Under the UK Trade Marks Act 1994, it is not usually an infringement of a registered trade mark to use the trade mark in relation to goods that were originally put on the market in the UK or the EEA by, or with the consent of, the trade mark proprietor. However, it can still be an infringement if there are “legitimate reasons” for the proprietor to oppose further dealings in the goods, for example, where the condition of the goods has been changed.
In a recent case1, the Intellectual Property Enterprise Court (IPEC) had to consider whether the manufacturer of the famous AGA stoves had legitimate reasons to oppose the activities of a company selling AGA stoves that it had converted to run on electricity rather than on traditional fossil fuels.
WHY SHOULD A REFURBISHED AGA RAISE ISSUES RELATING TO TRADE MARK INFRINGEMENT?
UK Innovations Group Limited had developed a range cooker with an electric control system. It also fitted this eControl System to pre-owned AGA cookers that it refurbished to enable them to run on electricity rather than traditional fossil fuel.
UK Innovations then sold the converted AGA stoves complete with their “AGA” badges but also carrying an ‘eControl System’ badge.
AGA argued that it had legitimate reasons to oppose UK Innovations’ marketing and sale of these converted cookers and that UK Innovations was accordingly infringing AGA’s registered trade marks. Nicholas Caddick KC, sitting as a deputy High Court judge, said that he did not find “this an easy matter to decide” but ultimately agreed that there was infringement.
AGA'S ARGUMENT IN RELATION TO THE REFURBISHMENT AND CONVERSION WORK
AGA’s technical witness identified 27 replacement parts in the converted AGA cooker that it had purchased from UK Innovations. The most significant change to the original AGA cooker was the replacement of the barrel and oil burner with the eControl System so that the cooker could run on electricity.
AGA accepted that people were entitled to refurbish and sell second-hand AGA cookers but argued that the work carried out by UK Innovations went beyond what was acceptable as the work changed the condition of the cooker in ways that might result in serious damage to the reputation of the AGA trade mark.
WAS THE REFURBISMENT WORK ENOUGH REASON FOR AGA TO CLAIM TRADE MARK INFRINGEMENT?
The judge noted that most of the pure refurbishment work (i.e., the work other than the conversion to run on electricity) fell within the ambit of what AGA’s technical witness considered an acceptable level of refurbishment.
The judge considered that the main parts of “what makes an AGA identifiably an AGA” were genuine AGA parts and that the new parts “were for the most part fitted to restore the appearance and/or functionality of the original AGA cooker”. AGA did not, therefore, have a legitimate reason to complain about the pure refurbishment work per se.
As to the conversion work, the judge accepted that this was clearly a significant change in the condition of the cooker. However, since AGA did not object to UK Innovations supplying its eControl Systems to customers so that they could convert their AGA cookers, it was hard to see how AGA could have a legitimate reason to complain about UK Innovations selling cookers that it had converted itself.
The situation would have been different if the work had given rise to a risk of serious damage to the reputation of the AGA trade marks, but the judge considered that the evidence did not establish that this was the case. Certainly, there was an (unresolved) dispute2 about the quality of some of the replacement parts. However, the judge was not convinced that customers buying cookers from UK Innovations would necessarily associate any quality issues with AGA or that they would necessarily expect all of the components to be of the same quality as the original.
UK INNOVATIONS' MARKETING OF THE CONVERTED AGA COOKERS
The judge’s findings referred to in the previous paragraph related only to the implications of the work itself. The problem for UK Innovations was that its marketing of the converted cookers clearly indicated, in the judge’s view, that there was a commercial connection between UK Innovations and AGA. For example, UK Innovations’ website invited people to “Buy an eControl AGA” while its invoices (sent out prior to delivery) described the goods and services using phrases such as ‘AGA eControl’ and “supply and fit of AGA in white”. UK Innovations had an obligation to prevent customers from gaining the impression of a commercial connection with AGA, and it had, in fact, done the opposite.
For this reason, AGA did have legitimate reason to object to UK Innovations’ activity. This was where the infringement of its trade mark rights occurred.
WHAT CAN WE LEARN FROM THE AGA TRADE MARK RESULT?
Although AGA was ultimately successful in its claim against UK Innovations, the judgment indicates that trade mark proprietors may not always find it easy to succeed in a trade mark infringement claim against businesses involved in refurbishing goods originally marketed by the trade mark proprietor. Furthermore, this is the case even when that refurbishment changes an essential characteristic of the goods.
The key question is often likely to be, as it was here, whether the way in which the refurbished goods are marketed suggests a commercial connection with the trade mark proprietor. The alleged inferior quality of the refurbishment work did not assist AGA in this case but is likely to be relevant in other cases, at least if serious quality issues can be proved and are likely to be associated with the trade mark proprietor in some way.
