Similar but not the same

Cyclists will know of Assos. Fashionistas will know of ASOS. So what happens when the two brands go head-to-head?

The decision has now come out from the Court of Appeal in respect of the appeals and cross-appeals from the High Court judgment of Mrs Justice Rose. The claimants are the owners of the Assos cycling clothes company. They sell clothing in 37 countries worldwide, including 15 member states of the EU. The sales take place primarily through specialist cycling stores. In order to maintain a high-quality brand image, Assos has not encouraged sales on the internet and does not have an online store. Assos owns a community trade mark (CTM) registration for this mark in classes 3, 12, and 25. The specification of goods in the later class reads ‘clothing, footwear, and headgear’.

ASOS was founded in 1999, originally under the name ‘As Seen On Screen’. It has become a global fashion and beauty retail business conducted purely as an online retail business. The acronym ‘ASOS’ was adopted in 2002. From 2004, it started to sell its own ASOS-branded range of clothing with a turnover of nearly £500m. 

Community proceedings

ASOS owns a UK trade mark registration. It also applied for a CTM registration in 2006.
Assos opposed the application at the Office for Harmonization in the Internal Market (OHIM)
and was successful. The Board of Appeal at OHIM determined that the goods covered by the two community marks were identical or similar and that there was a high degree of visual and phonetic similarity between the marks, so there was a likelihood of confusion. On final appeal to the EU General Court, it was ruled that the alleged co-existence of the brands in part of the EU did not have the effect of excluding the likelihood of confusion in the EU as a whole.

It was not until December 2011 that Assos began proceedings for trade mark infringement
and passing off and sought invalidation of the UK registration belonging to ASOS. The online retailer counterclaimed that the CTM was liable to be revoked as it had not been used in relation to any clothing goods other than specialist cyclists’ clothing. ASOS was entitled to rely upon the ‘own name’ defence as this name had been adopted honestly and without references to Assos and, despite millions of sales, there had been no evidence of confusion.

At first instance, Rose J decided partially to revoke the CTM to ‘specialist clothing for racing cyclists, jackets, t-shirts, polo shirts, tracksuit tops, tracksuit bottoms, casual shorts, caps’ and dismissed the invalidity attack against the mark based on earlier rights. She stated there was no likelihood of confusion between the two marks so there was no infringement, and hence declined to decide on whether the own name defence applied. The judgment referred to ‘notional fair use’, but then referred to the reputation of Assos as a prestige brand for cycling clothing but with no reputation for casual clothing. On this basis, the judge found it unlikely there would be any material confusion between the two marks.

Appeal and dissent

The matter then went to the Court of Appeal, with Lord Justices Kitchen, Underhill, and Sales presiding. The case was heard in November 2014, so it has taken some five months to reach a decision. This is quite possibly because there is a dissenting judgment.

The majority judgment overturned the High Court decision on likelihood of confusion and damage to distinctive character. All three judges were unanimous in finding the judge had erred by only considering the likelihood of confusion with respect to the actual use made of the trade mark by Assos rather than looking at notional and fair use across the whole specification, even with partial revocation of goods. The judges found that there was some damage to the distinctive character of the mark. The ability of Assos to identify some of the goods for which it was registered as being the goods of Assos had, in some circumstances, amounted to the normal and fair use of that mark being weakened.

The absence of actual confusion was not conclusive, particularly because Assos sold
through a specialised distribution channel in the cycling field, not on the internet, whereas ASOS sold goods exclusively over the web. As an infringement test is based on the mark as registered, there had to be a likelihood of confusion.

The court was split on the extent to which the trade mark specification should be revoked
and whether the own name defence applied. On revocation, the majority felt that goods could
be as decided by Rose J with a slight amendment from ‘specialist clothing for racing cyclists’ to ‘specialist clothing for cyclists’. ‘Casual clothing’ was deemed too broad a category and therefore a list of specific goods was more appropriate, to read ‘jackets, t-shirts, polo shirts, tracksuit tops, tracksuit bottoms, casual shorts, caps’.

Dissenting, Sales LJ held that the category ‘casual clothing’ was appropriate. He said at paragraph 237 that ’neither party could suggest any sensible, non-arbitrary dividing line between the sort of leisurewear which Assos has already been selling and casualwear generally’. He therefore thought the appropriate formulation could be ‘specialist clothing for racing cyclists and casualwear’.

As infringement on appeal had been found, the own name issue came back into focus. The name ASOS had been adopted innocently, but the only search carried out by the defendant was a Google search. No trade mark searches were carried out either upon the adoption of the acronym originally or when its use was extended to new countries.

Their Lordships decided on balance that the defendants had fulfilled their duty to act fairly
in relation to the Assos business but had not conducted their own business in a way that would unfairly compete with the claimants. As a result, the own name defence applied.

Sales LJ, in dissent, stated that the own name defence should not be available and focused particularly on the failure to conduct reasonable trade mark checks. ASOS should have appreciated it ought to use another sign which differentiated its goods from those of Assos and then invested in developing that brand using a different sign. Creation by ASOS of country-specific own-language websites directed at other EU member states was a further step that the company should not have taken, as it failed to be compliant with honest practices in relation to the legitimate interests of Assos. More weight should be placed on the rights of the trade mark proprietor and the interests of the public not to be confused. 

Carrollanne Lindley is an intellectual property partner at Kilburn & Strode @KilburnStrode