Monday 7 September 2015

Good news for owners of reputed trademarks


In its judgment of 3 September 2015 in the matter of Iron & Smith kft/Unilever (Case C-125/14), the Court of Justice of the European Union ruled on an interesting question referred by a Hungarian court concerning the territorial effect of the reputation of a Community trademark under Article 4.3 of Directive 2008/95 (refusal of a trademark application conflicting with an earlier Community trademark having a reputation but covering different goods). At issue was whether the reputation of a Community trademark in certain EU countries could also be relied on and have legal effect in other EU countries in which the mark was not reputed.

Happy-go-lucky European citizens will lose no sleep over the question raised by the Hungarian court, but to IP practitioners the issue is intriguing, since it is directly related to those two pillars of the EU trademark system, namely, the unitary character of the Community trademark and the co-existence of that system with the various national systems.

These two principles are firmly enshrined in the Community Trade Mark Regulation and underpin the EU's trademark system, but day-to-day practice can give rise to interesting, hard-to-assess issues like the one raised by the Hungarian court in its referral, since grand principles and doctrines tend not to be so clear-cut and helpful when it comes down to dealing with individual cases in the context of local market realities.

The unitary character of the Community trademark means that it shall have equal effect throughout the European Union, as expressly laid down in Article 1 of the Community Trade Mark Regulation. The wording "equal effect" should mean not only that a registration as such is formally in force in the 28 Member States of the European Union but also that the rights conferred on its owner, jus prohibendi chief among them, are equally effective throughout the European Union.

In the case at hand, the Court of Justice was asked to rule on whether the prohibitive rights of action emanating from the reputation enjoyed by a Community trademark reputed in certain countries could also be wielded in other EU countries in which the mark did not have a reputation. In the case before the Hungarian court that referred the question for a ruling, an earlier Community trademark opposing a later trademark application had a reputation in the United Kingdom and Italy but not in Hungary, where the new application had been filed. As the Hungarian court adroitly noted, the question displayed certain similarities with the controversy surrounding the issue of Community trademark use and the territorial scope of use that was to be deemed sufficient, a question on which the CJEU had already ruled, chiefly in the Leno Case (C-149/11). The Court has held that a trademark's reputation needs to be assessed on its own terms, not necessarily the same ones used to assess use.

The Court's judgment is tightly argued and clearer than usual. So, setting aside its customary vagueness, the Court has ruled straightforwardly that:

  1. If the reputation of an earlier Community mark is established in a substantial part of the European Union, which may in some circumstances coincide with the territory of a single Member State, the said earlier Community trademark is to be held to have a reputation in the European Union as a whole.
  2. The principles concerning genuine use of Community trademarks laid down by the case law are not necessarily relevant for the purpose of establishing the existence of a reputation.
  3. A Community trademark having a reputation may benefit from the extended protection specified for reputed marks in the Directive, even in a Member State in which it does not enjoy a reputation, where it is shown that a commercially significant part of the public is familiar with the mark and makes a connection between it and a later national mark and there is either actual and present injury to the Community trademark or there is a serious risk that such injury enjoy may occur in the future.

A Community trademark having a reputation can thus enjoy the extended protection conferred on reputed trademarks even in those countries in which it is not considered reputed, provided that certain conditions relating to actual and present injury are fulfilled, as the case law has in fact already been requiring even in those territories in which the reputation of an earlier mark is beyond question, as, for instance, in the judgments in the General Motors (C-375/97) and Royal Shakespeare (T-60/10) Cases.

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