Smith, Kline & French Laboratories Ltd. Vs. Sterling-Winthrop Group Ltd

Introduction

The case of Smith, Kline & French Laboratories Ltd. v. Sterling-Winthrop Group Ltd. ([1976] R.P.C. 511) is a landmark decision in UK trade mark law, addressing the registrability of a trade mark consisting of the entire external appearance of goods, specifically the colour combinations applied to pharmaceutical capsules and their pellets. This case, decided by the House of Lords, clarified the scope of the term "mark" under the Trade Marks Act 1938 and resolved whether such a mark, covering the whole visible surface of the goods, could be registered as a trade mark. The decision overturned the Court of Appeal’s ruling and established a significant precedent for the protection of unconventional trade marks, balancing statutory interpretation with commercial realities.

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Detailed Factual Background

Smith, Kline & French Laboratories Ltd. (SKF), a pharmaceutical manufacturer, developed "sustained release" drugs encapsulated in soluble capsules. These capsules were cylindrical with hemispherical ends, containing small spherical pellets. Each pellet had a neutral core (typically sugar), coated with the active drug and an outer layer that dissolved slowly in the digestive system to regulate drug release. To distinguish their products, SKF applied distinctive colour combinations to their capsules and pellets. One half of the capsule was coloured (e.g., maroon or dark grey), while the other half was transparent, revealing multicoloured pellets (e.g., yellow, blue, white, grey, red). These colour schemes varied for different drugs, ensuring market recognition.

In May 1963, SKF applied to register ten such colour combinations as trade marks under Class 5 of the Trade Marks Register for "pharmaceutical substances sold in pellet form within capsules." The applications described the marks verbally, and specimens (actual capsules) were deposited at the Trade Marks Registry due to the limitations of photographic representations. By 1971, evidence showed that these colour combinations were widely recognised by doctors, pharmacists, and hospital administrators as indicating SKF’s products, to the extent that their use by competitors would constitute passing off at common law.

Sterling-Winthrop Group Ltd., a rival pharmaceutical manufacturer, opposed the registrations, arguing that the colour combinations did not constitute "marks" or "trade marks" under the Trade Marks Act 1938, as they described the entire external appearance of the goods rather than a distinct mark applied to them.

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Detailed Procedural Background

1. Trade Marks Registry (November 1971):
   • The applications were heard by Assistant Registrar Mr. R.L. Moorby.
   • Moorby held that the colour combinations were "marks" capable of being trade marks under Section 68 of the Trade Marks Act 1938.
   • However, he refused registration on the ground that the marks lacked inherent distinctiveness, as they were not inherently adapted to distinguish SKF’s goods from others.
2. High Court (14 June 1973, [1974] R.P.C. 91):
   • SKF appealed to the High Court, where Graham J. allowed the appeal.
   • Graham J. agreed with Moorby that the colour combinations were "marks" but disagreed on distinctiveness, finding them both factually and inherently distinctive.
   • He ordered registration but limited each mark to the specific drug it had been used for, rather than the broader class of pharmaceutical substances, to prevent overreach.
3. Court of Appeal (8 May 1974, [1974] 1 W.L.R. 861; [1974] F.S.R. 455):
   • Sterling-Winthrop appealed, and the Court of Appeal (Russell, Buckley, and Lawton LJJ) reversed Graham J.’s decision.
   • The Court held that the colour combinations were not "marks" under Section 68, as they constituted the entire external appearance of the goods, not something distinct from them.
   • The issue of distinctiveness was not addressed, as the finding on the definition of "mark" was dispositive.
4. House of Lords (Heard: 6, 10-12 March, 21 May 1975; Decided: 1975, [1976] R.P.C. 511):
   • SKF appealed to the House of Lords, which unanimously allowed the appeal, restoring and expanding Graham J.’s order to permit registration without the drug-specific limitation.

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Issues Involved in the Case

1. Primary Issue: Whether the colour combinations applied to the entire visible surface of SKF’s capsules and pellets constituted a "mark" and thus a "trade mark" under Section 68 of the Trade Marks Act 1938.
2. Secondary Issue: If the colour combinations were marks, whether they were inherently distinctive and registrable under Section 9 of the Act.
3. Ancillary Issue: Whether the registration should be limited to the specific drugs for which each colour combination was used, as ordered by Graham J.

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Detailed Submission of Parties

Appellants (SKF), represented by T.A. Blanco White, Q.C. and Robin Jacob:

• On the Definition of "Mark":
  • The term "mark" in Section 68(1) is inclusive, not exhaustive, and should be given a broad interpretation in line with ordinary English usage, where a thing can be "marked all over."
  • There is no statutory requirement that a mark be distinct from the goods or limited to a portion of their surface. The Act’s language, including "use upon" or "in physical relation to" goods (Section 68(2)), supports marks incorporated into the goods’ structure.
  • Trade mark practice allows registration of marks like labels (e.g., Oxo cube) or woven patterns (e.g., Reddaway’s stripes), and there is no principled difference if the mark covers the entire surface.
  • English cases, such as Reddaway (F.) & Co. Ltd.’s Application (No. 1) (1914) 31 R.P.C. 147 and Winterbottom Book Cloth Co. Ltd.’s Application (1925) 42 R.P.C. 450, support the registrability of colour-based marks integrated into goods.
  • The Australian decision in Smith, Kline & French Laboratories (Australia) Ltd. v. Registrar of Trade Marks [1972] R.P.C. 519 (Windeyer J.) was inconsistent with English authorities and commercially impractical, as it required marks to be depicted apart from the goods.
• On Distinctiveness:
  • The colour combinations were conceded to be factually distinctive, as they were recognised as SKF’s in the market.
  • They were also inherently distinctive, as no other trader would legitimately need to use identical or similar colour schemes without improper motive, per Lord Parker’s test in W. & G. Du Cros Ltd.’s Application (1913) 30 R.P.C. 660.
  • Unlike word marks refused for descriptiveness (e.g., Yorkshire Copper Works (1954) 71 R.P.C. 150), these were novel, non-descriptive device marks, inherently capable of distinguishing SKF’s goods.
• On Limitation:
  • Limiting registration to specific drugs was unnecessary, as the marks distinguished SKF’s goods generally, and passing off law would protect against misuse.

Respondents (Sterling-Winthrop), represented by G.D. Everington, Q.C. and Anthony Rogers:

• On the Definition of "Mark":
  • A "mark" must be distinct from the goods and capable of being described or depicted separately, not merely a description of the goods’ appearance.
  • The colour combinations were the entire three-dimensional appearance of the capsules, not a mark applied to them, akin to the dome-shaped black lead in James’s Trade Mark (1886) 3 R.P.C. 340, which was held non-registrable as a mere depiction of the goods.
  • Section 68(1)’s examples (device, brand, etc.) imply a mark is a graphic or superficial symbol, not the goods’ overall get-up.
  • The Reddaway case (1914) involved a distinct mark (stripes), not the entire appearance, and thus supported their position.
  • The Australian decision (Smith, Kline & French [1972] R.P.C. 519) correctly held that a mark must be separable from the goods, and this reasoning should apply.
  • Allowing registration of appearances as trade marks would blur the line with registered designs under the Registered Designs Act 1949, potentially allowing perpetual monopolies (unlike the 15-year limit for designs) and enabling manufacturers to preempt colour combinations.
• On Distinctiveness:
  • Even if the colour combinations were marks, they lacked inherent distinctiveness, as other manufacturers might legitimately wish to use similar colour schemes to identify their drugs.
  • The Assistant Registrar’s discretion, informed by his expertise, should be upheld unless clearly wrong.
  • Graham J.’s decision to limit registration to specific drugs was inconsistent with finding inherent distinctiveness, as it implied the marks were not broadly distinctive.
• On Policy Concerns:
  • Registering appearances as trade marks could lead to market uncertainty, allowing manufacturers to register numerous colour combinations preemptively, stifling competition.
  • The Trade Marks Act should not encroach on the domain of the Registered Designs Act, which is better suited to protect appearances.

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Detailed Discussion on Judgments and Citations

Judgments:

1. Assistant Registrar (Mr. R.L. Moorby, 2 November 1971):
   • Found the colour combinations to be "marks" under Section 68, capable of being trade marks.
   • Refused registration due to lack of inherent distinctiveness, interpreting Lord Parker’s test in W. & G. Du Cros (1913) 30 R.P.C. 660 as requiring that no other trader would legitimately desire to use similar marks.
   • Considered Reddaway (No. 1) (1914) 31 R.P.C. 147 as supporting colour-based marks but distinguished Smith, Kline & French (Australia) [1972] R.P.C. 519.
2. High Court (Graham J., 14 June 1973, [1974] R.P.C. 91):
   • Upheld the colour combinations as "marks," relying on Reddaway (No. 1) and dismissing Smith, Kline & French (Australia) due to perceived differences in application forms.
   • Found the marks both factually and inherently distinctive, reversing Moorby on the latter point.
   • Limited registration to specific drugs, citing potential passing off protection for broader use.
   • Referenced Hoffmann-La Roche v. D.D.S.A. Pharmaceuticals [1972] R.P.C. 1 and Roche Products Ltd. v. Berk Pharmaceuticals [1973] R.P.C. 461, though these were passing off cases, not directly relevant.
3. Court of Appeal (Russell, Buckley, Lawton LJJ, 8 May 1974, [1974] 1 W.L.R. 861; [1974] F.S.R. 455):
   • Unanimously held that the colour combinations were not "marks," as they described the entire external appearance of the capsules.
   • Russell LJ emphasized that a mark must be distinct from the goods, citing James’s Trade Mark (1886) 33 Ch.D. 392 and Smith, Kline & French (Australia) [1972] R.P.C. 519.
   • Buckley LJ argued that the Act’s language (e.g., "use upon" in Section 68(2)) implied a mark is a graphic or superficial symbol, not the goods’ appearance.
   • Lawton LJ relied on dictionary definitions and James’s Trade Mark to conclude that a mark cannot be the goods’ overall appearance.
   • Did not address distinctiveness, as the primary issue was dispositive.
4. House of Lords (Lord Diplock, Lord Simon of Glaisdale, Lord Cross of Chelsea, Lord Kilbrandon, Lord Salmon, [1976] R.P.C. 511):
   • Lord Diplock delivered the leading speech, with others concurring.
   • Held that the colour combinations were "marks" and registrable trade marks, overturning the Court of Appeal.
   • Found no statutory or business rationale for excluding marks covering the entire visible surface of goods.
   • Upheld Graham J.’s finding of inherent distinctiveness and removed the drug-specific limitation.

Citations and Their Context:

1. Reddaway (F.) & Co. Ltd.’s Application (No. 1) (1914) 31 R.P.C. 147:
   • Context: Registration of three coloured stripes (blue, red, blue) woven into fire hoses, limited to use throughout the hose’s length.
   • Referred by SKF to show that colour-based marks integrated into goods are registrable.
   • House of Lords followed, rejecting the Court of Appeal’s attempt to limit its scope to partial markings.
2. Reddaway (F.) & Co. Ltd.’s Application (No. 2) (1925) 42 R.P.C. 397; (1927) 44 R.P.C. 27 (H.L.):
   • Context: Refusal of registration for similar stripes for export hoses, due to lack of UK distinctiveness.
   • Cited to confirm the correctness of the first Reddaway case, with Viscount Dunedin endorsing Warrington J.’s reasoning.
3. James’s Trade Mark (1886) 33 Ch.D. 392; 3 R.P.C. 340:
   • Context: Validity of a dome-shaped mark for black lead, upheld as a distinct mark affixed to goods, not a monopoly over the shape.
   • Sterling-Winthrop relied on Lindley LJ’s dictum (“a mark must be distinct from the thing marked”) to argue that the capsule’s appearance was not a mark.
   • House of Lords distinguished, noting the mark in James was separate from the goods’ shape, and the dictum was context-specific.
4. Smith, Kline & French Laboratories (Australia) Ltd. v. Registrar of Trade Marks [1972] R.P.C. 519:
   • Context: Australian refusal to register similar colour combinations, as they were not distinct from the goods.
   • Sterling-Winthrop relied on Windeyer J.’s test that a mark must be depicted apart from the goods.
   • House of Lords rejected this test as overly restrictive and inconsistent with Reddaway.
5. W. & G. Du Cros Ltd.’s Application (1913) 30 R.P.C. 660 (H.L.):
   • Context: Lord Parker’s test for inherent distinctiveness, focusing on whether other traders would legitimately desire to use the mark.
   • Cited by both parties on distinctiveness; House of Lords applied it to find SKF’s marks inherently distinctive.
6. Charles Goodall & Son Ltd. v. John Waddington Ltd. (1924) 41 R.P.C. 658:
   • Context: Dictum by Sargant LJ distinguishing designs (part of goods) from trade marks (extra, indicating origin).
   • Sterling-Winthrop cited to argue that the capsule’s appearance was akin to a design.
   • House of Lords clarified that the dictum did not preclude marks integrated into goods.
7. Parke Davis & Co.’s Application [1976] F.S.R. 195 (Ireland):
   • Context: Registration of a blue band around a capsule as a mark.
   • SKF cited to show judicial acceptance of colour-based marks, though the House of Lords noted it was not directly on point.
8. Hoffmann-La Roche v. D.D.S.A. Pharmaceuticals [1972] R.P.C. 1:
   • Context: Passing off case involving capsule colours.
   • Graham J. cited Harman LJ’s use of “mark” to support registrability, but the House of Lords dismissed its relevance, as it was not a trade mark case.
9. Roche Products Ltd. v. Berk Pharmaceuticals [1973] R.P.C. 461:
   • Context: Another passing off case.
   • Cited by Graham J., but deemed irrelevant by the House of Lords.
10. Winterbottom Book Cloth Co. Ltd.’s Application (1925) 42 R.P.C. 450:
    • Context: Registration of a red line at each selvedge of tracing cloth.
    • SKF cited to support colour-based marks, reinforcing Reddaway.
11. Yorkshire Copper Works (1954) 71 R.P.C. 150 (H.L.):
    • Context: Refusal of a geographical name as a trade mark due to lack of distinctiveness.
    • SKF cited to distinguish word marks from device marks like theirs.

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Detailed Reasoning and Analysis of Judge (Lord Diplock, House of Lords)

On the Definition of "Mark":

• Statutory Interpretation:
  • Section 68(1) defines "trade mark" as a "mark" used to indicate trade origin, with "mark" including a non-exhaustive list (device, brand, etc.). The broad ordinary meaning of "mark" encompasses visual indications, including those covering the entire surface.
  • Section 68(2) allows marks to be used "upon" or "in physical relation to" goods, supporting marks integrated into the goods’ structure (e.g., headings in textiles).
  • Nothing in the Act or Trade Marks Rules 1938 (e.g., Rules 23, 28) requires a mark to be two-dimensional or partial. Rule 28’s provision for specimens accommodates three-dimensional marks like SKF’s capsules.
• Commercial Purpose:
  • The colour combinations fulfilled the trade mark’s purpose of distinguishing SKF’s goods, as evidenced by market recognition and the concession of passing off.
  • Excluding marks covering the entire surface would be irrational, as no business purpose justifies distinguishing between partial and complete coverage.
• Precedents:
  • Reddaway (No. 1) (1914) was authoritative, showing that colour-based marks (stripes) woven into goods are registrable, even if position-specific. Extending the stripes to the entire surface would not change their status as a mark.
  • James’s Trade Mark was distinguished, as the dome-shaped mark was a separate device, not the goods’ shape, and Lindley LJ’s dictum was context-specific.
  • Smith, Kline & French (Australia) was rejected, as Windeyer J.’s test (mark depicted apart from goods) was overly restrictive and conflicted with Reddaway. The dichotomy between describing goods with or without markings was elusive.
  • Charles Goodall’s dictum was clarified to mean that designs and trade marks are not mutually exclusive, and SKF’s colours were “extra” to denote origin.

On Distinctiveness:

• Statutory Framework:
  • Section 9(1)(e) allows registration of “any other distinctive mark,” with “distinctive” defined in Section 9(2) as adapted to distinguish the proprietor’s goods.
  • Section 9(3) considers both inherent and factual distinctiveness. SKF’s marks were factually distinctive, as conceded.
• Inherent Distinctiveness:
  • Lord Parker’s test (W. & G. Du Cros) asks whether other traders would legitimately desire to use the same or similar marks without improper motive.
  • The Assistant Registrar erred in extending “some mark nearly resembling it” to any colour-based marking, as Lord Parker meant only deceptive marks. Since SKF’s marks, if copied, would constitute passing off, no legitimate use by others was plausible.
  • The marks were novel, non-descriptive, and unlikely to be needed by competitors, satisfying inherent distinctiveness.
• Judicial Discretion:
  • Section 52 grants the judge the same discretion as the Registrar. Graham J.’s reversal of Moorby was correct, and appellate courts should not lightly interfere.

On Limitation:

• The drug-specific limitation was unnecessary, as the marks distinguished SKF’s goods broadly, and no commercial purpose justified restriction.

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Final Decision

The House of Lords unanimously allowed SKF’s appeal, overturning the Court of Appeal’s decision. The Registrar was ordered to proceed with the registration of the ten trade marks as described in the Trade Marks Journal (11 January 1967), without limitation to specific drugs.

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Law Settled in This Case

1. Definition of "Mark":
   • A mark under Section 68 of the Trade Marks Act 1938 can include the entire visible surface of the goods, provided it serves the trade mark’s purpose of indicating trade origin.
   • There is no statutory or judicial requirement for a mark to be distinct from the goods or limited to a portion of their surface.
2. Registrability of Unconventional Marks:
   • Colour combinations and three-dimensional appearances can be registrable as trade marks if they are visually representable and distinctive, aligning with the Act’s flexible definition of "mark."
3. Inherent Distinctiveness:
   • A mark is inherently distinctive if no other trader would legitimately desire to use it or a deceptively similar mark without improper motive, per Lord Parker’s test.
   • Novel, non-descriptive device marks are likely to satisfy this test.
4. Scope of Registration:
   • Registration need not be limited to specific goods within a class if the mark distinguishes the proprietor’s goods generally.
5. Relationship with Designs:
   • The Trade Marks Act and Registered Designs Act serve distinct purposes, and registrability as a trade mark is not precluded by potential design protection.

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Case Details

• Case Title: Smith, Kline & French Laboratories Ltd. v. Sterling-Winthrop Group Ltd.
• Date of Order: 21 May 1975 (published in [1976] R.P.C.)
• Case No.: Not explicitly stated in the report (Trade Mark Application Nos. 849,766–849,776)
• Neutral Citation: [1976] R.P.C. 511
• Name of Court: House of Lords
• Name of Judge: Lord Diplock (leading judgment), with Lord Simon of Glaisdale, Lord Cross of Chelsea, Lord Kilbrandon, and Lord Salmon concurring.

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Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi