No wrestling or hugging: it's a knockout for BBL

No wrestling or hugging is the second of the Queensberry Rules, which did so much to give the sport of boxing that has provided the veneer of respectability that masks so much of the seamy side of this often sordid sport.  Named after the Marquess of Queensberry, these Rules called for contests to be fair -- but it was the impartiality of a High Court judge, applying some basic intellectual property principles, that was needed in the case described below.

 Boxing Brands Ltd v Sports Direct International plc and other companies [2013] EWHC 2200 (Ch), a Chancery Division decision from Mr Justice Birss on 25 July, is the latest boxing-brand litigation to hit the headlines.  After endless manoeuvrings and sparring between two heavyweight contestants in the Lonsdale litigation [on which see, eg, earlier katposts here and here -- and click here for Lonsdale's boxing significance], this Kat was expecting Queensberry [click here for boxing significance] to go a full 15 rounds -- but the referee seems to have stopped the fight at the end of the second.  The first round, in which interim relief was sought, went to the claimant -- and the result of the second round, almost entirely in favour of the claimant -- makes it look implausible that a third round appeal will be allowed. [Katnote: an earlier version of this post muddled the words 'claimant' and 'defendant' and made total nonsense. Apologies!]

So what happened in the Queensberry case? It runs something like this.

Boxing Brands Ltd (‘BBL’), was a company associated with, among others, celebrated boxing promoter Frank Warren.  The defendants (collectively 'Sports Direct' for the purposes of this blogpost) were Sports Direct International PLC, a holding company, and three other companies with which Sports Direct was associated.  Of these companies, the second defendant was the successor to a boxing enterprise associated with Luigi La Mura and Andrew Goodwin, which started when they opened a boxing gym in Bedford in 2004 under the names Queensberry or Queensberry Boxing.  The third and fourth defendants were licensees of the second defendant.

Each side in this litigation was the owner of a number of registered trade marks comprising the word 'QUEENSBERRY' for various goods and services; each side held UK registered trade marks; BBL additionally owned a Community trade mark.

Not boxing cats but boxed-in cats ...

The problem was that both BBL and the Sports Direct folk wanted to sell clothing under the QUEENSBERRY trade mark.  BBL alleged infringement of its UK registered trade mark 2,485,784 (the 784 mark), applied for on 8 May 2008 and registered in Class 25 for 'articles of clothing; footwear; headgear'.  In November 2012 BBL, having learned that a range of clothing branded QUEENSBERRY was being launched at a store of the fourth defendant, Lillywhite, in London, applied for an interim injunction. Mr Justice Sales granted interim injunctive relief and directed an expedited trial;  BBL sportingly agreed not to launch its own QUEENSBERRY range of clothing until after the trial, which additionally included a trivial claim for copyright infringement in respect of a winged logo, in which BBL said it owned the copyright, but which Sports Direct had neither infringed nor even considered using.

At trial, Sports Direct said that BBL’s 784 mark was invalid (i) under the Trade Marks Act 1994, section 5(4)(a), on the basis that, as at 8 May 2008, La Mura and Goodwin could have stopped BBL using its mark under the law of passing off or (ii) under section 3(6) of the same Act on the ground that BBL had applied to register the 784 mark in bad faith since, at the date of application, BBL knew that the mark really belonged to La Mura and Goodwin. The defendants also said the 784 mark was liable to be revoked under section 46(1) of the Act on the ground that its use was liable to deceive or mislead.  As for their own use, Sports Direct contended that, even if the 784 mark were upheld, they weren't infringing it anyway since they had a prior user defence under section 11(3) of the 1994 Act.. To add insult to injury, they counterclaimed that BBL was actually passing itself off as them by using the Queensberry brand.

Mr Justice Birss had no difficulty finding for BBL on almost all the points before him.

In particular, as to Sports Direct's right to prevent the use of BBL’s trade mark at its application date by enforcing an earlier unregistered right against it under section 5(4)(a) of the Trade Marks Act 1994, the test was whether, at the date of the application to register the mark, normal and fair use of the mark in relation to the relevant goods and services could have been prevented by an action for passing off. The answer, in short, was "no". While the judge agreed that La Mura and Goodwin had a right, protectable in passing off, to stop someone else opening a gym in Bedford and calling it Queensberry, that was as far as their goodwill went. It certainly didn't extend any further. Sports Direct had no goodwill in the word Queensberry as a boxing agency, nor in or relating to clothing. There was no way that La Mura and Goodwin could have restrained sale of Queensberry branded clothing in May 2008.

The ground on which this challenge to the validity of the 784 mark failed was  also the ground upon which the counterclaim for passing off against BBL must be dismissed.

Moving on to bad faith under the Trade Marks Act 1994, section 3(6), the question to be resolved was whether the conduct of BBL as a trade mark applicant involved dealings which fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular field of activity in which they conducted their business. It didn't.  Even though BBL knew that La Mura and Goodwin had been using the sign in some way, that alone was not sufficient to give rise to a finding of bad faith.  Registration of the 784 mark for clothing was not done in order to prevent La Mura or Goodwin from continuing to use the Queensberry sign as the name of a gym or a boxing agency.  Further, the degree of legal protection which La Mura or Goodwin would have had when the application for the 784 mark was filed was limited to that defined by their available rights under the law passing off.   All that they could have prevented was the use of the word as the name of a boxing gym in Bedford. It followed that the filing of an application for the 784 mark, in full knowledge of the existence of the earlier use, was entirely acceptable commercial behaviour: the challenge to validity of the 784 mark on the ground of bad faith would be rejected.

There's no rocket science in this judgment, but what interested this Kat was the approach taken by the learned judge to evidence submitted by Frank Warren -- a man whose evidence has on previous court appearances not been blessed with instant credibility.  As Birss J explained at paragraphs 10 and 11:

"Over the years Mr Warren has been involved in a number of court proceedings both here and in the USA. In cross-examination Mr Wyand put a number of judgments from previous cases in which Mr Warren's evidence was not believed. One was a dispute between himself or his company Sports Network and the boxer Joe Calzaghe, the other was a case in the Southern District of New York regarding the boxer Mike Tyson. Mr Warren maintained vigorously that he had not been lying on either of those previous occasions despite the findings of the judges. In my judgment the correct thing to do in the light of these earlier judgments is to be more wary than I might otherwise be about the evidence of the witness, but ultimately to approach the evidence on its own merits. The fact that Mr Warren has not been believed before does not mean he cannot or should not be believed on this occasion.

However considering Mr Warren's testimony on its own merits, there were elements of it which I did not find convincing. He maintained he had never seen a business sale agreement which was to have been the basis on which Mr La Mura and Mr Goodwin were to work together with Mr Warren's organisation and would acquire 10% of a Gibraltar registered company set up for Mr Warren as part of the arrangements. Given the importance of that agreement, I thought that was unlikely. Separately, his evidence about the negotiations relating to sponsorship deals between the Gibraltar company and certain boxers was unconvincing. However standing back and looking at his evidence overall, the thrust of Mr Warren's evidence was supported by the documents and in my judgment he was setting out an essentially truthful account. That does not mean I accept every detail of his evidence but I thought the broad thrust was true".

Boxing Cats (drawn to the attention of this blogger by Howard Knopf of Excess Copyright fame) here
How to be believed here
Cat in a box here and (for intellectuals) here
Queensberry Rules here
Queensbury: a fascinating exercise in naming a locality in London, here