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Background
8 March 2023

Parody in Trade Mark Law

In the second of the two-part article covering parody in trade mark and copyright law, we analysed the case of Shazam Productions Ltd v Only Fools The Dining Experience Ltd[1] with an emphasis on how the court applied the parody defence in s.30A of the Copyright Designs and Patents Act 1988 (CPDA) in copyright infringement cases in an exercise to balance copyright law and freedom of expression. However, when it comes to Trade Mark law, how far can the freedom of expression go if it parodies well-known brands, potentially damaging their long standing reputation?

Click here to read about parody in copyright.

The main piece of trade mark legislation in the UK, the 1994 Trade Marks Act (TMA), makes no reference to a parody provision. Why is this important?

Brand owners face two different problems when it comes to their brand being parodied: the first is the potential loss in reputation and dilution of their mark; and the second is in relation to bad faith applications of parodied marks.

An example is the 1972 case involving the ‘Enjoy Cocaine’ poster depicting the Coca Cola trademark which found in favour of Coca Cola[2]. However, the sharing and spreading of information are augmented in the digitalised world, and via gifs and memes for example, we have seen an increase in parodies of popular brands over the internet.

Legal Framework

Does trade mark law in the UK assist brand owners in relation to parodies of their popular brands? There is nothing in the TMA that addresses the current issues, however brand owners could, prima facie, rely on the part of the TMA (s.10(3)), which provides that it is an infringement of a registered trade mark: “To use in the course of trade a sign that is identical with or similar to the trade mark; where the trade mark has a reputation in the UK; and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.” If the brand owner can prove their brand has a reputation and the parody is unauthorised and unflattering, they may be able to claim damage to the brand’s value in terms of its distinctiveness or its reputation.

The main issues with relying on this provision (s.10(3)) when it comes to parodies are that these are usually not made in ‘the course of a trade’ for commercial purposes but to draw attention to some aspect of the brand seen sometimes as controversial. Moreover, parodies’ creators might argue that the use of the sign is not ‘without due cause’, arguing freedom of expression right which might prevail in an infringement case relying, although feebly, on recital 21 of EUTMR[3] “[…] This Regulation should be applied in a way that ensures full respect for fundamental rights and freedoms, and in particular the freedom of expression.”

Further, the difficulty trade mark owners encounter in such cases is the parody’s creator may claim that the use of the similar brand is use “not in a trade mark sense”, because it is acting as badge or guarantee of origin.

Some courts across the channel such as the Supreme Court of Italy in the recent case of Zorro[4] apply the view of the CJEU expressed in Arsenal[5] and Adidas Salomon[6] that trade mark infringement can also occur when a sign is used non-distinctively and not as an as indication of origin of goods . However, in the UK following the rectification of the Court of Appeal in Arsenal v Reed[7], R. Johnstone[8] and a shift back of the CJEU in Anheuser v Budejovicky[9], to prove infringement under the TMA a claimant prove there has been use in a trade mark sense.

Brand owners can still argue and prove, subject to the without due cause condition, that the parody makes undue advantage of the reputation of their mark and it is likely to cause confusion among consumers or that it rides upon the reputation of their brand.

What if a competitor applies to register a trade mark which mocks or is a parody of another? Does this constitute bad faith under s3(6) of the TMA?

Swatch AG v Apple Inc[10]: Factual background

The well-known Swiss watchmaker Swatch applied to register SWATCH ONE MORE THING and ONE MORE THING as UK trade marks on the basis, inter alia[11], that it had been made in bad faith pursuant to s.3(6) TMA. Apple opposed these applications on the basis of their earlier unregistered use of the phrase ‘One More Thing’ and on the basis that Swatch had acted in bad faith in filing these applications. ‘One More Thing’ has been used at launches of Apple products since 1998 when Steve Jobs, in leaving the stage for an event chosen for an important announcement, would turn back with the words ’but there’s one more thing’. The phrase has become associated with Apple in the sense that the kind of people who follow Apple launches expect the ‘One More Thing’ moment.

Between Swatch and Apple there is a long running Trade Mark dispute about the marks ‘I-WATCH’ and ‘I-SWATCH’. The ‘bad blood’ generated by that dispute was connected with the making of two different sets of trade mark applications by Swatch in a number of jurisdictions worldwide including for the mark TICK DIFFERENT (Apple used the slogan THINK DIFFERENT).

In their opposition to the applications for SWATCH ONE MORE THING and ONE MORE THING, Apple argued that Swatch had sought to parody Apple, falling short of the standards of acceptable commercial behaviour.

Apple’s evidence was made up mainly of a number of online comments from third parties published in trade blogs and websites criticising Swatch’s trade mark applications.

The Hearing Officer found that Swatch’s application had been filed in a retaliatory measure with the aim of upsetting or as stated ‘cocking a snook’ at Apple in a manner akin to parody. He held that “whilst parody was an important part of free speech, there was a difference between parody in commercial communications and registering trade marks consisting of parodies of a rival’s marketing signs, and using the trade mark registration system to obtain exclusive rights to such signs went far beyond what was necessary to engage in legitimate parody.”

He therefore upheld Apple’s opposition on grounds of bad faith[12].

The appeal

Swatch appealed the decision on three grounds, two of which have been accepted by Iain Purvis QC (sitting as a Deputy Judge of the High Court). The first ground was that the Hearing Officer, having rejected Apple’s claim to goodwill and unregistered rights in ONE MORE THING Trade Mark, should have rejected the bad faith ground as well. The Judge found that bad faith ground (s.3(6) opposition) is free-standing and does not require any enforceable right in the mark in the UK to be established.

The second ground of appeal was that the Hearing Officer did not have any adequate evidential basis for his findings as to Swatch’s intention. Acting for Swatch, Johnathan Moss relied on the principle[13] that the Hearing Officer “should not allow the assessment to degenerate into an exercise in speculation.” In fact, the Hearing Officer in his decision proceeded on the basis of what was put forward as one of the alternative, less probable explanations, namely the use of the mark for parodic purposes. He did so without explaining why the ’most probable’ explanation was not the right one on the facts.

The third ground of the appeal argued that intention of parodic use was not in any event sufficient to amount to bad faith, particularly in consideration of the principle of freedom of expression.

Analysis and application of the law

The ‘bad faith’ objection which involves a consideration of the state of mind of the applicant and of their intentions with respect to it, has been analysed by the CJEU in Sky v SkyKick[14]. Paragraph 75 summarises that “[Bad faith opposition] applies where it is apparent from relevant and consistent indicia that the proprietor of a trade mark has filed the application for registration of that mark not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin.”

The summary above is consistent with, at domestic level, the bad faith assessment of Arnold J in Red Bull[15].

In disagreeing with the Hearing Officer, Deputy Judge Purvis found that whilst some facts suggested that the applications were to some extent designed to ‘upset’ or ‘cock a snook’ at Apple, upsetting or ‘cocking a snook’ does not lead to the conclusion that parodic use was intended.

Further, there was no support in the evidence presented by Apple for reaching the conclusion that Swatch intended to use the trade mark to undermine Apple by parodic use. Simply annoying is not sufficient to amount to bad faith. The CJEU’s reference to ’undermining the interests of third parties’ suggests something which must be economically identifiable.

With reference to the use of the trade mark in a trade mark sense, Deputy Judge Purvis believed that it depends on the actual use in question, as a mark may well have parodic character whilst at the same time being perfectly capable of functioning as a trade mark. He provides the example of DUNK DIFFERENT as it could be a good Trade Mark for biscuits, “whilst no doubt conjuring up for some people a wry or even amusing allusion to Apple’s famous slogan.”[16]

Conclusion

This is the first case which considers parodic use and although the Judge found that parody is not an inherently dishonest business practice, he also indicated that there may be cases in which a mark is targeted in such a way that any use of it might transgress honest business practices and also impacts on the business interests of the wronged brand.

Charles Caleb Colton once wrote: “Imitation is the sincerest of flattery.”[17] Is it though?

 

 

[1] Shazam Productions Ltd v Only Fools The Dining Experience Ltd [2022] EWHC 1379 (IPEC).

[2] Coca-Cola Company v. Gemini Rising, Inc., 346 F. Supp. 1183 (E.D.N.Y. 1972).

[3]  Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (codification). Similarly, recital 27 of Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks (recast).

[4] Corte di Cassazione, Decision 38165/2022, CO.GE.DI. International – Compagnia Generale Distribuzione s.p.a. v Zorro Productions Inc. Civile Ord. Sez. 1 Num. 38165 Anno 2022.

[5] Arsenal Football Club plc v Matthew Reed [2003] EWCA Civ 696.

[6] Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd Case C-408/01.

[7] Arsenal Football Club plc v. Reed [2002] EWHC 2695 (CH), [2003] EWCA Civ 696.

[8] R v Johnstone [2003] UKHL 28.

[9] Anheuser-Busch v Budejovicky Budvar NP Case C-245/02 [2005] ETMR 27

[10] Swatch AG v Apple Inc [2021] EWHC 719 (Ch).

[11] The Oppositions were made by Apple under s5(4)(a) and s3(6) of the Trade Marks Act 1994 . We will focus on s.3(6) for the purpose of this article.

[12] Trade Marks Inter Partes Decision O/531/17 at [61].

[13] As explained by Geoffrey Hobbs QC sitting as the Appointed Person in IAN ADAM trade mark [2011] RPC 21 at [35].

[14] Sky v SkyKick C-371/18 [74]-[75].

[15] Red Bull GmbH v Sun Mark Ltd & Anor [2012] EWHC 1929 (Ch).

[16] Swatch AG v Apple Inc [2021] EWHC 719 (Ch) at [54].

[17] Charles Caleb Colton. ‘Lacon: or Many Things in Few Words; addressed to those who think’ (1820) at page 113.

Authored by James Tumbridge

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