All bark and no bite: guidance on trade mark disputes

Recent trade mark scuffles in the food and drink industry demonstrate just how important brand protection can be to restaurants and bars. However, a comparison of two instances of threatened legal action by the beer company BrewDog, and a case brought by the London based Japanese restaurant Zuma, reveal how and when it may be appropriate for trade mark proprietors to keep a tighter hold on the leash.

BrewDog – Lone Wolf

The contemporary craft beer company BrewDog were recently the subject of some unfavourable press in relation to its threatened legal action against a family run pub in Birmingham.

The independent local business, named 'Lone Wolf' in 2015 by the brother/sister duo running the pub, claimed that they chose the name for personal reasons, after bravely deciding to go into the pub industry alone, beforehand having always worked for large pub companies.[1]

Towards the end of 2015, BrewDog had registered a trade mark for 'Lone Wolf' in relation to 'Beers' in Class 32 and 'Spirits' in Class 33. In March 2017, BrewDog threatened a trade mark infringement action against the Lone Wolf pub, asking them to change the name of their pub or face legal action, in which, if BrewDog were successful, the pub owners would be liable for BrewDog's legal costs.[2]

According to the pub owners, this threat left them "panic-stricken"[3] as to the likely costs of any proceedings. Accordingly, the Lone Wolf Pub submitted to BrewDog's demands and, at the pub's own cost, changed the name of their pub to the 'Wolf', as well as changing their websites and signs.

In trade mark circles what is sauce for the goose can be sauce for the gander and, in this regard, in October 2016, when faced with a dispute concerning its drink 'Elvis Juice', BrewDog said "we don't take too kindly to petty pen pushers attempting to make a fast buck by discrediting our good name under the guise of copyright infringement."[4]

BrewDog recognises that a balance needs to be struck and, in response to adverse comments about the Birmingham pub, BrewDog's founder James Watt commented that threatened legal action against the Lone Wolf pub would be retracted. Mr Watt blamed "trigger happy"[5] lawyers for the threat and went on to state that "lawyers can sometimes go a bit crazy and forget the kind of business we are and how we behave."[6]

This is timely, as we await the implementation of the Intellectual Property (Unjustified Threats) Act 2017, which will offer protection and safeguards to professional advisers who write letters threatening infringement proceedings on behalf of intellectual property owners.

Where potential defendants have limited means of defending themselves, it may be more damaging to enforce rights by making disproportionate demands from individuals or small businesses, especially where this would categorically conflict with a client's philosophy. Companies (and lawyers) may come unstuck when "standardised" or "template" cease and desist letters are fired off to potential defendants, with little thought to their individual circumstances, or what remedies and undertakings would proportionately and reasonably address the right-holders concerns.

However, right-holders should not be discouraged from enforcing their rights, nor recovering their legitimately incurred legal costs where appropriate, but should be mindful of the potential repercussions (including any effect on the public perception) of their proposed course of action.

BrewDog – PUNK

Merely days after the dust was settling following BrewDog's apology in relation to the 'Lone Wolf' dispute, the beer company were again the subject of press coverage for the way they handled another trade mark clash.

Music promoter Tony Green had planned to open a new bar in Leeds under the name "Draft Punk"; however, BrewDog objected to the name, claiming it would amount to a trade mark infringement. BrewDog is the owner of the trade mark "PUNK" in relation to Class 32 (beer and lager).

In its initial threatened legal action, BrewDog's lawyers ran the argument that "because Draft Punk plans on serving beer meant its trade mark rights were infringed".[7] Had the legal action escalated further than the initial cease and desist letters sent to Mr Green,[8] BrewDog would have had to prove, under section 10(2) of the Trade Marks Act 1994, that:

1. 'Draft punk' is similar to 'PUNK'
2. The product beer is similar to the provision of food and drink services
3. There exists a likelihood of confusion, or likelihood of association, on the part of the public.

Even if BrewDog could have overcome the hurdle of proving the similarity of the marks and the goods or services, it is doubtful as to whether they could also have demonstrated that the public would think that the beer and the bar have the same origin; it is arguable that the public would be more likely to associate the bar name "Draft Punk" with the with the French band Daft Punk (as was Mr Green's intention).

Mr Green claims that he is now no longer planning to open the bar. BrewDog therefore achieved the desired result, but once again there was press coverage critical of its approach. BrewDog, along with other trade mark proprietors, is correct in actively policing its marks and presumably prioritises the strategy of ring fencing its key intellectual property assets in the face of some adverse comments.

Zuma

In a recent case that reached the Intellectual Property Enterprise Court ("IPEC"), the judge commended the parties on their excellent conduct of the litigation. The case provides a valuable example in how to conduct trade mark infringement proceedings where the claimant is a large company attempting to protect its brand against a much smaller enterprise.

On 24 March 2017, Her Honour Judge Melissa Clarke handed down her judgment in Azumi Ltd v Zuma's Choice Pet Products Ltd.[9] The case involved trade mark infringement under both section 10(3) of the Trade Marks Act 1994 and Article 9(2)(c) of Council Regulation (EC) No 207/2009, as amended by the EU Trade Mark Regulation 2015/2424.

The claimant, Azumi Limited ("Azumi"), runs several high-end fine-quality Japanese restaurants worldwide, including their UK restaurant 'Zuma', which is situated in Knightsbridge. Azumi prides itself on its sophisticated and tasteful brand and has been identified as "one of London's best Japanese restaurants".[10]

Brand protection was therefore sought by Azumi in the early 2000s in the form of both UK and EU registered trade marks for the word 'ZUMA' (registered in the UK in class 42 for provision of food and drink, and registered in the EU in class 43 for services providing food and drink). Azumi also obtained a registered EU mark for the figurative writing of the word 'ZUMA'.

Similarly, the defendant company also prides itself on its high quality, luxury food; however, in contrast to the claimant, the defendant produces food for cats and dogs.

Zuma Choice Pet Products Limited ("ZCPP"), named after the company owner's dog 'Zuma', had registered the domain name dineinwithzuma.com. The company website also used the word 'ZUMA', the phrase "DINE IN WITH ZUMA", and a graphic illustration of a dog with a banner containing the phrase "DINE IN WITH ZUMA".

Following ZCPP's attempt to register a UK trade mark for 'DINE IN WITH ZUMA' in 2014, Azumi entered into without prejudice correspondence with ZCPP, notifying it of Azumi's opposition to the trade mark application, and to ask them to refrain from using the name ZUMA in relation to pet food products. Azumi then proceeded to file an opposition to the application.

Before the dispute was heard in the IPEC, Azumi wrote two letters before action to ZCPP and both parties engaged in a meeting to discuss the dispute.[11]

During the court proceedings, Azumi was successful in challenging ZCPP's use of 'ZUMA' in relation to the pet food products and it was held that ZCPP must refrain from using the domain name dineinwithzuma.com, the website, and the ZUMA brand. "Zuma Choice Pet Products Limited", as a company name, was held not to infringe Azumi's trade marks.[12]

At various points throughout the judgment, there is commendation and praise from the judge for both parties. The judge described Azumi's letters to ZCPP as "perfectly proper, polite, professional letters"[13] and stated that the meeting between the parties in an attempt to settle the dispute had been "amicable and courteous."[14] Likewise, the parties were thanked "for the courteous way in which the trial was conducted"[15] and the judge commented on the two witnesses as giving "credible and reliable evidence honestly and carefully".[16]

The outcome of this dispute, being in Azumi's favour, set an example of how a large brand owner with deep pockets may choose to conduct itself in bringing proceedings against a small business in order to protect its brand.

Comment

It is interesting that, although BrewDog did not end up fighting its trade mark infringement claims in court, the result of its threatened legal action in both cases has been more harmful to them, and attracted more negative press, than the Zuma case which involved fuller legal proceedings (i.e. it was not settled before or after trial).

The lesson to take away for businesses with deep pockets (and their respective lawyers) seems to be that aggressively enforcing a trade mark against an independent business with limited means could be more detrimental than simply engaging in open, collaborative discussions – in order to maintain a positive reputation, whilst also seeking to achieve the main aim which must be protection of the trade mark.

On the 29 March 2017, directly following the bad press in relation to its trade mark infringement proceedings, BrewDog published a blog post entitled "Please Don't Steal Our Trade Marks".[17]

This blog re-enforces the BrewDog philosophy of being a laid back independent company who will only seek to protect their brand and enforce their trade marks where something detrimental is happening to their business. It will be interesting to note what effect, if any, the Intellectual Property (Unjustified Threats) Act 2017 will have on the attitude of brand owners and their legal advisers when composing letters before action and/or drawing up intellectual property enforcement strategies.