearing Officer was entitled to treat the relevant goods and services as similar, and to assess the other marks and services in the same manner. The appeal was dismissed.

• Registrar’s Hearing Officer: On 14 May 2007, Mr George Salthouse upheld the opposition to registration of the appellant’s marks under section 5(2)(b) of the Trade Marks Act 1994.
• High Court (Chancery Division): The appeal was dismissed. The court held that the Hearing Officer had made no distinct and material error of principle and was not plainly wrong.