Official Journal of the International Trademark Association

HIGH COURT ISSUE Two Pesos v. Taco Cabana: Still More Interesting for

What It Did Not Decide Joan L. Dillon & Michael Landau

Even More Parodic Than the Real Thing: Parody Lawsuits Revisited

Bruce P. Keller and Rebecca Tushnet Qualitex Revisited

Christopher C. Larkin Wal-Mart v. Samara Brothers and Its Progeny

S. Lloyd Smith TrafFix Revisited: Exposing the Design Flaw

in the Functionality Doctrine Clifford W. Browning

Federal Dilution Claims After Moseley v. V Secret Catalogue Howard J. Shire and Michelle Mancino Marsh

Brand Name and �Look-Alike� Drugs in Canada After Ciba-Geigy v. Apotex: A Proposal for Relief From Slavish Imitation

Daniel R. Bereskin, Q.C. A Sign of the Times? A Review of Key Trade Mark Decisions of the

European Court of Justice and Their Impact Upon National Trade Mark Jurisprudence in the EU Seiko Hidaka, Nicola Tatchell, Mark Daniels,

Bonita Trimmer and Adam Cooke Significant Trademark Developments in the Asia-Pacific Region

Joseph S. Yang

Vol. 94 September-October, 2004 No. 5

®

Vol. 94 TMR 1105

A SIGN OF THE TIMES? A REVIEW OF KEY TRADE MARK DECISIONS

OF THE EUROPEAN COURT OF JUSTICE AND THEIR IMPACT UPON NATIONAL

TRADE MARK JURISPRUDENCE IN THE EU∗

By Seiko Hidaka, Nicola Tatchell, Mark Daniels, Bonita Trimmer and Adam Cooke∗∗

I. INTRODUCTION In recent years the European Court of Justice (ECJ) has

received an ever increasing number of referrals from the national courts of EU Member States seeking guidance on the correct interpretation of the EC Trade Marks Directive (the �Directive�).1 The Directive sets out the law to be applied by the national trade mark offices and national courts of EU Member States in relation to both registrability and infringement of national trade marks. The purpose of the Directive was to harmonize national trade mark laws, thereby facilitating trade within the European Union. The Directive has been implemented into the national legislation of 15 EU Member States. In some instances, however, the wording of implementing legislation differs from that of the Directive. In addition, in part on account of the different history and philosophy of the national trade mark laws of individual EU countries prior to the Directive, there has been considerable uncertainty as to the interpretation of the provisions of the Directive, many of which represent a radical departure from the prior legislation of Member States. On 1 May 2004, a further ten countries joined the European Union. These countries have yet to modify their trade mark laws to comply with the Directive.

The provisions of the Directive are mirrored in the Community Trade Mark Regulation, the relevant provisions of which are broadly the same as those of the Directive. The ECJ hears appeals from the Court of First Instance in relation to the registrability of

∗ The authors would like to thank Tanguy de Haan of NautaDutilh (Brussels, Belgium), Sylvie Benoliel-Claux of Antoine & Benoliel (Paris, France), Eva Kessler of Graf von Westphalen Bappert & Modest (Freiburg, Germany) and Roberto Crosti of NCTM Studio Legale Associato (Milan, Italy) for their invaluable assistance and contributions. ∗∗ Wragge & Co., LLP, London, U.K., Associate Member of the International Trademark Association. 1. First Council Directive 89/104/EEC.

1106 Vol. 94 TMR Community trade marks examined by the Community Trade Mark Office (known as OHIM) in Alicante, Spain.

In this article, we review key ECJ trade mark decisions of the last five years and consider their impact upon national case law. For the sake of brevity, we have only considered a handful of EC territories, namely the Benelux, France, Germany, Italy and especially the United Kingdom, the authors� own country. We focus on those themes that have pre-occupied the ECJ in recent years. In relation to registrability/validity these are distinctiveness and descriptiveness, and non-standard marks. In relation to infringement these are the assessment of a likelihood of confusion, the special case of marks with a reputation and finally whether a sign has to be used in a trade mark sense.

II. DISTINCTIVENESS AND DESCRIPTIVENESS A. Introduction

The ECJ has noted on occasions too numerous to note that the essential function of a trade mark is �to guarantee the identity of the origin of the trade-marked product to the consumer or ultimate user, by enabling him without any possibility of confusion to distinguish that product from products which have another origin.� The Directive stipulates lack of distinctive character2 as a general ground for refusing registration, and provides, in particular, for those marks which are exclusively descriptive3 or customary in current language or trade4 to be refused registration.

B. Article 2 and Article 3(1)(a)-(d) of the Directive Article 2 sets out which signs may constitute a trade mark: A trade mark may consist of any sign capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings. Articles 3(1)(a)-(d) and 3(3) of the Directive, which govern the

absolute grounds for refusal of registration of a trade mark, are set out below:

Article 3: Grounds for refusal or invalidity

2. Article 3(1)(b). 3. Article 3(1)(c). 4. Article 3(1)(d).

Vol. 94 TMR 1107

1. The following shall not be registered or if registered shall be liable to be declared invalid: a. signs which cannot constitute a trade mark; b. trade marks which are devoid of any distinctive character; c. trade marks which consist exclusively of signs or

indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service;

d. trade marks which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade;

. . . 3. A trade mark shall not be refused registration or be declared invalid in accordance with paragraph 1 (b), (c) or (d) if, before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character.

C. Relationship Between Articles 2, 3(1)(a) and 3(1)(b) Interpretation of these provisions has not been

straightforward. First, it is unclear from the wording of the provisions themselves whether the distinctiveness requirement originates from Article 3(1)(b) (devoid of distinctiveness) alone, or Articles 2 (capable of distinguishing) and 3(1)(a) (signs which cannot constitute a trade mark) as well. In other words, it is unclear whether there may be a mark which is incapable of distinguishing (excluded by Articles 2 and 3(1)(a)) but which is not devoid of distinctive character. This could be important because if a mark is excluded by Articles 2 and 3(1)(a), it cannot ever be allowed registration, so it is pointless leading evidence that Article 3(3) (acquired distinctiveness) applies as Article 3(3) only applies to Articles 3(1)(b)-(d). Second, it is unclear whether marks not precluded by Article 3(1)(c) (exclusively descriptive) and/or (d) (exclusively generic), automatically are not �devoid of distinctive character� and, therefore, are �capable of distinguishing� and so are registrable.

In the case of Philips v. Remington,5 the ECJ held that there is no difference between Article 2/Article 3(1)(a) and Article 3(1)(b). Philips is the manufacturer of a three-headed rotary electric 5. [1998] ETMR 124 at 141, High Court.

1108 Vol. 94 TMR shaver. Philips registered a trade mark consisting of a graphic representation of the shape and configuration of the head of its shaver. When Remington launched its own similar three-headed rotary electric shaver, Philips sued Remington for trade mark infringement. The UK High Court held that the trade mark was excluded from registration by Article 2/Article 3(1)(a) because it was �not capable� of denoting only Philips� goods. Philips appealed, submitting amongst other things that there was no mark that was incapable of ever distinguishing and that their mark had acquired distinctiveness.

The U.K. Court of Appeal referred questions to the ECJ, one of which was whether there was a category of non-distinctive marks which is not excluded from registration by Article 3(1)(b)-(d) and Article 3(3) but nonetheless is excluded by Article 3(1)(a).6

The ECJ ruled that Article 3(1)(a) has the same effect as Article 3(1)(b)-(d). It therefore follows that there is no class of marks having a distinctive character by their nature or by the use made of them that is not capable of distinguishing goods or services within the meaning of Article 2 and Article 3(1)(a).7

Advocate General Jacobs in his opinion in Procter & Gamble v. OHIM (BABY-DRY)8 put it another way. In his view there is no point in determining whether a mark was precluded from registration on the basis of Article 3(1)(a) and/or Article 3(1)(b)-(d) because if acquired distinctiveness can be established, the mark clearly had the underlying capacity to distinguish all along! In a subsequent case, the ECJ confirmed that Article 3 does not distinguish between marks that are not inherently registrable and those that manifestly cannot be registered.9

Before Philips, however, the first step taken by the U.K. courts was to consider whether the sign contravened Article 3(1)(a), before going on to apply the criteria in Article 3(1)(b)-(d).10 Signs that violate Article 3(1)(a) were those incapable of distinguishing one undertaking from others,11 being so descriptive that they can never acquire distinctive character in practice. WELDED MESH

6. Philips v. Remington, [1999] RPC 809, Court of Appeal. 7. Philips Electronics NV v. Remington Consumer Products Ltd., Case C-299/99. There may be marks that are excluded by Article 3(1)(a) but not Article 3(1)(b)-(d) because they are incapable of graphic representation, e.g., olfactory marks. 8. Case C-383/99P. 9. Koninklijke KPN Nederland NV v. Benelux-Merkenbureau (POSTKANTOOR), Case C-363/99, § 126. 10. AD 2000 [1997] RPC 168, Appointed Person, Bach Flower Remedies Ltd. v. Healing Herbs Ltd., [2000] RPC 513, Court of Appeal, Premier Luggage v. Premier UK Ltd., [2001] ETMR 6, High Court. The Appointed person is a person appointed by the Lord Chancellor to hear and decide appeals under the UK national Trade Marks law. 11. Setting aside the question of graphic representation (see Section III, infra.)

Vol. 94 TMR 1109 was considered to be an example of such a sign.12 Whatever the nature and the extent of use, the sign would retain its primary meaning as a description.13 Conversely, signs that could not distinguish at the time of application, but had �sufficient capricious alteration,�14 such as WELDMESH, could acquire distinctive character with extensive use, and so were not caught by Article 3(1)(a) because they were �not incapable.�15

The U.K. courts then moved on to the second step, namely whether the mark was excluded as descriptive under Article 3(1)(c) and/or exclusively generic under Article 3(1)(d) and finally the third step of considering whether it is not distinctive generally under Article 3(1)(b).

The ECJ guidance in Philips put an end to the U.K. courts� approach because the ECJ held that Article 3(1)(a) did not add anything over Article 3(1)(b)-(d) and 3(3), as both required the mark to be distinctive.16 Further, in order for a mark to be capable of distinguishing, there was no requirement for there to be a capricious addition.17 As a result, in Premier Luggage & Bags v. Premier Co. (UK) Ltd,18 the laudatory word PREMIER (which has no capricious addition) was found by the U.K. Court to have acquired distinctive character because the claimant had established a reputation in relation to bags and the mark was used in such a way as to indicate the claimant.

D. The Relationship Between Articles 3(1)(b), 3(1)(c) and 3(1)(d)

Another important issue considered by the ECJ and national courts is how the distinctiveness of a mark should be assessed. If a mark is not totally descriptive, does that necessarily mean it is distinctive? In particular, may Article 3(1)(b) (devoid of any distinctiveness) still apply if a descriptive mark is not excluded by 12. Other examples are SOAP for soap, British Sugar Plc v. James Robertsons & Sons Ltd., [1996] RPC 281 at 302, 305, High Court, �Bunsen Burner� or �Wellington Boot� in Bach Flower Remedies, footnote 10, supra. 13. Bach Flower Remedies, British Sugar. See footnotes 10 and 12, supra, respectively. 14. Philips v. Remington, see footnote 6, supra. 15. See also AD 2000 Trade Mark, footnote 10, supra. �The proviso to section 3(1) indicates that the essence of the objection to registration under s.3(1)(b) is immaturity: the sign in question is not incapable of distinguishing goods or services of one undertaking from those of other undertakings, but it is not distinctive by nature and has not become distinctive by nurture.� 16. Note that some marks may be capable of distinguishing, and thus distinctive, but incapable of being represented graphically, for example, olfactory marks. See Section III, infra. 17. Philips v. Remington, § 50, see footnote 7, supra. 18. § 40, see footnote 10, supra.

1110 Vol. 94 TMR Articles 3(1)(c) (exclusively descriptive) and/or (d) (exclusively generic)?

In BABY-DRY,19 the ECJ appeared to be saying that if a descriptive mark does not offend Article 3(1)(c), i.e., it is not exclusively descriptive, it could not offend Article 3(1)(b) either, and so it is registrable. However, subsequent ECJ cases20 have stressed that these provisions are overlapping but independent, and as such each provision must be considered separately. A mark that is excluded by Articles 3(1)(c) or (d), may also be excluded by Article 3(1)(b), but the converse may not be true.21

The U.K. courts have always regarded Article 3(1)(b)-(d) to be independent, but overlapping. Articles 3(1)(c) and (d) are seen as specific categories of lack of distinctive character, which explain and clarify the concept, and Article 3(1)(b) is a sweeping-up provision, covering those non-distinctive signs that are not caught specifically by Article 3(1)(c) and/or (d).22 After BABY-DRY, some U.K. cases did not consider Article 3(1)(b) separately from Article 3(1)(c) or (d),23 but others placed no authority on BABY-DRY in relation to Article 3(1)(b) on the basis that that ECJ judgment solely related to Article 3(1)(c).24

E. Article 3(1)(c)�Descriptive Marks What follows is a discussion of a series of ECJ cases

specifically concerning Article 3(1)(c), which is aimed directly at descriptive marks.

CHIEMSEE Windsurfing Chiemsee Produktions und Vertriebs GmbH v.

Boots und Segelzubehor Walter Huber25 concerned an application to register CHIEMSEE, a name of a famous Bavarian lake, in relation to a range of sportswear. The German court asked the 19. BABY-DRY, Case C-383/99P, § 39. 20. Merz & Krell�s Trade Mark Application, Case C-517/99, §§ 35, 36, Linde AG�s Trade Mark Application (Linde), Case C-53/01, §§ 67, 68, POSTKANTOOR, Case C-363/99, §§ 69, 70, 85. 21. POSTKANTOOR, § 86, footnote 20, supra. 22. Procter & Gamble Ltd.�s Trade Mark Application, [1999] ETMR 375, Court of Appeal. 23. By giving effect to the word �any� in Article 3(1)(b) (devoid of any distinctive character). West v. Fuller, [2003] FSR 44, § 20, Court of Appeal. See the judgment of Court of First Instance in Wm Wrigley Jr. v. OHIM (DOUBLEMINT), [2001] ETMR 58 at §§ 19-29, and Daimler Chrysler Corporation v. OHIM, T-128/01 at §§ 31-33. 24. Cycling IS Trade Mark Applications, [2002] RPC 37, Appointed Person, Nestle SA�s Trade Mark Application [2003] FSR 37, High Court, Telewest Communication Plc�s Trade Mark Application, [2003] RPC 26, Appointed Person. 25. Joined Cases C-108/97 and C-109/97.

Vol. 94 TMR 1111 ECJ whether Article 3(1)(c) depends on whether there is a �real, current or serious need to leave the sign or indication free.� In German law, the need to keep free is a notion of great significance, that is to prevent one trader from monopolising words or signs which other traders would wish to be free to use in order to describe their goods.

The ECJ observed that Article 3(1)(c) ensured that geographically descriptive marks remained available to the public.26 Indeed, Article 3(1)(c) applied to prevent registration of a mark if it may serve to designate the geographical origin of the category of goods, in the future.27 Relevant considerations include the degree of familiarity amongst the relevant class of persons28 with that name, with the characteristics of the place designated by the name, and with the category of goods concerned.29 The ECJ stressed that the assessment was not to be made only by reference to abstract data such as the proportion of people who thought a particular word was descriptive, which the ECJ termed as �predetermined percentages.� Further, it was not necessary for the goods in question actually to be manufactured in that place.

BABY-DRY The next ECJ case concerning the ban on descriptive marks

was the BABY-DRY Community trade mark case. The applicant appealed against the Court of First Instance�s finding that BABY-DRY was insufficiently distinctive under the provision of the Community Trade Mark Regulation equivalent to Article 3(1)(c)30 for nappies (diapers) to be registered as a Community trade mark. The ECJ observed that the purpose of this provision was to preclude exclusively descriptive marks, and

as regards trade marks composed of words, descriptiveness must be determined not only in relation to each word taken separately but also in relation to the whole which they form. Any perceptible difference between the combination of words submitted for registration and the terms used in the common parlance of the relevant class of persons to designate the goods or services or their essential characteristics is apt to confer

26. § 25-30, footnote 25, supra. 27. § 31, footnote 25, supra. 28. The relevant class is the average consumer of the category of goods or services in question, who is reasonably well informed and reasonable observant and circumspect�Gut Springenheide and Tusky, Case C-210/96. 29. § 32, footnote 25, supra. 30. In fact, it was under Article 7(1)(c) of the Regulation, which is in the same terms as Article 3(1)(c) of the Directive.

1112 Vol. 94 TMR

distinctive character on the word combination enabling it to be registered as a trade mark.31 Whilst BABY-DRY can be used in everyday speech to

designate nappies, it was seen to be a �syntactically unusual juxtaposition� of the noun and adjective and not a familiar expression. The ECJ, therefore, allowed the appeal. This decision was immediately seen to be problematic and possibly inconsistent with Windsurfing in two fundamental ways. First, it does not refer to the public interest underlying Article 3(1)(c), and perhaps due to this, it imposes too low a hurdle of distinctiveness. Secondly, the test in this case appears to consider new ways to describe goods and services as distinctive just because that particular phrase/words have not hitherto been commonly used to describe the goods/services at issue.

DOUBLEMINT The ECJ�s decision in Wm Wrigley Jr. v. OHIM

(DOUBLEMINT)32 seemed to retreat from the applicant-lenient approach to Article 3(1)(c) suggested by BABY-DRY. The applicant here applied to register the word DOUBLEMINT as a Community trade mark for chewing gum contending that it was unusual and not purely descriptive. It had two possible meanings, either twice the usual amount of mint or flavoured with two varieties of mint, which showed that it was not purely descriptive, but more suggestive.

The ECJ ruled that a sign offended against Article 7(1)(c) of the Regulation (equivalent to Article 3(1)(c) of the Directive), if at least one of its meanings designates a characteristic of the goods/services concerned. Even the most descriptive indications were suggestive to some degree, and sometimes a difficult decision had to be made as to which side the mark lay. 33 In BABY-DRY, the mark was seen as only offending Article 3(1)(c) if the description was a normal way of describing the relevant matter.34 In DOUBLEMINT, the ECJ set the test higher�if the word at issue was capable of being used by other economic operators to designate a characteristic of their goods or services it should not be registered. In the light of the ECJ�s decision in Windsurfing,

31. § 40, footnote 25, supra. But see POSTKANTOOR below on �essential characteristics.� 32. Case C-191/01P. More than half of the panel had also presided in BABY-DRY. 33. The Opinion of AG Jacobs at §§ 62-66 proposed a framework in which a such an assessment could be made. First, to look at the way in which a term relates to a product or one of its characteristics. Second, to consider how the consumers perceive the term, and third to consider the significance of the characteristic in relation to the product. 34. Case C-383/99P, § 42.

Vol. 94 TMR 1113 �capable� will probably be interpreted to mean capable of being so used in the �foreseeable future.�

POSTKANTOOR The case of Koninklijke KPN Nederland NV v. Benelux-

Merkenbureau (POSTKANTOOR)35 also concerned a mark comprised of a descriptive word. The application was for the registration of POSTKANTOOR (meaning post office in Dutch) for paper and other services. The Dutch court asked the ECJ for direction on assessing registrability for a sign made up of various components, each being individually devoid of distinctive character.

The ECJ�s response appears to have set an even higher distinctiveness hurdle than in DOUBLEMINT in two ways.

First, the ECJ said that registration was only allowed where the juxtaposition of the components was unusual in relation to the subject of registration such that it created an impression sufficiently far removed from that produced by the mere combination of meanings conferred by the components of which it was composed (emphasis added). There had to be a perceptible difference between the word and the mere sum of its parts. As a general rule, a mere combination of elements, each of which is descriptive of the characteristics of the relevant goods itself, remains descriptive and should be refused under Article 3(1)(c).36

Second, it did not matter whether the characteristics which the mark described were essential characteristics of the goods.37 The public interest underlying Article 3(1)(c) means that signs which describes any characteristic whatsoever must be kept available.38 This may be too protective of the public interest. It may mean that the mark HANDLE, for instance, cannot be registered for vacuum cleaners because they have handles, and therefore, the mark would describe a characteristic of the relevant goods, albeit a very minor one. The real issue should be whether the description could be properly regarded as a distinctive trait of the goods.39 Advocate General Jacobs� Opinion in Zapf Creation AG v. OHIM (NEW BORN BABY)40 delivered one week later, did not follow POSTKANTOOR, preferring to ask whether the mark described the �essential characteristics� of the goods.

35. Case C-363/99. 36. § 98, footnote 35, supra. 37. As stipulated in BABY-DRY. 38. § 102, footnote 35, supra. 39. Dyson Ltd. v. Registrar of Trade Marks, [2003] ETMR 77, § 23, High Court. 40. Case C-498/01P, § 29.

1114 Vol. 94 TMR

In assessing registrability of the mark, all the factual circumstances must be taken into account,41 whilst bearing in mind the public interest.42 However, the registration of an identical sign in another Member State was irrelevant. The reasoning of the ECJ judgment in Campina Melkunie B.V. v. Bureaux Benelux des Marques (BIOMILD),43 given on the same day is very similar to that of POSTKANTOOR.

In practice it should now be difficult for applicants to register a mark comprising of two or more essentially descriptive words that are merely combined.

F. The Difference Between Article 3(1)(c) and Article 3 (1)(d)

Article 3(1)(c) (exclusively descriptive) can be contrasted with Article 3(1)(d) (exclusively generic) in one respect. Under Article 3(1)(d), a sign can only be refused registration if it has become customary in the current language or in the bona fide and established practices of the trade, rather than being merely liable to so become in the future. In Merz & Krell GmbH & Co.�s Application (BRAVO),44 the ECJ clarified that the exclusion under Article 3(1)(d) was on the basis of current usage in the trade sectors to designate the goods or services in respect of which registration is sought.

Note this latter qualification is not expressly contained in Article 3(1)(d). However, as for Article 3(1)(c), the assessment of the sign should not be in the abstract. The examination under Article 3(1)(d) must therefore take into account the connection between the sign and the goods or services covered by that mark,45 and following POSTKANTOOR,46 any other relevant facts.

United Kingdom courts have traditionally been wary of allowing registration of descriptive or common laudatory words for two reasons. First, these marks are as capable of being applied to other trader�s goods/services, and therefore, cannot easily function as badges of origin.47 Second, it is considered to be in the public interest to keep such words available for general use.48 This 41. Id. at § 30-37 observing Article 6 quinquies C(1) of the Paris Convention. 42. So, for example, the number of (potential) operators who may be interested in using the mark is relevant. Id. at § 58. 43. Case C-265/00. 44. Case C-517/99. 45. § 27, see footnote 44, supra. 46. § 30-37, see footnote 35, supra. 47. AD 2000 Trade Mark, see footnote 10, supra. 48. �Wealthy traders are habitually eager to enclose part of the great common of the English language and to exclude the general public of the present day and of the future from

Vol. 94 TMR 1115 approach has since been confirmed as correct by the ECJ, and this is why the ECJ cases have not resulted in any real change in the U.K. courts� approach.

Even before DOUBLEMINT, the U.K. courts, having in mind the public interest in keeping descriptive marks available for all to use, gave effect to the term �may serve in trade to designate,� by holding that a mark offended Article 3(1)(c) if it could describe the goods even if the form of description had not been hitherto used49 and even if synonyms were available.50 Then came BABY-DRY,51 which took no account of whether it would be possible for the designation to describe the goods in the future. However, in the U.K. case of Cycling IS Trade Mark Applications,52 the old U.K. position was maintained and construed BABY-DRY to allow for a degree of foreseeability in the application for descriptive names as well. His approach has now been confirmed as correct by the ECJ in both DOUBLEMINT and POSTKANTOOR.

A similar pattern can be found in the cases of the Benelux courts. In the two cases of WECOVER in relation to insurance services, and EASYBANK for financial services, the Brussels Court of Appeal applied an enthusiastic interpretation of BABY-DRY in both cases and held that WECOVER, and EASYBANK, taken as a whole were not the normal way of referring to insurance services or banking services and could be registered.53 However, in the later case of DE NATIONALE CARRIÈRE BEURS54 (�The national careers fair�) in relation to fair organisation services, the applicant argued that the word combination has a suggestive meaning because it had various interpretations. The Hague Court of Appeal applied DOUBLEMINT and refused the application, holding that it was descriptive because the mark could be used to describe the services at issue. It is anticipated that future cases will continue to apply a higher hurdle for registration than the test pronounced in BABY-DRY.

Similarly in Italy, the Court of Appeal of Milan in the case of Casa Editrice Universo S.p.A v. Harlequin Enterprises Ltd.55 was faced with the mark ROMANZI SILOHOUETTE, which it acknowledged was comprised of two descriptive and generic Italian

access to the enclosure,� Joseph Crosfield & Son�s Application (PERFECTION), (1909) 26 R.P.C. 837 at 854. 49. Philips v. Remington, [1998] ETMR 124 at 146. 50. Profitmaker Trade Mark, [1994] RPC 613 at 616. 51. See footnote 34, supra. 52. [2002] RPC 37, Appointed Person. 53. WECOVER, 20 December 2002 and EASYBANK, 9 September 2003. 54. 5 February 2004. 55. 8 May 2001.

1116 Vol. 94 TMR words. Although the court considered each component of the mark, it placed the most weight on the effect of the resultant whole, which was a new mark capable of distinctiveness.

There appear to be very few cases of this type that have come to the attention of the French courts, but in one case where the applicant applied for the mark CARTE GOLFEUR56 in relation to golfing goods, the court applied the ECJ Windsurfing case, faithfully placing due weight on the public interest. The mark was held to be descriptive of golfers� carts, and should be kept available for all to use, even where the application was in respect of a device mark incorporating the words CARTE GOLFEUR.

Recently, a U.K. High Court judge,57 Mr. Justice Lewison has provided a useful step-by-step formulation on how composite marks should be assessed in a case that concerned the mark WEBSPHERE in relation to Internet services and software. The judge noted that in BIOMILD,58 the ECJ had stressed it is necessary to consider both the individual components of the mark and the overall impression created by the word that those components form. His suggested approach was as follows:

i) if considered both individually and as a whole, the components or the word could be used to describe characteristics of the goods or services in relation to which registration is sought, registration should be refused, even if the words are not actually used in that way at the time of the application;

ii) even if the individual components could be descriptive of the goods or services in question, the whole may not be if the overall impression created is more than the sum of its parts; and

iii) in the case of a word mark both the visual and aural impression must be considered.

It is hoped that a systematic analysis will lead to the consistent implementation of ECJ case law to future cases when assessing distinctiveness of composite marks.

G. Article 3(1)(b)�Inherent Distinctiveness and Article 3(3)�Acquired Distinctiveness

Distinctiveness is the essential requirement for registration of a mark as it enables the mark to distinguish the product bearing it from goods of a different origin. Distinctiveness may be inherent in 56. 04/28/2004 Cofinoga/INPI. 57. I.B.M. United Kingdom Ltd. v. Web-Sphere Ltd. et al. (date 17 March 2004 ) unreported, High Court. 58. This Judgment is essentially the same as POSTKANTOOR.

Vol. 94 TMR 1117 the nature of the mark, for example an entirely made up word, or words that are not related to the type of product. The latter was the case in the Italian judgment of Maneschi v. Donatiello59 (MELA STREGATA (bewitched apple) for ice cream). Distinctiveness may also be acquired by use.

In the case of assessing distinctiveness under Article 3(1)(b) (devoid of distinctiveness), the national court must make an overall assessment of the greater or lesser capacity of the mark to identify the product for which it has been registered as coming from a particular undertaking.60

In the case of acquired distinctiveness under Article 3(3), the court must make an overall assessment of the evidence that the mark has come to identify the product concerned as originating from a particular undertaking.61 According to Windsurfing, this means the sign had gained a new significance62 from the perspective of at least a significant proportion of the relevant class of people.63 However, in POSTKANTOOR, the ECJ went further and ruled that the mark had to �become part of everyday language and has acquired its own meaning . . . [which is] not itself descriptive�64�suggesting that the trade mark recognition had to be very extensive. In neither case can the evaluation be made solely by reference to abstract survey evidence such as predetermined percentages of consumers perceiving the word as denoting a particular undertaking. Under both Articles 3(1)(b)65 and 3(3),66 the mark or evidence of the result of use must be assessed, firstly by reference to the products, and secondly by reference to the perception of them by the relevant public.

All the relevant circumstances must be taken into account.67 However, when examining a mark for distinctiveness under

59. Corte di Cassazione, 18 February 2000. 60. Lloyd Schuhfabrik Meyer GmbH v. Klijsen Handel BV, Case C-342/97, § 22. 61. Windsurfing, § 49, see footnote 25, supra. 62. Windsurfing, § 47, see footnote 25, supra. 63. The relevant class of people meaning the average consumer who �normally perceives a mark as a whole and does not proceed to analyse its various details��Lloyd Schuhfabrik, see footnote 60, supra. 64. § 100. 65. Linde, Case C-53/01, § 41, approved in POSTKANTOOR, Case C-363/99, § 34. 66. Windsurfing, § 50-52, see footnote 25, supra, Philips, Case C-299/99, §§ 59-63. 67. Observing Article 6 quinquies C(1) of the Paris Convention. Windsurfing mentioned the following as relevant for the purposes of acquired distinctiveness: the market share held by the mark; how intensive, geographically widespread and long-standing use of the mark has been; the amount invested by the undertaking in promoting the mark; the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking; and statements from chambers of commerce and industry and other trade and professional associations.

1118 Vol. 94 TMR Articles 3(1)(b)68 and 3(3),69 the perceived importance of keeping any particular mark available for public use was originally considered by the ECJ as irrelevant (as neither of these provisions make any distinction between different categories of trade mark for the purpose for assessing its inherent or acquired distinctiveness). Then, in Libertel Groep B.V. v. Benelux Merkenbureau,70 the ECJ stated that the general interest in keeping free certain marks for the use of others (in that case, colours) under Article 3(1)(b) was relevant.71 Libertel has been followed by Henkel KgaA v. OHIM,72 in respect of shapes but not in Advocate General Colomer�s opinion in Nichols Plc. v. Registrar of Trade Marks73 in respect of common surnames. Therefore, there is currently conflicting authority as to the application of the need to keep free doctrine to the general �devoid of distinctive character� grounds for refusal.

The Italian courts have taken different approaches, some considering whether the mark has distinctiveness enabling the customers to understand the origin of the product (Easytech S.r.l. v. Doc Medica S.r.l.)74 and others asking whether the customer will understand the mark to be purely descriptive (Nobel Sport Martignoni S.p.A. v. Laziale Pesca e munizioni S.r.l.).75

The former interpretation is consistent with the approach of the ECJ in Windsurfing76 and Lloyd Schuhfabrik77 as well as that of the U.K. courts. In the U.K. courts, despite the words �devoid of any distinctiveness,� a mere spark of distinctiveness was held here to be insufficient.78 The mark had to �readily distinguish one trader�s product from that of another competing trader� (emphasis added), which was a matter of impression.79

68. Philips § 48, Linde, § 42. 69. Windsurfing, § 48. 70. Case C-104/01, [2003] ETMR 41. 71. § 60. 72. Joined Cases C-456/01P and C-457/01P, §§ 4-7, page 9. 73. Case C-404/02, [2004] ETMR 48, § 42. 74. Court of Turin, 28 March 2002. 75. Court of Appeal of Milan, 17 July 2001. 76. § 46, see footnote 25, supra and approved in Philips, § 35, Linde, § 40. 77. [1999] ETMR 690. �In determining the distinctive character of a mark . . . the national court must make an overall assessment of the greater or lesser capacity of the mark to identify the goods or services for which it has been registered as coming from a particular undertaking, and thus to distinguish those goods or services from those of other undertakings.� 78. Shop!, January 10, 2000, unreported, the Appointed Person. 79. Proctor & Gamble Company�s Application, [1999] RPC 673 at 680, see also Dualit Ltd.�s (Toaster shapes) Trade Mark Applications, [1999] RPC 890��it was not enough that it was unusual�it had to have meaning denoting the origin of goods.� Yakult Honsha KK�s

Vol. 94 TMR 1119

The latter approach is similar to that of the German courts, which have tended to be more favourable to the applicant. The German courts have, therefore, given strict effect to the words �devoid of any� and �exclusively� descriptive in the Directive. Accordingly, marks with other meanings were regarded as distinctive and thus registrable, as held in cases such as BAR JEDER VERNUFT80 and BONUS II.81 A trade mark was considered devoid of distinctive character in Germany only if the majority of the general public did not consider the mark to be an indicator of a particular origin, as for example, the cases of CITY-SERVICE82 and ANTI-KALK.83 These cases ought now to be decided differently as a result of the ECJ decisions.

As for acquired distinctiveness, U.K. courts have long considered that a descriptive mark has had to displace its ordinary meaning to qualify for registration. In the case of British Sugar v. James Robertson & Sons,84 the mark (in that case TREAT for dessert sauces and syrups) had to become accepted by a substantial majority of persons as a trade mark, in other words, it had to be almost a household word.85

Following the ECJ�s decision in Windsurfing in 1999, subsequent U.K. cases took different approaches. In Bach Flower Remedies� Trade Marks,86 the Court of Appeal explained that the effect of Windsurfing meant it was insufficient if a significant number of people thought the mark had both distinctive and descriptive connotations. In the Court of Appeal�s judgment, unless the descriptive meaning was removed by reputation, a reasonably well informed and reasonably observant and circumspect consumer would know that the words are widely used in a generic/descriptive sense, even if he is aware that they are also used in a distinctive sense. In contrast, the judge in Premier87 found that although the claimant�s mark (PREMIER registered for bags, etc.) was not a household name, large quantities of luggage had been sold under it, and among certain members of the public the PREMIER brand enjoyed a high reputation for reliability and value. The mark was not used in a laudatory sense, but rather in a trade mark sense,

Trade Mark Application, [2001] RPC 39 § 10, High Court, Dyson Ltd.�s Trade Mark Application, [2003] RPC 47 § 17, High Court. 80. 1 ZB 1/00. 81. 1 ZB 10/99. 82. 1 ZB 6/03. 83. 1 ZB58/98. 84. See footnote 12, supra. 85. Id. at §§ 302 and 306. 86. See footnote 10, supra. 87. [2001] ETMR 6, High Court, decision affirmed in Court of Appeal, [2002] ETMR 69.

1120 Vol. 94 TMR and therefore, it had acquired distinctiveness. Unlike Bach Flower, the Judge did not consider whether the average consumer would also be aware that the mark could be used in the generic sense. The U.K. courts� interpretation of POSTKANTOOR is now awaited.

H. Conclusion The test for distinctiveness, whether inherent or acquired, has

developed over the last 5 years in the ECJ. The standard has not been consistent, evolving from the relatively applicant-generous approach in BABY-DRY, to the rather protective of the public interest approach in POSTKANTOOR. In Member States, such as the United Kingdom, Italy, France and the Benelux countries, the national courts appear to have been assiduous in attempting to keep up with the ECJ�s judgments as faithfully as possible, so the standard of finding distinctiveness adopted by the national courts in those countries has mirrored the shifts of the ECJ.

III. REGISTRATION OF NON-STANDARD MARKS Brand owners are always looking for new and exciting ways to

make their products more distinctive than those of their competitors. Shapes, sounds, colours and now even smells are becoming increasingly popular ways to promote goods and services. A series of important decisions of the ECJ in recent years has provided guidance on the extent to which such �non-standard� signs can and should be registrable as trade marks. In some cases, these decisions have changed the approach of the national courts.

The principal issues considered by the ECJ are: (1) Are the likes of smells, colours and sounds capable of graphic representation as required by Article 2 of the Directive? 88 (2) Are such signs capable of distinguishing the goods and services of one undertaking from another either inherently or through use? (3) Does public policy permit such signs to be monopolised by a single trader?

In this section, we consider the issue of distinctiveness of non-standard marks generally, and then consider shapes, smells, tastes, colours and sounds individually.

88. Article 2 of the Directive states that: �a trade mark may consist of any sign capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.�

Vol. 94 TMR 1121

A key ECJ decision in the area of non-standard marks was the Philips v. Remington89 case in 2002 mentioned earlier. Philips sued Remington in the United Kingdom for infringement of its trade mark that consisted of an image of its three rotating shaver heads shaped in an equilateral triangle. The ECJ was asked to consider a number of questions, but most importantly in the context of the current review was the question of whether the shape of goods is capable of distinguishing goods alone or whether an additional element would always be required�referred to in the case as a �capricious addition��in order for such a mark to be distinctive.

Philips held that no capricious addition was required to give distinctiveness to a shape mark, making no distinction between different categories of trade marks and the distinctiveness test to be applied. The sign must simply be capable of distinguishing the goods of one proprietor from those of another. Nevertheless, it is implicit from the remainder of the decision that a shape mark is in fact unlikely to be inherently distinctive, and it is only through extensive use that such a sign may obtain a secondary meaning and thus registrable. This is because the average consumer is accustomed to perceiving words and logos as identifiers of the origin of goods, but this is not the case immediately with shapes, colours, smells and sounds. Such signs require larger amounts of use to render them distinctive. It is, therefore, generally accepted that non-standard marks will rarely be considered inherently distinctive.

The Philips case was referred to in a subsequent U.K. decision involving the innovative vacuum cleaner manufacturer, Dyson Ltd.90 The case involved an application to register a clear dust collection chamber as a trade mark. Dyson argued that the collection chamber was inherently distinctive and had acquired distinctiveness, as it had become an integral aesthetic feature of the goods and so assisted consumers in identifying the range of goods and their origin.91 The U.K. judge refused to accept this contention. He did not believe that consumers know and understand that this sort of mark could be used to differentiate origin. His view was not altered by the fact that Dyson had enjoyed what was effectively a monopoly in bagless vacuum cleaners through their various patents. The case has been referred to the ECJ for guidance as to whether a de facto monopoly, absent express promotion by the trader of the sign as a trade mark, may nevertheless result in distinctiveness. 89. Koninklijke Philips Electronics NV v. Remington Consumer Products Ltd., Case C-299/99, [2003] RPC 2, [2002] ETMR 81. 90. Dyson Ltd. v. Registrar of Trade Marks, [2003] ETMR 77, [2003] RPC 47. 91. Relying on the Court of First Instance case, Daimler Chrystler Corp v. OHIM, T-128/01, unreported.

1122 Vol. 94 TMR

A further U.K. case involved an application by the company Yakult for registration of the shape of the bottle in which its cultured milk drink is sold, namely a squat round bottle with a indentation for use as a finger grip.92 The application was rejected on the grounds that the shape lacked any inherent distinctiveness and had not become distinctive through use. Whilst the U.K. court accepted that the bottle was both new and visually distinctive such that it would be recognised as being different from other bottles on the market, that did not mean that it was of memorable appearance so as to convey trade mark significance to the average customer.

It is clear that inherent and even acquired distinctiveness are significant hurdles to overcome when attempting to register non-standard marks. The ECJ has recently considered the issue of non-standard marks in a number of cases, looking at both distinctiveness and the issue of graphic representation. We will now look at each type of mark in turn.

A. Shape Marks Article 3(1)(e) expressly excludes from registration shapes that

arise from the nature of the goods themselves, shapes designed to have a technical result or shapes that give substantial value to the goods. In the Philips case referred to above, the technical result exception was also considered. Clearly, the three-headed shaver achieved a technical result, but Philips argued that if there were other ways to achieve that result, surely the three-headed arrangement could be protected as a trade mark. The ECJ did not agree. In a policy driven decision, the Court held that even where alternative technical solutions were available, trade mark protection was not the correct way to protect such a shape, this was the domain of patents and designs, which are of shorter duration.

There has not been a great deal of activity in national courts on the issue of shape marks since the Philips case. It thus appears that the Philips case has clarified the position and most of the objections to registrability of shape marks are now being resolved at the level of the national trade mark registry office. Indeed one of the only shape mark cases that seems to have reached trial in the national courts since the ECJ decision in Philips is the application of that judgment by the French court of first instance in a French dispute between Philips and Remington!93 In that case, all but one

92. Kabushiki Kaisha Yakult Honsha�s Application, [2001] RPC 756. 93. TGI de Paris, 13/6/03, Remington Consumer Products Ltd. v. Koninklijke Philips Electronics NV.

Vol. 94 TMR 1123 of Philips� trade marks in question were invalidated because they were in respect of shapes designed to achieve a technical result.

A contrasting example in Benelux, albeit before the date of the Philips decision, concerns the well-known TOBLERONE chocolate bar. The Court has ruled several times that the �technical result� refusal in Article 3(1)(e) does not apply to the TOBLERONE chocolate bar or the TOBLERONE triangle. Both three-dimensional trade marks are distinctive and even if a chocolate bar must have sloping sides in order to get it out of its mould, these sides are not such as to conclude that the mark consists exclusively of the shape of the goods necessary to obtain a technical result.94

The European national courts seem to be taking an increasingly harsh stance against the registrability of shape marks generally. The reasoning appears to be reasonably consistent across the national courts. As the consumables market is becoming increasingly competitive, brand owners are using increasingly unusual and eye-catching goods and packaging to capture the attention of their potential customers. But such visual appearance may be relatively short-lived before the next market trend comes along. The result is that the shapes in question are less likely to be considered by the average consumer as an indication of trade origin, but merely as marketing campaigns. The Yakult case discussed above is an example of this approach being adopted in the United Kingdom.

The French courts, even prior to Philips, appear to be very much in favour of keeping shapes free for public use. In 1999, a brandy distiller sued a competitor for infringement of its brandy bottle, with a top in the shape of a droplet. The court held that the general shape of a droplet belongs in the public domain and cannot be monopolised by a single trader.95

The German Federal Court of Justice approach is more lenient, in that shapes designed with any aesthetic elements are considered distinctive provided they are not subject to the exceptions contained in Article 3(1)(e) of the Directive.96 Nevertheless, the German Federal Patent Court takes a more restrictive approach, in line with the U.K. and French approach above. In market sectors where consumers are used to being confronted by ever-evolving forms and shapes of packaging, such

94. Brussels Court of Appeal, 2 October 2001, Kraft Food Schweiz. 95. SA Chateau de Cognac v. Union des Exportateurs associés, Supreme Court Commercial Chamber, June 15 1999 (PIBD No 682, III-349). 96. SWATCH, 1 ZB 27/98.

1124 Vol. 94 TMR packaging will not be considered to be indicators of origin, but simply as new market trends not deserving of a monopoly.97

B. Smell Marks There have been few registrations for �olfactory� or smell

marks in the national registries to date, but a significant amount of attention was focused on smell marks with the ECJ reference in the Sieckmann98 case. This involved a German application to register an olfactory mark consisting of �a balsamically fruity scent with a slight hint of cinnamon� for services in Classes 35, 41 and 42. At first sight, the applicant prepared a comprehensive application, providing a chemical formula, a sample and made available further samples from a local laboratory. Further, the smell description corresponded to classifications used commonly in the perfume industry. Two questions were referred to the ECJ: (1) whether a mark which cannot be reproduced visibly can nevertheless be reproduced with certain aids, and (2) whether the requirement for graphic representation in Article 2 is met when an odour is reproduced by (a) a chemical formula, (b) a description, (c) a sample or (d) a combination of these elements.

The ECJ held that a trade mark may consist of a non-visual sign, provided it can be adequately graphically represented by means of images, lines or characters and that the representation meets the following criteria (which have become known as the Sieckmann criteria): it must be �clear, precise, self contained, easily accessible, intelligible, durable and objective.� It was further held that none of the means the applicant had used satisfied these criteria. The policy behind this decision was to enable people checking the trade marks register to be clear about what is registered, given the paper nature of the registry.

Since Sieckmann, there have been no �smell� mark decisions in the United Kingdom, France, Germany or Benelux courts at the time of writing. German trade mark practitioners now seem to be taking the approach post-Sieckmann that smell marks are incapable of registration as they are incapable of graphic representation per se. OHIM recently refused registration for an olfactory sign for a perfume fragrance, as the application did not fulfill the conditions of independence and durability.99 This

97. BIC Kugelschreiber (BIC biro) 29W (pat) 11/00; Käse in Blütenform (cheese in the shape of a flower), 1 ZB 38/00; TABS 1ZB 27/00; Stabtaschenlampe (torch), 1 ZB 18/98. 98. Sieckmann v. Deutsches Patent- und Markenamt, Case C-273/00, [2003] E.T.M.R. 37; [2003] R.P.C. 38. 99. 5 December 2001 (R711/1999-3).

Vol. 94 TMR 1125 decision is in the line with OHIM�s earlier refusal to register the scent of raspberries for motor, diesel and engine fuel.100

It, therefore, appears that until we have a properly recognised and thorough smell classification system, smells will not be registrable. Some granted smell marks do still exist that may now be vulnerable to revocation, such as the smell of roses for tyres in the United Kingdom and the smell of freshly cut grass for tennis balls at OHIM.101

C. Taste Marks The Sieckmann criteria have recently been applied, rather

unusually, to an application for a �gustatory� or taste mark in France. In the Eli Lilly case,102 an application had been made for registration of �the taste of the artificial aroma of strawberries� for pharmaceutical products. This application was rejected on the grounds that it was not durable (the aroma of strawberries can vary due to the season or the maturity of the fruit) and because it could not be graphically represented in a precise manner. Again, it does not appear that we will see many applications for taste marks until we have more advanced technology to record them.

D. Colour Marks Colour trade marks used in association with a composite mark

have been acceptable in the national registries for some time. Many registries have, until recently, been relatively relaxed about the way in which that colour is represented. Take for example the 2002 French case Lever v. Colgate Palmolive,103 where the French Supreme Court ruled that a trade mark composed of the colour green for washing up liquid (without any details regarding the shade) constituted a valid trade mark, provided it was used in association with other elements in a complex mark.

In 2003, however, the ECJ examined for the first time whether a single colour could be registered as a trade mark in the Libertel104 case. The application in question was to the Benelux trade mark office to register the colour orange for telecommunication goods and services.

100. (R186/2000-4). 101. Venootschap Onder Firma Senta Aromatic Marketing�s Application, [1999] ETMR 429 �Freshly Cut Grass� which was said to be an instantly recognisable smell. 102. Court of Appeals, Paris, 10/03/2003 Societe Eli Lilly and Company v. Monsieur le Directuer de l�INPI. 103. February 22, 2000 (D2001 No.5). 104. Libertel Groep BV v. Benelux Merkenbureau, Case C-104/01, [2003] ETMR 63 [2004] FSR 4.

1126 Vol. 94 TMR

The ECJ held that a single colour may have a distinctive character, however it would be unlikely in fact for this to be established without some evidence of use�the only possible exception being where the application is restricted to very specific goods and services, directed at a very specific market. The question of distinctiveness would be hard to satisfy as brand owners have long been using colour in advertising without it conveying any specific message, therefore, the consumer will not easily identify the colour as an identifier of origin. It will be interesting to see whether this approach changes as consumers become more sophisticated in their awareness of advertising and as colours are used increasingly to identify brand owners specifically.

The ECJ also held that there was a public interest in keeping colours freely available for use by all, referring to the Windsurfing105 case, which as explained earlier provided that geographical descriptions should be kept free for general use. Further, the wider the scope of such an application, the more likely registration would hinder competition.

When considering how a colour should be graphically represented in practice, the ECJ held that it had to be clearly defined, applying the Sieckmann criteria, set out above in relation to smells. A mere colour sample will not be sufficient as this is not durable�it may alter over time. In some circumstances a verbal description may be acceptable but the ECJ appears to favour the use of an internationally recognised identification code, e.g., the Pantone system.

Following Libertel, the U.K. Trade Marks Registry has issued new guidance on the registration requirements for colour marks. It continues its practice of not requiring colour identification codes for composite marks that include colour as one of their elements. But where single colours are to be registered, they should be accompanied by a written description and a colour identification code (previously a colour sample was required).

It is worth discussing the approach taken to colour in Belgium prior to the Libertel decision, as it makes for a stark contrast. The Belgian courts were much more willing to consider colours as valid trade marks. The Belgian telecom company Belgacom, for example, successfully registered the colour turquoise, and their application was upheld by the Brussels Court of Appeal.106 The court had found that the issue of availability has no influence on the assessment of the distinctive character of a trade mark. The court held that colours as such can be used as trade marks and moreover 105. Windsurfing Chiemsee Produktions- und Vertriebs GmbH v. Boots- und Segelzubehor Walter Huber, Case C-108/97, see footnote 25, supra. 106. NV Belgacom v. Het Benelux Merkenbureau, Court of Appeal, Brussels, 28 September 1999.

Vol. 94 TMR 1127 can be very strong trade marks, as they are the first signs (possibly together with shapes) that the relevant public perceives. In the case at hand, turquoise was found not to be customary for designating telecom goods and services. It was thus deemed distinctive. Its distinctiveness moreover was increased by intensive use.

Another good case example, again in Belgium, involves Veuve Cliquot, the champagne producer that owns a Benelux trade mark consisting of a particular shade of orange. The defendant was using an identical shade on the label and packaging of beer. The court ruled that the use of the shade of a colour in an eye-catching way is decisive when assessing both the validity and strength of the trade mark and the infringing nature of the use. The use of very different word marks did not eliminate the likelihood of confusion, as the overall visual impression may lead the public to believe that the beer in question is a variant of the claimant�s range of products.107

Further, the colour blue for Camping Gaz bottles was held to be a valid trade mark. The holder was entitled to oppose use by a third party of a shade of blue that was not absolutely identical to the registered shade, as the blue in question must merely be in the same range.108

These cases are very interesting, as Benelux seems to be accustomed to enabling a much wider monopoly for colour marks than other countries, for instance Germany. However, it will be interesting to see what impact the ECJ�s decision in Libertel has on the established approach of the Benelux Courts in the future.

Germany has historically taken a conservative approach to colour registrations. There have been over 50 appeal cases and, as of 2003, there had not been a single registration without evidence of use.109 A blue and white colour combination for fuel, with a colour reproduction of the combination filed with the Patent Office, was held to be a sufficient graphical representation, but was held not to be sufficiently distinctive (as these colours were commonly used in the fuel trade and so they had to be kept free for common use).110 The Federal Court of Justice has drawn up criteria which state that, provided the general public clearly understands the colour in question as identifying origin, it is capable of distinguishing.111 It is likely, however, that use will almost always need to be demonstrated to meet these criteria.

107. Nivelles Commercial Court, 11 February 2003, Veuve Cliquot Ponsardin (orange). 108. Nivelles Commercial Court, 23 May 2000, Camping Gaz (blue). 109. See Schulze: Registering Colour Trade Marks, [2003] EIPR. 110. BpatG, 15 July 1998�28W (pat) 1/98; GRUR 61 (1999) (ARAL/Blau I). 111. Farbmarke violettfarben (Coloured trade mark purple), 1 ZB 57/98.

1128 Vol. 94 TMR

The Italian courts also traditionally followed a more restrictive approach when it comes to colours, holding that a colour will be held to have distinctive character and be registrable as a trade mark only if it is combined with other written or graphical elements that are capable of distinguishing goods or services from those of a competitor.112 In a case involving Louis Vuitton, the Italian court took a more liberal approach, allowing the applicant to register a colour mark that was an original and distinctive colour combination.113

In summary, colour marks are likely to be registrable in Europe only if they are combined with other features in a composite mark, or if there is sufficient evidence of use of a colour or colours alone. Where an application to register a colour alone is being made, the application needs to ensure that a Pantone reference or similar description is filed with the registry to ensure the application meets the Libertel and Sieckmann requirements.

E. Sound Marks In November 2003, the ECJ considered the criteria for

registrations of sound marks.114 The claimant, Shield, owned a trade mark, which comprised the first nine notes of �Fur Elise� and other marks consisting of the sound of a cock crow. It was held that, despite the inability of sounds to be perceived visually per se, a sound was capable of constituting a trade mark provided that it satisfied the Sieckmann criteria. These requirements were not met by a mere written description of the noise, e.g., the cry of an animal or a mere sequence of musical notes, but would be satisfied by a representation of the music on a stave with timings, rests, etc., identified.

The logic of this decision is open to question, as the average member of the public may find notes on a stave alone no more understandable than a series of notes. Nevertheless, this method is already being used in Germany, as the German trade mark law specifically provides for registration of sound marks by submitting a musical notation.115

There have been very few sound mark applications in Europe since the Shield decision, therefore it is difficult to see how, if at all, this case will change the approach of national courts, although OHIM has since refused registration for the sound of a lion�s

112. Ferrero S.p.A. v. Zaini S.p.A., Court of Appeal of Milan, 22 June 2001. 113. Louis Vuitton Melletier SA v. Robert Diffusion S.r.l., Court of Appeal of Milan, 7 May 2002. 114. Shield Mark BV v. Kist (t/a Memex), Case C-283/01, [2004] ETMR 33. 115. SWF-3 Nachrichten 30W (pat) 43/00.

Vol. 94 TMR 1129 roar.116 It appears that courts will be less willing to approve sound marks now, and many sounds (e.g., the sound of a dog barking for ICI paints), jingles and tunes which currently appear on national registers may be vulnerable to revocation. As technology improves and becomes accessible, perhaps we will see more sound registrations being permitted by way of downloadable samples of sound marks accessible online at the national registries.

F. Conclusion With all non-standard marks, there is a tension between the

policy question of keeping common colours, shapes and so on available for use and the desire of traders to register distinctive signs as trade marks. The ECJ is taking a more restrictive approach on registration, applying the origin approach strictly in order to keep eye-catching product features free for use by competitors in the market place and not allowing an excessive number of monopolies in a world which is becoming dominated by brand image and marketing devices.

Where non-standard marks may be registrable, the problem is how adequately to represent them on the register? The key is to enable anyone, when looking at the register, to be able clearly to ascertain the scope of the registrant�s monopoly. Whilst this can be easily done with a word or logo mark, it is less simple with non-standard marks. The Sieckmann criteria have provided excellent guidance that is equally applicable to sounds, smells and colours, but it may call into question a large number of registrations already granted by the national registries.

IV. LIKELIHOOD OF CONFUSION A. Article 5(1)(b)

If a trade mark owner is faced with an infringer using a similar or identical sign on identical or similar goods or services, it is necessary to show a likelihood of confusion between the sign and the mark, in order to bring a successful trade mark infringement action.

Article 5(1)(b) of the Directive states: The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

116. 25 August 2003 (R781/1999-4). The same sound has been registered for years in the United States, to MGM.

1130 Vol. 94 TMR

any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark

B. �Which Includes a Likelihood of Association� In the first years following the implementation of the

Directive, the words �which includes� caused some uncertainty in that some believed that this allowed infringement to be established merely because, due to the similarity of the sign to the mark, the mark was brought to mind by use of the sign (�mere association�). It is now however settled law that:

. . . the concept of likelihood of association is not an alternative to that of likelihood of confusion, but serves to define its scope. The very terms of the provision exclude its application where there is no likelihood of confusion on the part of the public.117 In this respect the likelihood of association here refers merely

to the sort of indirect or economic link confusion identified by the ECJ in Canon Kabushiki Kaisha v. Metro Goldwyn Mayer, Inc. (Canon):118

There may be a likelihood of confusion . . . even where the public perception is that the goods or services have different places of production. By contrast, there can be no such likelihood where it does not appear that the public could believe that the goods or services come from the same undertaking or, as the case may be, from economically-linked undertakings. This judgment proved to be something of a shock to the

Benelux countries who had believed that the words �which includes a likelihood of association� made the concept of resemblance leading to a mental association, the focus of defining the scope of the exclusive right conferred by a trade mark (as it was under Article 13(a) of the Uniform Benelux Law on trade marks).119 117. Sabel BV v. Puma AG, Case C-251/95 / Marca Mode BV v. Adidas AG, Case C-425/98). 118. Case C-39/97, [1999] ETMR 1. 119. For example in Jullien v. Verscuere, (Case A 82/5 of 20 May 1983, Jnr. 1983, vol 4) the Benelux Court held that there is resemblance between a mark and a sign when (taking account of the particular circumstances of the case, in particular the distinctiveness of the mark) the mark and the sign, considered separately and together, present, aurally, visually or conceptually, a similarity such as to establish an association between the sign and the mark.

Vol. 94 TMR 1131

However, this aspect of the judgment of Sabel v. Puma is now thoroughly embedded into the case law of the Member States. A good example at a national level of Sabel-type indirect/economic link confusion as to origin can be found in the case of Montblanc Simplo v. Sepia Products Inc.120 Here, the Court of First Instance of Milan found that although the public would recognise that the defendant�s products would not have originated from the claimant (because of the obvious difference in quality of the goods), nonetheless there was a risk that the public could be misled into assuming that there was a link or contractual relationship between the parties, whereby the defendant was authorised to manufacture a low-priced line of products for less affluent consumers. On this basis, the Court found that the defendant�s sign infringed the claimant�s mark.

The ECJ also held in Sabel121 that likelihood of confusion must be assessed globally, taking into account �all the relevant circumstances of the case.� This global assessment concerns the recognition, by the infamous �average consumer� with imperfect recollection, of the trade mark on the market, the degree of similarity between the trade mark and the sign, and the extent of similarity between the goods or services identified. The global appreciation test laid down in Sabel is now established as the way to determine whether the likelihood of confusion required to establish infringement under Article 5(1)(b) exists.122

120. Court of First Instance of Milan, 24 January 2000 (unpublished). 121. [1998] 1 CMLR 445. 122. The tenth recital in the preamble to the Directive states: �. . . whereas . . . the likelihood of confusion, the appreciation of which depends on numerous elements and, in particular, on the recognition of the trade mark on the market, of the association which can be made with the used or registered sign, of the degree of similarity between the trade mark and the sign and between the goods or services identified, constitutes the specific condition for such protection; whereas the ways in which likelihood of confusion may be established, and in particular the onus of proof, are a matter for national procedural rules which are not prejudiced by the directive.� Other than the elements listed after the words �in particular,� it remains unclear what other �numerous elements� may be considered relevant in determining a likelihood of confusion. The wording of Article 5(1)(b)�set out above�in fact only refers to the similarity of mark/sign and goods. For example it is probable that notices and disclaimers which seek to prevent confusion cannot be taken into account�see paragraphs 56 and 57 of the ECJ�s judgment in the Arsenal (Case C-206/01) case discussed in detail below �. . . the use of [the ARSENAL] . . . sign is such as to create the impression that there is a material link in the course of trade between the goods concerned and the trade mark proprietor. . . . That conclusion is not affected by the presence on Mr Reed�s stall of the notice stating that the goods at issue in the main proceedings are not official Arsenal FC products. . . . Even on the assumption that such a notice may be relied on by a third party as a defence to an action for trade mark infringement . . .� (emphasis added). Also it may be that extraneous elements alongside a sign should be disregarded as discussed by Advocate General Jacobs in S.A. Société LTJ Diffusion v. SA Sadas (Case C-291/00)��. . . [in] regard of a sign such as �Imitation X,� in which the element �X� taken alone may be identical to an earlier mark but �Imitation X� is not. In such cases . . . it might be difficult to establish a likelihood of confusion on the part of the public, given the bold denial of identity with �X.�

1132 Vol. 94 TMR

Even before Sabel, the German courts had adopted a similar approach. The criteria that had to be taken into account when determining whether confusion was likely were:

• the distinguishing strength of the earlier trade mark; • the identity/similarity of the goods or services; • the identity/similarity of the marks themselves. In assessing these three criteria, the German courts assumed

a correlation among them, in that the stronger one of the factors was, the less importance was placed on the other remaining factors.123

In Canon,124 referring in particular to the tenth recital of the preamble to the Directive,125 the ECJ held that a national court should indeed take into account the distinctiveness of the earlier mark, whether inherent or acquired, when assessing whether there is sufficient similarity between the sign and the mark to give rise to a likelihood of confusion.

The U.K. Government and MGM had argued before the ECJ that taking into account the distinctiveness of the earlier mark might prolong the registration procedure, but the French Government maintained that in its experience, this was not necessarily the case. The ECJ decided that even if the procedure was prolonged, this should not prevent the courts taking into account this important element.

C. Similarity of Goods As to determining the degree of similarity between the goods,

the ECJ confirmed that a lesser degree of similarity between the goods could be compensated for by a greater degree of distinctiveness of the mark or similarity of the mark with the sign. However, it also remarked:

that it was important to stress that, for the purposes of applying Article 4(1)(b), even where a mark is identical to another with a highly distinctive character, it is still necessary

Article 5(1)(b) of the Directive might thus not apply and, if those cases were also beyond the reach of Article 5(1)(a), it would seem difficult to prevent what seems a blatant abuse. However, it may well be that the average consumer would perceive a designation such as �Imitation X� not as a self-contained sign but as the mark �X� accompanied by an extraneous element.� 123. See for example the case of �Springende Raubkatze,� 1 ZB 22/93, Bundesgerichtshof. 124. [1999] 1 CMLR 77. 125. The recital states that �. . . it is indispensable to give an interpretation of the concept of similarity in relation to the likelihood of confusion . . . the likelihood of confusion, the appreciation of which depends on numerous elements and, in particular, on the recognition of the trade mark on the market. . . .� (emphasis added).

Vol. 94 TMR 1133

to adduce evidence of similarity between the goods and services covered. . . . Article 4(1)(b) provides that the likelihood of confusion presupposes that the goods or services covered are identical or similar. In other words there is a minimum threshold for the similarity of the goods which cannot be assumed to have been surmounted on the basis of evidence of a likelihood of confusion. So how should a court assess the degree of similarity of goods?

Advocate General Jacobs in his Opinion in the Canon case referred to the �objective factors� already accepted in the United Kingdom (as laid down by Jacob J in British Sugar)126 as relevant in this determination:

• The respective uses of the respective goods; • The respective users of the respective goods; • The physical nature of the goods/services; • The respective trade channels through which the goods

reached the market; • In the case of self-serve consumer items, where in practice

the goods are likely to be found in the supermarket, particularly on which shelves; and

• The extent to which the goods are competitive, for example how do market research companies classify the goods.

National courts appear now to have embraced this approach to confusion wholeheartedly. For example in France the Appeal Court in Indigo NV v. A Decision of the French Patent and Trade mark Office and Fujifilm127 paid close attention, in a global consideration, to the fact that the two companies were in no way in a competitive relationship (indicating a large degree of dissimilarity of goods) and that consequently no demonstration of the danger of confusion had been produced. The French Supreme Court in Orangina128 similarly adopted a global appreciation of the risk of confusion according to the principles set out in Lloyd and Canon.

Likewise in Italy, the courts have adopted the global appreciation test. In Helsion Healthcare SA v. Sanofi-Synthelabo SpA,129 the court held that to understand whether there is a likelihood of confusion, it is necessary to assess the nature of the goods themselves, and to which type of customer the goods are to

126. British Sugar Plc v. James Robertson & Sons Ltd., [1996] RPC 281, which in turn applied the old case of Jellinek�s Application, (1946) 63 RPC 59. 127. 21 March 2001 (Internal Decision No 2000/14839, unpublished). 128. Supreme Court 26/111/2003 (PPR/INPI et Orangina). 129. Court of Milan, 3 June 2002.

1134 Vol. 94 TMR be sold. In this case, the two marks (WALIX and PLAVIX) were applied to two very different medicines. Customers purchasing the medicines would have known which type of product they were buying and thus the court found that they would be unlikely to be confused.

In Canon, the ECJ referred to its earlier decision in Sabel, holding that the more distinctive the mark the greater the risk of confusion, which meant that it followed that marks with a highly distinctive character enjoy broader protection. This is the element of the global assessment test that the national courts seem to have experienced the most difficulty in accepting. For instance in Italy, at the interlocutory stage in MontBlanc,130 it was argued that the very reputation of the claimant�s mark prevented the likelihood of confusion, on the basis that consumers would view the defendant�s goods as cheap imitations of the claimant�s goods without ever being deceived but this argument was rejected on appeal. The U.K. courts have also had some difficulty with the reality of this part of the assessment but have accepted that it �is the law.�131

D. Relevant Factors It can be seen that over the past five years, the ECJ has held

that the approach to the assessment of a likelihood of confusion under Article 5(1)(b) must take into account the interdependence of the three primary factors (reputation of the mark, similarity of sign/mark and similarity of the goods or services). Therefore, it is no longer permissible for the national courts to look at the mark and the sign in isolation and reach a conclusion of not similar, so not infringed. However, it remains unclear what other factors that operate in the real market place to promote or prevent confusion can also be taken into account.

E. Article 5(1)(a)�Identical Marks and Goods: Global Assessment

The �global assessment� test has also, perhaps more surprisingly, been applied by the ECJ in relation to identical signs

130. 1 December 1999 (unpublished). 131. For example, in Daimler Chrysler AG v. Javid Alavi (T/A Merc), [2001] RPC 42, the U.K. High Court judge commented that �There is a greater likelihood of confusion with very distinctive marks (SABEL, Canon, Lloyd Schuhfabrik Meyer). This is a very surprising proposition (and perhaps only a presumption of fact, since this cannot be a legal issue), since normally it is easier to distinguish a well-known word mark from others close to it. But it seems to me to make more sense when one comes to consider [the similarity of] device marks. I have difficulty understanding how it can affect the similarity of goods, but that is the law.�

Vol. 94 TMR 1135 used on identical goods or services. Article 5(1)(a) of the Directive provides that:

The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered. In LTJ Diffusion v. Sadas,132 the ECJ was asked to consider

how the notion of �sign which is identical with the trade mark� is to be interpreted. The ECJ accepted the U.K. Government�s submission that a global appreciation test be applied. It held that Article 5(1)(a) does not require evidence of a likelihood of confusion in order to afford absolute protection in the case of identity of the sign and the mark, and that the criterion of such identity must be interpreted strictly, in that Article 5(1)(a) should not be construed to cover situations that are more specifically protected by Article 5(1)(b).

However, the ECJ held that the perception of identity: must be assessed globally with respect to an average consumer who is deemed to be reasonably well informed, reasonably observant and circumspect. The sign produces an overall impression on such a consumer. That consumer only rarely has the chance to make a direct comparison between signs and trade marks and must place his trust in the imperfect picture of them that he has kept in his mind. Referring to its earlier judgment in Lloyd Schuhfabrik, the

ECJ considered that such consumer�s level of attention is likely to vary according to the category of goods or services in question. Insignificant differences between the sign and the trade mark may go unnoticed by an average consumer, and so a sign is identical to a trade mark where it reproduces:

without modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contains differences so insignificant that they may go unnoticed by an average consumer. An example of the boundaries of identity being stretched too

far was given by Advocate General Colomer in Sadas. He referred to a French case where the trade mark ELLE owned by Hachette was held to be infringed by the sign �Belle à Craquer� used on T-shirts.133 In his view, the boundaries of identity in that case in 132. Case C-291/00, [2003] ETMR 83. 133. Cour d�Appel de Paris, 4e Ch, 9 December 1998.

1136 Vol. 94 TMR that case had been stretched unacceptably: such additions were not wholly insignificant or minute and the marks were, therefore, not identical.

The ECJ guidance in Sadas was criticised as being �opaque� by the U.K. Court of Appeal in Reed Executive Plc v. Reed Business Information Ltd.,134 in particular in respect of the importation of the concept of imperfect recollection into a test intended to determine whether a sign was identical to a mark. However, the Court of Appeal accepted that it was sensible to recognise that the addition of a further element to the defendant�s sign may take the case outside one of identity but held that there is no need to �soften the edges� of identity very far, because of the protection in Article 5(1)(b). In any event it held that REED BUSINESS INFORMATION was not identical to REED, on the basis that BUSINESS INFORMATION would not go unnoticed by the average consumer.135

In adopting a global assessment approach when analysing identity of signs and marks, the ECJ has potentially broadened the scope of protection under Article 5(1)(a) too far, as the average consumer with imperfect recollection could fail to notice differences of colour, typescript and size between the sign and mark. This would allow the proprietor to bring an action under Article 5(1)(a), thereby removing the requirement to prove a likelihood of confusion under Article 5(1)(b).

V. EXTRA PROTECTION FOR MARKS WITH A REPUTATION

The ECJ�s approach to potential infringements of marks with a reputation has begun to extend the protection provided by a registration beyond that strictly required to protect a mark�s essential function (to act as a badge of origin) so as to take into account the other commercial functions a mark now plays in today�s brand-dominated society.

Article 5(2) of the Directive provides that: Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade

134. [2004] EWCA Civ 159. 135. Sadas was considered further in the U.K. first instance decision of Compass Publishing BV v. Compass Logistics Ltd., [2004] EWHC 520, in which the Court held that COMPASS LOGISTICS was not identical to COMPASS because the differences between the two are apparent and would be identified without difficulty or prior coaching by members of the public.

Vol. 94 TMR 1137

mark is registered, where the latter has a reputation in the Member State and 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. As is seen from the section on Article 5(1)(b) above, it is

necessary to show a likelihood of confusion in relation to similar marks on similar goods or services. However, the national courts wondered early on whether a likelihood of confusion is a prerequisite under Article 5(2)136 too, despite the fact that it is not expressly required by the Article itself. The ECJ put this issue to rest in Marca Mode CV v. Adidas AG,137 which made it clear, once and for all, that a likelihood of confusion was definitely not a requirement for infringement under this provision:

Article 5(2) of the Directive establishes, for the benefit of well-known trade marks, a form of protection whose implementation does not require the existence of a likelihood of confusion. That provision applies to situations in which the specific condition of the protection consists of a use of the sign in question without due cause which takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

A. The Extent of the Required Reputation The first requirement under Article 5(2) is that the mark must

have a reputation in the Member State. What is the extent of the required reputation? The ECJ made it clear in General Motors v. Yplon SA138 that the standard was not as high as some had assumed. It was certainly not as high as needed to qualify as a �well known� mark under the Paris Convention. All that was required was the trade mark �. . . be known by a significant part of the public concerned by the products or services which it covers . . . it is sufficient for [it] to be known by a significant part of the public concerned in a substantial part of [the territory concerned] . . . which part may consist of a part of one of the countries composing that territory.�

The standard set by the ECJ has been widely followed by national courts. For example, the Court of Appeals of Paris in SEPA PRESS/CONNEXION139 modified the traditional approach

136. See the U.K. court decisions in Baywatch Production Co. Inc. v. Home Video Channel, [1997] FSR 22 and Marks & Spencer v. One In A Million et al., [1997] FSR 22. 137. Case C-425/98, [2000] ETMR 723. 138. Case C-375/97, [1999] ETMR 950. 139. 25 February 2000.

1138 Vol. 94 TMR by the French courts,140 to bring the law in line with General Motors. The French courts have in the past been reluctant to find that the mark in question has a reputation. For example in Roullet Fransac v. V Secret Catalogue141 the trade mark owner failed to show that the relevant mark had a reputation, despite evidence of press cuttings, catalogues, the list of transactions made by credit cards in stores and turnover. Likewise, Porsche AG was unable to show that its mark TARGA had a reputation in France despite evidence that the mark had been used on cars since 1965.142

The Antwerp Court of Appeal has applied the standard set by the ECJ, holding that the mark VITTEL had a sufficient reputation in Belgium to warrant a cease and desist order for Benelux as a whole.143

The German court, too, has adopted the ECJ criteria, in relation to establishing a reputation. In reaching its conclusion on this issue, it took into account the market share of the trade mark owner, the extent and the geographic area of use, the duration of use and how much the owner had financially invested in the promotion of the trade mark.144 However it noted that financial figures are not necessarily required as evidence to support the reputation.145

B. Similarity of Sign and Mark The second requirement under Article 5(2) is that the

offending sign must be identical or similar to the mark. This raises the question of �how similar?� especially as the answer here cannot be �similar enough to lead to a likelihood of confusion.� The ECJ has also clarified this factor: elements of visual, aural or conceptual similarity are required (as for Article 5(1)(b)) but �. . . 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.�146

140. Under the traditional approach the mark had to be known by a very wide part of the public. 141. 20 September 2000 (PIBD No 711, III-9). 142. Societe ING. HCF Porsche AG v. Fiat Auto SpA, Tribunal de Grande Instance de Paris, 15 October 1999 (PIBD No 693 III-115). 143. Nestle Waters France, 9 April 2004. 144. Faberge, 1 ZR 100/99. 145. See, for example, the Bundesgerichtshof decision in BIG BERTHA, 1 ZR 235/00. 146. Adidas-Salomon AG et al. v. Fitnessworld Trading Ltd., Case C-408/01.

Vol. 94 TMR 1139

C. Goods That Are Not Similar? Next, the strict wording of Article 5(2) requires that the sign

be used in relation to goods or services that are �not similar� to those for which the trade mark is registered. Unsurprisingly, several U.K. courts147 have held that this means what it says and that under the equivalent section in the United Kingdom, infringement cannot be established when the offending sign is used in relation to identical or similar goods.148 Accordingly, Article 5(1)(b) and 5(2) have, at least until recently, been seen in the United Kingdom as mutually exclusive.

However, in Davidoff v. Gofkid149 the ECJ was clear that Article 5(2) �cannot be given an interpretation which would lead to marks with a reputation having less protection where a sign is used for identical or similar goods or services than where a sign is used for non-similar goods or services.� It was not prepared to countenance any lacuna in the non-confusion protection of marks with a reputation, however narrow in real terms.150

The ECJ recognised the difficulty caused by the express wording but noted that Article 5(2) �must not be interpreted solely on the basis of its wording, but also in the light of the overall scheme and objectives of the system of which it is a part.�

Accordingly, having noted that Member States could choose whether or not to implement these Articles, it concluded that �Articles 4(4)(a) and 5(2) . . . are to be interpreted as entitling the Member States [emphasis added] to provide specific protection for registered trade marks with a reputation in cases where a later mark or sign, which is identical with or similar to the registered mark, is intended to be used or is used for goods or services identical with or similar to those covered by the registered mark.�

The Member States (including the Netherlands and the United Kingdom) were however still uncertain of the effect the Davidoff judgment had on their national law. As this was an optional protection that Member States could choose not to adopt at all, and as the judgment had only stated that Member States were �entitled� to provide it also where the use was on similar goods, could Member States choose to interpret the national provisions (by which they adopted this extra protection) more narrowly, i.e., as limited to use on �not similar� goods?

147. Pfizer Ltd et al. v. Eurofood Link (UK) Ltd., [2001] FSR 3 and DaimlerChrysler AG v. Alavi (t/a Merc), [2001] RPC 42 (following the Advocate General�s views in General Motors ). 148. Pfizer Ltd. et al. v. Eurofood Link (UK) Ltd. and DaimlerChrysler AG v. Alavi (t/a Merc), [2001] RPC 42. 149. Case C-292/00. 150. See Advocate General Jacobs� opinion in this case.

1140 Vol. 94 TMR

In Adidas-Salomon AG v. Fitness World Trading Ltd.,151 which concerned alleged infringement of Adidas�s famous three parallel lines motif, the ECJ answered �no.� It held that, in the light of the Davidoff findings as to the purpose of Article 5(2), if a Member State chooses to adopt that measure in its national law, it must �grant protection which is at least as extensive for identical or similar goods or services as for non-similar goods or services. The Member State�s option thus relates to the principle itself of granting greater protection to marks with a reputation, but not to the situations covered by that protection when the Member State grants it.�

The ECJ also reminded the national courts that their interpretation of their transposing provision (whatever its wording) must be consistent with the Davidoff interpretation:

It has been consistently held that, in applying national law, in particular national legislative provisions which were specially introduced in order to transpose a directive, the national court is required to interpret its national law, so far as possible, in the light of the wording and the purpose of the directive. . . .152 As a result of the ECJ�s judgments in the Davidoff and Adidas

cases, the provision which implements Article 5(2) in the United Kingdom (Section 10(3) of the Trade Marks Act 1994) has recently been amended so that it is now clear from the words of this section that it applies to use of a similar sign on any goods or services, whether they are similar or dissimilar to the goods in respect of which the trade mark is registered.153

D. Without Due Cause To contravene Article 5(2), the use of the sign must be

�without due cause.� The ECJ has yet to provide any real guidance on this proviso. However, a U.K. court has held that the onus must be on the defendant to prove its use was �with due cause.� The court, therefore, gave this �defence� a very narrow interpretation:

What this requires, as a rule, is that the user (of the mark) is under such a compulsion to use this very mark that he cannot honestly be asked to refrain from doing so regardless of the damages the owner of the mark would suffer from such use.154

151. Case C-408/01, [2004] ETMR 10. 152. Id. at § 21 (emphasis added). 153. The Trade Marks (Proof of Use, etc.) Regulations 2004 effected this change to the U.K. Trade Marks Act 1994 on 5 May 2004. 154. Premier Brands UK Ltd. v. Typhoon Europe Ltd. et al., [2000] FSR 767.

Vol. 94 TMR 1141

E. Unfair Advantage or Detriment Finally, and most problematically, under Article 5(2) it must

be established that the use takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

As yet there has again been very little guidance from the ECJ as to what is actually required to establish these effects. In General Motors, the ECJ merely observed that the stronger the earlier mark�s distinctive character and reputation, the easier it will be to accept that detriment has been caused to it. So far, the ECJ has avoided the thorny issues of detriment and unfair advantage altogether in all subsequent Article 5(2) cases.

Advocate General Jacobs, however, considered these requirements at some length in his opinion in Adidas. First, he noted that the wording of Article 5(2) catches four types of use that may infringe:

(1) use that is detrimental to the mark�s distinctive character; (2) use that is detrimental to the mark�s repute; (3) use that takes unfair advantage of the mark�s distinctive

character; and (4) use that takes unfair advantage of the mark�s repute. AG Jacobs identified use type 1 as what has become known

elsewhere as dilution, which means �the blurring of the distinctiveness of the mark [so that] . . . it is no longer capable of arousing immediate association with the goods for which it is registered and used.� For instance, if you allow ROLLS ROYCE155 restaurants and ROLLS ROYCE cafeterias, and ROLLS ROYCE pants, and ROLLS ROYCE candy, in 10 years you may not have the ROLLS ROYCE mark any more.

AG Jacobs identified use type 2 as what has become known elsewhere as tarnishment, meaning that the goods for which the sign is used appeal to the public�s senses in such a way that the trade mark�s power of attraction is negatively affected. By way of example, he referred to the Claeryn / Klarein decision of the Benelux court. Since the Benelux court found that the similarity between the two marks might cause consumers to think of detergent when drinking CLAERYN gin, Klarein infringed the CLAERYN mark.

AG Jacobs noted that there was little real difference between use types 3 and 4, both of which could be called �free riding� and would catch cases where there is an attempt to trade upon the reputation of the mark. For example, Rolls Royce would be entitled 155. ROLLS ROYCE is a registered trade mark in many classes in many countries around the world.

1142 Vol. 94 TMR to prevent a manufacturer of whisky from exploiting the exclusiveness and high quality associations connected with the ROLLS ROYCE mark in order to promote whisky.

Use types 2, 3 and 4 have been reasonably readily accepted in the United Kingdom and successfully established in the United Kingdom, although only in the context of opposition proceedings (not infringement proceedings) where only a �real prospect� or �real tangible risk� of such detriment or unfair advantage was needed to prove the case.156 The equivalent types of Article 5(2) infringement have yet to be successfully established in the U.K. courts. This may partly be because it has been held in the United Kingdom that what is needed for infringement is �actual� detriment or unfair advantage as opposed to a risk or likelihood of it.157

The greatest difficulty in the United Kingdom lies with use type 1�use which leads to dilution. It has been repeatedly held in the United Kingdom that mere association (i.e., the bringing to mind the mark by use of the sign, as required by General Motors)158 is not of itself sufficient to establish detriment to the distinctive character of the mark.159 The U.K. courts, at least currently, need to be convinced by something more than this mental link, that the mark will, by such use, �no longer [be] capable of arousing immediate association with the goods for which it is registered.� What that something more is, is anyone�s guess. As yet, there has not been a single mark successfully opposed, or a single sign held to be infringing under the U.K. Trade Marks Act 1994 on the basis of a true type 1 diluting use (Intel Corporation160 was, despite some of the language used, really a tarnishment case).

The Benelux courts accepted that mere association could amount to infringement even prior to the Directive so these cases have caused few problems to them. Even the German courts have followed the ECJ approach. According to the German courts, �unfair advantage� of a trade mark can manifest itself in three main guises:

1. The infringer may take advantage of the reputation of the mark, by taking advantage of the positive association based on the identity/similarity shared by the two marks.

156. Valucci Designs Ltd. (t/a Hugo Hog�s) Trade Mark Application, (2001) 24(2) IPD 24012 otherwise unreported, Intel Corporation v. Sihra, [2003] RPC 44 and C.A. Scheimer (M.) Sdn Bhd�s Trade Mark Application, [2002] RPC 484. 157. DaimlerChrysler AG v. Alavi (t/a Merc), [2001] RPC 42. 158. General Motors v. Yplon SA, Case C-375/97. 159. DaimlerChrysler AG v. Alavi (t/a Merc), [2001] RPC 42 and others. 160. Intel Corporation v. Sihra, [2003] RPC 44.

Vol. 94 TMR 1143

2. The infringer�s use of the mark may have a detrimental effect on the image of the trade mark with a reputation.

3. The �Kennzeichnungskraft� (strength of the mark�s distinguishing character) may be weakened, thus diminishing the commercial value of the trade mark in question.161

F. Conclusion on Article 5(2) As already explained, the national implementation of Article

5(2) theoretically gives marks with a reputation wider protection in that use of a similar sign on dissimilar goods can infringe. Furthermore, there is no need to prove a likelihood of confusion to establish such infringement.

However, the difficulties in establishing actual detriment or unfair advantage instead make it clear that in some Member States this protection is far from easy to obtain. This is illustrated by the fact that as far as the writers are aware, not a single Article 5(2) infringement action has so far been successfully brought in the United Kingdom.

Contrast this status with the (albeit first instance) decision in Italy in which Agip Petroli SpA successfully sued an infringer in respect of the detrimental harm caused to its famous stylised AGIP logo. The detrimental harm in that case was the use of the sign ACID in the same graphic rendition on T-shirts. The Court of Milan held that the AGIP logo constituted a mark with a reputation, and that the association with illegal drugs was clearly detrimental to the reputation of the AGIP logo162(i.e., a tarnishment case).

The ECJ�s insistence that Article 5(2) protection does not require a likelihood of confusion, and that it extends to use of a similar sign on any goods or services may force the courts of the more conservative Member States to give, at last, a breadth and depth of protection commensurate with the investment made by many of those involved in developing the equity in brands in the modern market place.

VI. IS USE AS A TRADE MARK REQUIRED FOR INFRINGEMENT?

Nowhere within the infringement provisions (Article 5(1)(a), Article 5(1)(b) and Article 5(2)) of the Directive is there any express requirement that the offending sign be used by the 161. See FOCUS 81 36/98. 162. Court of First Instance of Milan 22 February 1999 (unpublished).

1144 Vol. 94 TMR defendant in a trade mark sense (i.e., as a badge of origin) for infringement to be established. All that is expressly said as to the use of the sign in these provisions is that the owner of the registered mark be able to prevent third parties �not having his consent from using in the course of trade any sign. . . .�163

Furthermore, the limits of the effects of a trade mark specified in Article 6(1)164 expressly remove from infringement the most likely non-trade mark uses of a sign (for example descriptive use and use in one�s own name or address) provided such use of the sign is �in accordance with honest practices in industrial or commercial matters.�

However, as the ECJ has shown itself willing in some circumstances to imply wording into EC legislation,165 it is unsurprising that the courts of some Member States have attempted to persuade the ECJ that such a general requirement should be implied into the infringement criteria within the body of these Articles themselves.

This issue was first raised, if obliquely, before the ECJ in Holterhoff v. Freiseleben.166 Here, the German Court asked the ECJ to answer the following question �Does an infringement of a trade mark in the sense contemplated in Article 5(1)(a) and (b) . . . occur where the defendant reveals the origin of goods which he has produced himself and uses the sign in respect of which the plaintiff enjoys protection solely to denote the particular characteristics of the goods he is offering for sale so that there can be no question of the trade mark used being perceived in trade as a sign indicative of the firm of origin?�

The two trade marks concerned were the word marks SPIRIT SUN and CONTEXT CUT registered in Germany and covering, respectively, �diamonds for further processing as jewellery� and �precious stones for further processing as jewellery.� The trade 163. Although, of course, for infringement to be established under Article 5(1)(b), confusion as to origin must be the result of the use of the sign�see footnote 122, supra. 164. �The trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade�

(a) his own name or address; (b) indications concerning the kind, quality, quantity, intended purpose, value,

geographical origin, the time of production of goods or of rendering of the service, or other characteristics of goods or services;

(c) the trade mark where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts;

provided he uses them in accordance with honest practices in industrial or commercial matters.� 165. For example the words �not similar� in Article 5(2) were interpreted effectively as �similar and not similar� in Adidas-Salomon AG and another v. Fitness World Trading Limited, Case C-408/01, [2004] ETMR 10�see Section V, supra. 166. Case C-2/00, [2002] ETMR 79.

Vol. 94 TMR 1145 mark owner marketed precious stones under these marks, distinguished by particular cuts. The defendant (also a stones dealer) offered to sell to a jeweller some stones that he described as �Spirit Sun and Context Cut� and in response two garnets �in the Spirit Sun cut� were ordered. When he heard of this, the trade mark owner brought an infringement action in the Düsseldorf Regional Court in Germany. It held that the defendant�s acts constituted trade mark infringement. The German Appeal Court, however, found that the defendant had used �Spirit Sun and Context Cut� solely to describe the qualities and the type of cut of the stones offered for sale. Accordingly, such a description was not intended to suggest that the stones originated from the trade mark owner�s business. Despite this, the German court considered that whether such use could still infringe, depended on the interpretation of Article 5(1). It therefore referred the above question to the ECJ and stayed the infringement proceedings pending its answer.

The ECJ noted that such use did not encroach upon �any of the interests which Article 5(1) is intended to protect� although it did not explain why. Furthermore, and rather disappointingly, the ECJ added that it felt that it was not necessary in order to answer the question referred to it in this case �to discuss further what constitutes the use of a trade mark within the meaning of Article 5(1)(a) and (b).�

Instead the ECJ�s very specific answer to the very specific question referred to it, was that �Article 5(1) . . . is to be interpreted as meaning that the proprietor of a trade mark cannot rely on his exclusive right where a third party, in the course of commercial negotiations, reveals the origin of goods which he has produced himself and uses the sign in question solely to denote the particular characteristics of the goods he is offering for sale so that there can be no question of the trade mark used being perceived as a sign indicative of the undertaking of origin.� In other words a simple �no� with no explanation as to why. The reason may have been that such use was saved from infringement under Article 5(1) by virtue of the express Article 6(1)(b) descriptive use exception.

Although little general guidance could be gleaned from the ECJ�s answer in this case, its reference to not encroaching upon those interests that the infringement provisions were intended to protect gave a hint of the approach the ECJ would take when asked to address the issue of the possible need for trade mark use in a more direct and general question.

A. Does the Use Affect One of the Functions of the Mark?

In 1989, Arsenal, the famous U.K. football club, registered various U.K. trade marks including the words ARSENAL and

1146 Vol. 94 TMR ARSENAL GUNNERS in respect of articles of clothing. Matthew Reed has since 1970 sold items including scarves bearing the signs now registered as trade marks by the club, from his stall nearby the club�s stadium. Mr. Reed, however, made efforts (including putting a notice on his stall) to make it clear that the goods in question were not �official Arsenal merchandise.�

The club was unable to point to any instances of actual confusion notwithstanding many years of Mr. Reed�s activities; the club nevertheless commenced an action against him for infringement of its U.K. trade marks. In view of Arsenal�s Article 5(1)(a) infringement claim (which does not require any likelihood of confusion�see above), the U.K. judge felt it necessary to ask the ECJ for clarification as to whether non-trade mark use could infringe under Article 5(1)(a) and, if not, whether or not use as a badge of allegiance (rather than as an indication of origin) amounted to trade mark use.167

Advocate General Colomer in this case168 indicated, in essence, that trade mark use was required but such use was not restricted to use as a badge of origin but rather encompassed any commercial exploitation of the sign that assisted consumers to select one product in preference to another. His opinion was clearly influenced by his view that the badge of origin function is no longer the only important function of a trade mark. �In most cases the user is unaware of who produces the goods he consumes. The trade mark acquires a life of its own, making a statement . . . about quality, reputation and even...a way of seeing life . . . in certain cases consumers are more interested in the trade mark itself than the goods to which it applies.� Accordingly use as a badge of allegiance, as here, was trade mark use!

The ECJ did not however follow Advocate General Colomer�s rather modern and controversial opinion, although it did, in effect, reach the same conclusion�i.e., that use such as that of Mr. Reed did infringe. Instead, the ECJ chose not to answer the judge�s direct question but indicated that the concept of trade mark use was not relevant to infringement; therefore, it was �immaterial that . . . the sign is perceived as a badge of support for or loyalty or affiliation to the trade mark proprietor.� Although �use in the course of trade� was an express requirement, this meant simply that it must take place �in the context of commercial activity with a view to economic advantage and not as a private matter.�169 167. Arsenal Football Club Plc v. Matthew Reed, [2001] RPC 46. 168. Arsenal Football Club Plc v. Matthew Reed, Case C-206/01, [2003] ETMR 19. 169. This formula was applied and a gloss added to it by the Court of First Instance in Thomas Cook�s direct action for compensation against the EC Commission on the grounds that the Commission�s adoption and use of the Euro symbol for the new currency infringed Thomas Cook�s own prior registered figurative mark! Here it was held that the

Vol. 94 TMR 1147

What was relevant were the interests the infringement provisions were designed to protect. If the use in issue does not �affect or be liable to affect one of the functions of the mark,� it cannot be prohibited. The ECJ stressed once again that the essential function of a trade mark is to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others that have another origin. However, it noted that for that essential function to be ensured �the proprietor must be protected against competitors wishing to take unfair advantage of the status and reputation of the trade mark by selling products illegally bearing it.� This appears to be a reference to the damage that can be done to a mark�s ability to function as a badge of origin by diluting use, irrespective of whether such use causes confusion.

The ECJ�s judgment also made it clear that it felt that whether or not the sign was used in a trade mark sense, its use would in fact cause confusion as to the origin of the goods, if not at the point of Mr Reed�s sale then when they were passed on again perhaps as a gift.170 Such use would, therefore, clearly prejudice the ARSENAL mark�s ability to function as a badge of origin.

When the referring U.K. judge was tasked with applying the ECJ�s guidance171 it was clear that he did not like the answer he had received. Indeed, he felt that the ECJ had exceeded its jurisdiction by making a finding of fact that there was a likelihood of confusion in the circumstances of the case contrary to his own earlier findings. He, therefore, decided to disregard this finding of fact, and limit himself to applying the ECJ�s interpretation of the Directive.

He held that where the defendant�s use of a mark is not intended by him, or understood by the public, to be a designation of origin (as he had found on the facts of this case), such use cannot prejudice the essential function of the registered mark (i.e., to identify origin) and there was, therefore, no infringement even under Article 5(1)(a). Inevitably, Arsenal appealed.

Commission�s use was not �in the course of a commercial activity whereby goods and services are manufactured and supplied in a particular market��Travelex Global and Financial Services Ltd. (formerly Thomas Cook Group Ltd.), Interpayment Services Ltd. v. Commission�the European Communities (T-195/00). See also the judgment of the U.K. Court of Appeal in Reed Business Information Limited et al. [2004], EWCA Civ 159 where Jacob LJ questioned whether �metatag use [would] count as use of a trade mark at all?� 170. Post-point of sale confusion has recently (13 March 2003) been accepted as sufficient in the Netherlands by the Hague Court of Appeal in the Perfume Producers v. Tarari case where the ECJ�s Arsenal reasoning was applied to look-a-like perfumes marketed by Mr. Tarari at low prices and through different distribution channels. 171. Arsenal Football Club Plc v. Matthew Reed, [2003] ETMR 36.

1148 Vol. 94 TMR

The U.K. Court of Appeal reversed, holding that whether or not the use by Mr. Reed of the marks was a trade mark use by him, its effect was that goods came into circulation bearing the trade marks but which were not the goods of the proprietor. That was bound to damage the basic function of the marks to distinguish goods of Arsenal from goods of others.172

Although there is no express requirement for a likelihood of confusion as to origin to establish infringement by use of an identical sign on identical goods under Article 5(1)(a), it is clear that it will be easier to establish that the essential function of a trade mark has been prejudicially affected where such a likelihood exists, such as was found in the circumstances of the Arsenal case by both the ECJ and the U.K. Court of Appeal. In fact, the High Court Judge in this case clearly felt that unless there was such a likelihood there could not be any such prejudice!

B. Mere Embellishments The ECJ was given the opportunity of addressing this issue

again in a case, already mentioned, concerning the famous Adidas three-parallel-lines motif.173

In this case, the Netherlands Court referred the following questions (amongst others) concerning infringement under Article 5(2):

Must the question concerning the similarity between the trade mark and the sign in such a case be assessed on the basis of a criterion other than that of (direct or indirect) confusion as to origin, and if so, according to what criterion? If the sign alleged to be an infringement in such a case is viewed purely as an embellishment by the relevant section of the public, what importance must be attached to that circumstance in connection with the question concerning the similarity between the trade mark and the sign? As Article 5(2) (unlike Article 5(1)(b)) makes no express

mention of a likelihood of confusion and the ECJ had already held several times that such a likelihood is not a condition for the additional protection given to marks with a reputation under this provision (see above), it is unsurprising the ECJ was unwilling to smuggle the need for it in under the skirts of the concept of similarity of goods. Accordingly, the ECJ answered the first of these questions by confirming that the protection conferred by Article 5(2) �is not conditional on a finding of a degree of similarity

172. Arsenal Football Club Plc v. Matthew Reed, [2003] RPC 39. 173. Adidas-Salomon AG v. Fitness World Trading Ltd., Case C-408/01, [2004] ETMR 10.

Vol. 94 TMR 1149 between the mark with a reputation and the sign such that there exists a likelihood of confusion between them. . . . 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.�

However, the ECJ�s answer concerning the more controversial issue of whether signs that are perceived to be mere embellishments could infringe was more ambiguous. Its Advocate General had expressed the view that trade mark or non-trade mark use had nothing to do with the similarity of marks and that to infringe Article 5(2) the sign must be used for the purpose of distinguishing goods, i.e., not a �non-trade mark use.�174 Furthermore, he felt that a mark could not be regarded as being used as a trade mark where �it is viewed purely as a decoration by the relevant section of the public.�

The ECJ disregarded this opinion and instead answered, �The fact that a sign is viewed as an embellishment by the relevant section of the public is not, in itself, an obstacle to the protection conferred by Article 5(2) . . . where the degree of similarity is nonetheless such that the relevant section of the public establishes a link between the sign and the mark.�

Surely this must indicate that such non-confusing decorative (i.e., non-trade mark) use can infringe (presumably as long as it prejudicially affects the mark�s ability to fulfill its essential function)?175 However, the ECJ here, perhaps in an attempt to avoid any further allegation of making a finding of fact beyond its jurisdiction, then confused matters by continuing:

By contrast, where, according to a finding of fact by the national court, the relevant section of the public views the sign purely as an embellishment, it necessarily does not establish any link with a registered mark, with the result that one of the conditions of the protection conferred by Article 5(2) . . . is then not satisfied. It is far from clear what is meant here�is the ECJ trying to

say that if the public perceives the sign purely as a decoration it can�t be similar enough to the registered trade mark to bring it to

174. �Article 5(5) is clearly directed at provisions of national law in areas other than trade mark regulation�for example, unfair competition and comparative advertising. It follows from that provision that the regulation of non-trade mark use of a sign which without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of a trade mark is not governed by the Directive. Such use cannot therefore fall within Article 5(2)��Advocate General Jacobs� opinion in the Adidas case at paragraph 57. 175. In this respect note that the Netherlands Government observed that even the decorative use of a sign can dilute a mark with a reputation, in particular where it is a figurative mark.

1150 Vol. 94 TMR mind? The converse meaning is probably closer to the truth. In other words, if the relevant section of the public, when they see the sign, bring to mind the trade mark then they cannot perceive the sign to be �purely� a decoration (their minds will be considering some of the messages of the trade mark alongside appreciating the aesthetics of the sign�s decorative qualities). This interpretation stresses the need for a mental link between the sign and the mark, which is a logical first step towards establishing the required unfair advantage or detriment (see above) instead of the extra-Directive concepts of decorative/embellishing or trade mark use.

Only the German courts seem to have experienced anything like the same difficulty as the U.K. courts in accepting that use of a sign in a non-trade mark sense can now infringe. Prior to implementation of the Directive, as with the position in the United Kingdom, trade mark use was required under German national trade mark law for infringement to be established. An early indication that the German courts felt that the Directive had preserved this position came in 1996 where the Berlin Court of Appeal176 stated:

The required trade mark use is lacking in this case . . . [as the offending sign in issue was] used not so as to distinguish the origin of the postcards from postcards of a different origin but as a criticism of the pricing policy of the plaintiffs. The adoption of the characteristics of the plaintiffs� mark is obviously used to identify who is being ironically attacked. The owner of the allegedly infringed mark in this case was

Deutsche Telekom (the largest telecommunications company in Germany). The mark concerned was the word TELEKOM, in which the letter �T� is red with grey dots and the word TELEKOM itself features red and grey dots between the letters. The defendants distributed postcards upon which were printed the phrase: Toll Alles wird Teurer (�Great! Everything is getting more expensive�). The letters of the word �Teurer� were printed in red with grey dots between the letters.

A later example177 concerned another case of alleged infringement of Adidas�s three-parallel-lines motif (heard in Germany before the ECJ�s Adidas and Arsenal decisions). Here the Bundesgerichtshof stated that the lower court could assume that �the two stripes patterns were used by the defendant as trade marks . . . and that they had not been used as mere decorations. This cannot be doubted, given the high degree to which the claimant�s designations must be assumed to have been known in this instance . . . for the relevant customer circles are used to 176. Alles Wird Teurer [1999] ETMR 49. 177. 6 July 2000, THREE STRIPES Trade Mark, [2002] ETMR 52.

Vol. 94 TMR 1151 regarding this kind of design for clothes as [a] designation of origin, because of the designation practices developed by the claimant.�

It supported its view that such an assumption was needed, by reference to the ECJ�s reasoning in the BMW case178 which concerned the unauthorised use by the defendant of phrases such as �BMW specialist� and �Specialised in BMWs.�

The German court was probably relying mainly on the ECJ�s statement in the BMW case that:

[I]t is true that the scope of application of Article 5(1) and (2) of the directive on the one hand, and Article 5(5),179 on the other, depends on whether the trade mark is used for the purpose of distinguishing the goods or services in question as originating from a particular undertaking, that is to say in the main proceedings, as a trade mark as such, or whether it is used for other purposes. In a situation such as that, the issue is [whether] the use of the same trade mark [is] intended to distinguish the goods in question as the subject of the services provided by the advertiser.180 However, this statement was not addressed to the issue of

whether trade mark use was needed to infringe a trade mark under the Directive at all. Rather it explained that the Directive�s scope did not extend to harmonizing the protection Member States had granted marks from use of a sign for a purpose other than to distinguish the goods sold under it (i.e., unfair competition law, etc.). In fact, in this case the ECJ confirmed that the �use of the trade mark in the advertisements concerned . . . falls within the scope of Article 5(1)(a) . . . [therefore] the use in issue may be prohibited by the trade mark proprietor unless Article 6, concerning the limitation of the effects of a trade mark, or Article 7, concerning exhaustion of the rights conferred by a trade mark, are applicable.�

It will be interesting to see whether the German courts will continue to assume there is a need for the offending sign �to be used as a trade mark as such� for it to infringe, after the ECJ�s guidance in the Arsenal and Adidas cases.

178. Bayerische Motorenwerke AG (BMW) and BMW Nederland BV v. Deenik, Case C-63/97, [1999] ETMR 339. 179. Article 5(5) states��[Article 5(1) to (4)] shall not affect provisions in any Member State relating to the protection against the use of a sign other than for the purposes of distinguishing goods or services, where use that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.� 180. Id. at § 38.

1152 Vol. 94 TMR

C. The Descriptive Use Defences & Trade Mark Use For now, the German courts seem to be as attached to the

concept of trade mark use as ever. Early in 2004, the ECJ was asked further questions by the Bundesgerichtshof relating to the concept of trade mark use.181 These questions essentially asked for confirmation that if an indication of geographical origin (here KERRY the name of a district in Ireland, where the source of the spring water in issue was located) that was similar to a registered mark (GERRI) was also used in a trade mark sense (i.e., to indicate the origin of the goods), then it could not be entitled to the �descriptive use� defences stemming from Article 6(1)(b). In other words did the Article 6(1)(b) defences only apply to pure or exclusively non-trade mark uses?

Here, the ECJ was a little more forthright in rejecting the relevancy of the trade mark use concept:

Article 6(1)(b) draws no distinction between the possible uses of the indications [e.g., indications concerning geographical origin, etc.] referred to in that provision. Instead, the defendant�s use will fall within the scope of the defence if his indication concerns one of the characteristics enumerated in that Article as long as the use is in accordance with honest practices in industrial or commercial matters. That the use must be in accordance with honest practices in industrial or commercial matters is the only requirement and it constitutes in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner. The mere fact that the national court had found that there

was a likelihood of aural confusion between the earlier registered mark and the indication of geographical origin did not mean that the defendant�s use of the indication in the course of trade was not in accordance with honest practices. What did matter was whether the defendant was unfairly competing with the claimant; the shape and labelling the defendant had chosen may be relevant in this respect.

D. Final Comments on Trade Mark Use The above analysis shows that trade mark use as such does

not seem to be a prerequisite for infringement under any of the relevant Articles of the Directive. However, to infringe the use of the identical or similar sign must be prejudicial to the essential function of a trade mark to act as a badge of origin, and in practice, this will be easier to establish where there has been trade mark 181. Gerolsteiner Brunnen GmbH & Co v. Putsch GmbH, Case C-100/02, [2004] ETMR 40.

Vol. 94 TMR 1153 use than where there has not. Yet the ability of a trade mark to function as a badge of origin may be harmed both when the use of a similar sign causes either direct or indirect confusion as to the origin of the goods marketed under it, or where the use of the sign causes the public to make a link in their minds with the mark and as a result the distinctive character of the mark is diluted.

The flip side of this coin is that use of a sign that acts as an indication of the characteristics of goods or their geographical source, etc., will not be robbed of an Article 6(1) defence to a trade mark infringement action simply because that indication also acts as a badge of origin.

However, it may take the national courts of some Member States a while longer to wean themselves from their attachment to the related trade mark use concept and reconcile themselves to this significant change to their jurisprudence.

VII. CONCLUSION Since its controversial decision in BABY-DRY, the ECJ is

becoming more strict with regard to registrability issues, particularly in applying the distinctiveness criteria, which will lead to fewer marks being registered either as national trade marks or as Community marks. However, once a mark has been registered, the ECJ is exercising its authority to compel the courts of the Member States to provide a wider scope of protection than many national courts envisaged when they first started to interpret the wording of the Directive. The ECJ has done this by stressing the interdependence of the relevant factors in the Article 5(1)(b) infringement test and by allowing marks with a reputation (which encompasses many more marks than was first thought), a potentially very wide scope of protection under Article 5(2).

We wait with interest to see what the next five years bring.