BE WARY HOW YOU TREAD
business proposition, and it had only started taking issue with Tyrecor’s use years later when it had secured the registration. The court said this: “It is impossible in those circumstances to come to any conclusion other than that Etraction’s purpose in seeking the registration of the Infinity mark in respect of tyres was to stultify Tyrecor’s business. There is not a jot … of evidence to suggest that it genuinely intended at any stage to trade in tyres under the Infinity mark.”
Recognising that, even with a registration restricted to tyre rims, Etraction might still claim infringement based on the similarity between tyre rims and tyres, the court went further still. It said: “To put the matter beyond doubt the terms of registration of Etraction’s mark should be further amended by the insertion of a clear disclaimer that the registered mark does not include tyres.”
So, a rare and welcome decision on the prior use defence. For those of you who are not out-and-out trademark enthusiasts, I strongly recommend that you stop reading here. That’s because the SCA saw fit to cover a lot of other ground too. The Etraction judgment is dense and complex, and it is as likely to be remem- bered for some of the other issues covered as it is for prior use.
In order to decide whether Falck was a predecessor in title to Tyrecor, the SCA discussed the issue of whether a company that merely imports or distributes goods (in other words plays no role in their manufacture) can be said to have used the trademark as a proprietor.
This led the court on to the issue of whether it is in fact possible to own rights to an unregistered trademark, or whether the rights are actually in the goodwill, an idea that also expresses itself in the notion that you cannot assign an unregistered trademark without goodwill. The court said this: “Unlike a registered trademark, an unregistered mark is not itself an incorporeal asset capable of being owned .. .it contributes to the goodwill of a business by identifying a business... it is incapable of being alienated separately from the goodwill of that business.”
This led the court to conclude that the prior use defence isn’t linked to ownership: “It cannot therefore be the case that in order to enjoy the protection afforded by section 36(1), it is necessary to show that the party claiming protection owned the mark in issue.”
This, in turn, led the court to conclude that the purpose of the prior use defence is to protect common law rights. This might suggest that the defence is available simply to those who are able to sue for passing-off, an action that the court said is linked to reputation rather than goodwill (as it is in the UK): “The clear purpose of section 36(1) is to protect common law rights arising from continuous and bona fide use of an unregistered trademark prior to either the use or registration of the trademark in issue. Consistent with the purpose, any person entitled to bring a passing off action based on the reputation they had acquired from the use of the unregistered mark would be entitled to invoke section 36(1) against a claim from infringement by the proprietor of a registered mark.”
But, concluded the court, the prior use defence should not be confined to those with a reputation. That is because the wording of the section makes it quite clear that the defence is available to anyone who can show honest, prior and continuous use.
As I said, some fairly deep stuff. This judgment is likely to be discussed in many future court cases.
The court concluded that the purpose of the prior use defence is to protect common law rights