Frank Industries Pty Ltd ("Frank") is an Australian company and the owner of UK and EUTM (designation of IR) registrations for LNDR in relation to “clothing” including “sportswear” in Class 25. It has been using the LNDR trade mark in the UK since it launched in 2015. Frank's business experienced a very steep growth trajectory in the first few years and its clothing has been stocked by premium retailers and stores such as Net-a-Porter and Harrods, Harvey Nichols and Selfridges.
In January 2018, the well-known sportswear manufacturer Nike commenced an advertising campaign which used the sign LDNR in a number of ways, for example:
The aim of Nike's campaign was to appeal to the London-based 16-24 demographic. The campaign comprised a number of elements including a film, social media, website, awards, events, in store promotion, media partnerships, sports partnerships, keyword adverts and promotional clothing.
Frank commenced proceedings against Nike for trade mark infringement and passing off in the UK's Intellectual Property Enterprise Court ("IPEC").
IPEC is an alternative venue to the High Court for intellectual property disputes, and typically deals with simpler cases which can be dealt with by way of a cheaper and more streamlined procedure, and where the claim is under £500,000.
Frank was granted an interim injunction in March 2018 and the trial took place in July 2018, with the decision being issued just 12 days later.
Nike denied infringement and counterclaimed to invalidate Frank's registrations.
Arnold J's decision was handed down on 25 July 2018.
The average consumer was deemed to be a purchaser of clothing, in particular ladies' sportswear, who is a member of the general public and exercises a moderate degree of care and attention.
Arnold J considered that modern consumers in the UK, particularly younger consumers, are in the habit of writing and reading abbreviations in digital forms of communication such as texts, messages, tweets and Instagram posts, and in particular abbreviations in which vowels are omitted from words. However, such abbreviations can be used and understood because the context makes the intended meaning clear.
Similarity of marks
LDNR was considered to be highly aurally and visually similar to LNDR. The marks are identical except that the middle two letters are transposed. The marks were also considered to be highly conceptually similar – the average consumer would either understand both marks as an abbreviation of Londoner or would perceive both marks as meaningless. Arnold J considered it obvious that the average consumer would be likely to misread, mistype, mishear or misspeak one for the other from time to time.
Use of a sign in the course of trade
The main issue was whether Nike had used LDNR as a sign in the course of trade. While the LDNR mark had been placed on promotional clothing by Nike, it argued that the origin of those goods was clear because the famous Nike "Swoosh" was also present. In addition, Nike contended that the average consumer would understand LDNR as a reference to Londoner rather than a reference to the origin of the goods.
Arnold J was of the view that some consumers would understand LDNR as "Londoner" and others would see it as a brand name. This would depend on the context of the use, for example in relation to Nike's t-shirts, there was no context to inform a consumer of the meaning of LDNR therefore some would perceive it as a brand name. Nike's t-shirts also (mistakenly) bore ® symbols, which reinforced LDNR as a brand rather than merely a descriptive abbreviation.
Frank argued that the combined presence of the Nike "Swoosh" and the LDNR mark would cause consumers to incorrectly believe that there had been a collaboration between Frank and Nike. This was supported by witness evidence of actual confusion, which Arnold J thought reinforced the fact that LDNR had been used by Nike as a trade mark.
Nike argued that Frank's registrations were invalid, since LNDR is inherently descriptive as an abbreviation meaning Londoner. However, Nike was unable to provide any dictionary evidence (including online evidence such as Wikipedia or Urban Dictionary) to support this claim. Whilst Nike submitted social media evidence showing that the term LNDR was used as an abbreviation of Londoner, Arnold J considered that all this showed was that LNDR was capable of being used and understood by some consumers to mean Londoner, but only when used in an appropriate context in digital media. Without this context, the mark LNDR has a moderately strong distinctive character in relation to clothing. There was no evidence to show that the sign LNDR was perceived by the average consumer as denoting a characteristic of clothing, so as to render the registrations invalid.
The outcome of the decision was that Frank's trade mark registrations were found to be valid, and Nike was found to have infringed those registrations. Because the passing off claim stood or fell with the infringement claim, that too succeeded.
From a procedural point of view, this case serves as a great demonstration of how quickly IPEC can act when a matter is time critical.
The case also shows that the court will consider context, including the relatively modern landscape of social media, when assessing the average consumer and how they might perceive a trade mark and likelihood of confusion.