Unfair Advantage Ruling Upheld

In Monster Energy Company v Red Bull GmbH 2022 EWHC 2155 a UK High Court Judge upheld a Hearings Office decision that allowed an opposition based on taking unfair advantage of a well-known mark without requiring a subjective intention to do so.

Monster Energy’s class 32 application to register RED DAWG in respect of non-alcoholic beverages was opposed by Red Bull on the basis of their class 32 registrations for RED BULL, a stylised version thereof and a device mark, also in respect of non-alcoholic beverages, including energy drinks. Red Bull’s grounds of opposition were that the opposed mark is confusingly similar to theirs (section 5(2)(b)) and that it takes unfair advantage of their well-known marks (section 5(3)).

Although the goods are identical and the marks share the word ‘RED’, the Hearings Officer rejected the section 5(2)(b) direct confusion opposition, finding that average consumers would not overlook non-negligible differences between the marks even when taking into account imperfect recollection. The Hearings Officer also rejected the section 5(2)(b) indirect confusion opposition. Indirect confusion occurs where the relevant consumer recognises that the mark is different to another mark but assumes it has common ownership with the other mark on account of a distinctive shared element that creates a link between the two marks that is more than mere association. The Hearings Officer found that the shared element RED is not distinctive of the opponent and that the mark RED DAWG does not simply add or remove non-distinctive elements or amount to a brand extension of a mark of the opponent.

However, the Hearings Officer upheld the opposition under section 5(3), which protects well-known marks from uses of marks that take unfair advantage of or would be detrimental to the distinctive character or the repute of the well-known mark. The determination of section 5(3) centred on the well-known status of the RED BULL mark. Given that mark and the opposed mark begin with the same word, are two words long, reference animal names and involve the same goods, the distinctive character of the RED BULL mark and its well-known status led the Hearings Officer to find that it would be called to mind by a consumer encountering the RED DAWG mark. The Hearings Officer then found that unfair competition was established as the calling to mind of the RED BULL mark in respect of the same goods meant the opposed mark did not require as much investment in advertising as it would be riding on the coattails of Red Bull’s marketing efforts. The Hearings Officer made that finding on an objective basis and declined to find that Monster subjectively intended to benefit from the reputation of Red Bull’s mark. Nonetheless, Monster’s lack of evidence explaining why it chose the RED DAWG mark meant it failed to establish due cause for adopting the mark.

On appeal Monster argued that the onus was on Red Bull to provide evidence showing that there was a serious risk of unfair advantage being taken of its mark, and that in the absence of such evidence the Hearings Officer should not have inferred unfair advantage from the existence of a link or calling to mind of the opponent’s mark. The Judge rejected that contention. The Judge found that the Hearings Officer’s analysis regarding Monster’s adoption of the RED DAWG mark only required an intention to adopt an impactful brand, it did not require an intention to take advantage of Red Bull’s mark. While evidence of a subjective intention to take advantage of the reputation of another parties mark would be highly relevant to a finding of unfair advantage, it is not a necessary requirement under section 5(3). While merely obtaining a commercial advantage is not sufficient to engage section 5(3), the unfair advantage finding was based on the impact of the choice of that brand on consumer behaviour with the effect of Monster selling more while paying less. The Judge considered the Hearings Officer was entitled to infer from the link that consumers would likely make between the marks that unfair advantage would thereby be taken of Red Bull’s well-known mark. The inference was considered to be permissibly drawn based on inherent probabilities in the relevant context and not a mere supposition.

Author: Quinn Miller

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