The Supreme Court, in its highly-anticipated judgment in Iconix v. Dream Pairs, has unanimously confirmed the importance of post-sale confusion to both similarity and likelihood of confusion assessments in trade mark infringement. This is despite finding that the Court of Appeal was wrong to overturn a High Court decision on the basis of its own analysis where the High Court made no fundamental error.

What happened?

The case at hand concerned a claim of trade mark infringement in 2021 by Iconix, owner of the well-known sportswear brand UMBRO, against footwear seller Dream Pairs.

Iconix sued in relation to Dream Pairs' use of a sign (the DP Sign) on footwear, primarily sold on prominent online marketplaces, which it said infringed its earlier rights in its famous UMBRO diamond trade marks (the UMBRO Marks) by being confusingly similar (under Section 10(2)(b) of the Trade Marks Act 1994). A side-by-side comparison (using the most relevant UMBRO Mark) is shown below:

UMBRO Mark	DP Sign

The High Court rejected Iconix's claim, finding no infringement. This was because there was "a very low degree of similarity" between the UMRO Mark and DP Sign leading to no likelihood of confusion.

This finding held even through a consideration of post-sale contexts, such as where a consumer encounters the DP Sign for the first time from head height being worn, for instance, on a football pitch, where the DP Sign might be distorted to look more like the UMBRO Marks (see below image of the DP Sign on a football boot). The High Court did not think these post-sale situations moved the dial – consumers would still view the DP Sign as a titled square, and not an elongated diamond shape.

The Court of Appeal disagreed, and overturned the High Court decision. In its judgment, the Court of Appeal assessed there rather to be "a moderately high level of similarity" in the post-sale context, particularly in the aforementioned circumstance of a viewer standing nearby and looking down at the football boot. Therefore, a likelihood of confusion on the part of a significant proportion of consumers was found. Dream Pairs appealed to the Supreme Court.

What did the Supreme Court decide?

The Supreme Court allowed the appeal and overturned the Court of Appeal's decision, because the Court of Appeal had undertaken its own assessment of similarity and confusion where it was not entitled to: the High Court had carefully considered the realistic post-sale confusion contexts but had simply arrived at a different conclusion to what the Court of Appeal would have. It did not commit a fundamental error and therefore the appeal court could not simply substitute in its own analysis.

However, it is the Supreme Court's findings on post-sale confusion that are of more general significance. It unanimously rejected a number of arguments by Dream Pairs which sought to constrain the applicability of post-sale confusion to trade mark infringement:

• Similarity: Dream Pairs argued that, when assessing similarity, the court should only conduct a side-by-side analysis of the marks and not extend this to the post-sale environment unless there is an intrinsic similarity found side-by-side. The Supreme Court gave this argument short shrift, ruling that (i) relevant CJEU authority (Equivalenza) only held that post-sale confusion cannot be used to rule out similarity, not that it cannot help establish similarity; (ii) it would make little sense if post-sale contexts could not establish confusion if confusion was not found on side-by-side analysis (indeed, why would it be needed if side-by-side established similarity?); and (iii) the "overall impression to the relevant public" assessment required for the comparison necessarily includes post-sale context.
• Confusion: Dream Pairs argued that (i) only post-sale confusion jeopardising the essential functions of a trade mark as a guarantee of origin at the point of a subsequent sale/transaction can amount to infringement; and (ii) for actionable infringement, post-sale confusion must result in damage at the point of sale or in a transactional context influencing consumers when they make a choice about goods/services. It pointed out that it was established there was no confusion at the point of sale due to contextual factors on the online marketplace websites. Again, the Supreme Court disagreed, noting that no CJEU authority supports these propositions and there is not reason in principle to adopt them.

What are the consequences of the decision?

Post-sale confusion remains highly relevant to both similarity assessments and likelihood of confusion in trade mark infringement.

Brand owners should, therefore, be cognisant of this when designing new brands as well as deciding on what products any brand is used on. Decision-makers will need to use their imagination when thinking of how its branding will be encountered in practice and not just side-by-side graphically. You may nevertheless be liable for infringement if real-world situations give rise to similarity/confusion with third parties even if there is little chance on paper. 

Likewise, when enforcing their earlier rights brand owners should think about these post-sale contexts when considering the limits of their rights' effectiveness.

However, the dismissal of the Court of Appeal's own assessment removes potentially valuable authority on just how far a post-sale confusion finding can go. The Court of Appeal judgment found infringement on the basis of an arguably very narrow post-sale situation (standing very close, looking down on a football boot), even if a conceivable one. Will infringement be found going forwards if similarity and confusion are found only in a very limited real-life situation? We may need to wait for further cases to provide more clarity.