Walton International Ltd & Anor v Verweij Fashion BV

Genuine use requires real commercial exploitation directed to creating or preserving a market, assessed globally by reference to the goods, market, scale, frequency and territorial extent of use. A worldwide website which permits delivery to the United Kingdom and European Union is not thereby targeted at those territories. Individual sales deliberately fulfilled there can nevertheless constitute territorial use, but very small, passive sales of everyday clothing were insufficient to amount to genuine use.

Long and honest concurrent use may prevent identical-sign infringement where the later user has not exacerbated inevitable confusion or impaired the adjusted origin function of the mark.

The claimants, members of a Hong Kong clothing group, alleged infringement of UK and EU registrations for GIORDANO by a Dutch clothing business which had sold GIORDANO menswear in the United Kingdom since 2001. The defendant counterclaimed for revocation for non-use, invalidity and passing off.

On the eve of trial, the claimants discontinued their EU trade mark infringement claims. The defendant applied to set aside that notice so that its counterclaims concerning the EU marks could be determined. The principal issues were territorial targeting and genuine use of the claimants’ marks, bad faith and relative invalidity of a later UK mark, infringement, and passing off.

1. The defendant’s counterclaim succeeded. The notice of partial discontinuance was set aside. It was served immediately before trial, after substantial costs had been incurred, and would otherwise have forced the defendant substantially to restart its challenges before EUIPO while allowing the claimants to retain a collateral advantage. The claimants would not give undertakings adequate to protect the defendant. Setting aside the notice also restored the position in which the court remained seized of the EU infringement claims and the defensive counterclaims.

2. The advertisements and offers for sale on the claimants’ global e-shop and AliExpress store were not targeted at UK or EU consumers. They were international sites, with US-oriented or international presentation, worldwide delivery and no material territorial focus on the UK or EU. However, repeated individual sales deliberately fulfilled to UK and EU consumers were territorial use because the claimants shipped GIORDANO goods to those consumers.

3. Those sales did not amount to genuine use. Clothing was a staple consumer product in a vast UK and EU market. The sales were minute, commercially insignificant both in that market and in the claimants’ own business, and reflected passive acceptance of orders rather than a real attempt to create or preserve a European market. UK864, UK398, EU651, UK444, EU044, UK757, EU335 and EU150 were therefore revoked with effect from five years after their respective registration dates.

4. UK297 was not filed in bad faith. Although its filing formed part of the parties’ developing trade mark dispute, the defendant had not disproved the claimants’ genuine intention to use it or shown a legal or moral obligation owed to the defendant. It was, however, invalid on relative grounds because the defendant had acquired goodwill in GIORDANO clothing by its filing date and the use of UK297 would have amounted to passing off.

5. Alternatively, the defendant’s long-standing use was honest concurrent use. It had not increased inevitable confusion or encroached on the claimants’ goodwill. It would therefore not have infringed UK864, and consequently would not have infringed the other marks. The claimants’ UK sales since December 2010 amounted to passing off against the defendant.

High Court: The defendant’s revocation applications before the UK Intellectual Property Office were referred to the High Court and continued through its counterclaim. EUIPO revocation proceedings concerning two EU marks were suspended pending this judgment.