Acedes Holdings, LLC & Anor v Clive Sutton Limited & Anor

A party seeking invalidity under relative grounds must be the proprietor or a qualifying licensee of the earlier trade mark when the application is made. A later acquisition of locus standi cannot cure that defect. A sub-licence is ineffective where the head licence prohibits sub-licensing without prior written approval.

For the use conditions, genuine use is assessed by reference to real commercial exploitation, considering all relevant circumstances. A mark may be used genuinely through limited sales of expensive goods. Statutory acquiescence requires continued, though not necessarily continuous, use of the later mark and continued awareness of that use for five years.

The claimants owned the AC COBRA trade mark. The defendants marketed replica Cobra cars and counterclaimed for a declaration that the mark was invalid under sections 5(2) and 5(3) of the Trade Marks Act 1994, relying on two earlier Ford COBRA marks. They also sought revocation for non-use.

The infringement claim was discontinued before trial. The court therefore determined whether the defendants had standing as licensees, whether the statutory use conditions were satisfied, whether the relative grounds were established, whether Ford had acquiesced, and whether the AC COBRA mark had been put to genuine use.

1. Invalidity application. The defendants were not licensees of either Ford mark when the counterclaim was brought. The 1997 Agreement, properly construed, licensed US federal marks only. The later 2022 letter could not retrospectively cure the defendants’ lack of locus standi. Nor could an agreement by conduct create a licence where none otherwise existed.
2. The second Ford mark could not have been licensed under the 1997 Agreement because it had not yet been applied for. In addition, clause 8 prohibited sub-licensing without Ford’s prior written approval. Under section 28 of the Trade Marks Act 1994, the purported sub-licences were ineffective. The defendants’ applications therefore failed under the Trade Mark (Relative Grounds) Order 2007.
3. Use conditions. Genuine use under section 47(2B) has the same meaning as under section 46. The assessment is fact-sensitive and multifactorial. Sales of a limited number of expensive motor cars can constitute genuine commercial exploitation. The use conditions were satisfied for both Ford marks in both relevant periods.
4. Sections 5(2) and 5(3). Although the goods were identical, the evidence showed that Cobra was understood by the relevant market as a generic description of a type of car. There was consequently no likelihood of confusion as to origin. The section 5(2) ground failed. The section 5(3) ground also failed because the first Ford mark had not established the required reputation by the relevant date, and the later AC Cobra use could not retrospectively establish the reputation of the earlier mark.
5. Acquiescence and non-use. Ford had been aware of the relevant use and had acquiesced for the statutory period. The non-use allegation failed because the use conditions for the Ford marks had been satisfied. Both counterclaims were dismissed. The infringement claim had been abandoned.