The recent decision of the Intellectual Property Enterprise Court, in the case of Frank Industries Pty Ltd v Nike Retail BV, has highlighted the increased role social media plays in cases of modern day intellectual property law, such as trade mark infringement and passing off.
In this case, the key question was:
How would an average consumer perceive a hashtag against a trade mark - #LDNR versus LNDR - and could these be considered sufficiently similar so as to cause confusion?
Given that they are almost identical in spelling, both could be considered abbreviations of the term "Londoner" and related to companies that sell activewear, then first impressions would be yes, they are similar. The court agreed - they found that Nike's use of #LDNR was an infringement. But how did such a heated argument about a hashtag arise in the first place?
Frank Industries owns UK and EU trade marks for LNDR in Class 25 for clothing, footwear and headgear; and Class 35 for advertising and marketing purposes - expressly including use for "[...] social media, blogging and other forms of passive, shareable and viral communications."
In January 2018, Nike launched a London-centric advertising campaign, with the hashtag #LDNR and tagline "Nothing Beats a Londoner", to promote and inspire young local athletes. The similarity between Nike's campaign and Frank's trade mark was brought to Frank's attention by individuals who, upon seeing the advert on social media and the #LDNR hashtag, believed that Nike and Frank had entered into a collaboration. Frank acted swiftly and commenced proceedings against Nike for infringement and passing off claims, successfully obtaining an interim injunction to stop Nike's use. Nike denied the allegations and countersued, seeking to invalidate the marks.
Could LNDR and LDNR ever be confused with each other? Would a consumer ever think that LNDR is an abbreviation of "Londoner" in this context? Could LNDR ever be abbreviated to mean something else?
Nike argued that LNDR is "inherently descriptive" as an abbreviation meaning "Londoner". They provided evidence pertaining to this, most notably a search of the hashtag #LNDR on Twitter and Instagram, showing an assortment of London-centric social media posts. Nike also relied on the reputation of their "Swoosh" trade mark, which was used in their #LDNR campaign, arguing that it is so established in modern society that the average consumer could not possibly confuse their #LDNR campaign with any other brand that does not relate to Nike.
Frank's argument did not dispute the presence of the Swoosh and its unmistakeable connection to Nike. Their submissions were that the prevalence of abbreviations and their use among young people on social media and text communication (particularly hashtags) meant that the likelihood of confusion between the brand name LNDR and #LDNR was higher. This was of particular issue to them as they already have an established brand of selling high-quality ladies activewear, under their LNDR trade mark, which has no connection to London or Nike.
While the judge agreed that #LDNR could be understood to mean "Londoner" in a certain context, he said it did not mean "that LNDR would have been perceived by the average consumer as meaning Londoner when used in respect of clothing ... in the absence of some context suggesting that meaning". Therefore, in this case, the judge held that LNDR only had a "moderately strong distinctive character". Despite the presence of the Nike Swoosh, Frank had built up enough reputation and goodwill, in selling their goods under the LNDR trade mark, that there would be sufficient confusion, in the eyes of the average consumer, that #LDNR was the brand name of LNDR and not just an abbreviation of "Londoner". Accordingly, Nike's campaign was found to infringe upon Frank's LNDR trade mark, due to the use of the #LDNR hashtag.
The power of social media is never to be underestimated, particularly in the context of intellectual property rights. Had Nike stuck with the tagline "Nothing Beats a Londoner" in their campaign rather than #LDNR, for the purposes of social media, this case may never have happened.
Brand owners and legal representatives should always be aware of the key role social media plays in modern intellectual property law, as its impact is only likely to grow.