Facts

Urbanbubble Ltd is the owner of a UK trade mark registration for the word URBANBUBBLE, registered in July 2015 for “Property (real estate-) management”. It trades under the following logo:

In 2016, Urbanbubble agreed to manage certain residential buildings in Liverpool developed by The Elliot Group International Ltd (Elliot).

Later that same year, Elliot asked Sam Tumilty, whose company was called Liverpool City Rents Ltd (LCR), to act as management agent for a portion of the Liverpool buildings. Later that same month, LCR also took on about 25% of the Liverpool properties otherwise managed by Urbanbubble.

In 2018, Urban Evolution Property Management Ltd (UEPM) was incorporated and Mr Tumilty became one of the directors. UEPM traded under the name “Urban Evolution” using the following logo:

Following complaint from Urbanbubble that UEPM’s logo was too similar to Urbanbubble’s logo, UEPM designed a new logo:

However, UEPM continued to use the sign “Urban Evolution” to refer to UEPM.

In July 2018, Elliot appointed UEPM to manage the commercial units in the “Artesian”, one of the Liverpool buildings. Urbanbubble continued to manage the residential properties in the building.

In October 2018, UEPM received emails from third parties asking whether there was a connection between Urban Evolution and Urbanbubble.

By instigating a “Right to Manage” process during 2019, UEPM then took over management of the Artesian entirely in February 2020 and Elliot removed Urbanbubble as management agent for all the Liverpool properties that it had been managing and appointed UEPM.

In November 2020, Urbanbubble issued proceedings against UEPM, alleging that its use of the sign “Urban Evolution” infringed Urbanbubble’s trade mark under ss 10(2) and 10(3) of the Trade Marks Act 1994. Urbanbubble also claimed that UEPM had passed off its services for those of Urbanbubble.

UEPM denied the allegations and argued that Urbanbubble had consented to UEPM’s use of the trading name “Urban Evolution” and/or that the parties’ conduct had created an estoppel on which the Urban Evolution could rely.

Decision

Section 10(2)

The identicality or similarity of the services provided by both UEPM and Urbanbubble was admitted. The focus was therefore on the similarity between URBANBUBBLE and “Urban Evolution” and the likelihood of confusion.

One of the questions was whether the evidence of confusion, if there was any, should be ascribed to a failure on the part of those concerned to realise that there had been a transition from Urbanbubble to UEPM as managers of buildings owned by Elliot and not to any similarity there may be between mark and sign. Urbanbubble argued that in law it made no difference if other factors contributed to the confusion, provided that the similarity of the mark and sign was an operative cause of the confusion.

Considering the case law, His Honour Judge Hacon noted that if it is proved that the similarity between mark and sign is an operative cause of confusion, infringement of the mark is established, even if there are other simultaneous causes of the confusion, provided that the instances of confusion occurred under circumstances typically encountered by the average consumer. Further, If the average consumer’s reaction to the accused sign goes no further than bringing the mark to mind, that does not qualify as confusion. However, if the association between the mark and the sign causes the average consumer to believe that the respective services come from the same or economically linked undertakings, that qualifies as confusion within the meaning of s.10(2). The evidence need only show that there is a risk of such confusion, a risk that HHJ Hacon inferred must be significant, not trivial. Finally, the likelihood of confusion on the part of the average consumer must be assessed at the point of an economic transaction involving goods or services in relation to which the accused sign is used.

HHJ Hacon agreed with UEPM that the only point of similarity between mark and sign was the word “Urban”. UEPM argued that that word was highly allusive to the services provided by both parties, i.e., the management of urban buildings.  However, HHJ Hacon did not accept that the possibility of confusion was so preposterous that the evidence of alleged confusion should be summarily rejected.  The evidence of confusion could be sufficiently compelling to show that in practice a sign containing “Urban” could be sufficiently similar to the mark to lead to a likelihood of confusion and did so here.

To support its claim of confusion, Urbanbubble relied on the email evidence referred to above that Urban Evolution had received questioning whether Urban Evolution was connected to Urbanbubble. In particular, it relied on emails from two investors who had separately asked the question.

HHJ Hacon found that the emails showed that the two investors were not wholly convinced of a connection but thought it likely that UEPM’s services came from Urbanbubble or an undertaking economically linked to it. However, neither had demonstrated such confusion at the point of an economic transaction, as they had both indicated they were going to take further steps before investing.

Further, HHJ Hacon said, these investors were two investors out of many and could not be taken to be the notional average consumer.

Therefore, in HHJ Hacon’s view, 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 investor consumer that there was an economic link between UEPM and Urbanbubble. At most, there was a risk that the average consumer would regard it as a likely possibility, which was not enough. Accordingly, there was no infringement under s 10(2).

Section 10(3)

On the evidence, HHJ Hacon was satisfied that the URBANBUBBLE mark had a reputation in the UK. Further, given his findings in relation to investor confusion under s 10(2), a link in the mind of the average consumer had been established.

As for unfair advantage, HHJ Hacon disagreed that UEPM had deliberately chosen to use the word “Urban” to profit from the reputation of the URBANBUBBLE mark. The email evidence from the two investors showed that there would have been no advantage to UEPM in a perceived association with Urbanbubble, as both investors had expressed dissatisfaction with Urbanbubble’s services. Accordingly, unfair advantage had not been established.

As for detriment to the distinctive character of URBANBUBBLE, there was no evidence establishing a change in the economic behaviour of the average consumer consequent upon the use of UEPM’s “Urban Evolution” sign.

Lacking too was evidence that once UEPM had started to trade under the “Urban Evolution” sign this had caused customers to stop dealing with Urbanbubble or otherwise to behave economically in a manner detrimental to Urbanbubble.

Given these findings, it was not necessary to consider whether there was undue cause. However, HHJ Hacon said that if Urban Evolution’s case on consent was made out, that would qualify as due cause.

Accordingly, Urban Evolution had not infringed the mark pursuant to s 10(3).

Passing off

HHJ Hacon found that the evidence in relation to Urbanbubble’s reputation in the context of s 10(3) showed that, at the relevant date, Urbanbubble owned goodwill in its business associated with the trading name “Urbanbubble”.

However, the evidence on likelihood of confusion under s 10(2) did not show that use of the “Urban Evolution” sign constituted a misrepresentation on the part of UEPM. The evidence indicated that, at most, members of the relevant public thought that there was a likely possibility of a connection between Urbanbubble and UEPM, but this never coalesced into a fully-formed belief or assumption. It was UEPM taking over from Urbanbubble the same role as property manager in the same building on the instruction of the same developer that had led to the view of a possibility of a connection in the course of trade. That did not amount to misrepresentation, which meant that there was no damage and no passing off.

Defences

Although, given his findings on infringement, HHJ Hacon did not need to consider UEPM’s defences, he did so, as they were argued by the parties at trial.

HHJ Hacon found that certain communications between Urbanbubble and UEPM in 2018 were consistent with Urbanbubble having unequivocally demonstrated that it had renounced any intention to enforce its exclusive trade mark rights in relation to UEPM’s use of the trading name “Urban Evolution”. This constituted consent within the meaning of s 9 of the 1994 Act and, if needed, UEPM would have had a defence.

As for passing off, this consent to UEPM’s use of “Urban Evolution” as a trading name amounted to a licence, if a licence had been necessary.

However, HHJ Hacon rejected Urban Evolution’s defence of estoppel for both trade mark infringement and passing off. (Urbanbubble Ltd v Urban Evolution Property Management Ltd [2022] EWHC 134 (IPEC) (25 January 2022) — to read the judgment in full, click here).