Trade marks plus? the role of trade marks in the global economy and the danger of over-protection

This article examines the economic role of the trade mark, both as a structuring device and as a means of adding value to products. It shows how its role as a flexible structuring device that provides a distinct focus for goodwill derives from the special meaning of the term “origin” or “trade origin” in trade mark law, this being what a trade mark is supposed to indicate. Firms can control the identity that a trade mark signifies and confers on the products with which it is used without being tied to any particular set of production arrangements. This article also considers how goodwill can be a source of economic benefit both through reducing transaction costs and, in some cases, through adding value to products. This article then examines the economic rationale for the legal protection of trade marks and shows how this is analogous to the rationale for awarding property rights over tangible resources and different from that for other forms of intellectual property right. The pressure to expand the legal protection of stronger trade marks is explored and it is accepted that there is an economic case for doing so. However, it is argued that the additional protection must be carefully calibrated through definitions that take account of its economic rationale and avoid the danger of over-extending it. In particular, this danger of over-protection arises from making a false analogy between stronger trade marks and the kind of intangible output that is the subject of the other forms of intellectual property right.     

Coexistence in Community trade mark disputes: conditions and implications

Legal context. A defence based on coexistence has no legal basisin the Trade Mark Directive or in the Community Trade Mark Regulation.Still, a practical approach to Community trade mark conflictsrequires attention to the situation in the marketplace whereconflicting marks may be shown to coexist without any currentconfusion or dilution being reported. Key points. Trade mark coexistence may sometimes be persuasive,the strict requirements being laid down by the Community courts.Through a detailed review of the case-law of the Community courtsand OHIM's Boards of Appeal, this article explains the conditionsfor and the consequences of proving the coexistence of the conflictingmarks in cases based on likelihood of confusion or dilution. Practical significance. Consideration must also be given tothe effects of third parties' neighbouring marks which may diminishan earlier mark's distinctive character. Accordingly, this articlefurther addresses the issue of whether the scope of protectionof a mark may be damaged by the use of later marks in the lightof the ECJ Judgment in the preliminary ruling Case C-145/05Levi Strauss v Casucci Spa.     

Significant 2007 case law on the Community trade mark from the ECJ and the CFI

Legal context: This article looks at the important decisions of 2007 on theCommunity trade mark made by the Luxembourg courts. Key points: The cases discussed concern the application of Council Regulation(EC) No. 40/94 of 20 December 1993 on the Community trade mark(the ‘CTMR’), Commission Regulation (EC) No. 2868/95of 13 December 1995 implementing the CTMR (the ‘CTMIR’),and the Council Directive 89/104/EEC of 21 December 1988 (‘Directive89/104’). Practical significance: The purpose of this article is to give a quick overview of themost significant trade mark cases decided in 2007 by the Luxembourgcourts. The article has a practical bias and is aimed at readerswho wish to find quickly the key decisions of 2007.     

Questions referred to the ECJ regarding scope of protection against allusive packaging and use of registered marks on comparison lists

The Court of Appeal is referring a number of questions to theECJ, including questions concerning the scope of protectionfor registered trade marks and the meaning of ‘unfairadvantage’ for the purposes of the Trade Marks Directiveand the Comparative Advertising Directive.     

The new consumer and business protection regulations: another string to the brand owner's bow?

Legal context: This article assesses the impact of The Consumer Protectionfrom Unfair Trading Regulations 2008 (CPRs) (implementing theUnfair Commercial Practices Directive) and The Business. Protectionfrom Misleading Marketing Regulations 2008 (BPRs) (implementingthe consolidated and codified Misleading and Comparative AdvertisingDirective) on areas of marketing and advertising in which IPrights often become involved and the impact of the recent ECJdecisionon their application in the O2 v Hutchison 3G referencebythe Court of Appeal. Key points: The CPRs govern advertising and promotional activities aimedat consumers. Much of the consumer and business protection legislationpreviously scattered amongst various Acts has been repealedand replaced by elements of the BPRs or CPRs. In total, 36 Regulationsand Orders and 41 Acts are affected. The BPRs now govern misleadingmarketing and comparative advertising, previously dealt withunder the Control of Misleading Advertising Regulations 1988.The article looks at how these Regulations may be applied insituations which interested parties currently attempt to resolveusing trade mark or passing off laws. Practical significance: The new Regulations are aimed at the protection of consumersand businesses from unscrupulous marketing and trade promotionpractices which affect their economic behaviour. Thirty-onepractices are specifically identified as automatically fallingfoul of the Regulations. Businesses will need to review theirpractices to avoid the possibility of criminal penalties includingfines and imprisonment for consenting, conniving, or recklessofficers of businesses involved in such practices. Until the ECJ decision in O2 v Hutchison 3G, it had been thought(from Jacob LJ's finding in his reference to the ECJ in thiscase) that trade mark law had no role to play in comparativeadvertising as it was specifically provided for under the ComparativeAdvertising Directive and hence under the BPRs. Since thesedid not provide an individual right of action (the OFT or TradingStandards alone may enforce), it left trade mark owners withlittle muscle in comparative advertising situations. However,the ECJ made clear that where practices fail to satisfy thecriteria set out in the Directive for legitimate comparativeadvertising, trade mark law may be invoked as a remedy. Thiswill be a relief to major brand owners for whom comparativeadvertising is commonly a concern.     

Community trade mark case law round-up 2006

Legal Context: This article looks at the important decisions of 2006 on theCommunity Trade Mark made by the Court of First Instance, theEuropean Court of Justice and the OHIM. These cases concernthe application of Council Regulation 40/94 on the CommunityTrade Mark, and also preliminary rulings from the European Courtof Justice on the interpretation of Council Directive 89/104(the Trade Mark Directive). Key Points: The volume of case law relating to Community trade marks, notto mention the variety of official languages in which the lawis interpreted, makes it almost impossible for even the conscientiouspractitioner to keep abreast with developments as they occur. This article provides an overview of the shifts in Communitytrade mark practice, in terms of not only the relatively accessiblesubstantive law but also the far more diffuse areas of procedurallaw and Office practice. In seeking to review and explain these shifts, the authors haveadopted a view of the case law that is functional rather thanphilosophical. In doing so, they lay bare the manner in whichthe institutions that administer and adjudicate Community trademark issues interrelate to one another. Practical Significance: Practitioners can quickly find the important decisions from2006 relating to particular articles of the Council Regulation40/94 on the Community Trade Mark. This article provides an overview of the most significant trademark cases decided in 2006 by the European Courts of Justiceand the OHIM Boards of Appeal. The article enables practitionersto access rapidly the key decisions of 2006. The cases discussed concern the application of Council Regulation40/94 on the Community trade mark (‘CTMR’), CommissionRegulation 2868/95 implementing the CTMR (‘CTMIR’),and Council Directive 89/104 (the ‘Trade Mark Directive’).     

The ECJ eases the way for comparative advertisers

The ECJ reiterates its support for the comparative advertiserby indicating that common sense is needed to comply with theMisleading Advertising and Comparative Advertising Directive(Directive 97/55).     

ECJ allows service marks for retail trade and tells Nestle it can 'HAVE A BREAK' without having a Kit Kat

In response to a reference from the UK Court of Appeal, undertrade mark Directive 89/104/EEC of 21 December 1988, the ECJdetermined that distinctive character may be acquired throughuse as part of an already registered trade mark.     

EU Directive on unfair commercial practices--a UK perspective

Legal context. Lack of any catch-all law of unfair competitionin the UK – difficulty for brand owners in protectingtheir IP rights with regard to look-alike products. UK remediessuch as passing-off and trade mark infringement have provedtoo narrow. EU Directive will add to the remedies availableand may assist brand owners in their battle against look-a-likeproducts. Key points. Legal position on look-a-likes in the UK –objectives of the new Directive. Analysis of the two main waysto establish a commercial practice is unfair in the look-a-likecontext. The likely effect of the Directive in the UK on copycatsyndrome and looking to the future. Practical significance. Brand owners may use the new law alongwith the old to stamp out look-a-like activities. Practicalapplication of the test under the Directive. Remedies includecourt orders to stop and prevent unfair commercial practiceto optional possibility of court-imposed requirement to publisha corrective statement or fine – if latter is introducedinto the UK would be an additional deterrent factor of practicalvalue.     

Dishonestly and without due cause

Legal context: UK trade mark law was harmonised with the laws of other EU memberstates pursuant to the Trade Marks Directive (89/104/EEC) withthe coming into force of the Trade Marks Act 1994. Since then,the English courts have sought to absorb into English jurisprudencecontinental concepts of unfair competition, and a new code relatingto the use of another's trade mark in comparative advertising.Traditionally, the English approach has been more liberal andless protective of a trade mark owner's rights than that ofcontinental jurisdictions, but since 1994 the ECJ has been calledupon to provide frequent guidance on the interpretation of expressionssuch as the "essential function" of a trade mark and the "dutyto act fairly" in relation to the legitimate interests of thetrade mark proprietor. Key points: This article examines the way in which some recent decisionsof the ECJ have led to the English courts having greater regardto the property interests of the trade mark owner and less regardto the concepts of free market competition and consumer protection.In the recent High Court case of L'Oréal and others vBellure NV and others, Lewison J made findings of infringementunder s.10(1) and (3) Trade Marks Act 1994 where he found thatthere was "free riding" on the back of the reputation of certainof L'Oreal's trade marks without there being any evidence ofconfusion or association between the trade marks and the defendants'signs. Practical significance: For trade mark owners, this change in the approach of the Englishcourts opens up new opportunities to combat look-alike productsand comparative advertisements which take unfair advantage ofthe reputation of established marks.     

Registration of terms borrowed from another language

In answer to a question referred by a Spanish Court in a disputeas to the validity of the Spanish trade mark MATRATZEN, theEuropean Court of Justice (ECJ) has ruled that trade mark ownersare not precluded by Article 3(1)(b) or (c) of the Trade MarksDirective (Council Directive 89/104) from registering in oneMember State a term borrowed from another language, unless itcan be demonstrated that relevant public in the Member Statein which registration is sought are capable of identifying themeaning of the term.     

Keywords,case law and the Court of Justice: the need for legislative intervention in modernising European trade mark law

Recent preliminary references to the CJEU on online keyword advertising and registered trade mark infringement have exposed the challenges facing EU registered trade mark law in its response to new technologies. These cases and the challenges they pose provide a timely prism through which to examine the European trade mark law-making process and the role of the CJEU within that process. This article will employ an analysis of the way in which the CJEU has developed certain key new aspects of the law on ‘infringing use’ to explore concerns over the CJEU's role and approach. It will be argued that, driven by policy considerations, the CJEU has acted creatively to develop the law of infringement in ways that cannot be sustained by the TMD and CTMR and which are likely to cause increasing uncertainties going forward. With the European Commission currently considering reform of Trade Marks Directive 2008/95/EC and Community Trade Mark Regulation 207/2009/EC, this paper will argue that there is a need for more comprehensive and forward-looking legislative intervention than has yet been proposed and that such intervention will be essential to restoring balance in the European trade mark law-making process.     

Trade mark use in transit: EU-phony or cacophony?

Legal context The present article discusses the opinion of Advocate-GeneralJacobs in Case C-405/05 Class International BV v Unilever NVand others, according to which trade mark owners cannot opposethe entry into the European Union of grey market non-Communitygoods placed in external transit, on the grounds of Article5(1) of the Trade Mark Directive, or any equivalent provision,as such entry does not constitute trade mark use. Key points We examine the consistency of this approach withprior case law of the European Court of Justice, namely in theCommission v France, Rioglass, The Polo/Lauren and Rolex casesand draw a parallelism with Council Regulation (EC) 1383/2003. Practical significance We conclude that trade mark owners shouldbe allowed to prohibit the placing in transit of goods whichwould infringe an intellectual property right under the lawof the transit country, unless the owner or consignor of thelitigious goods can undeniably prove that the goods are notdestined for the internal market. Stop press. At the end of the article the authors provide abrief analysis of the European Court of Justice's decision of18th October 2005 in this case.     

Kicking butt? Tobacco Advertising and Promotion (Brandsharing) Regulations 2004

Legal context. This article looks at the provisions of The TobaccoAdvertising and Promotion (Brandsharing) Regulations 2004 implementingEU Directive 2003/33 to approximate the laws of EU Member Statesrelating to indirect advertising and sponsorship of tobaccoproducts through brandsharing. Key points. The Directive is the latest in a series of measuresto control direct and indirect tobacco advertising. Its provisionsand those of the implementing Regulations are widely drawn toprevent use of tobacco trade marks and other features indicatingthe origin of goods or services for non-tobacco products andvice versa if the effect of such use results in brandsharing.Purpose or intended effect is irrelevant—there is no requirementfor ‘mens rea’. There are defences however but absentthese, liability is assessed on the criminal rather than thecivil standard. The Directive also impacts on the procedureof the Patent Office and its assessment of whether trade markscan be accepted for registration. Practical significance. There are practical consequences tooas regards brand clearance and the extent to which identicaland similar marks for tobacco/non-tobacco goods need to be includedin clearance searches.     

Spanish court rules in 'Accessorize' trade marks case

The Barcelona Court of First Instance No. 1 found in favourof the claimants, owners of the famous registered trade mark‘Accessorize’ in their action for trade mark infringement,trade mark cancellation, unfair competition, and damages inrespect of the use by the defendants of the Accessori, Mr Accessoriand Accessori trade marks.     

A Case for Applying the Theoretical Semiotics in the Practice of Trade Mark Law

The application of semiotics in trade mark law is an interdisciplinary endeavour in its infancy. The author traces its genesis in recent years and situates it within the context of general theoretical approaches, in particular of an interdisciplinary kind, appearing in the trade mark law literature in the past. The purposes for which such theories are applied, and questions of methodology arising from this, are examined. In particular, it is observed that semiotic theory has, by and large, been used for the purpose of debating legal policy in trade mark law (especially in the United States), and that this has given rise to argument about the extent to which semiotic theory can exert any normative force of its own upon the law. This article offers a different perspective. It is sought to demonstrate the usefulness of theoretical semiotics in solving trade mark law questions in practice. The author emphasises that this involves no threat to orthodox legal problem-solving methodology (whatever one may think of the orthodoxy), and in particular does not require the normative use of semiotic theory. Taking as a starting point the concept of ‹trade mark use’, and having regard to trade mark law and literature in Europe, the United States and Australia, the author proceeds to demonstrate the proposed approach by reference to some current problems in trade mark infringement.     

Common sense prevails in trade mark transfer dispute

The High Court of Justice has interpreted Article 17(2) of theCommunity Trade Mark Regulation, which provides that ‘[a]transfer of the whole of the undertaking shall include the transferof the Community trade mark’, in a commonsense mannerthat provides that the Community trade mark shall follow thetransferred business. The Court gave great weight to facts andcircumstances of the relevant transactions in giving effectto the transfer of the trade mark rights.     

CFI upholds 'compulsory licences' of Green Dot trade mark

The European Commission was justified under competition lawin restricting the terms of trade mark licences for the GreenDot trade mark and, contrary to the view of the owner, thisdid not constitute a ‘compulsory licence’ of themark.     

Whose trade mark rights? What the Microsoft case means for trade mark owners

Legal context. The article considers the influence of the commissionruling in the Microsoft case, forcing Microsoft to use its WINDOWS-trademark for an ‘unbundled’ version of the program inthe light of the trade mark owner's properties rights. The scopeof these rights is determined by the function of the trade markand the rights that the trade mark laws confer to the ownerin case of infringement. Key points. Trade marks are protected as property rights undercommunity law. They are the embodiment of past investments andtransform the reputation of the owner into a bankable asset.Consumers rely on trade mark owners' control over quality. Thisis mirrored by the rights of the trade mark owner to stop interferencewith quality and image, in particular in the context of resaleof altered products. Any interference that would be considereda trade mark infringement if committed by a private party shouldbe considered an interference with the protected property rightif caused by a government agency. This interference is not justifiedby the public interest because trade mark rights also embodyimportant public interests. Practical significance. If the analysis proposed in the articleis followed, intellectual property rights have to be given greaterweight in shaping antitrust remedies.