Publications

European IP Bulletin, Issue 5, October - Trade Mark

Trade Mark

12.  Three’s company, Two’s A crowd

In Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd, Case C-408/01, Advocate General Jacobs considered whether Article 5(2) of the Trade Mark Directive applies to use by a defendant of his sign on similar or identical goods.  He also turned his attention to the precise meaning of the types of harms identified in Article 5(2) and whether trade mark use is necessary for infringement under that article.

Adidas is the proprietor of the Benelux registrations of the well-known three stripes mark, consisting of three parallel strips of equal width, for clothing.  Adidas objected to Fitnessworld’s marketing and importation of a range of fitness clothing bearing two parallel stripes of equal width, arguing that Fitnessworld’s activities: (1) created a likelihood of confusion with its mark; (2) took advantage of the recognition and popularity of Adidas’ mark; and (3) would harm the exclusivity of Adidas’ mark.  The Arnhem Court of Appeal found that there was no confusion and that there was no dilution because Fitnessworld used the two stripes merely to embellish its sports-clothing and many other undertakings had used similar stripe motifs for the same purpose.  Adidas appealed to the Hoge Raad der Nederlanden, which referred various questions of the interpretation of Article 5(2) of Directive 89/104/EEC (the “dilution” provision) to the ECJ and in July Advocate General Jacobs delivered his opinion.

Does Article 5(2) apply to use by a defendant of a sign on identical or similar goods?

Article 5(2) only expressly mentions use by a defendant on dissimilar goods.  However, in Davidoff and Zino Davidoff (Davidoff II) Case C-292/00, the ECJ said that Article 5(2) also applies to use on identical or similar goods.  Since then, certain commentators have argued that the ECJ meant this permissively and that the effect of the ECJ’s judgement was that countries that had incorporated Article 5(2) into their trade mark legislation had the choice of whether or not to offer Article 5(2) protection against the use of marks on identical or similar goods.  The Advocate General opined that Davidoff II is not permissive and consequently every Member State that has incorporated Article 5(2) must extend its protection to use on identical or similar goods.  This ensures that well-known marks have as much protection against use on identical or similar goods as they do on dissimilar goods and is consistent with the intention for the Directive to provide a complete harmonisation of the trade mark rights of mark proprietors.

The scope of protection under Article 5(2)

The Advocate General took the opportunity to provide the first comprehensive ECJ-level analysis of the types of injuries enjoined by Article 5(2).  Detriment to distinctive character can be equated with the US concept of blurring while detriment to repute is akin to tarnishment, as epitomised by the Benelux Claeryn/Klarein case (Case A 74/1, 1 March 1975, Benelux Court of Justice).  Unfair advantage of distinctive character and repute were said to “encompass instances where there is clear exploitation and free-riding on the coat‑tails of a famous mark or an attempt to trade upon its reputation.” However, the Advocate General felt unable to say what the real difference was between the two types of unfair advantage.

What are the criteria for the analysis of similarity of signs under Article 5(2)?

For the defendant’s sign to be detrimental to or take advantage of the plaintiff’s mark, it must in some way bring the plaintiff’s mark to the mind of the relevant public.  To determine whether this is the case, national courts should, according to the Advocate General, determine the degree of sensory (visual, aural or olfactory) and conceptual similarity between the two marks as they would under Article 5(1)(b).  However, unlike under Article 5(1)(b), it is not necessary to show that this similarity gives rise to a likelihood of confusion.  Beyond that, it is for national courts to determine whether the degree of similarity is sufficient to cause the type of harm specified in Article 5(2).

Is use purely as decoration or embellishment caught within Article 5(2)?

Purely decorative use, or use solely to embellish is not caught within Article 5(2) because only use by the defendant of his sign as a trade mark to distinguish his goods from the goods of other undertakings counts as infringement under this article.  This is consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of the trademarked product to the consumer or ultimate user by enabling him without any possibility of confusion to distinguish that product from products which have another origin – if the sign is perceived as merely decorative it cannot be identifying the origin of the product.  According to Advocate General Jacobs, this did not conflict with the ECJ’s decision in Arsenal v Reed, Case C-206/01 as there was “plainly trade mark use” in that case, even though the defendant’s sign was perceived there as a badge of loyalty or affiliation.  Furthermore, it would be against the public interest to extend trade mark rights in a way that would preclude the use of common decorations and motifs such as stripes which should be available, as a matter of principle, for other traders to use.

13.     Interaction Between The Elements Of A Mark: CFI Upholds OHIM On Its Examination Methodology

Best Buy Concepts v OHMI (BEST BUY) CFI T-122/01

The Court of First Instance has upheld the decision of the OHIM Third Board of Appeal in rejecting the application for a figurative trade mark incorporating the word element BEST BUY.  In doing so the CFI approved the method of first examining the separate elements of the mark applied for.

The applicant, Best Buy Concepts, applied for a mark made up of the words BEST BUY and a circular device incorporating the colours yellow and black.  The application was made in respect of services in classes 35 and 37, directed both to management consultancy professionals and installation services to the general public.  The applicant asked that the specification be interpreted narrowly by the court, but this was rejected as this amounted to a restriction of the application which could only be made in accordance with the rules of and to OHIM.

OHIM rejected the mark on the basis that it was devoid of distinctive character and descriptive.  The court decided the issue on the basis only of the distinctive character of the mark.  It took as the benchmark for distinctive character the capacity of a mark to allow customers to make repeat purchases or avoid such purchases after a first experience of the product/service sold under the mark.  In common with previous case law and practise the court considered that the average well-informed customer would not see as decisive the purely promotional characteristics of a mark.

OHIM had considered the word element then the figurative and colour elements, finally to conclude that the mark as a whole was devoid of distinctive character.  The court approved this method of approaching analysis of a combination mark and used such an analysis itself.

Just because the word element did not describe the nature of the products/service was not sufficient to make the mark distinctive especially when the first and foremost effect of the word element is to promote or advertise rather than as an indication of origin.  The only additional elements of the mark were the colour and shape of the price tag.  Since coloured price tags are widely used to sell products/services the mere fact that this would attract the customer’s attention did not add to the distinctiveness of the mark.

In finally considering the mark as a whole the court looked for “interaction” between the otherwise non-distinctive elements.  This interaction considered factors such as the effect of the shape of the figurative element of the mark on the word element.  Here a price tag would not add to the word element but indeed it emphasised the mere promotional character of the mark as a whole.

The court did not state that the “interaction” test was the only basis for testing distinctive character; however, it is a very useful benchmark to use for borderline combination marks.  Crucially it focuses on the internal structure of the mark rather than the mark’s relationship with its products/services.  In the case of such marks the reality is that the products/services to which they relate often will not affect the conclusion on distinctive character.  Rather distinctiveness is a question of human perception not whether the mark is linked to particular characteristics of products/services.

14.  Ansul To The Question of Genuine Use

Laboratories Goemar SA & La Mer Technology Inc [2003] EWHC 1382 (Ch) concerns an appeal to the English High Court of a decision made by the UK Trade Mark Registry to revoke, under ss.46 and 48 of the Trade Marks Act 1994 (equivalent to Articles 10 and 12 Council Directive 89/104/EEC) (the “Directive”), two trade marks registered by Laboratories Goemar SA in the UK in respect of class 3 and 5 goods. 

Goemar, a French company specializing in seaweed products, appointed an agent to sell its products in the UK under it’s marks.  Combined sales of class 3 and 5 goods sold under the mark by Goemar in the UK up to December 2001 amounted to ₤1,400 and ₤6,000 for goods outside the specification.  La Mer Technology Inc. applied for the marks to be revoked on the ground that the sales of products bearing the registered marks in the UK during the relevant five year period did not constitute “genuine use” within the meaning of s.46(1).

The Trade Marks Act 1994 s.46(1) provides a mechanism by which the registration of a trade mark can be revoked if the trade mark has not been put to genuine use in respect of the registered goods or services for a continuous period of five years from the date of registration.  Although the jurisdiction to remove for non-use is seen to be important to deal with covetous specifications the UK courts are uncertain how to formulate a de minimis test with which to assess proof of use in situations where the use is on a very small scale i.e. whether such use is merely token to validate registration of the trade marks or is bona fide.  The Directive does not impose upon the Act a lower limit below which the use of the trade mark should be disregarded as negligible. Jacob, J. rightly declined to give a final judgment on this appeal.  Instead he made a reference to the ECJ for guidance on how the national courts should formulate and apply a test to distinguish the genuineness of use of a registered trade mark.

The reference took the following form:

i)    What factors should be taken into account when deciding whether a mark has been ‘put to genuine use’ in a Member state within the meaning of Articles 10(1) and 12(1) of the Directive?

ii)     Should the extent of use of the mark, in relation to the goods or services for which the mark is registered in the Member state, be taken into account?

iii)     Is any amount of use, however small, sufficient if it was made with no purpose other than commercially dealing in goods or providing the service concerned?

iv)    If the answer to the foregoing questions is ‘no’ what is the test for determining how much use is sufficient, and in particular does that test include consideration of nature and size of the business of the registered proprietor?

v)      Is token or sham use to be disregarded, and in particular, is use the sole or predominant purpose of which is to defeat a potential claim for revocation, to be disregarded?

The jurisprudence of trade mark law in the UK and Benelux countries is sympathetic to realities beset by undertakings wishing to establish a new brand in a foreign economic territory.  Genuine use of a trade mark must, as noted by Jacob, J. in his judgment in Euromarket Designs Inc v. Peters and Crate & Barrel [2000] ETMR 1025 (at 304), “…involve that which a trader or consumer would regard as real of genuine trade in this country in the UK” and such use be… judged by commercial standards.  The UK courts (see the decision in FLORIS Trade Mark [2001] R.P.C. 19) are willing to find genuine use in circumstances where no actual sales of goods had taken place but the mark had been used to promote the existence of the registered products, but only if the proprietor can show the advertising is specifically directed at customers in the UK.  Under the Trade Marks Act 1938 s.26(1) cases in which small scale use (e.g. BON MATIN Trade Mark [1989] RPC 537) were deemed bona fide where it was shown that the proprietor intended to build up a business in the products under the mark.  On the facts of the present case, Jacob, J., sympathetic to this line of decisions, appeared willing to project such pragmatism to find genuineness of use within the meaning of the Directive, by considering factors such as the ₤6,000 worth of sales in relation to goods outside the specification of the registration and Goemar's endeavours to boost sales in their business by finding a more effective agent.  Jacob J. when attempting to distil what is genuineness in respect to how “little is too little” (at para 31) indicated that a qualitative rather than a quantitative test incorporating the commercial context of the trade mark owner should form the basis to any test.

The ECJ, wishing to be expeditious in disposing of matters, considered that their ruling in Ansul provided adequate guidance to national courts when assessing the genuineness of use of a trade mark.  The ECJ also deemed their ruling in Ansul to address the reference of Jacob, J and was appropriate to the factual circumstances in the present case and was willing to invoke Article 104(3) of its Rules of procedure.  The ECJ in the Ansul case held that ‘put to genuine use’ within the meaning of Article 12(1) of the Directive meant actual use of the mark and that a trade mark must operate to guarantee the identity of origin of the goods or services and the use made of a mark should not be merely token.  Unfortunately, the Ansul case considered ‘genuine use’ from the perspective of the contentious matter of bad faith registrations and not, as referred in this case, as a matter of how much use of a mark can be considered to support the existence of a small but genuine commercially motivated registration or whether there was a minimum level of use within the meaning of the Directive.  Interestingly, the test propounded by the Hoge Raad der Nederlanden on this issue goes some way to addressing the reference in this case but only comprehensively dispelled question 5 of the reference.

Jacob, J., in agreement with both parties to the case, requested that the reference should not be withdrawn save in relation to question 5 and commented that each side would no doubt interpret Ansul differently, requiring the UK court to engage in a difficult exercise in trying to divine the nuances of the views of the ECJ. 

 

15.    Russia Claims Geographical Protection For Russian Vodka

In June Russia’s Patent Office ruled that “Russian Vodka” can only be labelled as such if it is distilled in the country itself and if it tastes like the genuine article.

The ruling was handed down by the Patent Office in response to a plea by state-owned Soyuzplodoimport Corporation which owns, on the state’s behalf, the trademarks to popular vodka brands such as Stolichnaya, Moskovskaya, Russkaya and others.

The Russian decision, which aims at prohibiting foreign producers to use the term “Russian Vodka” for a product made outside the country, is in line with international practice protecting such terms as Scotch whisky, Champagne and Parma ham.

According to Vladimir Uvatenko, Soyuzplodoimport’s spokesman, the ruling applies to exported vodka as well, irrespective of what language the label is written in.

“Now, distillers have to be located in Russia to be entitled to label their products “Russian Vodka” or “Genuine Russian Vodka””, Uvatenko said.  “In addition, the distiller has to obtain confirmation from the Agriculture Ministry that his vodka meets the necessary criteria, then permission from the patent office to label the vodka as having been produced in Russia”.

The Russian authorities are now facing a long legal process if they want to protect their trade mark worldwide.  They will have to file detailed applications to patent offices in every country where they believe the non-genuine article might be produced.

Click here to return to the Summary page, or on any of the headings below to see the full case notes for that topic:

HOT TOPICS | COPYRIGHT | PATENTS