IP Law and Management CEIPI 22 February 2016

IP Law and Management CEIPI, 22 February 2016 Trademark Law: Protection Prof. Dr. Martin Senftleben VU University Amsterdam Bird & Bird, The Hague

Step 3: Monitoring and exploitation

Checklist • How to monitor the trademark register and the market in relevant countries? • How to decide on whether or not to take action against competing signs? • What is the scope of trademark rights?

Trademark rights

Exclusive right: Art. 10 TMD 1. The registration of a trade mark shall confer on the proprietor exclusive rights therein. 2. Without prejudice to the rights of proprietors acquired before the filing date or the priority date of the registered trade mark, the proprietor of that registered trade mark shall be entitled to prevent all third parties not having his consent from using in the course of trade, in relation to goods or services, any sign where: …

Two general use requirements General prerequisites ‘in the course of trade’ ‘in relation to goods or services’ business activity use as a trademark

Several types of protection identity similarity+ …of conflicting signs? …of goods or services involved?

Illustration: Art. 10(3) TMD a) affixing the sign to goods or packaging b) offering goods or putting them on the market, stocking them for those purposes, offering or supplying services c) importing or exporting goods d) use as a trade or company name e) use on business papers and in advertising; f) use in comparative advertising in a manner contrary to Directive 2006/114/EC.

Double identity

Art. 10(2)(a) TMD identical signs identical goods or services adverse effect on one of the protected trademark functions

CJEU, June 18, 2009, case C-487/07, L’Oréal/Bellure • ‘These functions include not only the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services, but also its other functions, in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising. ’ (para. 58) • recognition of further protected functions • but showing of ‘adverse effect’ required

Confusion: similarity

Art. 10(2)(b) TMD identical or similar signs identical or similar goods or services likelihood of confusion, likelihood of association sufficient? . . . the likelihood of confusion includes the likelihood of association between the sign and the trade mark. . .

Similarity between trademark and sign • comparison between: – trademark as registered and – sign as used in trade • no direct comparison: perception of marks in the mind of the average consumer • reasonably well-informed and reasonably observant and circumspect consumer of the product concerned

Similarity between trademark and sign overall impression, instead of focus on details

Similarity between trademark and sign • aural – Claeryn/Klarein • visual – Bally/Baileys • conceptual – Mars/Venus • differences can compensate similar features: – Obelix/Mobilix • decisive: overall impression

Similarity between goods or services = when consumers perceive the goods or services as being related to each other • CJEU: all relevant factors relating to those goods or services should be taken into account, including – nature, intended purpose, method of use – whether they are in competition with each other or are complementary – (case C-39/97, Canon/Cannon, para. 23)

ECJ, 11 November 1997, case C-251/95 • Sabel: application in Germany • Puma: opposition

ECJ, 11 November 1997, case C-251/95, Puma/Sabel • Risk of association in the strict sense (without risk of confusion) is insufficient. • Risk of confusion in any case required. Two types: – direct confusion: the public confuses the products concerned – indirect confusion: the public thinks that the products stem from the same or from associated enterprises

ECJ 22 June 1999, case C-342/97, Lloyd/Loint’s • risk of confusion to be assessed globally: – from the perspective of the relevant public – with regard to the goods or services involved • relevant factors: – degree of similarity between the trademark and the conflicting sign – degree of similarity between the goods or services involved – the degree of distinctive character of the mark

ECJ 29 September 1998, case C-39/97, Canon/Cannon • interdependency of the factors – similarity between trademark and sign – similarity between goods or services – the mark’s capacity to distinguish • high degree of similarity between trademark and sign may compensate low degree of similarity between goods or services and vice versa

Influence of distinctive character • the more distinctive the earlier mark, the greater the likelihood of confusion (ECJ, case C-251/95, Puma/Sabel, para. 24) • the more distinctive the earlier mark, the broader the field of similar goods/services (ECJ, case C-39/97, Canon/Cannon, para. 19)

Similarity+: marks with a reputation

Additional protection interests exclusive link advertising with a sign quality control creation of a brand image • identification • communication • distinctive character • reputation/ repute • protection against confusion • protection against dilution

Art. 10(2)(c) TMD trademark having a reputation identical, similar or dissimilar goods or services ‘…where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. ’

ECJ, 14 September 1999, case C-375/97, ‘Chevy’ • General Motors: – Owner of the Benelux trademark ‘Chevy’ – registered in 1971 for motor vehicles • Yplon: – also owns a Benelux trademark ‘Chevy’ – registered that mark in 1988 for washing agents and different cleaning detergents

ECJ, 14 September 1999, case C-375/97, ‘Chevy’ ‘The public amongst which the earlier trade mark must have acquired a reputation is that concerned by that trade mark, that is to say, depending on the product or service marketed, either the public at large or a more specialised public, for example traders in a specific sector. ’ (para. 24)

ECJ, 14 September 1999, case C-375/97, ‘Chevy’ ‘The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark. ’ (para. 26)

ECJ, 14 September 1999, case C-375/97, ‘Chevy’ ‘In the absence of any definition [in art. 5(2) of Directive 89/104 EEC] in this respect, a trade mark cannot be required to have a reputation ‘throughout’ the territory of the Member State. It is sufficient for it to exist in a substantial part of [the Member State]. ’ (para. 28) …niche reputation (+)

Territoriality

CJEU, 6 October 2009, case C-301/07, Pago/Tirolmilch

CJEU, 6 October 2009, case C-301/07, Pago/Tirolmilch • CTM requires reputation in a substantial part of the Community (para. 27) • single Member State may be sufficient ‘As the present case concerns a Community trade mark with a reputation throughout the territory of a Member State, namely Austria, the view may be taken, regard being had to the circumstances of the main proceedings, that the territorial requirement imposed by Article 9(1)(c) of the Regulation is satisfied. ’ (para. 29)

CJEU, 3 September 2015, case C-125/14, Iron & Smith/Unilever • opposition before Hungarian office based on protection of earlier Unilever CTM – but: CTM not widely known in Hungary – only evidence of reputation in Italy and UK = still CTM with a reputation in the EU • but: enhanced protection only available in the territory where reputation exists • without reputation in Hungary, the public will not make the necessary connection

CJEU, 3 September 2015, case C-125/14, Iron & Smith/Unilever ‘Also, even assuming that the earlier Community trade mark is unknown to the relevant public in the Member State in which the registration of the later national mark is applied for […], the use of the national mark does not, in principle, enable unfair advantage to be taken of it or of the distinctive character or reputation of the earlier mark and is not detrimental to them. ’ (para. 29) • minimum: commercially significant part of the relevant public must make a connection

Blurring, tarnishment, unfair free-riding

ECJ, 23 October 2003, case C-408/01, Adidas/Fitnessworld Trading ‘It is sufficient for the degree of similarity between the mark with a reputation and the sign to have the effect that the relevant section of the public establishes a link between the sign and the mark. ’ • likelihood of association in the strict sense sufficient

Three distinct anti-dilution actions damage to distinctive character (blurring) damage to repute (tarnishment) taking unfair advantage of distinctive character or repute (free-riding)

Damage to distinctive character (+) dilution …for pianos, clothing, perfume, books, software

Dilution theory ‘…the gradual whittling away or dispersion of the identity and the hold upon the public mind of the mark or name by its use upon non-competing goods. ’ (Schechter, Harvard Law Review 1927) • objective: safeguarding the exclusive link in the minds of consumers

CJEU 27 november 2008, case C-252/07, Intel/CPM • description of relevant harm ‘. . . such detriment is caused when that mark’s ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark. ’ (para. 29)

Damage to reputation …for fast food, a toilet cleaning detergent, a lousy night club in Amsterdam

Power of attraction ‘…a sign similar to the trademark used […] under such circumstances that prejudice to the trademark owner may be caused by encroaching upon the trademark’s potential for raising a desire to buy…’ (Benelux Court of Justice, case A 74/1, 1 March 1975, Claeryn/Klarein)

CJEU, 18 June 2009, case C-487/07, L’Oréal/Bellure • similar concept at EU level ‘. . . when the goods or services for which the identical or similar sign is used by the third party may be perceived by the public in such a way that the trade mark’s power of attraction is reduced. The likelihood of such detriment may arise in particular from the fact that the goods or services offered by the third party possess a characteristic or a quality which is liable to have a negative impact on the image of the mark. ’ (para. 40)

Taking unfair advantage of distinctive character or repute

CJEU, 18 June 2009, case C-487/07, L’Oréal/Bellure • L’Oréal: – Produces luxury perfume – owns several word marks with a reputation (Trésor, Miracle, Noa etc. ) • Bellure: – produces cheap imitations of L’Oréalperfumes – uses L’Oréal marks in comparison lists

Low threshold for unfair free riding • ‘. . . where a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of his own in that regard, the marketing effort expended by the proprietor of that mark. . . ’ (para. 49) • no detriment required

Different perspectives damage brought to the mark with a reputation advantage taken from the mark with a reputation

Defence of ‘due cause’

CJEU, 22 September 2011, case C-323/09, Interflora/Marks & Spencer • Marks & Spencer – selects the trademark ‘Interflora’ and variants as search terms – sponsored search result: ‘M & S Flowers Online www. marksandspencer. com/flowers Gorgeous fresh flowers & plants Order by 5 pm for next day delivery’

CJEU, 22 September 2011, case C-323/09, Interflora/Marks & Spencer • purpose of selecting a trademark with a reputation is to take advantage of that mark’s distintive character and repute ‘In fact, that selection is liable to create a situation in which the probably large number of consumers using that keyword to carry out an internet search for goods or services covered by the trade mark with a reputation will see that competitor’s advertisement displayed on their screens. ’ (para. 86)

CJEU, 22 September 2011, case C-323/09, Interflora/Marks & Spencer • use of a mark with a reputation in keyword advertising implies the taking of an unfair advantage (free riding) ‘. . . that such a selection can, in the absence of any ‘due cause’ [. . . ], be construed as a use whereby the advertiser rides on the coat-tails of a trade mark with a reputation in order to benefit from its power of attraction, its reputation and its prestige, . . . ’ (para. 89) • any ‘due cause’ defence available?

CJEU, 22 September 2011, case C-323/09, Interflora/Marks & Spencer ‘By contrast, where the advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark concerned – an alternative to the goods or services of the proprietor of the trade mark with a reputation, . . . ’

CJEU, 22 September 2011, case C-323/09, Interflora/Marks & Spencer ‘. . . it must be concluded that such use falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned and is thus not without ‘due cause’. ’ (para. 91) • new type of ‘due cause’ defence for informing consumers about alternatives • considerable breathing space for commercial freedom of speech • but several conditions to be fulfilled

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog • Mr. de Vries – runs Bulldog bar/restaurant in Amsterdam – started use of the trade name ‘Bulldog’ prior to registration of Red Bull’s trademark – registered name as a trademark himself several days after registration of Red Bull trademark – started selling energy drinks at some point • Red Bull – proprietor of the Red Bull trademark – trademark acquired high reputation

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog

Basis for due cause defence? not only objectively overriding reasons but also subjective third party interests

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog • balancing of interests required ‘. . . to strike a balance between the interests in question by taking account, in the specific context of Article 5(2) of Directive 89/104 and in the light of the enhanced protection enjoyed by that mark, of the interests of the third party using that sign. ’ (para. 46)

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog • use may imply unfair free riding, but all circumstances to be considered • in particular: own reputation of the Bulldog sign as a balancing factor ‘. . . requires a determination as to how [the Bulldog] sign has been accepted by, and what its reputation is with, the relevant public. ’ (para. 54)

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog • inquiry into the intention of the third party required • determination of good faith (para. 56) – degree of proximity between goods/services – when the sign was first used for an identical product – when the mark acquired its reputation

CJEU, 6 February 2014, case C-65/12, Red Bull/Bulldog • natural extension of the range of services and goods for which that sign already enjoys a certain reputation? ‘. . . the sale of energy drinks contained in packaging which displays that sign may therefore be perceived, not as an attempt to take advantage of the repute of the mark ‘Red Bull’, but rather as a genuine extension of the range of goods and services offered by Mr de Vries. ’ (para. 58)

Result of a finding of due cause no recognition of a right to the registered trademark but obligation of the trademark owner to tolerate competing use

Without due cause? …same colours and letter type, but written as ‘E$$O’

Without due cause?

General limitations of exclusive rights

Starting point: actionable use • exception? – Art. 14 TMD • . . . , unless – use is not in • exhaustion? – Art. 15 TMD • . . . , unless – owner has accordance with legitimate reasons honest practices to oppose

Exceptions

Art. 14(1) TMD a) use of the name or address of a natural person; b) use of signs or indications which are not distinctive or describe characteristics of goods or services; c) use of the trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark, in particular, where the use of the trade mark is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts.

ECJ, 17 March 2005, case C-228/03, Gillette/LA-Laboratories • Gillette Company: – markets razors composed of a handle and a replaceable blade and such blades on their own – owner of the trademarks ‘Gillette’ and ‘Sensor’ • LA-Laboratories: – sells comparable razor system under the trademark ‘Parason Flexor’ – packaging of the blades has affixed to it a sticker with the word ‘All Parason Flexor and Gillette Sensor handles are compatible with this blade’

ECJ, 17 March 2005, case C-228/03, Gillette/LA-Laboratories

ECJ, 17 March 2005, case C-228/03, Gillette/LA-Laboratories • use falling within the scope of the exception • ‘…the marks of which the Gillette Company is the owner being used by a third party in order to provide the public with comprehensible and complete information as to the intended purpose of the product which it markets, that is to say as to its compatibility with the product which bears those trade marks. ’ (para. 34)

ECJ, 17 March 2005, case C-228/03, Gillette/LA-Laboratories But several factors to determine use in accordance with honest practices: • global presentation of the product of the third party • way in which the trademark is included in this presentation • way in which a distinction is made between the trademark and the sign of the third party • effort made to prevent consumer confusion

CJEU, June 12, 2008, case C-533/06, O 2/Hutchison • O 2: – registered bubbles as a trademark • Hutchison: – shows in advertising for telecom services blackand-white pictures of moving bubbles – compares prices of telecom services – not perceived as a source identifier by the public

CJEU, June 12, 2008, case C-533/06, O 2/Hutchison • permitted referential use if in accordance with EU legislation on misleading and comparative advertising ‘. . . that the proprietor of a registered trade mark is not entitled to prevent the use, by a third party, of a sign identical with, or similar to, his mark, in a comparative advertisement which satisfies all the conditions, laid down in Article 3 a(1) of Directive 84/450, under which comparative advertising is permitted. ’ (para. 45)

Art. 4 Directive 2006/114/EC ‘Comparative advertising shall […] be permitted when the following conditions are met: a) it is not misleading […]; … d) it does not create confusion in the market place […]; … e) it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor; … g) it does not take unfair advantage of the reputation of a trade mark […]; … h) it does not present goods or services as imitations or replicas […]. ’

Exhaustion

Partitioning of markets? Netherlands: 100 EUR Greece: 75 EUR • trademark rights as a weapon against parallel imports? • Yes, in case of national exhaustion • No, in case of international exhaustion

Regional exhaustion ‘A trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Union under that trade mark by the proprietor or with the proprietor’s consent. ’ (Art. 15(1) TMD)

…unless legitimate reasons ‘. . . shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market. ’ (Art. 15(2) TMD)

Re-packaging – a legitimate reason?

ECJ, July 11, 1996, case C-427/93 etc. , BMS/Paranova • Bristol-Myers Squibb, Boehringer, Bayer: – market drugs in several EU Member States – have registered their trademarks in Denmark • Paranova: – buys drugs in EU Member States with relatively low prices and sells those drugs in Denmark where prices are higher – uses new packaging showing the trademarks of the original producers and information that the drugs have been imported and re-packaged

ECJ, July 11, 1996, case C-427/93 etc. , BMS/Paranova • to prevent artifical market partitioning, re-packaging is permitted, provided that – the original state of the product is not impaired; – the presentation of re-packaged products is not detrimental to the repute of the mark; – the trademark owner is informed beforehand. • establishment of an individual set of rules for the pharmaceutical sector

Advertising – a legitimate reason?

ECJ, November 4, 1997, case C-337/95, Dior/Evora • Parfums Christian Dior: – markets perfume through network of approved retailers who are obliged to sell exclusively to end consumers – perfume packaging (Poison, Dune etc. ) enjoys trademark and copyright protection • Evora (Kruidvat): – sells imported Dior products without being an official retailer – includes pictures of the packaging in its advertising leaflets

ECJ, November 4, 1997, case C-337/95, Dior/Evora

ECJ, November 4, 1997, case C-337/95, Dior/Evora • advertising is indispensable: reseller is permitted to advertise ‘If the right to prohibit the use of his trade mark in relation to goods […] is exhausted once the goods have been put on the market by himself or with his consent, the same applies as regards the right to use the trade mark for the purpose of bringing to the public’s attention the further commercialization of those goods. ’ (para. 36) • otherwise free movement of goods impeded

ECJ, November 4, 1997, case C-337/95, Dior/Evora • but duty to act fairly • reseller must seek to prevent detriment to the value of the trademark ‘The damage done to the reputation of a trade mark may, in principle, be a legitimate reason, within the meaning of Article 7(2) of the Directive, allowing the proprietor to oppose further commercialization of goods which have been put on the market in the Community by him or with his consent. ’ (para. 43)

ECJ, November 4, 1997, case C-337/95, Dior/Evora • permitted: advertising that is usual in the relevant sector ‘However, the fact that a reseller […] uses for trademarked goods the modes of advertising which are customary in his trade sector, even if they are not the same as those used by the trade mark owner himself or by his approved retailers, does not constitute a legitimate reason…’ (para. 46) • exception: advertising that seriously damages the brand image

Summary

Starting point: actionable use • exception? • exhaustion? – Art. 6 TMD – Art. 7 TMD • . . . , unless – use is not in – owner has = duty to act fairly accordance with legitimate reasons honest practices to oppose

The end. contact: m. r. f. senftleben@vu. nl