Pictured: Colin Hulme and Amy McSkimming

The IP Court re-affirmed the applicable standard of review. Burness Paull LLP was instructed for the respondent, Coleburn Distillery Limited, in an appeal raised by landlord and distillery owner, D&M Winchester Ltd.

In an opinion issued on 6 October 2023, the Court of Session had been asked to review the decision of the UK IPO under section 76 of the Trade Marks Act 1994 in an appeal. The Burness Paull contentious IP/IT team acted for the respondent, Coleburn Distillery, opposing the appeal brought on sections 5(1), 5(2)(a), 3(6) and 46 of the 1994 Act. Potter Clarkson has acted for Coleburn Distillery throughout the dispute and engaged us for the Scottish proceedings.

The appeal was brought by D&M Winchester after Coleburn Distillery opposed it’s trade mark application for the word COLEBURN. Much like in the only previous such appeal, CCHG Ltd t/a Vaporized v Vapouriz Ltd, decided in 2017, submissions from both parties initially centred around the standard of review for a hearing of this nature due to the novelty of this procedure in the Scottish Courts.

The court then heard submissions relating to genuine use, similarity/identity of services, and bad faith. The appeal was substantially refused with the appellant succeeding on one issue relating to bad faith, which is of no practical impact.

We acted for the respondent in Vapouriz, where the appeal was unsuccessful. As with Vapouriz, we instructed Usman Tariq, advocate throughout the appeal for the respondent.

UK IPO proceedings

Both parties have business interests at the site of the former Coleburn whisky distillery. Scotch whisky is not currently distilled there. The appellant owns the site and leases a warehouse to a company related to the respondent which operates a whisky storage facility there. The respondent has prior trade marks for COLEBURN (Classes 33, 39 and 40). The appellant claimed to have plans to develop the site and applied for a trade mark for COLEBURN in Classes 32, 33, 39, 40, 41, 43 and 44.

The respondent opposed the appellant’s application. The opposition was based on the following sections of the 1994 Act: 5(1) (identity of marks and goods/services); 5(2)(a) (identity of marks, similarity of goods/services and risk of confusion); and 3(6) (bad faith). In response, the appellant filed an application to revoke the respondent’s marks on the grounds of non-use, in terms of section 46 of the 1994 Act.

In its decision, the UKIPO revoked the respondent’s trade marks in classes 33 and 40 on the basis of non-use in terms of section 46(1)(a). However, the hearing officer did find that genuine use had been proven in respect of some of the goods and services in class 39 and allowed a restricted specification relating to “warehousing and storage services for whisky maturation; bonded warehousing services; whisky bottling services, arranging and conducting of tours relating to whisky warehousing”.

The UKIPO had dismissed the respondent’s opposition to the appellant’s trade mark in respect of classes 32, 41, 43 and 44. The appellant’s trade mark was registered in those classes. The respondent’s opposition was successful on all three grounds relied upon by it in relation to classes 33, 39 and 40.

The Court of Session Appeal

Section 76 of the 1994 Act allows the appeal of a decision of the UKIPO to be brought to either a court or an Appointed Person. The appellant chose to appeal to the Court of Session in Edinburgh for a one-day hearing.

The court heard submissions from both parties on the standard of appeal, based on the standard set in Vapouriz, before being taken through the five aspects of the claim that the appellant raised: genuine use of the trade mark, identical services, similarity of services, likelihood of confusion and bad faith.

Standard of Review

Much of the appeal hearing centred around the applicable standard of review that an appeal of this nature should adopt. Although parties agreed that the method of appeal was a ‘rehearing’ this should not be interpreted as a full rehearing. Detailed submissions were heard on exactly how that should be applied.

It was argued on behalf of the appellant that the standard in England had moved on since that considered in Vapouriz in 2017 and that the Scottish Court should follow this new approach. The appellant invited the court to identify a difference between “wrong” and “plainly wrong”. It was argued that establishing a decision which was (1) outwith the bounds of which reasonable disagreement was possible to be a lower standard than (2) one where no reasonable decision maker could have reached the same conclusion.

The respondent successfully argued it is not sufficient for an appellate body to interfere on the basis that they would have reached a different decision to the original hearing officer. Relying on Vapouriz, the respondent argued that an appeal judge may disagree with the original decision, but without an error in principle, they should not intervene unless the decision was so wrong as to sit outside the bounds of reasonable disagreement. The respondent also added that the court should only look to the evidence that was available to the hearing officer at the time of the hearing.

Lord Braid concluded that the test for what amounted to “wrong” had not changed. The court may only intervene where the hearing officer has “erred in principle” which can be by way of either (1) an error of law, or (2) by having reached a decision which lies outside the bounds within which reasonable disagreement is possible.

Assessment of Grounds of Appeal

The court then heard submissions from both parties regarding the use of the trade mark, identity/similarity of services, likelihood of confusion and bad faith. The court was taken through the evidence available to the hearing officer.

On the grounds required for successful defence against the appeal, the court agreed with the submissions for the respondent. Lord Braid agreed with the approach of the hearing officer on genuine use of the trade mark, identical services, similarity of services and likelihood of confusion.

Lord Braid was critical of the hearing officer’s reasoning on bad faith and ultimately held it be wrong. Reference was made to the Inner House of the Court of Session’s decision on bad faith on The Tomatin Distillery Company Limited v The Tomatin Trading Company Limited [2022] CSIH 28 (See link).

In Tomatin, the appeal court overturned the first instance finding of bad faith registration. Lord Braid followed the line that it is commercially prudent to seek and obtain trade mark protection to protect your business’ brand.

Conclusions

So what are the key points we can take from this case?

1. Users of the Intellectual Property Court in Scotland can be confident that the court will only intervene in a decision of the UKIPO where there is an error of law or where the decision lies outside the bounds of reasonable disagreement. In this regard, the court followed the approach set out in Vapouriz.
2. The court continues to apply a high bar for claims of bad faith. Lord Braid found that the UKIPO’s decision on bad faith did lie outwith the bounds upon which reasonable disagreement was possible. This case, together with the judgment in Tomatin, would indicate that bad faith claims may be a fertile ground for appeal in Scotland. This is likely to remain the case at least until we receive the eagerly awaited Supreme Court judgement in SkyKick.
   D&M Winchester have the option to appeal this decision to the Inner House of the Court of Session, Scotland’s appeal court.

Read the full judgment here.

Colin Hulme is a partner and Amy McSkimming is a solicitor at Burness Paull