In an action for infringement of the trade mark CRYPTOBACK (Wirex
Ltd v Cryptocarbon Global Ltd & Ors [2021] EWHC 617
(IPEC) (16 March 2021)) the defendants argued that they had earlier
rights to the name, and also that the application to register it had
been made in bad faith, but acknowledged that if they lost on their
counterclaim they were infringing the trade mark.

The counterclaim was therefore a slightly unusual s.5(4) claim, based
on the defendants’ ability to oppose the registration because they
had common law rights that, in other circumstances, would have
enabled them to sue for passing off. The test for passing off is set
out in Lord Oliver’s judgment in Reckitt & Colman Products
Ltd v Borden Inc [1990]
1 WLR 491 and the present case turned on whether the defendants
(counterclaimants) had goodwill in the word. To succeed, they had to
convince Hacon J that the name had been distinctive of their services
at the claimant’s filing date.

The name was plainly
a neologism, formed by merging elements of the words “cryptocurrency”
and “cashback”. A neologism is not inherently non-distinctive,
but it could be taken by consumers to be a new word for a type of
goods or services, especially when used for something innovative.
Linoleum Manufacturing Company v Nairn [1878] 7 Ch. D. 834
illustrates the problem: the product was protected by patents, which
were assigned by the inventor to the plaintiff company which he set
up to exploit them, but the name “linoleum”, coined by the
inventor to denote the product, was used to denote the substance not
(exclusively) the source of the substance, so the defendant could not
be stopped from marketing his product as “Linoleum floor-Cloth”
after the patents expired.

The evidence did not
support Global’s contention that they owned goodwill in the name
when the trade mark was applied for. There had been email campaigns,
a web article and an invoice, but that did not amount to enough to
impress the judge. To make matters worse for Global, in the few
months of use before the filing date, they had actually applied the
name CCRBBACK to their service, which made it more likely that
CRYPTOBACK would be seen as a generic name for a new type of service.