The Claridge’s Affair: A win, but at what cost?

Claridge’s Hotel Limited (Claridge’s) recently succeeded in challenging in IPEC the use of the CLARIDGE name by Claridge Candles Limited (Claridge Candles) – a small one-person business.

However, the success came at with a cost for the world renowned hotel as in doing so it lost one trade mark registration entirely and had a second mark reduced in scope due to a non-use counterclaim, highlighting one of the risks of instituting trade mark infringement action.

Background
Claridge’s has been operating under the Claridge’s name since 1889 and registered UK trade marks for ‘CLARIDGE’S’ in 2003 and again in 2018 for broader protection. A claim was brought against Claridge Candles and its sole owner and director in October 2018, claiming infringement of the two registered trade marks under s10(2) and s10(3) and for passing off. Claridge Candle’s brought a counterclaim for partial revocation of Claridge’s registered trade marks on the basis of non-use.

Counterclaim
In light of the evidence of use of Claridge’s marks, Claridge Candles was partially successful in its counterclaim for non-use. As a result, Claridge’s was forced to fully surrender its 2003 mark and partially surrender its 2018 mark, resulting in them having a word mark registered only in classes 3, 5, 16, 35, 43 and 44 to rely on for the infringement allegations. Claridge’s s10(2) argument failed as a result as there was no registered UK trade mark owned by Claridge’s in the same class as candles.

Claridge’s argument (and supporting evidence) focused on the use of the mark in classes 3 and 5 which were considered to be the closest to the Defendant’s goods. While Claridge’s demonstrated the use of the mark on toiletries, such as shampoos, these were provided to guests free of charge, and the court concluded that this was not a genuine use of the mark to “create or preserve a market for the goods or services that bear the mark.” As they were not actively carving out a market for the toiletries they were unable to rely on a s10(2) claim.

Infringement claim
In relation to the s10(3) claim, the Court held that Claridge’s easily met the necessary criteria for success, holding that the ‘CLARIDGE’S’ mark had a “very substantial reputation when used in relation to hotel services” and was linked to the notion of “luxury, glamour, elegance and exclusivity.” It concluded that there would be “a link between the Defendants’ sign and the Claimant’s mark in the mind of the average consumer… because of the similarity in the marks, the fact that both are premium offerings, the strength of the mark’s reputation and the degree of its distinctive character. All of these factors contribute to the link, as does the likelihood of confusion which arises as a result thereof.”

Further the Court found that the use of the mark, irrespective of Claridge Candles knowledge or intentions, enabled Claridge Candles to “charge higher prices for their products, and/or enables them to sell more of their products to consumers. As such it has an effect on the economic behaviour of their customers.” This not only created a commercial advantage for the Defendant but created an unfair one, adding to the success of the s10(3) claim.

Claridge’s submitted that its passing off claim depended on the success of its S10(3) claim, and the Court held that, similar to the reasons for the success of the s10(3) claim, the “Defendants’ use of CLARIDGE on its products is likely to lead the public to believe that the goods offered by the Defendant are the goods of the Claimant or that there is some trade connection or association between the Claimant and the Defendants.”

Burning Thoughts
There are many interesting takeaways from this decision, for parties in either claimants or defendants positions.

For a party opposing the registration of a mark, this decision demonstrates the exact purpose and ability of a s10(3) claim, and the benefit of having it in a company’s arsenal when opposing a similar mark, or the same mark in classes not registered. However, this case also provides caution to brand owners, especially for those registered in classes for goods and services where there is no genuine use. A company must consider the potential benefit of a claim verses the potential risk of a counterclaim, and to be aware of any potential weaknesses in their trade mark portfolio and select the most relevant mark to oppose a registration than relying on all marks owned. Such consideration could have prevented the voluntary surrender of the 2003 registered mark.

For parties who find themselves in the same position as Claridge Candles this case highlights the benefit of a successful counter claim for non-use, especially for marks over five years old. Further this case demonstrates the importance of carrying out not only trade mark searches but also company searches in order to avoid finding yourself in such a position. Had a name search been carried out (be it though companies house or via google) the defendant would have identified Claridge’s and potentially avoided the entire matter.

By Simon Casinader and Daniel Cartmell