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1 February, 2011

On 11 February 2011 the High Court of Justice (Chancery Division) Intellectual Property Community Trade Mark Court handed down judgement in the case of Hasbro Inc and others v 123 Nährmittel GmbH and Marketing and Promotional Services Ltd. This case is of particular significance to trade mark owners, in a time where defending rights during an uncertain economic climate is very important. In this case, the US-based toy giant Hasbro has secured a notable victory in the High Court in a Trade Mark Infringement and Passing Off action against 123 Nährmittel GmbH and its UK supplier, Marketing and Promotional Services Ltd. Hasbro brought an action against “the edible PLAY-DOUGH”, “edible PLAY-DOUGH” and “PLAY-DOUGH”, for infringement of three registered trade marks for the mark PLAY-DOH as follows: a Community Trade Mark No. 00238634 in classes 16, 25 and 28 b UK Trade Mark No. 960810 in class 16. c UK Trade Mark No. 1344740 in class 16. The defendants counterclaimed for a declaration of invalidity on the basis that PLAY-DOH is lacking in distinctiveness or is descriptive, together with a counterclaim for revocation on the ground that PLAY-DOUGH is the common name in trade for modelling compounds, as a consequence of acts and/or inactivity of the proprietor. In addition, the defendants relied on a special defence whereby the use of PLAY-DOUGH is an indication of the kind of goods they sell, and therefore that use is in accordance with honest practices in industrial and commercial matters.

Overview PLAY-DOH was developed by a company called Rainbow Crafts Cincinnati, a manufacturer of soap and cleaning compounds, in around 1955. It was initially used in schools and kindergartens. In 1956 PLAY-DOH was demonstrated and sold in the toy department of the Wood Wood and Lathrop store in Washington DC. Commercial success followed and the international launch, in a number of European countries including the UK, occurred in 1964. By 1971 Rainbow Crafts was owned by General Mills, and merged with Keno products. By 1972, 500 million tubs of PLAY-DOH had been sold worldwide. In 1991 the PLAY-DOH business was purchased by Hasbro as part of its acquisition of the business of the Tonka Group of Companies, which then owned Keno. The first defendant, 123 Nährmittel GmbH, manufactures abroad and sells in the United Kingdom (through the second defendant, Marketing and Promotional Services Limited, as its distributor) of powdered doughnuts under the name YUMMY DOUGH. It is an important selling feature of YUMMY DOUGH that, unlike PLAY-DOH, it is intended not only to be played with but also to be eaten, either raw or when baked. YUMMY DOUGH was marketed with the strap line THE EDIBLE PLAY DOUGH! printed across the bottom of the packet. On 24 March 2010 an application was made for an interim injunction by Hasbro which resulted in a consent order in which the defendants gave a temporary undertaking regarding their use of “the edible PLAY-DOUGH”, “edible PLAY-DOUGH” or “PLAY-DOUGH”. Four separate claims were then made by Hasbro in the Court as follows:

1) Infringement of their two UK registered trade marks and of their Registered Community Trade Mark;

2) Passing off, based on the goodwill which they claimed to have acquired through use of PLAY-DOH in the United Kingdom;

3) A counterclaim by the defendants for a Declaration of Invalidity that the mark PLAY-DOH lacks distinctiveness and/or is descriptive;

4) A counterclaim by the defendants for revocation of the registered trade marks PLAY-DOH on the ground that PLAY DOUGH is the common name in trade for modelling compounds, as a consequence of acts and/or inactivity on the part of the proprietor.

The evidence submitted by both parties clearly shows that the defendants took it upon themselves to decide that the registered trade mark owned by Hasbro for PLAY-DOH was descriptive. Mr Justice Floyd, after carefully considering the arguments of both parties, found not only that the mark PLAY-DOH had acquired sufficient strength to denote the goods of Hasbro and therefore dismissed the counterclaims for invalidity, but also concluded that there was a likelihood of confusion in the case of the strap line “the edible play dough” and Hasbro’s action for infringement was successful. Hasbro were also successful in respect of the passing off claim. The fact that the term “play dough” was argued to be descriptive did not affect Hasbro’s case, as they were able to show the mark PLAY-DOH has acquired distinctiveness. Furthermore, it should be borne in mind by any other party wishing to commence use of any term which may arguably be descriptive, but which is already protected by way of registered trade mark rights, that the rights in that registration can be invoked against them, until that registration is declared invalid or revoked.

Conclusion The outcome of this case may have been affected by the way in which the defendants handled their position from the outset. The decision that a registration will not be enforceable due to the descriptive nature of a mark, is clearly not prudent. This is something for trade mark owners and practitioners to be aware of when ‘clearing’ a mark for use and/or registration. Whether a person believes that a mark should or should not be on the register is irrelevant, and until the registration is removed, the legal risk posed by that earlier right will remain. At a time when trade mark owners need to defend their rights in order to maintain their position in sometimes difficult economic and market circumstances, this is a very welcome decision.