The CJEU and the Infringement of a Trade Mark - Essay Example

Critically analyse the case law of the CJEU in relation to the infringement of a trade mark under “Art. 5 a) of the Trade Marks Directive, Directive 2008/95/EC” Words count -4993 excluding title pages , bibliography , and list of caselaws. Part - A In this section, this research essay will analyse with the help of the following decided case laws like Arsenal Football Club plc v Reed, “Hoffmann-La Roche & Co. AG v. Centrafarm Vertriebsgesellschaft Pharmazeutischer Erzeugnisse mbH”, “Google France SARL v. Louis Vuitton Malletier SA” Sabel v. Puma, “Canon v. MGM”, “Lloyd Schuhfabrik v. Klijsen Handel”, Medion AG v Thomson Multimedia Sales Germany & Austria GmbH how the infringement of a trade mark is safeguarded in EU under Art. 5.1(a) of the Trade Marks Directive, and by the Directive 2008/95/EC. This research essay will make an attempt to discuss about how trademarks in EU currently enjoy adequate protection and that any further enlargement of rights of the proprietor may badly impact the consumer in the EU. Trademark encourages a fair competition, safeguards the consumers from confusion and acts as a stimulus for the proper functioning of market economies by facilitating consumers to vent their choice for a specific product or service. Article 5 (1) of the Trade Mark Directive (TMD) offer fundamental mandatory safeguard for the registered trademarks in all the Member States. Article 5 (1) (a) offer a wider analysis to the meaning of the word “use “. The origin function of a mark is thus concerned with the raison’être of the rights given by Article 5(1) (a) (b) of the TMD , which tries to make sure that consumers are not obscured or misled by the presence of similar or analogues marks for similar or identical products1. The Directive 2008/95/EC is aimed at harmonising the laws of Member States pertaining to trademarks so as to encourage the free movement of products and services and to nourish free competition within the EU internal market. This harmonisation is dealt with the basic rules on the trademarks obtained by registration. However, the procedural aspects of registration of trademarks and the protection of trademarks so registered are vested with the Member States2. In Loendersloot (Frits) v. Ballantine3 case, Court of Justice, European Union (CJEU) held that trademarks should assist to develop a system of “undistorted competition” to be in operation so that business can attract and to retain their clients by the quality of their products and in turn by providing them with quality assurance4. In “Copad v. Christian Dior Couture5 case, and in Parfums Christian Dior v. Evora” Case6, CJEU held that the overall superiority of luxury products can comprise of some “mental” or some intangible features, which emanate from their being linked with an impressive icon or image. This specific quality-conferring character of a trademark can offer a specific legal safeguard7. In Arsenal Football Club plc v Reed8, EU’s Advocate –General opined that the functions of the trademarks should not be restricted to the indication of origin only and hence, legal protection of trademarks should be enlarged and if so, on what footing such enlargement would be reasonable.9. In “Hoffmann-La Roche & Co. AG v. Centrafarm Vertriebsgesellschaft Pharmazeutischer Erzeugnisse mbH”10, ECJ identified three essential elements of a trademark namely the origin or identifying function, investment or the advertising function and the quality function. Out of three, identifying function has been acknowledged as the most significant function which is likely to educate the consumer to differentiate the product from other products on the basis of their different sign or origin11. As the trademark assumes more tangible form and are regarded as property, which can be protected against trespass or infringement by third parties12. In “Adidas-Salomon AG v. Fitnessworld Trading Ltd13”, it was held that to perceive the trademark as property connotes a wider ambit of protection for the owner surpassing the quality and origin functions. Thus, the protection of the mark itself does not need any evidence of the chance of confusion on the part of the public14. In Parfums Christian Dior SA & Parfums Christian Dior BV v.Evora BV case15, ECJ held that, in principle, any grave damages made to the repute of the mark could authorise its proprietor to protect the advertising function of his mark16. In “Google France SARL v. Louis Vuitton Malletier SA” case17, ECJ challenged the intricate issue of the use of trademarks as keywords to generate subsidised advertisements on the Internet. Google offers advertising services whereby anyone can buy a keyword, which, when explored on the Internet, generates a specific supported advertisement together with non-sponsored search outcomes. In the above case , the defendant who is the owner of the mark ‘Vuitton’ found that when he searched the Google search engine with his product name , the results depicted sponsored links to websites offering fake versions of Vuitton’s products. In French court, Louis Vuitton initiated infringement proceedings against Google which referred the same to the ECJ for an initial ruling. The ECJ was of the opinion that though the AdWords services may trespass trademarks’ rights, but accountability falls on individual’s AdWords account holders. ECJ declined to acknowledge that Google was directly accountable for trespassing use by a keyword on the footing that Google itself did not ‘employ’ marks within the terms of Article 5 of the Trade Mark Directive. (TMD). Thus, in this case, ECJ adopted the reasoning in Arsenal that a trademark is trespassed if the third party employs it in a manner that result in an “adverse impact” to the functions of the mark namely advertising and origin functions. ECJ then found that AdWords did not infringe the mark’s advertisement function. However, despite the Court did not conclude that Google trespassed Louis Vuitton’s trademark privileges; it did not mention what demeanour would fulfil the needs of the term “use.” However, it is to be kept in mind that ECJ still viewed that the use of trademarks as keywords may tantamount trespassing18. Sabel v. Puma case19ad has its source in the resemblances between two trademarks belonging to the German company Puma and the Dutch company Sabel BV. Each mark shows a catlike beast of prey running towards the right of the picture. Puma the German company lodged its opposition when the Sabel applied to register its trademark in Germany. The German patent office concluded that there was no resemblance for trademark law purposes between two marks. When it was referred to ECJ, it explained the notion of the perception of confusion.ECJ observed that the probability of confusion between two marks foots upon the uniqueness of the earlier mark either per se or due to the repute it adored with the public. ECJ observed that the mere connection which the buyers might make between the two trademarks connotes that the mere link which the buyers might make between the two trademarks with similar semantic content does not amount in itself adequate footing for finding that there is a probability of confusion. Thus, for the ECJ, the probability of confusion is a narrower notion than the chance of association. Thus, link between marks in public mind does not connote the public will automatically obscure the two20. In this case, ECJ observed that the probability of confusion must be appraised globally by taking into consideration all issues particular to the scenario of the case21. In “Canon v. MGM”22, the ECJ recognised the origin function as that safeguarded by the Directive in one of its earliest significant verdicts after harmonisation, and held that the crucial function of the trademark to warranty the identity of the origin of the marked product to the end user or consumer by facilitating him, without any chance of any chaos, to differentiate the service or product from others, which have another origin. Thus, the trademark should offer a warranty that all the products and services bearing it have emanated under the authority of a single business which is accountable for their quality23.Thus , in this case, ECJ observed that in evaluating the resemblance of the products or services , all appropriate issues pertaining to those products or services should be taken into consideration and these factors include , their end users , their nature , why these products are complementary or in competition with the each other, and their method of usage. In this case, ECJ further observed that trademarks with a highly unique appeal, due to the repute they possess or due to per se, such products usually enjoy wider safeguard than trademarks with a less unique character24. In “Lloyd Schuhfabrik v. Klijsen Handel”25, ECJ26 observed that it was possible to just auditory resemblance between trademarks may establish a probability of confusion27. In Diffusion SA v Sadas Vertbaudet SA28 case, ECJ held that a sign is undistinguishable where it has been replicated without any changes or inclusion, all the features constituting the trademark or where , it is viewed in absolute term , it contains variances so unimportant that they may go unnoticed by the mediocre consumer29. In Medion AG v Thomson Multimedia Sales Germany & Austria GmbH, the German trademark LIFE for electronic leisure devices is owned by the plaintiff Medion which sued Thompson for the trademark trespass, praying to stop it from using the mark THOMPSON LIFE for analogues’ devices, which, it asserted, would be probable to confuse consumers of those products. ECJ viewed that it was not proper to decline to find a probability of confusion simply due to a shared element was not dominant30. Medion case is obvious that the absence of dominance does not decide that there is a probability of confusion. It does not throw light on how much weight the presence of dominance should tolerate. In Miles Handelsgesellschaft International mbH v OHIM31, the owner of the CTM for MILES vehemently contradicted a latter CTM for a BIKER Miles mark, with the words designed against the background of a road, for similar Class of 23 products. Though the opposition was a success initially, however, the Board of Appeal rejected the appeal on the ground that marks were phonetically, visually and abstractly discernible. However, the Court of First Instance (CFI) repudiated the BoA’s verdict by holding that BIKER MILES mark was analogues to that of MILES and hence, probable to be conceived as the principal element. In spite of CFIs reading of case law warning against the dangers of comparing and extracting only one element from a whole mark, it however did so efficiently in the above case thereby comparing MILES to MILES in the place of BIKER MILES to MILES. It is to be noted that the BIKER MILES logo included a mixture of words, which were pertinent to each other and which collectively to establish a varied sound, look and the aggregate “feel” to MILES on its own. Thus, the strategy used by the CFI in this case indicates that for too much reliance is being given on dominance of shared elements instead of aggregate impressions. Thus, the verdict in the Medion may assist to extricate the pre-eminence of the “overriding components” litmus test and reverting to its apt place as one part of an aggregate evaluation32. Part B In this section, this research essay will advise Tyco with the help of decided case laws of the steps they can take to protect the Fat Freddies brand in the UK and other countries in Europe and the strategies to be worked out by Tyco for the problems they may face as a result of Fred Morgans café and the Fast Freddies business and trade marks. In UK, if a trademark owner is able to demonstrate that the use of his trademark in UK has created“goodwill” with that trademark, then this goodwill is defendable and the goodwill denotes the significance of its reputation in the mark33. If another business “passes off” their services resembling he claimant’s mark, if it asserts that their services are that of the claimant, or if they make consumers to believe that the claimant is in some way or rather linked or have acknowledged the services, then, the claimant can initiate legal action for the passing off. The claimant under UK law can recover damages or apply for an injunction to forbid the use of the mark, as long as the claimant can demonstrate that they have or probable to witness damage due to that infringement or usage34. A trademark owner only needs to demonstrate that the supposed products or services are adequately analogues to those recognised by the owner’s mark and that the consumer will have confusion in differentiating the products. In European Union and Australia, it is probable for a trademark owner to demonstrate infringement with actually establishing a likelihood of confusion35. As per UKs Trademarks Act, a trademark already registered in UK can be revoked if it is exploited in a manner that might mislead the public “especially as to the quality, nature or geographical origin of those products or services. In UK, the enforceable rights can be acquired through the reputation and use of the product and trademark registration offers significant substantive and procedural benefits in prosecuting trespassing or infringements36. Under UKs common law, passing off is a remedy which is aimed to forbid one business for illegally trespassing or infringing the goodwill of another. Thus, if a business makes a misrepresentation in the normal course of its trade, which creates chaos ending in causing damage to other’s repute or goodwill, then, such business will be held accountable passing off. Thus, such misrepresentations need not necessarily to be express. A distinctive misrepresentation would relate to the actions of a third party employing a sign which is in fact, typical of the other party37. In Reckitt & Colman Products v Borden38case, the following was regarded as essential elements for passing off: a) presence of claimant’s goodwill, b) falsification, c) presence of actual damage or probable damage39. As held in Wright, Layman & Chinley Ltd v Wright, if a defendant has used his own name in the name of their business honestly without any ulterior motive, then, the tort of passing of does not applicable. In “Diageo North America, Inc. v. International Brands (IBC) Ltd“40 case, a manufacturer of vodka succeeded in initiating a claim against the maker of VODKAT, an alcoholic beverage that failed to cater the requirements under the law to be sold as “vodka” under European Law41. In “Mirage Studios v. Counter-Feat Clothing Co.Ltd”42, the defendant employed images of the Teenage Mutant Ninja Turtles on clothing without having a license; it was observed by the court that the majority of the public aware that reproduction of character generally requires a license and thereby making the public that the defendant had the licence for that and hence, there was a passing off43. Bristol Conservatories v Conservatories Customs Built44case is pertaining to “reverse” passing off, where the illustrations of the plaintiff’s products are shown to praise the qualities of the claimant’s product. Thus, the salesmen of the defendant demonstrated the products employing the photos of products manufactured by the plaintiff, thereby impliedly parodying the claimant’s products as those of the defendant45. The Harrods Ltd v Harrodian School46 case acknowledged the notion of “dilution” in passing –off law, and it was held that it is adequate to demonstrate a misrepresentation, to show that the buyers may think that the defendant is associated or connected with the claimants in some way or other, despite the fact that even if the two are not in rivalry47. “Trademark Registration in UK “ An application has to be made to the UK Trade Marks Registry at the IPO. The proposed mark should meet some yardsticks and should not conflict with earlier registered trademarks or pending marks. For registration of trade mark under UK law, a trade mark must have the following ingredients: Being capable of symbolised graphically; Differentiating the products or services of one business from that of another business. While registering a trade mark in UK, the applicant has to choose one or more classed within which the applicant needs protection. At present, there are 45 categories to select from: 34 for the products and 11 for services48. In Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd, 49the claimant sued in a Dutch court, demanding for a preliminary injunction, asserting that defendant’s sports clothes contained two strip designs which both diluted and trespassed the claimant’s triple stripe design. The Dutch court held that there was no probability of misperception and hence, there was no dilution since the stripe design of the defendant was applied uniquely as ornamentation and decoration. In this case, the ECJ was of the opinion that as per finding of truth by the national court where the particular section of the public considers the sign purely as a decoration, it does not create any association with a registered trademark. In such scenario, the magnitude of similarity between the trademark and the motif would not be adequate enough to correlate such a link50. In Michael Holterhoff v Ulrich Freiesleben51, the defendant owned two trademarks for two types of gem stones, and he had employed them to denote not the origin but the shapes of the gem stones. On referral to ECJ, it found that there was no trespassing without the actual use of trade mark and oral use of a trade mark is sufficient to infringe52. In Arsenal Football Club v Reed53 case, the defendant sold T-shirts and souvenirs bearing Arsenal Football Club’s registered trademarks. However, the defendant used a notice informing that the products were not official products from Arsenal. Claimant sued Reed for the trespassing of registered trademarks and for acts of passing off. It was held that the marks used by the defendant were considered as badges of loyalty and not pertaining to origin. The action in passing off was failed due to the fact that disclaimer notices put by the defendant54. Celine SARL v Celine SA (ECL)55-, in this case a reference to ECJ was made due to a dispute between two businesses , as each business claimed a right to use the word Céline. As the registered trade mark owner, the claimant tried to stop the defendant to use Céline as shop and company name. It was held that the unlawful use by the defendant of a company , trade or shop name which is similar to an earlier mark in connection to which that mark was registered amounted to illegal use where the owner of such a mark is authorised to forbid as per Articles 5(1) (a). LOreal v Bellure extended the idea of the "functions of a trade mark" to include some that arent essential: the "guarantee of quality, communication, investment and advertising" functions of a trade mark are also protected under Article 5.1(a) In Plentyoffish Media v Plenty More LLP case, the claimant is a US based online dating service provider initiated a passing off its dating service website “plentymorefish.com” as it is registered trademark in US against UK marks owned by Plenty More LLP. UKs High Court turned down the claims asserted by the Claimant that it was authorised to claim rights over UK-registered trademarks as it had high numbers of visitors from UK to its website. The court observed that the claimant did not have any clients in the UK and hence, it did not possess any “goodwill” rights over UK marks owned by the UK defendant. The court further observed that just mere reputation in UK is not adequate: clients in the UK are needed, and business has to demonstrate that it offers services or products in UK regularly. The above verdict demonstrates that just building UK repute alone is not adequate for any foreign brands or businesses to be able to affirm rights for trademark in UK. The High Court in this case affirms that passing off safeguards’ custom and not trading names in general. There exists vast difference between reputation and goodwill. Thus, this case sends a clear message for the UK businesses is that they will not be disturbed by foreign competitors asserting claim to similar or identical brands unless those foreign businesses have the foresight to register the trademark in UK formally or a prior well-established customer base in UK56. In “Hoffmann-La Roche & Co. AG v. Centrafarm Vertriebsgesellschaft Pharmazeutischer Erzeugnisse mbH”57, ECJ identified three essential elements of a trademark namely the origin or identifying function, investment or the advertising function and the quality function. Since Tyco has already invested in advertising its brand in USA and planning to invest for product promotion in UK, it may rely on the above case58. As per UKs Trademarks Act, a trademark already registered in UK can be revoked if it is exploited in a manner that might mislead the public “especially as to the quality, nature or geographical origin of those products or services “Answer to question (i)” Tyco already registered the marks FAT FREDDIES and FAT FREDDIES SURF SHACK in both the USA and Australia in respect of clothing and surfing accessories. It is assumed that TYCO has registered its trademark in USA under the WTO agreements and the Paris Convention. Under these international conventions, a USA based mark owner can file a trade mark application in USA and then, within six-month period, he can apply for the same trade mark in UK or Europe also and he can bank upon the USA filing date. This connotes that foreign application efficiently back-dated to USA filing date thereby offering the business priority over any mark owner who has applied to register the mark during that time. If such is the case, then, TYCO can oppose the application made by Fred Morgan for his café and the FAST FREDDIES business and trade marks. The Madrid system permits an applicant who has filed an application in his home nation can make further application covering one or more those nations which have signed the Madrid Protocol footed upon the home application. If any objection is to be raised for granting of international registration covering their jurisdiction, the national trademark registry of the concerned nation can make such objection within twelve to eighteen months of the application. Hence, Tyco can file a trade mark application in USA under the Madrid system for registering its trademark in UK, Spain and Portugal if it has not registered under WTO Agreement and Paris Convention. Alternatively, since UK, Spain and Portugal are the Member States of the EU, Tyco can apply for a CTM. The Community Trade Mark (CTM) offers mark protection on a European level and thus CTM registration will offer protection to a mark in all the member states of the EU. There should not be any objection by a third party footed upon pre-existing national rights in any member state for granting a mark by CTM. Once the application is successful at CTM level, CTM sanction can be transformed into a chain of conventional national trade marks in the nations in which there are no oppositions. CTM offers a cost-effective means of offering protection in the member nations of EU, but it takes a lot of time for registration. Answer to question (ii) In this section ,this research essay will advise how Tyco can oppose Fred Morgans application and of the grounds on which they may oppose it. Tyco can oppose the trade mark application filed by Fred Morgan for the mark namely FAT FREDDIES within the two month period after it is advertised in the UK IPOs on-line journal. If Tyco files an e-form TM7a ,” Notice of Threatened Opposition” within the two months after the advertisement , the period may be extended to three months by the UK IPO. If Tyco want to oppose the application of Fred Morgan without any extension to the time period permitted, then, Tyco can file a TM7 application of “Notice of Opposition” followed by a £200 fee. Tyco should write to Fred Morgan and inform him why Tyco is opposing his application. Tyco is advised to settle the issue with Fred Morgan in a friendly manner instead of initiating formal opposition. Since, Fred Morgan is applying under T-shirts, hoodies and sweatshirts” in Class 25. Tyco should oppose this as it is already having mark registered in USA and Australia. Further, Fred Morgan cannot rely on Wright, Layman & Chinley Ltd v Wright as Fat Freddie was not his name. Tyco can rely on the Harrods Ltd v Harrodian School case which acknowledged the notion of “dilution” in passing –off law. Tyco can rely on Arsenal Football Club v Reed and a demonstrate that the unlawful use by Fred Morgan of Tyco’s trade or shop name which is similar to an earlier mark in connection to which that mark was registered amounted to illegal use where the owner of such a mark is authorised to forbid as per Articles 5(1) (a). However, Tyco’s efforts to oppose against Fred Morgan and FAST FREEDIES mark in UK may not be successful on the basis as what has been held in Plentyoffish Media v Plenty More LLP case. As Tyco is yet to start its operation in UK and clients in the UK are needed for the protection of a mark, and Tyco has to demonstrate that it offers services or products in UK regularly. It is to be reminded that just building a UK repute alone is not adequate for any foreign brands or businesses to be able to affirm rights for trademark in UK. Tyco should have the foresight to register its trademark in UK formally or should have a prior well-established customer base in UK to have successful claim against Fred Morgan and FAST FREEDIES. Bibliography Books Aplin T & Davis J, Intellectual Property Law: Text, Cases and Materials (1st edition. Oxford University Press 2013) Barnard, C, The Substantive Law of the EU (OUP 2007) Boundy C, Business Contracts Handbook (Gower Publishing Ltd 2010) Court of Justice of the European Communities, Report of the Cases of Before the Court of Justice and the Court of First Instances (Court of Justice of the European Communities 2005) Dinwoodie G B & Janis M D, Trademark Law and Theory: A Handbook of Contemporary Research. 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"Fundamentals of Intellectual Property Law." [2012] Computer Security Handbook, Set 11 3 Web Out-law.com, ‘US Dating Site has no “Goodwill” Trademark Rights. ‘(18 May 2011) < http://www.theregister.co.uk/2011/10/18/plentyoffish_trademark_ruling/> accessed 10 May 2014 List of Case Laws Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd Adidas-Salomon AG v. Fitnessworld Trading Ltd Arsenal Football Club plc v Reed Bristol Conservatories v Conservatories Customs Built Canon v. MGM Celine SARL v Celine SA (ECL) Copad v. Christian Dior Couture Diageo North America, Inc. v. International Brands (IBC) Ltd Diffusion SA v Sadas Vertbaudet SA Google France SARL v. Louis Vuitton Malletier SA Harrods Ltd v Harrodian School Hoffmann-La Roche & Co. AG v. Centrafarm Vertriebsgesellschaft Pharmazeutischer Erzeugnisse mbH L’Oreal SA v Bellure NV Lloyd Schuhfabrik v. Klijsen Handel Loendersloot (Frits) v. Ballantine Medion AG v Thomson Multimedia Sales Germany & Austria GmbH Michael Holterhoff v Ulrich Freiesleben Miles Handelsgesellschaft International mbH v OHIM Mirage Studios v. Counter-Feat Clothing Co.Ltd Parfums Christian Dior SA & Parfums Christian Dior BV v.Evora BV Plentyoffish Media v Plenty More LLP Reckitt & Colman Products v Borden Sabel v. Puma Wright, Layman & Chinley Ltd v Wright Read More