In a recent judgement, AGA Rangemaster Group Limited (AGA) was unsuccessful in its objections to UK Innovations Group Limited & Anr’s (the Defendant) retrofitting of AGA cookers with an electrical control system called the “eControl System” and related copyright infringement claims. However, AGA was successful in its trade mark infringement claims relating to the way in which the “eControl Cookers” had been marketed and sold.
The eControl Cookers sold retained the “AGA” badges but in place of the temperature gauge fitted to the original AGA cookers, the Defendant had fitted an “eControl System” badge.
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While admitting that there is a legitimate aftermarket in the refurbishment and resale of AGA cookers, AGA claimed that the Defendant’s actions went beyond what is permissible. AGA claimed that the fitting of the eControl system, which included removing the oil burner, changed the condition of the AGA cooker and could cause damage to AGA’s reputation. AGA claimed that by selling the eControl Cookers using the AGA name, the Defendant had infringed AGA’s trade marks. AGA further contended that the way in which the eControl cookers were marketed would lead people to believe that there was a commercial connection between AGA and the Defendant.
In the UK, a reseller is free to resell goods and make use of the third-party trade mark originally applied to those goods to bring the public’s attention to the further commercialisation of the goods. This is known as exhaustion of rights. A trade mark proprietor may object to this use where the condition of the goods has been changed or impaired after they were first put on the market, or where an impression is given that there is a false commercial connection or affiliation between the reseller and the trade mark proprietor. One of the key defences put forward by the Defendant was this exhaustion of rights defence. The Defendant argued that the use of the AGA marks was descriptive and was used to indicate that the eControl system could be used to convert genuine AGA cookers.
It was held that AGA had legitimate reasons to object to the Defendant’s activities, not as a result of the fitting or sale of AGA cookers with the eControl System per se, but because of the way in which the Defendant marketed and sold the eControl cookers. The evidence did not establish that there was a serious risk to AGA’s reputation as a result of the work done to the eControl Cookers. Further, AGA did not object to the act of converting the AGA cookers nor to the Defendant supplying customers with the eControl system to be fitted to existing AGA cookers. The sale of the eControl system results in the likelihood of converted cookers being sold in the second-hand market by their previous owners. If those retrofitted cookers can be accepted onto the market, then it follows that the Defendant’s actions in fitting eControl systems to second-hand AGA cookers and re-selling them should be accepted. This is unless the Defendant led customers to believe that their company or the eControl system were commercially connected to AGA in a way that gives AGA a legitimate reason to object.
On review of the evidence submitted, the Defendant’s website was found to offer customers, in effect, the opportunity to “Buy an eControl AGA”. The eControl cookers were advertised on the Defendant’s website under titles such as “The eControl System - Why even seasoned Aga lovers are flipping the switch - Buy an eControl Aga”. Further, the cookers were advertised as being available in a range of “AGA colours” and invoices provided by the company featured the AGA trade mark. The Defendant was therefore found to have given customers the impression that they were being offered an AGA product and that there was a commercial connection between the eControl Cookers and AGA.
In order to sell these converted cookers, there was a need for the Defendant to ensure that customers were not given the impression that the conversion of the cookers was somehow connected to AGA and, ideally, to take steps to dispel such an impression. In this case, the Defendant’s website and invoices were found to do the opposite.
The case therefore illustrates the importance of taking specialist advice when reselling third party products by reference to the original trade mark applied to those products, especially when those products have been altered in some way. In particular, the way in which those products are resold, and any marketing or promotional materials relating to those products, should be checked carefully to ensure that they do not suggest to the customer that the alterations made to the products have been carried out by the trade mark owner or by a party associated with the trade mark owner.
