Claridge's Hotel Ltd v Claridge Candles Ltd & Anor

For infringement under section 10(3) of the Trade Marks Act 1994, a link between the later sign and an earlier mark does not itself establish unfair advantage. The court must assess unfair advantage separately. A transfer of the earlier mark’s image may establish unfair advantage even without proof of subjective intention to exploit the reputation. The advantage must be unfair, and a change in customers’ economic behaviour is sufficient. A very strong reputation may make unfair advantage easier to establish, but does not remove the statutory requirements. For genuine use, use must create or preserve a market or outlet for the goods or services bearing the mark. Ancillary provision of goods may support the associated service without constituting genuine use for those goods. A fair specification may be wider than the precise use, but must reflect how the average consumer would describe the goods or services.

The claimant operated the Claridge’s hotel and owned the registered word mark CLARIDGE’S. The defendants sold, and intended to sell, premium candles, diffusers and related goods under CLARIDGE. The claimant alleged infringement under sections 10(2) and 10(3) of the Trade Marks Act 1994, passing off, and personal liability of the second defendant. The defendants counterclaimed for revocation for non-use.

The central issues were whether the claimant’s mark had a reputation, whether the defendants’ use created a link and unfair advantage, whether the mark had been put to genuine use for the registered goods and services, whether the use amounted to passing off, and whether the second defendant was personally liable.

1. Section 10(3). The claimant’s mark had a very substantial reputation for hotel services and a high degree of distinctive character. The marks were visually and aurally almost identical. Although the goods and hotel services differed, both were premium offerings likely to appeal to a similar public. Those factors, together with the risk of confusion, established a link in the average consumer’s mind.
2. The finding of a link did not automatically establish unfair advantage. The court considered that use of CLARIDGE caused a transfer of the luxury, glamour, elegance and exclusivity associated with CLARIDGE’S. That transfer enabled the defendants to charge higher prices or sell more products and affected customers’ economic behaviour. The advantage was therefore unfair. Subjective intention was not required. The claim under section 10(3) succeeded for all goods, including goods intended for future sale.
3. The alleged risks of dilution and tarnishment were merely hypothetical and did not satisfy the requirement of a serious likelihood of changed economic behaviour. That conclusion did not affect the result because unfair advantage was established.
4. Genuine use and revocation. Use of branded toiletries supplied free to hotel guests did not create or preserve a market for toiletries. The mark was therefore revoked for classes 3 and 5, subject to the court’s alternative findings that any fair specification would have been limited to shampoos, conditioners, body lotions and shower gels, and that the goods belonged in class 3 rather than class 5. Genuine use was established for books, but not magazines; for retail and online retail services concerning food, foodstuffs, non-alcoholic drinks and aged Negroni; for provision of business facilities and services; for the specified class 43 services; and for the specified beauty and spa services.
5. Other claims and liability. The defendants’ use was likely to misrepresent a trade connection with the claimant, so passing off succeeded. The second defendant was personally liable because she carried out the infringing acts herself. She was liable as a tortfeasor, not merely because she was a director.

The claim under section 10(2) failed because the relevant goods had not been used genuinely. The counterclaim for revocation succeeded to the extent stated.