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Expert Insights

24 August 2021

Consumers’ unwitting assumptions: A [wh]iskey business in brand competition

In the recent case of Liverpool Gin Distillery Ltd v Sazerac Brands LLC [2021] EWCA Civ 1207, the Court of Appeal considered the question of ‘indirect confusion’, ultimately confirming the High Court’s original ruling that the sign AMERICAN EAGLE for a bourbon whiskey infringed Sazerac’s earlier trade marks EAGLE RARE for “whisky”/“bourbon whiskey”.

Likelihood of Confusion’

A sign will be found to infringe an earlier registered trade mark where that sign is identical or similar to the mark and is used for identical or similar goods and/or services to those protected by the registration provided there is also a ‘likelihood of confusion’ (which includes a likelihood of association) with the earlier mark.

Direct confusion is where a consumer, when faced with two marks, mistakes one mark for the other. However, indirect confusion requires a mental process on the part of the consumer – he/she realises the marks are different, but taking account of a common element between the two, believes that both marks are associated with the same owner or an undertaking which is economically linked to the owner.

Case Overview

In the original judgment, the judge noted that there was “a significant degree of similarity, but not overwhelming similarity” between the sign and the earlier marks (a UK trade mark and an EU trade mark, converted into a UK comparable post Brexit).

Having looked at the expert evidence the judge considered there to be a “greater than usual degree of brand loyalty within the bourbon market and so, on average, the consumer has a somewhat higher degree of attentiveness than a consumer of certain other spirits”.

With regard to direct confusion, the court held that due to this higher degree of attention, there would be little likelihood that a significant proportion of the public would mistake the EAGLE RARE product and the AMERICAN EAGLE product as being the same. However, in relation to indirect confusion, due to the inherent distinctiveness of EAGLE RARE in the UK bourbon market, it would not be inconceivable for a consumer who came across AMERICAN EAGLE to associate the products with each other. Particularly, as prior to the launch of the AMERICAN EAGLE product, there was no other product in the UK bourbon market that contained the word ‘Eagle’. It was also highlighted that it is not uncommon in the spirits market for there to be connected brands with similar names, which belong to the same entity. The Appellants (i.e. those responsible for the AMERICAN EAGLE brand) appealed against this decision, arguing the judge was in error when assessing the likelihood of confusion. 

The Court of Appeal held that the original judge was entitled to conclude that there may well be a likelihood of some consumers  believing that EAGLE RARE and AMERICAN EAGLE were related brands. It was highlighted that it was perfectly reasonable for the first instance judge to conclude that consumers were unlikely to scrutinise a product’s label to ascertain whether there was in fact a link between the two brands; Arnold LJ noting: “trade mark law is all about consumers’ unwitting assumptions, not what they can find out if they think to check”.

Comment

When looking at the likelihood of confusion in the context of a trade mark dispute, attention is often focussed on whether a consumer is likely to mistake one mark/product for another. However, this case serves as a useful reminder that the possibility of a brand being mistakenly linked to that of another can instead be relevant.

As noted in the judgment, this will particularly be at issue where:

  • the common element of the mark and sign is so distinctive that it is assumed that no-one else but the brand owner would be using it;
  • the later sign appears as a sub-brand or brand extension by the addition of a banal/ non-distinctive element to the earlier mark (e.g. mini, lite, express etc); and/or
  • the change of an element of a mark appears logical and consistent with a brand extension.

However, as the Court of Appeal noted, these examples are not exhaustive and indeed the incorporation of a mark within a sign to suggest co-branding can also be relevant.

This case serves as a salutary warning to competing brands that even though a product’s get-up may be different (noting that the two bottles/their labelling looked notably different in this case), the incorporation of an earlier mark within a brand name may be problematic, especially where that earlier mark is distinctive. As such, brand owners need to consider whether an average consumer could consider their brand to be linked to another. If the answer is ‘yes’ then it might be wise to return to the drawing board.

https://www.bailii.org/ew/cases/EWCA/Civ/2021/1207.html

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