Intellectual Property Law: Trade Marks - Essay Example

The objective of this work is to establish that the legal protection given to trade marks could result in many powerful brands becoming unfair monopolies. Further, it will also be established by case law that the courts do not promote monopolies all the time. In order to achieve these objectives, the trademark law of the United Kingdom and the European Union have been discussed. After defining trademarks, the relevant trademark law was addressed. In this connection sections 5 and 10 of the trademark act 1994, which deal with the registration of trademarks, were discussed. Next, the role of registered trademarks in granting monopolistic rights to their owners has been examined. After this the rescission period of trademarks was discussed with reference to relevant case law. Next, several instances in which the court exhibited reluctance to grant trademark rights to applicants were described. After this cases dealt by the European Court of Justice in respect of trademark rights were discussed. Subsequently, the landmark case of Arsenal v. Reed was analyzed in detail. Thereafter, the House of Lords decision in respect of a criminal prosecution under the trademarks act was discussed. After this the applicability of the Harmonization Directive of the EU to the Member States was discussed. After this cases supporting the view that trademark infringement constitutes an overt attempt at establishing a monopoly were discussed. In this context, cases dealt by the ECJ and the UK Courts had been discussed. The Webster’s Dictionary defines a trademark as the protection accorded to a word, slogan, representation or design that serves to distinctively categorize the origin of goods. Trademarks are not extinguished as long they are in persistent use (Websters New World™ Computer Dictionary. 2003). A registered trademark permits its owner to utilize it anywhere in the United Kingdom. Legal action can be initiated against any person who employs someone else’s trademark without authorization. A criminal offence is construed to have transpired if a counterfeiter uses some other person’s trademark. In the absence of a registered trademark, the common law process of passing off has to be invoked if the former has been used by some other person. This common law process is extremely expensive and a favourable decision can be obtained from the court only after a protracted and difficult lawsuit. Moreover, unregistered trademarks tend to be geographically localized and do not extend to the whole of the country (Benefits of registered trade mark protection, 2006). Section 5 of the Trade Marks Act 1994 of the United Kingdom, stipulates the reasons for refusing a trademark. The main objective is to ensure that a trademark to be registered does not resemble a previously registered trademark. This was illustrated in the case of The Worldwide Fund for Nature (formerly World Wildlife Fund) v. The World Wrestling Federation Entertainment Inc, wherein the court required the World Wrestling Federation to desist from using the mark WWF, since it harmed the reputation of the Word Wildlife Fund (Kolah, Ardi.2002. P. 71). Section 10 of the Trade Mark Act 1994, states that a trademark infringement occurs if a trademark that is the same as an already registered mark is used without the mark owner’s consent and if the relevant goods or services are exactly alike. Moreover, there should be a distinct possibility of consumers being confused by such a mark. Placing the sign of the trademark on goods, exporting and importing goods under it are examples of using a sign that denotes a registered mark (Fawcett, and Torremans. 1998. Pp. 122 – 123). As such brand owners were permitted to obtain legal protection for the design of their products. Manufacturers believe that this Act would control the uncontrolled proliferation of products with like features. They also argue that replication of their products by miscreants cannot be stopped. Further, the Government had acknowledged that this Act would be unable to fight such a situation. It assures the manufacturers that the future legislation on unfair competition would curb activities that infringe trademark. A registered trade mark constitutes a monopoly right in the sense that it bestows on its owner the sole right to use that trade mark. If any other person uses the same or a similar trade mark then legal action can be initiated against such a person for trademark infringement. In addition, registered trademarks can be purchased, traded, hired, licensed or franchised within the territory where they are valid. The peril posed by monopoly is attendant on the difference of opinion in respect of what constitutes an infringing trademark use. Trademark law has been armed with a vast number of rights and remedies, which makes it capable of a dangerous monopoly in the absence of a definition of its limits. International trademark systems have been adopted, because the globalized world trade requires similar protection for products in the worldwide markets. The lack of consensus regarding protection of trademarks on a rational basis has resulted in erratic interpretation of the trademark law. Further, it is difficult to define boundaries in respect of trademarks. In the following cases the attitude of the judiciary in interpreting the law to decide trade infringements reveals that at times courts tend to promote the monopolizing of brands and thereby protecting the rights of trademark owners. For instance, in the Irvine case, the tort of passing off was taken advantage of in order to prevent sales that had made unauthorized use of a celebrity’s popularity (Edmund Irvine, Tidswell Limited v. Talksport Limited 2002 WL 237124, 2002). Registered trademarks form a part of the business’s assets and the act of registering trademarks bestows on their owner exclusive monopoly rights. The result is the acquisition of a better brand presence in the market. On the 20th of March 1998, MIP Metro applied for the registration of the sign METRO as a Community Trade Mark with the Office for Harmonization in the Internal Market. This was opposed to by Tesco Stores, which stated that the earlier mark had been registered by it. The Court of First Instance held that under such circumstances, where a conflict had arisen, with regard to the expiry of registration of a trademark, the first trademark would be renewed (MIP Metro Group Intellectual Property GmbH & Co. KG v Office for Harmonisation in the Internal Market (OHIM)). If a court judges that a trademarked term has been rendered common due to usage and if the average consumer no longer considers it to be a trademark, then the court may deem it to be an invalid trademark (Professional Golfers Association v OHIM — Ladies Professional Golf Association, 2006). The Trade Marks Act makes it mandatory for a trademark to be used within five years of its registration, otherwise it will be rescinded. The Professional Golfers Association filed a case against the Ladies Professional Golfers Association for having failed to prove the maintenance of the trademark for a five year period. The court upheld this contention and annulled the trademark (Professional Golfers Association v OHIM — Ladies Professional Golf Association, 2006). Article 5(1) (a) of the EU Trade Marks Directive prohibits the unauthorized commercial use of a trademark for identical goods or services. In the Roche case, drugs manufactured for use in clinical trial in the Dominican Republic were imported into the UK. The Defendant’s contention that the CE Mark on these drugs allowed their import into the EEA by implication was not accepted by the court, which held that the mark only signified the quality of the products (Roche Diagnostics Limited v Kent Pharmaceuticals, 2006). The European Court of Justice had opined that the bestowal of a dominant position was not concomitant upon the mere possession of an intellectual property right. Further the ECJ ruled that if an Intellectual Property right holder rejected a third party’s licence request, then such a refusal could be construed to be the abuse of a dominant position (Radio Telefis Eireann (RTE) and Independent Television Publications Ltd. (ITP) v. Commission (1995)). Dominance can be defined as the effective prevention of competition by an undertaking, which ultimately causes untold harm to the consumers (Galloway, Jonathan & Komaitis, Konstantinos, 2006). The enormous significance of a Community Trade Mark Application or Community Trade Mark exists in the fact that it has validity across the European Union. Moreover, a single application is sufficient for registering the trademark in all the Member States. Its importance can be gauged from the fact that more than two hundred thousand companies, worldwide, have applied for a Community Trade Mark (Trade mark protection in the EU gets cheaper, trademark. (2003). In Websters New World™ Computer Dictionary. Retrieved April 03, 2007, from DISPLAYURL2005)."trademark." Websters New World™ Computer Dictionary. 2003. Xreferplus. 03 April 2007 . Websters New World™ Computer Dictionary, 2003, s.v. "trademark," DISPLAYURL (accessed April 03, 2007). In the case of Levi Strauss v. Tesco, Levi’s won the right to limit imports from outside the EU, and by extension, the European Court’s decision means trademark holders can stop businesses importing their products from outside the EU and then selling them without the trademark holder’s consent. The ECJ stated that the trademark holder must give explicit permission to a retailer to let them sell grey goods. Therefore Tesco was prohibited from importing Levi jeans from the US and selling them in the UK. In this case the trademark holder Levi Strauss Co was allowed to continue the monopoly that had been enjoyed all along (Levi Strauss & Co v. Tesco Stores Ltd. 2003). In another case, an attempt was made to make inroads into the market share of Buy & Sell Magazine by Mayo Buy and Sell, the High Court passed an injunction that disallowed the new publication (Buy & Sell Magazine B&S Ltd v. Rapid Design Ltd). Furthermore, an attempt to apply the trademark KODAK to bicycles was prohibited by the court as it held that the business of cameras and bicycles were akin (Cameras & Bicycles Eastman v. Griffiths, 1898). In the case of Arsenal v. Reed, Reed had been unofficially selling Arsenal souvenirs for three decades. He contended that the name of Arsenal and badge on the replica kits did not perform the function of trademarks as they did not indicate the origin of the goods. Hence, the protection available to registered trademarks could not be extended to the marks used by him. In other words his argument was that he did not in any manner misrepresent the origin of the goods. Therefore, his utilization of the Arsenal marks was not illegal. The ECJ opined that Reed had infringed Arsenal’s trademarks. However, the High Court Judge decided the case in favour of Reed (Arsenal Football Club Plc v. Matthew Reed, 2003). In the beginning this case was construed to be a crucial registered trademarks case. Subsequently, its ramifications were held to include the relation between the ECJ and the English Judicature. The replica sports kit industry is extremely profitable and a decision that favours Arsenal will adversely affect the immunity from trademark infringement. On the other hand if the decision had been in the favour of Arsenal, then the major kit sponsors like Nike, Adidas and Reebok would have made enormous profits, because their monopolistic rights in respect of the sale of these kits would have been protected (Arsenal Football Club Plc v. Matthew Reed, 2003). The logic adopted by the European Court of Justice was based on the concept of trademark function and trademark use in community law. The ECJ drew attention to the fact that as per the provisions of Article 5, paragraph 1 of the directive; a registered trademark bestowed exclusive rights on its owner. These rights served to prevent third parties from using a sign that was identical with a trademark, in relation to goods or services which were also identical with those for which the trademark had been registered (Arsenal Football Club Plc v. Matthew Reed, 2003). On registering a trademark, its owner obtains the right to prevent the use of the same or similar brand name. This verdict conspicuously fortifies the rights given to brand owners through registration of their marks. It lends credence to the view that a trademark right is a property right and any breach thereof has to be viewed from that perspective. The non – descriptive use of a trademark could result in harm being rendered to it due to the fact that the registered trademark cannot make any assurances regarding origin. The origin of a trademark constitutes an essential component of a trademark (Arsenal Football Club Plc v. Matthew Reed, 2003). Subsequent to the Court of Appeal decision in the Arsenal case, the House of Lords ruled in a criminal prosecution under the Trade Marks Act, namely in the Regina v. Johnstone. The prosecution concerned the use of performer’s names on bootleg records in circumstances where such names were registered trademarks. The House of Lords referred to the decision of the European Court in Arsenal v. Reed and stated that the use of the performer’s name on the record was not use of a brand name but merely an indication of the performer whose songs are contained on the disc, or in other words it is descriptive of the contents of the disc (Regina v. Johnstone, 2003). What is disconcerting, however, is that the House of Lords analyzed the test to be whether the defendant’s use was that of a trademark to indicate trade origin, that is the very test that the Court of Appeal had decided in the Arsenal case to be irrelevant (Regina v. Johnstone, 2003). In Davidoff & Cie SA and Zino Davidoff SA v. Gofkid Limited, the proprietor of Davidoff possessed trademark registrations for jewellery and smoking peripherals. Gofkid possessed a German registration for DURFEE, which were similar goods. The latter trademark was used in Germany, in the same script as the former trademark. These trademarks and the goods they represented were similar. Therefore, Davidoff had to establish that confusion had been created due to the similarities in these trademarks. In this case a referral was made to the ECJ to clarify whether Articles 4(4)(a) and 5(2) of the Harmonization Directive could be made applicable to the Member States. The ECJ concluded that Article 5(2) could be applied if a similar trademark had been used, irrespective of whether the goods were similar or dissimilar. In other words Gofkid was prohibited from using a similar trademark (Davidoff v. Gofkid and ECJ, 2003). The consumer will be put to a great deal of confusion in respect of similar brand names and the manufacturer will be subjected to unfair trade policies from competitors if the tests are not sufficiently stringent. These tests serve to protect the consumers and the manufacturers alike from unscrupulous persons and unfair trade practices (Davidoff v. Gofkid and ECJ, 2003). This decision follows the requirements of the Harmonization Directive (Directive 891/104 EEC). The European Court of Justice confirmed that personal names can be trademarks (Case C-404/02 Nichols, 2004). Furthermore, according to what is a well known and well recognized fact, a trademark can depict the origin of the product, it can be in the form of a message that describes the product and it can also be in the manner of a promotional message (Case C-64/02, OHIM v. ErpoMöbelwerk GmbH (DAS PRINZIP DER BEQUEMLICHKEIT), 2005). The Directive 89/104/EEC has specified some prerequisites in respect of trademarks, which has resulted in their near total harmonization in the European Union. As was revealed in the Arsenal Football Club case, the ECJ, due to the reference procedure, guarantees an interpretation of trademark law that is the same throughout the EU. In this case the Court deemed it essential for Article 5(1) to be applied in the same manner throughout the EU (Reich, 2003. Pp. 176 – 178). This trademark directive not only constitutes the model for intellectual property rights but also forms the basis for a Community trade mark as has been specified in Regulation (EC) 94/40. The ECJ’s requirement is that graphical representation should be possible for trademarks. Since, a smell cannot be represented graphically, olfactory signs cannot be registered (Reich, 2003. Pp. 176 – 178). In the case of Inter Lotto (UK) Ltd v Camelot Group Plc the claimant had been operating lotteries in order to further the interests of several charities. Moreover, the claimant had utilized the trade mark “HOTPICK” since August 2001, for the purpose of organizing lotteries in this endeavour had managed to obtain a considerable amount of reputation and goodwill for that mark. In July 2002, the defendant, who was also an organizer of lotteries, inaugurated a new lottery that was named as HOT PICKS. The defendant presented an application for the purpose of registering this HOT PICKS trademark in October 2001. This trademark was publicized for opposition or dissent in August 2002 (Inter Lotto (UK) Ltd v Camelot Group Plc, 2004). The claimant lodged his dissent to this trademark in November 2002 and the opposition proceedings were accordingly held in abeyance till this matter was resolved. The petitioner asserted that the pertinent date for evaluating the goodwill should be the date from which the defendants had commenced to use the trademark. However, the defendant argued that this date should be the date on which the trade mark application had been files. The reason adduced for this contention was that the defendant was eligible to register the trademark on that date unless the claimant was in a position to establish a passing off claim by demonstrating that this trademark had been used prior to that date by the plaintiff. Moreover, the defendant claimed that if the claimant used this trademark after that date, then such use would be illegal and should be construed to constitute a breach of the defendant’s registered trademark. Further, the defendant argued that the claimant was to be precluded from depending on such unlawful use while preferring a claim for passing off (Inter Lotto (UK) Ltd v Camelot Group Plc , 2004). In the preliminary hearing the judge took recourse to section 2 of the Trade Marks Act 1994 to decide that the pertinent date was that on which the defendant commenced the actions that had been objected. Furthermore, the judge opined that the claimant was eligible to depend on the goodwill that had been procured since the time of the defendant’s application. The defendant appealed against this decision and the Court of Appeal set aside this appeal (Inter Lotto (UK) Ltd v Camelot Group Plc, 2004). In Musical Fidelity Ltd v Vickers, the defendant had registered an internet domain name that contained the brand name of the plaintiff. Moreover, the website contained a number of prevarications that the defendant and the plaintiff were on the best of terms and that there was a continuous association between these two parties. The claimant was successful in obtaining summary judgment for an infringement of the trademark and passing off by stating that confusion was bound to take place. The defendant asserted that in addition to other shortcomings, the judge had been harbouring an error in evaluating the prospects of success on the basis of facts that he was not justified in deciding. The Court of Appeal dismissed the appeal and while doing so stated that despite the fact that a judge could seek the help of cases involving at most a marginal interest in respect of the confusion issue it was nevertheless possible for an application for summary judgment to succeed in a claim for passing off (Musical Fidelity Ltd v Vickers (t/a Vickers Hi-Fi) , 2003). The applicant Nestlé submitted an application in order to obtain a trademark for the phrase HAVE A BREAK. This application was opposed for the reason that there was no unique character. The slogan Have a Break…Have a Kit Kat had been registered as a trademark. Moreover, this phrase had been widely used by the applicant. The Registry discovered that the phrase HAVE A BREAK had not been used much by the applicant and had therefore not acquired distinctiveness. It also set aside the argument that the trademark was solely descriptive in contravention to section 3(1)(c) of the Trade Marks Act 1994. The applicant approached the High Court, where the appeal was rejected because it was of the opinion that the trademark was not distinct. (Nestlé’s Trade Mark Application (HAVE A BREAK) , 2004). In Mars GB Ltd v. Cadbury Ltd [1987] R.P.C. 387 (Ch D), the plaintiff contended that the defendant had infringed its trademark TREETS by utilizing the sign TREAT SIZE, the Court opined that there was no confusion between these two signs and therefore the plaintiff’s plea was inadmissible. In Bravado Merchandising Services Ltd v. Mainstream Publishing (Edinburgh) Ltd , Wet Wet Wet was a trade mark and it was used as the title of a book. The Court held that infringement would transpire only if the trade mark had been used in a trade mark sense. These cases illustrate the fact that the plea of trademark infringement is an overt attempt at establishing a monopoly. Similarly, in the case of Mattel Inc v MCA Records Inc , the Danish Group Aqua, which had imitated the Barbie doll motif in a song named Barbie Girl were accused of trademark infringement, they warded off these monopolistic accusations of infringement by resorting to the First Amendment. In its far reaching judgment, the Ninth Circuit Court of Appeals held that there had been no infringement of the Barbie trademark. These cases make it imperative to impose reasonable restrictions on the rights of trademark owners so that trademarks can be employed for the purposes of review or commentary, without having to countenance costly retaliation. Exhaustion of intellectual property rights deprives a trademark owner from exercising ensuing control on goods that have been offered for sale. In the European Union this principle is applicable only to goods that have been offered for sale in the EEA by their owners or with their acquiescence. The ECJ offered these opinions in the Silhouette and Sebago cases. In these cases the trademark owner attempted to prevent the parallel import of goods into the EEA. The ECJ drastically reduced the circumstances under which consent could be construed. After analyzing the various case laws and legal provisions that have accorded a surfeit of importance to the protection of trademarks, it can be concluded that this leads to monopolies in the market. For instance, in the case of Arsenal v. Reed, the court of appeal held that using the Arsenal name on replica sport kits was an infringement of the trademark law. This case clearly depicts the fact that the protection of trademarks results in the furthering of monopolistic rights of the trademark owners. Further, the case laws of the United Kingdom and the European Union reveal the fact that the courts support the monopolistic rights of the trademark owners. They protect the registered trademarks from the unauthorized use by others without the consent of the trademark owners. The UK market is surfeit with grey market branded products. This has become a matter of concern to all. The Trade Marks Act 1994 extended protection to the businesses for their brands. Specific features of the goods were not accepted as marks, for instance the shape of a Coca-Cola bottle or the Jif lemon. The European Commission formulated the Directive 89/104/EEC in order to bring about Harmonization of the trademark law throughout the European Union. In other words it guarantees an interpretation of the trademark law in a similar manner in all the Member States. The right of a consumer to be undeceived by a wide range of products of the same category is granted by the Trademarks Law. It helps the consumer in categorising products of a specific make. The 1994 Trade Mark Act allows a wide range of products to be registered as trademarks. In order to protect the rights of trademark owners, the courts have interpreted the trademark law in such a manner that these owners have developed monopoly rights in respect of these products. Moreover, the monopolistic concerns in respect of trademarks are at loggerheads with the interests of rivals in the increasingly contentious areas of parallel imports and comparative advertising. These areas bestow substantial benefits on consumers; therefore, it is inadvisable to support disproportionate protection of proprietary interest. References 1. Arsenal Football Club Plc v. Matthew Reed. 2003.ECWA Civ 96. 2. Benefits of registered trade mark protection, 2006. Retrieved April 4, 2007 from http://www.ipo.gov.uk/protect/protect-benefit/protect-benefit-tm.htm. 3. Bravado Merchandising Services Ltd v. Mainstream Publishing (Edinburgh) Ltd 1996 S.L.T. 597 4. Buy & Sell Magazine B&S Ltd v. Rapid Design Ltd. 5. Cameras & Bicycles Eastman v. Griffiths (1898) 15 RPC 105 6. Case T-191/04 MIP Metro Group Intellectual Property GmbH & Co. KG v Office for Harmonisation in the Internal Market (OHIM). 7. Case T-248/06. 28/10/2006. Professional Golfers Association v OHIM — Ladies Professional Golf Association. 8. Case C-64/02, OHIM v. ErpoMöbelwerk GmbH (DAS PRINZIP DER BEQUEMLICHKEIT) [2005] ETMR731 9. Case C-241 & 242/91 Radio Telefis Eireann (RTE) and Independent Television Publications Ltd. (ITP) v. Commission, [1995] ECR I-743, [1995] 4 CMLR 718, [1995] All ER (EC) 416. 10. Case C-404/02 Nichols [2004] ECR I-8499 11. Davidoff v. Gofkid and ECJ. October 23, 2003. C – 408/01. 12. Directive 891/104 EEC. 13. Edmund Irvine, Tidswell Limited v. Talksport Limited 2002 WL 237124; [2002] EWHC 367 (Ch) Ch D 14. Fawcett, James J and Torremans, Paul L. C. 1998. Intellectual Property and Private International Law. Oxford University Press. ISBN: 0198262140. P. 122 – 123 15. Galloway, Jonathan & Komaitis, Konstantinos, 8 Feb 2006. Like Alice in Wonderland: Applying EC Competition Principles in the Case of Domain Names. Retrieved April 4, 2007 from http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/2005_2-3/galloway-komaitis/#P202_49831. 16. Inter Lotto (UK) Ltd v Camelot Group Plc (2004) RPC 9 (CA). 17. Kolah, Ardi.2002. Essential Law for Marketers. Elsevier. ISBN: 0750655003. P. 71 18. Levi Strauss & Co v. Tesco Stores Ltd. 2003. RP C 18. 19. Mars GB Ltd v. Cadbury Ltd [1987] R.P.C. 387 (Ch D) 20. Mattel Inc v MCA Records Inc 28 F. Supp. 2d 1120 (1998) (US) 21. Musical Fidelity Ltd v Vickers (t/a Vickers Hi-Fi) (2003) FSR 50 (CA). 22. Nestlé’s Trade Mark Application (HAVE A BREAK) (2004) FSR 2 (CA). 23. Regina v. Johnstone. May 22, 2003. UKHL 28 on appeal from: (2002) EWCA Crim 194. 24. Reich, Norbert. Understanding EU Law: objectives, principles and methods pf Community law. 2003. Intersentia. ISBN: 9050954650. P. 176 – 178 25. Roche Diagnostics Limited v Kent Pharmaceuticals, 2006, EWHC 355 26. Sebago and Ancienne Maison Dubois & Fils v. GB Unic [1999] E.C.R. I-4103 27. Silhouette International Schmied v. Hartlauer Handelsgesellschaft [1998] E.C.R. I-4799 28. Summary of the Trademark Law Treaty (TLT) (1994). Treaties and Contracting Parties. Retrieved on April 10, 2007 from http://www.wipo.int/treaties/en/ip/tlt/summary_tlt.html 29. Trade mark protection in the EU gets cheaper. trademark. (2003). In Websters New World™ Computer Dictionary. Retrieved April 03, 2007, from DISPLAYURLBusiness Alert – EU. Issue 22. November 4, 2005. Retrieved April 3, 2007from http://www.tdctrade.com/alert/eu0522f.htm."trademark." Websters New World™ Computer Dictionary. 2003. Xreferplus. 03 April 2007 . Websters New World™ Computer Dictionary, 2003, s.v. "trademark," DISPLAYURL (accessed April 03, 2007). 30. Websters New World™ Computer Dictionary. 2003. Retrieved April 03, 2007, from http://www.xreferplus.com/entry/3486600. Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana trademark. Read More