Publications
European IP Bulletin, Issue 18, January - Trade Mark
Trade Mark
7. Peak Holding AB V Axolin-Elinor AB
On 30 November 2004, the European Court of Justice (ECJ) made a preliminary ruling under Article 234 EC in the case of Peak Holding AB v Axolin-Elinor AB C-16/03.
In late 2000, Axolin-Elinor (Factory Outlet) marketed a particular consignment of goods with the trade mark Peak Performance contending that Peak Holding had already offered the goods for sale and thus the trade mark rights were exhausted. Peak Holding brought an action for infringement against Axilon-Elinor. The Lunds tingsrätt (Lund District Court) dismissed the application. Peak Holding appealed to the ECJ against the judgment of the Lunds tingsrätt. Two important questions were referred to the ECJ for preliminary ruling:
- Whether Article 7(1) of the First Council Directive 89/104 of 21 December 1988 must be interpreted to mean that goods with the Peak Performance trade mark can be said to have been placed on the market where the proprietor of the trade mark has imported them into the EEA with a view to selling them or offering them for sale in his own shops within the EEA without actually selling them;
- Whether the goods are to be regarded as having been placed on the market by virtue of the fact that they have been sold by the trade mark proprietor by another company in the EEA, if, upon the sale, the trade mark proprietor imposed a restriction on the buyer under which he was entitled to resell the goods in the Common Market?
The Court ruled that Article 7(1) must be interpreted to mean that the actual sale of the goods determines whether or not the goods shall be regarded as having been put on the market in the EEA where the proprietor of the trade mark has imported them into the EEA with a view to selling them or where his own shops or those of an affiliated company have offered them for sale. Exhaustion occurs solely by the proprietor placing goods on the market in the EEA and cannot preclude exhaustion provided by the Directive.
It is notable that in a contract of sale between the proprietor of the trade mark and an operator established within the EEA, the prohibition on reselling in the EEA does not preclude the exhaustion of the proprietors’ exclusive rights in the event of resale in the EEA in breach of the prohibition. The ruling states that under Article 5(3)(b) and (c) of the Directive, the importing of goods or offering them for sale to consumers within the EEA is not tantamount to putting them in the market within the EEA. Article 7(1) is interpreted to mean that goods bearing a trade mark cannot be regarded as been put on the market by the proprietor without the proprietor actually selling them.
8. Lowden v Lowden Guitar Co Ltd
On 17 November 2004, the Chancery Division of the English High Court delivered its judgment in Lowden v Lowden Guitar Company Limited [2004] EWHC 2531
(Ch).
In this case, the Claimant, Mr Lowden, was the registered proprietor of a mark in respect of “Guitars; acoustic guitars; parts and fittings for all the aforesaid goods”. On 31 December 2003, the Defendant company, a manufacturer of guitars, filed an application in the UK Trade Mark Registry alleging non-use under s46(1)(a) and s46(1)(b) of the Trade Marks Act 1994.
In a letter of 9 January 2004, the Registry informed the Claimant of the application for revocation, the burden on the registered proprietor to show what use has been made of the mark and the three month deadline to do so. The Appellant failed to comply with the 9 April deadline and sent his counter-statement to the Registry on 15 April. The Registry responded to the receipt of the counter-statement by a letter stating that the counter-statement was received outside the period allowed and therefore the opposition to the application for revocation was deemed withdrawn.
On 7 May 2004, the Claimant was informed of the decision made by the Hearing Officer to revoke the registration with effect from 20 October 1999, as requested in the Defendant’s application. However, the Defendant was not entitled under s46(1) to seek revocation of the mark from a date earlier than 20 October 2000, since registration of the trade mark was not completed before 20 October 1995.
As a consequence, the Claimant filed a notice of appeal on the following three main grounds: (i) the Registrar’s order to revoke the mark from a date earlier than any date which was permissible under s46(1)(a) should be set aside since he had no jurisdiction to make it; (ii) the Registrar had not exercised the required discretion under TMR rule 31(3); and (iii) the decision to revoke was taken without giving the Claimant an opportunity to be heard, contrary to TMR rule 54.
It was held that once the time for filing the counter-statement had expired, the Registrar had no discretion under TMR rule 31(3) to consider the proprietor’s evidence of use. However, it was open to the Registrar to consider material submitted out of time to determine whether there were other reasons which might enable a proprietor to continue to oppose an application for revocation, such as a defect in the statement of grounds which the Claimant could have raised, had he been given the opportunity to be heard according to TMR rule 54.
In addition, it was held that the incorrect date of revocation of 20 October 1999 instead of 20 October 2000 was not a clerical mistake, but a misunderstanding of the law. As a consequence, the error was one of substantive law, which could only be corrected on appeal. The amended statement of grounds would have the effect of causing time to run again and the Claimant would be entitled to file a counter statement which raised the factual issues.
9. Denial of Domain Transfer: BAA Loses Request For gatwick.com
On 11 November 2004 the WIPO Arbitration and Mediation Center produced its decision on BAA plc v. Bob Larkin
(case
D2004-0555).
BAA claimed that gatwick.com was confusingly similar to two registered trade marks (BAA GATWICK and BAA LONDON GATWICK), and identical to the common law mark established as a consequence of the activities taking place at Gatwick airport.
BAA stated that the respondent was not known by the name Gatwick and could have used a different domain name to run its commercial activities. Moreover, the domain name was used to host links to a number of services in the Gatwick area. Therefore it could have gained commercial advantage from diverted traffic. It was also argued that these facts, together with the respondent’s willingness to sell or rent the website for valuable consideration, represented evidence of bad faith.
The respondent claimed that he started gatwick.com in 1996, even if not explicitly under his name, and this was before the registration of the UK trade marks by BAA. Larkin also submitted a list of third parties using “Gatwick” as a part of their commercial names. Moreover, he argued that his website never pretended to officially represent the airport. Finally, in relation to the allegation of cybersquatting, the respondent counterclaimed he was the victim of deception and conspiracy orchestrated by intermediaries possibly linked to BAA.
The panel acknowledged the registration of <gatwick.com> from 2000 rather than 1996 in agreement with the registrar. It found that lack of visual or phonetic similarity excluded the domain name from being declared confusingly similar to registered trade marks (see BAA pcl & Aberdeen Airport Limited v Hashimi case
2004-0717). However, the word “Gatwick” was widely known, due of its association with the airport, and was sufficiently distinctive to be recognised as a common law mark. The panel therefore determined there was a risk of confusion. On the other hand, the panel stated that the respondent was operating a legitimate business, offering links related to the airport, without displaying BAA marks or otherwise misleading the diverted traffic. The decision did not comment on the issue of bad faith, since legitimate interest had been proven and the claim was dismissed.
This case resolved three key issues;
- Gatwick is a geographical area, but has acquired universal recognition. For this reason a common law mark was documented and the consequent risk of confusion caused the claim of “reverse domain name hijacking” to be unsuccessful.
- The panel did not consider all the correspondence between the complainant, intermediaries and respondent, in which the former tried to get an offer to buy or to rent from Larkin. The respondent stressed that such deceiving behaviour could constitute evidence of the claimant’s bad faith. The panel did not start an investigation and suggested the matter to be processed by a court or a tribunal.
- In relation to the claimant’s allegations of passing off, the decision lacked a deeper understanding of this kind of tort, and simply stated that the respective rights of the parties are better dealt with in a court than through the procedures under the policy.
10. Anheuser-Busch v Budejovicky Budvar
On 16 November 2004, the European Court of Justice (ECJ) gave its judgment in Anheuser-Busch v Budĕjovický Budvar, case C-245/02.
Anheuser-Busch is the proprietor in Finland of the trade mark Budweiser, which it first applied for in 1980. Budvar registered its trade name in the Czechoslovakian commercial register in 1967. It was registered in Czech (‘Budejovický Budvar, národní podnik'), English (‘Budweiser Budvar, National Corporation') and French (‘Budweiser Budvar, Entreprise nationale').
Anheuser-Busch brought an action before the Finnish Court to prohibit Budvar from use in Finland of the trade marks Budejovický Budvar, Budweiser Budvar, Budweiser, Budweis, Budvar, Bud and Budweiser Budbraü as signs for the marketing and sale of beer produced by Budvar. Anheuser-Busch argued that the trade name and signs used by Budvar could be confused with its trade marks since those signs and trade marks designate identical or similar types of goods.
Budvar denied trade mark infringement and contended that the signs it used in Finland could not be confused with Anheuser-Busch’s trade marks. It also submitted that, with respect to the sign ‘Budweiser Budvar’, the registration of its trade name in Czech, English and French conferred on it, pursuant to Article 8 of the Paris Convention (which provides that a trade name shall be protected without the obligation of filing or registration, whether or not it forms part of a trade mark), a right in Finland earlier than that conferred by Anheuser-Busch’s trade marks and that their earlier right was therefore protected under that article.
After several hearings, the case reached the Finnish Supreme Court which referred several questions to the ECJ.
The first question was whether the World Trade Organization's Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) applies to a conflict between a trade mark and a sign where the conflict arose before the date of application of TRIPS but continued beyond that date. The ECJ’s answer was that since the conflict had continued after the application date of TRIPS, that agreement applied to the conflict.
Secondly, the Finnish Supreme Court asked whether, and if so under what conditions, a trade name could be regarded as a sign for the purposes of the first sentence of Article 16(1) of TRIPS with the result that, the proprietor of a trade mark has an exclusive right to prevent all third parties from using that trade mark without his consent. The ECJ found that a trade name may constitute a sign within the meaning of the first sentence of Article 16(1) TRIPS. According to the ECJ case law, that provision enables a trade mark owner to exercise its exclusive right in cases in which a third party's use of the sign affects or is liable to affect the functions of the trade mark, in particular its essential function of guaranteeing the origin of the goods to consumers. It is up to the national court to establish whether that condition is fulfilled.
The Finnish Supreme Court's third question was whether, and under what conditions, a trade name which is not registered or established by use in the State in which the trade mark is registered may be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of TRIPS (“The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use”), having regard in particular to that Member State's obligations to protect the trade name under Article 8 of the Paris Convention and Article 2(1) of TRIPS. The ECJ held that an unregistered trade name may be regarded as a prior right if its proprietor has a right falling within the substantive and temporal scope of TRIPS which arose prior to the trade mark, and which entitles him to use a sign identical or similar to that mark.
Both Anheuser-Busch and Budvar are claiming victory with this ECJ decision. The final decision of the Finnish Supreme Court, will determine the true outcome.
11. Distinctiveness in Registering 3D CTM: Frischpack v OHIM
On 23 November 2004, the Court of First Instance (CFI) gave its judgment in Frischpack v OHIM (Forme d'une boîte de fromage) Case T-360/03.
The applicant sought to alter and then annul the contested decision made by the Board of Appeal in so far as it refers to cheese slices in large packs, not intended for the final consumer, after being denied registration of a 3D shape packaging for cheese
(Class 29 of the Nice
Agreement). The applicant argued that the Board of Appeal had not complied with Article 7(1)(b) of Regulation No 40/94 in failing to have regard to the distinctive character of the mark applied for.
The applicant noted that the distinctive character of a mark depends on the goods for which registration is sought (in this case, foodstuffs in sliced form, in particular slices of cheese) and the relevant public. It argued that the Board of Appeal erred in defining the relevant public as the general public where it was in fact the wholesale trade, who are able to identify the distinctive character of the shape for the packaging.
OHIM defended itself on the grounds that:
- The applicant should not be allowed to change the subject matter in the proceeding, and that the limitation to the wholesale trade, was not apparent from the list of goods which accompanied the application for registration.
- The applicant had not proved the difference between the distinctiveness of the mark to the trade as opposed to the general public.
The CFI dismissed the applicant’s appeal in holding that the definition of the public does not change the subject matter of trade mark for Class 29 of the Nice Agreement. The trade mark sought was lacking in distinctiveness. Further, since cheese is a staple product aimed at the average consumer, the distinctiveness of the mark should be based on the perspective of the consumer.
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