Unknown case

Whether a trade mark displayed on one component of a composite product is used in relation to the product as a whole or to another component depends on the perception of the relevant average consumer in context. The court must identify each relevant consumer class; “average” is not a statistical mean. End-users may be consumers even if they did not choose the packaging and are usually indifferent to its source. Where they perceive a cage mark as identifying the whole intermediate bulk container, use of that mark on a cross-bottled container may infringe marks covering the bottle and the container. A disclaimer is effective only if its wording, prominence and permanence alter that perception. Passing off may be established without proof of inferior quality where the misrepresentation creates a real risk of damage to goodwill through blame for defects or failure.

The claimants, leading manufacturers and suppliers of intermediate bulk containers, alleged that Delta’s cross-bottling of used Schütz cages with bottles made by another manufacturer infringed their trade marks and amounted to passing off. The Schütz marks remained prominently displayed on the cages, while Delta used various disclaimers. The liability-only trial concerned whether the marks were used in relation to the non-Schütz bottles and the containers as a whole, whether exhaustion applied, whether the disclaimers altered the relevant consumer perception, and whether the alleged misrepresentation was likely to damage the claimants’ goodwill.

1. Trade mark infringement. Under CTM Regulation (Number 207/2009) Article 9.1(a), and section 10(1) of the Trademarks Act 1994, the question whether a mark displayed on one component is used in relation to another component or to a composite product as a whole is determined by the perception of the relevant average consumer in its commercial context. The alleged infringer’s intention is not determinative, although it may support the conclusion.
2. “Average consumer” did not mean a statistical average between different classes of users. The court had to identify the relevant classes and assess consumers who were reasonably well informed, observant and circumspect, excluding both deficient consumers and unusually sophisticated consumers. End-users were consumers because the containers performed useful storage and dispensing functions for them, despite their usual lack of choice over the packaging and their general indifference to its origin. The approach was consistent with OFT v. Officers Club [2005] EWHC 1080.
3. Typical end-users were likely to perceive the Schütz marks on the cage as identifying the whole container, including the bottle. Delta’s use therefore infringed the claimants’ marks in relation to both the bottles and the containers as a whole. Exhaustion under Article 13.1 could assist in relation to the original Schütz cage, but not in relation to a non-Schütz bottle or the Delta container as a whole.
4. A disclaimer had to be assessed together with the mark and in context. Disclaimers 1 and 2 failed because their language was ambiguous, their presentation lacked sufficient prominence, and their adhesive labels were liable to be removed during later reconditioning. Disclaimer 3 also presented a significant risk of infringement. The commercial cost of removing the marks did not outweigh that risk.
5. Passing off. The court applied the three elements summarised in Reckitt & Colman Products Limited v Borden Inc [1990] RPC 341: goodwill or reputation, a misleading representation, and damage or likely damage. The retained Schütz marks misrepresented to typical end-users that the container was wholly manufactured by Schütz or consisted entirely of Schütz components. Mere indifference to origin and the absence of purchasing choice did not prevent such a misrepresentation.
6. The claimants did not need to prove that Delta’s containers were of inferior quality or more prone to failure. A real risk that defects or failures would be wrongly attributed to Schütz was sufficient evidence of likely damage to goodwill, applying the reasoning illustrated by Associated Newspapers Group plc v. Insert Media & ors [1991] FSR 380. Both claims were established and a final injunction was to issue, with the form of injunction and case management concerning damages to be addressed separately.