Court of Appeal “crowded market” ruling clarifies trademark infringement considerations

The case highlighted that the degree of distinctive character possessed by a trade mark is affected by the closeness of similar marks being used by third parties. It also confirmed that the concept of a crowded market is relevant to the distinctive character of the trademarks and that market context will be taken into account when a court is asked to assess trade mark infringement. However, what will be deemed to be “relevant context” - and therefore how far context extends - is yet to be fully judicially explained.

The dispute revolved around the use of the “Beverly Hills Polo Club” trade mark, owned by Lifestyle Equities CV, and the “Royal County of Berkshire Polo Club” branding. Lifestyle Equities owned registrations for a mark used in various territories, including the UK and EU. The registrations covered clothing, footwear, fragrances, luggage and watches.

The primary contention was that the similarities between the two brands could lead to consumer confusion.

The Court of Appeal upheld the decision of the High Court, which found in favour of Royal County of Berkshire Polo Club. The court ruled that there was no likelihood of confusion between the two brands, despite the similarities between their names and logos. The court agreed with the High Court decision that the “crowded market” of polo-themed trade marks affected the distinctive character of the trade marks and reduced the risk of confusion, dismissing the infringement claim.

Lifestyle Equities had argued that the issue of a “crowded market” should not have been taken into account when assessing infringement. They argued that the other polo brands were irrelevant as a matter of law when assessing distinctiveness and did not form part of the relevant context in which infringement should have been assessed.

However, the Court of Appeal judgment emphasised that the market for polo-themed clothing and accessories is crowded, with several brands using similar motifs and names, including the well-known Polo by Ralph Lauren, and therefore the crowded market was relevant.

The Court of Appeal further dismissed Lifestyle Equities’ argument that the High Court had been wrong to take into account co-existence agreements entered into by both Lifestyle Equities and the Royal County of Berkshire Polo Club with various other third parties when assessing the likelihood of confusion. The judge held that co-existence agreements may form part of the factual background against which a court must make its assessment of confusion and, insofar as they have effects on the relevant market, it may be necessary to take those effects into account. Even if the co-existence agreements have no effect on the market, they may provide some insight into what market participants consider to be acceptable or unacceptable. Provided that caution is exercised before drawing any conclusion from this, it may be appropriate to take it into account as part of the global assessment of the likelihood of confusion.

The ruling may have significant implications for brands that operate in a market with common themes. The ruling clarifies important aspects of trade mark law in the UK, emphasising the need for distinctiveness while providing valuable guidance for brands navigating the complexities of trade mark protection in competitive markets. The ruling also provides clarity on the boundaries of trade mark protection in a crowded market where marks include elements widely used by other brands.

This article first appeared in WTR Daily, part of World Trademark Review, in October 2024.