C & J Clark International Limited v Trek Bicycle Corporation & Anor

A trade mark co-existence agreement must be construed objectively and as a whole. A prohibition on use of a mark for clothing, “but not including footwear”, prevented the bicycle manufacturer from using the mark on cycling shoes and insoles. “Adapted for” meant “suitable for”; shoes could fall within sports or fitness goods without being designed for a particular named sport. Relevant factors included descriptions, appearance, materials and consumer-facing descriptions.

A party remained responsible under the agreement for relevant acts of affiliates and licensees. A “so long as” condition operated only while the other party remained in breach. The court also applied the statutory tests for trade mark infringement, partial revocation, invalidity, bad faith and accessory liability.

Clarks and Trek had entered into a worldwide trade mark co-existence agreement in 2001. Clarks used TREK for footwear, while Trek used TREK for cycling clothing and related goods, excluding footwear.

The trial concerned alleged breaches of the agreement, infringement of Clarks’ registered trade marks by Trek’s cycling shoes and insoles, sales of Lidl-Trek footwear, partial revocation and invalidity of registrations, a Chinese opposition, and alleged breaches by Clarks in relation to sports or fitness shoes.

The central issues were the proper construction of the agreement, whether consent or acquiescence had been established, whether particular footwear was adapted for sports or fitness, and whether the statutory trade mark claims succeeded.

1. Agreement and consent. The agreement preserved a division under which Clarks sold TREK footwear and Trek sold TREK cycling goods, but not TREK footwear. “Footwear” meant outer coverings for the feet and included shoes and boots. Trek’s cycling shoes and insoles therefore breached clause 6. No binding consent had been given at the 2018 meeting: the statement relied on was conditional and did not amount to agreement.
2. Construction of restrictions. “Adapted for” meant “suitable for”. The phrase “sports or fitness” was general and did not require suitability for a particular named sport. Relevant factors included written descriptions or specifications, appearance, materials and descriptions given to consumers. Motion Trek LT, ATL Trek Free Waterproof, ATL Trek Run and ATL Trek Vibe were adapted for sports or fitness; the evidence did not establish breaches for the other identified models. “So long as” operated only during the relevant period of breach. Clause 2 did not import that qualification. Clause 14 made each party responsible for acts of its affiliates and licensees, so TBC was liable for Lidl’s restricted use of TREK.
3. Other agreement claims. Because Clarks was in breach when the Chinese opposition was filed, Trek was not then restricted by clause 1. TBC was entitled to counterclaim for invalidity. The restraint-of-trade defence failed.
4. Trade marks. Clarks’ marks were not partially revoked for non-use. Trek’s registrations were invalid for footwear under section 47 of the Trade Marks Act 1994. TBC infringed under sections 10(1) and 10(2) by advertising and selling TREK cycling shoes and insoles. The section 10(3) claim failed because there was no unfair advantage or detriment. Honest concurrent use was a factor in the infringement analysis, not a separate defence. TBC was not jointly liable for Lidl’s UK infringements because procurement or a common design had not been proved.
5. Bad faith and orders. The applications for Trek’s registrations were not made in bad faith. The court’s conclusions were that TBC breached the agreement and infringed under sections 10(1) and 10(2); TBCL was jointly liable; Clarks breached the agreement in relation to four sports or fitness models; Trek’s registrations were invalid for footwear; the partial-revocation claim and Chinese-opposition claim failed; TBC breached the agreement through Lidl’s sales; and the Team-goods infringement claim failed. The parties were directed to seek to agree an order.