UK Supreme Court Confirms Post-Sale Context Is a Basis for Trademark Infringement

The UK Supreme Court recently handed down judgement in the case of Iconix Luxembourg Holdings SARL v. Dream Pairs Europe Inc. The decision has provided important clarity on the question of whether post-sale confusion is actionable in trademark infringement claims.

The case centered on a trademark infringement claim filed by Iconix Luxembourg Holdings SARL (Iconix) based on its “double diamond” marks, used for the well-known UMBRO sports brand. Iconix alleged trademark infringement on the grounds of Section 10(2) and 10(3) of the Trade Marks Act 1994 against Dream Pairs Europe Inc. (Dream Paris) in its use of the “DP” sign. Iconix had, for an extensive period, used its earlier “double diamond” marks on sportswear, specifically football clothing and boots. Dream Paris had begun using its “DP” sign on a range of footwear, which included trainers and football boots.

At first instance, the claim had been dismissed on the basis the marks lacked similarity and there was no risk of confusion. On appeal, the Court of Appeal overturned the decision, conducting a fresh assessment of the similarity of the marks and likelihood of confusion. The Court of Appeal held there was a similarity between the marks in a post-sale context. This assessment considered the perspective of a consumer seeing the “DP” sign on the football boot of another person, namely from an angle and above. Dream Paris appealed to the Supreme Court.

SUPREME COURT

The Supreme Court allowed the appeal. The key issues determined by the Supreme Court were:

• Post-sale circumstances: The Supreme Court considered the circumstances of post-sale confusion to be relevant. It concluded that in establishing whether the signs are similar, “realistic and representative” post-sale circumstances can be taken into account.
• Absence of confusion at point of sale: Dream Paris had sought to narrow the scope of post-sale confusion, arguing that it was not relevant if the confusion did not result in damage at the point of sale or in the transactional context. The Supreme Court held that there can be a likelihood of confusion in the post-sale context, even in the absence of likelihood of confusion at the point of sale.
• Role of the appellate courts: The assessment of infringement under Section 10(2) of the Trade Marks Act 1994 is a multifactorial assessment. Given this requires the application of facts to the relevant law and an evaluative decision, the Supreme Court noted that it is quite possible for reasonable minds to reach differing conclusions. Unless the lower court has acted irrationally or made an error in legal principle, the higher court should not substitute their own views for the multifactorial assessment. It was found the Court of Appeal had incorrectly substituted its own evaluation in this case.

KEY TAKEAWAYS

The Supreme Court decision has confirmed that post-sale confusion, absent any confusion at the point of sale, is actionable as trademark infringement. This principle has been questioned previously, on the basis that a trademark owner does not suffer damage if confusion is limited to the post-sale context.

The Supreme Court decision enhances protection for brand owners, confirming the scope of protection extends beyond the point of sale. It has particular relevance for “copycat” products, where confusion may only arise in their post-sale use. Consequently, it is important that post-sale use is given due consideration when clearance searches are conducted.

Finally, the judgement serves to reinforce the challenges in overcoming a multifactorial assessment at first instance. This Supreme Court decision may create reticence from the Court of Appeal in overturning High Court decisions in future likelihood of confusion claims.