The London Taxi Corporation Ltd (t/a The London Taxi Company) v Frazer-Nash Research Ltd & Anor

A product shape may be unusual without having inherent distinctive character. Unusualness is necessary but not sufficient; the relevant public must perceive the shape as indicating trade origin. Acquired distinctive character requires proof that a significant proportion of the relevant class perceives the goods as originating from a particular undertaking because of the shape itself. A shape may give substantial value to goods where its aesthetic characteristics materially enhance their attractiveness, even if the goods also perform important practical functions. Genuine use requires real commercial exploitation capable of creating or preserving market share. Trade mark infringement and passing off must be assessed by reference to the relevant consumer, the overall impression and the circumstances of use.

The claimant owned three-dimensional trade marks for the shapes of the Fairway and TX1/TXII London taxis and claimed goodwill in the shapes of those taxis and the TX4. It alleged that the defendants’ proposed new Metrocab infringed the marks and constituted passing off.

The defendants counterclaimed that the marks lacked distinctive character, consisted exclusively of shapes giving substantial value to the goods, and that the Community trade mark was revocable for non-use. The central issues concerned validity, genuine use, infringement, the honest-practices defence and passing off.

1. Validity. Both trade marks lacked inherent distinctive character at their respective application dates. Although an unusual product shape may depart from ordinary sector norms, that is not sufficient unless the relevant consumer perceives it as indicating origin. The marks had not acquired distinctive character by the date of the counterclaim because the evidence did not show that a substantial proportion of taxi drivers relied on the shapes, as opposed to conventional badges and marks, to identify origin.
2. Both marks consisted exclusively of shapes giving substantial value to the goods. Applying Hauck GmbH & Co KG v Stokke A/S [2014] EU:C:2014:223, the court considered the goods’ aesthetic qualities, their dissimilarity from other vehicles, their status as iconic designs, consumer perception, promotional strategy and the existence of registered-design protection. The shape itself, rather than goodwill generated by sales and advertising, was material.
3. Revocation. The Community trade mark was revoked for non-use in Class 12 with effect from 2 May 2014. Disposal of vehicles for scrap was not use. Even assuming that sales of used Fairways constituted use, the sales merely recirculated old vehicles and did not create or preserve a market for goods bearing the mark. Sales of TX1, TXII and TX4 vehicles did not use the Community mark in a form preserving its distinctive character.
4. Infringement. The relevant average consumer was the taxi driver, not the passenger. In any event, there was no likelihood of confusion. The goods were identical, but the marks had low distinctive character and the new Metrocab had only a low degree of visual similarity. The marks’ reputation and link provisions were also not infringed: the association was merely that the vehicles were species of London taxi, and there was no sufficient detriment or unfair advantage.
5. Defence and passing off. The shape of the new Metrocab indicated that it was a licensed London taxi. Assuming infringement, the defendants’ use was in accordance with honest practices because it served that legitimate descriptive purpose and was not intended to exploit the claimant’s marks. Passing off failed because the claimant had not proved goodwill in the abstract features relied upon, misrepresentation or likely damage. The fraud allegation was rejected.