MONSTER ENERGY COMPANY v RED BULL GmbH

For an opposition under Trade Marks Act 1994, s.5(3), unfair advantage does not require proof that the later-mark proprietor subjectively intended to exploit the earlier mark. The court may assess objectively whether the similarity between the marks is likely to influence consumer behaviour, making the later mark easier to establish and market at reduced expense. A link between the marks and unfair advantage are separate inquiries, although the former may provide the factual basis for the latter. Actual damage need not be proved where a serious risk can be established through rational inferences based on inherent probabilities, normal commercial practice and the circumstances of the case. Absence of confusion does not preclude unfair advantage.

Red Bull opposed Monster’s application to register RED DAWG, relying on ss.5(2)(b) and 5(3) of the Trade Marks Act 1994. The Hearing Officer rejected the opposition based on likelihood of confusion under s.5(2)(b), but upheld the s.5(3) opposition on the basis that consumers would link RED DAWG with RED BULL and that the later mark would free-ride on Red Bull’s reputation.

Monster appealed only the s.5(3) finding. It argued that the Hearing Officer had conflated the link and unfair-advantage requirements and had reached his conclusion without sufficient evidence. The central issues were whether subjective intention was necessary and whether the finding of unfair advantage was properly open on the evidence.

1. The appeal was dismissed. The Hearing Officer’s conclusion that use of RED DAWG would take unfair advantage of the reputation of RED BULL was not vitiated by an error of principle or clearly wrong evaluation.
2. Under s.5(3) of the Trade Marks Act 1994, the requirements of reputation, a link in the consumer’s mind, and one of the specified forms of injury are distinct. A finding of no direct or indirect confusion under s.5(2)(b) does not prevent a finding of unfair advantage under s.5(3).
3. Following Jack Wills Limited v House of Fraser (Stores) Limited, subjective intention specifically to exploit the earlier mark is not a necessary element of unfair advantage. The relevant unfairness may arise objectively where the later mark influences consumer behaviour and benefits from the reputation or goodwill associated with the earlier mark.
4. The Hearing Officer was entitled to infer that RED DAWG would make it easier for Monster to establish and sell its products without equivalent marketing expenditure. The added factor beyond commercial advantage was the objectively unfair boost to consumer attraction produced by the similarity between the marks. No due cause was established.
5. Actual damage was unnecessary. A serious risk could be proved by legitimate inferences founded on inherent probabilities, normal practice in the relevant commercial sector and the circumstances of the case. The court could not proceed on mere suppositions, but the Hearing Officer’s assessment was properly motivated.
6. An appellate court should be slow to interfere with a multifactorial evaluation unless satisfied that the decision was clearly wrong or involved an error of principle.

• High Court (Intellectual Property List): appeal from the Hearing Officer’s decision dated 26 August 2021 dismissed. The finding under s.5(3) of the Trade Marks Act 1994 was upheld.