The property manager is not responsible for infringement of a competitor’s trademark

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In a recent decision, the Intellectual Property Court ruled that a property management company using a sign similar to the mark of another property management company, in relation to services provided in the same building where the owner of the the brand operated, was not responsible for trademark infringement or by the way.

context

The case before IPEC (Urbanbubble Ltd and others v Urban Evolution Property Management Ltd and others [2022] EWHC 134 (IPEC) (January 25, 2022)) involved two property management companies. The plaintiff, Urbanbubble Ltd (“Urban Bubble“), operates under the name and trademark “URBANBUBBLE”. She claimed that the defendant, Urban Evolution Property Management Ltd (“UEPM”), a competitor marketing under the name “URBAN EVOLUTION”, infringed its trademark rights.

The request was made on the following basis:

  1. following the use by UEPM of a sign similar to Urbanbubble’s mark, in relation to services identical to those protected by the registration of the mark, there was a risk that the relevant public would be confused by thinking that UEPM’s services originated from Urbanbubble or that the companies were associated in some way;

  2. the use by UEPM of “URBAN EVOLUTION” unduly took advantage of the notoriety of the URBANBUBBLE mark and undermined its distinctive character; and

  3. UEPM’s use of “URBAN EVOLUTION” was contrary to deception laws.

Facts of the case

Urbanbubble has been providing property management services since 2008. Shortly after launching UEPM’s property management business in March 2018, Urbanbubble complained that the UEPM logo which featured the words “urbanevolution(just like a single lowercase word) looked too much like his own logo in which the words “Urbanbubble” were also shown as a single lowercase word. UEPM quickly changed its logo to reconfigure how the words “Urban” and “Evolution” were presented, and Urbanbubble subsequently wrote to UEPM to say the issue had been resolved.

As of mid-2018, Urbanbubble and UEPM were providing property management services to the same property developer in relation to the same mixed-use building in Liverpool, although Urbanbubble act as letting agents for the residential apartments and the UEPM manages rentals for business units.

Shortly after UEPM’s appointment, and unbeknownst to Urbanbubble, UEPM was contacted by unit owners in the building asking if there was a connection between UEPM and Urbanbubble. . At the beginning of 2020, Urbanbubble’s mandate ended and UEPM took over the management of the entire building. Again, UEPM received inquiries about the connection between UEPM and Urbanbubble. Urbanbubble sought to rely on these communications as evidence of a likelihood of confusion between its mark and the trade name of UEPM.

UEPM defended the alleged infringement on the grounds that Urbanbubble consented to UEPM’s use of “URBAN EVOLUTION” when it informed UEPM that the problem with the logo (i.e. say the complaint that was centered on the presentation of the words “URBAN EVOLUTION” and not the use words themselves) had been resolved.

Court findings

1. No confusion

When assessing the likelihood of confusion between the marks, the judge noted that there were two categories of consumers relevant to the services at issue: (1) landowners/property developers requiring property management services; and (2) investors/owners of units in a building that they rent for commercial or residential purposes. The likelihood of confusion in the minds of either of these types of consumers would be sufficient to establish an infringement.

The judge did not rule out a finding of confusion on the grounds that the respective marks only overlapped in the word “Urban” which alluded to the services provided (as argued by UEPM). However, to establish the likelihood of confusion, the judge stated that care had to be taken that the similarity between “URBANBUBBLE” and “URBAN EVOLUTION” was an operative cause of the confusion and that the confusion arose in typical circumstances. of those in which the average consumer would see the “URBAN EVOLUTION” sign.

The evidence showed that two investors thought it was likely that UEPM’s services came from Urbanbubble (or a related entity), but neither was sure. The judge considered that this evidence did not establish that there was a risk that the use of the sign “URBAN EVOLUTION” would create a well-founded 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 consider it a “probable possibility”, which was insufficient to prove confusion.

The judge said that even if he had found that there was a likelihood of confusion, that would have been qualified. The confusion arose in the particular circumstances where UEPM operated in the same building as Urbanbubble, then took over the role of Urbanbubble and acted on the instructions of the same property developer. In the absence of these circumstances, the judge concluded that there could probably be no likelihood of confusion.

2. No Reputational Harm or Unfair Advantage

Urbanbubble provided sufficient evidence to prove that its mark enjoyed a reputation, and the evidence showed that UEPM’s use of its sign “URBAN EVOLUTION” evoked the mark “URBANBUBBLE”, so that a link between them had been established in the mind of the consumer concerned. However, Urbanbubble had produced no evidence that UEPM had chosen an “Urban” name to take advantage of Urbanbubble’s notoriety. On the contrary, the judge noted that some of the communications received by UEPM from investors indicated that there would have been no benefit to UEPM from a supposed association with Urbanbubble.

Urbanbubble’s additional claim that UEPM’s use of “URBAN EVOLUTION” impaired the distinctiveness of its mark also failed. Urbanbubble has not established that UEPM’s use of its trade name caused a change in the economic behavior of the average consumer, that is to say that such use caused the consumers concerned to stop dealing with Urbanbubble.

3. No deception

The judge admitted that Urbanbubble had goodwill in his business that was associated with his brand. However, the evidence of confusion did not support the allegation that the use of “URBAN EVOLUTION” amounted to misrepresentation by UEPM and, therefore, no harm could result.

4. Defense of Consent

The judge found that the communications between the parties regarding the original UEPM logo were consistent with the fact that Urbanbubble had demonstrated unequivocally that it waived any intention to assert its trademark rights in relation to the use by the UEPM of “URBAN EVOLUTION”.

Even if counterfeiting or marketing fraud had been found, Urbanbubble’s case would have failed on that basis.

Comment

This is an interesting case where the particular set of circumstances meant that the judge had to consider the situation where the similarity of the conflicting marks could be a cause of confusion, but there were also other concurrent causes of confusion at stake. The decision recalls that the confusion must be likely to arise in circumstances usually encountered by the relevant public and that it must be caused by the similarity of the marks.

Although the judge found no infringement in this case, the issue of consent reminds trademark owners not to settle disputes too quickly based on the presentation of the word element of a third party’s mark. : 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 any given rule should be carefully considered.

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