David vs Goliath dispute in IP – Mercury not in retrograde for the claimant in Equisafety Ltd -v- Battle, Hayward And Bower, Ltd & Anor [2021] EWHC 3296 (IPEC)

With limited resources in terms of business time and litigation costs, small businesses often need to carefully consider where to focus their time, energy and funds in order to make best use of their resources when facing litigation, as larger entities have deeper pockets. Disputes with this feature are particularly prevalent when dealing with intellectual property rights.

This is where the Intellectual Property and Enterprise Court (‘IPEC’) comes in. Established in 2017, IPEC is a specialist branch of the High Court which was set up to hear disputes across all forms of intellectual property. IPEC is a cost effective court forum specifically designed to assist small businesses. It also has its own set of rules and streamlined procedures.

It is this court forum that has enabled Equisafety Limited (‘Equisafety’) to successfully bring a claim against a large competitor, Battle, Hayward and Bower, Limited (‘Battle’) in respect of infringement of Equisafety’s UK registered trademark and also for passing off. 

Equisafety designed, manufactured and sold high visibility safety products in the equestrian field. In around February 2015, it started to sell a high visibility jacket under the mark ‘Mercury’. Equisafety later sought to expand its range of high visibility products to include other items to be worn by horse riders.

Battle is a large competitor of Equisafety which also manufactured and sold equestrian products, both directly to consumers but also through stockists. In or around 2018/2019 (the date of which was not established during the litigation) Battle commenced selling products, including high visibility products for horse riders, under the label ‘HyVIZ Silva Mercury Reflective’ or shortened to ‘Silva Mercury‘ (the ‘Mercury Signs‘). 

On 6th June 2019, Ms Fletcher, Equisafety’s sole shareholder and director, emailed Battle and asked that it cease the use of the Mercury Signs to describe Battle’s high visibility equestrian products. On 7th June 2019, Equisafety applied to register the word ‘Mercury‘ as a UK trademark (the ‘Trade Mark‘). The Trade Mark was registered in class 9 for, amongst other things, ‘safety clothing for protection against accidents or injury‘; class 18 for ‘leg boots‘; and class 25 for ‘clothing excluding footwear‘. On 30th October 2019, following no response from Battle to the correspondence of Ms Fletcher despite chasers, Ms Fletcher issued a claim against Battle in her own name in the Small Claims Court. This case was subsequently transferred to the IPEC, with the claim form amended to substitute Equisafety as the claimant, rather than Ms Fletcher.

The claim was brought under Section 10 (1), 10 (2) and 10 (3) of the Trade Mark Act 1994. The claim was defended by Battle and included a counterclaim for invalidity on the basis that the Trade Mark was: devoid of distinctiveness; descriptive; customary in the course of trade; and filed in bad faith. 

Nicholas Caddick QC, sitting as Deputy High Court Judge, assessed the counterclaim arguments first. The judge held that the Trade Mark was not descriptive as the average consumer (an end user of the relevant products or an equestrian retailer who buys products to be sold on to end users) would not regard the use of the term ‘mercury‘ as being descriptive of any characteristic of the relevant goods. The goods were also not made of mercury and the fact that mercury substance has a silver white appearance does not mean that the products with that appearance are likely to be described as mercury products. Equisafety also used the term ‘Mercury‘ to denote that the goods were of the Mercury range or derived from mercury fabric manufactured by Equisafety.

The judge also held that the trademark had not become customary in the course of trade as the evidence submitted by Battle did not satisfy the necessary tests needed to discharge Battle’s burden of proof for the same.

Finally, the judge rejected Battle’s argument in respect of bad faith, as Equisafety’s filing of the application for the Trade Mark after the cease and desist letter had been sent did not support a case of bad faith. Additionally, Equisafety was also making use of the Trade Mark at the time the application was filed. Having a trade mark specification which is slightly more broad in scope than the goods it is currently being applied to does not render a trade mark invalid, the bad faith in circumstances where the trade mark was registered less than 5 years ago.

In terms of infringement, the judge rejected any claim under Section 10 (1) on the basis that Battle’s use of the Mercury Signs was not identical to the Trade Mark. In respect of Section 10 (2) the judge held that there was a likelihood of confusion based on Battle’s use of the mercury sign. This was made on a global assessment, when looking at the visual and aural similarities between the Trade Mark and Mercury Sign.

Infringement was also established in relation to Section 10 (3) as the judge held that Equisafety had acquired a reputation in the Trade Mark, and use of the Mercury Sign by Battle had led to injury of the trademark, namely; injury to its distinctive character; taking unfair advantage of the reputation of the Trade Mark; and the inference of knowledge Battle had of Equisafety’s use of the Trade Mark drawn by the judge.

Equisafety’s claim for passing off succeeded on the basis that Equisafety had acquired goodwill in the word ‘mercury‘ in relation to high visibility equine products. Battle’s clear misrepresentation that its products were derived or connected in some way with Equisafety had led to damage to Equisafety’s goodwill in the word mercury. 

Commentary

This case demonstrates that even small businesses can seize their moment and effectively enforce their rights. Equisafety first sought to use the Small Claims Court for this dispute, most likely in order to try and keep legal costs proportionate. Whilst the IPEC does offer its users certainty with regards to potential adverse costs exposure, making it a more favourable court for small businesses, it also allows such businesses to pursue IP disputes they may otherwise have viewed as commercially unviable, given the capped recoverable costs element for each stage of IPEC litigation. 

The IPEC procedure also offers its users a more streamlined process and is well versed in hearing cases of this nature. Seeking early advice of specialist IP lawyers can assist with decisions around proportionality of resources by giving opinions as to infringement and prospects of successfully obtaining a judgement against an alleged infringer.

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