May 20, 2015

Pinterest, Inc. v. (1) Premium Interest Limited and (2) Alex Hearn

[2015] EWHC 738 (Ch) (24 March 2015)

Introduction

This case arises from a dispute over the trade mark PINTEREST.  Each side has applied to register PINTEREST as a Community trade marks (“CTM”) for overlapping goods and services and each of these applications is being opposed by the other party before the Office for Harmonisation in the Internal Market (“OHIM”).  In the English action Pinterest has sued Premium Interest for passing off on a quia timet basis.

This High Court judgment deals with two interim applications: first, an application by Pinterest for strike out or summary judgment of certain aspects of Premium Interest’s pleaded defence regarding the nature of the rights conferred by a CTM; and secondly, Premium Interest’s application for a stay of the passing off action pending the final determination of the OHIM opposition proceedings.

Background

Pinterest (the claimant) currently uses the trade mark in relation to a well-known social networking website which allows users to collate images and content and arrange them into themed collections for their own personal use or for others to browse for inspiration.  Pinterest established its business in late 2009 and has promoted its services throughout the world, including in the UK, since 2010.  However, Pinterest did not apply to register a CTM for the mark until 10 February 2012.

Premium Interest (the defendant) developed an idea for a news aggregation platform to link news with trending information across the internet, ranking each news story using an algorithm.  The platform was called ‘Premium Interest’ and, according to the defendants, at the end of 2010 the term PINTEREST was coined to name the score used to rank news stories on the platform.  Premium Interest applied to register PINTEREST for services in Class 41 and 45 on 31 January 2012 (i.e. just before Pinterest’s CTM application referred to above) but have not yet used the mark in the course of trade anywhere in the world.

Opposition proceedings at OHIM

The parties filed oppositions against the other’s CTM applications.  Pinterest is opposing Premium Interest’s CTM application contending, amongst other things, that it has an earlier right to the sign PINTEREST under the English law of passing off pursuant to Article 8(4) of Council Regulation 207/2009 (EC) (the “Regulation”).   Meanwhile, Premium Interest opposes Pinterest’s CTM application relying upon its CTM application as an earlier trade mark within Article 8(1)(a) and (b) of the Regulation.

OHIM issued its decision on Pinterest’s opposition in November 2013 holding that Pinterest had not proved that it owned substantial goodwill in the mark PINTEREST in the UK at the relevant time.  Pinterest appealed this decision and, in October 2014, the Board of Appeal annulled the Opposition Division’s decision, allowed further evidence from Pinterest into the case, and sent the case back down to the Opposition Division for further prosecution.  Premium Interest has announced its intention to appeal this decision to the General Court.

In July 2014 (before the decision of the OHIM Board of Appeal), Pinterest commenced proceedings against Premium Interest in the High Court for passing off on a quia timet basis.

High Court decision

Premium Interest’s defence asserted that registration of its CTM application for PINTEREST would confer on Premium Interest the ‘right to use’ the mark in relation to services for which the CTM is registered and that this positive ‘right to use’ would afford Premium Interest a complete defence to Pinterest’s claim for passing off.  The defendant argued that, if the court disagreed, it should send the question to the CJEU for guidance.

This position was resisted by Pinterest who cited case law in support of their contention that the right acquired by trade mark registration is negative, i.e. only a right to prevent others from infringing.

Arnold J, in the High Court, held that that registration of a Community trade mark (a) confers no positive right to use that mark and (b) does not provide a defence to a claim for passing off or unfair competition, and refused the defendant’s request to refer a question on this point to the ECJ on the basis that he considered the position to be acte clair.  He explained with regard to point (a) that this proposition is not undermined by the courts sometimes loosely referring to a trade mark proprietor as having the “right to use” the mark, especially when one considers that such a right may often include the ability to license.   In respect of (b), Arnold J agreed with Pinterest that the Regulation sets out clear provisions in Articles 110 (Prohibition of use of Community trade mark) and 111 (Prior rights applicable to particular localities) by which prior rights holders could assert their earlier rights against CTM holders (albeit in specific circumstances).

In considering Premium Interest’s stay application Arnold J focused on the starting point that it is inherently undesirable for the same issue to be litigated between the same parties in two different tribunals at the same time; predominantly because it leads to wasted costs.  However, it was also accepted by the parties that neither decision would create a res judicata.  This position is supported by a decision of the General Court of the EU, which came out the following day, in Apple and Pear Australia, Star Fruits Diffusion v OHIM, Case T-378/13, 25 March 2015, in which the General Court held that parties to opposition proceedings in OHIM could not rely on a decision in a CTM infringement action as creating a res judicata, although OHIM has a duty to consider any such judgments.

In this case, a further factor in support of granting a stay was that if the opposition proceedings were determined in favour of Pinterest, then the English proceedings might become redundant.

Arnold J ultimately held that the factors against granting a stay were more compelling in this case – namely, the need for commercial certainty in the UK, that the determination of the Court proceedings might promote a wider settlement, and the English case would be decided a good deal faster than (i.e. several years before) the OHIM opposition proceedings –and the stay application was refused.

Comment

This case is a useful reminder, and a clear statement, of the principle that a CTM registration is not in and of itself a ‘right to use’ come what may, but rather a negative right to prevent others from encroaching onto its scope of protection.

One issue which was raised but which the judge did not need to determine on the facts was whether a claimant in a passing off action can rely on goodwill generated through use which itself was infringing a CTM.  This point has been determined in relation to a UK national trade mark by the Court of Appeal (holding, in Interlotto v Camelot [2003] EWCA Civ 1132, that goodwill acquired through use which otherwise infringed a UK trade mark could nevertheless be relied upon to allege passing off, because Section 2(2) of the Trade Marks Act 1994 provides expressly that nothing in that Act affects the law of passing off).  The position in respect of a CTM has not yet been decided (although it was referred to (without being resolved) in Redd Solicitors v Red Legal [2012] EWPCC 54, as well as in this case).  Here, although Premium Interest had pleaded the point initially, at the hearing Pinterest and Premium Interest accepted that the relevant date for assessing passing off was the filing date of the defendant’s CTM, being the first ‘threat to use’ by the defendant, and so the point did not need to be considered. However, it may only be a matter of time before the issue resurfaces in another case in the future.