Azumi Ltd v (1) Zuma's Choice Pet Products Ltd & (2) Ms Zoe Vanderbilt [2017] EWHC 609
Azumi Limited is a company which runs various high-end Japanese restaurants across the world including a restaurant called ZUMA in London. Azumi holds three trade marks (UK and EU) for the word ZUMA and the figurative ZUMA mark (the ‘Marks’).
Zuma’s Choice Pet Products Ltd is a company set up by the second defendant Ms Vanderbilt for the purpose of selling high end pet food. The company was named after Ms Vanderbilt’s pet dog Zuma. Ms Vanderbilt registered the domain name dineinwithzuma.com and set up the website to advertise the company’s products including by using the following logo (‘ZUMA Logo’).
In August 2014 Ms Vanderbilt applied to register “DINE IN WITH ZUMA” as a trade mark. In December 2014, the claimant objected to this registration and asked Ms Vanderbilt to change the name. The claimant’s trade mark attorney went on to write an open and a without prejudice letter before action to the Ms Vanderbilt on 13 February 2015 and the parties met on 16 May 2015 to discuss the dispute.
In June 2015, the claimant issued proceedings against the defendants claiming infringement of its UK and EU ZUMA Marks under s10(3) of the Trade Mark Act 1994 (‘TM Act’) and under the corresponding Regulation 9(2)(c) of Council Regulation (EC) no 207/2009 (TM Regulation), as amended. In particular the claimant complained about infringement stemming from the defendants’ use of ZUMA in the domain name dineinwithzuma.com and on the website in the signs DINE IN WITH ZUMA, ZUMA and the ZUMA Logo. The defendants made a claim/counterclaim for groundless threats.
At the case management conference HHJ Hacon identified 8 issues which were to be determined at trial.
1) Do the ZUMA Marks have sufficient reputation in the relevant territories?
General Motors v Yplon was referred to in which it states that for s10(3) TM Act/ art9(2)(c) TM Regulation infringement the “registered trade mark must be known by a significant part of the public concerned by the products or services for which it covers... in a substantial part of the territory”. The claimant submitted various evidence to support their claims including newspaper cuttings, magazine articles, celebrity endorsements, restaurant guide reviews and awards for their ZUMA restaurant. They also provided evidence of the growing turnover since opening in 2002, the high number of pre-booked reservations and the number of covers they sit.
The defendants did not deny ZUMA has a reputation, but argued it is not sufficient for s10(3)/art9(2)(c). The defendants submitted that ZUMA holds only 0.03% of UK restaurant business, spends 0.27% of its turnover on marketing and is therefore known by only an insignificant proportion of public.
Her Honour Judge Melissa Clarke accepted as submitted by the claimant that ‘significant’ does not mean majority. Judge Clarke noted that the ‘market’ in this case is not whole of restaurant market in UK but is the smaller market for high end restaurants in London. Based on the evidence adduced Judge Clarke stated that a restaurant would not have so many bookings and sit so many covers without a reputation amongst the public concerned and accordingly she was satisfied “that the Marks have a substantial reputation in the United Kingdom which is sufficient also to establish a reputation in the EU for the EU marks”.
2) Were the defendants using the sign on good or services?
Use is defined in s10(4) of TM Act (there is an identical provision in the TM Regulation) and includes uses such as affixing a sign to goods, exposing goods or services for sale under a sign and use of a sign for advertising. Arsenal Football Club v Matthew Reed was referred to in which it states use must be for commercial activity. The claimant submitted that the defendants were using ZUMA in their domain and in signs on their website and packaging.
The defendants accepted that DINE IN WITH ZUMA and the ZUMA Logo were being used on the website and on packaging. Even though no sales had been made Judge Clarke noted that the website was ready for business. The defendants disputed however that ZUMA solus was being used as a sign. ZUMA solus was being used as part of narrative text on the website. The defendants argued that although it is not explained on the website it can be inferred from the website mission statement that Zuma is the name of MS Vanderbilt’s dog. Judge Clarke stated that customers have no way of knowing this and therefore ZUMA solus is being used on website.
In relation to the domain name dineinwithzuma.com the defendants disputed this amounted to use. However, Judge Clarke agreed with the claimant’s submission that it is well established law that a domain name can amount to infringement where it is used to indicate origin, as per BT v One in a Million. In relation to the Zuma Choice Pet Products Ltd company name Judge Clarke accepted the defendants’ argument that they only ever used the company name as a company name and this alone does not amount to infringement as the name was not being used as a sign.
Judge Clarke went on to find that even though the defendants had not traded at this point, Ms Vanderbilt had given evidence of her ambitions for the company, including evidence to show that she had offered to sell it to the claimant for £500,000 and this evidence was enough to show the signs (accept the company name) had been used in the context of commercial activity.
Judge Clarke noted that ZUMA solus is identical to the claimant’s Marks and that in the DINE IN WITH ZUMA sign the average consumer would perceive the distinctive element as ZUMA because ZUMA is aurally and conceptually dominant. Judge Clarke was therefore satisfied that DINE IN WITH ZUMA constitutes use of a sign similar to the Marks.
3) Whether use of the signs would cause the claimant’s consumers to link the sign to the Marks?
Specsavers v Asda was referred to in which the average consumer is described as “reasonably well informed and reasonably circumspect and observant”. Judge Clarke agreed that the average consumer is the average consumer of the goods/services in questions and in this case, it is not the general public, but is a person who visits high end restaurants in London.
Judge Clarke considered whether there would be an opportunity for ‘consumers’ to make a link and decided that the ZUMA public are likely to own dogs, buy food and therefore a significant proportion may be exposed to advertising allowing them to make such a link. Judge Clarke then considered whether the average consumer would make the link having seen the defendants’ signs and she decided that “dine in” enhances the chance of a link as it humanises the products and therefore “the average consumer aware of the Marks would, on exposure to the signs complained of, call the Marks to mind and make a link”.
4) Could the defendants’ use of the signs harm the distinctive character of the Marks?
Tarnishment and dilution were considered by the court at this point in the trial. The claimant referred to Dulces v Conservas HELIOS in relation to tarnishment, which states that for tarnishment to be found the use must adversely affect the consumer’s perception of the mark. L'Oréal v Bellure was referred in relation to dilution in which it states that dilution occurs where the trade mark’s ability to identify goods is weakened. Intel Corporation v CPM United Kingdom was also referred to which states that dilution occurs where there is a change/risk of change in the economic behaviour of the average consumer.
The claimant’s submitted evidence claiming that generally dog food is perceived as being not very pleasant. Judge Clarke agreed and stated that she was satisfied there is an inherent tension between dog and human food. In HELIOS it was held that animal food is likely to raise unpleasant associations with human food. Accordingly, association between the claimant’s Marks and the defendants’ pet food products is likely to adversely affect and tarnish the ZUMA Marks.
In relation to dilution the claimant argued the link would lead to a reduction of prestige associated with ZUMA, which is likely to lead to a change in economic behaviour of customers. The defendants’ argued that there are a number of other companies using ZUMA, to which to claimant responded by stating that in Intel Corp it states there is no requirement for uniqueness of a trade mark. Judge Clarke held that the defendants’ aim was to build a large pet food business, stocked in supermarkets which would lead to a serious likelihood of change in the economic behaviour of consumers and would lead to dilution.
5) Were the defendants using the sign with ‘due cause’
In Leidseplein Beheer v Red Bull it is explained that for a defendant to use ‘due cause’ as a defence they must be able to objectively justify their use of the sign. The defendants argued that there was due cause because she had created a dog food business using the sign. Judge Clarke held that this was insufficient to found a due cause defence.
6) Own name defence
S11(2)(a) of the TM Act states that a trade mark is not infringed by use of a defendant’s own name provided such use is in accordance with honest practice (there is an equivalent provision at Art 12(1)(a) of the TM Regulation). Under the TM Act the own name can be that of a corporate entity or a natural person, however in the EU only a natural person’s own name can be used.
The defendants pleaded the defence based on the name of Ms Vanderbilt’s dog Zuma. Judge Clarke stated that this could not succeed as a matter of law and agreed with the claimant’s summary which stated that the defence must fail because “the dog is not a party to the proceedings, nor is it a natural person or company”.
The defendants also sought to argue the own name defence by relying on the company name Zuma's Choice Pet Products Ltd. In relation to the EU marks this argument failed because company names cannot be used. For the UK marks the argument failed because ZUMA is not Zuma's Choice Pet Products Ltd’s legal name. Judge Clarke reiterated at this point that use by Zuma's Choice Pet Products Ltd of its own name as a company name would not by itself infringe the Marks.
7) Is Ms Vanderbilt a joint tortfeasor?
Sea Shepherd v Fish & Fish was referred to which sets summarises the following three requirements of joint tortfeasorship:
• the defendant must assist in commission of the primary tort;
• the defendant must provide assistance pursuant to a common design; and
• the act must constitute a tort against the claimant.
Judge Clarke was in no doubt Ms Vanderbilt was a joint tortfeasor because she was the sole shareholder and director of the company and no one else was involved with running the company.
8) Were the claimant’s threats unjustified?
Judge Clarke commented on the letter from the claimant’s attorney’s saying they were proper, polite and professional. Regarding unjustified threats Judge Clarke held that all the threats were justified as infringement had been found, except the requirement in the letters asking Ms Vanderbilt to change the Zuma's Choice Pet Products Ltd company name. However, Judge Clarke went on to note that the defendants had failed to provide any evidence of loss suffered as a result of this threat and therefore elected to award no damages to the defendants.
Judgment Date: 24 MARCH 2017
High end restaurant succeeds in trade mark claim against copycat dog food company