Trademark Dilution in the European Union - Essay Example

?Trade Mark Dilution in European Union Introduction Trade marks often suffer fro blurring and tarnishment. Blurring and tanishment are what is referred to as dilution when they affect trademarks. Blurring takes place when an original trade mark is affected through its usage in other areas. The distinction in the earlier trademark may be impaired and difficult to identify. Gin addition, tarnishment involves the effects of impairment on the reputation of a trade mark by its usage in other settings. Reputation of a trade mark may be affected when it is used on goods and services which do not meet the set standards. Blurring and tarnishment have been recognized in the anti dilution laws of the European Union. There have been controversies surrounding various organizations in the world on the use of trade marks. Companies have claimed that their competitors or other organizations have been using their trademark thereby affecting their market base as well bas competition. Trade mark dilution refers to the use of a similar trade mark by another company. However there are misunderstandings as to whether the products registered under the trade mark should be similar or different. In the European Union, courts have ruled otherwise that the use of similar trademarks but different goods under the trade mark does not lead to trade mark dilution1. The European Union has put in place measures to curb dilution of trade marks; they ensure that there is no unfair advantage on the use of a trade mark on their poor quality products that can harm the products reputation and character. The most widespread term applied is known as the protection against “free riding” on the trade mark. It is also important to note that the unfair advantage in the use of trade mark, blurring and tarnishment are grouped together in the same sub article in their laws. In the United States, there is no major link in the application of laws between dilution protection and unfair advantage over the use of trade mark2. There are three aspects in which dilution differ from other forms of infringement in the European Union. The first aspect involves the confusion in which the consumer cannot differentiate the original trade mark and its usage on other junior products. Secondly, dilution can also involve the use of trade mark on different goods. This differs in traditional forms of protection where the difference in types of goods represented by the same trade mark was not a big issue. It was difficult to actually show the level of confusion when the goods were dissimilar from those of the senior user of the trade mark. Finally, dilution is generally applied in cases whereby the consumers have a common knowledge of the trade mark and the goods it represent3. The controversy surrounding dilution is based on its differences from confusion based infringement. In Europe as well as in the United States, the focus is on the use of a similar trade mark but with dissimilar goods. Infringement actions involved situations whereby the goods under the trade mark were similar and thus confusing the consumers4. The Argument The application of anti dilution laws in Europe are more complicated. The formulation of trade mark laws brought about different perspectives in the application of the law. The main concern has been on the unfair advantage enjoyed by the junior users of a trade mark rather that the harm caused to the trade mark. Unfair competition was the main driving force behind the use of trademarks by other companies. For example, in France, a company had to show that its trade mark suffered harm fro its usage by other companies. However, the use of a trade mark to achieve competitive advantage was also termed as a form of harm to the trade mark. In Germany, a company had to show how it was affected in competition by the use of its trade mark by other competitors. Competition should be understood to mean competition for the trade mark and on situations whereby the junior user of the trademark would use the mark on dissimilar goods5. Article 5(2) of the European Council Trade Mark directive states that any organization with a registered trade mark can prevent any third party from using any sign which may be identical or similar to its trademark even when the products are dissimilar. When a trade mark has a reputation in a member state, any usage of its trade mark is unlawful since it leads to unfair advantage, the character of the company and to the reputation of the company. Other provisions, especially those of articles 4(3) and 4(9) enable trade mark owners to prevent any further registration of trade marks having similar characteristics to their trade mark6. The United Kingdom has implemented article 5(2) though it is optional. Dilution claims in the United States can be claimed through the application of sections 5(3) and 10(3) contained in the Trade Marks Act 1994. In addition, the United Kingdom allows for the usage of a trade mark in goods and services that are not comparable to those in which the earlier mark is registered. The European Court of Justice has come up with parameters in which dilution can be claimed in the European Union member states. The first claim is that the trade mark must be famous or known by majority of consumers using the product or service. A claim on the popularity of a trade mark can be assessed in the approach in which customers use the product or service under the trade mark on a daily basis. Other perspectives in which the popularity of a trade mark can be established involve its usage within a larger geographical area and the duration of time in which the consumers have been using the product or service7. Further, any confusion that may arise in the trade marks is not required under the law. It is important for the companies under competition to have their marks being linked to their products or services. The consumers should also be able to establish a link between the mark and the product. However, if the link is likely to cause confusion, it must be assessed globally ensuring that all relevant factors to the circumstance of the case are established8. Consequently, when there is little and limited distinction in the protected trade mark, the claim process is very challenging. The natural distinctive character of the protected mark is always important to the exercise of determining the level of confusion among or between competing trade marks9. The European Union also put emphasis on reputation of the trade mark. Trade marks that have stronger reputation have an advantage because they always have links between the mark and the signs. The fact that the public can identify the mark from another offending mark is not enough in proving dilution, thought it is very important10. The courts have moved away from literal interpretation of the legislation. Organizations that claim dilution on their trade marks must prove that there was actual damage or economic harm on the company. They also need to show how the damage can be brought to the organization. The damage must be based on the rules of probability but not on the risk of them occurring11. The European court of justice has handled some cases involving trade mark dilution that may have significant impact on the European trade marks. The best example of trade mark dilution case involved Intel Corporation and the CPM (UK). The European court of justice had to clarify the European understanding of trade mark dilution as opposed to the US understanding. The case involves the controversy between INTEL Corp who owns the mark and Compumark who actually had the mark. The market in which these two companies operate is quite different since INTEL is in the business of developing computer applications while INTELMARK operates in marketing and telemarketing businesses. Intel filed a suit in the court claiming that INTELMARK’s registration was unlawful and could affect its competition and market base. The main claim was that INTELMARK’s trade mark would dilute the earlier INTEL trade mark. However, the suit filed in the UK was dismissed by the UK IPO and the high court. Intel Corp complained to the court of appeal that the use of its trade mark by INTELMARK would affect their reputation and competition even if the products that they were dealing with were different. This shows that it is very difficult to prove economic harm in European court of justice when the trade marks are similar but the products under the trade mark are different12. The second case involving trade mark dilution is between Adidas Salomon and the international sportswear company Adidas. The controversy was in the use three striped logo by Adidas and the use of two striped logo by the Fitness world company. The court in Netherlands ruled that n the use of two striped logos affected Adidas’ trade mark. However, the European court of justice overturned the ruling claiming that the two striped logo was just a mere decoration and had not infringed the Adidas trade mark13. Further, the case of trade mark dilution also a rose in the case the UK L’ Oreal and Bellure, [2006] EWHC (ch) where the smell of their perfumes was said to be similar. L’ Oreal claimed that Bellure was producing similar perfumes that were packaged and had a similar smell to its more costly perfume products. Courts in the United Kingdom gave several interpretations on whether the case involves trade mark dilution. There are also a number of appeals in the European court justice concerning the cases14. Trade mark dilution in the United Kingdom has no specific regulations to control unfair competition. However, the country has regulations to prevent false hoods, interference with contract which aims at affecting fair competition among various companies. The main aim of the country’s regulations concerning trade mark dilution is to prevent consumer confusion that may arise when two or more companies use similar trademarks to trade similar goods and services. The regulations also seek to allow the market operate freely within the boundaries of market characteristics. The United Kingdom’s regulations concerning trade mark dilution also state that any confusion that may arise in the trade marks is not required under the law. It is important for the companies under competition to have their marks being linked to their products or services. The consumers should also be able to set up a link between the mark and the product. However, if the link is likely to cause confusion, it must be assessed globally ensuring that all relevant factors to the circumstance of the case are established15. Conclusion It is very difficult to claim trade mark dilution in Europe because an industry must be able to demonstrate that their sales have been affected by the use of their trade mark by other companies. Mere speculation of the possibility of damage happening to the organization can not be considered by the court. The European Union also allows the use of a similar trade mark but with different products and services registered under the trade mark. This can be seen through the cases in which European Union have intervened. In the case of Inter Corporation and INTELMARK, European Union argues the Intel cannot claim trade mark dilution since the products and the market in which the two companies operate are different. The European stance on trade mark dilution appears to be creating several complications to trade mark owners in member states. References Bagley C, Dauchy, C: The Entrepreneur’s guide to business law (London, Cengage Learning, 2011) 76 Broekman, J: The Semiotics of Law in Legal Education (New York, Springer, July 19, 2011)69 Eeckhout, P., Tridimas, T: Yearbook of European Law 2009 (New York, Oxford University Press, volume 2y8, Feb. 25, 2010) 312 Fhima. S: Trade Mark Dilution in Europe and the United States (New York, Oxford University Press, 2012) 1-10. 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