27 July 2011

Beer and Trade Marks: Samuel Smith v Lee

"This is a case about Yorkshire pride, in more ways than one" said Mr. Justice Arnold in the first sentence of his judgment Samuel Smith Old Brewery (Tadcaster) v Lee (t/a Cropton Brewery) [2011] EWHC 1879 (Ch) (22 July 2011). He continued:
"The protagonists, Samuel Smith and Cropton Brewery, are two proud, small, independent Yorkshire breweries. There is no dispute about the quality of their respective beers. The casus belli is Samuel Smith's claim that Cropton Brewery has infringed Samuel Smith's registered trade mark for a stylised white rose device, and committed the tort of passing off, by use of labels incorporating two similar stylised white rose devices. For the uninitiated, a white rose is the traditional symbol of the county of Yorkshire, having been the emblem of the House of York during the Wars of the Roses. The dispute is one which ought to have been capable of settlement out of court a long time ago. Instead it has grown into a case which is out of all proportion to what is at stake in commercial terms. One explanation for this is Yorkshire pride; but I fear that the English legal system bears a measure of responsibility as well."
The causes of action were trade mark infringement and passing off. There was also a counterclaim for groundless threats under s.21 of the Trade Marks Act 1994.

The Trade Marks
The claimant company had registered two trade marks but the one around which this case revolved was 1,006,571 for beer in class 32. Its other mark was 2,005,780 in respect of "draught and bottled beer, all brewed in Yorkshire" in Class 32. Although that mark had been pleaded the judge made no further reference to it in his judgment.

The Alleged Infringements
Mr. Lee, the proprietor of Cropton Brewery had produced two labels to which Samuel Smith objected. One was for "Yorkshire Bitter" distributed by Marks and Spencer shown to the left.

The other was "Yorkshire Warrior" which was marketed partially to raise money for the benefit of troops serving in the Yorkshire Regiment shown below.

The Arguments
The claimant complained that the "Yorkshire Bitter" and "Yorkshire Warrior" labels infringed its trade marks under art 5 (1) (b) of the Trade Marks Directive (that is to say s. 10 (2) of the Act) and also art 5 (2) or s.10 (3) and that such use also amounted to passing off. The defendant argued that the white rose elements of the signs complained of are "indications concerning the … geographical origin" of the goods, namely Yorkshire. The threats were alleged to have been contained in letters to Marks & Spencer from the claimant's trade mark agents and solicitors on 10 Dec 2007 and 7 July 2010 respectively.

Mr. Justice Arnold held that:

(1) The "Yorkshire Bitter" label did not infringe Samuel Smith's registered trade mark;

(2) The "Yorkshire Warrior" one did, but

(3) Mr. Lee had a defence under art 6 (1) (b) of the Directive or s.11 (2) of the Act in respect of its use before the end of October 2009 but not afterwards;

(4) the use of the "Yorkshire Warrior" amounted to passing off though the use of the "Yorkshire Bitter" one did not; and

(5) the counterclaim failed because the defendant had not been a person aggrieved in respect of the first letter and the second letter did not amount to a threat.

How the Judge reached his conclusions
Throughout his judgment, his lordship referred not to the Act but to the EU legislation that is implemented by the Act. He probably did that as he directed himself in the principles derived from the well known decisions of the Court of Justice of the European Union on all the points that were before him. These are so well known that it would be otiose to repeat them but if anybody wants to look them up those on the art 5 (1) (b) or s.10 (2) point start at paragraph [76], those on art 5 (2) or s.10 (3) at paragraph [107] and those of the art 6 (1) (b) or s.11 (2) defence at paragraph [111].

As to why "Yorkshire Bitter" did not infringe, he said this at paragraph [105]:
"So far as Yorkshire Bitter is concerned, the identity of the goods and the distinctive character of the Trade Mark favour a likelihood of confusion, but the differences between the white rose device and the Trade Mark, the remainder of the sign and the identification of Cropton Brewery as the producer on the front of the label all militate against it. Samuel Smith has not adduced any evidence of weight to demonstrate a likelihood of confusion. Samuel Smith's dilatoriness in pursuing Marks & Spencer and Cropton Brewery over the matter suggests that it did not consider that there was a real likelihood of confusion. I infer that Yorkshire Bitter was only included in the case because Samuel Smith thought it would look odd to pursue Yorkshire Warrior without pursuing Yorkshire Bitter. Be that as it may, the evidence of experience strongly suggests that there is no likelihood of confusion. Overall, I am not persuaded that Samuel Smith has established that there is a likelihood of confusion."
As to why "Yorkshire Warrior" did, he said at [106]:
"Turning to Yorkshire Warrior, the identity of the goods and the distinctive character of the Trade Mark again favour a likelihood of confusion. In this case the white rose device is more similar to the Trade Mark, and it is more a dominant element of the sign, than in the case of Yorkshire Bitter. Importantly, Cropton Brewery is not identified as the producer on the front of the label. Furthermore, I think many consumers would miss the small print identifying it on the rear of the label. The evidence of the three independent witnesses considered above is some evidence of a likelihood of confusion, although not strong evidence. As I have explained, there is also the evidence of how Yorkshire Warrior has been sold in at least one retail outlet. Although there is no evidence of actual confusion in practice, for the reasons given above it is more difficult to place confidence in this as showing there is no likelihood of confusion than in the case of Yorkshire Bitter. In my view the majority of consumers will not be confused. Overall, however, I am persuaded that there is a likelihood that some consumers will be confused into believing either that Yorkshire Warrior is a Samuel Smith product or that it has some other connection with Samuel Smith."

The art 6 (1) (b) defence requires "use is in accordance with honest practices in industrial or commercial matters." The Yorkshire Warrior label is based on the cap badge of the Yorkshire Regiment which the defendant honesty and reasonably thought he had been licensed to use but on 22 Oct 2009 the colonel of the regiment asked him to stop.

As to passing off, the absence of evidence of confusion scuppered any cause of action in respect of the "Yorkshire Bitter" label but the reasoning set out in paragraph [106] above sufficed in respect of "Yorkshire Warrior".

The reason why the defendant was not a person aggrieved in respect of the first letter is that Marks & Spencer do not seem to have taken much notice of it. They continued to buy "Yorkshire Bitter" for over two years after receiving the letter and did not even pass on the letter to the defendant at first. The second letter went out of its way to assure Marks & Spencer that it did not wish to drag them into the proceedings.

The judge's postscript was that in future mediation should be explored for disputes of this kind as soon as practicable. The IPO offers an excellent mediation service as does WIPO and indeed do NIPC. The IPO has listed a whole lot of other mediation providers of whom I am one. Anyone who wants to learn more about mediation and other types of ADR should call me on 0800 862 0055 or contact me through this form.