Jul 7, 2015

Are You Sitting Comfortably - The Sofa Workshop v Sofaworks - TM's, Non-use and Passing Off

In what Sofaworks CEO Jason Tisdale has stated was a 'David and Goliath' case, the Wigan based furniture manufacturer has lost its legal battle against their furniture brand rivals, The Sofa Workshop.

Background

The Sofa Workshop is owned by DFS and had registered two Community Trade Marks ("CTM's") both in respect of the same wordmark 'SOFA WORKSHOP'.

The CTM registered on 11 February 2005 was in the following classes:

class 18: Leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides; trunks and travelling bags; umbrellas, parasols and walking sticks; whips harness and saddler;
class 20: Furniture; pillows, bolsters, mattresses; beds, sofa beds; mirrors; picture frames; goods (not included in other classes) of wood, cork, reed, cane, wicker, horn, bone, ivory, whalebone, shell, amber, mother-of-pearl, meerschaum and substitutes for all these materials, or of plastics;
class 24: Textiles; textile articles, textile piece goods; bed and table covers; household linen; linen cloth; bed linen; bath linen; table linen; table cloths; curtains of textile or plastic; pillow shams; pillow cases; sheets; towels; eiderdowns; duvets; covers for eiderdown and duvets; napery; napkins; serviettes; table mats (not of paper); face towels; flannels; tissues of textile for removing make-up; traced cloth for embroidery; tapestry (wall hangings) of textile; rugs (travelling); furniture coverings of plastic; and
class 35: Retail services of a general store specialising in household furniture (including home office furniture), appliances, apparatus, textiles and security.

The second CTM registered on 1 August 1996 was in:

class 20: Furniture; upholstered chairs and sofas.; and
class 24: Textile piece goods for furnishings..

Until 2013 Sofaworks had been called CSL. It had in 1996 acquired the name 'Sofaworks' but it didn't seek registration of this name as a trademark until September 2013 when it changed its name.  When they did apply for registration they were met with opposition from DFS.

DFS who acquired The Sofa Workshop in 2013 brought a claim alleging that their names were too similar and it was a misrepresentation of their brand for Sofaworks to be selling under this name.

Decision

Following a two day hearing at the Intellectual Property Enterprise Court, it was held that there was no infringement of the CTM's as they had been invalidly registered and were liable to be revoked for non-use. The Judge's finding with regard to non-use are quite detailed and can be read in the case report here (brief comments in this regard are set out below).  The Judge went on to state that had this not been the case, he would have found that the CTM's had been infringed.

Non-use

The Judge held that maintenance of a CTM requires evidence of use to create or maintain a share in the market at least beyond the boundaries of one member state. Use of the CTM's by The Sofa Workshop outside of the UK in advertisements in UK magazines with a pan-European distribution did not evidence an intention to trade outside of the UK.

The Judge felt that the format of the telephone numbers and the invitation to "pop in" (presumably referring to The Sofa Workshop stores) indicated that the adverts were targeted at readers in the UK. This was consistent with the fact that the claimant could only point to one sale outside the UK. In addition, there was no evidence that this sale resulted from marketing received by the purchaser outside of the UK and that it was entirely possible that the individual who placed the order could have done so in the UK.

Descriptive

Sofaworks challenged to the validity of the CTM's on the basis that the marks were descriptive. The court accepted evidence that the term "sofa workshop" is used as a descriptive term by traders in the sofa business.  However, The Sofa Workshop's large customer base, extensive use of the CTM's in marketing and advertising and the fact that 25% of its surveyed customers identified themselves as repeat customers led the Judge to find that the marks had acquired a distinctive character in relation to sofas and related goods in the UK.

Likelihood of Confusion

The sign and the CTM's were visually, aurally and conceptually similar and the Court was unconcerned that The Sofa Works had not provided instances of actual confusion among a high proportion of either party's customers.  The Judge commented that relevant confusion in the minds of consumers would always be difficult to detect and was satisfied that a proportion of the relevant actual customers that was above the de minimis level (although markedly less than half the total number) believed that the goods of each party came form the same or economically-linked undertakings, given the similarity between the CTM's and the sign.

On this basis had the CTM's been validly registered and not liable to be revoked (see section headed Non-use above), the court would have found that they had been infringed.

However, The Sofa Workshop succeeded in its claim for passing off.

Passing Off

The Judge felt that in this instance, there was a large degree of overlap between the criteria to be considered in respect of alleged infringement of the CTMs and passing off.

The Judge found that The Sofa Works had goodwill in its business in England and Wales which was associated in the public mind with its trading name. Sofaworks' use of its "Sofaworks" sign resulted in a representation to a proportion of the relevant public in England and Wales that its goods and services came from a source the same as or associated in the course of trade with The Sofa Works and had the potential to cause material damage to the The Sofa Works' goodwill.

The implications for Sofaworks are yet to be determined as it awaits the courts ruling on the timescale for the branding changes as well as confirmation of the courts intentions.  Sofaworks has yet to comment on whether it plans to appeal.

Risk of Registering a CTM over a National TM

The decision highlights the risks involved in seeking to register a trade mark as a CTM, rather than a national trade mark, when there is a doubt over the geographical extent of the EU in which the applicant proposes to use the mark. By registering a mark as a CTM when national registration would have been sufficient, the proprietor risks losing trade mark protection altogether, although conversion of the CTM into one or more national marks may remain a possibility.

Posted by: in: Case Law, Companies, News, Passing Off, Trade Marks

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