London black cabs lack distinctive character, appeals court affirms

The English Court of Appeal has rejected an appeal from The London Taxi Company (LTC) against a finding that designs of the city’s famous black cabs lack distinctive character.

In a decision handed down today, November 1, Lord Justice Floyd and Lord Justice Kitchin affirmed a decision made by Mr Justice Arnold in January this year at the English High Court.

LTC had hit Frazer-Nash Research, the manufacturer of the new eco-friendly Metrocab taxi, with a passing off claim and an accusation that Frazer-Nash had infringed two trademarks which depicted models of black cabs.

Arnold had rejected LTC’s passing off claim and found two trademarks to be invalid for class 12 (taxis) because they were “devoid of inherent distinctive character”.

In coming to this conclusion, Arnold found that the marks would have been perceived by the average consumer as “merely a variation of the typical shape of the taxi” and wouldn’t have been perceived as identifying the origin of the goods.

He also revoked LTC’s EU trademark (EUTM) covering the cab design for non-use, but didn’t revoke the UK trademark.

According to LTC, the design of the Metrocab infringed its 3D trademarks, EU number 9,518,71, (which depicts the Fairway model) and UK trademark number 2,440,659 (covering the TX1/TXII model).

“Further, even if the LTC marks had been valid, he held that they would not be infringed by the new Metrocab. He also dismissed a claim founded on the common law tort of passing off,” said Floyd.

In December 2014, Transport for London handed out licences to five new Metrocab vehicles allowing them to operate under a trial period. The Metrocab has yet to be launched.

Floyd explained that a taxi hirer should be included in the class of consumers “whose perceptions it is necessary to consider”, disagreeing with Arnold’s conclusion that average consumer didn’t include members of the public who hire taxis.

“As will be seen, however, it is not necessary for us to reach a concluded view on this issue, as it does not in the end have a bearing on the outcome of this appeal,” Floyd added.

The Court of Appeal held that Arnold was correct to hold that the marks didn’t have distinctive character and had not acquired it by use.

LTC had also appealed against the revocation of its EUTM. In Arnold’s view, the use relied on was not genuine.

“The key consideration was the nature of the activity relied on. The use did not help to create or maintain a share of the market for vehicles bearing the Community trademark [EUTM]. On the contrary, production of those vehicles had long since ceased and been superseded by the production of later models,” said the court in its judgment today.

Arnold had considered whether there was use of the mark in a form “differing in elements which did not alter its distinctive character”.

LTC had relied on sales of other models in the relevant period, and Arnold had concluded that the difference between the mark (if it had distinctive character) and other models meant that LTC couldn’t take advantage of the second hand use provision.

In its appeal, LTC had claimed that Arnold failed to put into practice his assumption that second hand use could amount to genuine use.

But the Court of Appeal disagreed.

“The judge did take the second hand use into consideration, but held that, against a background where the production of the Fairway had long since ceased, and where even sales of used vehicles had dried up, the second hand use relied on could not save the mark,” it said.

Floyd went on to add: “That was because it was not used to create or preserve a market for the goods under the CTM [EUTM]. I agree with the judge that the sales of the Fairways did not amount to genuine use in the relevant sense.”

The court dismissed the appeal against the finding that the LTC trademarks were invalid for lack of distinctive character and the appeal in relation to passing off.

A spokesperson for LTC, now renamed as the London EV Company (LEVC), said: “LEVC has noted the decision of the court and will be making no further comment while we review the judgment and consider our options.”

Frazer-Nash said it was now in a position to bring its “tried and tested world-leading British innovation into production”.

A spokesperson for the company said: “Metrocab are delighted that the Court of Appeal have upheld Arnold’s original decision.”

Rupert Ticehurst, partner at Berwin Leighton Paisner and representative of Frazer-Nash, said: “I am delighted that we have succeeded in this disruptive litigation so that the taxi can go into production. The Metrocab will bring quiet and green taxis to London. The benefits for the capital are enormous.”

Peter Nunn, legal director at Mishcon de Reya, explained that this case is a further example of the difficulties faced by applicants for shape trade marks in demonstrating distinctive character.

He went on to say however, that the decision does give some hope that “a design which departs significantly from the norms of the sector might be sufficient for ‘inherent’ distinctiveness”.

Nunn concluded: “Here, however, the types of features LTC relied upon to show inherent distinctive character (such as the round headlamps, a deep/high bonnet etc) did not depart sufficiently from the basic design features of a car—they were merely a variant on them.”

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