Maslyukov v Diageo Distilling Ltd & Anor

An appellate court reviewing a multi-factorial trade mark decision should show real reluctance to interfere absent a distinct and material error of principle. Bad faith under section 3(6) is assessed objectively at the application date, by reference to the applicant’s knowledge and the standards of acceptable commercial behaviour. For passing off, goodwill may survive cessation of production. Continued marketing of existing stock can sustain or generate goodwill for the proprietor, including where independent bottlers market goods under the original mark. Goodwill is protectable without public knowledge of the proprietor’s identity. Damage includes loss of control, erosion of distinctiveness and false association, not merely direct sales substitution. A successful party cannot appeal merely against adverse reasoning.

The appellant applied to register DALLAS DHU, CONVALMORE and PITTYVAICH for alcoholic beverages, with limitations concerning historic single malts. Diageo opposed the applications under the Trade Marks Act 1994. A hearing officer upheld the oppositions on bad faith under section 3(6), but rejected other grounds, including passing off under section 5(4)(a). The appellant appealed against the refusal of his applications. Diageo purported to appeal against the rejection of its additional grounds and filed a respondent’s notice.

The central issues were whether the hearing officer had erred in finding bad faith, whether Diageo could appeal despite having succeeded, and whether Diageo owned goodwill capable of supporting a passing-off opposition.

1. Bad faith. The hearing officer correctly applied the combined test. The relevant questions were what the applicant knew when applying and whether, in that light, his conduct fell below the standards of acceptable commercial behaviour in the relevant trade. The assessment was objective and made at the application date. Later limitations did not cure the bad faith. The appellant’s appeal was dismissed.
2. Diageo’s appeal. The court had no jurisdiction to entertain Diageo’s appeal. Under section 40(1) of the Trade Marks Act 1994, the hearing officer’s decision was whether each opposition was upheld or rejected. Individual reasons on separate grounds were not separate appealable decisions. The court also lacked power to grant the declaration sought. A successful party could not appeal merely to challenge adverse reasoning or avoid a supposed estoppel.
3. Goodwill and passing off. The hearing officer had erred under section 5(4)(a). Continued sales of whisky from existing stock by independent bottlers sustained and generated goodwill in the original distillery marks. The bottlers acted as implied licensees, or alternatively their activities generated goodwill in the original provenance marks for Diageo’s benefit. Goodwill was not destroyed merely because production ceased; abandonment had not been established.
4. It was immaterial that the public might not know Diageo’s identity as proprietor. Damage could arise from wrongful association, loss of control, erosion of distinctiveness and diminution of exclusivity. Both appeals were dismissed.

High Court (Chancery Division): the appellant’s appeal from the hearing officer’s decision was dismissed. Diageo’s appeal was dismissed for want of jurisdiction, although its additional passing-off arguments were considered and accepted in substance.