Battle Of The Eagles: Trademark Infringement And 'indirect' Confusion

• Published date: 27 January 2022
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Novagraaf Group
• Author: Laura Morrish

If a likelihood of direct confusion between two trademarks cannot be established, the courts may still be prepared to find infringement on the basis of a likelihood of indirect confusion. A decision by the England and Wales Court of Appeal over the 'American Eagle' trademark provides some insight into the circumstances necessary for indirect confusion to apply.

In Liverpool Gin Distillery/Halewood v Sazerac Brands, the England and Wales Court of Appeal upheld the decision by the High Court that the 'American Eagle' trademark infringed the 'Eagle Rare' trademarks on the basis of indirect confusion.

The ruling highlights the different nature of direct confusion and indirect confusion. While it was accepted that there was a low risk that consumers would mistake 'American Eagle' for 'Eagle Rare' (ie there was no direct confusion), the Court concluded that consumers would believe that 'American Eagle' came from the same, or an economically linked, business as 'Eagle Rare' (indirect confusion).

The ruling highlights the importance of carrying out availability searches prior to use and registration of a mark, not only in respect of directly conflicting goods but also in areas where there might be a natural brand extension and/or risk of indirect confusion. The latter is a particularly relevant concern in the drinks sector, given the expansion of traditional product ranges into the no and low alcohol and ready-to-drink markets, for example.

The High Court ruling

Sazerac is the owner of two trademark registrations for Eagle Rare and has produced and sold a Kentucky straight bourbon whiskey under this mark since 2001. In 2019, Halewood launched a Tennessee straight bourbon whiskey under the sign 'American Eagle' and sought to register its trademark in the UK and EU.

The resulting dispute landed before the High Court in the UK, which found that, although there was a significant similarity between the signs and the goods were identical, there was no likelihood of direct confusion. Nonetheless, Halewood was found to have infringed the Eagle Rare trademarks on the basis of a likelihood of indirect confusion; in other words, on the basis that consumers would believe that the American Eagle bourbon was produced by or somehow linked to Sazerac and its Eagle Rare brand.

In reaching this conclusion, the High Court considered the characteristics of the average consumer of bourbon in the UK and concluded that "there is a greater than usual degree of brand loyalty within...