• U.K. PRACTICE

    What’s in a Name?

    A recent UK case involving the fashion designer, Elizabeth Emanuel, raised some interesting questions concerning the ownership and assignment of trade marks which are personal names.

    Ms Emanuel is a designer whose reputation was guaranteed by her involvement in the design of Diana’s dress for her wedding to Prince Charles in 1981. This reputation grew during the 1980s to the point where an Elizabeth Emanuel store was opened in 1990 in London’s Brook Street.

    Fashion can be a fickle business, however, and by 1997, Ms Emanuel had fallen into financial difficulties. This led her, metaphorically at least, into the arms of Shami Ahmed, the man behind Joe Bloggs jeans. As a result, Ms Emanuel agreed to sell her business and its goodwill, including a registered trade mark (UK1586464, dated 28 September 1994 covering Class 25 goods) for an Elizabeth Emanuel Logo, to one of Mr Ahmed’s companies. Ms Emanuel also became an employee of an Ahmed company.

    This arrangement (of employment) did not last very long – about one month – and although negotiations took place with a view to Ms Emanuel’s reengagement, this never took place.

    In the following year (18 March 1998), Mr Ahmed’s company filed a UK trade mark application for the name Elizabeth Emanuel covering goods in Classes 3, 14, 18 and 25. This UK application was accepted and published for opposition in January 1999. The application was opposed by a Mr Anthony Drew and shortly thereafter Mr Drew also applied to revoke the assigned UK trade mark registration (no. 1586464). Mr Drew’s involvement was short-lived because, by the time the opposition and the revocation action came to be heard by the UK Registry, the opponent had changed to Ms Emanuel. At the date of the Hearing, the UK trade mark application and registration were owned by Continental Shelf 128 Limited.

    The ground of opposition raised by Ms Emanuel was Section 3(3)(b) of the 1994 Trade Marks Act, which implements Article 3(1)(g) of the Harmonisation Directive 89/104. Section 3(3)(b) is in the following terms:

    “A trade mark shall not be registered if it is –

    (b) of such a nature as to deceive the public (for instance as to the nature, quality or geographical origin of the goods or services).

    The ground of revocation raised was Section 46(1)(d) of the Act, which implements Article 12(2)(b) of the Directive and provides as follows:

    “The registration of a trade mark may be revoked on any of the following grounds -

    (d) that in consequence of the use made of it by the proprietor or with his consent in relation to goods or services for which it is registered, it is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services”.

    Before the Registry, the Hearing Officer dismissed the opposition and the application for revocation. He found that, at the relevant dates, there had been deception and confusion. Nevertheless, he considered that such deception and confusion was lawful and the inevitable consequence of the sale of a business and goodwill which has been conducted under the proprietor’s own name.

    Ms Emanuel appealed both adverse decisions to the Appointed Person (David Kitchin QC). Mr Kitchin made the following rulings and observations:

    • In the opposition proceedings, the date at which deception had to be shown was 18 March 1998, the filing date of the UK trade mark application for Elizabeth Emanuel (words).

    • In the revocation action, the relevant date – to prove a liability to mislead – was the date the application to revoke was made, namely 9 September 1999.

    • On the evidence filed, the use of the mark Elizabeth Emanuel by Mr Ahmed’s company was likely to cause confusion amongst the relevant UK public from the point Ms Emanuel left the company until a date well into the year 2000. During this period, a significant portion of the relevant public took the use of the mark Elizabeth Emanuel in relation to garments to indicate that the eponymous designer was personally involved in their design and creation. This belief was likely to influence the purchasing behaviour of those persons.

    • When considering Section 3(3)(b) and Section 46(1)(d) of the 1994 Act and the equivalent provisions in the Directive, it was a tenable argument that deception should be assessed in the terms set out below:

      (a) matters must be considered from the standpoint of the average consumer who is deemed to be reasonably observant and circumspect;

      (b) for a mark to be liable to mislead, it must be established, having regard to the opinions or habits of the consumers in question, that there is a real risk of their economic behaviour being affected by an inaccurate message conveyed by the mark. The existence of actual deceit or a sufficiently serious risk that the consumer will be deceived must be shown.

    • If a trade mark is deceptive such that there is a real risk that the purchasing behaviour of the average consumer will be affected, then there is a public interest in prohibiting the registration of that mark. Conversely, there is also a clear public interest in allowing the sale and assignment of businesses and goodwill, together with associated trade marks.

    • In the case of small businesses involved in the selling of goods, there will be cases where the public may well believe, for at least a time after the transfer, that a particular individual is still involved with the design or production of those goods. It was regarded as questionable whether this confusion, limited as it is likely to be in time, is incompatible with the essential function of a trade mark as an indication of origin of the goods in a particular business. In the case of the registered mark it may also be questioned whether or not any liability to deceive may fairly be said to be in consequence of the use made of it by the proprietor or with his consent.

     

    In view of difficulties posed by the facts of this case, the Appointed Person decided to put the following issue to the ECJ for a ruling:

    “Whether a trade mark is to be regarded as liable to mislead the public within the meaning of Article 3(1)(g) or Article 12(2)(b) if, for a period following its assignment together with the business of making the goods to which it relates, the use of the mark in relation to those goods is liable to deceive the public into believing, contrary to the fact, that a particular person has been involved in designing and making those goods.”

     

    Comment

    This case has highlighted the problems associated with the assignment of personal names, particularly where the person, whose name is being sold, has no subsequent connection with the purchaser of the trade mark and the related goodwill (the assignee).

    The obvious way to avoid such an assigned mark from becoming deceptive (liable to mislead) is for the new owner to publicise the change of ownership widely and to emphasise the lack of any connection between the assignee and the original owner of the mark.

    Of course, for a trade mark such as Elizabeth Emanuel this presents a potential purchaser with considerable difficulties. The real value in such a name lies in maintaining the myth, for a period at least, that there is still some connection between the assignee and the famous designer. Further, even if that connection is eventually broken, the mark must still mean the same to the relevant public as it did before the assignment. In the case of the Elizabeth Emanuel mark that meaning would presumably be quality fashion garments that an icon like the Princess of Wales might wear. If the mark no longer conveys that meaning because, for example, it is used as a brand for cheap, low quality products, then the value of the mark will be severely diminished.

    The ruling of the ECJ is therefore awaited with considerable interest in this case. The purchase value of designer names could drop dramatically if the Court finds in favour of Ms Emanuel.