Gold standards
Even long-standing use and recognition did not translate into a monopoly trade mark right, writes Chris Morris. [2017] EWHC 417 (Ch), The Royal Mint Ltd b The Commonwealth Mint and Philatelic Bureau Ltd (SOVEREIGN), High Court, 3rd March 2017.
[2017] EWHC 417 (Ch), The Royal Mint Ltd b The Commonwealth Mint and Philatelic Bureau Ltd (SOVEREIGN), High Court, 3rd March 2017
Key points
- The word “sovereign” alone could not guarantee trade origin, due to it having become customary in the current language, or bona fide and established practice in the trade
- Expert witnesses called on by RM were held to have views that were unlikely to represent those of the average consumer
- A near monopoly on sovereign coins in the UK and long-standing evidence of use is not, in itself, enough to obtain a monopoly trade mark right if customers cannot be shown to perceive the sign as a trade mark
This case concerned a UK trade mark application to register the word SOVEREIGN for “gold commemorative coins”, filed by The Royal Mint Ltd (RM). The application was successfully opposed by the Opponent, The Commonwealth Mint and Philatelic Bureau Ltd (CMPB), with that decision then appealed by RM to the High Court.
Case facts
“Sovereign” coins have been struck since 1489, first by The Royal Mint, and latterly by RM in its current status as a private limited company. Sovereign coins are manufactured and produced by other mints, and are legal tender in countries and territories such as Andorra, Cyprus, Gibraltar, the Isle of Man, Jersey, New Zealand and Tristan da Cunha (a British Overseas Territory).
It was common ground in the proceedings that no party other than RM can issue a sovereign as legal tender in the UK. There is no prohibition on trade in the UK in sovereigns issued outside the UK.
Sovereign coins produced by RM do not bear the word “sovereign”, in contrast to many of those made in other territories.
Opposition
CMPB opposed the application on absolute grounds under s3(1)(c) and (d) of the Trade Marks Act 1994 – descriptiveness, and customary in trade, respectively – arguing that: “The word SOVEREIGN is in common use in and beyond the trade, and is widely recognised, as a word describing coins of a particular type and denomination that may be legal tender in any one of a number of countries/territories.”
The Hearing Officer (HO) agreed with CMPB on both grounds, and further concluded that SOVEREIGN had not acquired distinctiveness through use.
In assessing whether a descriptiveness objection under s3(1)(c) should apply, the HO had to consider whether “the sovereign is not a kind of coin [as CMPB argues] but a name which distinguishes coins from a particular source” (ie RM). He concluded:
“Although the denominative value of a sovereign is nominal, sovereigns are legal tender in the UK with a face value set down by statute. Secondly, the evidence shows that RM itself draws attention to the denominative meaning of sovereigns in its marketing material, particularly in its certificates of authenticity. Thirdly, RM’s promotional material uses ‘sovereign’ in an analogous way to other obvious denominations, such as ‘The Official Queen’s Diamond Jubilee UK £5 Coin’. This is likely to have reinforced the denominative significance of ‘sovereign’ to UK consumers. Fourthly, although the quality of the sovereign coins issued by RM is closely controlled, this is true of all coins minted by RM to meet statutory requirements, including legal tender for general circulation, such as pound coins. No one would say that ‘pound’ is a trade mark for coins. Consequently, although quality control of goods sold under the contested mark is consistent with sovereign being a trade mark, it is not sufficient to establish that it is perceived as a trade mark (rather than as a kind of legal tender coin) by relevant average consumers.”
The objection was therefore upheld.
As regards the s3(1)(d) ground, the HO found that the average consumer may be aware that most sovereigns available in the UK are produced by RM, but will also be aware of the availability of commemorative sovereign coins from elsewhere.
Consequently, even though by far the majority of sovereign coins are RM tender, the word alone could not guarantee trade origin, due to it having become customary in the current language, or bona fide and established practice in the trade.
Again, the objection was upheld. RM appealed.
Appeal points
The first point of interest on appeal was the lack of weight given by the HO to two expert witnesses. Both were experts in coinage (“it is unlikely that there is anyone more knowledgeable”, according to RM), and that very expertise counted against them, with the HO concluding that their views were, consequently, unlikely to represent those of the average consumer. The Judge on appeal saw no reason to diverge from this position.
The second point of appeal attacked the conclusion that sovereign is a denomination in the UK, albeit (the HO concluded) a nominal one, with coins worth far more than their face value. RM argued that because sovereign does not form part of a “coherent currency system”, in contrast to the pound and penny, the name does not indicate the value, but rather the type of coin, being struck exclusively by RM.
Considering the evidence that had been presented to demonstrate various clear usages of sovereign as having a denominative value – including Acts of Parliament and materials produced by RM – the Judge again found the conclusions reached were reasonable.
A third ground of appeal was the argument that the HO failed to find that RM has a legal monopoly to make and issue coins called sovereigns in the UK – the claimed logical conclusion being that sovereign must, then, distinguish goods of RM.
The Judge reiterated the HO’s finding that, while RM is the only entity that can produce sovereigns as legal tender, a trade in sovereign coins produced elsewhere is ongoing and legal. The Judge confirmed that the fact that no one but RM can produce sovereign coins does not mean the word is distinctive of its coins, because of the trade in international sovereign coins.
Having concluded as above, the Judge found that an appeal against the HO’s conclusions in respect of s3(1)(d) must also necessarily fail. Sovereign is customary in the trade.
This case shows that a near monopoly on sovereign coins in the UK and extremely long-standing evidence of use is not, in itself, enough to obtain a monopoly trade mark right if customers cannot be shown to perceive the sign as a trade mark. It also demonstrated the need for right holders to police their own use, and to ensure that it is proper trade mark use. The potential pitfalls of putting reliance on expert advice offered an interesting subplot.
Chris Morris is a Senior Associate and Chartered Trade Mark Attorney in the Intellectual Property team at Burges Salmon LLP