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ECJ rules on the scope of anti dilution protection under European Trade Mark Law
On 27 November 2008, the European Court of Justice (ECJ) handed down its ruling in Intel Corp v CPM UK Limited as to the factors relevant in determining whether use of a later mark would take unfair advantage of, or would be detrimental to, the distinctive character or reputation of an earlier mark.
The decision is far reaching and relevant to all European trade mark owners, particularly those owners of better known trade marks on whose reputational coattails others may try and get a free ride. It would suggest that anti-dilution claims may be more difficult to bring than many had thought.
Facts of the Case
Intel is the registered proprietor of the INTEL trade mark both in the UK and CTM in relation to computers and computer related goods and services. In 1997 CPM registered the INTELMARK trade mark in the UK for marketing and tele-marketing services.
In October 2003, Intel filed an application before the UK Trade Mark Registry for a declaration of invalidity against INTELMARK claiming that the use of that mark would take unfair advantage of, or be detrimental to, the distinctive character or reputation of its INTEL trade mark within the meaning of Article 4(4)(a) of the EU Trade Marks Directive.
In Adidas v. Fitnessworld Trading Ltd, the ECJ had held that such a claim of invalidity required the trade mark owner to establish a link between the earlier and later marks. The Court of Appeal accepted that (1) there was a "huge reputation" in the word INTEL for microprocessor products; (2) INTEL was not used by anyone for any goods or services other than those of Intel Corp; (3) INTEL was "an invented word with no meaning or significance beyond the products which it identifie[d]"; and (4) the reputation of the mark was such that the average consumer would "focus on INTEL in INTELMARK, at least so as to bring to mind the INTEL mark". It asked the ECJ to clarify whether that was sufficient for a "link" to exist and what was required for there to be detriment to distinctive character.
Intel's primary argument was that a mere bringing to mind of the earlier mark was sufficient for there to be the necessary "link" and that once this link had been established it could claim the protection of Article 4(4)(a). That mere calling to mind of the mark was said to provide the necessary unfair advantage and detriment.
Salient features of the Decision
The "Link"
The ECJ held that the existence of a link must be assessed globally and take into account all factors relevant to the case, including:
- The degree of similarity between the marks,
- The nature of the goods or services for which the conflicting marks are registered,
- The strength of the earlier marks reputation,
- The degree of the earlier mark's distinctive character,
- The existence of the likelihood of confusion on the part of the public.
However, the absence or existence of any one of these factors does not imply that a link does not exist.
The fact that the average reasonably well informed and observant consumer called to mind the earlier mark was sufficient to establish the relevant link. The ECJ rejected Intel's argument that this by itself was sufficient for an anti dilution claim.
Unfair Advantage or Detriment
Again the ECJ indicated that in determining whether unfair advantage or detriment has taken place reference must be had to all the factors of the case including those referred to above.
The ECJ ruled that it is not necessary for a mark to be unique in order for unfair advantage or detriment to arise, however the fact that a mark is unique increases the likelihood that a later mark will take unfair advantage or be detrimental to the earlier mark. A first conflicting use may cause actual and present damage to the distinctive character of the earlier mark. However, the ECJ went on to rule that in order to successfully claim that there has been "detriment to the distinctive" character of the earlier mark the owner of the earlier mark would have to prove that the use of the later mark has or would lead to a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered (although it is immaterial whether the owner of the later mark obtains any commercial benefit from the distinctive character of the earlier mark). It was not necessary to show actual and present injury, but a trade mark proprietor must prove that "there is a serious risk that such an injury will occur in future".
What does the Decision mean for Trade Mark owners?
This was a case about an application to invalidate a trade mark. However, it is much more far reaching than that. The same test applies when a trade mark is opposed on anti-dilution grounds and when there is a claim of trade mark infringement.
It is also important to note what this case is not about. It is not about the test that applies where the claim is that the second mark takes "unfair advantage" of the mark. Therefore, the ECJ's statement that whether or not the second trade mark owner benefits from the calling to mind of the first trade mark owner's reputation is not relevant to the assessment of detriment, may not be as far reaching as it first sounds. The decision is unlikely to close the door on claims of "free riding". The decision also focuses on damage to distinctive character rather than to reputation, saying little about claims that a later mark "tarnishes" an earlier mark.
Nevertheless, the requirement of economic detriment in pure dilution claims is significant and controversial. It is in marked contrast with the earlier opinion of the Advocate General in this case who had suggested that economic detriment was not required. It also raises significant practical questions as to how a trade mark owner can demonstrate this detriment. Cases where the second trade mark has been applied for or granted but has not been used are particularly problematic. A national court is faced with having to assess that there is a serious risk that injury without the advantage of evidence of how the public have reacted. Ultimately, this is likely to leave a fair amount of discretion in the hands of national courts and trade mark registries. This also opens up the possibility of local differences in the application of this requirement.
That said, one thing is quite clear from this decision. The anti-dilution provisions of European Trade Mark law cannot be used to prevent the registration or use of a later mark that merely calls to mind an earlier mark with a reputation no matter how great that reputation is. It is no longer sufficient to claim that there will be impermissible erosion of the distinctiveness of an earlier mark merely by reason of the existence of a later identical or similar mark. The ECJ has thereby refused to grant trade mark owners the degree of protection that many famous mark owners have called for. This some brand owners will find disappointing. In contrast, those whose trade marks arguably call to mind the marks of others should find it easier to resist anti-dilution claims.