Restaurant names and the own-name defence

On Tuesday the newest appointee as a specialist Patents Court judge for England and Wales, Mr Justice Arnold, delivered a major trade mark infringement and passing off judgment in Hotel Cipriani SRL and others v Cipriani (Grosvenor Street) Ltd and others [2008] EWHC 3032 (Ch). The three claimants in these proceedings were all members of the Orient Express Hotels Group. They owned and ran, respectively, (i) the Hotel Cipriani in Venice, (ii) the Ristorante Hotel Cipriani at the Lapa Palace Hotel, Lisbon, and (iii) the Ristorante Villa Cipriani at the Reid’s Palace Hotel, Madeira. The first claimant owned Community and UK trade marks for the word CIPRIANI for (among other things) hotels, restaurants, cafeterias, eateries, bars, catering and the delivery of drinks and beverages for immediate consumption.

In 2004 the first defendant CGS opened a restaurant, Cipriani London, usually referred to as Cipriani. The other defendants were the sole director of CGS and a Luxembourg corporation that owned 60% of CGS and licensed it to use the name Cipriani. Both the second defendant and his father were directors of the Luxembourg (the latter being its Chairman). The Luxembourg company was itself licensed by ATG, a Madeiran company, with CGS, the Luxembourg company and ATG being what the defendants called the Cipriani Group of companies. One way or another, the Luxembourg company wholly owned its licensor ATG and various other companies (Cipriani SpA, Cipriani Industria Srl, Cipriani International Group SA and Cipriani USA, Inc).

In this action the Cipriani claimants sued for Community trade mark infringement and passing off. They argued that CGS’s use of the sign CIPRIANI in relation to its restaurant was a classic case of 'double identity' infringement of same mark, same services. The They also alleged that the use of the sign CIPRIANI LONDON infringed under the principle of 'same service, similar mark, likelihood of confusion'. The defendants conceded that their use constituted prima facie case of infringement, but argued that (i) they were entitled to rely on the the 'own name' defence and that (ii) the marks were in any event invalid as having been registered in bad faith. The own-name defence gave rise to three issues: (i) did the use of the signs CIPRIANI and CIPRIANI LONDON constitute use by CGS of its own name? (ii) if not, could CGS rely on the names of the second and third defendants; (iii) if the answer to the first or second question was "yes", was such use to be regarded as being "in accordance with honest practices in industrial or commercial matters"?

Arnold J came down heavily in favour of the claimants in this dispute:

* First he summarised the jurisprudence that now governs the means by which a court assesses and compares trade marks and then determines whether there exists a likelihood of confusion. In this case, there was a manifest likelihood of confusion between CIPRIANI and CIPRIANI LONDON. The dominant and distinctive element in the defendants’ sign was CIPRIANI (the word LONDON being non-distinctive for a restaurant in London). That this was so was confirmed by the fact that the defendants and others often dropped the word LONDON. Accordingly the dominant and distinctive elements of the respective marks were identical, as were the services for which they were registered or used. CGS’s use of the sign CIPRIANI withor without LONDON thus infringed the claimants' CTM.

* As to the own-name defence, its application to a company’s trading name as contrasted with its registered name (ie its real name) would constitute a substantial inroad into the rights conferred by trade mark registration even where the defendant used a sign identical to the registrant's mark, particularly where the company had only just commenced trading. It was unlikely that this could have been intended by the Community legislature. In any event, since neither CIPRIANI nor CIPRIANI LONDON was its CGS's own name, the defence did not apply.

* The fact that the Luxembourg company had licensed CGS's use did not affect the latter's liability -- it did not mean that CGS's use of the signs CIPRIANI and CIPRIANI LONDON had been in accordance with honest practices in industrial and commercial matters.

* On the basis that anything that was not bad faith was good faith, the claimants' marks had been registered in good faith. There was no evidence on which to demonstrate that the applications had been made in bad faith.

* The claimants' action for passing off also succeeded. Not only did they have customers in the UK in April 2004, when CGS's restaurant opened, but they had foreign customers who booked the hotel and restaurants directly, as well as via tour companies and travel agents. The claimants thus had not only a substantial reputation but valuable goodwill.

The IPKat is bursting to read this in full on BAILII, since this posting-- based on a LexisNexis Butterworth note -- has stimulated his appetite to know more. In particular, since there seem to be so many defendant businesses with the name Cipriani in them, he is curious to see a little more of the facts and to answer his question as to why the challenge to the CTM registration was apparently based on bad faith alone, when it might have been arguable that, since other Cipriani hotel/restaurant businesses were known in Europe at the time of the claimants' application to register, the mark could not by itself indicate the applicant as the sole source connected with it.

Merpel says, Cipriani hotels have been in court a lot recently: see these three cases they lost before the European Court of Justice less than a fortnight ago.

Hotel Cipriani here
Cats' Hotel here