Monster and Red Bull at Dawn

Monster Energy Company produces, as the name would suggest, energy drinks and so does Red Bull. The parties recently met in the High Court in the case of Monster Energy Company v Red Bull GmbH [2022] EWHC 2155 (Ch) as Monster appealed a decision of the UK Intellectual Property Office (UKIPO) to permit Red Bull’s opposition to Monster’s word UK trade mark application for RED DAWG.

At first instance, the UKIPO found that there was no likelihood of confusion between Red Bull’s RED BULL mark and Monster’s RED DAWG mark even where the goods were identical (eg non-alcoholic beverages). However, the UKIPO did uphold Red Bull’s complaint under section 5(3) of the Trade Marks Act 1994 that use of RED DAWG by Monster would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the RED BULL mark – this was the decision that Monster sought to appeal.

It’s convenient to note that following opposition proceedings, there are two ways in which an appeal can be raised. Option one would be an appeal to the appointed person (a senior trade mark lawyer appointed to hear trade mark appeals) and option two is by way of the High Court, as Monster did here.

Monster claimed that the UKIPO was wrong when it concluded that there was a risk of RED DAWG “free riding” on RED BULL and that this decision was not open to be made as there was no evidence to support this. Monster claimed that: a) it is not enough that simply the owner of the latter mark (RED BULL) benefits from an advantage, there must be something which makes that advantage unfair; and b) as there was no evidence relating to advantage or unfairness, and that these were matters that needed to be proved, it could not just be assumed by the UKIPO.

Red Bull disputed this position and made the points that: a) it is perfectly possible for an advantage to be characterised as unfair, irrespective of whether the owner of the later mark (RED DAWG) had the subjective intention of taking advantage of the earlier one (RED BULL); and b) that the UKIPO drew certain conclusions relating to advantage and unfairness in a rational manner and as such, it was not open to the Court to interfere with that decision, unless it was plainly wrong.

Mr Justice Adam Johnson held in Red Bull’s favour and that the UKIPO’s conclusions on the unfair advantage question are not open to challenge and the appeal must be dismissed. The Judge considered the UKIPO’s reasoning and referred to Jack Wills Limited v House of Fraser (Stores) Limited [2014] EWHC 110 (Ch) and in particular the following passage:

“It is also clear from the case law both of the Court of Justice and of the Court of Appeal that the defendant’s conduct is most likely to be regarded as unfair where he intends to benefit from the reputation and goodwill of the trade mark. In my judgment, however, there is nothing in the case law to preclude the court from concluding in an appropriate case that the use of a sign the objective effect of which is to enable the defendant to benefit from the reputation and goodwill of the trade mark amounts to unfair advantage even if it is not proved that the defendant subjectively intended to exploit that reputation and goodwill”.

The Judge then went onto consider the UKIPO’s evaluation, as the Appeal Court should always exercise caution before reversing a lower Court or tribunal’s decision – even where the Appeal Court has doubts about whether the first decision was correct. The Judge then found that there was nothing in the UKIPO’s evaluation that involved any error or principle or was clearly wrong and that, therefore, the decision was not open to be challenged. The Judge then held that “It is very often the case that there are competing factors in an evaluation, and that is why a decision needs to be made. This Court should not interfere unless it is satisfied that the decision is one which clearly should not have been made”.

In summary, this is a useful decision of the Court as it confirms that where the contested mark has not in fact been used in the UK, it is not necessary to show proof of actual unfair advantage. Further, that the appeal threshold is high and that the Courts will only interfere with a lower decision if that decision was one which should not have been made.

Written by Sam O’Toole – Associate