ABP Technology Limited v Turtle Beach Europe Limited: amendments and counterclaims in trade mark disputes

Last month the High Court in England and Wales handed down its summary judgment in ABP Technology Limited v Voyetra Turtle Beach, Inc and Turtle Beach Europe Limited. The judgment resulted from an intermediary hearing concerning a trade mark dispute, and in particular, a request from the defendants to (1) amend their pleadings and (2) initiate a counterclaim against the claimants.

The facts

Both the claimants and the defendants sell computer gaming accessories. In this instance, the products of focus were audio headsets.

The claimants held registered trade marks for "STEALTH" and "STEALTH VR" in relation to "audio headsets for playing video games". The defendants also used the (unregistered) sign "STEALTH" in the UK in relation to their own gaming headsets.

In November 2020, the claimants initiated proceedings on the basis that the defendants had breached section 10(1) and (2)(a) of the Trade Marks Act 1994 (the "Act").

Section 10(1) of the Act provides that any use of an identical sign on identical services and goods amounts to an infringement of the trade mark, while section 10(2)(a) sets out that any use of an identical sign on similar services and goods constitutes an infringement where there is a likelihood of confusion on the part of the public, including likelihood of association with the trade mark.

The defendants lodged their defence in February 2021 in which they advanced the defence of "honest concurrent use". The defendants submitted that each of the marks had been held in honest coexistence over a period of time without complaint and with minimum confusion on behalf of the consumer. As such, they should not be subject to the consequences of infringement.

Importantly, in the weeks following the lodging of their defence, the defendants acquired a trade mark for STEALTH in relation to "hi-fi apparatus", though this was not disclosed for commercial reasons until the defendants lodged their submissions to amend the pleadings.

This trade mark, known in the judgment as "mark-250", was registered prior to either of those belonging to the claimant. The defendants therefore sought to amend their defences to include a second defence on the basis that the claimants – being the holders of STEALTH trade marks registered after mark-250 – were guilty of trade mark infringement themselves. The defendants also sought to raise a counterclaim on this basis.

Two applications were made: the first on behalf of the claimants in which they sought summary judgment in their favour on the basis that the defendants had no real prospect of success in their defence, and the second on behalf of the defendants to amend their pleadings and raise a counterclaim.

The judgment

The judge, Mr Justice Miles, centred his discussion around three key questions:

• Should the claimants be granted summary judgment?

The court held that the defendants' use of the "honest concurrent use" defence may well have mileage if the case proceeded to full trial with the assistance of "further and fuller" evidence. Therefore, in the interests of administration of proper justice, it was decided that the proceedings should continue to a full trial.

• Should the defendants be permitted to amend their pleadings to reflect their acquisition of mark-250?

To answer this question the court carried out a prejudice-based balancing exercise. In doing so, it found that if it refused the defendants' proposed amendments it would be required to apply the law "blinkered to the full legal reality". This would prevent the defendants from asserting their defences and claims following the acquisition of mark-250 and therefore a refusal of the amendments would not be just.

• Should the defendants be permitted to raise a counterclaim on the basis of these amendments?

In terms of the counterclaim, however, the court found in favour of the claimants. It was held that the defendants had failed to set out the way in which they had met the required legal tests which their argument demanded..

The key takeaway

While procedural cases like these should, of course, be viewed in the context of their facts, it is worthwhile noting the leniency the court showed in both refusing the claimants' application for summary judgment and allowing the defendants' amendments. The court attributed significant importance to the defendants' ability to make full use of their statutory defences in the context of the full reality as opposed to the one set out in their original set of defences. Equally and for similarly themed reasons, however, the court demonstrated restraint in its refusal to allow a counterclaim. This case will now proceed to full trial.

If you have any queries relating to trade marks, or intellectual property in general, please get in touch with a member of the IP, Technology and Data team or your usual contact at Brodies.