The role of surveys in Trade

Mark and Passing Off Cases

Jeremy Dickerson

Partner

Burges Salmon LLP

Oxford University – November 2014

Overview

The role of evidence in trade mark and passing off cases

The role of surveys as evidence

The road to Interflora – a history lesson

Court of Appeal’s decision in Interflora v. M&S

Surveys after Interflora

Discussion/Questions

The need for evidence

In trade mark and passing off cases, burden of proof is on

the Claimant to establish:

- Existence of a likelihood of confusion (or deception in

passing off cases)

- Reputation

- Unfair advantage or detriment

- Acquired distinctiveness

Evidence assists the Court

“Ultimately the question is one for the court, not for the

witnesses. It follows that if the judge’s own opinion is that

the case is marginal, one where he cannot be sure

whether there is a likelihood of sufficient deception, the

case will fail in the absence of enough evidence of the

likelihood of deception. But if that opinion of the judge is

supplemented by such evidence then it will succeed. And

even if one’s own opinion is that deception is unlikely

though possible, convincing evidence of deception will

carry the day…..As I grew more experienced I said more

and more “it depends on the evidence…..””

(Jacob J., Neutrogena v. Golden 1996)

Proving actual confusion/deception can

be difficult…

Timing

- Low market penetration of defendant’s product

No incentive for consumers to report confusion/deception

Hurdles to reporting confusion

- How and who does the consumer contact?

Records of confusion may not be kept e.g. retailers

Consumer doesn’t realise he is confused/deception

Therefore practice developed of “seeking out” such evidence

The trouble with surveys

“[Survey] evidence does not simply put before the court

the spontaneous reaction of members of the public who

have been exposed to … [a party’s] advertising material in

actual use or the defendant’s allegedly offending

advertisement in actual use; it is evidence obtained as a

result of the artificial application to members of the

public of stimuli directed at provoking reactions and

responses.”

(Rimer J, UK Channel Management)

Lego System A/S v. Lego M Lemelstrich

(1983)

Passing off claim - use of the LEGO name on gardening

equipment

Survey of 96 respondents, agreed by experts to be broadly in

line with age, sex and social grade distribution of British adult

population for market research purposes

19 of 29 classified as confused attended court

The Court relied upon the survey:

- The survey was representative

- The witnesses constituted a substantial part of those

surveyed and were therefore representative of a substantial

number of persons

Imperial Group v. Philip Morris Ltd (1984)

(“Raffles”)

Passing off claim concerning use of black and gold

cigarette packaging

Six market research surveys relied upon by the claimants

“However satisfactory market research surveys may be in

assisting commercial organisations as to how they can

best conduct their business, they are by and large, as

experience in other cases has indicated, an unsatisfactory

way of trying to establish questions of fact which are likely

to be matters of dispute.” (Whitford J.)

Severe criticism of the surveys followed leading to the

“Whitford guidelines” [see later]

Fatal Flaws

Following Raffles, surveys suffered from increasing

criticism, e.g.

- Scott v. Nice-Pak – questions in survey so flawed that

both it and witness evidence could not be relied upon

- United Biscuits v. Burtons – questions affected by the

way respondents were shown products in question

- British Sugar v. James Robertson & Sons – critique of

leading questions and manner of recording answers

- The European v. The Economist – questioning on a

false premise led to rejection of survey evidence

Witness Collection Exercises

“Pure questionnaire evidence is seldom helpful –

there are almost inevitable faults with the questions or

the recordal of the answers… Of course the court needs

to know how the evidence was collected , and needs to

have the full picture, including particularly what failed

surveys, if any, there were. But unless one can have

some real evidence, tested in cross-examination, one

cannot really be sure of what was passing through

people’s minds. Those cases where surveys have

proved to be useful have all involved some of the

“pollees” coming to court.”

(Jacob J., Neutrogena v. Golden)

And now – back to where we started?

“A cynic might think that the phrase “witness collection

programme” is simply a euphemism for adducing

evidence from a skewed selection of witnesses identified

by means of a statistically invalid and unreliable survey”.

(Lewison L.J., Interflora v. Marks and Spencer 2012)

Interflora

Trade mark infringement claim by Interflora for

M&S’ use of its trade mark as a Google Adword

Interflora applied to High Court for permission to

adduce witness evidence from respondents to

two pilot surveys

Permission granted by Arnold J. in respect of

one of the surveys only

M&S successfully appealed to the Court of

Appeal concerning the grant of permission

Interflora refused leave to appeal by the

Supreme Court

Interflora: Witness gathering exercise

95 respondents interviewed on the street were asked to

conduct a Google search for INTERFLORA, which created

search results including the sponsored link to M&S

Series of questions then asked, including:

- 1st survey: “Thinking specifically about this search result

(Point to M&S result). What if anything do you think this

tells you about any relationship between Interflora and

M&S?”

- 2nd survey: “Thinking specifically about this search result

(Point to M&S result). Is there anything that tells you it is

not related to Interflora?”

Interflora: First instance decision

Permission given to call witnesses from the 1st survey, but

refused for the 2nd survey due to leading nature of

questions

Arnold J.: “The problem, as I see it, at this level of the judicial

hierarchy is that there is considerable precedent for judges of this

Division taking into account the evidence of witnesses obtained by

means of a survey in circumstances where the survey itself is either

not relied upon or is conceded not to have statistical validity. …

Furthermore, in a number of those cases the judges in question not

merely admitted, but also relied upon the evidence of witnesses

obtained by such surveys in circumstances where they acknowledged

that the questions posed in the surveys were flawed.”

Interflora: M&S’ Appeal

M&S argued that the court should not permit evidence to be adduced

from witnesses selected as a result of a survey unless the survey is

statistically reliable, pursuant to CPR Pt 32.1:

- The ‘reasonably well-informed and reasonably observant internet

user’ is not a real person but a legal construct

- Witness evidence can only be probative if the witnesses stand

proxy for the legal construct

- If the survey is unreliable, the court doesn’t know if the witnesses

can be treated as reliable proxies for the legal construct

- Problem is compounded where the party calling witnesses is

permitted to call those most supportive of its case

- Such evidence is of such little utility and is so expensive and time

consuming to obtain and deal with in court, it ought to be excluded

Interflora: Power to exclude evidence

CPR 32.1:

(1) The court may control the evidence by giving directions as

to –

(a) the issues on which it requires evidence;

(b) the nature of the evidence which it requires to decide

those issues; and

(c) the way in which the evidence is to be placed before the

court.

(2) The court may use its power under this rule to exclude

evidence that would otherwise be admissible.

Interflora: The utility of survey evidence

Was it possible for Interflora to prove its case without survey

evidence? Yes!

For example, Lord Diplock in GE Trade Mark: “… where goods are

sold to the general public for consumption or domestic use, the

question whether such buyers would be likely to be deceived or

confused by the use of the trade mark is a “jury question”. … The

judge’s approach to the question should be the same as a that of a

jury. He, too, would be a potential buyer of the goods.”

Lewison L.J.: The Judge can make up his own mind without the need

for either expert evidence or evidence from consumers, therefore if a

party wishes to proceed with a survey it seeks permission

The new procedure – a standard form of

order

A party may conduct a true pilot survey without

permission, but at his own risk as to costs

- A true pilot survey is a means of testing a

questionnaire for use in a full survey

No further survey may be conducted or adduced in

evidence without the court’s permission

No party may adduce evidence from respondents to any

survey without the court’s permission

Obtaining permission – a high hurdle?

“Only if the court is satisfied that the evidence is likely to

be of real value should permission be given. The reliability

of the survey is likely to play an important part in that

evaluation. Even then the court must be satisfied that the

value justifies the cost. As Mr Hobbs said, this requires

the court to conduct a cost/benefit analysis. In a case of

trade mark infringement in which the issue is one of

deception in relation to the provision of ordinary consumer

goods or services, these criteria are likely to be satisfied

only in a special or unusual case.” (Lewison L.J.)

Permission to carry out a survey

The applicant should provide the court with:

- The results of any pilot survey;

- Evidence that the survey will comply with the Whitford

guidelines; and

- The cost of carrying out the pilot survey and the

estimated cost of carrying out the further survey

The Whitford Guidelines (from Raffles)

If a survey is to have any validity at all, the way in which the

interviewees are selected must be established as being done

by a method such that a relevant cross-section of the public is

interviewed

Any survey must be of a size which is sufficient to produce

some relevant result viewed on a statistical basis

The party relying on the survey must give the fullest possible

disclosure of exactly how many surveys they have carried out,

exactly how those surveys were conducted and the totality of

the number of persons involved, because otherwise it is

impossible to draw any reasonable inference from answers

given by a few respondents

The Whitford Guidelines (cont)

The questions asked must not be leading; and must not

direct the person answering the question into a field of

speculation upon which that person would never have

embarked had the question not been put

Exact answers and not some sort of abbreviation or digest

of the exact answer must be recorded

The totality of all answers given to all surveys should be

disclosed

The instructions given to interviewers must be disclosed

Costs of a survey

Any assessment of costs of a survey should include:

- Costs of designing survey

- Cost of conducting survey

- Cost for analysis, preparing a schedule of results etc.

(for both parties)

- Costs of preparing and considering witness evidence

- Costs of applications for permission to rely on evidence

- Costs of extra time in trial

Anticipated costs in Interflora of £250,000 realistic

Surveys in Passing Off?

Trade Marks:

- Average consumer who is reasonably well-informed,

observant and circumspect

Passing Off:

- Substantial proportion of the relevant public

Surveys of more value in passing off?

Lewison L.J.:

“Suppose that a valid survey shows that in an election

49% of the electorate support candidate A and 51%

support candidate B. It would be possible to say on

the strength of such a survey that B will win the

election. It would also be possible to say that a

substantial proportion of the electorate will vote for

Candidate A. But what a survey does not, I think, tell

you is this: for whom will the average voter vote?”

Is the survey dead?

Peter Smith J, AETN v. Discovery 2013 (on costs):

“…hopefully these kind of exercises will in the future

be confined to the bin, marked "Irrelevant and not

to used under any circumstances", both in trade

mark and passing off actions”

Maier v. Asos Plc, Asplin J (November 2012)

Passing off and trade mark infringement claim

Claimants sought permission to contact respondents to a

prize draw, claiming that the exercise was spontaneous

and shows confusion in the real world

Claimants also sought to conduct a survey at a bike show

Total costs estimated at £20,000 to £38,000

The Judge was satisfied that the exercises would be

valuable

The costs were proportionate to the probative findings

Fage v. Chobani, Hildyard J (December 2012)

Passing off claim re. use of the name “Greek Yoghurt”

Defendant sought permission to conduct a full survey

following a pilot

Permission granted to conduct a survey, but at

defendant’s own risk as to costs

On balance, the replies to the pilot survey suggested that

a full survey could assist in establishing whether the

Claimants can prove goodwill and whether a substantial

proportion of relevant consumers would believe that

Greek Yoghurt is a badge that means that the claimant’s

product is made in Greece

Fage v. Chobani, Hildyard J (January 2013)

Having conducted the survey, the defendants sought

permission to adduce the survey results and expert evidence

- It was not proposed to call any of the survey respondents as

witnesses

Application granted, at the defendant’s risk as to costs

It was impossible to determine the value of the evidence in

advance of trial

Since the additional cost and time would not affect the trial

timetable, it would not be fair or proportionate to rule out the

evidence

Survey related to scope of goodwill not deception

At trial both parties relied heavily on expert testimony and

statistical analysis

No witnesses were called

Judge thought survey was not conclusive either way

Fage v. Chobani, Briggs J (March 2013)

Trade mark and passing off case, but survey only on

passing off

Birss J refused permission for survey

Costs were £150,000

A borderline passing off case might be saved by survey

evidence

In this case watching TV was not an “esoteric exercise”

so Judge could decide

Zee Entertainment v Zeebox,

Birss J (June 2013)

Appeal dismissed so survey disallowed

Floyd LJ “any marginal value it might have is outweighed

by the significant, and in my view, disproportionate cost”

Lewison LJ “the general run of cases, both before and

after Interflora, does tend to show that such surveys have

limited value”

Zee Entertainment v Zeebox,

CA (Jan 2014)

Survey re enhanced distinctiveness of Enterprise mark

NOT confusion/deception

Potentially different considerations for this type of survey,

as here it might have “real value”

Survey allowed

Enterprise v Europcar,

Morgan J (July 2014)

Waiver of privilege

Lewison L.J: “It may have a material effect on the

court’s decision whether (and if so to what extent) the

applicant is prepared to waive privilege insofar as it

attaches to the selection, interviewing and preparation

of witness statements for the witnesses proposed to

be called. In the absence of a waiver of privilege in this

respect, a party who wishes to challenge the evidence is

likely not to be able to do so effectively; and in particular

would not know what questions were asked of the witness

in order to prepare the witness statement. If the evidence

proposed to be called cannot be effectively challenged,

that may in itself reduce its potential probative value.”

Privilege

No adverse inference can be drawn from refusal to waive

privilege

Should surveys be a special case?

Some inroads into privilege made by the Whitford

Guidelines: “all answers given to all surveys should be

disclosed”

Is the process of obtaining witness statements analogous

with conducting the survey itself?

Evidence from selected members of the public allows

cherry-picking of favourable evidence only

Preparing witness evidence

Solicitors should take particular care when preparing

evidence on behalf of members of the public

Peter Smith J. in AETN v. Discovery: “It must not be

forgotten that witness statements are merely a

replacement for evidence which a witness previously used

to give live in chief. It is intended to be the factual

evidence of the witness in his own words. Too often

witness statements are drafted by solicitors who put words

in their mouth to achieve a better result.”

Best practice

Instruct market research expert

Conduct pilot(s) for a

statistically valid survey

Provide opportunity for other

party to comment on questions

Give disclosure of all pilot

surveys and responses

Does the pilot

survey assist

your case?

NoYes

Stop

Obtain Court permission for

full survey – NB. requirements

Best Practice (continued)

Conduct full survey to ensure

statistically relevant results

Disclose statements (consider waiving

privilege for increased weight)

Prepare witness statements

Do you want to call

members of the

public as witnesses?

NoYes

Obtain Court permission to

adduce witness evidence

Obtain Court

permission to

adduce survey

and expert

evidence

So what’s left for survey evidence?

Surveys still likely to be conducted – but for what?

In practice, likely to be very difficult for a Judge to refuse

permission on an interim application –with cost penalties?

BUT

Reduced use of surveys in trade mark infringement cases

Witness evidence in limited situations only

A return to reliance upon statistically valid surveys

supported by expert evidence (see Fage)

- Guidance might be available from the USA where

greater emphasis is given to statistical relevance

Any questions?

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