GE TRADE MARK

Reports of Patent, Design and Trade Mark Cases, Sep 1973

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GE TRADE MARK

Printed in Scotland by Her Majesty's Stationery Office at HMSO Press, Edinburgh Dd LORD KILBRANDON IN THE HOUSE OF LORDS GE TRADE MARK Trade mark-Rectification-GEC:GE-General Electric-Whether GE rondel mark 10 likely to deceive or cause confusion-Whether likelihood of confusion must be due to blameworthy act of registered proprietor-Licensing of mark-Appeal from Court of Appeal allowed-Rectification refused. - [No. 11] 6th September 1973 [1973] R.P.C. GE TradeMark in the mark MONOGRAM. It was held by the Court of Appeal (a) that the use of the GE mark was in 1967 likely to lead to the deception or confusion of a substantial pro­ portion of the public and (b) that the court had power under section 32 to expunge the entry of a trade mark if, subsequent to its date of registration, it had become likely to deceive or cause confusion to a substantial number of members of the public, whether or 5 not this was caused by fault on the part of the registered proprietor. The Court of Appeal was also of the opinion, although it was unnecessary to decide the point, that the licensing of the GE mark had not vitiated or "muddied" the mark. On appeal by the registered proprietors to the House of Lords the main question on the appeal was whether, as a result of events which had happened since 1907, the entry of the rondel mark had become 10 an "entry wrongly remaining on the register" within the meaning of section 32(1) of the Trade Marks Act 1938. Held, allowing the appeal (i) that the legal status under the Act of a registered trade mark the use of which is likely to cause confusion can be summarised as follows:(i) The fact that the mark is entered upon the register is prima facie evidence of the 15 validity of the original registration and of the right 0.[ the registered proprietor to the exclusive use of the mark, subject however to the rights of concurrent user by any registered proprietor of an identical mark or one nearly resembling it. (ii) If the mark was likely to cause confusicn at the time when it was first registered it may be expunged from the register as "entry made in the register without 20 sufficient cause" unless the proprietor of the mark at that time 'would have been entitled to have it entered on the register by reason of his honest concurrent use 0..( the mark as a trade mark before the original registration of the mark. (iii) If the likelihood of causing confusion did not exist at the time when the mark was first registered, but was the result of events occurring between that date and the 25 date of application to expunge it, the mark may not be expunged from the register as an entry wrongly remaining on the register, unless the likelihood of causing deception resultedfrom some blameworthy act of the registered proprietor 0.[the mark or of a predecessor in title of his as registered proprietor. (iv) Where a mark is liable to be expunged under (ii) or (iii) the court has a discretion 30 whether or not to expunge it and as to any conditions or limitations to be imposed in the event of its being permitted to remain on the register. (2) That the Court of Appeal was right in holding that the use of the rondeI mark would in 1967 have resulted in likelihood of confusion among a substantial number of members of the public, but that this likelihood was not caused by any blameworthy 35 conduct on the part of G.E. Moreover the licensing objections had also not been estab­ lished. Rectification would accordingly be refused and the appeal allowed. Cases referred to in judgments: Pidding v. How (1837) 8 Sim. 477. Millington v. Fox (1838) 3 My. & Cr. 338. Perry v. Truefitt (1842) 6 Beav. 66. Dent v. Turpin (1861) 2 J. & H. 139. Southorn v. Reynolds (1865) 12 L.T. 75. Hodson, Re (1881) 26 So. J. 43. Jelley, Sons & Jones' Application, Re (1882) 46 L.T. 381. Batt (J) & Co.'s Trade Mark (1898) 15 R.P.C. 534. Thorne & Sons Ltd. v. Pimms Ltd. (1909) 26 R.P.C. 221. Woodwardv. Boulton Macro Ltd. (1915) 32 R.P.C. 173~ 40 45 [No. 11] House of Lords Arnold, Q.C.-The Court of Appeal decided the case on an issue which was not a live one when the evidence closed. Therefore, nothing should be predicated from the absence of certain evidence, and certainly not the absence of clear evidence of user GE Trade Mark by us between the years 1907-1967. No one could have realised before the trial that this was a point that was going to be the determining factor. The issue of confusion arising out of similarity between mark and mark is an issue which had been decided in both the courts below in our favour. It has been held that neither was there similarity between mark and namein 1907; but the Court of Appeal has held that such similarity 5 did exist in 1967. We submit that such supervening confusion is not proved and in any event is not a proper ground for rectification. Besides, insofar as there is confusion it is in truth confusion between two companies with very similar names and that has not been contributed to by the nature or use of our trade mark; rather that our trade mark, insofar as it has an influence on the matter, either succeeds or fails to succeed 10 in distinguishing the two companies between whom there must necessarily be an inherent danger of confusion because of virtually identical names, and that is not, as a matter of law, confusion within the ambit of the meaning of that term in the Trade Marks Act. What has happened in this case is something quite unique in the annals of trade mark law. The Court of Appeal has said: If a person looks at this rondel mark 15 and sees that this is a particular form of depicting the initials "G.E.", then it is likely that he will conclude that those letters stand for General Electric-and so far that may be right. Then it is said, when he imagines those words from the initials he will be led either to identify the goods with the English company because of their name which is said to be very well known in the trade (although there is practically no 20 evidence of this as to the words "General Electric") or alternatively, he will be led to a state of confusion as to whether those might be the initials of the American company or the English company. There is no justification as a matter of law for that, because there is not in truth a similarity between mark and name. It is a similarity between name and name. The worst thing that can be said against our mark is that 25 it failed to avoid such confusion as already existed. Moreover, the Court of Appeal have said: We, the members of the Court of Appeal, believe that we know the English company under the name General Electric. There is scant evidence that anybody else thought of them under that name. (They are usually called G.E.C. or General Electric Company ofWembley). We say that is quite impermissible. Similarity may be judged 30 subjectively by the court; but when reputation enters into the equation, then the matter must be judged upon the evidence, for judges are not experts in the com­ mercial field. In the evidence not one single shopkeeper has been found to say that one single customer has ever asked for one single article made by or under the English company under the name "General Electric". 35 Had the trial Judge decided that there was jurisdiction to expunge the mark he would in any case have exercised his discretion in favour of retaining it on the register. [Lord Reid: Is there a difference between a discretion which is exercised by a tribunal which has seen the witnesses, and a discretion which is simply exercised on the paper evidence 1] On the construction of this statute, if the trial Judge had in fact exercised 40 his discretion (in our favour) then it is submitted that the Court of Appeal could not, as a matter of law, overturn the exercise of that discretion unless they discerned that it had been exercised on a wrong principle; but we are not quite in that favourable position because we did too well before the learned Judge. [Lord Diplock: The exercise of the discretion was obiter.] On one view; on the other view he gave two alternative 45 grounds for his decision, because he was against us on the law, one being that on the facts there was not a relevant confusion, the other that he would not exercise his discretion. [Lord Reid: This is a little double edged. If the first court called upon to exercise discretion was the Court of Appeal and it did not err in principle, then we could not upset the Court of Appeal.] An experienced Judge has exercised a dis- 50 cretion very carefully, and an appellate court would be slow to overturn this discretion. [Lord Simon: Is there any authority on the review of discretion by a further appellate [No. 11] House of Lords court when the discretion has for the first time been exercised by an Appeal Court?] I have found none. On first principles, if a discretion has to be exercised by an appellate court as a matter of ratiocination from its conclusion of the facts, then one appellate court is every bit as good to do it as any other appellate court. [Lord Simon: That 5 would be so if the rules concerning review of discretion by an appellate tribunal are based purely on the fact that the trial court sees the witnesses, but that is not so. It is the same approach when the material is wholly written.] Yes. In this case the Act conferred the discretion on the trial Judge exclusively. If he did not exercise a dis­ creation, or exercised it on a wrong basis so that it can be overturned, then we submit 10 that it is an ordinary appellate point from there on, one which this House is competent to deal with. Turning to the provisions of the Act, section 4(4) contemplates the possibility that there may be on the register at the same time two similar marks neither of which will infringe the other. The consequence of our being taken off the register is not at all to 15 prevent us using our mark, but it is to stop us from preventing an infringer usurping our mark. The English company could not stop somebody else using a mark identical with ours; both courts below have so held. Where the public advantage lies in taking us off remains wholly obscure. This will be important in relation to discretion. Section 7 again contemplates the possibility of two similar marks remaining on the 20 register. Section 8 provides: "No registration of a trade mark shall interfere with (a) any bona fide use by a person of his own name ..." so taking us off the register cannot prevent the real confusion, which is the confusion between name and name. (Counsel referred to section 9). Section 11 is very important; it contains and contains only a provision about registration that it shall not be lawful to register certain things. 25 [Lord Kilbrandon: What do the words "or otherwise" mean?] If the court's subjective conclusion was, for a sound reason, that it was disentitled to protection in a court of law, then it would be covered by this. [Lord Kilbrandon: It does not have much content, does it?] I know of no case in which anything has been held disentitled to protection for a reason not expressly stated in the section. [Lord Diplock: It might cover the case 30 where there had been an agreement not to register.] Yes. [Lord Morris of Borth-Y­ Gest: The comma is in a curious place, is it not ?] Yes, it would not be a bad idea to have another comma after "confusion". Section 11 deals plainly with the situation obtaining at the date of registration, not with a state of things obtaining at any other time. Section 12(2) permits registration of similar marks in cases of honest concurrent 35 user. Section 12(3) is a further instance of two people going on the register at the same time for closely similar marks. Section 13 protects-but does not do anything else, it simply protects-the original registration. What is offended against is "the provisions" of section 11 and not "the idea behind" section 11 or "the conception entertained by the author of" section 11 or "the mischief aimed at by" section 11. The only "pro40 vision" of section 11 is one that it shall not be lawful to register any matter which is disentitled to be registered by that section. The respondents say that section 13(1)(b) provides that the trade mark itself, not the registration of it, offends (in the present tense) against the provision of section 11. They slur over the word "provisions" and get to a situation in which the trade mark is in a constant state of offence against the 45 sort of idea which is aimed at by section 11 at the time of the legal proceedings.· But even if that is right, the only consequence under section 13 is that the seven year rule shall not protect. Supposing in 1910 I had registered for playing cards a swastika design; at some time during the period 1930-1940 it might well be said that that is a scandalous design. It would be a remarkable result if at that distance of time, because 50 evil men had used this mark as a symbol of oppression and cruelty, my mark would have to come off the register, but that would be the inevitable consequence of the Court of Appeal's construction. [Lord Reid: That construction would mean that you GE Trade Mark gain no advantage from being on the register.] That sentiment is reinforced when one looks at section 46, which provides that the fact of registration shall be prima facie evidence of the validity of the original registration-but not of the continuing validity of the registration, which would be surely a most notable omission if section 13 is capable of being construed in the way suggested. In section 32(1) the ground "wrongly 5 remaining on the register" is one of four grounds; the other three are where the mark is there contrary to some provision of the Act; yet it is said that "wrongly remaining" must be something outside the provisions of the Act. Section 15(2) provides that where a word becomes descriptive in the trade it "shall be deemed for the purposes of section 32 of this Act to be an entry wrongly remaining on the register". There is a 10 case in which the Act specifically says that an entry wrongly remaining on the register is forfeit for the purposes of section 32. This suggests that section 32 is merely a directory section of the Act to give effect to matters which are regulated elsewhere in the Act rather than a general sort of dispensing power to remove anything which was thought for some reason (not necessarily connected with the statute) to be objection- 15 able. Section 15 also illustrates a difference of standard between getting on to the register and being taken off the register. Section] 5(3) is another instance of a mark being expressly deemed for the purposes of section 32 to be an "entry wrongly remaining on the register". So here is the further instance of a disqualification imposed by the Act upon which the phrase "any entry wrongly remaining" in section 32 may bite. 20 Under section 26 any bona fide user at all is sufficient to save the mark. This becomes important in the light of the significance attached by the Court of Appeal to the extent of our user in this case. It is almost as if we are being punished here for a degree of non-user which is not remotely sufficient to be of use under section 26. If it were a right view that section 13 had any relation to anything other than an initially bad 25 registration, then it could somehow be used to protect the proprietor from the con­ sequences of non-use under section 26(1)(b); but there is nothing like that to be found in the section. Section 27(5) is another provision defining when a mark is "wrongly remaining"; it leaves it to section 32 to regulate it. The same is true of section 28(10). If it be true that section 32 itself gives power to expunge a mark, not where it con- 30 travenes a specific provision of the Act, but merely where it offends against the policy of the Act, then section 33 must be superfluous. Section 37(6) is only a further illus­ tration of a case where resemblance between one mark and another is not necessarily fatal to concurrent registration of both. From 1892 onwards there was a company in the U.S.A. called General Electric 35 Company and another in England called The General Electric Company Limited. There sprang up from that circumstance an anxiety on both sides to adopt trading practices which would avoid confusion between respective names. This has been quite misappreciated in the Court of Appeal, who supposed that the mutual arrange­ ments were adopted for the purpose of avoiding confusion between marks. In fact, in 40 overseas territories the arrangement was that they should add to their company names a territorial appellation like U.S.A. or Great Britain and that they should use their respective marks; the very mark which is now said to be confusing. This was so in a number of countries which were English speaking, where of course mental transition from "G.E." to "General Electric" would be just as difficult as it would be in the U.K. 45 [Lord Reid: If you are perfectly entitled to go on using this thing in any way you like even if you are expunged, then I cannot myself see how expunging it from the register does anything to protect the public.] That is the central point of discretion. The only instance of actual confusion in relation to the mark was one man in relation to a blanket, a man who had not read the packaging material. The public survey question- 50 naire put out by the respondents suggests the answers they wished to obtain. [Lord [No. 11] Simon: Is there no way of getting questionnaires of this sort settled on an order for directions, as in the case of interrogatories?] I see no reason why not. An analogous process happens in the variation of a trust settlement with a very large number of beneficiaries, when the court will direct that a settled form of resolution shall be put 5 to class meetings. [In relation to section 11 of the Act Lord Kilbrandon observed: This is one of the rare cases of a misprint in the Public and General Statutes and that comma, as in fact you can tell from the 1905 Act, has been put in the wrong place. It does not make sense like that.] 10 In 1907 they could not have objected to us registering our G.E. mark on the basis that it was similar to the G.E.C. mark, because the register contained a limitation that "the registration of this mark shall not interfere with the bona fide use by any person of his own initials"; "person" includes a company, section 19 of the Interpreta­ tion Act 1889. G.E. are our initials. (Counsel reviewed the evidence.) [Lord Reid: Is it 15 sufficient for your purpose if we conclude generally on this evidence that there was a small, but nevertheless significant import of your goods from a pretty early date down to 1965 and that probably a good deal of that bore the rondel mark?] Yes. What is "small" depends on what you are considering. A £100,000 a year is not usually considered small. There is no valid reason in law for making a comparison between us 20 and the other company. It is not a competition. [Lord Reid: There will be different categories of people. One will attribute the mark to the American company; another to the English company; others will know nothing about it. Commonsense tells you that there will be some people in all these categories. Your evidence does not establish the sizes of these categories.] Our evidence should not be judged too harshly, because 25 the main point of this case was not thought to be involved at the stage when the evidence closed; see General Electric CO.'s Trade Mark [1968 ] F.S.R. 517. In fact, we objected at that stage to the evidence being put in as having no relevance whatsoever to the proceedings. The public may be divided into nine classes of person. In each case assume the mark 30 is seen on goods without any associated packaging or promotional material. First, the man who knows that the rondel mark is our mark; he cannot be confused. Second, the man who knows both companies, thinks the letters stand for a name, General Electric, but does not know to which company the mark belongs. If he is confused, the state of confusion as a matter of causation stems from similarity of names and not from the 35 mark. Section 11 is a section about a trade mark and for the confusion to be relevant it must be confusion which is caused by the mark. [Lord Simon: That means that you divorce the mark from its association and I should have thought that the whole essence of the mark is its association.] You have to look at the causation. When the mark has made the man think of the words "General Electric" then that causation is spent. 40 There is up to that point no confusion. He has been told to think of the words "General Electric". That has not confused him, it is when he comes to apply that knowledge to the facts of the case that he falls into confusion, solely because there are two companies with identical names. [Lord Reid: The mark speaks true because he thinks it means General Electric, and it does mean General Electric. If he thought it was General 45 Electric but the name of the company happened to be George Elliot then it would not have spoken truly.] The most that can be said against the mark is that it has failed to dispel the inevitable confusion between these two companies, and that is not to make it deceptive, because it speaks true. [Lord Diplockr It is not just "caused confusion"; it is "caused a particular kind of confusion", namely, the kind of confusion which 50 would have made the mark disentitled to protection, originally in a Court of Equity GE Trade Mark (because the first Act was before the Judicature Act), and subsequently in a Court of Justice.] Quite apart from the nature of the relevant confusion, it is only confusion under the Act at all if it is caused by the use of the mark. [Lord Reid: So it is, because the use of this mark is the same as the use of the name, and the latter does cause confusion.] I do not admit the use of our name causes confusion. The use of the name 5 is a perfectly truthful act. It only causes confusion because somebody chooses to trade under the same name. It is perfectly fair and legitimate for us to use our own name. If we were applying for registration for the first time now we would have no difficulty in getting it. Section 12(2) says: "In case of honest concurrent use . . . the court or the Registrar may permit the registration of trade marks that are identical 10 or nearly resemble each other...." I say under section 11 that this, being no more than the use by a man of his own name, the confusion (assuming against myself that the use of the mark would be likely to cause confusion) certainly would not be such as to disentitle me to protection in a court of justice. The relevant protection is the pro­ tection afforded by the court, formerly the Court of Equity, in the granting of an 15 injunction to protect the use. The question is: Would one be entitled to protection against a man who applied one's mark to his goods without leave? To bring a mark within section 11 it is not enough to prove confusion. The hallmark of disqualification is disentitlement to protection in a Court of Equity. [Lord Reid: A man is entitled to use his own name, leaving initials aside. But does it follow that if he used his own name 20 and found there was another man of the same name, he would be entitled to pro­ tection?] The answer is yes, if he comes with clean hands. "Protection" means the right to be protected against usurpers; not necessarily the owner's protection, as a successful defence, if he in turn were sued by somebody. [Lord Diplock: "Disentitled to protection" means generally disentitled to protection, i.e. against the whole world not 25 merely one particular man.] It has got to be a man's own fault. It is a subjective disentitlement. It comes in at an earlier stage than discretion. On the authorities there is a distinction between confusion which is caused and not caused by the use of the mark without the fault of the proprietor. I now begin to see why that is so. It is because of this conception of subjective disentitlement. The true position is that unless 30 I come in with unclean hands, guilty of what in equity is called fraud, and that does not mean common law deceit, I am entitled to protect from a usurper my trade use of my name. Third, the man who knows both companies, does not know to which company the mark belongs, and does not happen to think that the letters G.E. stand for the name General Electric. He cannot be confused. Fourth, the man who knows 35 only our company and thinks that the letters stand for a name, General Electric. He cannot be confused. Fifth, the same except that he does not think the letters stand for the name, General Electric. He cannot be confused. Sixth, the man who knows only the English Company and he thinks that the letters stand for a name, General Electric. He might be confused by the use of the mark, provided he were to perform the two 40 stages of the thought process. That is a matter of evidence. And even that class is subject to argument about whether even that would disentitle us to protection in a court of equity. Seventh, the same as No.6, except that he does not think that the letters stand for a name, General Electric. He could not be confused. Eighth, the man who knows neither company but thinks that the letters stand for a name, General Electric. 45 Any confusion in this case would stem not from the use of the mark but from the similarity of the names. Ninth, the man who knows neither company and does not think that the letters stand for the name General Electric. He would not be confused. [Lord Reid: A substantial number of people may fall within your sixth class.] The trial Judge held there was not. The evidence does not prove it and the onus is on the 50 Respondents. We sold goods on a substantial scale under the rondel mark starting a great many 15 30 35 [No. 11] House of Lords years before the present proceedings commenced. [Lord Reid: Apparently, there was no attempt to stop you either by appealing to your better nature on the gentleman's agreement or by taking legal proceedings.] Yes. The only two incidents are (i) the Customs affair of 1961, where they stopped our goods coming in, but even there they 5 did not protest to us; (ii) the affair of Mr. Stocks and the blankets, and there the correspondence shows plainly that their real anxiety was that we might trade in this country under our company name. It is true that the registration of initials has sometimes been refused, but not because the initials might suggest some name, which is the case made here, but because they 10 might unreasonably block the use by another trader of his own initials. Registrar of Trade Marks v. W. & G. Du Cros Ltd. (1913) 30 R.P.C. 660. The public survey evidence adduced by the Respondents is worthless for the same reasons as in Coca Cola Co. v. Struthers [1968 ] R.P.C. 231: "It arises from an artificially contrived situation wholly divorced from 'the course of trade', and the evidence thus sheds little, if any, light on the question whether when the persons interviewed were actually buying the products of one or the other of the parties to this case they would confuse one product with the other." [Lord Morris: Supposing one company registers the trade mark G.E.C. on the 1st January and another company the mark G.E. Co. on the 1st February, neither having 20 any reputation or user.] That is a section 12 case rather than a section 11 case. Under section 12(1) the bar is absolute and, since there is by definition no honest concurrent use, the exception under section 12(2) does not arise. Under section 11 it would be necessary to consider the likely use of the marks. The only relevant date for section 11 purposes is the date of registration. Therefore, having regard to the known facts at 25 that date, one must project the thing into every reasonable future probability. [Lord Simon: In section 11 what are the matters covered by the words "or otherwise"?] I can think of four. (1) Considerations of comity, e.g. an injunction granted by a foreign court restraining the use of the mark throughout all the world; (2) Where the proprietor agreed not to use it; (3) Where the mark was so outrageous as to be calculated to provoke a breach of the peace; (4) (Possibly) where the proprietor derives title from an expropriation without compensation. (Counsel referred to sections 2, 3, 5, 6, 10 of the Trade Marks Registration Act 1875; sections 62, 64, 65, 70, 73, 75, 90 of the Patents, Designs and Trade Marks Act 1883.) Section 90 provides; "the court may on the application of any person aggrieved . . . by any entry made without sufficient cause . . . make such order for . . . expunging ... the entry as the court thinks fit". 40 "Without sufficient cause" must mean without it being justified under the provisions of this Act. [Lord Reid: It is nothing to do with anything that happened after the entry was made?] No; and this gave rise to difficulty because there was no provision, e.g. for removing an entry for non-payment of fees. The phrase "wrongly remaining" in section 32 of the modern Act was first introduced by section 35 of the Trade Marks GE Trade Mark Act 1905; and that was put in as a result of some obiter remarks in Batt's Trade Mark (1898) 15 R.P.C. 535 at 538, per Lindley L.J.: "If any entry is at any time on the Register without sufficient cause, however it got there, it ought, in our opinion, to be treated as covered by the words of the section". 5 [Lord Reid: The court had drawn attention to the matter, so the only sensible thing to do, from the Parliamentary point of view, was to put in a section to clear up the difficulty.] Yes. This is consistent with the view that the phrase "wrongly remaining" which appears for the first time in 1905 is satisfied only by a contravention of the statute. In 1905 non-user (as in Batt) was made a ground for rectification; that is the 10 only reason "wrongly remaining" was put in. (Counsel referred to sections 3, 9, 15, 19,20,21,22,28,29, 30, 32, 35, 37,41 of the Trade Marks Act, 1905) . Section 21 envisages a state of affairs which is exactly similar to the old pre-registration equity situation where different persons, each having the right to sue a third party infringer, each could not sue the other. Section 41 is the predecessor of the present section 13. 15 The only thing which is protected by that section is the original registration. Therefore, if there can be an attack on the current validity of the mark through supervening circumstances, no period of limitation after those supervening circumstances have supervened is ever going to save the mark from invalidation, which would be remark­ able. It would mean that bad initial registrations were safe after seven years, but 20 registrations bad owing to supervening circumstances would be at risk for ever. There is no power under section 32 of the 1938 Act to remove from the register a mark properly registered in the first place, unless there has been some contravention of a provision of the Act. There are no cases supporting the contrary proposition. Thorne v. Pimms (1909) 26 R.P.C. 221 was essentially a passing off case; and the trade mark 25 there was always potentially misleading; the registration should have been limited to the use of the label in connection with Thorne's Whisky. So it was wrong ab initio. [Lord Reid: It is plain that Neville, J. took your opponent's view, but the case can be justified for other reasons.] [Lord Diplock: Could you tell me this, because I am not so familiar with the reputation of the Chancery Judges. Where does Neville, J. rank in 30 the hierarchy between Eve, J. and Kekewich, J. 1] I am bound to say: at the Kekewich end of the scale. But although Neville, J.'s general reputation is not enormously high he in fact did do quite a lot of trade mark work. Bowden Wire Ltd. v. Bowden Brake Co. Ltd. (No.1) (1913) 30 R.P.C. 45, 580 is a case really based on a construction of section 70 of the 1883 Act, equivalent to section 22 of the 1905 Act, and the House of 35 Lords specifically took the view that there had been a contravention of the prohibition in section 22, see 31 R.P.C. 385. Lacteosote Ltd. v. Alberman (1927) 44 R.P.C. 211 is plainly based on a contravention of a specific section of the statute, namely, section 22 of the 1905 Act, although there is an obiter passage to the contrary at 325. [Lord Reid: Do you go so far as to say that if the owner of a mark himself contributes to deception 40 after it has been registered he can still keep the mark and go on with it 1] Yes, but probably he would be prevented from using the mark either under the criminal law or under the law of passing-off. Cases supporting our proposition are Imperial Tobacco Co. Ltd. Trade Marks (1915) 32 R.P.C. 40; Woodward Limited v. Boulton Macro Ltd. (1915) 32 R.P.C. 173, a case decided later than all those cited against me except 45 Lacteosote (supra) where it was not cited. This was the last case on the subject before the 1919 Act and it was a clear case very much in point unlike the other cases cited against me. [Lord Reid: Are you relying on the doctrine that if Parliament passes an Act after a single Judge has decided upon it his decision is thereby endorsed by Parliament?] Only if there is sufficient notoriety, and this is such a case. [Lord Reid: I 50 [No. 11] House of Lords think personally that that doctrine has been much overworked in the past.] Yes, but here the argument put forward by the Board of Trade was overruled and they must have had it very much in mind when the 1919Act was being framed. [Lord Reid: If you get a decision of this House it may be there is something to be said for that, but I 5 demur from this idea that because a single Judge has decided something, and Parlia­ ment has used the same words later, then that single Judge's authority becomes not only equal to that of this House but equal to that of Parliament. That seems to be going far too far.] (Counsel referred to sections 6 and 9 of the Trade Marks Act, 1919.) Woodward was approved by the Court of Appeal in the Bali case. Pan Press Limited's 10 Applications (1948) 65 R.P.C. 193; DIEHL Trade Mark [1970] R.P.C. 435. Turning to section 11, in order to be disqualified owing to likelihood of causing confusion, the mark must fulfil two cumulative conditions. First, that the use of the mark would be disentitled to protection; secondly, that that disentitlement is oc­ casioned through the likelihood of causing confusion. In one word, guilty confusion 15 is necessary. Even collateral fraud will not necessarily disentitle to protection. Cases showing the position in equity before the 1875 Act are Dent v. Turpin (1861) 2 J & H 139; Hine v. Lart (1846) 7 L.T. 41; Southorn v. Reynolds (1865) 12 L.T. 75; Ainsworth v. Walmsley (1866 ) L.R. 1. E. 518; Jelley, Son & Jones' Application (1882) 46 L.T. 381; 20 "If it is a new mark which has never been used before then you cannot adopt somebody else's mark, but if you have got a case of honest user you are entitled to rely on it", per Jessell M.R. (There must however be a measurable use. That was not so in BALI Trade Mark. See Re Hodson (1881) 26 So.J. 3: "The evidence of user was of so slight a kind as not to give the applicants a concurrent right to use their trade mark", per Chitty J.); Banks v. 25 Gibson (1865) 34 Beav. 566; Benbow v. Low (1880) 44 L.T. 875; [Lord Reid: Does that mean that supposing your mark had never been registered before 1967 and you had come along then for the first time and said "I have been using this mark for twenty years. I want it registered," it would have been no answer for your opponent to say "Oh! but it is liable to cause confusion"?] Yes, certainly, unless he could say it was 30 the same as his mark in which case one would look to section 12 instead of section 11. Under section 11 I would be disqualified by a misdeed of my mark only; Ford v. Foster (1872 ) 7 Ch. App. 611, the phrase "calculated to deceive" in section 6 of the 1875 Act (now section 11 of the 1938 Act) emanates from the judgment in this case; Leather Cloth Co. v. American Leather Cloth Co. (1865 ) 11 H.L. Cas. 523, from whence 35 the words "use" and "protection" in section 11 of the 1938 Act. "The use of an old mark would not necessarily be disentitled to protection in a court of justice by reason of its' identity with another mark", per Lord Warrington in Bass, Ratcliff and Gretton Ltd. v. Nicholson & Son Ltd. (1932) 49 R.P.C. 88. The respondents have never accused us of misconduct. "Knowledge of the registration of the opponent's mark 40 may be an important factor where the honesty of the user of the mark sought to be registered is impugned, but when once the honesty of the user has been established the fact of knowledge loses much of its significance", per Lord Tomlin in Pirie's Application (1933 ) 50 R.P.C. 147 at 159. BALI Trade Mark [1969] R.P.C. 472 is relevant both on section 11 and section 32. 45 On section 32 the case never went beyond the Court of Appeal, which decided by a majority that the Woodward construction was right, and therefore that a mark validly registered initially could not be taken off the Register on the basis of likelihood of confusion, under section 32, read in conjunction with section 11, unless there was a contravention of some other section which rendered the mark removable: [1968] GE Trade Mark R.P.C. 426. In the House of Lords both sides presented their case on the footing that Woodward was right. The mark was removed on the ground that it had offended when it was originally registered in 1938. What was argued in BALI Trade Mark was that section 11 was confined to cases where the level of likelihood of deception was sufficient to sustain a passing-off action. Our argument that to construe section 11 you have to 5 look at the pre-registration law was never put to the House. [Lord Reid: Is not e.g. Lord Morris against you? On page 490 he says: "From all this I think it follows that, in 1938, if Berlei had shown that the use of the mark BALI was likely to deceive or cause confusion they would have shown (quite without any reference to section 12(1)) that the use of the mark BALI was disentitled to protection in a court of justice."] 10 That is not a universal conclusion on the law. It is a conclusion that in that particular case BALI would have been disentitled. There the use was de minimis, see Hodson's Application (1881) 26 So.J. 43, and Lord Upjohn at page 495 in BALI: "It may be that Sir John Romilly went too far in saying that user for a week would be sufficient." [Lord Reid: Suppose BALI, before the first Registration Act in 1875, had been doing 15 precisely what they were doing in 1938, and somebody else had come along, a cheat, and had used the word "Bali". Would it have been in the mouth of Bali to say: "But I am not disentitled to the protection of the court because I am genuinely using this mark. I have used it for years. It is perfectly genuine."] The answer is no, because the user was de minimis: one retailer with a small amount of goods over at most three 20 years. But here we have £IOim. worth of user. [Lord Reid: I am not sure that I remember any case in which we have had to consider what the position is when you find a new argument brought in, and this House has laid down apparently a perfectly general rule on an occasion when that argument was not brought up and would have been no use if it had been brought up. Are we now at liberty to say: "That is all very 25 well, but there is a very material qualification, namely, that you have also got to con­ sider whether the facts are such that under the common law you would have been entitled to protection ?"] The case of Cowley v. Inland Revenue Commissioners [1899] A.C. 198 is an obvious case where your Lordships later found no difficulty in saying that those observations were no doubt controlled by the environment. [Lord Reid: I 30 think some people take the view that Lord Simmonds was the progenitor of our present practice that we can reconsider decisions of this House because what in fact was done was that they reconsidered Cowley's case.] [Lord Morris: If before 1875 BALI had used that name for an appreciable time could they have got an injunction against Berlei?] No, see Benbow v. Low (1880) 44 L.T. 875 and Banks v. Gibson (1865 ) 34 35 Beav. 566. The courts would have said that this was an honest concurrent user. Neither could stop the other. [Lord Reid: You are entitled to say that if you take the BALI dicta at their face value, honest concurrent user becomes anomalous to the conception of the general law because it had no right to be there.] Yes. [Their Lord­ ships indicated that they would defer argument on the topic of discretion until the end 40 of the argument on other matters.] Falconer, Q.C., for the respondents.-Notwithstanding that a mark may originally have been rightly registered, it may nevertheless be removed on the ground that it "wrongly remains" on the register and if, subsequently to the date of its original registration, a mark-for whatever reason-becomes likely to deceive or cause co- 45 fusion, it ceases to be a registrable mark and, therefore, "wrongly remains" on the register and may be removed therefrom. The American Company want to save their mark in order to rely on the Defence under section 4(4), because we are suing them. The appellants enquire where is the public advantage in taking their mark off the register. There are two answers. First, if their mark is one which is wrongly on the 50 register, it is not a right to which they are entitled anyhow. Second, so far as the public advantage is concerned, it is that the purity of the register is restored by removing [No. 11] House of Lords from it a mark which is deceptive or confusing. The register is divided into Part A and Part B. Pan Press was a Part B case. That is why there was no discussion of section 13(1). The purpose of section 7 is purely to safeguard the prior rights of a proprietor who has prior used his own mark. As to this section contemplating concurrent 5 registrations, the section says nothing about the validity of the first registered mark. It has long been a cornerstone in our trade mark law that a mark must be distinctive, see section 9(1). See the Fanfold Ltd.'s Application (1928 ) 45 R.P.C. 325. Section 11 was construed in this House in Bass v. Nicholson (1928) 45 R.P.C. 88, 107. There is no restriction as to the kind of deception or confusion contemplated except that it 10 shall be such as to disentitle it to the court's protection. If one is going to rely on the use of a mark as barring another entry on the register then it must be under section 11, not 12(1). The appellants say that if our argument on section 13 is right, and one can look at the present time, the word "offends" being in the present tense, there would be a continuing peril to the mark, which is said to be a revolting concept. But that is 15 not a concept that revolted the legislature because a Part B mark is always under continual periL The kind of protection that section 13 gives to a Part A registration is that it cannot be said after seven years that the mark should not have gone on the register because it did not qualify under section 9. It is also directed to the protection of the title of the first registered proprietor. The original registration may be impeached 20 if the trade mark offends (present tense), i.e. offends against the provisions of section 11 [Lord Reid: What about the case where a mark offended to start with and if you look at it today without reference to the history it is perfectly all right ?] The original regis­ tration would probably still stand after seven years. [Lord Reid: So that the concession that was made in BALI was quite wrong and they should not have looked at the original 25 date at all, they should have looked at the date of the commencement of proceedings.] No, in BALI it made no difference what date you took. [At this point Lord Morris left the case.] On section 32, so far as an entry made in the register without sufficient cause is concerned, prima facie that would refer to the time of entry on the register, and by 30 an entry wrongly remaining on the register, that must as a matter of language refer to something which is wrong now and therefore would include something which has gone wrong between the time of entry and the present time. The phrase "wrongly remaining" requires this test to be applied, if this were a new application today would it succeed? Section 15(1) strongly suggests that without the saving provision con35 tained therein a registration could become invalid owing to a supervening event. [Lord Diplock: If the test is: "Could you get on the register today?" what good is the prescriptive right under section 13?] A Part A mark may have got on to the register wrongly, e.g. it was descriptive, but in the course of a few years the user has cleared up that vice. After seven years section 13 protects the mark from an attack that it 40 was originally wrongly registered. Alternatively, a mark which began to offend against section 11 after the date of registration makes the entry one "wrongly remaining'. Clause 4(1) of the First Schedule provides that the Board of Trade (but not the court) shall have jurisdiction to remove a certification trade mark on the ground that it is no longer to the public advantage that the mark should be registered. That provision 45 was necessary because otherwise under section 32 the court would have jurisdiction. [Lord Diplock: No! The explanation is probably that you cannot remove a mark under section 32 unless it infringes some other provision of the Act. When you put in an express provision for removal by the Board of Trade, as a matter of ordinary prudence you make it quite clear that this is not covered by the general words of section 32, 50 which it otherwise might be.] My general submission is supported by Thorne v. Pimms (1909) 26 R.P.C. 221. [Lord Reid: It does seem as if this was a proposition that had GE Trade Mark not been fully argued and on which Neville, J. arrived at something of a snap judg­ ment.] Bowden Wire Ltd. v. Bowden Brake Co. Ltd. (1913) 30 R.P.C. 580. [Lord Reid: This is a case where they had done something which the Act did not permit them to do, not a case where it became deceptive by some means not struck at in the Act]; (1914) 31 R.P.C. 385. [Lord Reid: If a man by his own acts makes his mark deceptive, then 5 he must suffer. But that is a very long way from the present case.] The rule against the assignment of trade marks is explained by Pinto v. Badman (1891 ) 8 R.P.C. 181. In Bowden (supra) the real basis for removing the mark was that it had become deceptive. A further authority is Lacteosote Ltd. v. Alberman (1927) 44 R.P.C. 211. A section 11 position arose afterwards, and there is no doubt that that mark originally was properly 10 registered. Pan Press Publications Ltd.'s Applications 65 R.P.C. 193 at 198: The second half of that case proceeded on the footing that registration originally was a perfectly valid one. It cannot be right that if a mark has become deceptive the decision whether or not it is to remain on the register depends on whether or not the deceptiveness is the fault of the proprietor. The public interest is dominant that a deceptive mark should 15 not remain on the register. Fault can be relevant to discretion only. Woodward v. Boulton Macro (1915) 32 R.P.C. 173 is wrongly decided. Woodward is now covered by section 15 anyway. [Lord Diplock: That is a strong point against you. When Parliament amended the Act it left the construction as it was.] Woodward was not the only authority on the point; Thorne v. Pimms (supra) and Bowden (supra) were the other 20 way. [Lord Reid: Have we had any recent pronouncements about the inference to be drawn, if Parliament passes a new Act and leaves the law alone as it stands, where no inference was drawn about the last case on the topic being approved by Parliament.] [Lord Simon: At the end of my time at the Bar I tried that argument three times running and each time it failed, based on Barras v. Aberdeen Steam Trawling Co. 25 [1933] A.C. 402 at 432-3.] [Lord Reid: I think the law is in a fluid state on that.] Confusion between mark and mark is a ground for invoking section 11, without anything more. Relevant confusion may be that which arises because of the similarity of the mark with a name meaning a name of a person used in the business. It has been accepted for very many years now that in order to remove a mark under section 11 it 30 is enough to establish that the mark in question is likely to cause confusion or decep­ tion by reason of being similar to the opponent's mark, and I say also name. If the appellant's propositions are accepted, your Lordships would be upsetting a long line of authority, and what is more, would be upsetting a great deal of the practice that has gone on for many years. Whatever may have been the position before 1875, today 35 deception is not restricted to something inherent in the mark. Dunn's Trade Mark (1889 ) 6 R.P.C. 148,379,7 R.P.C. 311. Lord Watson there proceeds on the basis that what is now section 11 strikes at anything which is calculated to deceive the public, neglecting entirely as irrelevant whether this would be disqualified from protection in a court of law. [Lord Diplock: There is an express finding of fact by him that it was 40 done with the deliberate purpose of obtaining pecuniary advantage. This was a case where Mr. Dunn had not used this trade mark before in this country.] The next case where the idea of deception was widened is Compagnie Industrielle des Petrole's Application (1907) 24R.P.C. 585: 'Motricine' could not be registered since it was too like the trade mark 'Motorine' and might deceive the public. [Lord Reid: That is giving 45 a preference to the man who is on the register first.] Yes. That is what the Act does. Subject to anything that might happen under section 12(2) there is an absolute power under section 12(1) to refuse the later man. It is very important and a great deal of jockeying goes on nowadays to make sure that you get your application in before the other man. See per Warrington, J. at page 590: fradulent intent is irrelevant, the only 50 question is, is the mark calculated to deceive? See per Lord Hanworth in Me Dowell's Application (1927) 43 R.P.C. 313 at 334. The unanimous decision there was that it was [No. 11] House of Lords sufficient to compare the two marks, and if they were sufficiently similar as to be likely to be confused that was sufficient to disqualify under section 11. [Lord Diplock: There was no question there of a prior user of the mark "Nuvol". He had never used it before and it did not matter to him whether he used it or not. This is not a mark the 5 exclusive use of which was entitled to protection. It is only in the honest concurrent user cases that the question arises.] That approach was that adopted by the majority of the Court of Appeal in BALI Trade Mark (1968 ) R.P.C. 426 and this House said it was wrong: [1968] R.P.C. 472. [Lord Diplock: One does not consider the question of honest concurrent user when one is considering whether a mark already on the 10 register should come off. That is why I do not find the registration cases, where a new mark is sought to be registered, as being very helpful.] If that is so it is difficult to understand how section 11 can ever apply to the case of an application for registration of a new mark which had never been used. "Disentitled to protection" as the law has now developed, arises automatically out of likelihood of deception. The cases cited 15 by the appellants are all old ones. [Lord Reid: Has there been any case where there was substantial user so as to make a property in the mark, such mark being subsequently expunged for a defect for which the proprietor was not responsible?] Yes. Aristoc v. Rysta (1945 ) 62 R.P.C. 65. [Lord Reid: That was a service mark. There was no common law property in such marks; they could have been protected by an action of passing 20 off only.] The case was considered on the footing that it was a trade mark. [Lord Reid: In that case the proprietor caused the confusion by his own actions.] It would have been no different if there had been another person on the register with the mark "Rysta" for stocking repair. A case where a mark was taken off the register because of its resemblance to a name 25 was George Cording Ltd.'s Application (1916 ) 33 R.P.C. 325. [Lord Reid: That was not a case of honest concurrent user.] The case is cited purely for the proposition that confusion with a name also counts. [Lord Reid: If you are right, then neither G.E., General Electric or, for that matter, G.E.C., can be registered by either of you.] In this country we are General Electric. [Lord Reid: If your name was Smith you could 30 not stop another Smith from America from coming and trading here.] But this is not a surname, it is a company name. Office Cleaning Services v. Westminster Window & General Cleaners (1946) 63 R.P.C. 39. [Lord Diplock: Where is the case where a person or a company has been stopped by an injunction in a passing off action from trading under its full name with sufficient indication of origin or otherwise so that it 35 is not confusing.] Parker-Knoll Limited v. Knoll International Limited [1962] R.P.C. 265. Further, the evidence is that half the public think that the rondel mark referred, not merely to General Electric, but to G.E.C. Even on the appellant's version of the law, they do not have, under modern trading conditions, enough use to give them a common law property in their mark; and the use from 1965 to 1967 was in the face 40 of our protests about their breach of the understanding, so that would not entitle them to the protection of the courts. [Lord Simon: A breach of contract would dis­ entitle them to protection in a court of equity; what exactly is an "understanding"?] It was a gentleman's agreement. [Lord Simon: An "understanding" is an agreement not intended to create legal relations. What effect would it have in a court of equity 45 which follows the law?] [Lord Reid: You would be disentitled to protection, would you not, if you disregarded a gentleman's agreement?] Certainly in a court of equity. [Lord Diplock: If it was not intended to create legal relations it is not too difficult.] In relation to the market for electrical goods, the appellant's use is small enough to be ignored. [Lord Simon: If there has to be use amounting to a substantial proportion 50 of the market, the question is, what market? In some of the early cases a local market was envisaged.] That illustrates the difficulty about importing this essentially old concept into the present day trade mark law. For a long time now everybody has GE Trade Mark forgotten all about this and under section 11 you simply look to see if there is a likeli­ hood of confusion, yes or no, and that is the end of the matter. BALI Trade Mark [1969] R.P.C. 472 at 489,492,495. Bass v. Nicholson (1932) 40 R.P.C. 88; that was a case about an old mark, see the proviso to section 9 of the 1905 Act. After the proviso to section 9 disappeared in 1937 Bass could have moved under section 32 and section 11 5 of the 1938 Act to have Nicholson's mark removed. [Lord Simon: That is a very startling conclusion.] [Lord Diplock: The only difference between honest concurrent user and old marks in 1905 was that you did need the leave of the court in the former.] The American Company are not entitled to use their name General Electric on their goods since that would indicate to the public that they were goods of our make. 10 Joseph Rodgers & Sons Ltd. v. W. N. Rodgers & Co. (1924 ) 41 R.P.C. 277. [Lord Reid: That is a cheat case; of course, if you bring in a young man in order to use his name, obviously you are going to be stopped.] See at page. 291 : "A man of the name of Pears is, in my opinion, entitled to carryon the business of the manufacturer of soap, but he is not entitled to sell his soap as 'Pears' Soap', 15 and he is not entitled so to mark his soap as to lead to the belief that it is 'Pears' Soap'.... To the second rule, to which I have referred, I think there is no excep­ tion at all; that is, that a man is not entitled so to describe his goods as to lead to the belief that they are the goods of somebody else." This was cited with approval by Lord Simonds in Marengo v. Daily Sketch (1948 ) 20 65 R.P.C. 242 at 251 : "It does not follow from the fact that a man may carryon his trade in his own name that he may also mark his goods with that name if the result will be to deceive the public." [Lord Reid: How do you let the public know who made the goods if you are not 25 entitled to use your name ?]. They could change their trading name. [Lord Reid: But you cannot ask an old established company to change its trading name.] [Lord Diplock: In the Rodgers case the injunction was qualified, "without clearly distinguishing between his goods and those of the plaintiff's manufacture."] That form of injunction is in practice a bar to using the name at all. It should be noted that the appellants do 30 not in fact trade under the name General Electric; they trade under "Monogram Electric Company", and so on. The proposition is also supported by Parker-Knoll Limited v. Knoll International Ltd. [1962] R.P.C. 265. [Lord Reid: So the appellants cannot say that the confusion is not caused by the use of the mark, because the use of the name is as equally obnoxious as the use of the mark, and they have not got that 35 escape route. It does not matter which way they cause the confusion; you have a remedy in either case. That strengthens your case enormously]. In any event there is confusion between mark and mark. (Counsel referred to the evidence.) Section 11 is for the protection of the public: BALI Trade Mark [1969] R.P.C. 472 40 at 495, per Lord Upjohn, at 491 per Lord Morris. Yet if my friend is right, a mark, deceptive when propounded for registration, would not be disentitled to protection if it had been used for some time. fn such a case the public interest would really have no protection at all. [Lord Reid: The statutes allows honest concurrent user, and the public interest is hurt just as much by honest concurrent user as by dishonest con- 45 current user. So the statute does not put the public interest as requiring such purity [No. 11] House of Lords of the register that there must never be two marks which can cause confusion. There­ fore it is a matter of degree, weighing one against the other.] Yes, but the public interest is the dominant consideration. No-one has an automatic right to get on under section 12(2). 5 One must remember that their mark was registered as a blocking device without any intention of using it. It would be a strange thing if the court's protection were to be extended to the mark so as to save such a registration. [Lord Reid: Supposing a man registers a mark as a blocking device and does not use it at all for ten years and then uses it significantly for the next three or four years, would that not save the mark 1] 10 Yes. In the pre-registration cases relied upon by the appellants there was no need to preserve the purity of the (non-existent) register. Today the court ought to take into account the purity of the register. I abandon the point that there was likelihood of confusion in 1907. 15 I turn to the licensing point. The function of a trade mark is to indicate the origin of the goods. This is still so, even though the statutory definition of a trade mark in section 68(1) of the 1938 Act is wider than the definition in section 3 of the 1905 Act, as is clear from the Aristoc case. Prior to 1938, any licensing of a trade mark, whether registered or unregistered, invalidated the mark as rendering it deceptive. The Bowden 20 Wire case is one such instance. The legal position today is the same, save for the exception specifically provided for by section 28 of the 1938 Act, the registered user section. It is only in the case of "permitted use" that licensing of a trade mark is recognised by the law of England. In no other case is a licensed use deemed to be use by the proprietor. A registered usership may be cancelled on the ground that the 25 registered user has used the trade mark otherwise than by way of the permitted use: section 28(8)(c). The licence granted to Simplex-G.E. to use the G.E. rondel mark in relation to goods not falling within the specification of goods of the registered mark amounts to a licence of an unregistered mark. This has vitiated the rondel mark and rendered it disentitled to the protection of the court so that the registration thereof is an 30 entry wrongly remaining on the register. The whole mark, the common law mark, has been completely vitiated. I will restrict my argument to the Simplex-G.E. licensing, and ignore the Monogram licensing. I do not now dispute that there was quality control in the Simplex case. This is an important matter to commercial firms. If the judgments below are right, 35 then there is really no point in using the registered user provisions at all. Up to 1938 if the proprietor of a trade mark, registered or not, licensed the use of a trade mark so that the licensee could use it on goods other than those of the proprietor, he invali­ dated his mark. He would not be able to protect his mark even by a passing off action, the theory being that the mark had become deceptive. [Lord Reid: Have you authority 40 for the proposition that, before 1938, if you allowed somebody else to use your mark on goods which were not within the registration, that vitiated your registration 1]. Yes. Thornloe v. Hill (1894) 11 R.P.C. 61. [Lord Diplock: The Judge in that case does not say that it was the grant of the licence which vitiated the mark. He goes straight to the expiration of the licence and says that by that time "John Forrest" did not mean 45 the plaintiff.] Precisely. That is the effect that licensing has. [Lord Diplock: They had no reputation.] See also Pinto v. Badman (1891 ) 8 R.P.C. 181 and the Bowden (1914) 31 R.P.C. 385 and Lacteosote (1927) 44 R.P.C. 211 cases. By the time the 1938 Act came along we had had the growth of international concerns, big companies, and GE Trade Mark [1973] R.P.C. groups of companies with subsidiaries, and no doubt it seems to have been considered that there was some need for some relaxation of that strict rule against assignment or licensing of a trade mark. The framers of the 1938 statute made provision for some relaxation with regard to assignment and licensing, but they did not lose sight of the fact that such assignment or licensing as they were proposing to allow might lead 5 to confusion or deception, so the provisions being made were very strictly circum­ scribed in that respect. See section 22 of the Act. [Lord Reid: I do not understand what is meant by assigning an unregistered trade mark. If an unregistered trade mark is not protected by the law, what is it that you assign?] Presumably, the right to sue someone else in a passing off action. [Lord Reid: But you have that without any 10 assignment. You always have a right to sue somebody who is passing off his goods as yours.] Section 28(2) provides that the permitted use of a trade mark shall be deemed not to be use by a person other than the proprietor for the purposes of section 26 and for any other purpose under the Act or at common law. That shows that the legislature appreciated that the use of the mark by the registered user might otherwise destroy 15 the proprietor's common law rights. I am prepared to deal with the unregistered mark upon the footing that all that was required was some sort of quality control, as is embodied in the condition imposed by the Registrar. I am proceeding upon the footing that there was such quality control and that it was effective. [Lord Reid: Your case would be exactly the same if the licence had been confined to unregistered goods and 20 had said nothing whatever about registration?] That is right. The registered user provisions of the Act sanction the licensing of registered trade marks but not un­ registered marks. [Lord Reid: But there is nothing in the Act which prevents the licensing of an unregistered trade mark. If "wrongly remaining" means remaining in contravention of the provisions of the Act, then this is not wrongly remaining.] The 25 common law mark has been destroyed by licensing. It is like the Bowden case (1914) 31 R.P.C. 385 where the first mark, having become deceptive by reason of the assign­ ment in gross rendered deceptive the second mark, which was registered for the same kind of goods: (1914) 31 R.P.C. 385 at 391, 393, 396. [Lord Reid: But he does not say that assigning the first mark has vitiated the second one. He says that in the circum- 30 stances there would be a confusion, which is quite a different thing. You are trying to say that the mere fact that you assign the first vitiates the second.] I was going to say that the Judges below are wrong in holding that the expression "connection in the course of trade" in the 1938 definition of a trade mark was not wide enough to include mere quality control of manufacture by another person. [Lord Simon: Do any of the 35 Judges say that? I thought they said financial control plus quality contro1.] That was Monogram. So far as Simplex is concerned they were basing themselves on quality contro1. [Lord Simon: Simplex was a 51 %holding.] The courts below are saying that the common law concept of a trade mark has changed in step with the change in definition of registered trade marks by the legislature. [Lord Reid: Is that not a reason- 40 able approach? The common law is always capable of development to meet the needs of the time.] [Lord Diplock: And in this branch of the law, which is commercial law, the common law normally follows the practice of the merchants. If you look at some of the earlier cases on trade mark law, for instance, Lord Westbury in Leather Cloth Co. v. American Leather Cloth Co. (1865 ) 11 H.L.Cas. 523, you find him referring to 45 the development of the common law in relation to using the name of the predecessor in business as a trade mark as something in which you would follow the development of the custom.] But the relaxation in 1938 was a narrow one, carefully circumscribed. There are no provisions for licensing unregistered trade marks, whereas there are provisions about assignment of unregistered trade marks. If it had been intended that 50 an unregistered trade mark could be in some way licensed, that would have been provided for. The plain inference from all that is that the legislature intended that there should be no further relaxation other than what they provided for in the statute. [No. 11] House of Lords Burrell followed.-The register which is authorised under the Act exists to record for the service of the public and for trade mark owners in this country and overseas, trade marks which clearly and truthfully indicate in this country the trade source from which the goods emanate. The G.E. rondel has at all times been a non-distinctive 5 mark in this country, because it has never in the course of trade in this country distinguished the goods of the American Company from the goods of other persons. The registration is accordingly a defective entry and wrongly remains on the register because the Act does not contemplate the initial registration and continuance on the register of non-distinctive marks. That the philosophy of the Act is that marks should 10 be distinctive is shown by sections 9, 10, 14, 22(4), 22(7), 23(10). That forfeiture can result only from some guilty act of the proprietor is a far-fetched argument when considered against the background of the Act itself. Section 15 was put in on order to save from automatic rectification a word which, while descriptive, had not become generic. It cannot be argued that "disentitled to protection" in section 11 refers to 15 common law rights, because section 2 of the Act says: "Nothing in this Act shall be deemed to affect rights of action against any person for passing off". [Lord Reid: Why was it necessary to put that in?] [Arnold Q.C.: Because of Rosenthal v. Reynolds (1892 ) 9 R.P.C. 189. A man sued in passing off in respect ofa part of his mark which he had disclaimed in the registration of that mark.] [Lord Reid: If that is right, it reduces 20 section 2 to a very small matter.] The doctrine of honest concurrent user under section 12(2) is of no avail, for that is concerned with initial registrations only. See the BALI Trade Mark [1969] R.P.C. 492. Arnold, Q.C. [Lord Reid: We desire you to deal with the question whether you are immune from a passing off action if you put your own name on your own goods. It 25 would be very ridiculous if the law were to say that you can put your own name on your own goods, but you cannot put a mark on your goods which suggests your name. If, on the other hand, you cannot put on your own name, that is a sound reason for saying, why should you be able to put on your mark?] The bona fide use of one's own name is exempted by section 8 of the Act from infringement proceedings under 30 section 4. That is infringement. As to passing off, see the Parker Knoll case [1962 ] R.PoC. 265; a strong case from our point of view because in that case the name of the Company sought to be protected was not, as here, a descriptive name. ·In order to get a passing off injunction against a man who is using his own name, or something which is very close to it (e.g. the name without the word 35 "Limited"), you have got to show a dishonest filching of your goodwill or an infringe­ ment of your trade mark, and if you do that then you will get relief, but the relief will not extend to a total injunction, but only to a qualified injunction, viz. "without clearly distinguishing their goods from the goods of the plaintiff". [Lord Reid: You can only use your own name in these circumstances if you add the caution: "Now 40 remember, I am not the other man".] That is precisely what we do. We say "The General Electric Company U.S.A. is not connected with the English Company of a similar name. This is the trade mark of the General Electric Company U.S.A." If the defendent is being dishonest, then he may be totally enjoined. The English Company have been very careful not to sue us in passing off. But even so "General Electric" is 45 a descriptive name, to which Office Cleaning Services Limited v. Westminster Window and General Cleaners Limited (1946) 63 R.P.C. 39 applies. Where a trader adopts a trading name containing words in common use some risk of confusion may be inevit­ able, but that risk must be run unless the first trader is allowed an unfair monopoly, and in such cases the court will accept comparatively small differences as sufficient to 50 avert confusion. [Lord Reid: If you are entitled, acting with scrupulous care, to put your own name on your goods without being found guilty of passing off, why are you not entitled to put your own initials in a circle?] I submit that we are. Even assuming Lord Reid Lord Diplock GE Trade Mark that we are quite wrong about everything else, we say this, that if on the 28th July 1967 we had in fact applied for this rondel mark as a new mark, we having used it to the extent that we had done, and the respondents were opponents under section 11, we would have been granted registration. Falconer, Q.C., replied on the cases.-The Office Cleaning case (1946) 63 R.P.C. 39 5 was a case of a trading name, the name of the business. The law is otherwise where the name is applied to goods. This is exactly the sort of case where you can get an absolute injunction, and it falls within the first category of Romer, J.'s two categories in the Rodgers case (1924) 41 R.P.C. 277. [Lord Reid: But why? If you can call yourself "Office Cleaning Services", and clean offices, why should you not call yourself "Office 10 Accessories Services" and sell office accessories? It is illogical.] It is the law as estab­ lished by cases in this House. [Lord Reid: You say there is this wholly illogical distinction in the law, that so long as you are offering services you can create a certain amount of confusion and get away with it, but once you are selling goods you cannot? It seems very odd.] The appellants do not always distinguish their goods from ours. 15 There is no obligation upon them to do so. [Their Lordships indicated that they did not wish to hear argument on discretion.] Lord Reid: I have read the speech of my noble and learned friend, Lord Diplock. I am in general agreement with it apart from one matter. I agree with the view of Eve J. in Woodwardv. Boulton Macro Ltd. (1915) 32 R.P.C. 173 that section 11 of the Act 20 has only a limited application. If that is right then I would reach the same conclusion that this appeal should be allowed but by a shorter and simpler route. As I believe that I am alone in taking this view I do not think that it would serve any useful purpose either to set out my reasons for agreeing with Eve J. or to set out the subsequent steps by which I reach my conclusion. 25 I would allow this appeal. Lord Diplock: The parties to this appeal are an American company incorporated in New York State and an English company. They have almost identical names. That of the American company is "General Electric Company". It has been so since its incorporation in 1892. That of the English Company is "The General Electric Com- 30 pany Limited". It adopted that name in 1903. Both companies manufacture and sell a wide variety of electrical machinery and goods including electrical goods for domestic use. Both have grown and prospered. The name of each is a household word in its own home market, the United States and the United Kingdom respectively. Both have a worldwide export trade to other countries where they sell in competition with one 35 another. Given the close similarity of names and the size and renown of both com­ panies, it is inevitable that where their goods are sold in competition in the same market some members of the public who buy goods with no further information about their origin than that they are the products of a company called "General Electric Company" or "General Electric" may be confused as to whether they are 40 the product of the American Company or of the English Company. A buyer who has heard of only one of the companies is likely to think that the goods are the product of the company which he knows as "General Electric Company" or "General Electric" even though they are in fact the product of the other company. A buyer who has heard of both companies may be in doubt as to which of them was the maker, but 45 if it mattered to him would presumably make further inquiries. [No. 11] House of Lords As long ago as 1906 the English Company registered as its trade marks for various classes of electrical goods the initials of its name GEC in block capitals. In the follow­ ing year, 1907, the American Company registered as its trade mark for electrical goods in one of the same classes its initial G.E. in script enclosed in an ornamental circle, 5 which is conveniently referred to as the Rondel Mark. Subsequently, the English Company registered as a trade mark in respect of the same and other classes of electrical goods its initials G.E.C. in script. It is in this form that the trade mark has been mainly used for the last forty years. I will call it the G.E.C. Mark. It is not contended that the Rondel Mark and the G.E.C. Mark themselves are 10 liable to be mistaken for one another. They are clearly distinguishable and distinctive. In this connection it is significant that in 1937 the two companies entered into an agreement that in overseas territories in which they competed, other than their respective home markets, the English Company would use its name in the form "The General Electric Company Limited of England" and the American Company 15 would use its name in the form "General Electric Company U.S.A." and that the English Company would use the G.E.C. Mark only and the American Company the Rondel Mark only. The purpose of this agreement was to reduce the risk of confusion between the products of the two companies. The distinctive differences between the two marks, it seems to have been considered, would help to make their respective 20 products more easily distinguishable. It has not been contended in your Lordships' House-though it was unsuccessfully contended below-that in 1907, when the American Company's Rondel Mark was originally registered, its use as a trade mark on electrical goods made by the American Company was likely to cause confusion between products of the American Company 25 and products of the English Company. Confusion could only arise if to a buyer who saw the Rondel Mark not only did the initials G.E. suggest the words "General Electric" but also the words "General Electric" suggested the English Company. There is no reason to suppose that at that early stage in the development of the electrical industry and in the growth of the reputation of the English Company in the 30 United Kingdom, a buyer of electrical goods would be likely to take either of these mental steps-both of which would be a pre-condition of his being deceived or con­ fused as to the origin of the goods. There is no evidence to support any such supposi­ tion; and the fact that in 1907 the Registrar entered the Rondel Mark on the register of trade marks raises the presumption that he, at any rate, did not consider any such 35 confusion to be likely. My Lords, it follows that there was nothing wrong with the original registration of the Rondel Mark. At the time when the entry was first put on the register it was not an "entry made in the register without sufficient cause" within the meaning of section 32(1) of the Trade Marks Act, 1938. The main question in this appeal is whether as 40 a result of events which have occurred since 1907 it had become an "entry wrongly remaining on the register" within the meaning of that section, on 20th July, 1967, when the English Company started proceedings to expunge it from the register. The history of the trading by the American Company in the United Kingdom between 1907 and 1967 and the use made of the Rondel Mark by it and its associated 45 companies is complicated. It is recounted in the careful judgment of Graham J. to which the reference may be made for the details. Owing to the way in which the case has developed in the course of its progress from the Chancery Division through the Court of Appeal to your Lordships' House, I shall not find it necessary to repeat here Lord Diplock GE Trade Mark more than a very brief summary of those findings of fact of the learned judge which are still relevant to the decision of the instant appeal. The History of the Litigation The case has had a chameleon-like history. It was started by Notice of Motion accompanied by Particulars of Objections. The main points there raised were that the 5 American Company had rendered the mark disentitled to protection because of the way in which they had licensed its use in the United Kingdom by two associate companies Simplex G.E. Manufacturing Ltd. ("Simplex") and Monogram Electric Housewares Ltd. ("Monogram"). These associated companies had not used the Rondel Mark as a trade mark simpliciter, but only in combination with the words 10 SIMPLEX and MONOGRAM respectively. SIMPLEX, however, had also imported and sold in the United Kingdom some goods manufactured by the American Company with the Rondel Mark in combination with the words GENERAL ELECTRIC. Most of the evidence before Graham J. was directed to these grounds of objection, which may conveniently be referred to as "the licensing objections". Very shortly 15 before the hearing, however, the English Company obtained leave to adduce further evidence, directed to showing that the use of the Rondel Mark simpliciter upon electrical goods would be likely to deceive or cause confusion so as to make its continued registration unlawful under section 11 of the Act. This evidence appears to have been relied upon mainly in support of the licensing objections. The contention that it 20 constituted in itself a separate ground for expunging the Rondel Mark did not loom large in the argument before Graham J. and it is not dealt with as such in his judg­ ment. In the result he rejected the licensing objections and found as a fact that there was no sufficient evidence of likelihood of deception or confusion in the way in which the Rondel Mark was in fact used under the licensing agreements in combination 25 with the words SIMPLEX, MONOGRAM, or GENERAL ELECTRIC. He accord­ ingly dismissed the English Company's application to expunge the Rondel Mark from the register. In the Court of Appeal the argument took a different course. The likelihood that the use of the Rondel Mark simpliciter would cause deception or confusion at the date 30 of the motion to expunge, which had been a subsidiary contention before Graham J., became the sole ground upon which all three members of that court allowed the appeal. None of them upheld the licensing objections, though only Cross L.J. gave any detailed reasons for rejecting them. Having reached the conclusion in law that the Rondel Mark was an entry wrongly remaining on the register and accordingly liable 35 to expunction at the discretion of the court under section 32(1) of the Trade Marks Act, 1938, the Court of Appeal ordered it to be expunged from the register. This was contrary to the way in which Graham J. had said that he would have exercised his discretion if he had considered the mark to be vulnerable in law. But the chameleon-like character of the case did not end in the Court of Appeal. 40 In that court attention was concentrated upon whether the use of the Rondel Mark simpliciter would be likely to cause deception or confusion in July, 1967. No attention was directed to the further question whether the circumstances in which that likelihood had arisen were such as would make its use as a trade mark or part of a trade mark "disentitled to protection in a court of justice" within the meaning of section 11 of the 45 Trade Marks Act, 1938. The importance of this question only emerged for the first time in the argument in your Lordships' House. My Lords, in the light of the history of these proceedings I cannot refrain from 20 25 30 35 40 45 expressing my regret that an order for pleadings was not made in the initial stages. It was evident from the particulars of objections served with the notice of motion, even though these were then confined to the licensing objections, that difficult issues of law and of fact would be involved. Because of the absence of pleadings the issues were 5 never defined by the parties and, in the result, have not been finally identified until they emerged in the course of the hearing in your Lordships' House. This has greatly protracted the hearing and added to the costs. It has deprived your Lordships of the advantage of the considered opinions of the trial judge and of the Court of Appeal upon at least one question of law of general importance which is, in my view, crucial 10 to the decision of the appeal. There may be many simple cases of applications to rectify the register of trade marks where the ordinary procedure by notice of motion supported by affidavit is adequate and expeditious. It was, however, obvious from the outset that the issues in the instant case were likely to be complex and that they called for precise definition. I express the hope that in similar situations in future the power 15 to order delivery of pleadings by the parties will be exercised. The Facts The facts as to the use of the Rondel Mark in the United Kingdom by the American Company and its associated companies which are, in my view, relevant to the decision of the instant appeal may now be stated in summary form: (1) From about 1900 until 1952 the American Company sold goods of their manufacture through the exclusive agency of an English company, the British Thomson-Houston Company Ltd. ("B.T.H."). B.T.H. was also a manufacturing company. Evidence as to the volume of sales of imported goods under the Rondel Mark is scanty and inconclusive. Graham J. was of opinion that it was probably on a small scale. (2) In 1952 the business association between the American Company and B.T.H. was terminated in compliance with the Anti-Trust laws of the United States. Sales of imported products manufactured by the American Company and bearing the Rondel Mark continued to be effected. Though in volume and value these sales were small compared with the total sales in the United Kingdom of goods of the English Company, it is conceded that even between 1952 and 1965 they were substantial in absolute terms and cannot be brought within any de minimis principle. (3) Between 1965 and 20th July 1967, there were very substantial sales of goods bearing the Rondel Mark in combination with SIMPLEX, MONOGRAM or GENERAL ELECTRIC. These were effected through one or other of the American Company's associated companies incorporated in England, viz. Simplex and Monogram, which have already been mentioned, and a third wholly-owned subsidiary, International General Electric Company of New York Limited. (4) The share capital of both Simplex and Monogram was divided between the American Company and an English company, Tube Investments Ltd. The American Company held 51 per cent. of the capital of Simplex and 49 per cent. of the capital of Monogram, but it maintained quality control over all products manufactured by either company which were sold under a mark which incor­ porated the Rondel Mark. (5) The use of the Rondel Mark by Monogram in combination with the word Lord Diplock GE Trade Mark MONOGRAM was licensed by the American Company, but the name of Mongram was not entered on the register of trade marks as a registered user of the Rondel Mark. (6) The use of the Rondel Mark by Simplex in respect of electrical goods of the class for which it was registered was also licensed by the American Company; 5 and the name of Simplex was entered on the register on 10th March 1966, as a registered user of the Rondel Mark in respect of that use. By the same licence agreement the American Company also licensed the use by Simplex of the Rondel Mark as an unregistered trade mark in respect of goods which did not fall within the class for which it was registered. Pursuant to this agreement 10 Simplex did in fact use the Rondel Mark upon some electrical goods which were found by Graham J. to fall outside the class of goods in respect of which it was registered. (7) Both the English Company and the American Company recognised from the start that, having regard in particular to the similarity of their names, there 15 was some danger of confusion in the United Kingdom and also in overseas markets; but so far as the United Kingdom is concerned there has not "ever been anything more than an understanding between successive directors of the two companies that it was to their advantage that confusion should be minimised by each company and that, so far as possible, each should try to do so." The English 20 Company have not established "anything in the way of an enforceable agreement or estoppel so far as the use of their respective companies' names and trade marks '(sc. in the United Kingdom)' are concerned." (8) If the Rondel Mark were used simpliciter on electrical goods on sale in the United Kingdom for domestic use it is likely that a substantial number of buyers 25 would infer that the initials G.E. in the Rondel Mark stood for "General Elec­ tric" and that of those who drew that inference a not insubstantial proportion would have heard of the English Company but not of the American Company and would draw the further inference that the goods bearing the mark were connected in trade with the English Company. 30 The Likelihood of Confusion The facts which are summarised under (1) to (7) above were found by Graham J. By the end of the hearing in this House they had ceased to be a matter of controversy between the parties. The inference of fact summarised in (8) was drawn by the Court of Appeal relying in part on the evidence of answers to a questionnaire used in a public 35 opinion survey conducted on behalf of the English Company and in part on their own subjective impressions as to whether they themselves would be likely to be confused if they were buying for domestic use electrical goods marked with the Rondel Mark simpliciter. Graham J. had declined to draw this inference. But it is right to say that because 40 of the way in which the case was conducted before him, his mind was directed to the way in which the Rondel Mark had in fact been used in England, which was never simpliciter but always in combination with the words SIMPLEX, MONOGRAM or GENERAL ELECTRIC. He was impressed by the lack of convincing evidence of actual confusion having occurred and was critical, in my view rightly, of the form of the 45 questions asked in the questionnaire. But the question whether the use of any matter as a trade mark would be likely to deceive or cause confusion arises in connection with a prohibition upon registration contained in section 11 of the Act of 1938. It is a [No. 11] House of Lords hypothetical question which first arises on an original application for registration. It looks to the future use of the matter as a trade mark and embraces any normal and fair use which as registered proprietor the applicant would be entitled to make of it in the ordinary course of trade in respect of goods of the class for which it is registered. 5 Thus, in the case of the BALI Trade Mark [1969] R.P.C. 472, it was held by this House that although the current use of the Bali mark sought to be expunged was upon ready-made corsets which were not in competition for the same market as tailor-made corsets for which the Berlei mark was currently used, consideration must be given to the fact that registration of the two marks in respect of the same class of goods would 10 entitle the proprietors of each of them to use their respective marks in the future on both ready-made and tailor-made corsets which would be in competition for the same markets. Where the question of the likelihood of deception or confusion arises upon an application to expunge a registered mark which has already been the subject of 15 substantial use, the absence of evidence of actual confusion having occurred is a potent factor in determining whether or not the court should exercise its discretion to expunge the mark from the register. But it does not decide the relevant hypothetical question which must be answered in the affirmative before any question of discretion to expunge the mark arises: Would any normal and fair future use of the mark, in the 20 course of trade be likely to cause deception or confusion? If actual confusion in the past is proved, this is a strong indication that continued confusion is likely; but the absence of evidence of past confusion may be accounted for by the small extent to which the mark has been used or by special circumstances affecting its past use which may not continue to operate to prevent confusion in the future. 25 It has been contended on behalf of the American Company that the Court of Appeal fell into error in relying on their own common sense in deciding whether the use of the Rondel Mark simpliciter would be likely to cause confusion. They ought, it is said, to have limited their consideration to the evidence, which consisted in the main of the public opinion survey, and to have given no weight to their own subjective 30 impressions as to whether they themselves would have been likely to be confused. My Lords, where goods are of a kind which are not normally sold to the general public for consumption or domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential. A judge, 35 though he must use his common sense in assessing the credibility and probative value of that evidence is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether or not he himself would be likely to be deceived or confused. In the instant case this would apply to the large industrial electrical machinery sold under the Rondel Mark. But where goods are sold 40 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". By that I mean: that if the issue had now, as formerly, to be tried by a jury, who as members of the general public would themselves be potential buyers of the goods, they would be required not only to consider any evidence of other 45 members of the public which had been adduced but also to use their own common sense and to consider whether they would themselves be likely to be deceived or confused. The question does not cease to be a "jury question" when the issue is tried by a judge alone or on appeal by a plurality of judges. The judge's approach to the Lord Diplock GE Trade Mark question should be the same as that of a jury. He, too, would be a potential buyer of the goods. He should, of course, be alert to the danger of allowing his own idiosyn­ cratic knowledge or temperament to influence his decision, but the whole of his training in the practice of the law should have accustomed him to this, and this should provide the safety which in the case of a jury is provided by their number. That in 5 issues of this kind judges are entitled to give effect to their own opinions as to the likelihood of deception or confusion and, in doing so, are not confined to the evidence of witnesses called at the trial is well established by decisions of this House itself. It was also submitted by the American Company that if the source of the confusion as to the origin of the goods which resulted from the use of the trade mark was due 10 to the similarity of the names of two different manufacturers either of whom might be associated with the mark in the mind of a potential buyer of the goods, this was confusion "between name and name", not confusion "between mark and mark"; and that only the latter was relevant "confusion" within the meaning of that ex­ pression in section 11 of the Act. I am unable to accept this argument. The essence 15 of a trade mark is the association that it bears in the mind of a potential buyer of the goods to which it is applied. I can see no reason for differentiating between cases where the confusion arises because the trade mark is associated with the name of a manufacturer to which some other manufacturer's name is similar, and causes the association with a design or with descriptive words and the confusion arises because 20 some other manufacturer uses a similar design or similar descriptive words to indicate the origin of his goods. In my view, section 11 is wide enough to embrace "confusion" resulting from any of these kinds of association. In the instant case all three members of the Court of Appeal were alert to the danger of relying upon their own idiosyncratic knowledge and temperaments. All 25 gave due weight to the evidence adduced upon the issue at the hearing and to the criticisms of it by the trial Judge. All were of opinion that they themselves would have been likely to be confused by the use of the Rondel Mark simpliciter upon electrical consumer goods if, as had been the fact before the hearing of the appeal, they had known of the English Company but had not known of the American Company. 30 My Lords, I myself, as a member of the public in the United Kingdom, am idiosyn­ cratic in that I have for many years known of both companies. I should not have been likely to be confused by the use of the Rondel Mark simpliciter upon electrical consumer goods. Nevertheless, my commonsense convinces me that there would be a likelihood of confusion among a substantial number of members of the public who 35 did not share my idiosyncratic knowledge. Upon this issue I think the Court of Appeal was right. The Questions of Construction Accordingly, I now turn to consider whether, upon the facts summarised under (1) to (8) above, the entry of the Rondel Mark was "an entry wrongly remaining on 40 the register" on 20th July 1967, within the meaning of section 32(1) of the Act of 1938 That section is as follows: "32.-(1) Any person aggrieved by the non-insertion in or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any 45 entry in the register, may apply in the prescribed manner to the court or, at the option of the applicant and subject to the provisions of section 54 of this Act, to the Registrar, and the tribunal may make such order for making, expunging or varying the entry as the tribunal may think fit." [No. 11] House of Lords Lord: Diplock It is clear that the subsection contemplates that an entry which was lawful at the time it was originally made may, as a result of subsequent events, become one which "wrongly remains" on the register. As a matter of legislative history the words "or by any entry wrongly remaining on the register" first appeared in section 35 of the Trade 5 Marks Act, 1905. In section 90 of the Patents, Designs and Trade Marks Act, 1883, the power to expunge was confined to "any entry made without sufficient cause". But this had been construed by the Court of Appeal in J. Batt and Co.'s Mark (1898) 15 R.P.C. 534 as empowering the court to expunge the entry of a mark which was lawful at the time it was originally made but had become unlawful as a result of subse10 quent events. The alteration in wording in the Act of 1905· thus did no more than to spell out in express words, and so place beyond doubt, a power which the Court of Appeal had held as a matter of construction was conferred by the words already present in the corresponding section of the Act of 1883. For reasons which I shall develop later I reject the extreme submission of the 15 American Company that section 32 is a mere procedural section prescribing the steps to be taken to give effectto an express power of removal conferred by other sections of the Act, such as sections 15(3), 26(1), 27(4), 28(8) and (10), and 29(4), and does not in itself confer any power to expunge otherwise than pursuant to those sections. I reject also the extreme submission of the English Company that the words "wrongly 20 remaining on the register" give to the court a discretion to remove from the register any entry the continued use of which the court considers would be contrary to the policy of the Act notwithstanding that it does not offend against any specific prohibi­ tion, express or implied, contained in the Act. In my opinion, an entry which was lawful at the time it was originally made can only be expunged under section 35(1) if, 25 at the time of the application, its continued presence on the register is prohibited by virtue of some other provision of the Act. Such prohibitory provisions are not limited to those which also themselves confer an express power of removal. They include all provisions which, upon their true construction, make unlawful the continued presence of the entry on the register. The Court of Appeal, having held, as I think rightly, that the use of the Rondel Mark simpliciter as a trade mark on the 20th July 1967, would have been likely to cause confusion, were of opinion that its continued presence as an entry on the register was prohibited by section 11 of the Act of 1938 which is as follows:"11. It shall not be lawful to register as a trade mark or part of a trade mark any matter the use of which would, by reason of its being likely to deceive or cause confusion or otherwise, be disentitled to protection in a court of justice, or would be contrary to law or morality, or any scandalous design." They were also of opinion that its continued presence as an entry on the register was not excluded from that prohibition by section 13 of the Act of 1938, which is as 40 follows:30 35 45 "13. (1) In all legal proceedings relating to a trade mark registered in Part A of the register (including applications under section 32 of this Act) the original registration in Part A of the register of the trade mark shall, after the expiration of seven years from the date of that registration, be taken to be valid in all respects, unless-(a) that registration was obtained by fraud,or (b) the trade mark offends against the provisions of section eleven of this Act." They held that it fell within exception (b). Lord Diplock GE Trade Mark The ratio decidendi of the Court of Appeal involves two questions as to the true construction of section 11. The first is as to the time to which the prohibition expressed in the words "It shall not be lawful to register" relates. The second is as to whether a limitation upon the prohibition of the registration of a potentially deceptive or con­ fusing trade mark is imposed by the requirement that its use "would ... be disentitled 5 to protection in a court of justice". The words in which the proviso to section 13 is expressed are of assistance in answering the first question as to the. construction of section 11, but throw no light upon the answer to the second question. Neither of these questions can be answered by linguistic analysis alone. The first depends upon whether, in the context of section 11, the verb "to register" 10 refers only to the act of making an entry on the register or whether it refers also to the retention of an entry on the register after it has been made. As a matter of ordinary useage of the English language either is a permissible meaning. With regard to the second question, as a matter of syntax the dominant phrase in the relevant description of the disqualified matter is:-matter "the use of which would 15 be disentitled to protection in a court of justice". The words "by reason of its being likely to deceive or cause confusion or otherwise" constitute a subordinate clause of which the syntactic function is to restrict the amplitude of the disqualified matter This it does by reference to the reasons for the disqualified matter's being disentitled to protection in a court of justice. But the inclusion in the subordinate clause of the 20 words "or otherwise", if they are to be given a literal interpretation, has the conse­ quence that the clause is wide enough to embrace any reason for the matter being disentitled to protection in a court of justice, and the clause thus becomes devoid of any restrictive effect and therefore performs no function at all. Furthermore, the use of the subjunctive mood in the dominant phrase gives rise to ambiguity as to the time to 25 which the test of disentitlement to protect relates. Is the critical time at which the use of the mark would be disentitled to protection before it is entered on the register or after it has been entered on the register? Finally, whichever is the time to which the test relates, what meaning is to be ascribed to the words "disentitled to protection in a court of justice" ? 30 My Lords, the meaning of particular sections in the Act of 1938 can, in my view, only be ascertained by applying a purposive construction to the Act as a whole, and construing the actual words used in particular sections (unless it is linguistically impossible), so as to achieve and not so as to thwart the underlying policy to which the Act was intended to give effect. 35 The Legislative History The Act of 1938 does not purport to be a self-contained code of the whole of the law relating to trade marks. As its long title discloses, it was an Act to consolidate three previous Acts of Parliament: the Trade Marks Act, 1905, the Trade Marks Act, 1919, and the Trade Marks (Amendment) Act, 1937. Recourse must therefore be had to 40 these Acts to ascertain the underlying policy to which it was intended to give effect. The Act of 1905, however, was itself an Act to consolidate and amend the law relating to Trade Marks. Sections 11 and 41 of that Act are re-enacted in sections 11 and 13 of the Act of 1938, the former verbatim and the latter with a minor amendment restricting its operations to marks in Part A of the register but with no other change of language. 45 Section 11 of the Act of 1905 was, however, itself a re-enactment of section 73 of the Patents, Designs and Trademarks Act, 1883, with minor amendments, but without any alteration of any of the words or phrases which fall to be construed in the instant [No. 11] House of Lords appeal. Section 41 of the Act of 1905 replaced part of section 76 of the Act of 1883, but with substantial amendments. Similarly, to ascertain the purpose of section 13 of the Act of 1938 which reproduces the language of section 41 of the Act of 1905 which itself amended the law as it stood 10 before that date by replacing part of section 76 of the Act of 1883, one must look to see what that pre-existing law was, in order to identify the defect in it which the amendment was intended to rectify. This, too, leads one back to the Act of 1883 and since section 76 re-enacted verbatim section 6 of the act of 1875, final recourse must again be had to the Act of 1875. 15 The right of property in a trade mark was recognised at common law before it was the subject of any enactment. The Act of 1875 did not itself create any right of property in trade marks. As its title itself indicates and its provisions confirm, it simply provided for the registration of trade marks and spelled out the consequences of registration and non-registration upon the proprietary rights of the owner of the trade mark and the 20 remedies available to him for the protection of those proprietary rights. The Act of 1875 must, therefore, be construed in the light of the common law relating to trade marks in 1875. I use the expression "common law" to include the doctrines of equity applied in what at that time was the separate court of chancery. My Lords, it may well be a legitimate criticism of our methods of drafting legislation 25 that in order to ascertain the meaning of an Act of Parliament passed in 1938, it should be necessary not only to consider its legislative history over the previous sixty-three years but also to engage in what in other systems of law might be regarded as antiquarian research, namely the state of the common law as it existed before the first Act to alter it was passed nearly one hundred years ago. But, in my view, the Act 30 of 1938 which purports to consolidate our existing law becomes intelligible only when this course, which is a well recognised aid to statutory construction, is adopted. The Common Law of Trade Marks before 1875 The use by manufacturers of distinctive marks upon goods which they had made is of very ancient origin, but legal recognition of trade marks as a species of incorporeal 35 property was first accorded by the Court of Chancery in the first half of the nineteenth century. It may be said to have been established by Lord Cottenham in Millington v. Fox (1838) 3 My. & Cr. 338. He decided that it was not necessary to establish any intention to deceive on the part of an infringer against whom an injunction to restrain his use of a trade mark was sought. 40 The right of property in a trade mark had special characteristics. One, which it shared with patents and with copyright, was that it was a monopoly, that is to say, it was a right to restrain other persons from using the mark. But it was an adjunct of the goodwill of a business and incapable of separate existence dissociated from that goodwill. To be capable of being the subject-matter of property a trade mark had to be 45 distinctive, that is to say, it had to be recognisable by a purchaser of goods to which it was affixed as indicating that they were of the same origin as other goods which bore the same mark and whose quality had engendered goodwill. Property in a trade mark Lord Diplock GE Trade Mark could therefore only be acquired by public use of it as such by the proprietor and was lost by disuse. The property was assignable, transmissible and divisible, but only along with the goodwill of the business in which it was used. Since the only right of the proprietor of a trade mark was to prevent its use by other persons the original remedy for the protection of his right was an injunction to 5 restrain infringement. This continued to be the principal remedy, though by the middle of the nineteenth century damages for infringement were also recoverable, at any rate where the infringement was intentional and deceitful at common law. The equitable remedy by injunction was discretionary and the principles as to the way in which the discretion should be exercised had become settled by the Court of Chancery by the 10 time the Act of 1875 was passed. A right of property of this character calls for an accommodation between the conflicting interests of the owner of the monopoly, of the general public as purchasers of goods to which the trade mark is affixed, and of other traders. This accommodation had been substantially worked out by the Court of Chancery by 1875. The interest of the general public requires that they should not be deceived by the trade mark. It ought not to tell a lie about the goods. Two main kinds of deception had been the subject of consideration. These were misrepresentation (a) of the character of the goods to which the trade mark was attached, and (b) as to their origin, i.e. that they were the product of some other manufacturer. 20 But the interest of the public in not being deceived about the origin of goods had and has to be accommodated with the vested right of property of traders in trade marks which they have honestly adopted and which by public use have attracted a valuable goodwill. In the early nineteenth century trade was still largely local; marks which were identical or which closely resembled one another might have been innocently 25 adopted by traders in different localities. In these their respective products were not sold in competition with one another and accordingly no question of deception of the public could then arise. With the rapid improvement in communications, however, in the first half of the nineteenth century markets expanded; products of two traders who used similar marks upon their goods could thus come to be on sale to the same 30 potential purchasers with the consequent risk of their being misled as to the origin of the goods. Furthermore, it was accepted that as an adjunct of the goodwill of the business the right to use a trade mark might be acquired by more than one successor if the goodwill of the business were divided, as it might be, for instance, where the business had formerly been carried on in partnership or from more than one manu- 35 factory or shop. To meet this kind of situation the doctrine of honest concurrent user was evolved. Under this doctrine a trade mark remained entitled to protection in cases where the use of it had not oringially been deceptive but a risk of deception had subsequently arisen as a result of events which did not involve any dishonesty or other wrongful conduct upon the part of the proprietor of the mark. If, however, 40 his own wrongful conduct had played a part in making the use of the mark deceptive, the Court of Chancery would not grant him an injunction against infringement. This was but a particular application of the general equitable doctrine that he who seeks equity must come with clean hands. In cases of honest concurrent user, neither of the owners of the mark could restrict 45 the other from using it, but as against a usurper who infringed it either owner of the mark could obtain an injunction. (Dent v. Turpin (1861) 2J & H 139; Southorn v. Reynolds (1865) 12LT75). [No. 11] House of Lords The requirement that a mark must be distinctive in order to qualify as the subject­ matter of proprietary rights is another instance of the accommodation between the conflicting rights of traders. One trader could not pre-empt the use of ordinary words which were descriptive of his product so as to prevent their use by other traders as an 5 honest description of their own similar products. This doctrine had not, however, been fully developed by the date of the passing of the Act of 1875. The principal defects in the law of trade marks as it had developed by 1875 were: first, that in any action which he brought for infringement of his trade mark the proprietor had to prove his title to the mark afresh by aducing evidence of his public 10 use of it; and, secondly, that there was no easy way in which a trader who wished to adopt a particular mark to distinguish his own products could find out whether its use would infringe proprietary rights in that mark already vested in some other trader by virtue of his public use of it. The evident purpose of the Act of 1875 was to provide a practical remedy for these defects without changing the main characteristics of trade 15 marks at common law. The Registration of Trade Marks Act 1875 The Act of 1875 by section 10 prescribed what a trade mark must consist of in order to qualify for registration. It was in the following terms: 25 "For the purposes of this Act: A trade mark consists of one or more of the following essential particulars; that is to say; a name of an individual or firm printed, impressed, or woven in some particular or distinctive manner; or a written signature or copy of a written signature of an individual or firm; or a distinctive device, mark, heading, label or ticket; and there may be added to any one or more of the said particulars any letters, words or figures, or combination of letters, words or figures; also any special and distinctive word or words or combination of figures or letters used as a trade mark before the passing of this Act may be registered as such under this Act." This distinguishes between the essential particulars and permissible additional matter. These requirements were extended and elaborated in subsequent Acts though 30 the dichotomy between essential and permissible matter was abandoned in the Act of 1905; but even in 1875 the essential characteristics of a registrable mark was that it should be distinctive. The Act of 1875, however, did not alter the common law rules that a mark did not become a "trade mark" until it had been publicly used as such by its proprietor and 35 that such public use was the only means by which title to a trade mark could be acquired by the first proprietor of it. It did not authorise the registration of a prospec­ tive trade mark before it had been actually used as such or after it had ceased to be used. The Act provided for the establishment of a register of trade marks and of the 40 names of their proprietors. In order to persuade proprietors of trade marks to enter them upon the register, the Act supplied both negative and positive inducements. The negative inducement was contained in the latter part of section 1 itself which provided that: 45 "from and after the 1st July, 1876, a person shall not be entitled to institute any proceedings to prevent the infringement of any trade mark as defined by this Act until and unless such trade mark is registered in pursuance of this Act" . Lord Diplock GE Trade Mark The words I have italicised make it clear that the verb "to register", which is used here in the passive voice, does not refer only to the act of making an entry in the register but includes the continuance of the mark upon the register after the original entry has been made, and contemplates that a trade mark may be removed from the register. Express power to make rules as to the removal of marks from the register is 5 conferred by section 7. The positive inducements were contained in sections 2 to 4 of the Act. Section 2 provided for the legal consequences of registration of the mark itself as distinct from the registration of a person as proprietor of the mark. It read as follows:"2. A trade mark must be registered as belonging to particular goods, or 10 classes of goods; and when registered shall be assigned and transmitted only in connection with the goodwill of the business concerned in such particular goods or classes of goods, and shall be determinable with such goodwill, but subject as aforesaid registration of a trade mark shall be deemed to be equivalent to public use of such mark." 15 The first part of this section makes applicable to registered trade marks the common law rules by which a trade mark could only exist as an adjunct of the goodwill of the business in which it was used. The second part remedies one of the principal defects in the existing law by making registration equivalent to public use and thus obviating the necessity for proving actual public use afresh in every action for infringement. 20 Section 6 imposed prohibitions upon the registration of certain kinds of marks. These prohibitions are additional to the requirement that a trade mark should consist of distinctive matter as prescribed in section 10. The section read as follows:"6. The registrar shall not, without the special leave of the court, to be given in the prescribed manner, register in respect of the same goods or classes of goods a 25 trade mark identical with one which is already registered with respect to such goods or classes of goods, and the registrar shall not register with respect to the same goods or classes of goods a trade mark so nearly resembling a trade mark already on the register with respect to such goods or classes of goods as to be calculated to deceive. It shall not be lawful to register as part of or in combination 30 with a trade mark any words the exclusive use of which would not, by reason of their being calculated to deceive or otherwise, be deemed entitled to protection in a court of equity; or any scandalous designs." The first part of the section deals with the act of making the original entry of a trade mark on the register. It imposes a prohibition upon the Registrar's acting upon his 35 own initiative but leaves it open to the court to permit the registration of identical marks notwithstanding the inherent risk of the public's being thereby deceived as to the origin of the goods. As a matter of judicial policy the court exercised this power under the Act so as to preserve the doctrine of honest concurrent user. Where honest concurrent user was established beyond what could be ignored under the de minimis 40 rule (cf. Re Hodson (1881) 26 So. J. 43) the practice was to permit registration of identical or similar trade marks in respect of the same classes of goods up to the number of three but to refuse leave to register more than three upon the ground that the mark would thereby cease to be distinctive. (Re Jelley Son & Jones' Application (1882) 46 L.T. 381.) 45 The second part of the section introduced by the words: "It shall not be lawful to Lord Diplock register", imposes an absolute prohibition upon the registration of particular matter otherwise falling within the definition contained in section 10. It is clearly designed to prevent the proprietor obtaining by registration protection for a mark of such a character that a court of equity would have exercised its discretion to refuse to grant to its proprietor 5 an injunction to restrain its being infringed by a usurper. Since the mere fact that the use of a mark involved a risk of deceiving the public was not enough to disentitle it to protection against infringement by a usurper provided that the risk of deception was due to honest concurrent user, there was no conflict between the first and the second parts of the section. The reference to the cause of disentitlement to protection, viz. 10 "by reason of their being calculated to deceive or otherwise", does not restrict the ambit of the prohibition. The specific reference to deception is probably accounted for by the fact that up to 1875, misrepresentations as to the character of the goods, as in Pidding v. How (1837) 8 Sim. 447, or as to their origin, as in Perry v. Truefitt (1842) 6 Beav. 66 were the commonest reasons for the refusal of the Court of Chancery to 15 grant injunctions. The addition of the words "or otherwise" may have been added per majorem cautelam or possibly to cover the cases of marks to which no title had been acquired by use or to which title had been lost by disuse as a trade mark. In the context of section 6, as in the context of section 1, "to register" must, in my view, refer not only to the act of making an entry on the register but also to permitting 20 the continuance of the entry of a trade mark on the register. It would not be reasonable to impute to Parliament in 1875 an intention that a mark, which truthfully described the character of the goods in respect of which it was registered at the time of its first being entered on the register, should continue to enjoy the protection accorded to registered trade marks even though the proprietor subsequently deliberately altered 25 the character of the goods so that the registered mark told a lie about them. It is difficult to conceive of a case where a mark which was not deceptive as to the character of goods at the time of original registration could become so subsequently except by some dishonest conduct of the proprietor himself. But deception as to the origin of the goods, in cases of honest concurrent user of identical or similar marks, 30 could arise at any time during the period of concurrent use without any blameworthy conduct by any proprietor of the mark. In such cases, each of the proprietors remained entitled to protection of his mark against infringement by a usurper, though not against infringement by another bona fide proprietor of an identical or similar mark. Section 6 did not make the entry or continuance of such a mark upon the register 35 unlawful. Sections 3 and 4 of the Act of 1875 provided for the legal consequences of the registration of a person as proprietor of a trade mark registered under the Act. They read as follows: 40 45 "3. The registration of a person as first proprietor of a trade mark shall be prima facie evidence of his right to the exclusive use of such trade mark, and shall, after the expiration of five years from the date of such registration, be conclusive evidence of his right to the exclusive use of such trade mark, subject to the provisions of this Act as to its connection with the goodwill of a business." "4. Every proprietor registered in respect to a trade mark subsequently to the first registered proprietor shall, as respects his title to that trade mark, stand in the same position as if his title were a continuation of the title of the first registered proprietor." Lord Diplock GE Trade Mark The references in section 3 to "the exclusive use" have to be read as subject to the rights of other persons to honest concurrent user of the mark with are preserved by section 6. In contrast with sections 2 and 6, sections 3 and 4 deal not with the registration of the mark itself but with the registration of the name of a person as proprietor of a 5 registered mark and the evidential effect of such registration upon his common law right to use the mark. It is to be observed that the right to the exclusive use of the mark was not in this Act treated as a statutory right created by registration of the mark but as a common law right vested in the proprietor of which his registration as proprietor was evidence. 10 The distinction between the registration of the mark itself and the registration of a person as proprietor of a registered mark is reflected in the provisions for rectification of the register. These were contained in section 5 of the Act of 1875 which read as follows: "5. If the name of any person who is not for the time being entitled to the 15 exclusive use of a trade mark in accordance with this Act, or otherwise in accordance with law, is entered on the register of trade marks as a proprietor of such trade mark, or if the registrar refuses to enter on the register as proprietor of a trade mark the name of any person who is for the time being entitled to the exclusive use of such trade mark in accordance with this Act, or otherwise in 20 accordance with law, or if any mark is registered as a trade mark which is not authorised to be so registered under this Act, any person aggrieved may apply in the prescribed manner for an order of the court that the register may be rectified; and the court may either refuse such application, or it may, if satisfied of the justice of the case, make an order for the rectification of the register, and may 25 award damages to the party aggrieved.... The court may, in any proceeding under this section, decide any question as to whether a mark is or is not such a trade mark as is authorised to be registered under this Act, also any question relating to the right of any person who is party to such proceeding to have his name entered on the register of trade marks, or to have the name of some other person 30 removed from such register, also any other question that it may be necessary or expedient to decide for the rectification of the register. The court may direct an issue to be tried for the decision of any question of fact which may require to be decided for the purposes of this section." The words I have italicised suggest that the conclusiveness which section 3 ascribed 35 to registration after 5 years applied only to applications for removal of a person's name as proprietor dealt with in the opening words of section 5, and did not prevent the removal of the mark itself from the register if it had become deceptive as a result of the blameworthy conduct of its proprietor, so as to come within the prohibition contained in section 6. 40 The extent of the conclusiveness of registration after five years conferred by section 3 did not, however, fall for consideration by the court in any case decided under the Act of 1875 or the Act of 1883 which reproduced section 3 verbatim as section 76, with the sole omission of the word "first" before "proprietor"; and both section 3 and section 5 were replaced by different provisions in the Act of 1905 which must now 45 be considered. [No. 11] House of Lords The Trade Marks Act 1905 With the passing of the Act of 1905 the law of trade marks assumed what is sub­ stantially its modern form. The basic change effected by the Act was that registration of a person as proprietor of a mark became the source of his title to the exclusive right 5 to the use of the mark and not mere evidence of a title acquired at common law by actual public use of the mark; but this exclusive right was expressly made subject to the concurrent rights of other registered owners of the same or substantially the same trade mark. The Act also authorised the registration of marks prior to their actual use, by introducing a statutory definition of a trade mark as meaning 10 "a mark used or proposed to be used upon or in connexion with goods for the purpose of indicating that they are the goods of the proprietor of such trade mark by virtue of manufacture, selection, certification, dealing with, or offering for sale" . But it contained provision for removal of a mark from the register for non-user-a power which under the Act of 1875 had been implicit in the common law meaning of 15 trade mark which involved a requirement that it should be in actual use as such. The Act also deprived the owner of an unregistered mark not in use before the Act of 1875 of any right to recover damages for its infringement as well as of his right to an injunction to prevent infringement; but preserved in respect of such a mark any rights of action at common law for passing-off goods in contradistinction to infringement of 20 a trade mark. The provisions as to the registration of identical marks and marks so nearly resem­ bling one another as to be calculated to deceive, which appeared in the first part of section 6 of the Act of 1875, were re-enacted in expanded forms in sections 19 to 21 of the Act of 1905, which gave express statutory recognition to the power of the court to 25 register such marks "in case of honest concurrent user"-a power which the court had previously exercised by giving effect to the common law doctrine of honest concurrent user in the exercise of the general discretion conferred upon the court in the first part of section 6 of the Act of 1875. The second part of section 6 of the Act of 1875 was re-enacted with immaterial 30 alterations and additions by section 11 of the Act of 1905 which read as follows:"11. It shall not be lawful to register as a trade mark or part of a trade mark any matter, the use of which would by reason of its being calculated to deceive or otherwise be disentitled to protection in a court of justice, or would be contrary to law or morality, or any scandalous design." 35 40 45 The crucial words: "It shall not be lawful to register" and "the use of which would by reason of its being calculated to deceive or otherwise be disentitled to protection in a court of justice" must, in my view, bear the same meaning as the corresponding words in the Act of 1875. The change of nomenclature from "court of equity" to "court of justice" was due to the passing of the Judicature Act, 1875. The basic change effected by the Act of 1905 as to the source of title to a registered trade mark, however, necessitated changes of substance to section 3 of the Act of 1875. It was replaced by sections 40 and 41, which, so far as is relevant for present purposes, read as follows: "40. In all legal proceedings relating to a registered trade mark (including applications under section 35 of this Act) the fact that a person is registered as Lord Diplock GE Trade Mark proprietor of such trade mark shall be prima facie evidence of the validity of the original registration of such trade mark and of all subsequent assignments and transmissions of the same." "41. In all legal proceedings relating to a registered trade mark (including applications under section thirty-five of this Act) the original registration of such 5 trade mark shall after the expiration of seven years from the date of such original registration (or seven years from the passing of this Act, whichever shall last happen) be taken to be valid in all respects unless such original registration was obtained by fraud, or unless the trade mark offends against the provisions of section 11 of this Act." 10 Section 35, which is referred to in section 41, replaced section 5 of the Act of 1875. It reads as follows:"35. Subject to the provisions of this Act: (1) The court may, on the application in the prescribed manner of any person aggrieved by the non-insertion in or omission from the register of any entry, or by any entry made in the register 15 without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, make such order for making, expunging or varying such entry, as it may think fit: (2) The court may in any proceeding under this section decide any question that it may be necessary or expedient to decide in connection with the rectification 20 of the register: (3) In the case of fraud in the registration or transmission of a registered trade mark, the Registrar may himself apply to the court under the provisions of this section: (4) Any order of the court rectifying the register shall direct that notice of the 25 rectification shall be served upon the Registrar in the presecribed manner who shall upon receipt of such notice rectify the register accordingly." Section 40, like sections 3 and 4 of the Act of 1875, deals only with the evidential effect of registration of the mark itself and of a person as proprietor of the mark. Section 41, on the other hand, reflects the basic change made by the Act of 1905 in 30 making registration the only way whereby a trade mark could become the subject­ matter of proprietary rights. After a mark had remained upon the register for seven years it was no longer open to any court to hold that at the time when it was registered it was not of such a character as to be a proper subject-matter of proprietary rights, unless its registration had been obtained by fraud. Section 41 was thus a provision 35 which vested substantive rights in whoever was for the time being validly registered as proprietor of the mark. The substantive rights conferred by section 41 are, however, limited to those which are the consequence of an "original registration" being valid. The insertion of the adjective "original" before "registration" in the description of what "shall ... be 40 taken to be valid in all respects" affords confirmation that the draftsman of the Act used the noun "registration" simpliciter and the corresponding verb "to register" as referring not only to the initial act of making an entry in the register but also to the continuance of it as an entry in the register. Thus, section 41 did not preclude removal of a trade mark from the register under any of the express powers of removal con- 45 [No. 11] House of Lords tained in other sections of the Act, nor did it preclude removal if the trade mark fell within the second exception laid down in section 41 itself in the words "unless the trade mark offends against the provisions of section "11 of this Act". The contrast between this language and the corresponding language of the first exception "unless such 5 original registration was obtained by fraud", and in particular the change of noun from "original registration" to "trade mark" and the change of tense of the verb from past to present, is a clear indication that the draftsman assumed that the words in section 11 "It shall not be lawful to register" imposed a prohibition upon a trade mark's remaining on the register as well as upon its original entry in the register. 10 What section 41 did was to preclude removal of a trade mark from the register after seven years upon any ground of invalidity, such as lack of distinctiveness, which would have applied to the original registration. What it did not do, was to preclude removal of a mark from the register if it had become likely to deceive as a result of blameworthy conduct by its proprietor since the date of its original registration. A bona fide 15 proprietor whose trade mark had become likely to deceive through no fault of his own did not need to look to section 41 for his protection. Section 11 itself was sufficient protection to him whether or not seven years had elasped since the original registration of the mark. In Thorne & Sons Ltd. v. Pimms Ltd. (1909) 26 R.P.C. 221, Neville J. construed 20 section 11 as authorising the removal from the register of a mark which had become deceptive since the date of original registration as a result of the wrongful conduct of the proprietor. Graham J. is in error in supposing that the mark in question was not governed by section 41 because it had been registered before the passing of the Act of 1905. Section 41 was made expressly applicable to such marks by section 6 of the Act 25 of 1905. In Woodward Ltd. v. Boulton Macro Ltd. (1915) 32 R.P.C. 173, Eve J. held that a mark "Gripe-Water", which had become non-distinctive since its original registration because through no fault of its proprietor those words had come to be generally used as descriptive of any remedy for gripes, could not be removed from the register, Even 30 assuming, as I think wrongly, that this non-distinctiveness also resulted in the mark having become "calculated to deceive" within the meaning of section 11, the actual decision was justified upon the ground that it was excluded from the operation of section 11 because the deceptiveness resulted from circumstances over which the owner of the mark had no control and so was not disentitled to protection in a court of 35 justice. Eve J.s judgment was treated by Wynn-Parry J. in Pan Press Publications Ltd.'s Applications (1948) 65 R.P.C. 193, as being confined to cases where the subsequent deceptiveness of a mark resulted from events over which the proprietor of the mark had no control. Analysis of Eve J.s reasoning, however, shows that his decision was based upon the more general ground that, irrespective of the cause of any subsequent 40 deceptiveness of a mark, it could not be removed as offending against section 11 because that section only applied to the moment of original registration of the mark. In this I think that he was wrong. The particular mischief of allowing a mark to remain upon the register after it has come into general public use as descriptive of the class of goods in respect of which it 45 was originally registered has since been dealt with by successive amendments first introduced in section 6 of the Act of 1919 and replaced and added to by Section 15 of the Act of 1938. The right of such marks to remain upon the register is no longer governed by section 11 of the Act of 1938 (which corresponds to section 11 of the Act of 1905) . Lord Diplock GE TradeMark The Trade Marks Act, 1938. Sections 11, 35, 40 and 41 of the Act of 1905 were re-enacted in the Act of 1938 where they became sections 11, 32, 46 and 13 respectively. The minor differences in wording do not,in my view, affect their meaning. In section 11, "calculated to deceive" became "likely to deceive or cause confusion". In saying, in my judgment in 5 the BALI Trade Mark case [1968 ] R.P.C. 426 in the Court of Appeal, that this involved a change in the meaning of the section, I was mistaken. I had overlooked the con­ struction placed upon the word "calculated" by this House in McDowell's Application (1927 ) 44 R.P.C. 335 at 341. But this can have no effect upon the reasons based upon the language of section 13 which I then advanced in support of that view that section 10 11 bears the meaning that I have ascribed to it. They were the same as those I have again advanced when dealing with the corresponding section 41 of the Act of 1905. They gain support from the previous legislative history of section 11 itself; and I adhere to them. The only substantive alteration in the law effected by the Act of 1938, which is 15 germane to the instant appeal, is the provision in section 22: "22.-(1) Notwithstanding any rule of law or equity to the contrary, a regis­ tered trade mark shall be, and shall be deemed always to have been, assignable and transmissible either in connection with the goodwill of a business or not. (2) A registered trade mark shall be, and shall be deemed always to have been 20 assignable and transmissible in respect either of all the goods in respect of which it is registered, or was registered, as the case may be, or of some (but not all) of those goods." This, however, is relevant to the licensing objections only. It does not affect the main ground of appeal. The Present Law on the Main Ground of Appeal As respects the main ground of appeal, the legal status under the Act of 1938 of a registered trade mark the use of which is likely to cause confusion can be summarised as follows:(1) The fact that the mark is entered upon the register is prima facie evidence of the 30 validity of the original registration and of the right of the registered proprietor to the exclusive use of the mark, subject however to the rights of concurrent user by any registered proprietor of an identical mark or one nearly resembling it. (2) If the mark was likely to cause confusion at the time when it was first registered it may be expunged from the register as "entry made in the register without 35 sufficient cause" unless the proprietor of the mark at that time would have been entitled to have it entered on the register by reason of his honest concurrent use of the mark as a trade mark before the original registration of the mark. (3) If the likelihood of causing confusion did not exist at the time when the mark was first registered, but was the result of events occurring between that date and 40 the date of application to expunge it, the mark may not be expunged from the register as an entry wrongly remaining on the register, unless the likelihood of causing deception resulted from some blameworthy act of the registered proprietor of the mark or of a predecessor in title of his as registered proprietor. [No. 11] House of Lords (4) Where a mark is liable to be expunged under (2) or (3) the Court has a discretion whether or not to expunge it and as to any conditions or limitations to be imposed in the event of its being permitted to remain on the register. The question whether the American Company is entitled to succeed on the main 5 ground of appeal thus depends upon whether the likelihood that the use of the Rondel mark simpliciter upon electrical goods would cause confusion on 20th July 1967, the date of the application to expunge, resulted from some blameworthy act of the American Company. Upon the facts, it is only those which I have summarised earlier under Head (7) which could be suggested as constituting blameworthy conduct on the 10 part of the American Company. On the findings of Graham J., which in my opinion are amply justified, as to the nature of the understanding between the two companies such as it was, it seems to me to be impossible to hold there was any such blameworthy conduct by the American Company as would amount to an equitable ground for disentitling them to protection for the use of the mark. There is therefore no ground 15 in law for expunging the mark and no question of the exercise of the discretion of the Court can arise. On this part of the case it only remains to consider whether the decision of this House in BALI Trade Marks case [1969] R.P.C. 472 conflicts with the above statement as to the effect of the relevant sections of the Act of 1938 .When the BALI Trade Marks 20 case reached this House, the argument, by the common consent of the parties, was confined to the question whether its use had been likely to cause confusion at the time it was first registered. At that time, the previous actual use of the mark by the Bali Company had been negligible and it was not suggested that at the date of the original registration the Bali Company were entitled to registration of the mark because of 25 their previous honest concurrent use of it. It was thus sufficient for the determination of the appeal in this House that the prohibition in section 11 related to the original registration of the BALI mark. The question whether it would have applied to the continuance of the mark upon the register notwithstanding that the original registra­ tion had been valid never arose. 30 The argument as to the meaning of the words "disentitled to protection in a Court of Justice" which has been advanced in the instant appeal was not presented to this House in the BALI case. What was argued was that the phrase "disentitled to pro­ tection in a Court of Justice" imported the requirement that the applicant for ex­ punction of the mark in addition to showing that the use of the mark would have been 35 likely to deceive or cause confusion must also show that he would have been entitled to succeed in a passing-off action brought against the registered proprietor of the mark sought to be expunged at the date of the original registration. This obviously untenable argument was unanimously rejected by this House. But the four speeches that were delivered do not disclose a majority opinion in favour of any alternative meaning of 40 the phrase. In my view, there is nothing in the decision itself or in the speeches which would require this House to hold that the law is not as I have stated above. There is a dictum of Lord Wilberforce (at page 501) to the effect that section 11 of the Act of 1938 treats likelihood of confusion as ipso facto disentitling a trade mark to protection. His reasoning is, however, based entirely on the wording of the section. It did not 45 command the acceptance of the other members of this House; and, with great respect I think that it was wrong linguistically even if legislative history be left out of account. So far as it concerns the ground upon which the Court of Appeal ordered the Rondel mark to be expunged from the register, I would therefore allow this appeal. The Licensing Objections It remains to deal with the alternative licensing objections which were rejected both by Graham J. and by the Court of Appeal, As I understood them, they are based upon thefacts summarised under Head 6 and may be stated briefly as follows:(a) The American Company licensed the use by Simplex of the Rondel mark as an 5 unregistered trade mark in respect of electrical goods which fell outside the class of goods for which it was registered. Since section 22 of the Act of 1938 applies only to registered marks the right to use an unregistered trade mark remains subject to the common law rule that it is assignable only with the goodwill of the business in which it is used. The American Company did not 10 assign to Simplex the goodwill of that business, so that the licence to Simplex to use the trade mark was invalid at common law. (b) The unregistered trade mark having thereby ceased to be an adjunct of the goodwill of the business in which it had been used, became incapable of being the subject of proprietary rights by the American Company and accordingly 15 ceased to exist as a trade mark at common law. It is not necessary to consider whether or not the proposition contained in (b) is well 20 founded; because I can see no justification for the proposition in (c). There is, in my view, no logical ground for holding that the right of a proprietor to use a registered mark in respect of goods for which it is registered can be affected by his losing the right to use the same mark as an unregistered mark in respect of other goods. Since he would lose it in any event at common law by disuse, it would follow from this 25 proposition that the owner of a mark registered in respect of a particular class of goods would lose his right as the proprietor of such mark if he failed to continue to use the mark as an unregistered mark in respect of any other class of goods for which he was using it at the time of first registration. This has only to be stated to be rejected. I would allow the appeal. 30 Lord Kilbrandon. I have had the advantage of reading the speech prepared by my noble and learned friend, Lord Diplock. I agree with it; and for the reasons which he 35 gives I would allow the appeal. McDowell's Application ( 1927 ) 44 R.P.C. 335 , affirming ( 1926 ) 43 R.P.C. 313 . Pan Press Publications Ltd.'s Applications ( 1948 ) 65 R.P.C. 193 . BALI Trade Mark [1968] R.P.C. 426 , 472 . Additional cases referred to in argument: 5 Hine v . Lart ( 1846 ) 7 L.T. 41 . Banks v . Gibson ( 1865 ) 34 Beav. 566 . Leather Cloth Co . v. American Leather Cloth Co. ( 1865 ) 11 H.L. Cas. 523 . Ainsworth v . Walmsley ( 1866 ) L.R. 1 Eq . 518. Ford v . Foster ( 1872 ) 7 Ch . App. 611 . 10 Benbow v. Low ( 1880 ) 44 L.T. 875 . Dunn's Trade . Mark ( 1889 ) 6 R.P.C. 148 , 379 ; ( 1890 ) 7 R.P.C. 311 . Pinto v . Badman ( 1891 ) 8 R.P.C. 181 . Rosenthal v . Rosenthal ( 1892 ) 9 R.P.C. 189 . Thorneloe v . Hill ( 1894 ) 11 R.P.C. 61 . 15 Cowley ( Earl) v . Inland Revenue Commissioners [1899] A.C. 198 . Compagnie Industrielle des Petrole's Application ( 1907 ) 24 R.P.C. 585 . Bowden Wire Ltd . v. Bowden Brake Co. Ltd. (No.1) ( 1913 ) 30 R.P.C. 45 , 580 ; ( 1914 ) 31 R.P.C. 385 . Registrar of Trade Marks v . W. & G. Du Cros Ltd. ( 1913 ) 30 R.P.C. 660 . 20 Imperial Tobacco Co . Ltd.'s Trade Mark ( 1915 ) 32 R.P.C. 40 . Cording (George) Ltd .'s Application ( 1916 ) 33 R.P.C. 325 . Rodgers (Joseph) & Sons Ltd. v. W. N. Rodgers & Co. ( 1924 ) 41 R.P.C. 277 . Lacteosote Ltd . v. Alberman ( 1927 ) 44 R.P.C. 211 . Fanfold Ltd .'s Application ( 1928 ) 45 R.P.C. 325 . 25 . Bass , Ratcliff & Gretton Ltd. v. Nicholson & Son Ltd. ( 1932 ) 49 R.P.C. 88 . Pirie's Application ( 1933 ) 50 R.P.C. 147 . Barras v . Aberdeen Steam Trawling Co. [1933] A.C. 402 . Aristoc Ltd . v. Rysta Ltd. ( 1945 ) 62 R.P.C. 65 . Office Cleaning Services Ltd. v. Westminster Window & General Cleaners ( 1946 ) 30 63 R.P.C. 39 . Marengo v . Daily Sketch & Sunday Graphic Ltd . ( 1948 ) 65 R.P.C. 242 . Parker-Knoll Ltd . v. Knoll International Ltd. [1962] R.P.C. 265 . General Electric CO.'s Trade Mark [1968] F.S.R. 517 . Coca Cola Co . v. Struthers [1968] R.P.C. 231 . 35 DIEHL Trade Mark [1970] R.P.C. 435 . This was an appeal to the House of Lords from a decision of the Court of Appeal (reported at [1970] R.P.C. 339) allowing an appeal from a decision of Graham, J. (reported at [1969] R.P.C. 418) rejecting an application by the General Electric Company Limited of London for rectification of the register by the removal therefrom 40 of trade mark No. 291,287 (GE) registered by the General Electric Company of New York, United States of America. Representations of this and of other marks discussed in the case are set out in [1970] R.P.C. at page 341. John Arnold , Q.C. and Robin Jacob, instructed by Slaughter & May, appeared for the appellants (registered proprietors) . Douglas Falconer , Q.C. and John Burrell, 45 instructed by Bristows, Cooke & Carpmael, appeared for the respondents (applicants for rectification) . To ascertain the meaning of the language used in section 11 of the Act of 1938 one must go back beyond the Act of 1905 to the Act of 1883; but since the Act of 1883 was 5 itself an act to amend and consolidate the law relating to trade marks and section 73 merely reproduced verbatim the language of the second part of section 6 of the Registration of Trade Marks Act, 1875, final recourse must be had to the Act of 1875.


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GE TRADE MARK, Reports of Patent, Design and Trade Mark Cases, 1973, 297-336, DOI: 10.1093/rpc/90.11.297