Thursday, 11 December 2008

Cipriani: using your own name

Hotel Cipriani SRL have, I find, been in the law reports before, in fact just last month. The day before yesterday Mr Justice Arnold gave judgment in a major trade mark infringement and passing off case involving the same company, Hotel Cipriani SRL and others v Cipriani (Grosvenor Street) Ltd and others [2008] EWHC 3032 (Ch), not yet on Bailii, although there are state aid cases and other exciting reports of Cipriani litigation). It's an old story: family sets up business, sells out to another (usually larger, multinational, corporate) party with little sense of history and none of humour, then another member of the family sets up another business (perhaps a long way away) under the family name, and gets sued by the humourless multinational.

Humour and trade mark ownership, of course, rarely go together. I often tell my audiences on training courses that trade mark owners must suspend their senses of humour: if you have a well-known trade mark (and I don't mean that in the specialised Paris Convention sense, necessarily, especially because no-one really knows what that means anyway) you have to wield a big stick at every pizza restaurant, night club, escort agency, one-man building firm or teenage computer programmer who threatens the distinguishing function or (which is sometimes different) value of your trade mark. So I am not criticising the Italian company (actually, that should be plural as there were three claimants in the action, according to the IPKat), rather the mindset that places the protection of every little bit of intellectual property above more conventional forms of competition.

Well, perhaps that isn't happening here, but it's not a case where I feel instinctively that the IP owner was in the right. Maybe that's because I was acting a couple of years ago in a similar dispute - also in the hospitality industry, as we should now call it - and my client was on the receiving end. There, the nasty corporate had a Community trade mark but no discernible intention of trading in the Community. They were carving out an exclusive position that they might never wish to exploit: and meanwhile there were businesses in the Community with legitimate reasons to use the same name - indeed, like the Cipriani case, there was a "common origin" issue.

In the present case, the defendant's restaurant was called Cipriani London and usually referred to (there being little need most of the time to identify the city) as just Cipriani (as its website does this morning, though probably not for long). The claimants were companies in the Orient Express group. Both the Venice and the London establishments were set up by members of the family, though the Venice hotel had been sold on some time ago (on terms that don't seem to have protected the family's rights to carry on using its name, though perhaps that was just not on offer at the time) and the London restaurant is owned by a group of companies of which the most important was Cipriani (Grosvenor Street) Limited.

The defendants conceded that their activities were prima facie infringements, but that they could use their own name (section 11 of the Trade Marks Act 1994). The judge held that there was an infringement as the distinctive element in the defendant's sign was the name Cipriani, and then went on to say that the "own name" defence was not available because Cipriani was the company's trading name, not its own name. This is difficult to grasp without the full judgment: would the answer have been different had the company been Cipriani Limited? Surely if Cipriani is the distinctive part of the trading style ("London" adding nothing), it is also the distinctive part of the company name, "(Grosvenor Street)" adding nothing (though the address is Davies Street, incidentally) and "Limited" not making a ha'porth of difference. Had the defence applied, the judge didn't think it would extend to the trading name anyway.

The claimants also won on passing-off, as they had customers here when the restaurant opened and had foreign customers who booked direct (although i don't understand quite what difference that makes). They had a substantial reputation her, and more importantly they had valuable goodwill too.

There is a lot about this case that will require careful thought when the judgment becomes publicly available. It is more than an example of David losing out to Goliath, though it does not seem to be one of those cases of over-reaching intellectual property rights that trouble me so often. Perhaps what my reaction comes down to is an instinctive sense that customers will patronise all the four establishments concerned on the strength of the Cipriani name, and the connection between the family and the Orient Express businesses will never go away completely. The parties, like parties to similar disputes including that of my former client, should learn to live with it: no-one needs a monopoly over a mere name.

The Court of Appeal [2010] EWCA Civ 110 upheld Arnold J’s judgment (24 February 2010), though Lloyd LJ expressed some reservations about the ‘direct bookings’ test, which he thought might in the Internet age be outmoded although the case before him did not provide an opportunity to deal with the matter.

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