Fifteen years after the Trade Marks Directive 89/104 first sought, as from 1993, to harmonise national trademark laws throughout the European Community, many uncertainties still remain as to its interpretation.
2008 saw some of these uncertainties addressed, either in the context of the directive itself (which as from November 2008 has been replaced by a consolidating Directive 2008/95, which does not, however, change the underlying substantive law) or that of the Community Trade Mark Regulation, which provides a corresponding regime for the registration of trademarks which have a unitary effect throughout the European Community and for their enforcement.
Two cases stand out among the trademark cases which the European Court of Justice (ECJ), as the ultimate arbiter of such matters, had to consider last year. Both came from English courts. One, O2 v Hutchinson, concerns the degree to which trademark law can be used to impede otherwise legitimate comparative advertising. The other, Intel v CPM, addresses what is perhaps the most elusive concept encountered in trademark law, namely that of trademark dilution. In neither case did the trademark owner secure the decision that it sought.
In O2 v Hutchinson (C-533/06), the ECJ held as a matter of general principle that the proprietor of a registered trademark cannot prevent the use by a third party of a sign identical with, or similar to, his mark, in a comparative advertisement which satisfies all the conditions, as laid down in the Comparative Advertising Directive (at the time, Directive 84/450, but now incorporated in the consolidating Misleading and Comparative Advertising Directive 2006/114) under which comparative advertising is permitted in the European Community. However, it also pointed out that the requirement of the Comparative Advertising Directive that the comparison not create confusion in the marketplace between the advertiser and a competitor or between the advertiser’s trademarks, trade names, or other distinguishing marks, goods or services and those of a competitor, would not be met in circumstances where article 5(1)(b) of the Trade Mark Directive would prevent the use of a sign identical with, or similar to, a registered trademark because there existed a likelihood of confusion on the part of the public. It then analysed whether a comparative advertisement could ever, irrespective of whether or not it satisfies the requirements of the Comparative Advertising Directive, infringe a registered trademark under article 5(1)(b) of the Trade Mark Directive, and decided that it could not where the specific use complained of does not give rise to a likelihood of confusion on the part of the public (for example, by suggesting that there is any form of commercial link between the advertiser and the registered trademark). Thus in practice it will be a rare case in which trademark law can be used to prevent comparative advertising.
In Intel v CPM (C-252/07), the ECJ has developed Community law further in the internationally controversial issue of trademark dilution. Unlike the USA, which has federal and state statutes that use the word "dilution", the term is nowhere found in "black letter" EC trademark law. Instead, in the Community attention has focused on article 5(2) of the Trade Mark Directive (to which article (9)(1)(c) of the Community Trade Mark Regulation corresponds), which gives the proprietor of a trademark with a reputation the right to prevent another "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 mark is registered... 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". This corresponds, in the context of validity, to article 4(4)(a) of the directive and article (8)(5) of the regulation, by which a later application for registration of a mark can successfully be challenged if it stands in the same relationship to an earlier trademark with a reputation.
The recent development of dilution law in the Community has been proceeding in parallel with that seen in the USA in recent years, where the 2006 Trademark Dilution Revision Act was passed in an attempt to reverse the 2003 Supreme Court decision in Moseley v V Secret Catalogue that had held that the Federal Trademark Dilution Act required a showing of actual dilution, rather than a likelihood of one. Despite this, preliminary indications as to the operation of the new US legislation in practice, as in the May 2008 first instance decision in the remanded case Moseley v V Secret Catalogue suggest that dilution by blurring (as opposed to dilution by tarnishment, and on which the plaintiffs here prevailed) will remain very hard to prove. In contrast, Community law on trademark dilution has developed without ostensible legislative change, but in hardly a less haphazard manner. The best example of this lies in the application of article 5(2) of the Trade Mark Directive (and its corresponding provisions) to use in relation to similar goods and services.
Thus in the context of infringement one might be forgiven, from a literal reading of it, for thinking that an important aspect of this provision, in contrast to the more traditional grounds of infringement for similar goods and services under article 5(1)((b) of the directive (and article 9(1)(c) of the regulation), with their requirements for a showing as to a likelihood of confusion in order to establish trademark infringement (or for their equivalents to invalidate a later mark), is that it applies only to use in relation to goods and services that are dissimilar to those for which the trademark is registered. So limiting, it serves to recognise the need to protect marks with a reputation against certain types of damaging use which will not in practice involve any confusion on the part of the public. However, in 2003 in Davidoff v Gofkid (C-292/00) and Adidas-Salomon v Fitnessworld (C-408/01) the ECJ held that the provision did not mean what it said, and was not limited to dissimilar goods and services. Thus in practice the ECJ conflated for similar goods and services the concept of confusion with that of dilution, although in Adidas-Salomon it sought to retain certain aspects of the distinction by also holding that this provision required that the relevant section of the public make a connection between the challenged sign and the registered trademark with a reputation, or in other words "establishes a link between them even though it does not confuse them".
In Intel, which arose under article 4(4)(a) of the directive, the goods and services were dissimilar, INTEL being registered for computers and computer-linked goods and services in various classes and, the later challenged registration in issue INTELMARK being registered for marketing and telemarketing services. The issue here was thus what precisely could constitute a "link" in the terminology of Adidas-Salomon, whether that sufficed in itself where the registered trade mark had a reputation, and if not what more was required to prevail on the provision.
The ECJ observed that the types of injury against which the provision ensured protection for the benefit of trademarks with a reputation are, first, detriment to the distinctive character of the earlier mark, secondly, detriment to the repute of that mark and, thirdly, unfair advantage taken of the distinctive character or the repute of that mark, and that just one of these three types of injury would suffice for it to apply.
It equated the first of these types of injury, that of "detriment to the distinctive character of the earlier mark" with "dilution, whittling away or blurring" and observed that "such detriment is caused when that mark’s ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark", going on to say that such was "notably the case when the earlier mark, which used to arouse immediate association with the goods and services for which it is registered, is no longer capable of doing so".
Having identified the nature of the relevant public, the ECJ turned to the nature of the proof required by a trademark proprietor seeking to rely on the provision. It held that such proprietor need not demonstrate actual and present injury to its mark for such purpose, observing that "when it is foreseeable that such injury will ensue from the use which the proprietor of the later mark may be led to make of its mark, the proprietor of the earlier mark cannot be required to wait for it actually to occur in order to be able to prohibit that use. The proprietor of the earlier mark must, however, prove that there is a serious risk that such an injury will occur in the future."
Had the ECJ left matters there, owners of trademarks with reputation would have regarded the decision as favourable to them, and as achieving, in terms of requiring only foreseeable rather than actual injury, a standard that had required legislation in the USA. However the ECJ then went on to observe that "proof that the use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future". It also observed that it was "immaterial, however, for the purposes of assessing whether the use of the later mark is or would be detrimental to the distinctive character of the earlier mark, whether or not the proprietor of the later mark draws real commercial benefit from the distinctive character of the earlier mark".
Proving a change in the economic behaviour of the average consumer, or serious likelihood of such change, rather than leaving it to be inferred, imposes what is likely to be a heavy evidential burden on owners of trademarks with reputation who seek to rely on this provision. Indeed they would seem to face problems of the same sort as owners of trademarks with reputation seem to be facing in the USA in proving dilution by blurring, despite the new legislation there, and which may represent a fundamental scepticism on the part of courts in both Europe and the USA about dilution by blurring.
So much for 2008. 2009 will see the ECJ having to turn its attention to another area of trademark law which is also unsettled in the USA, namely, what constitutes trademark use in the context of "keywords" provided by search engines. The French courts have referred three cases to the ECJ in which Google is a defendant. A flavour of the issues can be gleaned from one of the questions posed, namely "whether the reservation by an economic operator, by means of an agreement on paid internet referencing, of a keyword triggering, in the case of a request using that word, the display of a link proposing connection to a site operated by that operator in order to offer for sale goods or services, and which reproduces or imitates a trade mark registered by a third party in order to designate identical or similar goods, without the authorisation of the proprietor of that trade mark, constitutes in itself an infringement of the exclusive right guaranteed to the latter".
The ECJ has already had to consider what constitutes trademark use on several occasions (notably in Holterhoff v Freiesleben (C-2/00), Arsenal v Reed (C-206/01), Adam Opel v Autec (C-48/05), Celine v Celine (C-17/06) and most recently in O2). With so few express defences in European trademark law, the keywords cases will not be the last time that it has to do so.