News Item
Court of Appeal judgment in “Cipriani” trade mark case
5 March 2010
The Court of Appeal recently gave its judgment in the case Hotel Cipriani SRL & others v Cipriani (Grosvenor Street) Ltd & others ([2010] ECWA Civ 110.
The case was an appeal from the December 2008 High Court decision of Mr Justice Arnold that the owners of the London restaurant named “Cipriani London” and sometimes referred to as simply “Cipriani”, infringed the Italian based Hotel Cipriani’s Community trade mark for the word CIPRIANI, registered in respect of restaurant services (amongst others). The Court of Appeal dismissed the appeal and upheld the High Court decision that the London restaurant was infringing Hotel Cipriani’s trade mark and that use of the Cipriani name by the London restaurant amounted to passing off.
The Cipriani case
The parties have a long and complex past which has included litigation in various jurisdictions. The owners of the London restaurant are linked to the Cipriani family. The Cipriani family had originally founded and run the famous Venetian establishments Harry’s Bar and Hotel Cipriani. In 1967 they sold the Hotel Cipriani to its current owners who subsequently registered the Community and UK trade marks for the word CIPRIANI.
In its decision, the Court of Appeal looked again at the so-called “own name” defence to trade mark infringement and at the question of what is necessary for the reputation of a business abroad and its mark to qualify as protectable goodwill in the United Kingdom. A further issue in the proceedings was whether Hotel Cipriani’s trade marks had been applied for in bad faith based upon the prior use of CIPRIANI by the London restaurant owners’ group of companies, however, this also failed on appeal.
Own name defence
It is a defence to a claim for trade mark infringement if a person, or a business, is using its own name provided this is in accordance with honest practices in industrial or commercial matters. The issue arising in this case is whether the owners of the London restaurant, a company called “Cipriani (Grosvenor Street) Ltd”, could rely on the own name defence for its use of the names “Cipriani London” and “Cipriani” with respect to its restaurant business.
Although the restaurant is officially known as “Cipriani London” it is often referred to as Cipriani, including by staff at the restaurant. The Court of Appeal found that the owners of the London restaurant had adopted “Cipriani London” as a trading name. In contrast they did not accept that “Cipriani” alone amounted to a trading name but was an informal name commonly used by staff and others to refer to the restaurant.
The Court of Appeal held that both a corporate name and a trading name could fall within the “own name” defence. The success of such a defence when based on a trading name would depend on (a) what trading name had been adopted, (b) in what circumstances it has been adopted and (c), whether the use is in accordance with honest practices. Some of the issues to be considered under these headings would be if the trading name had been in use for some time before the company claiming the “own name” defence adopted it. The example given by the Court of Appeal was where a newly formed company acquired an existing business carried on under a trade name and wishes to carry it on under the same name. In that case the Court did not see why it should not do so, nor why, if it did so, that trading name should not be eligible for protection under the “own name” defence. In contrast the Court went on to explain that while using an established trading name may well satisfy the test for honest use, to adopt a new corporate name or trading name for a new business which conflicts with an existing registered trade mark is unlikely to do so. This provides useful clarity that a trading name can qualify for the defence while maintaining protection for rights holders through the honest use proviso.
On the facts the defence was not open to the owners of the London restaurant as their use of Cipriani London was not in accordance with honest practices as they were aware of the rights of Hotel Cipriani at the time they adopted the name and had not taken these into account.
UK goodwill and foreign businesses
The Court of Appeal also considered the difficult question of what in law has to be shown for a foreign business to claim goodwill in the UK, particularly in respect of service businesses. Previously, businesses have generally had to show that they had a reputation in the UK and that consumers had placed orders for the goods or services in the UK directly or through intermediaries (when the circumstances are not such that the intermediary owns the goodwill).
The Court of Appeal reviewed the previous cases on this point and made several observations. Firstly, the Court noted that an undertaking which seeks to establish goodwill in relation to a trade mark for goods cannot do so, however great may be the reputation of his trade mark in the UK, unless it has customer among the general public in the UK for those products. In the case of undertakings that provide services which are physically performed abroad, it is sufficient for goodwill to exist in the UK that the services are booked by customers from the UK.
The Court in this case did not have to consider the question any further but noted academic commentary proposing a wider test relating to whether UK consumers would seek out the foreign business in preference to competitors in the UK or elsewhere. They recognised the test should be considered in an appropriate case in the future.
It was recognised that the test of direct bookings for services might be increasingly outmoded in an increasingly global service industry which employs varied methods of attracting custom. Those international businesses that have previously struggled to show goodwill in the UK to found an action for passing off may find in the future that judicial consideration is more in favour of the global reality of trade in the 21st century.
For more information, contact your usual Marks & Clerk solicitor or attorney, Kirsten Gilbert at kgilbert@marks-clerk.com or Ian Turner at iturner@marks-clerk.com.