#1690 - Trademarks Infringement - Intellectual Property Law

Infringement - Rights Conferred

Development: Rights of TMOs have expanded to such an extent that it could be said that they now confer a form of quasi-copyright protection which protects traders rather than consumers. + Lemley: The ‘death of common sense’.

Circumstances in which a mark may be infringed: Mirror relative grounds for refusal in s.5(1)-(3).

1. Double identity (s.10(1));

2. Marks identical, goods/services similar, and likelihood of confusion/association (s.10(2)(a));

3. Marks similar, and goods/services are either identical or similar, and confusion (s.10(2)(b));

4. Marks identical or similar, and registered TM has a reputation in UK, and use of D’s mark would take unfair advantage of, or be detrimental to, distinctive character or reputation of unregistered TM (s.10(3)).

Two differences between action for infringement and relative grounds for refusal:

1. Need to identify D’s mark (a task that in context of relative grounds for validity the applicant for the later mark carries out);

• LTJ Diffusion; Determining exactly what D’s sign is can prove problematic. ECJ held s.10(1) only covers only identical reproduction of signs without addition or modification. Implied there was no doctrine of ‘added matter’ or ‘ineffective addition’. Gives no guidance on how cts are meant to define parameters of D’s mark.

2. To establish infringement it is necessary to show that the mark was ‘used in the course of trade’.

‘In the course of trade’ - Trade defined to include ‘any business or profession’ (s.103(1)), so presumably does not cover social or domestic use. Remains unclear whether use by public bodies will amount to trade use.

• Arsenal v. Reed [2002]; ECJ stated sign used in course of trade where it has been used, ‘in the context of commercial activity with a view to economic advantage and not as a private matter’. Perhaps things such as Warhol’s famous depictions of Campbell’s soup and Aqua’s use of the mark ‘Barbie’ in Barbie girl song would constitute use in the course of trade. AG Colomer suggested no.

Use as a mark? - Use of a sign as a TM (i.e. to indicate origin) will constitute a relevant use. However, controversy surrounds the question whether , and if so which, other uses should constitute infringements.

• Arsenal v. Reed [2002]; Whether or not other uses will infringe depends upon whether the use affects or is liable to affect the functions of the TM, ‘in particular its essential function of guaranteeing to consumers the origins of the goods’.

In contrast, if the use of a sign cannot affect the trade mark proprietor’s interests, having regard to the mark’s functions, it may not be prohibited. The question is which uses implicate the essential function of the mark.

+ AG Mengozzi: ‘bristling with difficulties’.

a) Use as a description – Will not infringe because does not jeopardise the essential function of the mark.

• Hölterhoff v. Freiesleben [2002];

Facts: TMO of words SPIRIT SUN and CONTEXT CUT for ‘precious stones for further processing as jewellery’ brought an action alleging infringement by H as a result of certain commercial dealings in which he had been asked to cut diamonds in shape of SPIRIT SUN. Dealings were oral and neither the customer, nor the jeweller considered the term to indicate that the goods came from C.

Decision: The exclusive right could not be relied on ‘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’.

• L’Oréal v. Bellure [2009];

Issue: ECJ held Bellure’s use of comparison lists for their smell-alike perfumes, showing which Bellure product corresponded to which L’Oréal perfume, went beyond “purely descriptive” use, because it was used for advertising (distinguishing Hölteroff).

CA decision: Jacob LJ highlighted importance of such lists to many businesses, including generic drug manufacturers and generic spare part producers. Acknowledged such lists used to promote a person’s products – as alternatives for the branded version - and that the benefit obtained is a kind of ‘free riding’, although not necessarily one that is unlawful. Problem was to ascertain where the line be drawn between permissible and impermissible free-riding.

ECJ: Although ECJ did not rule on facts of the case, its shift away from the essential function, as well as its distinguishing of L’Oreal from its judgment in Holterhoff in which it held that a purely descriptive use of a TM fell outside of Article 5(1)(a) on the basis that the smell-alikes use the marks for advertising, not descriptive, purposes, indicates that it considers the comparison lists unlawful.

Significance: Great significance to TM law and of great assistance to TMOs. Whereas previously the lack of any impairment of the essential function (in effect lack of any confusion as to origin) may have scuppered or discouraged litigation (such as the MR SPICY case on the use of trade marks in keyword advertising), now brand owners have a potentially endless list of functions to rely upon, of which we have so far only been given few examples. Also elevates TM beyond its historical ‘badge of origin’ origins, perhaps recognizing the extent to which the ‘brand’ has become far more than simply a maker’s mark. Yet it does so with little basis in consumer protection, the bedrock of trade mark law. Consumers of the smell-alikes in L’Oreal were not confused, and knew what they were buying. If anything, it might be said that their interest would be harmed if comparison lists were unlawful, as they may now struggle to find the right perfume, and the budget perfumer will not be able to help them.

b) Use to indicate loyalty – Even though the use of a registered mark on clothing was not understood as indicating origin (rather to indicate that the wearer supported a sports team), it was treated as likely to affect the essential function of the mark to indicate that the clothing bearing it came from the TMO.

• *Arsenal v. Reed [2002];

Facts: Arsenal FC owned TM for ARSENAL in respect of clothing and footwear. Brought action against a stall holder, R, who sold scarves bearing mark from stall outside Arsenal’s grounds. Evidence indicated marks not perceived by purchasers as indicating origin, just as badges of support, loyalty or affiliation.

Decision: Indicated the exercise of the TMO’s right was confined to cases in which a 3^rd party’s use of the sign affects or is liable to affect the functions of the TM (origin). ECJ regarded the factual situation as ‘fundamentally different’ from that in Hölterhoff, because the use of the sign was ‘obviously not intended for purely descriptive purposes’ because the use of the sign took place in the context of sales to consumers. The use of the ARSENAL sign was ‘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’. Question to ask: Does it undermine guarantee of origin? Here, even if initial consumers were not confused, some consumers who come across the goods after they have been sold, ‘may interpret the sign as designating Arsenal FC as the undertaking of origin of the goods’. Liable to jeopardise guarantee of origin. CA held D had infringed. ‘The wider and more extensive the use, the less likely the TM would be able to perform their function’.

c) Use on replicas

• *Adam Opel v. Autec AG [2007];

Facts: Opel had registrations of its logo for toys and cars. D sold scale models bearing the logo. Opel sued.

Issue: ECJ ruling requested on whether such use infringes in circumstances where consumers are used to scale models and accord importance to absolute fidelity, so that viewing the toy would appreciate it was a reduced scale.

Decision: ECJ emphasised the exclusive right was conferred in order that the TM could fulfil its functions and, therefore, that its exercise must be reserved to cases in which a third party’s use of the sign affects or is liable to affect the functions of the TM - in particular the essential function of guaranteeing to consumers the origin of the goods.

Ct said it was up to the national court to find if there was a link. Decided that there was no possibility of confusion because it was covered in other marks, like Autec AG = So long as consumers did not think that the toys came from Opel or an economically linked undertaking, then the use did not affect the essential function of the mark.

Although Arsenal had acknowledged that some uses of C’s mark on another’s goods might not affect the essential function, this case provides an example of where that is the case. It raises the possibility that even on some football merchandise, where consumers expect replicas to the same, there will be no infringement.

• Adidas v. Marca Mode [2008] (decorative three-stripe mark);

‘It should be pointed out that the public’s perception that a sign is a decoration cannot constitute a restriction on the protection conferred by Article 5(1)(b) of the Directive when, despite its decorative nature, that sign is so similar to the registered trade mark that the relevant public is likely to perceive that the goods come from the same undertaking or, as the case may be, from economically-linked undertakings.’

+ Seville: Brings case within Arsenal and says it does not bring a guarantee of origin so it does not matter if it is a decoration...