High Court confirms 'initial confusion' as principle of EU trade mark law

Even if the confusion has been cleared up by the time the purchase is made, that 'initial confusion' can form the basis of a trade mark infringement claim, the Court said.

European trade mark law bans the use of material which causes "a likelihood of confusion" with existing trade marks.

The High Court has ruled in a case in which asset management company Och-Ziff Management claimed that investment management company OCH Capital infringed its trade marks in 'och' in its name, logo, email addresses and domain name.

The European Council Regulation on Community Trade Marks says that something infringes a trade mark when "because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark".

Mr Justice Arnold explained in his ruling that the idea of 'initial interest' confusion came from US rulings, and examined whether or not it applied in the UK as part of EU trade mark law.

He examined rulings from the European Court of Justice (ECJ) dealing with the question of whether or not it was trade mark infringement for search engine company Google to allow companies to pay for their adverts to appear as a result of rivals' trade marks being searched for.

Those rulings said that there is infringement in cases where "that advertising does not enable average internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark ... or, on the contrary, originate from a third party".

"It ... seems clear from this that there can be a likelihood of confusion ... at the point when a consumer views an advertisement, whether or not the advertisement leads to a sale and whether or not the consumer remains confused at the time of any such sale," said Mr Justice Arnold.

The judge said that OCH Capital had not presented evidence of any previous rulings which supported its view that initial interest confusion is not prohibited by the Council Regulations on Community Trade Marks.

"My conclusion is that the weight of authority supports the conclusion that initial interest confusion is actionable under Article 9(1)(b) [of the Regulations]," said his ruling. "[OCH Capital] had no convincing answer to the point that Article 9(2) shows that there may be an infringing use of a sign even if there is no sale, in particular in an advertisement. As discussed above, this analysis is supported by the [ECJ] decisions."

Mr Justice Arnold also supported Och-Ziff's argument that a trade mark could suffer damage even when no sale has taken place.

"[OCH Capital did not] have a convincing answer to the point that confusion arising from an advertisement is capable of causing damage to the trade mark proprietor even if such confusion would be dispelled prior to any purchase," he said. "Although there will be no diversion of sales in such circumstances, there are at least two other ways in which the trade mark proprietor may be damaged."

"The first is that a confusing advertisement may affect the reputation of the trade marked goods or services. It is irrelevant for this purpose whether the defendant's goods or services are objectively inferior to those of the trade mark proprietor. The second is that such confusion may erode the distinctiveness of the trade mark," he ruled.

Trade marks offer protection for elements of a brand's identity in defined countries and in relation to defined classes of goods and services. Infringement was an issue between Och-Ziff and OCH Capital because the two companies operated in the same field of business – investment management.

OCH Capital said that it did not infringe the trade mark in question because its name, unlike Och-Ziff's, had the word 'Capital' at the end of it.

"I disagree," said Mr Justice Arnold. "'Capital' is descriptive, or at least non-distinctive, for financial services, and in particular investment services. Given the distinctiveness of the Trade Mark, the identity of the services and the non-distinctiveness of the word 'Capital', I consider that there is a manifest likelihood of confusion on the part of both types of consumer in the case of all five signs."