Property manager not liable for infringement of competitor’s trade mark

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In a recent decision the Intellectual Property Enterprise Court found that a property management company using a similar sign to another property management company’s trade mark, in relation to services provided in the same building where the trade mark owner operated, was not liable for trade mark infringement or passing off.

Background

The case before the IPEC (Urbanbubble Ltd and others v Urban Evolution Property Management Ltd and others [2022] EWHC 134 (IPEC) (25 January 2022)) concerned two property management companies. The claimant, Urbanbubble Ltd (“Urbanbubble”), operates under the name and registered trade mark “URBANBUBBLE”. It claimed that the defendant, Urban Evolution Property Management Ltd (“UEPM”), a competitor trading under the name “URBAN EVOLUTION”, was infringing its registered trade mark rights.

The claim was brought on the following basis:

  1. as a result of UEPM’s use of a sign similar to Urbanbubble’s trade mark, in relation to services identical to those protected by the trade mark registration, there was a likelihood that the relevant public would be confused into thinking that UEPM’s services originated from Urbanbubble or that the companies were associated in some way;
  2. UEPM’s use of “URBAN EVOLUTION” took unfair advantage of, and was detrimental to the distinctive character of, the reputation of the URBANBUBBLE trade mark; and
  3. UEPM’s use of “URBAN EVOLUTION” was contrary to the laws of passing off.

Facts of the case

Urbanbubble has been providing property management services since 2008. Shortly after the launch of UEPM’s property management business in March 2018, Urbanbubble complained that UEPM’s logo that featured the words “urbanevolution” (all as one word in lower case) was too similar to its own logo in which the words “urbanbubble” were also presented all as one word in lower case. UEPM swiftly changed its logo to reconfigure how the words “Urban” and “Evolution” were presented, and Urbanbubble subsequently wrote to UEPM to say that the matter had been resolved.

By mid-2018, both Urbanbubble and UEPM were providing property management services to the same property developer in relation to the same mixed-use building in Liverpool, albeit Urbanbubble acted as letting agents for the residential apartments and UEPM managed lettings for the commercial units.

Not long after UEPM’s appointment, and unbeknown to Urbanbubble, UEPM was contacted by owners of units within the building asking if there was a connection between UEPM and Urbanbubble. In early 2020, Urbanbubble’s appointment ended and UEPM took over management of the whole building. Again, UEPM received enquiries about the connection between UEPM and Urbanbubble. Urbanbubble sought to rely on these communications as evidence of a likelihood of confusion between its trade mark and UEPM’s trading name.

UEPM defended the infringement claims on the basis that Urbanbubble had consented to UEPM’s use of “URBAN EVOLUTION” when it informed UEPM that the issue concerning the logo (i.e. the complaint that had centred on the presentation of the words “URBAN EVOLUTION” and not the use of the words themselves) had been resolved.

Findings of the court

1. No confusion

In assessing the likelihood of confusion between the marks, the judge noted that there were two categories of relevant consumer for the services at issue: (1) freeholders / property developers requiring property management services; and (2) investors / owners of units within a building which they rent out for commercial or residential use. The likelihood of confusion on the part of either of these types of consumers would be sufficient for infringement to be found.

The judge did not rule out a finding of confusion on the basis that the respective marks only overlapped in the word “Urban” which was allusive of the services provided (as argued by UEPM). However, for the likelihood of confusion to be made out, the judge said that care is required to ensure that the similarity between “URBANBUBBLE” and “URBAN EVOLUTION” was an operative cause of confusion and that confusion occurred in circumstances typical of those in which the average consumer would see the “URBAN EVOLUTION” sign.

The evidence showed that two investors had thought it was likely that UEPM’s services were coming from Urbanbubble (or a linked entity), but neither was sure. The judge found that this evidence did not establish that there was a risk that the use of the “URBAN EVOLUTION” sign would create a fully formed belief in the mind of the average consumer that there was an economic link between UEPM and Urbanbubble. At most, the judge found that there was a risk that the average consumer would regard it as a “likely possibility”, which was insufficient to prove confusion.

The judge said that even if he had concluded that there was a likelihood of confusion, it would have been qualified. The confusion arose in the specific circumstances of UEPM operating in the same building as Urbanbubble, then taking over Urbanbubble’s role and acting on the instructions of the same property developer. Absent these circumstances, the judge found that there could probably be no likelihood of confusion.

2. No detriment to reputation or unfair advantage

Urbanbubble adduced sufficient evidence to prove that its trade mark had a reputation, and the evidence showed the UEPM’s use of its “URBAN EVOLUTION” sign brought to mind the “URBANBUBBLE” trade mark, so a link between them had been established in the mind of the relevant consumer. However, Urbanbubble had not produced any evidence that UEPM had chosen an “Urban” name to profit from Urbanbubble’s reputation. On the contrary, the judge noted that some of the communications received by UEPM from investors indicated that there would have been no advantage to UEPM from a supposed association with Urbanbubble.

Urbanbubble’s further claim that UEPM’s use of “URBAN EVOLUTION” was detrimental to the distinctive character of its trade mark also failed. Urbanbubble had not established that UEPM’s use of its trading name had caused a change in the economic behaviour of the average consumer, i.e. that such use had caused relevant consumers to stop dealing with Urbanbubble.

3. No passing off

The judge accepted that Urbanbubble had a goodwill in its business which was associated with its trade mark. However, the evidence regarding confusion did not support a claim that the use of “URBAN EVOLUTION” amounted to a misrepresentation by UEPM and accordingly there could be no resulting damage.

4. Defence of consent

The judge found that the communications between the parties in relation to UEPM’s original logo were consistent with Urbanbubble having unequivocally demonstrated that it renounced any intention to enforce its trade mark rights in relation to UEPM’s use of “URBAN EVOLUTION”.

Even if infringement or passing off had been found, Urbanbubble’s case would have failed on this basis.

Comment

This is an interesting case where the particular set of circumstances meant the judge needed to consider the position where the similarity of the marks at issue may be one cause of confusion but there were also other simultaneous causes of confusion at play. The decision reiterates that confusion must be likely to occur in circumstances typically encountered by the relevant public, and it must be caused by the similarity of the marks.

Although the judge did not find infringement in this case, the issue of consent is a reminder to brand owners not to be too quick to settle disputes on the basis of how the verbal element of a third party’s mark is presented: there may be circumstances in which the use of the words themselves would not be desirable. No one has a crystal ball, but the potential ramifications of a given settlement should be considered carefully.