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

A three-dimensional mark consisting of a product’s shape has inherent distinctive character only if it departs significantly from the norms or customs of the relevant sector and thereby indicates trade origin. The court must identify the sector, ascertain its norms and customs, and determine whether the shape departs significantly from them.

Acquired distinctiveness requires proof that a significant proportion of the relevant public perceives the goods, because of the shape itself rather than other marks, as originating from one undertaking. Recognition, association, iconic status or an indication that a vehicle belongs to a regulated class is insufficient. For passing off, shape features must likewise have generated goodwill as an indication of trade source, and the defendant’s design must amount to a misrepresentation of that source.

The appellant manufactured successive models of the traditional London taxi and owned three-dimensional marks depicting the Fairway and TX1/TXII shapes. It alleged that the respondents’ proposed new Metrocab would infringe those marks and amount to passing off.

Arnold J, in [2016] EWHC 52 (Ch), held that both marks were invalid for want of inherent or acquired distinctive character and because their shapes gave substantial value to the goods. He also revoked the Community mark for non-use, rejected infringement on alternative assumptions, and dismissed passing off.

The appeal concerned the relevant average consumer, the validity and use of the shape marks, infringement, the honest-practices defence, and passing off. The central question was whether the taxi shapes functioned as guarantees that the vehicles originated from one undertaking.

1. Appeal dismissed. The registered shapes lacked inherent distinctive character. The relevant sector comprised cars generally, including taxis and private-hire vehicles, and was not confined to licensed London taxis. Its norms included the ordinary structural and visual features of cars and the range of modern and traditional designs familiar to consumers. The claimed features were minor variations on those norms, whether viewed separately or together, and did not depart significantly from them.

2. The marks had not acquired distinctive character. The proprietor had to establish that a significant proportion of the relevant class perceived the vehicles, because of the shapes themselves rather than conventional word or logo marks, as originating from one undertaking and no other. Evidence that the shapes signified a licensed London taxi, were iconic, or influenced consumers’ preferences established recognition and association, not trade origin. The advertising materials did not justify overturning the judge’s assessment that passengers or drivers understood the shapes as denoting a unique manufacturer.

3. It was unnecessary to decide whether taxi hirers were average consumers of the vehicles. In principle, the relevant public may include any class to whom the mark’s guarantee of origin is directed and who is likely to rely upon it when deciding whether to buy or use the goods. Complete possession is not essential. That reasoning was non-dispositive because the marks lacked acquired distinctiveness even if hirers were included.

4. The remaining trade mark issues were addressed on hypothetical assumptions. The court agreed that sales of obsolete second-hand Fairways did not constitute genuine use because they did not create or preserve a market for goods under the Community mark. It would, however, have treated sales of later models as use in forms whose small differences did not alter the assumed distinctive character. The judge made the required overall comparison for confusion and was entitled to find the proposed Metrocab strikingly different.

5. Had the marks possessed distinctive character and reputation, the threatened use would have infringed the enhanced-protection provisions because it created the necessary link and would cause detriment. On the same assumptions, the honest-practices defence would have failed: the descriptive message that a vehicle was a licensed London taxi could be conveyed in other ways which avoided confusion and detriment.

6. The passing-off appeal was also dismissed. The abstracted features shared by the appellant’s models had not been shown to denote their trade source, and the respondents’ strikingly different design was not likely to represent that it came from the same source.

• Court of Appeal (Civil Division): Dismissed the appeal against the findings that the marks were invalid for lack of distinctive character and that passing off had not been established: [2017] EWCA Civ 1729 .
• High Court, Chancery Division: Arnold J held the marks invalid, revoked the Community mark for non-use, rejected infringement on alternative assumptions, and dismissed passing off: [2016] EWHC 52 (Ch) .