Whisky distiller loses trade mark infringement appeal against developers of proposed nearby retail park

Whisky distiller loses trade mark infringement appeal against developers of proposed nearby retail park

Artist's impression of the proposed retail development

The Inner House of the Court of Session has refused an appeal by a whisky distillery against a judge’s decision not to grant interdict in a trade mark infringement case brought against another company proposing to develop a retail site in a village near the distillery.

Tomatin Distillery Company Ltd objected to the name “Tomatin Trading Company” used by the defender on the ground that it infringed on its trade mark and made a further claim of passing off. After a proof, the judge at first instance held that they had failed to establish either arm of its case.

The appeal was heard by the Lord President, Lord Carloway, sitting with Lord Woolman and Lord Pentland. Lake QC and Mitchell, solicitor advocate, appeared for the reclaimer and McBrearty QC and Tariq, advocate, for the respondent.

Niche brand

The respondent had purchased a site on a B road leading towards the village of Tomatin located several hundred yards away from the Tomatin distillery operated by the reclaimer, on which it intended to build a retail park. It was noted that within the village several businesses used the word “Tomatin” as part of their trading name, with the name also being used by the railway station, golf club, primary school, and local football team.

The pursuer and reclaimer first registered a trade mark for “Tomatin” in relation to Scotch whisky in 1963. In 2018 it obtained two further trade marks in relation to alcoholic beverages, retail, education, and bar and leisure services (classes 33, 35, 41, and 43), which were declared invalid by the judge at first instance. In 2019 the respondent sought to register its own mark “Tomatin Trading Company” in several classes, including some covered by the reclaimer’s marks. At the request of the reclaimer, the respondent removed class 33 (Scotch whisky) from its application.

Expert evidence was given at the proof by a whisky expert, Mr Russell, who stated that Tomatin single malt was “a niche brand within a niche market” with a low position within the overall sale of Scotch whisky. Additionally, the defender relied on the “honest practices” defence under the Trade Marks Act 1994, argued the action was premature as the development had not yet been built, and that there was no risk of confusion as businesses located within the development would trade under their own names.

It was submitted for the reclaimer that the inferences drawn by the judge from the primary facts were amenable to review. It asked the court to determine four questions: whether the 2018 figurative mark was invalid by reason of bad faith, whether TTC’s sign infringed the mark, and if so whether its use accorded with honest dealing, and whether the court had a discretion to refuse interdict if infringement is established.

Geographical descriptor

Delivering the opinion of the court, Lord Woolman observed: “Much litigation is characterised by uncertainty. But this case involves a higher degree than most. The development is unbuilt. It is unknown whether and which franchises TTC will attract. It is unknown what goods and services they will offer, and under what name. Covid has further complicated the picture.”

On whether the reclaimer had registered its 2018 marks in bad faith, he said: “The onus was on TTC to establish bad faith. That is a high test. It was not met here. To seek and obtain trademark protection was to be expected. Intellectual property is the distillery’s prime asset. It could be viewed as acting in accordance with commercial prudence. Its shareholders might have levelled legitimate criticism at its directors if they had not instructed a filing.”

Addressing any potential for confusion between the marks, Lord Woolman noted: “The intellectual property judge concluded that the average consumer of the distillery’s goods and services was a whisky aficionado or explorer. Such a person is discerning about single malts and was unlikely to be confused. We agree. The intellectual property judge did not err in considering the average consumer of the distillery’s goods and services, as opposed to the average consumer of TTC’s goods and services.”

He went on to say: “Consumers who are less knowledgeable about single malts, such as those who may visit TTC’s development, would readily distinguish between the parties’ respective goods and services. They would understand ‘Tomatin’ to be a geographical descriptor. The addition of ‘Trading Company’ emphasises the bright line between the sign and the marks.”

Lord Woolman concluded: “We reiterate that this is an artificial discussion. It takes place under a cloud of uncertainty. At present TTC is only using the name for the development as a whole. That is common practice. An example is the Gyle shopping centre in Edinburgh. The important point is that TTC is not using its name in relation to goods or services. As yet it is unknown what will be offered, or by whom. No comparison exercise is therefore possible.”

The reclaiming motion was therefore refused, with the previous interlocutor varied only to a limited extent in relation to the bad faith finding.

A statement from The Tomatin Trading Company read: “At long last we have the Appeal Court’s decision dismissing Tomatin Distillery’s appeal against Lady Woolfe’s original verdict. The Tomatin Trading Company is more than happily relieved that justice and common sense has finally prevailed.

“The Appeal Judges concluded that there was no warrant for Tomatin Distillery – described as producing a niche brand in a niche market - to have a monopoly on the use of the word Tomatin for non-whisky products.

“We look forward to putting this case firmly behind us, and can now finish off our financial structuring with real confidence, getting down to the very important business of actually starting – and delivering - this important new development for the Tomatin – and wider Highlands – areas.”

A spokesperson for Tomatin Distillery said: “Whilst we are disappointed that Lord Woolman has upheld the original ruling regarding trademark infringement, we are delighted that the judgement regarding our trademark registrations has been overturned. We are pleased to now be able to draw a line under the matter and, as ever, remain committed to creating a thriving community here in Tomatin.”

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