Mrs Justice Rose:
- The Claimant ('Roederer') is a French company which produces champagne sold under a variety of brand names. The brand to which this dispute relates is CRISTAL champagne, said by Roederer to be one of the best-known prestige cuvées in the world. Roederer is the registered owner of a UK trade mark 1368211 for the word CRISTAL which is registered with effect from 22 December 1988 in respect of champagne wines. It is also the owner of a Community trade mark ('CTM') number 008513913 for the word CRISTAL registered with effect from 27 August 2009 in respect of wines, sparkling wines, wines of French origin with the designation of origin 'Champagne'. The scope of the goods covered by the registration of the mark is thus wider for the CTM than for the UK trade mark.
- The First Defendant ('JGC') is a Spanish company which makes and sells a range of wines including sparkling wines. The global turnover of JGC in 2013 amounted to €745 million. It claims to be the largest Spanish producer of wines in both Spain and the EU as well as being the fourth largest producer of wine in the world. It sold 40 million cases of wine in 2013 and made exports of about €400 million in 2014. One of its products is a cava sparkling wine made in Spain. JGC is the registered proprietor of UK trade mark registration number 2425725 registered in respect of the sign "CRISTALINO JAUME SERRA" in class 33 in relation to, amongst other things, sparkling wines and wines. This mark was applied for on 28 June 2006 and registered on 31 July 2009. JGC is also the registered proprietor of the CTM registration number 5178538 applied for on 4 July 2006 and registered on 14 August 2009 in respect of the sign "CRISTALINO JAUME SERRA".
- The Second and Third Defendants (Asda and Morrisons respectively) are well known supermarket chains operating in the United Kingdom.
- Roederer alleges in these proceedings that the Defendants have infringed Roederer's UK and Community trade marks by importing into and selling in the United Kingdom its Spanish sparkling wine under the sign 'CRISTALINO'. The product comes in three forms, CRISTALINO Brut, CRISTALINO Rosé and CRISTALINO Sparkling Reserva Cava. JGC has sold the products to Asda and Morrisons, amongst others. Bottles of Cristalino cava sell for about £5 each. It is alleged that this amounts to an infringement under both section 10(2) and 10(3) of the Trade Marks Act 1994, so far as the UK mark is concerned and under article 9(1)(b) and 9(1)(c) of the Community Trade Mark Regulation (Council Regulation 207/2009, OJ L78 28.3.2009 p. 1) ('CTMR') so far as the Community trade mark is concerned.
The background
- The claim was issued on 19 March 2010. The claims against Asda and Morrisons have been settled; Tomlin orders were made in respect of Morrisons on 28 April 2011 and in respect of Asda on 14 October 2011. Proceedings against them are therefore stayed on the basis, as I understand it, that they will no longer stock JGC's CRISTALINO wine. The supermarkets have played no further part in the case.
- JGC initially contested the claim up to the point when they served an Amended Defence and Counterclaim on 7 February 2011. In that Defence, JGC admits that Roederer produces champagne under the 'composite sign' 'LOUIS ROEDERER CRISTAL CHAMPAGNE' and that that product has been sold in the UK. But the Claimant is put to proof as to the volume and duration of sales in the UK and of any use by them of the CRISTAL mark other than as part of the composite sign. It is admitted that JGC makes and sells cava and that it intends to use its mark, that is CRISTALINO JAUME SERRA, in relation to its cava.
- In early 2013 JGC ceased to instruct solicitors within the jurisdiction to conduct the proceedings on their behalf. They have not responded to the various directions orders made by the court; they have not provided any disclosure or put in any evidence in support of their case. It would have been open to Roederer to apply for a default judgment but because these proceedings are part of a much wider battle between Roederer and JGC in many jurisdictions across the world, Roederer wanted to obtain a judgment on the merits of their claim. At a pre-trial review hearing on 16 June 2015, I made an order that unless by a specified date JGC indicated an intention to cross-examine Roederer's witnesses, those witnesses' evidence would be treated as having been confirmed on oath and the witness did not have to attend trial. The exception to this was Frédéric Rouzaud, the chief executive of Roederer and the sixth generation of the family to own and manage the champagne house. Nothing was heard from JGC. A trial took place over two days in which I was taken carefully through the evidence put forward by Roederer and detailed submissions were made on the law by Mr Malynicz on behalf of Roederer. M Rouzaud did attend trial and confirmed his evidence on oath in the witness box.
- The other witnesses of fact for Roederer were:
i) Michel Janneau who is Executive Vice President of Roederer and in charge of Communications and Marketing;
ii) Mark Bingley who is the Fine Wine Director of Maisons Marques et Domaines Limited. That company is a wholly owned subsidiary of Roederer and their sole distributor of CRISTAL champagne in the UK. He holds the qualification of Master of Wine from the Institute of Masters of Wine. His evidence describes the UK champagne market;
iii) Christophe Pelèse who is a partner at the French law firm Ernest Gutmann-Yves Plasseraud SAS in Paris. His firm specialises in intellectual property disputes and he is a trade mark attorney. His firm has managed the Roederer portfolio of trade marks since 1985. That portfolio now includes around 200 marks in about 110 jurisdictions;
iv) Georgia Davis who is a legal director at the London firm of Reynolds Porter Chamberlain LLP. Her evidence summarises the procedural history of the proceedings.
- Roederer also relied on the expert report of Philip Malivoire, director of Philip Malivoire Ltd. His evidence described the survey that was carried out by Roederer to establish the extent of brand recognition among the alcohol buying public of the CRISTAL brand.
- The following findings about the history and current position of the Roederer champagne house and the CRISTAL cuvée are mostly taken from the evidence of M. Rouzaud and M. Janneau.
- The Roederer champagne house traces its origins back to 1776 and was named 'Louis Roederer' in 1833. It is one of the small number of 'Grand Marques' or 'prestige cuvées' French champagne houses which produce the best champagne in France. It has always been and remains a family owned and run company. Roederer produces a range of vintage and non-vintage champagnes from its headquarters at Reims. They bear various names which do not use the CRISTAL mark. Non-vintage champagnes are called Brut Premier or Carte Blanche and the vintage champagnes bear the name Vintage, Rosé and Blanc de Blancs. Roederer also produces a range of sparkling wines in the Anderson Valley of California. These are not labelled as champagne but are marketed under the name 'Roederer Estate'.
- M Rouzaud explains that Roederer created the first 'Cuvée de Prestige' at the request of the cellar master of Tsar Nicholas II of Russia in about 1876. Roederer had been the official wine supplier to the Imperial Court of Russia and was invited to produce something special for the Tsar himself. M. Rouzaud's evidence is as follows (referring to Roederer as CLR):
"22. As the political situation in Russia during his rule was unstable, the Tsar feared that assassination attempts would be made on his life. The Tsar noted that the design of a standard Champagne bottle (which was often made of green glass) made the colour and effervescence of the Champagne invisible to the eye. He therefore requested that his personal cuvee be served in bottles made of transparent crystal glass with a flat bottom to remedy this defect, as well as to foil any would-be assassins from inserting explosives in the indentation at the base of the bottle.
23. The resulting "Cuvée de Prestige" (the first of its kind) was named CRISTAL, in reference to the look and feel of the bottle. For its initial years of production, CRISTAL was made strictly for the private consumption of the Tsar. After the fall of the Russian Monarchy during the Russian Revolution in 1917, CLR decided after a short time to continue to produce CRISTAL and market it internationally. CRISTAL was first made commercially available in the UK in 1924.
24 CRISTAL is, and has always been, CLR's flagship brand since its creation in 1876. The history and prestige associated with CRISTAL is very valuable to us and, as such, we have ensured that the look and feel of the bottle has remained largely unchanged throughout the years.
25. CLR's success is directly linked to and has resulted from the reputation and success of CRISTAL. As such, whilst there is no separate entity for CRISTAL and it is part of the family of wines which make up CLR, it nevertheless stands alone as CLR's most important and valuable product."
- The labelling that appears on a bottle of CRISTAL champagne today is very similar to the original label used in 1886 with only minor modifications. The labelling of the other champagnes in the Roederer range are carefully designed, M. Rouzaud says, to reference the CRISTAL label but still to be distinct from it (and they do not use the CRISTAL word). There remains a major difference between CRISTAL and the others because CRISTAL is the only champagne in the clear flat-bottomed bottle – the others are in the more usual green bottle with the indented base.
- Mr Bingley describes the champagne market as dividing into three sectors. The low price sector (£10 - £25 per bottle) includes supermarket own brands and lower priced brands from the recognised champagne houses. In this part of the market, champagne competes with other sparkling wines such as Prosecco. The middle market is bottles priced at £25 - £45 and includes Roederer's Brut Premier and Carte Blanche brands. There are high quality non-vintage champagnes from reputable champagne houses. Thirdly there is the luxury market (£75 – over £500 per bottle) including famous luxury brands from the top champagne houses such as CRISTAL, Krug, and Dom Pérignon. CRISTAL is the most expensive of the champagnes that Roederer sells in the UK, retailing along with CRISTAL Rosé at upwards of £175 per bottle when sold off licence. A bottle of CRISTAL sells for considerably more if bought at a restaurant or night club.
- Roederer produces a total of about 500,000 bottles of CRISTAL a year, compared, say, with Moët & Chandon which produces about 7.5 million bottles of Dom Pérignon champagne per year. Because it depends on the excellence of the harvest, in some years no CRISTAL is produced at all. M Janneau states that CRISTAL has existed for a long time as a brand without having to advertise because demand has always outstripped supply. The company still does not have a large marketing budget and does not undertake extensive year round marketing. Roederer produces a glossy magazine "L'Officiel" which is devoted to information about Roederer wines including CRISTAL. About 60,000 copies of the magazine are issued to customers and distributors around the world (about 5,000 copies in the UK). M Janneau describes the limited advertising campaigns that have been carried out over the years; seeking he says 'to modernise the image of the house without compromising its elegance and prestige'. Advertisements have been placed in specialist magazines for wine connoisseurs or trade purchasers such as Decanter and Drinks Business and in up-market general interest magazines such as the New Yorker and Harpers Bazaar. M Janneau also revamped the company's website to expand, he says, the communication of Roederer to a new modern dynamic audience, namely the younger generation and future buyers of champagne.
- Roederer has never paid for celebrity endorsements or marketing opportunities at prestigious occasions. The brand has featured in a number of Hollywood films – although Roederer does not pay for these endorsements, where they give their consent to the use of the brand, they may supply a case of CRISTAL to be used in the film. Roederer has recently entered into sponsoring deals with up-market partners including The Royal Academy of Arts in London and Cowdray Polo Club. The brand has also in recent years featured in the press as part of articles about celebrities including notable politicians and sportsmen and women as well as those who represent 'new money' such as pop stars, rappers and comedians. I shall refer to this evidence further below.
The legislation
- Section 10 of the Trade Mark Act 1994 provides that:
"10 - (2) A person infringes a registered trade mark if he uses in the course of trade a sign where because—
(a) …
(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.
(3) A person infringes a registered trade mark if he uses in the course of trade a sign which—
(a) is identical with or similar to the trade mark, and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered,
where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."
- The corresponding provisions for the CTM are found in the Community Trade Mark Regulation 207/2009 on the Community Trade Mark (OJ L78 24.3.2009 p. 1) ('CTMR') which codified and consolidated the much amended Council Regulation 40/94. Article 9 provides:
"Article 9
Rights conferred by a Community trade mark
1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) …
(b) any sign where, 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;
(c) any sign which is identical with, or similar to, the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark."
- For ease of exposition, I shall refer to an infringement of section 10(2) and article 9(1)(b) as a 'confusion infringement' and an infringement of section 10(3) and article 9(1)(c) as a 'reputation infringement'. Roederer allege that JGC's use of the CRISTALINO sign on their Spanish cava constitutes both a confusion infringement and a reputation infringement of their UK and Community marks.
The reputation of CRISTAL champagne
- I will consider the two kinds of infringement alleged separately since the elements that Roederer must establish in order to make good their claims differ. However, the issue of the scope of the reputation of the CRISTAL mark is key to the application of article 9(1)(c) and also relevant to the application of article 9(1)(b) because a greater distinctive character as a result of use will increase the scope of protection of the mark. It is therefore convenient to consider it here.
- M Janneau and Mr Bingley give evidence about the history and scale of sales of the brand in the United Kingdom. The UK champagne market is one of the most important in the world and is the largest export market for France. About 31 million 75cl bottles of champagne are distributed in the UK each year. For CRISTAL champagne, the UK is the fourth largest market in the world. Sales records starting in 1949 show that six bottles of CRISTAL were shipped to the UK in that year. This has grown to about 40,000 bottles of CRISTAL making their way into the UK each year. This amounts to less than 0.5 per cent of the UK champagne market. The bottles are distributed by Maisons Marques et Domaines Limited carefully throughout the year. The bottles are supplied to Michelin-starred restaurants, the Ritz and Claridge's Hotel, to department stores such as Fortnum & Mason and Selfridges and to prestige night clubs. They are not sold to supermarkets other than Waitrose but are sold through wine merchants such as Majestic, Oddbins and the Wine Society with sales both online and through bricks and mortar shops. I find therefore that although the volume of sales is small compared to some other champagnes and wines in general, they have been significant and valuable over several decades.
- I turn then to the important question of the existence and nature of the reputation of CRISTAL as a trade mark in the United Kingdom and to Roederer's contention that, as Mr Bingley put it, the CRISTAL mark 'personifies luxury, excess and indulgence' and has 'become shorthand for success and celebration in the eyes of the media'. I note first that I consider the CRISTAL mark to be inherently distinctive as applied to champagne or other wines. The evidence on which I base my conclusions as to reputation is as follows.
Reputation: press media references
- First there are many references in the media to CRISTAL champagne. These references exhibited to the witness statement of M Rouzaud fall into two main categories. There are reviews of the wine describing the quality of the different vintages and there are also references in the popular press to celebrities buying and drinking CRISTAL champagne. Often the specialist press also refer to the popular image of the wine. What follows is a small selection of the many newspaper cuttings exhibited to M Rouzaud's witness statement:
i) In an article by the wine critic Jancis Robinson in December 2004 she chooses Roederer Cristal 1989 as her wine of the week saying:
"So here I am at the end of a very long working day/week/month, having poured myself (before others to come) a glass of the famous Cristal, for once from a fully mature vintage. It is also, incidentally, one of the very few wines that cuts the mustard with the under 23 year-olds in my household, thanks to various rappers' espousal of the easiest-to-spot de luxe champagne of all."
ii) An article in Tatler magazine in June 2005 includes an article on Louis Roederer:
"You could say that the cult-vintage bubbly Cristal is the Champagne that ran away with itself. Synonymous with decadence as much as excellence, its racy reputation has refused to mellow since it was first created in 1876 by Louis Roederer."
The writer goes on to comment that the CRISTAL name has greater brand recognition that the Louis Roederer estate itself:
"Today unless you're a sommelier, a wine writer or a bit of a connoisseur there is a danger that the name Champagne Louis Roederer might not immediately elicit recognition followed by a glint in the eye and an anticipatory lick of the lips – such has the house been overtaken by the starry eyed child."
iii) An article on prestige champagnes in 'The Drinks Business' magazine in June 2005 refers to the fact that as new world sparkling wines get better and better the importance of the image enhancement for champagne generically should not be underestimated. The writer also states that 'Many buyers of Cristal see only an iconic status brand and do not make the Roederer connection, just as Dom Perignon's customers do not appreciate that there is a link with Moët & Chandon".
iv) In an article in Decanter magazine by Michael Broadbent on the highlights of 2009 he writes:
"At a Roederer tasting I noticed its recently released Cristal Brut 2002. We English tend to drool over old champagne, but this youthful Cristal was the finest, most refined I can recall: pale with a pure gold sheen, distinctive, effortlessly sublime, crusty nose, exquisite flavour, great length."
v) An article in Square Meal magazine in August 2014 refers to Cristal champagne as a '21st century phenomenon' describing its origin as the cuvée produced for Tsar Nicholas:
"If the world has changed immeasurably since then, Cristal has maintained its status as a prestige cuvee Champagne of unparalleled quality and pedigree. Yes, it's still instantly recognisable for its signature gold label, cellophane wrapping and transparent crystal glass bottle - but there's a lot more to Cristal than this elegant outer skin. Over the past few decades, Roederer's family owners have reinforced the house's almost obsessive fixation with quality, buying selected vineyard plots to enhance the quality of its Champagnes. …. The result in a year such as 2006, the current vintage of Cristal, is a wine of unrivalled intensity, balance and elegance; one which combines a silky texture with a complexity and depth of flavour to which only truly great wines can aspire – and one which, while ready to drink now, has a long life ahead of it. Nearly 140 years after Cristal was created, this remarkable Champagne continues to win accolade after accolade. It was recently named Drink of the Decade by readers of leading industry magazine The 'Drinks Business, while Cristal Rose 2002 topped the rankings of FINE Champagne magazine s 100 best champagnes for 2014."
- Examples of the second are many instances where people, either celebrities or people known or assumed to be very wealthy are photographed partying at night clubs where they are reported to have drunk CRISTAL. There are also reports of celebrities serving the champagne at weddings and other celebratory events from the wedding of Brad Pitt and Jennifer Anniston to the Manchester United football team celebrating the Club's 20th league title in April 2013. The Daily Express in May 2010, reporting on a lottery winner's prize of £84 million lists "Ten ways to spend the winnings" including 42,000 jeroboams of vintage Cristal champagne, a luxury cruise for the winner and 5,000 friends or a Picasso painting. The position is perhaps best described by an article in the Mail on Sunday in December 2006. It describes the dilemma facing the management of an elite London night club on finding that they had run out of Cristal champagne when they were expecting a visit from some wealthy patrons. The solution was to fly a private jet to a club member living in the South of France to collect some of his stock. The article continues:
"The label has always been popular among the super-rich, but few outside of those jet-setting circles had ever heard of it until the mid-Nineties when it was adopted as a status symbol by US hiphop stars. In the rap world, being seen to drink Cristal signified that you had arrived, you were a 'playa', and it's been eulogised in records by stars such as Notorious BIG, P Diddy, Jay-Z and 50 Cent. Later, being seen to 'waste' Cristal made an even more grandiose statement. Thus in rap videos, instead of being imbibed, the exquisite champagne was sprayed over scantily-clad women. Over the past year, the practice has found its way to London - most notably in Mo'vida. It was from here that reports emerged of a French investment banker spending £41,000 on Cristal in one night …"
- Since then, the hip hop world has moved on to endorse other brands, and recognising the power of their endorsement, more recent lyrics may reflect a commercial arrangement between the performer and a particular brand. But overall, the volume of press coverage is remarkable given the tiny proportion of the champagne market occupied by CRISTAL. It amply shows that the CRISTAL mark has a strong reputation in the United Kingdom.
Reputation: survey evidence
- The survey in this case was devised and implemented by Philip Malivoire. He is an independent market research consultant with over 30 years' experience in market research including consumer surveys. He was instructed to conduct a reputation survey of the brand CRISTAL amongst the British public. Permission was given to conduct the survey by Henderson J by order of 28 April 2015, after a pilot survey had been carried out. Mr Malivoire used the same method as he had used for the survey in Enterprise Holdings v Europcar Group UK Ltd [2015] EWHC 17 (Ch) where he was also the expert witness and where his evidence was relied on by the trial judge. In fact, two parallel surveys were carried out. In both surveys, members of the public over the age of 18 were recruited and interviewed at a busy high street location out of sight of places that sell alcohol or of advertising for alcohol brands. All respondents are shown a card with the word CRISTAL in capital letters and plain script. The interviewer is instructed not to say the word out loud but only to ask the questions on the script.
- In survey A, the interviewer first asked the respondent two recruitment questions namely (i) whether the respondent had bought champagne or sparkling wine such as cava, prosecco or something similar in the last five years and (ii) whether he or she had close friends or relatives working in certain industries (advertising, making of alcoholic drinks, legal profession). If they answered no to the first question or yes to the second, the interview did not proceed. If they were not disqualified by the recruitment questions the respondent was then shown the card and there was a five second pause during which any comment they made was recorded. After the pause the respondent was asked 'Have you ever seen or heard of this before in relation to champagne?'. If the answer was yes, the respondent was then asked where had they seen or heard of it before and whether there was anything else they could tell the interviewer about it.
- In survey B, the respondent was simply first handed the card with no question asked and there was a pause for any immediate response. Then the question asked was "What can you tell me about what you are looking at". Then the respondent was asked two recruitment questions. When considering the results of Survey B, only the responses of people who have bought champagne or sparkling wine in the last five years and who did not have relatives or friends in the relevant sectors were included in the analysis. This reflects the fact that the survey is seeking to establish the reputation of the brand among the target customer base for the product.
- In his report, Mr Malivoire explains how he reviewed the demographic profiles of those interviewed and concluded that the sample obtained for the survey accurately reflects the population of Great Britain. He explains further why he believes that the surveys comply with the Whitford Guidelines, that is the guidelines set out by Whitford J in his judgment in Imperial Group plc v Philip Morris Ltd. [1984] RPC 293.
- Survey A results. A total of over 549 interviews were conducted for survey A, adding the pilot and main survey together. Of the 549 people Mr Malivoire divides them into four categories based on his assessment of their answers to the questions asked:
i) people who he believes recognise 'CRISTAL' as a particular brand of champagne because they make some reference to the position of CRISTAL in popular culture or to its expensive or luxury image. These number 168 people or 31 per cent of the sample. A number of these refer to the fact that stars and footballers drink it and that it appears in films, music videos and 'it's what the rich and famous drink'.
ii) People who he believes may recognise CRISTAL as a particular brand of champagne because they say they have seen or heard the word in relation to champagne but their answers are rather vague. These number 61 people or 11 per cent of the sample.
iii) People who he believes probably do not recognise CRISTAL as a particular brand of champagne because their answers are equivocal. These number 40 people or 7 per cent of the sample.
iv) People who say that they do not recognise it: the remainder (61 per cent of the sample).
- Survey B results. 1080 people were interviewed for Survey B across Britain, adding the pilot and the main surveys together. After discounting those disqualified by the recruitment questions there were 568 results included in the analysis. The number of people who recognise 'CRISTAL' as a particular brand of champagne was 77 or 14 per cent, that is, 14 per cent of respondents brought champagne to mind seeing the word CRISTAL printed on a card without any context.
- I consider that these survey results show that the CRISTAL brand has a strong reputation among a significant proportion of those who have previously bought champagne or sparkling wine. I accept Mr Malynicz's submission that one must assess the scale of recognition in the context that the survey respondents who are likely actually ever to have bought or even tasted CRISTAL champagne is tiny, since only 30,000 – 40,000 bottles are sold in the UK and the lowest price at which they are available is £175.
- Although brand recognition was much lower in survey B respondents I consider that 14 per cent is an impressive result. I bear in mind that the word of itself has no connection to champagne or wine or alcoholic beverages at all and moreover could be taken, when viewed completely out of context as it was here, to refer to the word 'crystal' as a rock or as glassware or to a girl's name. Indeed some of the Survey B respondents did refer to glassware and lead crystal. Despite that different potential association, it is very significant that some people still made the connection between the plain word on a piece of paper and a product that they are unlikely ever to have bought or tasted.
Reputation: awards, social media and other references
- Among the press reports that have been exhibited to the witness statements for Roederer are those which record the awards that have been given to CRISTAL champagne. Mr Rouzaud's evidence was that the 2002 vintage of CRISTAL champagne has won the supreme world champion prize in the champagne and sparkling wines category and it was given 100 points, the maximum score, by Wine and Spirits Magazine in 2010.
- There is also evidence as to references to CRISTAL in song lyrics, particularly in hip hop music. Thus, 'CRISTAL' was 7th in the list of brand names mentioned in pop lyrics (Cadillac being first). It has been referred to lyrics of songs by JayZ, first in 'Can't Knock the Hustle' ("My motto, stack rocks like Colorado / Auto off the champagne, Cristal's by the bottle"). JayZ and other rappers clearly expect that their fans will recognise the brand as a synonym for luxury and excess (although JayZ later transferred his allegiance to other brands).
- Finally, there are also the instances of ordinary people making play on the similarity of the names CRISTAL and CRISTALINO which I describe later when considering the issue of 'free-riding' in respect of the reputation infringement. Those references also rely on the reader appreciating the significance of the CRISTAL mark.
Reputation of the word 'CRISTAL' without 'Louis Roederer'
- Much of this evidence also supports Roederer's contention that the word CRISTAL used by itself has a reputation and this is not limited to where it is used in conjunction with the words 'Louis Roederer' or 'Champagne'. Although most of the serious wine magazine coverage of CRISTAL does also refer to the champagne house, much of the popular media refers to it only as CRISTAL.
- The Defence and CCM put Roederer to proof that the word has a reputation 'solus' and not just in conjunction with the name Louis Roederer. In my judgment the evidence provided by Roederer clearly establishes this reputation.
The nature of the reputation
- Finally on the question of reputation I am satisfied that the reputation of the CRISTAL brand is that it is:
i) a top quality champagne of the very finest kind;
ii) very expensive and available therefore only to those who are so wealthy that they can afford to spend a substantial amount of money on expensive consumables;
iii) enjoyed by those who have the taste, discernment and sophistication to appreciate the finer things in life and spend their money accordingly – or at least by those who aspire to being regarded as such a person.
- The Roederer witnesses refer in their evidence to the fact that the kinds of people who drink CRISTAL champagne has broadened over recent years to reflect the different paths to fame and fortune that our society now provides. But there is no doubt from the evidence that I have seen that CRISTAL has a firm place among wine connoisseurs of all kinds and in popular culture as a high quality, prestigious and aspirational brand. I approach the application of the law in this case against that background.
Infringement based on the likelihood of confusion
- In order to succeed in showing a confusion infringement, Roederer must establish that:
i) the sign used by JGC is similar to the UK and Community trade marks on which Roederer relies;
ii) the goods to which the sign is attached are similar or identical to the goods protected by the Roederer marks;
iii) JGC is using the signs in the course of trade;
iv) there exists, therefore, a likelihood of confusion on the part of the public including a likelihood of association between the sign and the trademarks.
- In its Defence and CCM, JGC accepted that it is using its own registered mark, that is CRISTALINO JAUME SERRA in the course of trade. Given that they make and sell cava under their mark, whatever sign they use is clearly being used in the course of trade. I will therefore consider whether each of the other requirements has been made out here.
Similarity of the sign and the trade marks
- The trade mark registered by Roederer is simply the word 'CRISTAL'. What is the sign that has been used by JGC? Roederer argue that the sign used by them is in fact the single word CRISTALINO. JGC pleaded in their Defence that they have not used the sign, CRISTALINO, only the sign 'CRISTALINO JAUME SERRA'. On this point the evidence is, in my judgment, clear that the sign used by JGC is CRISTALINO. I base this conclusion on the following evidence.
- First, an examination of the labels of the CRISTALINO bottles shows that the sign emphasises the word CRISTALINO rather than the words CRISTALINO JAUME SERRA:
i) On the bottle of Brut cava, the word CRISTALINO appears in much larger and bolder font than the words 'Jaume Serra' and those latter two words are along the bottom of the label whereas the word CRISTALINO is in the middle of the label and underlined. Further, on the gold foil covering the neck of the bottle, the word CRISTALINO appears printed vertically on the front by itself. On the label on the back of the bottle the word CRISTALINO appears by itself without the words 'Jaume Serra'.
ii) On the bottle of Reserva, although the words JAUME SERRA appear just underneath the word CRISTALINO, they are printed in much smaller and less bold font and are separated from the CRISTALINO word by a line. Again, on the black foil on the front of the neck of the bottle the word CRISTALINO appears by itself and that word is printed on the back label without reference to JAUME SERRA.
iii) On the bottle of rosé brut the word CRISTALINO appears very prominently by itself on the front label, on the neck of the bottle and on the back label. The words JAUME SERRA do not appear at all other than in tiny print right at the bottom of the label where it says "Produced by Jaume Serra".
- On the basis of the bottles I have seen it is incontestable that the sign used by JGC is CRISTALINO and not CRISTALINO JAUME SERRA.
- Mr Malynicz also showed me invoices issued by JGC for sales of Cristalino. In those invoices the cava is referred to simply as "Cava Cristalino Brut" rather than as Cristalino Jaume Serra. The name 'Jaume Serra' is attached to other products included on the invoices such as 'Cava Jaum. Serra Semi Seco' but not to the Cristalino cava. There is also evidence of the receipts from the test purchases of the cava from Morrisons where it appears in the till receipt as 'CAVA CRISTALINO'.
- To determine whether the CRISTALINO sign is similar to the CRISTAL marks I must consider the visual, aural and conceptual similarity of the two signs. Visually the first seven letters of the mark and the sign are the same. I accept Mr Malynicz's submission that this visual similarity is particularly important in this case where the sign is printed on a convex surface of the cylindrical bottle. If the bottle is stacked on the shelf at the store, the view of the customer may well be focused on the first part of the name rather than the complete name and indeed the end of the name may be obscured if the bottle is not directly facing the front.
- Aurally, the sign is clearly similar in that the JGC sign incorporates the whole of the Roederer mark in terms of sound. Further, the name of the product is often likely to be uttered in a noisy environment such as a night club or restaurant where the 'ino' may get lost. There is a strong aural similarity, in my view, even though the likely pronunciation of CRISTALINO would put the emphasis on the third syllable which is not part of the CRISTAL sound. Conceptually I consider the sign and the mark are very similar. They both refer to the word 'cristal' or 'crystal' with its connotation of something high quality and precious, and of something sparkling, glittering and pure. The addition of 'ino' in the sign does not detract from this. It has the appearance of a suffix indicating a diminutive (though it is not in fact a diminutive suffix in Spanish or English) and does not in my judgment, remove the strong conceptual similarity.
- I have also considered the similarity of CRISTAL mark and the sign 'CRISTALINO JAUME SERRA'. I consider that the longer sign is still similar to the trade mark in terms of its visual, aural and conceptual qualities. The average consumer would regard the key element as CRISTALINO and the other words are likely to be assumed, correctly, to be a foreign name (in fact a Catalan name) designating the maker of the product.
- I am therefore satisfied that there is a similarity between the Roederer mark and the sign used by JGC for the purposes of section 10(2) and article 9(1)(b), whether one regards the sign used as just CRISTALINO or as CRISTALINO JAUME SERRA.
Identical or similar goods
- I turn next to consider whether the product to which JGC has attached its sign, that is cava sparkling wine, is identical or similar to the goods protected by the Roederer marks. So far as the Roederer CTM is concerned, the goods are identical because the mark is registered for sparkling wines. The fact that so far Roederer has only attached the CRISTAL brand name to champagne does not matter because they are entitled to protect their fair use of the mark for the whole range of products for which it is registered: see Maier v ASOS plc [2015] EWCA Civ 220 ('ASOS') paragraph 85.
- Roederer's UK mark is registered only in relation to champagne so the question arises whether cava is similar to champagne. The test to be applied here is that set out in Case C-39/97 Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc. [1998] ECR I-5507, [1999] RPC 117. There the Court of Justice of the European Union ('CJEU') emphasised that:
"In assessing the similarity of the goods or services concerned, …, all the relevant factors relating to those goods or services themselves should be taken into account. Those factors include, inter alia, their nature, their intended purpose and their method of use and whether they are in competition with each other or are complementary."
- Additionally, one must also have regard to the channels of trade of the respective goods or services: see British Sugar Plc v James Robertson & Sons Limited ("Treat") [1996] RPC 281.
- I consider that cava is similar to champagne for this purpose. Again, it is important not to limit the champagne covered by the mark's registration to the prestige cuvée to which Roederer currently attaches the mark. As the evidence of Mr Bingley shows, there are many champagnes on the market which sell for considerably less than CRISTAL. The nature of both cava and champagne is that they are alcoholic drinks traditionally served not only as an accompaniment to a meal but often as an aperitif or at a party, celebration, or other catered event. Their purpose is to help generate a convivial atmosphere where the host hopes that the sparkle in the drink will generate a sparkle in the ambiance and among the guests attending. I regard them as loosely being in competition with each other. This is also apparent from the fact that they are included together in the web sites of online wine merchants who have sections of their sites dedicated to champagnes and sparkling wines where champagnes are positioned alongside cavas, Proseccos, crémants and other sparkling wines. The trade channels through which champagne and cava are sold are the same; they are both sold in general supermarkets, specialist wine merchant stores and online. They are also both sold in restaurants and night clubs and by caterers.
Likelihood of confusion
- The principles to be applied in considering whether there is a likelihood of confusion on the part of the public have been discussed in a large number of cases both in the domestic courts and in Luxembourg. It is clear that the confusion referred to must be in relation to the origin of the goods: see Case C-251/95 Sabel BV v Puma aG [1997] ECR I-6191. The factors that the court must take into account when considering confusion were set out in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24, [2012] FSR 19 at paragraph 52:
"(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion."
- As to what proportion of the general public must be confused in order for this to be established, this was considered in Interflora Inc. v Marks & Spencer [2014] EWCA Civ 1403 where the Court of Appeal said at paragraph 129:
" … in light of the foregoing discussion we do not accept that a finding of infringement is precluded by a finding that many consumers, of whom the average consumer is representative, would not be confused. To the contrary, if, having regard to the perceptions and expectations of the average consumer, the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court then we believe it may properly find infringement."
- I also note the points made by Kitchin LJ in ASOS, paragraphs 76 to 80, namely:
i) the risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion for the purposes of the provision;
ii) even if the proprietor of the mark has made only limited use of the mark as registered, it is still entitled to protection against the use of a similar sign in relation to similar goods if the use is such as to give rise to a likelihood of confusion;
iii) when the mark is compared with the offending sign, the court must take into account all the circumstances of the actual use of the sign that are likely to operate in the average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context;
iv) the likelihood of confusion must be assessed globally taking into account all relevant factors and having regard to the matters set out in Specsavers at paragraph [52] and repeated above. If the mark and the sign have both been used and there has been actual confusion between them, this may be powerful evidence that their similarity is such that there exists a likelihood of confusion. Conversely, the absence of actual confusion despite side by side use may be powerful evidence that they are not sufficiently similar to give rise to a likelihood of confusion. This may not always be so, however. The reason for the absence of confusion may be that the mark has only been used to a limited extent or in relation to only some of the goods or services for which it is registered, or in such a way that there has been no possibility of the one being taken for the other. So there may, in truth, have been limited opportunity for real confusion to occur.
- Dealing with this final point first, Roederer did not put forward any evidence of actual confusion, that is of anyone buying a bottle of Cristalino thinking that the sign was the CRISTAL mark or that it was a cheaper brand of sparkling wine produced by the Roederer house. However, I consider that this is a case where the absence of such evidence is not detrimental to Roederer's claim. Sales in the United Kingdom of the Cristalino cava through Asda and Morrisons were stopped very shortly after they started following the swift intervention of Roederer. There has not been a substantial period when the cava was actually sold on the market in the UK. Further as Mr Malynicz points out, instances of confusion would have been more likely to emerge from JGC's disclosure since they rather than Roederer would be on the receiving end of any complaints by retailers that their customers have been confused by the product. As I have described earlier, there has been no disclosure by JGC in these proceedings.
- Roederer base their claim on both direct and indirect confusion. Direct confusion occurs where the customer buys a product bearing the CRISTALINO sign because they have misremembered the CRISTAL mark and when they see the CRISTALINO sign they mistake it for the CRISTAL mark. As is clear from Specsavers, the matter must be judged through the eyes of the average consumer of the goods who rarely has the chance to make direct comparisons between the mark and the sign and must instead rely upon the imperfect picture of them he has kept in his mind.
- When considering the context in which the sign is used, I have looked at the overall presentation of the sign on the bottle of Cristalino cava and compared that with the CRISTAL bottle. I was shown two bottles at the trial, one of the Cristal Brut and one of Brut Rosé. The main label of both bottles is a golden colour, the foil and label of the rosé wine are a pinky gold rather than the yellowy gold of the brut. Centred at the top of the label are the words LOUIS ROEDERER and lower down the words CRISTAL CHAMPAGNE separated by a white oval with the entwined initials 'LR' in fancy italics and the year of the vintage. Underneath the oval the word CRISTAL appears again and the word is also printed four times on the front of the neck of the bottle, once embossed under the embossed 'LR' initials, once under a smaller white oval and twice on either side of the white oval. Between the main label and the neck label there is an additional label that displays the Imperial Court of Russia's coat of arms and the Louis Roederer mark round either side.
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- The bottle still has a flat base and the glass is still transparent. When the bottle is filled with CRISTAL champagne, it takes on a slightly yellowy golden colour.
- I was shown three bottles of CRISTALINO cava. I have described the labels when considering whether the sign used by JGC is the word CRISTALINO or the composite sign CRISTALINO JAUME SERRA. The CRISTALINO brut is produced in a green bottle with gold label and gold foil over the cork.
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- The CRISTALINO reserva is also in a green bottle with a black label with silver lettering and a black foil covering over the cork. The CRISTALINO rosé brut is in a clear bottle with a pinky gold label and foil.
- I conclude from this that the overall impression created by the sign as it is used on the bottle is very similar and that there may well be direct confusion whereby customers mistake the CRISTALINO sign for the CRISTAL mark.
- However Mr Malynicz was right, in my judgment, to place greater emphasis on Roederer's concern that there will be indirect confusion between the sign and the marks. This occurs where the average customer believes that, because of the similarities of the mark and the sign and the similarity of the goods, the two brands might be linked in that one is an off shoot of the other and that they are both made by the same wine producer. The key evidence on this point comes from Mr Bingley who described what is referred to in the trade as 'second wine' practice (known in French as "Second Vin"). His evidence is that the second wine practice is common in the wine industry and is most commonly associated with Bordeaux wine. The practice has been around for some time but became increasingly popular in the 1980s when consumers became aware of these second wines as a more affordable way to drink the product of a renowned estate without being required to pay a premium for the estate's label and classification. From the wine producer's perspective, the second wine practice allows them to be more selective about the wine selection for their Grand Vin or main labels, whilst also being able to capitalise on their name and distribution channels when selling these second wines. It is considered that selling a second wine using a renowned estate name, rather than selling it anonymously (eg in bulk bottlings or to supermarkets for own label product), is more profitable for the wine producer.
- Mr Bingley gives the following examples (amongst others) of second wine labels:
i) Château Mouton-Rothschild produce a second wine called Le Petit Mouton-Rothschild;
ii) Château Latour produce a second wine called Les Forts de Latour;
iii) Château Grand Corbin-Despagne produce a second wine called Petit Corbin-Espagne;
iv) Château Cheval Blanc produce a second wine called Le Petit Cheval;
v) Télégraphe Chateauneuf Du Pape produce a second wine called Vieux Télégramme Chateauneuf Du Pape.
- As is apparent from these examples, the name chosen for the second wine is often a diminutive of the premier wine – Le Petit Mouton-Rothschild or Le Petit Cheval.
- Mr Bingley also describes how for over 30 years Moët & Chandon have been producing sparkling wine from its vineyards in the Napa Valley and has used the name 'Chandon'. This creates a connection between the Champagne house and its American subsidiary. The Chandon products are marketed at a lower price point at £19.49 per bottle compared to around £40 per bottle for Moët & Chandon's champagne.
- In my judgment, Roederer are entirely justified in their concern that average consumers are likely to buy CRISTALINO cava thinking that it is a cheaper sparkling wine put on the market by Roederer to capitalise on the brand value of the CRISTAL name, just as Chandon is a cheaper sparkling wine from the Moët & Chandon house and Le Petit Mouton-Rothschild is a cheaper claret from Château Mouton-Rothschild. This is not only because of the similarity of the name itself but also because of the similarity of the presentation of the two bottles as described earlier. Moreover, the word CRISTALINO is not only linked visually, aurally and conceptually with the word CRISTAL but appears to be a diminutive of CRISTAL in a context where wine producers have used diminutives to signal that a wine is a cheaper version of their premier, flagship product.
- I therefore find that there has been an infringement by JGC of Roederer's marks because JGC's use of the CRISTALINO sign in relation to cava wine is likely confuse people into thinking that their Spanish cava is produced by Roederer.
The claim based on detriment to the mark or taking unfair advantage of the mark
- The elements that Roederer must establish to make good their claim of reputation infringement under this head are:
i) there is use in the course of trade of the allegedly infringing sign;
ii) the sign is identical with or similar to the trade mark;
iii) the mark has a reputation in the UK (or the EU for the CTM);
iv) the use of the sign takes undue advantage of or is detrimental to the distinctive character or repute of the trade mark;
v) there is no due cause for the use of the sign.
- As with the claim for confusion infringement, there is no dispute that the JGC sign is being used in the course of trade. I note here that although the wording of article 9(1)(c) of the CTMR and section 10(3) of the Trade Marks Act appears to limit their scope to situations where the goods to which the sign is attached are not similar to those covered by the mark, it is well established in the case law that the provisions also apply where the goods concerned are identical with or similar to those in respect of which the mark is registered: see Case C-292/00 Davidoff & Cie v Gofkid Ltd [2003] ECR I-389 at [30], and Case C-408/01 Adidas-Salomon AG v Fitnessworld Trading Ltd [2003] ECR I-2537 at [18]-[22].
The sign is similar to the trade mark
- The link between the sign and the mark for the purposes of the reputation infringement is rather different from the link required for the confusion infringement. Here, the question is whether the degree of similarity between the registered mark and the sign is such that the average consumer makes a connection between them. It is not necessary that the degree of similarity is enough to create a likelihood of confusion. The fact that for the average consumer who is reasonably well informed and reasonably circumspect, the sign would call the registered mark to mind is tantamount to the existence of such a link: see Case C-252/07 Intel Corporation Inc v CPM United Kingdom Ltd [2008] ECR I-8823 ('Intel Corporation') at paragraph 60. This is to be assessed having regard to all the circumstances of the case. The relevant average consumer here is someone who has heard of the CRISTAL mark, even if they are not purchasers of CRISTAL champagne. These are the people for whom the Roederer mark has a value.
- I consider that the Roederer mark and the CRISTALINO sign are similar here for the same reasons as I rely on for the purposes of the confusion infringement.
The Roederer marks' reputation in the UK and EU
- The ambit of the requirement that the mark has a reputation was considered by the CJEU in Case C-375/97 General Motors v Yplon SA [1999] ECR I-5421, [2000] RPC 572. That case concerned a challenge by General Motors, owner of the trade mark 'Chevy' in relation to cars and vans, to Yplon's use of its mark 'Chevy' in relation to detergents and cleaning materials. General Motors applied to the Belgian court for an injunction restraining Yplon from using the sign 'Chevy' on the ground that such use entailed a dilution of its own trade mark and thus damaged its advertising function. The Belgian court referred a question to the CJEU seeking clarification of the requirement that General Motors' mark have a reputation. The Court noted at paragraph 23 of its judgment that the provision which is now article 9(1)(c), unlike article 9(1)(b), protects trade marks registered for non-similar products or services. The first condition for its application implies a certain degree of knowledge of the earlier trade mark among the public. This is because it is only where there is a sufficient degree of knowledge of that mark that the public, when confronted by the later trade mark, may possibly make an association between the two trade marks, even when used for non-similar products or services, and that the earlier trade mark may consequently be damaged. The Court went on to give the following guidance to a national court considering this issue.
i) The public amongst which the earlier trade mark must have acquired a reputation is that concerned by that trade mark, that is to say, depending on the product or service marketed, either the public at large or a more specialised public, for example traders in a specific sector.
ii) There is no requirement that the trade mark must be known by a given percentage of the public so defined. The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark.
iii) In examining whether this condition is fulfilled, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it. Territorially, the condition is fulfilled when the trade mark has a reputation 'in the Member State'. In the absence of any definition of the Community provision in this respect, a trade mark cannot be required to have a reputation 'throughout' the territory of the Member State. It is sufficient for it to exist in a substantial part of it.
iv) There is a link between this first requirement and the second requirement of detrimental effect in that the stronger the earlier mark's distinctive character and reputation the easier it will be to accept that detriment has been caused to it.
- As regards the necessary territorial scope of the reputation, the CJEU held in Case C-301/07 PAGO International GmbH v Tirolmilch registriete Genossenschaft mbH [2009] ECR I-9429 that Austria was a sufficiently substantial part of the EU for a reputation there to satisfy the requirement of article 9(1)(c).
- I have set out the evidence in support of the reputation of the CRISTAL mark in the United Kingdom and my conclusions on that evidence. I am satisfied that the evidence establishes that CRISTAL has a strong reputation in the United Kingdom among consumers of sparkling wine and that this reputation is enjoyed by the word CRISTAL even when not associated with the words 'Louis Roederer'. This reputation across the whole of Britain is sufficient to satisfy the requirement both for the UK mark and the CTM. Although the market share of CRISTAL is tiny (even if one defines the relevant market as champagne rather than sparkling wine) the mark has been used over very many years and has been used intensively since there have been substantial sales in the United Kingdom and other Member States for a long time.
Does the use of the sign take advantage of the distinctive character or repute of the registered mark?
- Roederer must show that the use of the sign Cristalino takes or would take advantage of, or is or would be detrimental to, the distinctive character or repute of the registered mark. There are three types of injury which are discussed in the case law: first, detriment to the distinctive character of the registered mark by dilution of the association of the mark with the proprietor in the minds of the consumer; secondly, detriment to the repute of the mark where the use of the sign tarnishes the reputation of the mark; and thirdly, unfair advantage being taken of the distinctive character or repute of the mark by free-riding on that repute: see Intel Corporation at [27]. Roederer asserts that all three kinds of injury are caused by the use by JGC of the CRISTALINO sign.
Dilution of the mark
- The CJEU elaborated upon the nature of this type of injury in Intel Corporation at paragraph 29:
"29. As regards detriment to the distinctive character of the mark, also referred to as 'dilution', 'whittling away' or 'blurring', such detriment is caused when that mark's ability to identify the goods or services for which it is registered is weakened, since use of an identical or similar sign by a third party leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so."
- In her Opinion in that case, Advocate General Sharpston considered what factors are relevant in assessing whether dilution or blurring is established. She noted (in paragraph 76) that the strength of the distinctiveness (whether inherent or acquired) and reputation of the earlier mark are factors which must be examined and which may tend to indicate the extent of blurring. The degree of similarity or dissimilarity between the goods or services covered by the two marks may also be an indication in that regard but cannot be decisive one way or the other. She emphasised the need for a 'global appreciation, taking all relevant facts into consideration' and that this approach means that each factor must be accorded the significance which it deserves, but it is the overall balance which will be decisive.
- In my judgment the use of the sign CRISTALINO would lead to dilution or blurring. The word CRISTAL itself has no particular link with wine or champagne but more usually refers to the clarity, purity and sparkle of rock, glass or water. It is therefore a very distinct mark in relation to Roederer's champagne. Roederer's use of the word over the centuries has created a strong link in consumers' minds between 'Cristal' or 'crystal' and fine champagne. As I have already found, the mark has a strong reputation among drinkers of sparkling wines; the marks and the sign are very similar in visual, aural and conceptual terms and the nature and intended purpose of the goods are the same.
- As Mr Malynicz put it in his written submissions, the image projected by Roederer through decades of use of the CRISTAL mark for champagne both displaces and yet also trades upon the ordinary meaning of the word 'crystal'. If another sign makes that same connection between the qualities of crystal and sparkling wine, that will dilute the association of those qualities with Roederer champagne in the mind of consumers. The association with Roederer specifically will be blurred into an association simply between those crystal qualities and all sparkling wines.
- I therefore find that the use of the CRISTALINO sign will result in dilution and detriment to the distinctiveness of the CRISTAL mark. Further, the use of the sign for a cheap cava is likely to dilute the association of the mark in the public's mind with exclusivity, luxury and prestige and hence damage the reputation that I have found the mark has established in the United Kingdom.
Likely change in future behaviour
- The Intel Corporation case also established that it is necessary for the mark owner to show, in addition to dilution or blurring, that there has been an actual change in the economic behaviour of consumers or at least that there is likely to be a change in future. The burden placed on the claimant in this regard was considered by the CJEU in Case C-383/12P Environmental Manufacturing v OHIM (Wolf head), judgment of 14 November 2013. In that case, the claimant sought to register a mark incorporating a wolf's head in relation to machines for the processing of wood and green waste. A notice of opposition was filed by Elmar Wolf the owner of an earlier mark, alleging that the proposed mark would dilute its own mark. The opposition was dismissed in part on the grounds that Elmar Wolf had not adduced evidence of any detriment to the repute of the earlier marks or any unfair advantage gained from them. The CJEU reiterated the law as established in Intel Corporation to the effect that proof that the use of the later mark is, or would be, detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered, consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future: (paragraph 37):
"The concept of 'change in the economic behaviour of the average consumer' lays down an objective condition. That change cannot be deduced solely from subjective elements such as consumers' perceptions. The mere fact that consumers note the presence of a new sign similar to an earlier sign is not sufficient of itself to establish the existence of a detriment or a risk of detriment to the distinctive character of the earlier mark within the meaning of Article 8(5) of Regulation No 207/2009, in as much as that similarity does not cause any confusion in their minds."
- The Court held that the General Court had erred in holding that the fact that competitors use somewhat similar signs for identical or similar goods compromises the immediate connection that the relevant public makes between the signs and the goods at issue and that that was likely to undermine the earlier mark's ability to identify the goods for which it is registered as coming from the proprietor of that mark. The CJEU held that it is 'necessary to demand a higher standard of proof in order to find detriment or the risk of detriment to the distinctive character of the earlier mark' – the General Court's test could lead to a situation in which economic operators improperly appropriate certain signs, which could damage competition.
- However, the CJEU went on to say that the case-law does not require evidence to be adduced of actual detriment, but also admits the serious risk of such detriment, allowing the use of logical deductions: 'none the less, such deductions must not be the result of mere suppositions but … must be founded on "an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case"' (paragraph 43 of the Court's judgment). The CJEU remitted the case to the General Court.
- The test here in relation to dilution relates to a change in the conduct of Roederer's customers, not just a finding that, for example customers will buy JGC's cava rather than another brand of cava. But Mr Malynicz submitted, and I accept, that Roederer do not have to show that people will buy CRISTALINO cava instead of CRISTAL champagne – only that they will buy less CRISTAL champagne if the name ceases to be linked with luxury and prestige.
- An important factor to my mind here is that the allure of CRISTAL and the value of the brand lies not only in the fact that it is a guarantee of the high quality of the champagne in the bottle but in the perception that drinking CRISTAL is a sign that one is able to lead the glamourous life of an A-list celebrity. Of the already few people who can afford to drink CRISTAL there must be even fewer who buy it because they can really tell the difference between it and another very high quality champagne. At least some people choose to drink it and to be seen to drink it because it signals something about their status in the world they inhabit. That kind of caché on the part of the premium product is hard won and easily lost – people can easily drop some brand that has been fashionable hitherto and take up a rival brand as the new drink to be seen drinking. Roederer have little control over how the mark is portrayed in the press and social media but they are entitled to do what they can to maintain the high quality of the champagne and to cement its luxury and high class image. In such a case, where the prestige of the mark is fragile, I am satisfied that the dilution of the CRISTAL mark by the use of CRISTALINO sign in connection with a cheap sparkling wine will lead to a reduction in sales of CRISTAL. In particular, other prestigious brands such as Le Monde d'Hermès and Aston Martin will be less keen to join in marketing initiatives with Roederer and prestigious venues will be less enthusiastic about entering into sponsorship deals. These are the ways in which Roederer chooses to promote CRISTAL. If they are compromised, then there is likely to be a change in the behaviour of Roederer's customers.
Tarnishment
- Detriment to the repute of the mark, also referred to as 'tarnishment' or 'degradation', is caused when the goods or services for which the offending sign is used may be perceived by the public in such a way that the trade mark's power of attraction is reduced. The concept was described by Arnold J in Red Bull v Sun Mark [2012] EWHC 1929 (Ch) at [93] where he quoted the relevant passage from Kerly's Law of Trade Marks and Trade Names (15th ed) at para 9-131. Detrimental effect occurs where the later mark is used for goods or services which provoke a reaction of annoyance or displeasure whether through their intrinsic nature or because of the unpleasant mental association with the goods for which the earlier mark is reputed. It may also occur when the trade mark applied for is used in an unpleasant, obscene or degrading context, or in a context which is not inherently unpleasant but which process to be incompatible with the earlier mark's image. This leads to tarnishment whereby "the reputed mark creases to convey desirable messages to the public: hence the detriment to its distinctive character".
- No criticism is made of the quality of JGC's cava and there is no evidence as to whether it is good or bad of its kind. There is nothing inherently unpleasant or degrading about cava wine. The case law on this type of injury is less well developed than the other two types. It appears to me that it would be a step forward in the law to find that tarnishment is made out merely by using a sign on a product which is a cheaper and more ordinary than the product to which the mark is attached. I do not need to take any such step in order to decide this case and I therefore make no finding on the issue of tarnishment.
Unfair advantage or free-riding
- The third kind of injury is 'taking unfair advantage of the distinctive character or the repute of the trade mark', also referred to as 'parasitism' or 'free-riding'. This relates not to the detriment caused to the mark by the use of the sign but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers cases where by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation of the mark with a reputation.
- The claim in the Specsavers case was based in part on the allegation that Asda was exploiting the reputation that Specsavers had built up for providing a good value optician services. The Court of Appeal upheld that claim. In Specsavers, it was clear on the evidence before the court that there was intention on the part of Asda to take advantage of the Specsavers' reputation. Is intention necessary here? If it is, then Roederer are in difficulty because there has been no disclosure showing the background to the adoption of the word CRISTALINO by JGC. However in Jack Wills Limited v House of Fraser [2014] EWHC 110 (Ch), [2014] FSR 39, Arnold J held that it was not necessary to show intention to free-ride on the part of the user of the allegedly infringing sign in order to prove a reputation infringement. The claimant Jack Wills embroidered a silhouette of a pheasant with a top hat and cane on its range of casual clothing and sought to prevent House of Fraser using a similar embroidered image consisting of a silhouette of a pigeon with a top hat and bow-tie on its in-house brand of Linea clothing. Jack Wills had pleaded its case under article 9(1)(c) in general terms and a late application to amend the Particulars of Claim to allege intention to free-ride on the part of House of Fraser was refused. Arnold J held that it was not open to Jack Wills to pursue the case on the basis of intention to free-ride. However, he held that the claim could succeed without proof of any such intention. He said in paragraph 80 of his judgment:
"80. … In my judgment, however, there is nothing in the case law to preclude the court from concluding in an appropriate case that the use of a sign the objective effect of which is to enable the defendant to benefit from the reputation and goodwill of the trade mark amounts to unfair advantage even if it is not proved that the defendant subjectively intended to exploit that reputation and goodwill."
- He later upheld Jack Wills' claim in the following terms:
"109 Did use of the Pigeon Logo take unfair advantage of the reputation of the Trade Marks? Although it is not open to Jack Wills to contend that House of Fraser adopted and used the Pigeon Mark with the intention of free–riding on the reputation of the Trade Marks, it does not follow that House of Fraser's intentions in adopting and using the Pigeon Logo are irrelevant. I have already found that House of Fraser intended the Pigeon Logo to have brand significance, and that that is how consumers will have perceived it. Furthermore, it is clear that House of Fraser's intention in using the Pigeon Logo was to make the garments more attractive to consumers. I consider that it was a classic case of a retailer seeking to enhance the attraction of its own brand goods by adopting an aspect of the get-up of prestigious branded goods, in this case an embroidered logo of the kind used by Fred Perry, Lacoste, Polo Ralph Lauren and others. Thus House of Fraser was seeking to influence the economic behaviour of consumers of Linea menswear. I see no reason to think it will not have succeeded in that endeavour.
110. Furthermore, I consider that it is a legitimate inference from the nature of the particular market, the nature of the logos and the circumstances of the case, that, due to its resemblance to the Trade Marks, the effect of House of Fraser's use of the Pigeon Logo will have been to cause a subtle but insidious transfer of image from the Trade Marks to the Pigeon Logo (and hence from Jack Wills' goods to House of Fraser's goods) in the minds of some consumers, whether that was House of Fraser's intention or not. This will have assisted House of Fraser to increase the attraction of its goods in circumstances where House of Fraser did not undertake any advertising or promotion of those goods. Furthermore, House of Fraser had no justification for such conduct. Thus I conclude that House of Fraser did take unfair advantage of the reputation of the Trade Marks."
- Applying that approach here, there is no doubt that the word CRISTALINO is intended to have brand significance rather than just being part of the decoration of the bottle of cava – it is intended to be interpreted as the brand name of the cava. It has the objective effect that consumers would take notice of it and it would attract attention.
- There is evidence of the effect of the free-riding of the CRISTALINO brand on the CRISTAL reputation in the exhibits to Mr Rouzaud's witness statement of screen shots from social media sites. He says that when the Cristalino wine was launched in the United States many young people removed the letter 'ino' from the foil label and jested that Cristalino was similar to Cristal. Although this was in the US market there is every possibility the same thing may happen in the UK market. I find one set of screen shots is particularly telling. This was taken from the social media photograph sharing site Flickr showing people with bottles of Cristalino pretending that it is Cristal. One photograph is of two young men in Michigan, one holding a bottle of vodka and one holding a bottle of Cristalino. The caption to the photograph is "Drinking Cristal .. Okay it was Cristalino but whatever'. Another photograph is a close-up of the label of a bottle of CRISTALINO and the caption is "Wow …. CristalINO". Another photograph shows a young woman pulling the cork from a bottle with the caption "poppin' bottles of CRISTALino hahaha" and one shows a bottle of CRISTALINO in an ice bucket with the caption 'Cristal Champagne? We wish … CristaLINO for us!"
- Other more serious writers also refer to Cristalino in effect as a poor man's Cristal, not that they are mistaking it but because they are taking advantage of the play on words involved in making the contrast. For example, there is an article in the Independent in Ireland reviewing 32 different kinds of 'fabulous fizz' under €30 per bottle. It says "… third spot was claimed by the cheekily-named Cristalino Cava from Spain. Roederer Cristal is one of the worlds' most expensive top champagnes. Cristalino Cava Brut is made from the decidedly ethnic Spanish grape varietals, Macabei, Parellada and Xarelo by Jaume Serra." There is also a article about Jaume Serra CRISTALINO in a US journal by a respected wine writer where he refers to his readers being 'part of the hip hop nation' but with a more limited budget:
"If you can't afford to sip Cristal on a nightly basis (as the laws of hip hop dictate) go for Cristalino instead."
- It is clear to me from these examples that the use of the name has resulted in Cristalino drawing attention to itself, differentiating itself from other cavas by being associated with a premier champagne when it has done nothing to contribute to the premier image of CRISTAL. The people on Flickr seem to have bought Cristalino rather than any other brand of cava so that they could post their photos and make the joke which, at base, is 'Look I'm pretending to be the kind of rich person who can drink Cristal champagne and I am using this bottle of Cristalino as a prop to make the joke'.
Change in consumer behaviour
- In Jack Wills it was common ground between the parties that a claimant relying on article 9(1)(c) must show some change in the behaviour of the consumers as a result of the use of the allegedly infringing sign, or a serious likelihood of such a change. Where the alleged infringement relied on a dilution of the trade mark's distinctive character, the relevant consumers are the customers of the claimant's goods as I discussed earlier. Where the alleged infringement relies on free-riding the relevant customers are the customers of the defendant's goods. Arnold J in that case held that the correct approach was to proceed by analogy with the approach laid down by the CJEU in paragraphs 42 and 43 of Environmental Manufacturing (quoted above).
- The evidence I have seen amply supports the finding that there is a change of behaviour on the part of cava buyers in choosing CRISTALINO cava because of its quasi-association with the CRISTAL brand.
Damage to the function of the CRISTAL trade mark
- The final element which Roederer accept must be established in order to succeed in their claim for reputation infringement is that damage must be caused to any one of the functions for which the trademarks have been registered. The Court of Appeal in Specsavers regarded this element as part of establishing that there was no 'due cause' for the use of the sign, such as use in comparative advertising. The relevant functions here are the origin function, the advertising/communication function and the investment function: see Case C-487/07 L'Oréal SA v Bellure NV [2009] ECR I-5185 at paragraph 58. These additional functions were described by the CJEU in its judgment in Case C-323/09 Interflora Inc v Marks & Spencer plc [2011] ECR I-8625 when considering Interflora's claim that the use of its mark as an 'Adword' in Google searches by Marks & Spencer damaged various functions of its mark. Interflora claimed that the defendant's use adversely affected the origin, advertising and investment functions of Interflora's mark. The Court gave guidance to the national court when considering whether the claim was made out. So far as the origin function is concerned, that function is adversely affected if the use of the sign does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party: paragraph 44. So far as adverse effect on the mark owner's ability to use the mark for advertising his products is concerned, the Court held that the mere fact that the use, by a third party, of a sign identical with a trade mark in relation to goods or services identical with those for which that mark is registered obliges the proprietor of that mark to intensify its advertising in order to maintain or enhance its profile with consumers is not a sufficient basis, in every case, for concluding that the trade mark's advertising function is adversely affected. The trade mark is intended to protect its proprietor against practices inherent in competition: paragraph 57. The investment function of a trade mark is its function as an instrument of commercial strategy used to acquire a reputation capable of attracting consumers and retaining their loyalty by techniques other than advertising. The CJEU indicated that in a situation in which the trade mark already enjoys such a reputation, the investment function is adversely affected where the third party's "affects that reputation and thereby jeopardises its maintenance". However, the Court went on to say that the mark owner cannot prevent use of a sign, if the only consequence of that use is to oblige him to adapt his efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Likewise, the fact that that use may prompt some consumers to switch from goods or services bearing that trade mark cannot be successfully relied on by the proprietor of the mark: paragraphs 60 – 64.
- Applying those principles here, I consider that there is damage to these three functions of the CRISTAL mark. The use of the sign CRISTALINO risks turning the association of the qualities of crystal with sparkling wines in general by diluting the strong association between the word CRISTAL and the Roederer premium champagne. It is likely that the strength of the link between CRISTAL or crystal with a champagne originating with Roederer will be weakened.
- Further, there is damage the advertising power of the CRISTAL mark which cannot be combatted by more or different advertising on the part of Roederer. That comment has been made by the CJEU where the mark owner complains about the use of its mark by a competitor advertising that its offering is better than the mark owner's. In such a case, the mark owner cannot complain of straight forward competition even if the advert uses his mark to his detriment, since he can respond by improving his own offer or extolling its virtues in his own advertising. This case is not such a case. The allure and prestige of the CRISTAL mark as a high quality and exclusive brand – and hence its advertising and investment function – depend not only on the continued use and promotion of the brand by Roederer but on the absence of other associations of the word CRISTAL with other lower quality and mundane products. The investment function of the brand has been relied on by Roederer to promote the CRISTAL mark by sponsorship as well as by advertising and I find that this function is also damaged by the CRISTALINO sign.
- The reputation infringement provisions also require that the use of the sign be without due cause. On the pleadings as they were before me at the trial, following the strike out of much of the positive case advanced by JGC, there was no assertion of due cause on which I need to make a determination.
- In the light of these findings I conclude that JGC has infringed Roederer's marks because the use of the CRISTALINO sign takes unfair advantage of and is detrimental to the distinctive character and repute of the CRISTAL mark.
Challenge to JGC's UK and Community trade marks
- I referred earlier to the trade marks registered by JGC for the mark CRISTALINO JAUME SERRA. In those parts of the Amended Defence and Counterclaim that were struck out by order of Master Bowles in January 2015, JGC raised certain defences based on the use of those marks. JGC denied that there was any conflict between Roederer's marks and the signs used by JGC but argued, in the alternative that if there is such a conflict, then Roederer's CTM (which post dates JGC's UK and Community marks) was invalid for the reasons that were set out in the Particulars of Objection served with the pleading.
- In response to that, Roederer's Reply and Defence to Counterclaim asserted that JGC's UK mark should be declared invalid under section 47 of the 1994 Act because Roederer is the proprietor of an earlier mark, namely its UK mark 1368211 for CRISTAL so that JGC's mark is liable to be declared invalid pursuant to section 5(2) of the 1994 Act; and that JGC's CTM should be declared invalid under article 53(1) of the CTMR because Roederer is the owner of an earlier national mark, namely the UK mark 1368211 so that the JGC mark is liable to be declared invalid pursuant to article 8(1)(b) CTMR. The relief pleaded at the end of the Defence to Counterclaim was a declaration that JGC's UK mark and CTM were invalid.
- Although JGC's challenge to the validity of the Roederer CTM was struck out and so is not an issue that I had to decide, the paragraphs in the Reply and Defence to Counterclaim which rely on Roederer's UK mark to challenge the validity of JGC's UK and Community mark were not struck out. Mr Malynicz argued that I should therefore consider not only Roederer's infringement claim but also the invalidity claim against JGC's marks.
- At the start of the trial I expressed some concern as to whether it was appropriate for me to consider striking down the JGC marks in this case without being satisfied that JGC fully realised that the proceedings in which they had decided to play no part might result not only in a finding of infringement being made against them but also in the invalidation of their CRISTALINO JAUME SERRA marks. However, Mr Malynicz's submissions have persuaded me that it is appropriate to deal with this aspect of the case. JGC is a very substantial company that is very familiar with trade mark law and proceedings. They have been kept fully informed about all the orders made in the case since they stopped participating. The court orders make clear that although the passages in the Counterclaim challenging the validity of the Roederer marks have been struck out, the passages in the Reply and Defence to Counterclaim attacking the JGC marks remain. I accept that JGC should not be in a stronger position before the court because of their refusal to engage in the proceedings and that if I decline to deal with the matter now, it would be open to Roederer to bring separate infringement proceedings, thereby leading to a duplication of effort. Mr Malynicz also reminded me that any decision I make in these proceedings as regards the CTM has effect only in relation to its validity in the UK, the CTM can then be converted into a series of national marks, excluding the UK.
- The invalidity claim relies solely on confusion, not on dilution or blurring. In the light of my findings on the likelihood of confusion I consider that the invalidity claim should also be upheld. Although the JGC marks are for CRISTALINO JAUME SERRA and not for CRISTALINO by itself, the use that they have in fact made of their mark is a fair notional use of the composite and it is likely to give rise to confusion. I note here that I am coming to a different view from that taken by Mr Bryant, the Principal Hearing Officer at the Trade Marks Tribunal at the Intellectual Property Office on 2 June 2009 when he rejected Roederer's opposition to the registration of JGC's UK mark. However, it is clear from Special Effects v L'Oreal SA [2007] EWCA Civ 1, [2007] RPC 15 that this decision is not binding on me. I have before me evidence that he did not have, namely the use of the mark in the UK with the first word much more dominant than the other two words also present on the label of the Reserva and Brut versions of the cava.
- I therefore uphold the challenge to the invalidity of JGC's UK mark and CTM. I invite Mr Malynicz to draw up a draft order giving effect to this judgment. That draft order will be sent to JGC so that they have an opportunity to comment on it if they wish to do so.
