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The Development of Case Law in Europe

Info: 4569 words (18 pages) Law Essay
Published: 8th Aug 2019

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Jurisdiction(s): EU Law


Europe is meant the countries that do up the European Union. The Law of registered trademarks, unfair competition, misappropriation of member of states and the trademark law was national before 1989. Tradition and not only did different states have law stated in different footing, but there were difference of ideology, aim, legal culture. A traditionalist might say that the only legitimate object behind it was to create a single commercial market. Within the Europe as if there were no national borderlines, commodity should flow freely. Intellectual property rights, including trademark rights, could have hindered that free flow. In different states, a very similar or a same trademark could be held by different proprietors or owners, so a product or service legitimately marked and marketed in one state could be blocked from entering another state where the trademark owner was nominally different. According to competition authorities the undesirable feature of a single market would have allowed trademark owners to create price discrimination territories by manipulating trademark law. The smooth function of common market might have hindered due to different national trademark standards. So an EU directive of 1989 came in existence to “approximate” their trademark laws – essentially to standardize their laws on key features, with occasional opt-out provision.

The Part A of the discussion is to critically analyze the development of case law in Europe in relation to the requirement of distinctiveness, for registration of trademark. To simplify the analyzing process the discussion has been dived into six sub parts. Part 1.1 explains, what are trademarks? Part 1.2 emphasises on, what can be registered as trademark and the role of distinctiveness. Part 1.3 discusses, why are they registered and how distinctiveness plays a role in registration? Part 1.3 analyzes, what are the reasons for rejection of registration and the role of distinctiveness in the rejection process? Part 1.4 explains why do they need to be distinctive and how it has developed of case law?

Part A. Discuss and critically analyze the development of case law in Europe in relation to the requirement of distinctiveness, for registration of trademark.

1.1 What are trademarks?

The term “Trademark” have been defined by various people, it is rightly said by Gurry F, Director Genral, Wipo that “Trademarks play a key role in engendering consumer confidence, an important factor for businesses facing the challenges of the current economic slowdown. Nothing that trademarks enable companies to build and maintain their reputation in the market place and to add value to their commercial operations. Even in economically difficult times, businesses continue to recognize that a trademark is a smart investment in a company’s reputation and long-term sustainability.”

The value of trademark lies in its role to warranty the identity element of the origin of the noticeable production to the consumer or end substance abuser by enabling him, without any affirmable muddiness, to distinguish the production or service from others which individual a assorted origin. However to prove its importance in the system of undistorted contest which the treaty seeks to establish, it must offer a guarantee that all the goods or services bearing it have originated under the control of a single undertaking which is responsible for their standards. It may consist of any sign satisfying three conditions. First, it must be a sign. Secondly, that sign must be capable of being delineated graphically. Thirdly the mark must be capable of distinguishing the goods or services of one project from those of early undertakings. (Council Regulation (EC) No 40/94 of December 1993 on the Community trade mark, art. 4 and Council Directive 89/104 of December 1988 to approximate the laws of member states relating to trade marks, art. 2.)

1.2 What can be registered as trademark and the role of distinctiveness in it?

According TRIPS (Trade-Related Aspects of Intellectual Property Rights), any signs or combining of signs may be certified as a trademark, although a status may be obligatory that the grade be visually detectable. On the other hand apparently less stringent conditions has been imposed by EU law imposes to qualify for registration, a feature must be a “sign” that is “capable of being represented graphically. In addition it must:

“be clear, precise, self contained easily accessible, intelligible, durable and objective”

“be distinctive, i.e., guarantee to consumers the identity of one product source from others”

“not deprive the trade or the public of sings that directive or regulation implies should be free to all”

Until quite recently the way of identifying one dealer’s products from those of another would be a word mark and perhaps also an accompanying device mark. By recent changes in advertising and marketing practices, the traditions have been overturned. “Nowadays, in order to maintain his/her market position, a trader often has to have, in addition to the traditional word and device marks, packaging with distinctive design in terms of colour and, if possible, shape, a slogan that appears both with the product and separately from it, and an advertising jingle or tune that, when heard, will immediately bring the product to mind. Even fragrances are also used to indicate their products.” Trademarks that can be registered can be divided into two forms, Visible and Non Visible Marks.

Visible : colour, hologram, 3D, film or book title, slogans, gesture, position and Motion or multimedia signs

Non visible marks: Sound, taste marks, texture marks, olfactory(smell) marks

1.3 Why are they registered and how distinctiveness plays a role in registration?

Going further the trade marks should be registered from the conventional marks. This is because it will lead to facilitate the trade names and smoother running of the market. It will also save the large amount of litigation which is extra burden of expenditures on companies. Moreover it is because the real life is different and more complex than that of the soundest theory. On other side it is clear that the descriptive marks have no legal value but it can hamper to the bona fide users upon if some one just point out that the sign is already registered. In such case it would create more problems for the small entrepreneurs when the large companies will issue any warning letters.

Distinctiveness plays a major role and is one of the conditions set in the registration of the trade mark with EU, as a rule, distinctiveness is inherent, as described in Article 3(1)(b) of the Directive. This means that it is inherent in the nature of the mark, and not related to the type of a product. For example a word that does not directly indicate a type of goods that it is used for would be inherently distinctive. In order to access such distinctiveness, or rather determine whether a mark is devoid of distinctiveness, it must be assessed if the mark has a capacity to identify the products as coming from certain undertaking.

The question why distinctiveness matters in the registration of descriptive trade marks? It is because the ‘essential function’ of a trade mark is to act as a guarantee to consumer about the identity of the origin of the goods or services for which it is registered by enabling him/her, without any possibility of confusion, or to distinguish the product or service from others which have another origin.

1.4 What are the reasons for rejection of registration and the role of distinctiveness in the rejection process?

“The obstacle in Article 3(1)(c) prevents registration of trademarks that consist exclusively of signs which may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering the service, or other characteristics of the goods or service. This article is aimed directly at descriptive marks. Additionally, refused registration shall also be the signs customary in the current language and in the bona fide and established practises of the trade, as per Article 3(1)(d), which refers to generic marks. Article 3(1)(b-d) of the Directive prevent thus the registration of signs which lack distinctiveness, that is an indication of the origin of goods and services, which is the main feature of a trademark. Absence of distinctiveness must therefore be found as the primary and essential reason for refusal of registration”

Certain “Signs which do not conform to the requirements of article 4 of Community trade mark Regulation (CTMR); trade marks which are devoid of any distinctive character; trade marks which consist exclusively of descriptive signs; trade marks which consist exclusively of generic signs or indications; signs which consist exclusively of either the shape which results from the nature of the goods, or which is necessary to obtain a technical effect, or which gives a substantial value to the goods; trade marks contrary to public policy or accepted principles or morality; deceptive trade marks; trade marks for wines which falsely indicate their geographical origin; signs, which have become customary in ordinary language and established practices of the trade.”

“In the resent Dyson-case the Court had to consider whether a part of a vacuum cleaner was a “sign” within the meaning of article 2 of the Directive. The applicants described the mark as “a transparent bin or collection chamber forming part of the external surface of a vacuum cleaner as shown in the representation’. A picture of different vacuum cleaners manufactured and marketed by the applicant was attached to each of the descriptions. The Registration Office refused to register the mark and the matter was ultimately referred to the ECJ. The Court held that the subject matter was not a sign, primarily because it was obvious that the subject-matter of the application was not a particular type of transparent collecting bin forming part of the external surface of a vacuum cleaner, but rather, in a general and abstract manner, all the conceivable shapes of such a collecting bin. The Court continued by stating that “what consumers can identify visually is not so much the subject-matter”. Where the subject matter is capable of taking on a multitude of different appearances, the representation of the mark is not specific. In addition, the Court noted that art. 2 was intended to prevent the abuse of a trademark law in order to obtain an unfair competitive advantage.”

1.5 Why do they need to be distinctive?

“As we discussed earlier that distinctiveness is one of the conditions set in the registration of the trade mark. The concept of distinctiveness is widely accepted and plays a critical role in the definition of scope of trade mark protection. “Distinctiveness in this context refers to the extent to which a claimed designation conveys to consumers information about the source of products or services as opposed to merely conveying product-related information.”

In case of “Societe des Produits Nestle SA v Mars UK Ltd (C353/03) Times, July 20, 2005 (ECJ) ” it was held that, “ a mark has distinctive character when it is capable of distinguishing the goods or services of one undertaking from those of other undertakings; and distinctive character must be assessed in relation to the goods or services in respect of which registration is applied for, in light of the reasonably well informed and reasonably observant and circumspect consumer of those goods.”

In Koninklijke KPN Nederland NV v Benelux-Merkenbureau (C-363/99) [2004] E.C.R. I-1619, it was held that “A trademark’s distinctiveness within the meaning of Article 3(1)(b) of the Directive must be assessed, first, by reference to those goods or services and, second, by reference to the perception of them by the relevant public, which consists of average consumers of the goods or services in question, who are reasonably well informed and reasonably observant and circumspect”

“The question why distinctiveness matters in the registration of descriptive trade marks? It is because the ‘essential function’ of a trade mark is to act as a guarantee to consumer about the identity of the origin of the goods or services for which it is registered by enabling him/her, without any possibility of confusion, or to distinguish the product or service from others which have another origin. It means the answer is attachment of the trade mark word with the source or geographical indication. Moreover the purpose behind is to balance the interests of the consumers and producers.” “The sign must be distinctive, so consumers can distinguish it as identifying a particular product, as well as from other trademarks identifying other products. This requirement is, therefore, addressing the question whether a sign performs or is intended to perform the function of a trade mark. The test of whether it is distinctive is bound to depend on the understanding of the consumers, or at least the persons to whom the signs are addressed. A sign is distinctive for the goods to which it is to be applied when it is recognised by those to whom it is addressed as identifying goods from a particular trade source, or is capable of being so recognised. The distinctiveness of a sign is not an absolute and unchangeable factor. Depending on the steps taken by the user of the sign or third parties, it can be acquired or increased or even lost.”

“Marks are similar if in practice they resemble each other enough to be likely to confuse consumers about trade origin. Thus, in Wagamama v. City Centre Restaurants, the first mark “ Wagamama” had been registered for restaurant services. The second mark “ Rajamama” was the name of another restaurant. Whilst there is a significant difference in the visual appearance of these two words, they sound quite similar, having the same distinctive internal rhythm. In practice, consumers often encountered the first mark aurally, through word of mouth recommendation or discussion of restaurants. In practice, therefore, the aural similarity was likely to confuse customers, not least because there was a significant danger of imperfect recollection of a first mark encountered aurally. Laddie J. held that, given these circumstances, the second mark was similar to the first mark and that there was a resulting likelihood of confusion.”

“The doctrine of functionality was originated and developed mainly in the US. The doctrine can be applied to IPR in general. However, its concept is deeply embedded in trade mark law. The functionality doctrine has been adopted and applied by almost all trade mark authorities and courts to determine the imperative requirement of distinctiveness for trade marks and has become ever more important in relation to trade mark law. The US Patent and Trademark Office and the courts will not grant trade mark protection to features of a product design which is functional. The rationale for this is that if a business could get trade mark protection for a functional features this would hinder competition by preventing others from using the features to achieve the same necessary function. “The exclusion of functional design from the subject matter of trade mark law is intended to ensure effective competition, not just by the defendant, but also by other existing and potential competitors”

“The EC trade mark legislation approaches closely to the US doctrine of functionality. The concepts of the doctrine are reflected in the provisions on the grounds for refusal to register as CTM. “Art. 7(1)(b) to (c) of Regulation No. 40/94 address the concern of the Community legislation to prevent the grant to one operator alone of exclusive rights which could hinder competition on the market for the goods or services concerned”

“In UK, “the provisions of section 3(2) [of The Trade mark Act 1994] contain a balanced mechanism akin to but not identical with the doctrine of functionality developed by the US courts”, “it must be stated that the (abstract) “ capable of distinguishing” test contained in the definition of a trade mark may not be expected to play a very significant role in practice, as the signs which it excludes — certain universally applicable laudatory words, basic graphic features such as a straight line of a given length or common shapes such as a plain bottle — will not normally be the subject of trade mark applications anyway. On that basis, it is fair to assume that in practical terms, this criterion merely serves as a guideline as to what may constitute a trade mark rather than having any practically significant line-drawing function”

“In Pfizer v. Eurofood Link, 59 Simon Thorley Q.C. (sitting as a deputy judge of the High Court) also used the guidance given by the ECJ in Sabel and Canon to apply section 10(2). This case concerned the alleged infringement of the first mark “ Viagra” , which had been registered for pharmaceuticals, by the second mark “ Viagrene” for a drink marketed as an aphrodisiac. He concluded from the ECJ’s judgments that60 : “ … one must have regard to the interdependence of the similarity of the trade marks and the similarity of the goods or services. Further one must take into account the distinctive character of the [first] mark and its reputation, if any, when determining whether the similarity is sufficient to give rise to the likelihood of confusion. In particular, these authorities make it plain that there is no automatic bar to a finding of infringement under section 10(2) merely because the goods on which the defendant is using the [second] mark are in some respects dissimilar to those for which the [first] mark is registered. In all cases, it will be a question of fact as to whether, notwithstanding the differences in the categories of goods but having regard to all the other relevant factors, the relevant likelihood of confusion is proved.”

In applying section 10(2), the judge began by identifying the marks and the products that would have to be featured in the comparison, but did not treat similarity on these points as prerequisites or distinct requirements.”

However “The non-distinctive trade mark can be registered if it has acquired distinctiveness through the use made of it. This provision is derived from art. 6 quinquies C 1) of the Paris Convention and is also affirmed in art. 15(1) of TRIPs. This acceptance is very important for trade marks in general and for the registration of special marks in particular”

Part B.

Explain how you would advise Atlantic Fashions Inc. in relation to their concerns.

“The owner of a trademark can legally defend his mark against infringements. In order to do so, the trademark must either be registered, or have been used for a period of time so that it has acquired local distinctiveness (Prior Rights). The extent to which a trademark is defendable depends upon the similarity of the marks involved, the similarity of the products/services involved and whether the trademark has acquired distinctiveness.

A registered trademark is relatively simple to defend in a court of law. An unregistered mark relies on the law of ‘passing off’ (where one parties’ goods/services are misrepresented so as to cause confusion between it and another good/service). Rights have also been recently extended with regard to well-known marks. The Trade Marks Act 1994 states that “a person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered” (section 10(1) of the Act). A person may also infringe a registered trade mark where the sign is similar and the goods or services are similar to those for which the mark is registered and there is a likelihood of confusion on the part of the public as a result (section 10(2)).

A person/company also can infringe a registered trade mark where a sign is identical but the goods are dissimilar if the trade mark has a reputation in the UK and its use takes unfair advantage of, or is detrimental to, the mark’s distinctive character or reputation (section 10(3)).” However, as Atlantic Fashions Inc acted upon our advice and has the UK registered trade marks CATFISH and the Catfisjh logo for clothing, have an upper edge as only registered trademarks have protection of law. Therefore they can take a legal action against Harpy and can make them stop selling this range which carries a realistic picture of a catfish and the word “Catfish”. However, the Harpy also can defend under the law that the mark has been in use by them since long time.

What can Atlantic Fashions do about this Harpy T shirt with catfish?

“A cause of action for passing off is a form of intellectual property enforcement against the unauthorised use of a mark which is considered to be similar to another party’s registered or unregistered trademarks, particularly where an action for trademark infringement based on a registered trade mark is unlikely to be successful (due to the differences between the registered trademark and the unregistered mark). Passing off is a form of common law, whereas statutory law such as the United Kingdom Trade Marks Act 1994 provides for enforcement of registered trademarks through infringement proceedings. Passing off and the law of registered trademarks deal with overlapping factual situations, but deal with them in different ways. Passing off does not confer monopoly rights to any names, marks, get-up or other indicia. It does not recognize them as property in its own right.

Perry v Truefitt (1842) 6 Beav. 66 is a famous English case where the tort of passing off was first articulated. Leathart made a hair treatment product. He had shown the mixing process to Perry, a perfumer and hair-dresser, who decided to call the mixture “Medicated Mexican Balm”. Perry marketed the mixture under the title “Perry’s Medicated Mexican Balm”. Truefitt, one of Perry’s competitors, made a product that was very similar to Perry’s mixture, which he marketed it under the name “Truefitt’s Medicated Mexican Balm”, and used bottles and labels that looked like Perry’s product. Perry filed a bill against Truefitt, arguing that the name “Medicated Mexican Balm” was valuable to his business and that he should have exclusive right to prevent others from using it. The Court denied Perry the right to the name. However, Lord Longdale held that misrepresentation can be grounds for an injunction, stating that “a man is not to sell his own goods under the pretence that they are the goods of another man”.

The law of passing off is designed to prevent misrepresentation in the course of trade to the public, for example, that there is some sort of association between the business of defendant and that of the claimant. Another example of passing off is where the defendant does something so that the public is misled into thinking the activity is associated with the claimant, and as a result the claimant suffers some damage, under the law of passing off it may be possible for the claimant to initiate action against the defendant.” “Passing Off: The specific description of passing off is not given in the trademark act but the courts have drawn its meaning from common law that if the infringement of trademark done in such a manner where the mark is not only deceptively similar to the trademark of other company but also creating confusion for the customers, which ultimately results in damage for business of the company. Differences between Passing Off and Infringement: They are slightly different to each other: · Statutory remedy is available for infringement whereas the action for passing off is a common law remedy. For infringement it is necessary only to establish that the infringing mark is identical or deceptively similar to the registered mark but in the case of a passing off action, the need is to prove that the marks are identical or deceptively similar which is likely to deceive or cause confusion and damage to the business of the company. When a trademark is registered, registration is given only with regard to a particular category of goods and hence protection can be given only to these goods and action of infringement would be taken but in a passing off action, the defendant’s goods need not be the same, they may be related or even different.”

If the designs are deceptively similar to that of Catfish, then the company may take legal action against Harpy T-shirts. However if the design is not similar, they may still challenge it under the passing off law.

Will Micron Corporation and the other brand owners whose logos Harpy are using be able to stop them doing this?

‘The ECJ in L’Oreal while emphasising on the objective of trademark, location the trade origin, confirmed that if a product expressly or implicitly advertised itself as imitations of reputed brands, it would constitute to unlawful comparative advertising.’

“The English Law has a similar opinion. It is evident from the case of Reckitt and colman v.Borden   where the plaintiff sold lemon juice in a yellow plastic lemon shaped container. Jiff was embossed on the side and printed on a neck label. There were strong evidence that the purchasing public would think that they were buying a Jiff lemon if confronted by the defendant’s lemon juice in a similar packaging. It was held that the defendant’s proposed get up would amount to a threat of passing off against which an injunction should be granted. Also the court’s opinion in the case of Gillette Company is mentionable. In the case of Gillete UK ltd. v. Edenwest ltd, the plaintiffs manufactured and sold a disposable razor blade called Gillette G-II. The defendants purchased and resold counterfeit Gillette G-II blades without realizing that they were not genuine products. The plaintiffs sued for passing off and seeking an injunction. The defendant contended that it never tried to harm the plaintiffs economic interests and were unaware of the fact that the blades were counterfeit. It was held that the defendant’s innocence on such a claim couldn’t protect them against a suit for “passing off” so as to affect the economic interests of the plaintiffs.”

The logo is deceptively similar to Micron, hence Micron can take action for infringement of trademark. All the other brands whose logos resemble the one used by Harpy can take action against Harpy for infringement. This is to protect the goodwill of the companies.

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