VETSURE v PETSURE – Second Cat-tempt

This article first appeared in the Intellectual Property Forum journal, published by Intellectual Property Society of Australia and New Zealand. Hafsa Babar and Kyrana Hulstein, “VETSURE v PETSURE – Second Cat-tempt” (2024) 138 Intellectual Property Forum.

TVIS Limited v Howserv Services Limited & Others [2024] EWCA Civ 1103

On 2 October 2024, the UK Court of Appeal reversed the first instance decision of Mr Ian Karet (sitting as Deputy High Court Judge) on the validity and infringement of the mark VETSURE, in the case of TVIS Limited v Howserv Services Limited & Others [2024] EWCA Civ 1103.

Background

TVIS Limited (“TVIS”) (owner of the Vetsure brand of pet insurance) initiated proceedings against Howserv Services Limited (“Howserv”) (owner of the Petsure brand of pet insurance) for trade mark infringement, passing off and invalidity. At first instance, the Judge ruled that the PETSURE mark did not infringe the VETSURE mark because of the descriptive nature of the marks. In particular, Arnold LJ found the shared suffix “sure” was descriptive of insurance services, the words “pet” and “vet” were unlikely to indicate a particular source of pet insurance and conceptually dissimilar, and the VETSURE mark lacked highly distinctive character because it was made up of descriptive terms. Additionally, Arnold LJ treated the instances of confusion identified from the parties’ disclosure as examples of administrative errors, rather than evidence of brand confusion. 

TVIS appealed the decision. Although permission to appeal was refused in respect of sections 5(3) and 10(3) of the Trade Marks Act 1994 (UK) (“the Act”) (relating to marks with a reputation), the appeal was allowed in respect of sections 5(2) and 10(2) of the Act. Since the success or failure of the passing off and invalidity claims depended on the outcome of the trade mark infringement claim, the judgment focusses primarily on the infringement assessment.

Similarity Between the Marks

Visual and Aural Similarity

TVIS argued that the Judge had erred in assessing the visual and aural similarities between the PETSURE and VETSURE marks as merely “similar”, as opposed to “highly similar”. However, Arnold LJ refused to interfere with this assessment because no error of principle on the part of the Judge had been identified, nor was the Judge’s assessment plainly wrong. Arnold LJ emphasised more generally that while it has become customary for first instance tribunals to employ labels such as “high”, “medium” or “low” to classify similarity of trade marks, this practice is not based on a legal requirement. Arnold LJ emphasised that the focus of the assessment should be on whether the similarities between the marks at issue and other relevant factors lead to a likelihood of confusion, as opposed to the verbal label applied.

Crucially, Arnold LJ noted that a high degree of visual and aural similarity does not necessarily imply a likelihood of confusion; conversely, a low degree of similarity does not preclude the possibility of confusion. The assessment of a likelihood of confusion is multi-factorial and the similarity between the marks is one factor in that assessment. This reasoning reflects a nuanced approach, recognising that likelihood of confusion is determined not by degrees of similarity, but by assessing those similarities with a broader range of relevant factors. 

Conceptual Similarity

TVIS also argued that the Judge had erred in concluding that the VETSURE and PETSURE marks were conceptually dissimilar. Arnold LJ agreed with this critique, highlighting three key issues with the initial approach.

i. First, the Judge appeared to have blurred the assessments of conceptual similarity and distinctiveness when both ought to have been separate considerations. While related, these elements serve different roles in trade mark evaluation: conceptual similarity considers the underlying idea behind a mark, whereas distinctiveness looks to its uniqueness or recognisability within the market.

ii. Second, although the Judge explained that “VETSURE” would be understood by consumers as describing insurance for veterinary services, he provided no clarity as to what concept “PETSURE” represented. If “VETSURE” brings to mind veterinary insurance, then logically, “PETSURE” could too be understood by consumers as describing insurance for pets. After all, insurance to cover the costs of veterinary care is one of the principal expenses of pet ownership. According to Arnold LJ, this overlap suggested considerable conceptual similarity between the marks, in contrast to the Judge’s view that they represent entirely distinct concepts.

iii. Lastly, the Judge appeared to place too much emphasis on the relevance of conceptual (dis)similarity in cases where the marks are visually and aurally similar. Arnold LJ highlighted that it is not necessary for a mark to be conceptually similar to generate a likelihood of confusion; visual and aural similarity alone can suffice to create confusion among consumers.

Distinctive Character of the VETSURE Mark 

TVIS’ third ground of appeal criticised the Judge’s approach to assessing the distinctiveness of the VETSURE mark.

Inherent Distinctive Character 

TVIS first challenged the Judge’s determination that the VETSURE mark was descriptive. Given that the validity of the mark was not in dispute, it was not open to the Judge to conclude that it lacked inherent distinctive character. Arnold LJ noted that the real problem with the Judge’s assessment was that it jumped from finding that the components (“VET” and “SURE”) of the mark were descriptive, to stating that the combination itself was descriptive, a conclusion which did not necessarily follow. VETSURE is an invented portmanteau and while it may allude to pet insurance, it does not describe it as such. Arnold LJ rightly accepted that a combination of descriptive terms is not necessarily descriptive itself; however, where two descriptive terms are combined, established caselaw does require there to be some “unusual variation, in particular to syntax or meaning” which produces an impression on the relevant consumer that the word is more than the sum of its parts (Campina Melkunie BV v Benelux-Merkenbureau, Case C-265/00 (“Campina Melkunie”)). 

Given Arnold LJ’s comments about the conceptual meaning and consumer perception of the mark, his assessment of descriptiveness seemed quite generous to TVIS since VETSURE is hardly a “lexical invention”. TVIS also argued that the Judge’s findings as to the inherent distinctiveness of the VETSURE mark were unclear. On the one hand, the Judge concluded that VETSURE was descriptive and consequently had no inherent distinctive character. On the other hand, Arnold LJ acknowledged that VETSURE “does not have a highly distinctive character”, leaving open the possibility that the mark has a moderate level of distinctive character. Considering this ambiguity, Arnold LJ made his own assessment that the mark had a low-to-medium level of inherent distinctive character. 

Acquired Distinctive Character 

TVIS’ second criticism focused on the inconsistency in the Judge’s assessment of the acquired distinctiveness of the VETSURE mark. The Judge initially dismissed TVIS’ claim that the mark had enhanced distinctive character, but then went on to say that VETSURE had “some character acquired through use” and met the reputation threshold for extended protection under section 10(3) of the Act. Arnold LJ agreed that the Judge’s reasoning was inconsistent, noting that it implied the mark had acquired some additional distinctive character over and above its inherent distinctive character. Consequently, Arnold LJ found the mark to be moderately distinctive overall. 

Assessment of Actual Confusion

Arnold LJ supported TVIS’ three criticisms of the Judge’s assessment of the evidence of actual confusion at first instance.

Administrative errors or evidence of confusion?

First, Arnold LJ disagreed with the Judge’s dismissal of examples of confusion as mistakes or administrative errors. Arnold LJ noted that there was no reference to “administrative errors” in the case on which the Judge had relied (The European Ltd v The Economist Newspaper Ltd [1998] FSR 283) and although it is possible for an instance of alleged confusion to involve some administrative error which does not demonstrate any relevant confusion, the examples relied on by TVIS did show relevant confusion. At the very least, the examples showed that consumers regarded the marks as brand names and that the supposed conceptual difference between the marks did not avoid the potential for confusion. 

In one example, a Vetsure customer contacted TVIS to discuss her policy and asked if they were “definitely Vetsure, not Petsure”, expressing confusion after receiving an email from Petsure. In two further examples, Petsure customers filed claims with Vetsure, not appreciating that Petsure and Vetsure were different brands. Another example showed a Petsure customer mistakenly calling Vetsure to discuss her policy, only to realise her error on the call. In that example the customer noted specifically that the shared “-SURE” suffix in both marks had caused her confusion. 

Marks sufficiently different to negate likelihood of confusion

Second, Arnold LJ disagreed with the Judge’s view that the marks were sufficiently different to negate a likelihood of confusion. Rather, the evidence showed that consumers might confuse the marks due to the visual and aural similarities between them. 

In one example, a Vetsure employee followed up with a customer looking for a new policy. When asked whether she had a quote from Vetsure, the customer replied: 

I do have a quote. Just …  I think I do, oh no I don’t, no wait a minute I’m confused now […] so you’re Petsure are you? 

Another example shows a TVIS-related social media post initially mentioning Petsure instead of Vetsure (although later corrected). 

Examples of actual confusion

Third, Arnold LJ agreed that the Judge’s finding that “there was confusion in a small number of instances” was inconsistent with his finding that there was no likelihood of confusion. 

In one example from Howserv’s disclosure, a customer reached out to Petsure to discuss a Vetsure Pet Health Plan. In another example, a customer cancelled her Petsure policy because she had mistakenly signed up with the wrong provider, having wanted to get a Vetsure policy instead. Arnold LJ questioned why the Judge had recognised this as an instance of confusion but not previous, similar examples.

Arnold LJ thought that the frequency and significance of these occurrences distinguished the present case from W3 Ltd v easyGroup [2018] EWHC 7 (Ch), in which there had been fewer instances of confusion (including one instance originating from Italy and many instances after the relevant date), despite a long period of simultaneous use of the marks and significant efforts to find proof of confusion. As counsel for TVIS submitted: 

[t]hese were two relatively small ships in a vast ocean, and yet instance after instance of them crashing into each other.

Conclusion on a likelihood of confusion 

Given the errors in the Judge’s assessment, Arnold LJ thought it necessary to re-evaluate the likelihood of confusion. TVIS made four criticisms in this respect, the following three of which Arnold LJ found to be persuasive.

i. First, the Judge had failed to properly account for consumers’ imperfect recollection, leading them to mistake PETSURE for VETSURE. Additionally, the Judge had ignored the fact that no other pet insurance provider used a brand name with the suffix -SURE. 

ii. Second, the Judge had failed to consider likelihood of confusion from the perspective of consumers familiar with VETSURE, who might have been more likely to misread and/or mishear PETSURE as VETSURE.

iii. Third, the Judge had failed to properly apply the interdependency principle, whereby a lower degree of similarity between marks can be offset by a higher degree of similarity between goods and/or services, especially given that the services in question were identical. 

Arnold LJ concluded that a likelihood of confusion did exist between VETSURE and PETSURE. While Arnold LJ recognised that small differences between descriptive marks may suffice to avoid confusion (Reed Executive plc v Reed Business Information Ltd [2004] EWCA Civ 159), Arnold LJ did not think this principle applied here. Indeed, VETSURE is not descriptive and there was minimal overlap with other VET- prefixed or -SURE suffixed names in the market, so there was no reason to think that the average consumer of pet insurance would be alert to the difference between the marks. Furthermore, the evidence showed that some consumers did fail to distinguish between the marks. 

As a result, TVIS’ claims under section 5(2) and 10(2) of the Act, as well as its claim for passing off, succeeded.

Comments

This case serves as a useful reminder that the Court of Appeal may not only overturn a first instance decision, but also conduct a thorough re-evaluation of the evidence.

Arnold LJ’s judgment offers a helpful reminder of the multi-factorial assessment required to determine a likelihood of confusion.  In particular, it highlights that invented words made up of descriptive terms may be distinctive, in line with existing EU caselaw such as Babydry (Proctor & Gamble v OHIM, Case C-383/99 P) and Campina Melkunie. Additionally, Arnold LJ’s comment that “trade mark law is all about consumers’ unconscious assumptions” reinforces the idea that consumer perception plays a key role in trade mark disputes, particularly where the differences between the marks are minor. The case also highlights the importance of considering the context and purpose of marks when assessing conceptual similarity. Here, the fact that veterinary costs are some of the principal expenses of pet ownership was key to Arnold LJ finding that the marks were ultimately conceptually similar. 

Finally, from a practical perspective, the decision underscores the importance of effective time management under the Shorter Trials Scheme, as the parties at first instance had insufficient time to present oral arguments on evidence of actual confusion. Arnold LJ emphasised the value of oral arguments, and as reflected in the decision, reached a markedly different assessment regarding the evidence in question.