The Supreme Court has affirmed that post-sale circumstances can be taken into account when assessing similarity in a case where Umbro brand owner Iconix had accused fashion footwear brand Dream Pairs of trademark infringement.

Supreme Court judges Lord Hodge, Lord Hamblen, Lady Rose, Lord Briggs and Lord Stephens handed down their unanimous judgment today (24 June), thereby reinstating a High Court decision that there was no infringement.

This is the first time the court has addressed the issue of post-sale confusion in trademark infringement, and the decision has important ramifications for anyone managing IP and brand strategy, particularly in consumer-facing sectors like retail, fashion and sport.

Iconix, represented by Brandsmiths, sued Dream Pairs in 2021 for selling shoes featuring a logo (the DP sign) that it said was confusingly similar to two Umbro trademarks. The High Court dismissed Iconix’s claim, finding that there was a very low degree of similarity between the signs and no likelihood of confusion.

The case ended up at the Court of Appeal, which found that there was a “moderately high level of similarity” between the logos in the post-sale context, particularly when the DP sign was viewed on a football boot by a viewer standing nearby and looking down at it, calling the lower court ruling “irrational”. 

Detailing their reasoning on using post-sale elements to assess similarity, the Supreme Court said that the case authority on the subject, the CJEU Equivalenza decision, established that post-sale circumstances cannot be used to dismiss intrinsic similarities between signs but can support a finding of similarity.

Bird & Bird partner Ewan Grist, who represented Dream Pairs, said: “The Supreme Court held that ‘real and representative’ post-sale circumstances (for example, a particular viewpoint from which a sign might be encountered) can be taken into account when assessing similarity of the mark and sign, and that post-sale confusion can be a basis for a finding of infringement, even if there is no confusion at the point of sale.”

He continued: “While both of these findings will give the trademark owner more latitude to be able to allege infringement, it will also make it easier to oppose new trademark applications. So, potentially good news for trademark owners, but bad news for new market entrants.”

Andy Lee, partner and head of IP at Brandsmiths said: “This judgment is positive for brand owners. The court confirmed that trademarks have an important ongoing role and existence after sale and should be appropriately protected recognising the value of brands and the work that goes into establishing them.”

‘Misplaced’ criticism of trial judge

The Supreme Court also found that the Court of Appeal’s criticism of the trial judge was “misplaced”. The judges said the trial judge gave careful consideration to the effect of viewing the DP sign from different angles, and the post-sale context, but did not regard those considerations as detracting from his conclusion about faint similarity or unlikelihood of confusion.

There were no matters such as “irrationality”, or error of principle or of law, which justified the Court of Appeal in substituting its own different views of the answer to the multifactorial question facing the judge, the Supreme Court believed. 

Grist said the Supreme Court’s decision was perhaps most notable for its “firm rebuke” of the Court of Appeal. He added: “Dream Pairs won this appeal because we were able to show that the Court of Appeal had overstepped its appellate power.”

Lee added that the judgment reiterates that when considering such multi-factorial assessments, “appeal courts should be slow to interfere on the basis of their own views if the first instance judge has carried out a proper assessment. This may lead to less appeals being heard in certain cases and therefore the first instance trial result becomes even more important”.

Nicholas Buckland, a partner in the IP team at Lewis Silkin, said he was “slightly surprised” that it was not enough for the appeals court to show that it would have reached a different conclusion to the trial judge.

He commented: “The Court of Appeal based its decision on the fact that the trial judge had failed to take into account the importance of viewing the trademark from different angles. When you read the first instance judgment, this is undoubtedly correct. I struggle with the Supreme Court’s decision that this was not enough to allow the Court of Appeal to re-evaluate the likelihood of confusion argument, given – to my mind – it was a fundamental part of the balancing exercise.”

He too believed the ruling would make parties “think twice before appealing any first-instance decision on likelihood of confusion, whether relying on post-sale confusion or not”.

He added: “The Supreme Court has confirmed that any appeal on this ground must clearly show that the first instance judge was wrong, which many thought was the case here.”

Sarah Mountain, an IP partner at RPC, commented: “While many, including the Court of Appeal and no doubt Umbro itself, may not agree with the outcome, the inclusion of a ‘real-world’ assessment will be welcomed by brand owners. This should make it easier to take action against infringing signs where their application to products, such as on footwear or apparel, makes them more closely resemble registered trademarks and therefore more likely to cause confusion amongst the public.”

The Umbro trademarks have been widely used on football boots in the UK since 1987. UK sales of goods bearing the Umbro marks totalled more than $60m between 2016 and 2018.

The DP sign was designed and created in 2015 and used as a US trademark by Dream Pairs in relation to footwear. Since 2018, Dream Pairs has, via the Amazon UK website and to a lesser extent the eBay UK website, sold a variety of footwear branded with the DP sign in the UK.