Wirex Ltd v Cryptocarbon Global Ltd & Ors

For an unregistered sign to support a passing-off claim or invalidate a trade mark, the claimant must show goodwill associated with the sign as a badge of origin at the relevant date. A newly coined word may nevertheless be understood by the public as describing a type of product or service. The more descriptive the word, the more evidence of trade-origin significance is required. Personal liability of a company officer for the company’s tort requires personal involvement sufficient to make the officer a joint tortfeasor, such as procuring, inducing or concerted action securing the infringement.

Wirex registered the word CRYPTOBACK as a UK trade mark for, among other things, financial and software services. Cryptocarbon Global Ltd, Cryptocarbon UK Ltd and Bee-One UK Ltd used “cryptoback” for cryptocurrency cashback services and admitted infringement if the mark was valid.

The defendants counterclaimed that the mark was invalid because Global had acquired goodwill in “cryptoback” before the filing date and because Wirex had acted in bad faith. Wirex also alleged that Mr Manuel was jointly liable for Bee-One’s infringement. The central questions were whether Global owned goodwill associated with “cryptoback” at the filing date and whether Mr Manuel was personally involved sufficiently to incur joint-tortfeasor liability.

1. Validity and goodwill. The counterclaim under section 5(4)(a) of the Trade Marks Act 1994 failed. The defendants did not establish that, by 28 April 2018, “cryptoback” was recognised by the public as distinctive of Global’s services. The evidence did not sufficiently demonstrate relevant United Kingdom use, the manner in which the word was presented, or perception of it as a badge of origin.
2. Neologism and descriptiveness. A newly coined word is not necessarily inherently non-descriptive. Its nature and the goods or services for which it is used determine its position on the spectrum of descriptiveness. A neologism used for a new product or service may be understood as the generic name for that type of product or service. The more descriptive the word, the more use as a badge of origin is required to establish distinctiveness. Linoleum Manufacturing Company v Nairn [1878] 7 Ch. D. 834 provided an illustration of that possibility.
3. Evidence and consequence. The “Shopping is Mining” article and “Shop & Mine” webpage were more likely to present “cryptoback” as the name of a new type of service rather than a trade name. The concurrent use of “CcrbBack” increased the likelihood that “cryptoback” was generic. The mark was therefore valid, and the Corporate Defendants infringed it. The accepted failure of the section 5(4)(a) ground also defeated the bad-faith allegation under section 3(6).
4. Officer liability. Applying the test in MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441, personal liability requires procurement or inducement of the infringing acts, or concerted action with the company to secure them. Mr Manuel was jointly liable for Global’s and Cryptocarbon UK’s infringements, but the evidence did not establish sufficient personal involvement in Bee-One’s infringement.

First-instance judgment. No prior appellate decision is stated in the judgment.