Bake Off? Square-bashing baker makes rival eat humble pie
From Katfriend and occasional contributor Emma Perot comes a fascinating look beneath the crust of a pie-based dispute that has intrigued a number of our readers. It hasn't got to court and almost certainly won't. But it does raise issues. In fact, were it not for the fact that it really happened, it could be the basis for a typical law school exam question. This is what the fuss is all about:
Pie-maker Square Pie, of Spitalfields Market fame, has taken legal action against recently established rival pie maker, Eat Square. The dispute concerns Eat Square’s name as well as use of the word ‘square’ to refer to their savoury filled pastry pies. Square Pie has filed opposition proceedings at the Intellectual Property Office against the registration of the words ‘Eat Square’ as a United Kingdom word mark. Eat Square, established in 2014 in Wiltshire, has removed all references of ‘square pies’ from its website but continues to trade under the name Eat Square.
Square Pie trade mark
Square Pie Ltd is the owner of a registered trade marks for the words ‘Square Pie’ contained in a red square logo as well as in black and red rectangular logos. On the basis of these trade marks, Square Pie has asserted its right to prevent Eat Square from using the word ‘square’ to refer to their pies. Should Square Pie have received these trade marks in the first place? The trade marks are literally descriptive of the goods being produced by the company, but Square Pie first secured registration two years after establishing its business and it is likely that it acquired distinctiveness during the period leading to its successful registration.
The trade mark does not give the owner a monopoly on the phrase ‘square pies’. Nor does it prevent other pie makers from producing square pies, an act which Square Pie is not contesting. Rather, the company can object to uses of the trade mark that fall within the grounds of infringement under s.10 Trade Marks Act 1994 (TMA 1994). In Case C-291/00 Diffusion SA v Sadas Vertbaudet SA the Court of Justice of the European Union (CJEU) set out strict criteria for identity between marks:“a sign is identical with the trade mark where it reproduces, without any modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contains differences so insignificant that they may go unnoticed by an average consumer.”On this basis, a product that is a square pie is not identical to the words ‘Square Pie’. However, it is clear that the marks are similar, in that they both contain the word ‘Square’ and the coloured background and stylized text used in the parties’ respective logos are unlikely to go unnoticed.
Based on similarity of the marks and identity of the goods, there is a possible infringement under s.10(2) TMA 1994. There needs to be a likelihood of confusion for a finding of infringement under this section. Square Pie is known for making square pies, in contrast to the traditional round shape, and has been selling these products for the past 15 years. Square Pie products sell in London in shops and through online sales via Tesco and Ocado, whereas Eat Square currently sells its goods in markets many miles away in Wiltshire and Somerset. The average consumer of pies may think that the Eat Square’s pies originate from Square Pies if the mark if used at the point of sale, as customers may think that Square Pies has expanded their distribution.
There is, however, a defence to the use of the phrase ‘square pies’. Under s.11 TMA 1994, a registered trade mark is not infringed if the mark is used to describe the characteristics of the goods, provided that the use is accordance with honest practice in commercial matters. The use is descriptive as the pies are indeed square. To put this in to context, if the mark in question was ‘triangular pies’ and Eat Square was using this mark to advertise its pies, there would be no defence since its pies were not triangular in shape. Similarly, if the mark in question was ‘chicken pies’, Eat Square would not be infringing the mark (assuming honest practice) by advertising its chicken pies under this phrase, but would probably be infringing if they sold pork pies under that same phrase.
Less clear cut is the qualification of honest practice. In Case C-228/03 Gillette Co v LA-Laboratories Ltd Oy, the CJEU stated that use that does not create an impression of commercial connection or take unfair advantage of the earlier mark’s distinctive character or repute will be considered honest practice. Eat Square’s owner had claimed that this name and choice of shape was based on the idea of a ‘square meal’. Honest practice is difficult to assess as the owner may have chosen to use the phrase as part of his ‘square meal’ theme, but the use of the word isn’t necessary to convey the shape of the pies. If Eat Square had made round pies instead, would they have advertised them as such? The author welcomes opinions on whether readers think this is a simple case of descriptive use or if Eat Square was trying to benefit from Square Pie’s reputation.
Eat Square trade mark
Square Pie has filed opposition proceedings against the registration of ‘Eat Square’. ‘Eat Square’ appears to satisfy the criteria for registration since it is not prima facie barred under the absolute grounds for refusal under s. 3 TMA 1994. The name alludes to a square meal, but is not descriptive as such. However, in terms of relative grounds, Eat Square is similar to Square Pie due to the use of the dominant word ‘square’ as well as the food theme of the names. Both names also have the same number of syllables and consist of two words comprising of 9 letters. The identical nature of the goods which is to be taken into account in making a global assessment of similarity of the marks is also a contributory factor. The similarities are such that the average consumer is likely to be confused into thinking that Eat Square’s pies are made by Square Pie. Square Pie are likely to be successful in this opposition under the relative grounds as refusal.
Square off
As the pie makers prepare to square off, the inhibiting cost of this issue could negatively affect Eat Square’s cash flow. Founder Alex Joll has stated that, even without litigation, the dispute will cost him between £2,000 and £10,000 to resolve. On the other hand, Square Pie is currently crowdfunding a bond to finance expansion and has raised over £602,000. According to its Crowdcube profile, its turnover was £2.6m last year, putting the established business in a better position to fight a trade mark battle.
The case details for the opposition proceedings indicate that a defence has not yet been filed. With financial restrictions in mind, it would be more prudent for Eat Square to change its name. It would be strategically useful to make the change while the issue is still hot, to take advantage of the press attention so that customers are notified of the change. With regard to the descriptive use issue, Eat Square has removed all references to the word ‘square’ on its website except when referring to its company name. It seems that Square Pie will bring a claim for infringement if East Square recommences use of the phrase. Since litigation should always be the last resort, both parties should get together and attempt to come to a settlement that is literally fair and square.
It's a Square World here and, explaining why it would be madness for Britain to join the Common Market, here
Simple Simon and the Pieman here
A Katpat goes to Graham Burnett-Hall (Marks & Clerk) for spotting this link for us.
