Nike LDNR campaign sunk by trademark infringement

How careful do you need to be when utilising third party trade marks in advertising campaigns?

The background
Frank Industries is a ladies' sportswear brand based in Australia. It holds UK and EU trade marks consisting of the upper-case letters ‘LNDR’. In January 2018, Nike launched its “Nothing beats a Londoner” campaign, in which it used the ‘LDNR' sign (note the spelling difference) alongside its famous Nike Swoosh. Frank Industries issued a claim for trade mark infringement under the Trade Marks Act 1994 and the EU Trade Mark Regulation (2017/1001), as well as a claim for passing off. It also applied for an interim injunction to restrain the alleged infringing acts.

At first instance, the Intellectual Property Enterprise Court granted a prohibitory injunction and a mandatory injunction requiring Nike to, within 14 days, "take all reasonable steps to delete the signs LDNR…from social media accounts within its reasonable control" – including Twitter, Instagram and YouTube. The Court directed an expedited trial, and on this basis the duration of the interim injunction was limited to four months.

The injunction was appealed and the Court of Appeal upheld the prohibitory element of the injunction, but reversed the mandatory element. The mandatory requirements were considered too burdensome given the nature of the social media platforms. Nike was required to stop using LDNR, but was not required to re-edit YouTube videos or delete entire Instagram posts or Tweets.

Nike also brought a counterclaim against Frank Industries on the basis that the LDNR trademark was invalid.

The decision
The Intellectual Property Enterprise Court found for Frank Industries. The decision was threefold:

• the Court found that LNDR was sufficiently distinctive to be a valid trademark. There was no dictionary definition identified. Nike failed to establish that the average consumer would perceive it as meaning Londoner;

• the Court ruled that the trademark had been breached, which could encompass passing off. LNDR and LDNR were deemed to have a high level of aural and visual similarity. Given this and the fact that there were several accounts of actual confusion, the court found that it was likely that the average consumer could have been confused;
• the Court also ruled that Nike were unable to rely on the defence laid down in Article 14(1)(b) of the EU Trademark Regulation. Part of this test was to consider whether Nike had accorded with honest practices. Nike were considered not to have acted fairly. They had continued to attempt to use LDNR despite knowing that Frank Industries protested and that the use could be harming their goodwill permanently. 

Why is this important?
This case shows that the court will consider the context in which a trade mark is used when considering consumer perception – both for validity and infringement. Hashtags on social media will not necessarily be conclusive.

The Court of Appeal decision also shows an understanding of the value of social media. In particular, from an injunction perspective, it provided practical and savvy alternatives to the High Court's suggested outright deletion of posts.

Any practical tips?
The case is an example of how an advertising campaign can be terminated early as a result of trade mark infringement. Nike's LDNR campaign was substantial and, until Frank Industries pitched up with their complaint, highly successful. There was advertising at Premier League football games, in a YouTube Film, a Nike LDNR award ceremony and even posts of Sir Mo Farah in a Nike LDNR T shirt. So the pain felt by Nike went beyond damages for trade mark infringement, given the lost brand capital in what had been a successful campaign.

So the message is clear – if you're clearing copy, keep your eyes open and check for any possibility of trade mark infringement. This includes the use of abbreviations, which are now common in the context of social media posts – and the latter may slip more easily through the copy clearance process than more obvious/traditional full word brand names.