Protecting the SOVEREIGN - The Royal Mint v The Commonwealth Mint
Can the Royal Mint register SOVEREIGN as a trade mark for "gold commemorative coins"?
The Royal Mint Ltd wanted to but the Commonwealth Mint & Philatelic Bureau Ltd was not impressed and opposed the application on the basis that "The word SOVEREIGN is ... widely recognised, as a word describing coins of a particular type and denomination that may be legal tender in any one of a number of different countries/territories." The Hearing Officer upheld the opposition and refused to register the mark on the basis of the absolute grounds for refusal set out in section 3(1)(c) and (d) of the Trade Marks Act 1994 ("the TMA"). In other words, the word "sovereign" when used for gold commemorative coins:
(i) designates the the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services; and (ii) consists exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade.
Whilst "Sovereign" can mean many different things to different people, in the world of coins it means a gold coin with a nominal value of £1 which is used for commemorative or trading purposes.
In the UK, only the Royal Mint is entitled to make or issue a sovereign as legal tender. However, there is nothing to prohibit UK trade in sovereigns which were minted elsewhere. Although the Royal Mint argued that the word sovereign had acquired distinctiveness through use, the Hearing Officer refused registration because:
sovereigns are legal tender in the UK (albeit the value is nominal);
the Royal Mint drew attention to the value of sovereigns in igts marketing material;
the Royal Mint's marketing material uses "sovereign" in an analogous way to other denominations such as the Queen's £5 coin which was issued for the diamond jubilee; and
although the Royal Mint closely assesses the quality of the sovereigns, this is also true for the other coins it mints such as the £1 coin and "pound" is not a trade mark for coins;
although the average consumer is likely to be aware that most sovereigns offered for sale in the UK come from the Royal Mint, there is trade in the UK of coins from other countries e.g. Australia; and
although the Royal Mint has sold a large volume of coins over a long period of time and had a very significant share of the gold coins market in the UK, it had not established that consumers perceived gold coins as originating from a particular undertaking based on the word "sovereign" alone.
This decision was made after hearing evidence from two experts in coinage - from the British Museum and Royal Mint Museum. The Hearing Officer didn't consider that either represented the average consumer (which he considered to be "traders in gold coins, such as banks and jewellers"). Therefore whilst they clearly knew a great deal about commemorative coins this did not help the Royal Mint.
Newey J agreed that neither witness was an average consumer and that the Hearing Officer was entitled to discount their opinions. Indeed, Newey J agreed with the Hearing Officer's findings and upheld his decision in full.
As Newey J put it, "The real question" is "whether the fact that no one but [the Royal Mint] can make sovereign coins for United Kingdom purposes means that the word "sovereign" must be distinctive of its coins?"
He concluded that the answer was "no" based on the Hearing Officer's unchallenged findings that:
"the trade in gold commemorative coins is international in nature" (paragraph 62),
"a small proportion of coins so-named [i.e. as 'sovereigns'] have been produced outside of RM's control" (paragraph 62) and
"'sovereign' gold commemorative coins from, at least, the Isle of Man, Jersey, Gibraltar and/or Australia are also available in the UK" (paragraph 77).
In fact, while sovereign coins from jurisdictions other than the United Kingdom commonly bear the word "sovereign", United Kingdom sovereigns hardly ever have, and RM's promotional material usually involves "the designation 'sovereign' [being] used in association with the name Royal Mint" (paragraph 34 of the Decision).
Acquired distinctiveness could not come to the Royal Mint's rescue because although 'the vast majority' of coins in the UK came from the Royal Mint and 'a large proportion' of the relevant public was familiar with the name 'sovereign' this did not mean that 'a "significant proportion" of the relevant class sees the goods as originating from a particular undertaking because of the trade mark (per Windsurfing and Cadbury).
Some fun facts to finish
A postage stamp is legal tender in the UK, don't take it from me, take it from David Brent.
Find out more about the history of the sovereign here.