Background
Norton Motorcycle Co. Ltd ('the opponent') acquired the assets (including trade marks) and goodwill of its predecessor in title in April 2020 from its administrators. The company in administration had traded in motorbikes throughout the previous 100 years under the name ‘NORTON’ in various guises. The opponent opposed the application to register ‘NORTON MOTORCYCLE RACING’, filed in July 2020 by Norton Motorcycle Racing Limited ('the applicant'), relying on two earlier word marks NORTON and a third (series) mark NORTON/NORTON (stylised), all registered for Class 12 goods.
The opposition was based on Section 5(2)(b), 5(3), 5(4)(a) and 3(6) of the Trade Marks Act 1994 (the 'Act').
Section 5(2)(b) – likelihood of confusion
The opposition succeeded on the Section 5(2)(b) ground, with a finding of a likelihood of direct confusion based on the similarity of the marks and the identity of the goods in issue. The hearing officer refused to find enhanced distinctiveness for the opponent’s earlier marks, stating that the opponent had not provided details of recent UK sales, advertising expenditure or market share in the UK for goods bearing the registered marks. This was the case notwithstanding the provision of a witness statement setting out a very detailed history of use of the earlier marks (including significant press coverage referencing the marks) since 1898.
Section 5(3) – reputation
The opposition failed on the Section 5(3) ground, based on the lack of evidence of market share, sales figures and investment in the advertisement and promotion of goods bearing the earlier marks submitted in support of the opposition. While intermittent use of the marks over a long period was accepted (which was, for example, sufficient to support a finding of goodwill as further discussed below), it was not sufficient to support a finding of a reputation in the UK.
Section 5(4)(a) – passing off
Despite inadequacies in the evidence, the hearing officer was able to establish the value of UK sales from 2013 to 2018 (based on the percentage of international sales stated in an article around the relevant time and overall sales figures submitted by the opponent). This allowed a finding of a small, but protectable, residual goodwill by the date of the application in July 2020. The hearing officer found that substantial number of members of the relevant public would mistakenly purchase the applicant’s goods believing they were the goods of the opponent. As a result, he considered that damage through diversion of sales was 'easily foreseeable'. The Section 5(4)(a) ground of opposition was therefore upheld.
Section 3(6) – bad faith
In the alternative, the opponent claimed that the applicant had filed the application in bad faith. Whether the applicant was acting in bad faith must be the subject of an overall assessment, taking into account all the factors relevant to the particular case (Sky Limited & Ors v Skykick, UK Ltd & Ors, [2021] EWCA Civ 1121). The intention of the applicant at the filing date of the application has to be taken into account. In this case, the opponent’s predecessor in title had gone into administration in early 2020, a fact widely reported in the UK press. Shortly thereafter, in early February 2020, the applicant’s sole director incorporated the applicant and four other companies whose names all included 'Norton'. 'Cease and desist' letters were sent to the applicant’s director then, and again after the opponent acquired the business and goodwill of the opponent in April 2020. The applicant then registered several domain names incorporating the word NORTON (in July 2020). On the facts, the hearing officer found that the applicant was very likely to have been aware at the date of filing the application of the opponent’s business and related rights in the NORTON mark. Accordingly, the hearing officer considered that it was likely that the purpose of the application was to block the opponent/any future purchaser of the goodwill from competing with the applicant’s own business within the same field and/or to benefit from association with the goodwill of the original historical business. All this created a rebuttable presumption of bad faith on the applicant’s part at the date of the filing of the opposed application.
It is notable that the applicant filed no evidence, but the counterstatement filed claimed the opponent had neither a registered trade mark nor goodwill relating to motorcycle racing activity. The hearing officer rejected this, as the opposed mark was filed for 'motorbikes'. The applicant had failed to explain the motivation behind filing the mark and therefore to rebut the presumption of bad faith. The opposition therefore also succeeded on this ground.
Comment
This decision is a useful reminder to rights holders that, to establish recognition and reputation in a mark, hard evidence of use must be filed. A history of factual use, however extensive and high profile it may be, is no substitute for such evidence.
As regards bad faith, the course of questionable conduct by the applicant established a presumption of bad faith that it was unable (or failed) to refute. Notwithstanding, the hearing officer refused the opponent’s claim for costs 'off the scale', indicating that it could not be established that the conduct of the applicant had the aim of increasing costs for the opponent for the purposes of enhanced costs recovery.
This article was written by Louise Carey and first appeared on WTR Weekly, part of World Trade Mark Review, in January 2022.
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