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ASOS and ASSOS settle their dispute

Print publication

10/11/2016

The fashion retailer ASOS has reportedly agreed to pay £20.2 million to two European retailers, the cyclewear manufacturer ASSOS and menswear retailer Herrenhaus, to settle the high-profile trade mark dispute between the parties.

The dispute reached the Court of Appeal early last year [1], where the claimant appealed against a High Court judgment that there was no likelihood of confusion between the defendant’s ASOS mark, registered as a UK trade mark in relation to skin care products, clothing and the bringing together of those products for retail purposes, and its own word mark ASSOS, registered as an EU trade mark in relation to cycling products and clothing and casual clothing. The judge had also refused to grant a declaration of invalidity in respect of the ASOS mark, although she did agree to exclude specialist cycling-related goods and services from the registration.

Subsequently, the EU General Court upheld a Board of Appeal decision that there was a likelihood of confusion between a proposed Community trade mark for ASOS and the existing EU trade mark.

The principal issue when the case came before the Court of Appeal was the applicability of the “own name” defence provided by Article 12 of the Community Trade Mark Regulation [2]. Article 12 states that an otherwise infringing act cannot be prevented by the trade mark proprietor where the infringer is using his own name, so long as he uses it in accordance with honest practices in industrial or commercial matters.

The Court found that there was a likelihood of confusion on the part of the public, at least in respect of the sale by the defendant of casual wear and the provision of its retail services in relation to such casual wear. The Court was united in finding that the judge at first instance had erred by only considering the likelihood of confusion in relation to the actual use made by the claimant of the ASSOS mark and not also the notional and fair use of the mark in respect of all the goods falling within the scope of the specification.

ASOS argued that it could rely on Article 12 as it was using its own name (one that it had registered shortly after the claimant’s application to register the mark ASSOS). The Court of Appeal – by a majority – agreed.

The Court examined the conduct of ASOS before and after the proceedings began. The mark ASOS was clearly derived from the company’s earlier corporate name, As Seen On Screen, without knowledge of ASSOS and there was no evidence that the name ASOS had been chosen dishonestly. It appeared that ASOS had also taken steps to exclude certain goods from its website to minimise the risk of confusion with the claimant’s ASSOS goods. On the other hand, it had not taken effective steps to ensure that it was free to adopt the ASOS mark without infringing the rights of a third party. Taking this into consideration, the majority of the Court found that the own name defence was made out.

ASSOS was refused permission to appeal to the Supreme Court on the “own name” defence.

It is reported that the settlement agreement reached by the parties will entitle ASOS to sell athletic leisurewear but will be prohibited from selling cyclewear and from opening shops in Germany. Additionally, ASOS is paying £20.2 million.  Shares in ASOS, which is quoted on AIM, rose on news of the settlement.

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[1] [2015] EWCA Civ 220
[2] Regulation (EC) No 207/2009.  Article 12 was amended by Regulation 2015/2424, which came into effect on 23 March 2016. The amended Article 12 continues to stipulate that the defence only applies where the use made by the third party is “in accordance with honest practices in industrial or commercial matters”.  However, the amended Article 12 states that the defence only applies where the third party is a “natural person” – which does not include companies.

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