Tea rooms & passing off
20
Mar
The Willow Tea Rooms - a very British trade mark case

Designed by renowned architect Charles Rennie Mackintosh, and opened in 1903 by the well-known tearoom owner Kate Cranston, the Willow Tea Rooms at Sauchiehall Street are considered the best known of Glasgow’s late 19th and early 20th century tearooms.

The Willow Tea Rooms were restored in 1983 by Glasgow business woman Anne Mulhern who has run them ever since. In 2014, the Sauchiehall Street building was acquired by The Willow Tea Rooms Trust.

The dispute

In 2015, the Trust filed a UK trade mark application for THE WILLOW TEA ROOMS covering a range of commercial, cultural, architectural and hospitality services.

Ms Mulhern, who has registered as UK trade marks stylised versions of WILLOW and THE WILLOW TEA ROOMS, opposed the application under S. 5(2)(b), S.5(3) and S.5(4) of the Trade Marks Act 1994, citing a likelihood of confusion, reputation in her earlier rights and passing off.

As well as denying all of these grounds and putting Ms Mulhern to proof of use of her marks, the Trust claimed that, as owner of the Sauchiehall Street building, it had established goodwill in THE WILLOW TEA ROOMS itself.

Ms Mulhern’s opposition succeeded in part  , but failed in respect of the services relating to architecture covered by the Trust’s application. The decision can be found here.

Considerations for businesses and trade mark owners

Goodwill

This case serves as a reminder that goodwill is inseparable from the business that generates it. The accepted definition of goodwill in UK trade mark law is:  “…the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom.”  (Emphasis added) (See Inland Revenue Commissioners v Muller & Co’s Margerine Ltd [1901] AC 217 at 223.)

The Trust argued that the Sauchiehall Street building had been known as “The Willow Tea Room” since 1903, and therefore that any goodwill in that name “was associated with the building itself and not the business carried on there”.

Citing established case law, the UKIPO decision makes clear the distinction between reputation, a non-proprietary right which can exist without a supporting business, and goodwill, which “cannot exist in a vacuum, must be the result of custom, and is not to be equated with some general reputation unrelated to buying and selling or dealing with customers”. Accordingly, the UKIPO found that the Sauchiehall Street building could enjoy reputation (e.g. recognition as one of Mackintosh and Cranston’s tearooms), but not goodwill.

Ownership

This case also highlights the importance of clarifying who owns, who uses, and who is entitled to use a trade mark registration. Although this may seem obvious, complications can arise when the lines are blurred between parent or sibling companies, between licensors and licensees, or, as in the present case, between small business owners and the businesses themselves.

In putting Ms Mulhern to proof of use of her prior registrations, the Trust questioned whether use of the marks had in fact been made by Ms Mulhern herself, or rather by her company. The UKIPO found that, since Ms Mulhern was both the trade mark owner and the sole director of the company, any use made by the company had clearly been with her consent, as is permissible under UK law. Similar consideration was made as to her entitlement to oppose under S. 5(4) in her own name as owner of this goodwill.

Records of use

The ability to bring a passing off claim can be valuable – as illustrated by the Willow Tea Rooms case. Cases relying on unregistered rights are usually very evidence-heavy, as are claims of reputation or acquired distinctiveness and defences to non-use challenges. Ms Mulhern had to provide evidence to support her S.5(3) and S.5(4)  grounds of opposition, as well as to prove that her earlier marks were in use and thus enforceable.

Businesses should keep complete, accurate, dated records of their trade mark use – from saving copies of invoices and advertisements, to keeping track of a breakdown of sales figures. This is important whether or not the marks are registered.

Register your rights

Of course, it is typically far more straightforward to enforce registered rights than unregistered user rights. Businesses should carry out periodic reviews of their activity and upcoming plans in conjunction with their trade mark portfolio to ensure that the  portfolio adequately reflects and protects the trade mark owner’s actual use of its marks.