The recent High Court decision in Best Buy Co Inc and another v Worldwide Sales Corp Espana SL, reminds Trademark owners to exercise caution when making allegations of Trademark infringement.
The Facts:
In advance of their intended entry into Europe, Best Buy Co Inc, a major market player in the USA, filed a Community Trademark Application BEST BUY. Opposition was filed to this Application by Worldwide Sales Corp Espana SL, based upon their prior Spanish and Community Trademark Registrations, which contained the words BEST BUY.
During the opposition, Best Buy’s lawyers wrote to the Opponent’s representatives to invite a negotiated settlement. In reply, Worldwide Sales’ lawyers advised that their Client was entitled to bring Trademark infringement proceedings against Best Buy’s use of their Trademark in Spain or the EU. In addition, they stated that Worldwide Sales would be willing to explore settlement (in return for compensation) and invited Best Buy’s confirmation of their agreement to enter negotiations or provide undertakings not to use their Trademark within fifteen days.
Settlement negotiations between the parties failed and Best Buy brought an action for groundless threats of Trademark infringement against Worldwide Sales in the UK.
In this case, Judge Floyd concluded that, whilst a “reasonable recipient” of Worldwide Sales’ lawyers letter would consider its content to be a threat of Trademark infringement, when considered within the context of correspondence that had been exchanged between the parties, it was held that the letter in question comprised a “comprehensive negotiating response”, which attracted the benefit of legal privilege (the “Without Prejudice” rule). On this basis, Best Buy’s action failed.
The Threats Provisions:
Section 21 Trademarks Act 1994, provides for “any person aggrieved” by a threat of Trademark infringement to seek damages, a declaration that the threats are unjustified or an injunction against the issuance of further threats. However, certain acts are excluded from the scope of these provisions: –
- The affixing of the Mark to goods or their packaging,
- The importation of goods to which (or the packaging of which) the Trademark has been affixed, or
- The supply of services under the Trademark.
Comment:
This case highlights: –
- The importance of ensuring that any communication whatsoever made in connection with a potentially litigious situation is carefully drafted to comply with the threats provisions of the UK Trademarks Act.
- Threats can be implied by context.
- Communications or correspondence in the course of negotiation should be marked “Without Prejudice”.
If you would like more information about the points discussed in this article, have an issue involving unauthorised use of a trade mark or are in receipt of a letter alleging trade mark infringement, please contact one of our Trade Mark Attorneys.