Shenzhen Ske Technology Co Ltd v Bargain Busting Limited

On an appeal from a trade mark opposition decision, the appellate court should review rather than rehear the case. It should not interfere with a multifactorial assessment unless there is an identifiable error of principle or the conclusion falls outside the bounds of reasonable disagreement.

Protectable goodwill must be established at the relevant filing date. Evidence of later rapid sales does not, without more, prove goodwill at that date. Goodwill may subsist among trade customers, but the evidence must show that the mark was distinctive of the claimant’s goods and had sufficient substance to support a passing-off claim.

The question whether pre-launch advertising alone can create protectable goodwill was left unresolved.

Shenzhen Ske Technology Co Ltd opposed an application for the mark CRYSTAL BAR under section 5(4)(a) of the Trade Marks Act 1994. It relied on alleged goodwill in electronic cigarettes and vaping products existing by 10 May 2022.

The Registrar’s hearing officer rejected the opposition in decision O/1063/24 dated 8 November 2024. The evidence showed a December 2021 trade-fair soft launch, a distribution agreement with Shemax and an order for 30,000 units, but limited evidence of use before the relevant date. Shenzhen Ske appealed under section 76(1) of the Act, alleging errors concerning trade-customer goodwill, the rationality of the assessment, and pre-launch advertising.

1. Appeal dismissed. The appeal was a review, not a rehearing. Under section 76(1) of the Trade Marks Act 1994, intervention was justified only for an error of law, an identifiable flaw in the evaluative process, or a conclusion outside the bounds of reasonable disagreement. Particular caution was required before overturning a specialist tribunal’s multifactorial assessment.
2. The hearing officer had not failed to consider goodwill among trade customers. She had considered the trade-fair evidence and the dealings with Shemax in the round. Her reference to trade taking off after the relevant date did not show that she had treated the pre-existing trade as starting from zero.
3. The conclusion that Shenzhen Ske had not established protectable goodwill by 10 May 2022 was rationally open to the hearing officer. The evidence concerning the soft launch was extremely thin. Only one distributor was identified, there was no evidence from Shemax or another trade customer that CRYSTAL BAR was distinctive of Shenzhen Ske’s goods, and the mark had low distinctiveness. The order for 30,000 units and the agreement to order an average of 100,000 units monthly did not compel a finding of protectable goodwill.
4. The hearing officer was also entitled to reject an inference that consumer sales began on 9 May 2022. The evidence did not support that inference and did not break down later sales sufficiently to establish goodwill at the filing date. Rapid post-date sales were insufficient by themselves.
5. The issue whether pre-launch advertising alone can create protectable goodwill remained unresolved. It did not arise because there was no evidence of pre-launch advertising to ultimate consumers, and Shenzhen Ske had in any event had dealings with a UK distributor. The hearing officer had taken the relevant promotional evidence into account.

• High Court (Chancery Appeals): appeal from the Registrar’s decision O/1063/24 dated 8 November 2024 dismissed.
• UKIPO, Trade Marks Registry: Shenzhen Ske’s opposition to trade mark application no. 3786148 was rejected.