Warning – May Cause Confusion

Liverpool Gin Distillery Ltd & Ors v Sazerac Brands LLC & Ors [2021] EWCA Civ 1207

In August 2021 the Court of Appeal upheld the High Court’s decision that the sign AMERICAN EAGLE infringed the trade mark EAGLE RARE. This decision illustrates the differences between direct and indirect confusion, and shows that arguments focused on indirect confusion may improve the chances of a claim for trade mark infringement succeeding due to the wider considerations this line of argument involves.

The marks

Sazerac Brands had owned trade mark registrations for EAGLE RARE in the UK since 1981 in respect of whiskey, and in the EU since 2002 in respect of bourbon whiskey. The mark had been used to market its Kentucky straight bourbon whiskey since 2001.

In February 2019 Liverpool Gin Distillery launched a Tennessee straight bourbon whiskey under the brand name AMERICAN EAGLE. Sazerac subsequently sued for trade mark infringement.

First instance                                                                        

In September 2020 the High Court found in favour of Sazerac.

The High Court did not find that the marks were similar enough to cause direct confusion, where consumers would mistake American Eagle for Eagle Rare. However, the High Court held that there would be indirect confusion, where consumers would believe the two products came from the same producer. This was due to the distinctiveness of the word ‘Eagle’ in the whiskey market and the fact that many bourbon producers used similar names for connected brands.

Appeal

Liverpool Gin Distillery claimed that the judge at first instance had failed to consider the mindset of consumers, and that the judge should not have considered any possible or likely future developments in terms of consumers associating the brands. The Court of Appeal held that the judge had considered these factors and was right in doing so under the circumstances, so these arguments were rejected.

It was also argued that there was no likelihood of indirect confusion between the marks. The focus on Liverpool Gin Distillery’s argument was that the finding of a lack of direct confusion, due todifferences between the marks, supported a finding of a lack of indirect confusion. Also, they claimed that the fact that Eagle Rare was so distinct, in that it had no brand extensions, meant consumers would not consider American Eagle to be connected to it.

The Court of Appeal rejected these arguments, finding that the High Court was right to infer that there was a likelihood of consumers thinking that Eagle Rare and American Eagle were related brands. The judge focused on the fact that the “unwitting assumptions” of consumers, rather than the likelihood of the consumer scrutinising the product, should be assessed when determining the likelihood of confusion.

Comment

This case has demonstrated the importance of indirect confusion in trade mark infringement claims. Even where marks are not sufficiently similar to result in direct confusion, the broader commercial factors considered with indirect confusion may be relied upon to improve the chance of a successful claim, particularly with highly distinctive marks such as EAGLE RARE which was the only whiskey product marketed under a brand making use of the word ‘Eagle’. In this case factors such as consumer mindsets and market characteristics, such as the propensity for whiskey producers to use similar names for brand extensions, played particular importance in relation to indirect confusion.

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