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How businesses are to lose Own Name defence in UK trade mark actions by 2019 in exchange for “bright line” rule
The Intellectual Property Office (IPO) recently confirmed that businesses are set to lose the ability to rely on the own name defence to defeat UK trade mark infringement claims, provided for by Section 11 (2) (a) of the Trade Marks Act 1994 via Article 6(1)(a) of the Trade Mark Directive 2008/95 (the TMD) (the Own Name defence). This is as a result of a study commissioned by the European Commission on the Overall Functioning of the European Trade Mark System which formed the basis of the changes which were introduced by the EU Trade Mark Regulation 2015 /2424 (the 2015 Directive). Traditionally the Own Name defence provided that a registered trade mark could not be infringed by an individual or business using their own name, where that individual or business was doing so in accordance with honest practices in industrial and commercial matters i.e. they were unaware of any prior rights to the name.
The Own Name defence will continue to apply in the UK for both businesses and individuals until around 14 January 2019 at the latest (when the 2015 Directive must be implemented into national laws across EU member states). Thereafter, as the law currently stands, it will apply to the personal names of individuals only. For EU trade mark infringement actions the change has already taken place whereby Article 12(a) of the Community Trade Mark Regulation 207/2009 (the CTMR) has been amended by Article 1(13) of the 2015 Directive.
The case of Sky v SkyKick  EWHC 155 presided over by Arnold J in the High Court, earlier this year, provided an explanation of the reasons behind the change in the law. SkyKick (a US based company specialising in computer services) sought to trade mark SKYKICK in 2016, following which Sky (the UK based media giant) issued proceedings for trade mark infringement and passing off, including allegations of both EU and UK trade mark infringement. In the proceedings, SkyKick sought to rely on the Own Name defence provided by Article 12(a) of the CTMR and Article 6(1) (a) of the TMD (amongst other defences); and, applied for an order to make reference to the Court of Justice of the European Union (CJEU) on the question of revocation of the Own Name defence, on the grounds it was contrary to fundamental EU rights and therefore invalid.
Consideration of this issue by the CJEU would only be possible, if SkyKick were permitted to rely upon the Own Name defence. This led to an assessment by Arnold J as to whether the use of the SkyKick sign was “in accordance with honest practices in industrial and commercial matters”. Even though Arnold J considered that SkyKick’s use of its own name was not in accordance with honest practices in industrial and commercial matters, he went on to consider SkyKick’s argument that restricting the Own Name defence to individuals was invalid and equated to an unjustified or disproportionate interference with EU fundamental rights enjoyed by companies, in any event. However, whilst Arnold J considered that the restriction of the own name defence to natural persons did equate to an interference with, or restriction upon, the commercial freedom of expression and the freedom to conduct a business, ultimately he rejected SkyKick’s argument. He considered that on balance the measure to remove the Own Name defence for businesses was justified by legitimate objectives (the protection of trade marks) and was not manifestly inappropriate.
Arnold J explained that different considerations would be involved depending on whether the defendant was an individual or a business. An individual would generally be named by their parents at birth, the choice of name being strongly influenced by family history and other cultural factors. By contrast, businesses are named when they are formed and generally have a free choice of name within the law. In Arnold J’s view, this difference between the positions of individuals and businesses could be accommodated by the requirement that the use of the sign be in accordance with honest practices in industrial and commercial matters, meaning that the removal of the own name defence for businesses was not manifestly inappropriate. He also commented that it has the advantage of providing a clear “bright-line” rule for businesses rather than leaving matters to a case-by-case assessment.
As such, the position remains that businesses can no longer rely on the Own Name defence in relation to European trade mark actions, and it looks likely, in the absence of any further challenge, that it will also disappear in the UK come January 2019, if not before. These changes will mean that businesses will have to proceed with extra caution when seeking to register new trade marks and launching new branding campaigns which are similar to/the same as existing registered trade marks in the UK and EU, and it is all the more important to undertake appropriate searches prior to the adoption of trading or company names to ensure that there are no relevant prior rights.
For advice on protecting or commercialising your organisation’s intellectual property please contact a member of our Corporate/Commercial team. Alternatively if you need advice or assistance with an intellectual property dispute please contact our Dispute Resolution team.