Camelot (the UK National Lottery manager) has found that its registered trade mark for its HOTPICKS game will not shield it from its rival’s passing off claim.
Background
Inter Lotto (UK) Ltd alleges that since August 2001 it has used the similar name HOT PICK for its own lotto game. Just two months later Camelot applied to register its mark as a UK trade mark although it was not until July 2002 that it began to use it for its own new game. Inter Lotto assert that by this time it had acquired substantial goodwill from its use of HOTPICKS. To prevent further harm to this goodwill Inter Lotto sued Camelot for passing off. Camelot raised several defences the most interesting of which concern the relationship between registered trademarks and other IP rights. These were considered at a preliminary issue hearing in the UK court on 6th June 2003.
Issues & Outcome
Camelot attempted to use its trade mark as a defence to the passing off claim in two ways. Firstly it argued that it had a statutory and exclusive right to use its trade mark which could not be restrained by Inter Lotto’s "inferior" common law right. If this was not the case then it asserted that as any goodwill that had accrued to Inter Lotto subsequent to Camelot’s registration had resulted from its infringing use of HOTPICKS, Inter Lotto should not be permitted to rely upon it to found an action.
Mr Justice Laddie determined that neither of these defences was arguable. Accordingly all the goodwill that had accrued to Inter Lotto up to the date when Camelot commenced using HOTPICKS was to be taken into consideration.
Although section 9(1) of the Trade Marks Act 1994 states that "The proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent" this "did not stipulate the proprietor of the registered mark has an exclusive right to use the mark" such an interpretation could only result from a "basic flaw in the appreciation of what the section achieves" rather "registered trade marks, like all other intellectual property rights do not give a right to the proprietor to use, but give him a right to exclude others from using" .
Furthermore although there may well be cases where the nature of the trade mark infringement was "so flagrant and clearly and knowingly wrongful" that the court should refuse to allow a claimant to rely on goodwill acquired from the infringing acts, this clearly was not such a case. It is reported that Camelot intend to appeal this decision.
Comment
If the outcome of this hearing had been different it may have required a sea change in the way IP rights are understood in the UK. However frequently businesses fail to appreciate that obtaining a trade mark registration offers them no guarantee that they can actually freely use their mark. This case illustrates once again the importance of conducting as thorough a brand audit as possible before investing in a registration.
Bonita Trimmer
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