Trade marks - High Court gives short shrift to BMW free-rider

The incorporation of company names which include famous trade marks is a frequent thorn in the flesh for top brands. In some cases this is done in order to try to extort money from the brand owner, in others to suggest an association with the brand. Whatever the reason, brand owners will wish to take swift action before any significant use can be made of the name. A recent case, in which a Mr Benjamin Michael Whitehouse decided that he wished to use his initials as part of his company name - BMW Telecommunications - illustrates the court’s approach.

Use of a trade mark in a company name

There is no doubt that use of a trade mark as part of a company name can infringe the trade mark ,[i] and it can also constitute passing off where it amounts to a misrepresentation that the company is associated with the brand owner. The main issue which arises in such cases is whether the mere registration of the name on the Companies’ Register and minimal use is likely to lead to confusion on the part of the public.   If not, the defendant will say, there is no liability and no injunction should be granted.  

The case

In 2017 Mr Whitehouse, who was involved in railway telecommunications and signalling work, incorporated a company called BMW Telecommunications Ltd of which he was the sole shareholder and director.  The famous car maker applied for summary judgment and an injunction against Mr Whitehouse and the company, claiming passing off and infringement of its BMW trade mark registered for vehicles and telecommunications. Mr Whitehouse countered by arguing that his company did not advertise its name and had only used it to invoice one client railway company which knew him well so that they had not been misled into thinking there was a connection to BMW – nobody was confused.  Relying on the leading case of ‘One in a Million’ (in which famous brand names had been registered as domain names), the Court held that the registration of the name in itself amounted to a false representation that the company was connected with BMW. The judge (Hacon J) held that ‘telecommunications’ was a descriptive term and people would see this as indicating the purpose of the BMW company in question.  Even if Mr Whitehouse’s clients were not confused, there was a risk of confusion for people consulting the Companies Register who were likely to believe that there was an association with the well-known car manufacturer. As a result, the defendants were liable both in trade mark infringement and passing off.

Was it relevant that BMW were Mr Whitehouse’s his own initials?

The ‘own name’ defence no longer applies in relation to a company name and was not raised in this case. In any event it is unlikely that this defence would have succeeded in a case such as this where the initials appeared to be being used in order to suggest a connection with the car manufacturer.

Was an injunction available?

As is not uncommon in such cases, by the time the matter came to court, Mr Whitehouse had changed the name of the Company, which was now called BW Telecommunications. Such manoeuvers can often take the wind out of the sails of the claimant – why continue if the problem appears to be resolved?  However, Mr Whitehouse had a bit of a history in these matters: in March 2012 he had incorporated a company called BMW Associates Ltd, which had entered into a co-existence agreement with the car manufacturer.  The incorporation of BMW Telecommunications Ltd by Mr Whitehouse in 2017 had not been a breach of this agreement, because Mr Whitehouse himself had not been a party to it. This history suggested that there was a risk that Mr Whitehouse might incorporate another ‘BMW’ company in the future, justifying the grant of an injunction.

 

[i] This was expressly confirmed in recent amendments made to the EU trade mark regulation (2017/1001 - Art 9.3(d)) in respect of EU trade marks and to the UK Trade Marks Act (S.10(4)) in relation to UK national marks

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