On 19 June 2024, the UK High Court delivered its judgment in Case No [2024] EWHC 1430 (IPEC) concerning Engineer.AI Global Limited’s BUILDER trade marks and an alleged infringement by Appy Pie Ltd and Appy Pie LLP. The court rejected the claims, ruling that the claimant’s trade marks lack distinctiveness.
Background information and facts
The judgement refers to a trade mark dispute between two competitors both operating in the “no code” software application development field.
A “no code” or “code-free” software application development allows users to build or create an app without having to carry out coding, and so simplifies app development and makes it accessible to those without prior experience of creating or developing software.
Engineer.AI Global Ltd owned seven UK registered trade marks all of which included the element BUILDER in word and in stylised forms.
Details of the dispute
In 2022, Engineer.AI sued the defendants for infringement in respect of various uses of Builder, Builder AI and other phrases which it contended were used in a trade mark rather than descriptive sense. It also alleged that a LinkedIn post which reproduced its Builder.AI device mark was comparative advertising which infringed because it failed to comply with regulation 4 of the Business Protection from Misleading Advertising Regulations 2008/1276.
The defendants counterclaimed that each of the registered trade marks owned by the claimant were, and always had been, invalid in respect of the goods and services for which they were registered in classes 9 and 42 on the basis of descriptiveness and lack of distinctiveness.
In particular, all seven registered marks were challenged for non-compliance with s.3(1)(b) and s.3(1)(c) TMA and the Builder Word Mark and Builder House Mark are additionally challenged under s.3(1)(d) on the basis that they “consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade”.
The claimant denied the counterclaim and argued that each one of the registered marks were inherently distinctive and/ or had acquired distinctive character by the date of their registration or, alternatively, had acquired distinctive character before the date of the counterclaim and therefore the registered marks were not liable to invalidation under s. 47(1) TMA.
Decision outcomes
On the points of distinctiveness and of acquired distinctiveness, the Judge found that none of the registered marks were distinctive or had acquired distinctiveness and that the signs “Builder”, “Builder.ai”, “Builder Now”, “Builder Cloud” and “Builder Studio Pro” are descriptive terms used widely and interchangeably in the software industry as a tool to enable the creation or development of software, whether used with a further descriptor or not, since at least 2013.
The average consumer, who is deemed to be well-informed reasonably observant and circumspect, would have known that, and would immediately perceive the Builder marks as descriptive, and as such inherently unable to identify the goods and services for which they were registered as originating from the claimant and so distinguish them from goods or services of other undertakings, as at the registration date.
On the points of reputation, the Judge found that the claimant did not produce sufficiently compelling evidence that the any of the marks in dispute enjoyed reputation with a significant part of the public in the UK or an enhanced distinctive character capable of impacting on the assessment of infringement.
On the point of infringement, the Judge concluded that in absence of distinctiveness and/ or acquired distinctiveness, the infringement claim failed and was dismissed.
Summary
- The claimant’s claims for infringement of the marks were dismissed.
- The defendants succeed on the counterclaim and hence all of the marks were deemed partially invalid for lack of distinctive character.
Learning outcomes
This case is a reminder that the registration of a trade mark is by no means a guarantee of its enforceability and that attempting to enforce registrations for trade marks of questionable distinctiveness can be fraught with risks and difficulties.
The above decision is also yet another reminder that a proprietor must file clear, cogent, and credible evidence if it seeks to rely on acquired distinctive character. While it is challenging to define what specifically “clear, cogent, and credible” evidence might be in theory, we must remind ourselves of the factors that will be taken into account when assessing the evidence:
- the market share held by the mark with regard to the relevant goods or services;
- how intensive, geographically widespread and long-standing use of the mark has been;
- the amount invested in promoting the mark for the relevant goods or services;
- the proportion of the relevant public who, because of the mark, identifies the goods or services as originating from that particular undertaking.