5 October 2015

Sheffield Educational Charity's Trade Mark Case: NOCN v Open College Network Credit4Learning

In NOCN  v Open College Network Credit4Learning [2015] EWHC 2667 (IPEC) (25 Sept 2015) NOCN which is based in Sheffield sued its former affiliate OCN Credit4Learning for trade mark infringement and passing off for using the following sign:

The Trade Marks

NOCN had registered the following signs as well as the letters OCN and NOCN as trade marks for accreditation and certification services:

The Arguments

NOCN argued that it was the only organization in the country that was entitled to use the initials OCN or the swoosh device in relation to vocational qualification and accreditation services.  OCN Credit4Learning replied that OCN was short for "Open College Network" and counterclaimed for invalidation of the registration of the letters "OCN" as a trade mark.

The Decision

The action and counterclaim came on before His Honour Judge Hacon who held that NOCN had no monopoly of the use of the letters OCN and declared the registration of those letters as a trade mark to be invalid. However, he found that OCN Credit4Learning's use of the dot device in a sort of V shape around the words "OCN Credit4Learning" was too similar to the swoosh device in NOCN's trade marks and found that such use amounted to trade mark infringement and passing off.

The Reasons for the Decision

The judge came to his decision because a trade mark is supposed to distinguish one supplier's goods or services from those of all others. OCN is simply an abbreviation for "open college network" of which there are several in the UK. Some of these are affiliated to NOCN while others are not. If NOCN were allowed a monopoly of the abbreviation it would make it difficult for other open college networks to carry on their business.

On the other hand the letters "OCN" combined with the swoosh device were capable of distinguishing NOCN's services from those of other organizations. The dots device when combined with the letters "OCN Credit4Learning" looked very like NOCN's registered trade marks. Its use might lead people to believe that OCN Credit4Learning was somehow connected with NOCN.

If anyone is interested in the legal issues I have discussed them at length in When one charity sues another - NOCN v Open College Network Credit4Learning 4 Oct 2015 NIPC Law.

The Postscript

In a postcript to his judgment, Judge Hacon said:
"I now know that between them the parties, both charities, have incurred well over £400,000 on fees in this litigation. A very strong recommendation to settle at the case management conference was not taken up. The laudable cause of encouraging adult education will presumably have to endure an equivalent cut in funding solely because this dispute was not resolved at an early stage. Such an outcome is much to be regretted."
The action and counterclaim were brought in the Intellectual Property Enterprise Court, the successor to the Patents County Court, which requires trials to be completed in 2 days and limits the costs that one party can recover from the other to a scale (see Jane Lambert New Patents County Court Rules NIPC Law 31 Oct 2010). However, nothing in the new rules prevents lawyers charging their clients more than the costs that they can recover on the scale and that seems to have happened in this case.

Alternatives to Litigation

There are alternatives to litigation which parties to a dispute are required to consider (see paragraphs 8 to 11 of the Practice Direction - Pre-Action Conduct and Protocols). These include direct negotiations, mediation, expert determination, early neutral evaluation, arbitration and proceedings in the Intellectual Property Office.

Most disputes are settled by direct negotiations between the parties or their legal advisers. If conducted in the right spirit with a proper exchange of information and documents they can be the fastest and cheapest way of resolving a dispute. The Practice Direction promotes such negotiations by requiring parties to exchange information and documents in their letters of claim and response and they can be penalized if they fail to do so.

If a dispute cannot be settled by direct negotiations the parties are required to consider alternatives. One of the reasons why direct negotiations do not always succeed is that the parties do not usually know each other's bottom line or interests. Another is that bitter emotions and recriminations can get in the way. Mediation addresses those problems. It is essentially a form of negotiation where the mediator makes it his or her business to understand the underlying issues and suggest solutions which may not have occurred to either party but with which both may live. I am a mediator specializing in IP disputes and I sit on the WIPO and Consensus Mediation Panels. The Intellectual Property Office also offers a very cost-effective mediation service for trade mark and other IP disputes.

Expert determination, early neutral evaluation and arbitration are all forms of adjudication, that is to say where the parties agree to refer their dispute to a trusted third party for determination. ICANN's Uniform Domain Name Dispute Resolution Policy for generic top level domain name disputes and the IPO's opinion service for patent disputes is an example of early neutral evaluation.  The terms upon which neutrals are retained will depend on the needs and wishes of the parties. Our panel of arbitrators can sit as experts, neutrals or arbitrators in any kind of dispute though I specialize in IP.

Although the Registrar of Trade Marks does not have jurisdiction in infringement disputes his hearing officers can hear revocation and invalidity disputes. Proceedings before a hearing officer are more informal than court proceedings and can often be disposed of without a hearing. Costs are awarded in IPO proceedings but these rarely exceed a few thousand pounds.

Further Information

Should anyone wish to discuss this article or trade mark law or passing off in general call me on 01484 599090 during office hours or use my contact form.