We’ll meet AGAin: permission to appeal granted in AGA Rangemaster v UK Innovations trade mark and copyright dispute

An AGA is a cast iron cooker, oven and water heater churning out enough heat to run a bath, dry clothes and cook dinner for the extended family, all at once. Once installed, one gets the impression that an AGA will ‘see you out’, and many are used for decades. AGA cookers can be powered by gas, oil, electricity, or (if they are really old) even coal. 

The aesthetic appeal and longevity of AGAs, together with the environmental impact and running costs of the hydrocarbon versions, mean that there is a thriving market in electrification of AGAs. AGA itself supplies electric AGAs, but this case concerns the sale of AGA cookers converted from hydrocarbon fuel to electric.

UK Innovations offers such conversions, selling conversion fittings or complete “eControl” AGAs. UK Innovations’ use of AGA’s trade marks on products and in marketing has raised long simmering questions about how far aftermarket sellers can go before they infringe the rights of the original supplier (OEM). This judgment serves up some clarification with a side-dish of copyright and designs cross over.

UK Innovations were selling and marketing converted AGAs. Those converted AGAs bore AGA trade marks and an electric control panel mimicking those found on the AGAs. AGA owned trade marks for the word AGA, a logo, and 2D and 3D marks of the full cooker shown below. 

AGA objected to UK Innovations’ sale and marketing of the eControl cookers on the basis of s10(1), (2) and (3) Trade Marks Act 1994 (“TMA”) infringement. They brought a copyright claim for the UK Innovations control panel which they alleged infringed the copyright in a design CAD drawing of the AGA control panel. Finally, Mr McGinley, the director of UK Innovations, was included in the claim as a joint tortfeasor. 

Trade Mark Infringement

UK Innovations sought to rely on the usual trade mark defences available to aftermarket suppliers: 1.  AGA’s trade mark rights were exhausted as the converted products had already been legitimately placed on the market, and 2. the use of the trade marks was permitted to describe the AGA compatible goods/services UK Innovations was providing. 

Product conversion

AGA accepted the principle that UK Innovations was entitled to supply its eControl System to AGA owners, and to refurbish AGA cookers. Its complaint related instead to what it described as the sale of complete retrofitted AGA cookers fitted with the eControl System, as well as some of the marketing materials used to promote them as an “eControl AGA”.  AGA complained about the use of non-AGA parts, a replica AGA logo, and UK Innovations’ eControl logo affixed to the AGA.
Many brands might be concerned to learn that it was only the marketing materials promoting the converted AGA cookers as ‘eControl AGAs’ that infringed AGA’s trade marks. In particular, the judge found that having accepted that reconditioned and electrified AGAs can in principle be sold, absent evidence of particularly shoddy workmanship (of which there was nothing compelling), AGA could not complain of the sale of co-branded AGA cookers with non-AGA parts and a fake logo put on it.
In particular, the judge found that:

• UK Innovations was entitled to rely on s12(1) TMA, which provides a defence to trade mark infringement where the goods have already been put on the UK or EEA markets by the brand/OEM or with its consent. 
• The fact that the core technology that made the converted AGA cooker work was not something produced by AGA or installed with its consent was not enough to give AGA legitimate reasons to oppose the sale.
• There was no compelling evidence that the eControl system was so poorly manufactured that the sale of the converted AGA cookers risked seriously damaging AGA’s reputation, a fact not helped by the streamlined nature of IPEC trials. The judge found that customers would expect that replacement parts might not be of equivalent quality to the original. 
• Most of the replacement parts were either genuine AGA parts or not visible to consumers.

The converted AGA cookers were comprised of a collection of AGA parts and replica/replacement parts. After a certain point, you may end up with a ‘Ship of Thesus’, i.e. at some stage of replacement and repair you might question whether the AGA cooker ceases to be the original and become a wholly different product. The judge dealt with this problem by finding that the parts which make and AGA “identifiably an AGA” were original parts and, in the trap purchase case study, were largely all from the same AGA placed on the market in the 1980s. The replacements were necessary to restore appearance and functionality to the cooker to which AGA could not legitimately object. 

Marketing use

However, AGA obtained something of a consolation prize with the finding that UK Innovations had overstepped the mark in its marketing of the cookers. Its website and invoice materials displayed images of the cookers and referred to buying an “eControl AGA”, choosing from a range of “AGA colours”, using their “decades of Aga experience and conversions” to provide the “supply and fit of AGA”. The court found that, while consumers are likely to pay a higher degree of attention to such expensive purchases, they would be given the impression that they were buying an actual AGA product, i.e. an ‘eControl AGA’ when they were not. 

Post-sale confusion

An interesting point for conversion companies to consider, is whether the presence of the converters logo and the original brand logo on a product will appear as authorised co-branding and result in a post-sale assumption of a commercial connection. Here, the addition of the ‘eControl’ logo would be understood as descriptive and similar to instances where repair works have been carried out and the tradesperson places a label indicating their work on that project. Whether this balancing assessment would have been the same if it was the less descriptive UK Innovations brand applied to the cookers is worth bearing in mind.  

Copyright infringement

IP lawyers have been on tenterhooks over the question of copyright and design cross-over ever since Brexit and the long (long) awaited decision on WaterRower. The question is whether the English courts are prepared to diverge from the EU approach that has enabled many products traditionally protected by design rights to benefit from the much longer-lived copyright protection. The AGA case does not take us very far on this issue. The facts sat squarely within the s.51 Copyright Designs and Patents Act (“CDPA”) defence to copyright infringement of making an article to a design embodied in a design document. This defence is intended to draw a boundary between what should be protected by design rights and copyright.

AGA were relying on a design (CAD) drawing of their control panel that they argued was infringed by UK Innovations’ control panel. Despite elements of the CAD being dictated by technical function, there were other ways to achieve the same result and there were creative and aesthetic choices at play in the CAD. As a result, copyright subsisted in the CAD as an original artistic work. The UK Innovations panel was unarguably influenced by the AGA control panel and looked highly similar. The judge found that the UK Innovations panel was an indirect copy of the CAD. However, because the control panel itself was not an artistic work under English law, the copying of the design drawing by making the control panels was not considered infringement. 

The impact of the CJEU decision in Cofemel on the application of s51 CPDA was considered by the judge, i.e. is a s51 CDPA exception to infringement compatible where an artistic work, such as the CAD drawing, has been copied in any format. The parties did not make any submissions on this point and as a result the Judge did not address the issue. 

Joint Tortfeasorship

As has often been the case in IP proceedings, the corporate defendant UK Innovations’ director was joined as a defendant. However, the case was pleaded and actually heard prior to the Lifestyle Equities Supreme Court decision that set a knowledge threshold for individuals to be held as joint tortfeasors. The parties provided post-hearing submissions, with Mr McGinley denying liability on the basis that he did not have knowledge of facts that would make his authorisation or procurement of the company’s actions amount to infringement of the trade marks. A key issue, as in Lifestyle Equities, was that Mr McGinley’s knowledge was not pleaded, nor did he give evidence on it at trial. Whilst he did have knowledge of the AGA marks (although possibly not the 2D and 3D marks) and that UK Innovations was using those marks, it was not evident that he had reason to believe the use by UK Innovations would affect the origin function of the AGA trade marks, or that there would be a likelihood of confusion. As a result, Mr McGinley was held not to be liable. 

The Appeal

We understand that UK Innovations was refused permission to appeal the trade mark infringement finding (where it had been largely successful) but has been granted permission to appeal the copyright point. Unless AGA is able to obtain permission to appeal the specific findings of non-infringement by cross appeal, those findings will stand.

Conclusion

From repairs of consumer electronics to electrification of vehicles, the transition to electric is generating whole new industries in repair and conversion. Many OEMs themselves support the repair and conversion of their products, provided such changes happen with authentic parts. The decision is obviously unhelpful to OEMs, whether they support repair and conversion or not. 

It also indicates a more pro-exhaustion approach than is the case with parallel imports of pharmaceutical products, where importers can rely on exhaustion only if they comply with various quite onerous criteria (including that the product inside is not affected by the changes to the packaging, and notice has been given to the trade mark owner). 

As more and more brands and consumers make the switch to electric, the ability of third parties to convert existing products is gaining in importance. In many industries conversions are an important part of the market. This decision sets the benchmark really very high for the scale of alterations of such products that can legitimately bear the trade mark of the original brand. This seems to be in spite of the fact that such alterations change the key functioning of a product and may be carried out using lower quality parts. The limit to the use of the original brand’s trade marks seems to be in how they are marketed which a prominent disclaimer and thoughtful wording may be sufficient to avoid. 

For OEMs, the decision will raise questions as to how to protect their brand if an aftermarket converter can fundamentally alter their product but continue to sell it under the original brand. It may be that issues of quality diminishing alterations will be better fought outside of IPEC with more time to consider the issues and scope for more evidence.