Trademark Infringement

Question 1

What is the meaning of an “earlier trade mark” as defined in section 6 of the Trade Marks Act 1994?

Answer 1

• a UK registered trademark, EUTM, international trademark (UK or EC), which has an earlier priority date
• a EUTM or international trademark (EC) which has a valid claim to seniority from an earlier UK registered trademark or international trade mark (UK),
• a trademark which, at the priority date of application for registration of the trademark in question, was entitled to protection under the Paris Convention or the WTO agreement as a well-known trademark.

Question 2

Describe very briefly the background to the General Motors v. Yplon (i.e. the “Chevy‟ case) C-375/97.

This case relates to marks with reputation.

Answer 2

GM (US motor vehicles manufacturer) was the proprietor of “Chevy” registered in Benelux in 1971, primarily in relation to motor vehicles.

Yplon was the proprietor of the same mark registered in Benelux in 1988 and used for detergents.

GM applied to restrain Yplon’s use of the mark and Yplon defended the action on the basis that GM had not shown that its trademark had a “reputation” in the Benelux countries.

The national court asked the ECJ for a preliminary ruling on the meaning of the term “has a reputation” in Council Directive 89/104 Art.5(2).

Question 3

Discuss very briefly the concept of “reputation” as defined by the ECJ in General Motors v. Yplon (i.e. the “Chevy‟ case) C-375/97.

Answer 3

• It was known by a significant part of the public concerned by the product or services covered by that mark.
• In determining that, a national court must take into account all the relevant facts, in particular:
  
  • the market share held by the trademark,
  • the intensity, geographical extent and duration of its use,
  • the size of the investment made in promoting it.
• However, it must also be shown that the use of the mark was without due cause and took unfair advantage of, or was detrimental to the distinctive character or repute of the mark, and
• A trademark need not have a reputation throughout the territory.
• It was sufficient for it to be known by a significant part of the public concerned in a substantial part of that territory, which part might consist of a part of one of the countries comprising that territory.

Question 4

Discuss briefly the importance of the decision of the CJEU in L’Oreal SA v Bellure NV, Case C-487/07 in relation to the concept of taking ‘unfair advantage’.

Answer 4

• Defendants sold L’Oréal “smell-alike” perfumes with packaging that resembled those of the L’Oréal perfumes.
• They also produced comparison tables showing the word marks for L’Oréal’s perfumes against their own “smell-alike” products but did not suggest that their perfumes were anything other than cheap imitations of the original.
• Defendant taking unfair advantage of the senior mark’s distinctiveness
• 3rd party sought to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark
• The 3rd party sought to exploit, without paying any financial compensation, the marketing effort expended by the proprietor
• Harm must be assessed in relation to the relevant public comprised by the consumers of the later trademark
• No need to show a change in the economic behaviour of the average consumer

Question 5

When would a junior use affect the origin function of an earlier trademark in the context of AdWords advertising?

Answer 5

The origin function of an earlier trademark is impaired when the advertisement does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the g/s referred to therein originate from the proprietor of the trademark or an undertaking economically connected to it or, on the contrary, originate from a third party.

Question 6

When would a junior use affect the advertising function of an earlier trademark?

Answer 6

The advertising function means conveying a particular image to the average consumer of the g/s in question. It is impaired if the defendant’s use of the mark

• Diverts consumers from plaintiff to other sellers
• Adversely affects the proprietor’s use of its mark as a factor in sales promotion or as an instrument of commercial strategy.

Question 7

When would a junior use affect the advertising function of an earlier trademark?

Answer 7

The advertising function is to convey a particular image to the average consumer of the g/s in question. It is be impaired if the defendant’s use of the mark

• Diverts consumers from plaintiff to other sellers
• Adversely affects the proprietor’s use of its mark as a factor in sales promotion or as an instrument of commercial strategy.

Question 8

When would a junior use affect the investment function of an earlier trademark?

Answer 8

There is an impairment of the investment function of a trademark if junior use substantially interferes with the proprietor’s use of its trademark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.

Question 9

Describe briefly the functions of trademarks that enjoy legal protection according to the case law of the CJEU.

Answer 9

• Origin (essential) function – the function of “guaranteeing” that g/s bearing the registered mark has been placed on the market with the authority of the proprietor.
• Advertising function – the function of conveying a particular image to the average consumer of the g/s in question
• Investment function – functions as an instrument of commercial strategy so as to enable the proprietor to acquire a reputation to develop consumer loyalty.

Question 10

What is the legal test for ascertaining whether a junior use takes unfair advantage of the repute of an earlier mark with a reputation?

Answer 10

Intel Corp Inc. v CPM United Kingdom Ltd (C-252/07)

In order to show a detriment caused by the use of a later mark, the proprietor of a well-known mark had to

• Establish a link between the two marks
• Demonstrate a change in the average consumer’s economic behaviour or a serious likelihood that such a change would occur in the future.
• Evidence of a change in consumer’s economic behaviour or a serious likelihood that such a change will occur in the future.
  
  • Loss of sales
  • Devaluation of attractiveness or image
  • A decrease in the mark’s economic value
  • Mark becoming a generic term

Question 11

Discuss very briefly the concept of “use in the course of trade” as defined by the ECJ in Arsenal v. Reed C206/01.

Answer 11

In Arsenal v Reed, the ECJ held that use in the course of trade is used:

• in a commercial context
• with a view to economic advantage
• and not private use.

Reed’s defence on no “use in the course of trade” was unsuccessful as the ECJ held that “showing affiliation” did infringe Arsenal’s trademark rights and that it was immaterial whether Reed’s use of the signs was perceived as a badge of support for, or loyalty or affiliation to, the legitimate trademark proprietor.

Question 12

Explain the requirement that the use of a sign must be use “in the course of trade” in the UK to infringe a registered trademark wrt L’Oréal v eBay.

Answer 12

• In L’Oréal v eBay it was held that when traders sell goods bearing the mark through eBay, eBay itself does not use the marks, the traders do.
• This use can be in the course of trade depending on the volume and frequency of sales but is not necessarily so.
• There is, therefore, the scope for small volumes of sales to be classed as private use and therefore not infringe the TM.

Question 13

Under what circumstances will the use by a person of his own name or address amount to a successful defence to trademark infringement?

Answer 13

A registered trademark is not infringed by the use by a person of his own name or address, provided the use is in accordance with honest practices in industrial or commercial matters.

In Celine SARL v Celine SA the ECJ held that the following should be considered in deciding whether the use of the mark was in accordance with honest practice:

• the extent to which the use of the third party’s name was understood or known by the public as indicating a link between the third party’s g/s and the trademark proprietor
• the extent to which the third party ought to have been aware of the above; and
• the degree to which the third party might profit from the reputation of the trademark proprietor.

Question 14

How is infringement of a registered trademark defined by section 10 (Infringement of registered trademark) of the Trade Marks Act 1994?

Answer 14

Paraphrased:

• Double identity
• Likelihood of confusion
• Marks with reputation

Question 15

List four defences that are available to the infringement of a trademark registered under the Trade Marks Act 1994.

Answer 15

• own name defence
• descriptive/non-distinctive defence
• where the use of the mark is necessary to indicate the intended purpose of a product or service (in particular, as accessories or spare parts)
• A registered trademark is not infringed by the use in the course of trade in a particular locality of an earlier right which applies only in that locality.

Question 16

Discuss briefly the importance of the decision of the ECJ in O2 Holdings v Hutchison 3G.

Answer 16

• Hutchison’s launched an advertising campaign in which it compared its prices with those of O2, and in doing so used O2’s bubble imagery
• A trademark proprietor was not entitled to prevent the use by a third party, in a comparative advertisement, of a sign similar to his mark provided that such use did not give rise to a likelihood of confusion on the part of consumers.
• The ad, as a whole, was not misleading and, in particular, did not suggest that there was any form of commercial link between O and H

Question 17

What is ‘honest use’ as established by the CJEU in Gillette v LA-Laboratories Ltd

Answer 17

• The ECJ held that the use was “necessary” where it was the only way to give the public complete and comprehensible information on the intended purpose of the product in order to preserve undistorted competition in the market.
• Such use does not mean the third party is indicating that their goods are of the same quality of or equivalent to the proprietors’.
• The ECJ held that use was not honest if, for example, the use:
  
  • Gives the impression of commercial connection
  • Affects the value of TM by taking unfair advantage of character or repute
  • Entails the discrediting of denigration of mark
  • Represents product as an imitation or replica of the product bearing TM

Question 18

Discuss Intel v CPM in relation to determining “detriment to the distinctive character” (i.e. “dilution‟).

Answer 18

• Claimant: TM for “INTEL” wrt computers and their related g/s
• Respondent: TM for “INTELMARK” wrt marketing and telemarketing services.
• Claimant sought a declaration of invalidity against INTELMARK, claiming that the use of that mark would take unfair advantage of, or be detrimental to, the distinctive character

ECJ

• The existence of a link between the competing marks must be assessed globally, taking into account:
• the degree of similarity between them;
• the nature of the goods or services for which the marks were registered,
• the strength of the earlier mark’s reputation;
• the degree of the earlier mark’s distinctive character; and the existence of the likelihood of confusion on the part of the public.
• It was also necessary to show that the well-known mark had been, or was seriously likely to be, harmed.
• That was also to be assessed globally, taking into account all relevant factors, and required the proprietor of the well-known mark to prove a change in the economic behaviour of the average consumer, or a serious likelihood that such a change would occur in the future.

Question 19

Explain briefly the concept of dilution by tarnishment

Answer 19

• Taking advantage of the senior mark’s repute (image)
• Detriment is caused when the g/s for which the identical or similar sign is used by the third-party may be perceived by the public in such a way that the trade mark’s power of attraction is reduced.
• The likelihood of such detriment may arise in particular from the fact that the g/s offered by the third party possess a characteristic or a quality which is liable to have a negative impact on the image of the mark

Question 20

What is dilution by blurring

Answer 20

The gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon non-competing goods.

Question 21

What must a claimant establish in order to prevail in a claim based on dilution by blurring?

Answer 21

Redbull v Bull Dog

• The injury that is most likely to occur if the RED DOG mark is used is a dilution of the distinctive character of the RED BULL mark.
• The proof that the use of the later mark would be detrimental to the distinctive character of the earlier mark requires evidence of a ‘change in the economic behaviour’
• It is likely that the average consumers of the RED BULL beverages perceive that the RED DOG beverage is a cheaper replica and at least a portion of the relevant public would accept to trade down and buy the cheaper version instead of the ‘original’ product.
• This would no doubt represent a ‘change in economic behaviour’. That change would, of course, reduce the appeal, exclusivity and lustre, in other words, the strong distinctive character of the earlier mark