Trade marks in the automotive sector: brand protection and its limitations

Written on 7 Sep 2016

A recent case
involving BMW provides useful guidance as to the limits on the use of third
parties’ trade marks in the automotive sector and, in particular, how far independent
garages or dealers can go in using vehicle manufacturers’ marks in the course
of their business.  

The
High Court found that BMW’s trade mark rights in its famous BMW roundel mark and
the ‘M’ series logo had been infringed by Technosport London, a garage
providing repair and maintenance services. 
It also ruled that Technosport, which had used those marks on its
signage, website and other business materials, was guilty of passing off.  However, the garage’s use of the letters
‘BMW’ in its business generally was permitted.

This decision builds on the earlier case of BMW v Ronald Karel Deenik (1999) in
which it was held that Deenik, a garage owner, had not infringed BMW’s (word)
mark by advertising his garage as a ‘BMW specialist’ on the front of its
premises as this statement was simply an accurate message that the garage had
expertise in servicing BMW vehicles.

Key issues before the
court

In the Technosport
case, the activities at the heart of BMW’s complaint were the fact that
Technsport was using:

  • the ‘BMW’ (word) mark on its trade t-shirts andtwitter account (as many BMW dealers do);
  • BMW’s roundel mark extensively on and around itspremises, van, business cards and website; and
  • BMW’s ‘M’ logo on its website.

Faced with claims for trade mark infringement and passing
off, Technosport contended that its usage amounted to nothing more than ‘fair
use’, in line with the decision in the earlier BMW case.  Technosport further contended that BMW had in
any event consented to its usage, referring as evidence to the presence of these
marks on BMW’s spare parts packaging and on various complimentary items provided
by BMW to its authorised network. 
Technosport argued that BMW “would
have known”
that these would also be passed on to independent garages
and dealers such as Technosport, along with spare parts.

What did the court
decide?

The court held that Technosport’s usage of the ‘BMW’ (word)
mark did not constitute trade mark infringement, but distinguished the usage of
the roundel and ‘M’ logo in relation to which BMW’s claim was upheld on the
basis that an average consumer would naturally interpret the presence of these
marks as signification of the garage being an authorised BMW dealer.

In reaching this decision, it was relevant that BMW:

  • controls the use of its trade marks throughformal licences to its authorised network;
  • does not grant such licences to independentdealers; and
  • actively monitors the use of its marks and takesenforcement action against unlicensed use.

Technosport’s argument was further undermined by the fact
that it had previously received a warning letter from BMW regarding this issue.
The court also dismissed Technosport’s ‘consent’ argument, finding that the
presence of BMW’s marks on spare parts and trade materials simply confirms that
those parts are genuine products originating from BMW and that those materials
are for display in or on authorised premises.

What does this
decision mean for the automotive sector?

The case serves to confirm that, under the ‘fair use’
principle, permitted use extends to use in connection with both physical
premises and assets as well as in digital presence via the internet and social
media. This limited right to use such marks however should be not be taken as carte
blanche to use any mark owned by a manufacturer in any circumstance or context.

The court did not consider whether Technosport could have advertised
its specialism in servicing BMW’s M-series vehicles in another (legitimate) way.
 However, the decision suggests that
dealers may be able to refer to specific models in their trade materials to describe
themselves as specialists in those models, where this description does rely on
or include use of a manufacturer’s registered images or device marks, such as BMW’s
‘M’ logo.

For dealers, distributors and other businesses who use
manufacturers’ marks, the decision highlights that whilst it is permissible to
include a manufacturer’s (word) mark in various ways to describe nature of their
business as a specialist or expert in servicing that manufacturer’s products, this
freedom does not extend to usage of other (visual) marks owned by manufacturer,
especially where the manufacturer actively polices its marks. These businesses
should therefore be wary of the limits on the ‘fair use’ defence and, where
their usage may go beyond those limits, consider seeking an express licence to
avoid possible liability for trade mark infringement. 

For manufacturers and trade mark owners, while it is clear
that third parties may rely on a degree of legitimate use of their registered trade
or brand name marks in their business, the case emphasises the importance of having
robust trade mark maintenance and licensing policies and of acting swiftly in
response to any infringements to protect the strength of their brand and the value
of any associated marks. This is particularly important in relation to logos
and other graphical marks.