Intellectual Property Summative

Introduction

The ECJ has recently taken to another level what constitutes “unfair advantage” in relation to comparative advertising with regards to protection of trade marks with reputation or well know brands. The ECJ has ruled that any advantage gained by an advertiser who uses a comparison list which presents his goods as an imitation of goods protected by a trade mark with reputation, is unfair advantage. This being irrespective of the fact that such comparison does not even create any form of confusion in the minds of the public.

The l’oreal case

Facts.

The case through which this principle was exposed is that of L’Oreal SA v Bellure NV. The defendant in this case produced scents which smelled like some of the perfumes produced by the claimant’s company who were well known in the United Kingdom as proprietors of trade marks registered for perfumes. The defendants also sold these scents in bottles similar to the perfume bottles used by the claimants for some of its perfumes. The defendants made a comparison list which listed similarities between defendants perfumes and the one made by the L’Oreal group, thereby making the defendants perfumes seem like imitations of perfumes produced by the L’Oreal group.

Proceedings.

L’Oreal group which is the claimant instituted an action in court claiming for infringement of their trade mark, that the use of their mark in the defendants comparison list is an infringement under S. 10 (1) of the Trade Marks Act which is same as Art. 5 (1) (a) of the Trade Marks Directive. They further claimed that the use of bottles very similar to those used by the claimants in the packaging of their perfumes also amounted to infringement of some of their trade marks by taking unfair advantage under S. 10(3) of the Trade Marks Act 1994 similar to Art. 5(2) of the Trade Mark Directive.

The High Court held that there was an infringement under S.10 (1) (a) of the Act but dismissed the claim for unfair advantage under S.10 (3). The defendants were not satisfied with the decision of the High Court. An appeal was brought before the Court of Appeal. The Court of Appeal referred these questions to the ECJ for preliminary ruling:

“ (1) Where a trader, in an advertisement for his own goods or services, uses a registered trade mark owned by a competitor for the purpose of comparing the characteristics (and in particular the smell) of goods marketed by him with the characteristics (and in particular the smell) of the goods marketed by the competitor under that mark in such a way that it does not cause confusion or otherwise jeopardise the essential function of the trade mark as an indication of origin, does his use fall within either (a) or (b) of art.5(1) of Directive 89/104 ?

(2) Where a trader in the course of trade uses (particularly in a comparison list) a well-known registered trade mark for the purpose of indicating a characteristic of his own product (particularly its smell) in such a way that:

(a) It does not cause any likelihood of confusion of any sort; and

(b) It does not affect the sale of the products under the well-known registered mark; and

(c) it does not jeopardise the essential function of the registered trade mark as a guarantee of origin and does not harm the reputation of that mark, whether by tarnishment of its image or dilution or in any other way; and

(d) It plays a significant role in the promotion of the trader’s product, does that use fall within art.5 (1)(a) of Directive 89/104 ?

(3) In the context of art.3a[1](g) of Directive 84/450 , what is the meaning of ‘ take unfair advantage of’ and in particular, where a trader in a comparison list compares his product with a product under a well-known trade mark, does he thereby take unfair advantage of the reputation of the well-known mark?

(4) In the context of Article 3a [1] (h) of the said directive, what is the meaning of ‘present[ing] goods or services as imitations or replicas’ and in particular does this expression cover the case where, without in any way causing confusion or deception, a party merely truthfully says that his product has a major characteristic (smell) like that of a well-known product which is protected by a trade mark?

(5) Where a trader uses a sign which is similar to a registered trade mark which has a reputation, and that sign is not confusingly similar to the trade mark, in such a way that:

(a) The essential function of the registered trade mark of providing a guarantee of origin is not impaired or put at risk;

(b) There is no tarnishing or blurring of the registered trade mark or its reputation or any risk of either of these;

(c) The trade mark owner’s sales are not impaired; and

(d) The trade mark owner is not deprived of any of the reward for promotion, maintenance or enhancement of his trade mark;

(e) But the trader gets a commercial advantage from the use of his sign by reason of its similarity to the registered mark,

Does that use amount to the taking of an ‘unfair advantage’ of the reputation of the registered mark within the meaning of art.5(2) of Directive 89/104 ?”

The ECJ held interpreting Art 5(1) (a) as meaning that the proprietor of a registered trade mark has the right to stop any one from using in comparative advertising any sign identical to the registered trade mark if such use does not satisfy the conditions in Art. 3a (1) irrespective of the fact that the use does not cause confusion in the minds of the public as to origin as long as the use “affects or is liable to affect one of the other functions of the mark”.

The ECJ held further that Art 5(2) does not mean that the use of the sign similar to the trade mark must be detrimental to the distinctive character of the mark or its proprietor neither must there be a likelihood of confusion for it to be said that the competitor or advertiser took unfair advantage. But that the fact that the third party benefited from that use, he can be said to have taken unfair advantage as he “seeks by that use 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 and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image”.

Article 5 (2).

Having said that, it is with question 5 which dwells on the interpretation of Art 5(2), that we are concerned. Art 5(2) is therefore reproduced as follows:

“ Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.”

The Court has interpreted the above provisions to include use of the similar mark in relation to goods and services which are similar to the ones protected by the trade mark.

It is therefore settled by the ECJ that Art 5(2) which is consistent with S. 10(3) of the Trade Marks Act gives a wider protection to trade marks. As it stands from the ruling of the ECJ in the L’Oreal case, the proprietor of a well known trade mark does not have to show that the use of a mark identical to his mark in comparative advertising caused any harm to him, his mark, the sale of his goods, neither does he have to prove that there was any form of confusion in the mind of the public. As long as the third party benefited from the use of the identical mark without having to pay for the benefit or advantage derived, it can be said that there has been an unfair advantage.

It is worthy of note here that the settled position before the L’Oreal case was that a registered trade mark does not give a proprietor of such registered mark an absolute power to prevent the use or reproduction of his mark. It is only when the mark is used in ways that are contrary to Art 3 of the directive that the proprietor of the registered mark would have a cause of action. In such instances, the proprietor of the mark would show that the third party used the mark in the course of trade or that there has been confusion in the minds of the public as to origin as in O2 HOLDINGS LTD V HUTCHISON 3G UK LTD

However, in the L’Oreal case, confusion in the minds of the public was not an issue. Because though the packaging was similar, and though Bellure’s Sweet Pearl scent was like L’Oreal’s Noa, it was however not Noa. There was no confusion in the minds of the public as to the origin of the perfume. The scents were worlds apart. While the L’Oreal scent was clearly a luxury product, the Bellure scent was a cheap imitation. So no one would have bought the Bellure scent thinking it was Noa. That was certain.

Furthermore, apart from the fact that there was no confusion in the minds of the public as to origin, there was no harm to the repute of the mark or the proprietor of the mark. There was no recorded reduction in the sales of product. It was still business as usual. The ECJ’s definition of unfair advantage therefore does not relate to any harm as stated above but more to the advantage that the competitor or advertiser would derive as a result of the use of the well-known mark in comparative advertisin, “free-riding” on the well known trade mark.

However, before it can be said that a competitor has taken unfair advantage of a trade mark with reputation, the ECJ holds that there should be a “global assessment, taking into account, in particular, the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity of the marks at issue and the nature and degree of proximity of the goods concerned”.

It is therefore a fact established by the ECJ in the L’Oreal case that where an advertiser expressly or by implication advertise his products as imitations of a well-known brand or a brand with reputation, it would amount to unlawful advertising and the advantage gained would seen as taking unfair advantage of the reputation of the mark.

The ruling of the ECJ in the case at hand has been described as “a major victory for the owners of well-known brands”. This is because proprietors of well known brands now have a wider protection over their registered trade mark under Art 5(2) than the protection afforded by Art 5(1) of the directive. “The decision will effectively destroy the market in ‘imitation’ products — and extends the reach of well-known brands beyond the limits so far set by the English Courts. “

It has been said that the decision of the ECJ would always give rise to controversy as there would constantly be arguments for and against the decision by the two groups of advertisers, proprietors of trade marks with reputation and those with the imitation.

The question is, if one of main purpose of trade marks is to protect consumers from deception, why then should Art 5(2) protect a trade mark with reputation even when it is clear that there is no confusion neither is the public deceived by the use of such mark by a competitor?

Problem question

The Shape Of The Bottle.

The illustration of the bottle from a 1930s comic book is an “artistic work”. S. 4 of the Copyrights, Design and Patents Act 1988 (CDPA) defines artistic work to mean inter alia “a graphic work, photograph, sculpture or collage, irrespective of artistic quality”. S. 4(2) defines a graphic work to include:

(a) any painting, drawing, diagram, map, chart or plan, and

(b) any engraving, etching, lithograph, woodcut or similar work

The bottle used by Martian Ruler Spulex which was illustrated in the 1930s comic book being an artistic work under S.4 CDPA enjoys copyright protection. For a work to be protected by copyright, it must have been recorded in a material form as required by S. 3 of the CDPA. The design for the bottle was recorded in a comic book.

Another requirement is that the work must be original as in S. 1(1) CDPA. That is to say that sufficient labour, skill or effort has been exercised to produce the work. It is assumed that the drawing of the bottle in the comic book is original and if the author of the design is a qualified person under s. 154 CDPA, then the work can be said to be qualified and therefore it would enjoy copyright protection.

The design of the bottle in the comic book having satisfied the criteria for copyright protection, it would therefore mean the author would be the owner of copyright in the work.

Haven established that the design of the bottle in the comic book is protected by copyright, another issue for consideration is whether the production of wooden dolls of the Martian Ruler Spulex which included a detachable carved wooden bottle which were on sale in the 1930s enjoyed any protection under the CDPA. This requires a consideration of whether the wooden reproductions were sculptures or work of artistic craftsmanship.

S. 4 of CDPA defines a sculpture to include “a cast or model made for the purpose of sculpture”.

The reproduction of the illustration of the Matian Ruler Spulex as wooden dolls with detachable wooden bottle which were on sale cannot be described as sculpture or works of artistic craftsmanship. See the case of Lucasfilm Ltd V Ainsworth where the court held that the reproduction of helmet, armour and stormtroopers which had their origin in a drawing, were not sculptures or works of artistic craftsmanship as their primary function was utilitarian and were not made to appeal as a piece of art. “We are not dealing here with highly crafted models designed to appeal to the collector but which might be played with by his children. These are mass produced plastic toys. They are no more works of sculpture than the helmet and armour which they reproduce… It is not that it lacks artistic merit; it lacks artistic purpose.”

From the case at hand, it is clear that the illustrations from the comic book were reproduced as dolls and were put on sale. Dolls are used as a childs toy. If they were made to be a childs play thing, it could be argued that their primary function was utilitarian and were not made to appeal as a piece of art, following the decision in Lucasfilm Ltd V Ainsworth.

On the issue of the risk of litigation that might arise as a result of the design of the bottle which was copied from the comic illustration, Fuggles could rely on the defence of S. 51 of the CDPA. S. 51(1) &(3) provides that:

1. 1. It is not an infringement of any copyright in a design document or model recording or embodying a design for anything other than an artistic work or a typeface to make an article to the design or to copy an article made to the design.

(3) In this section-

‘design’ means the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article, other than surface decoration

‘design document’ means any record of a design, whether in the form of a drawing, a written description, a photograph, data stored in a computer or otherwise.

S. 51 defence is available to a person who produces a three dimensional object based on a design which enjoys copyright protection. As long as the design or illustration is not for an artistic work, producing an object from the illustration would not amount to an infringement. So considering the fact that the illustration of the bottle though a copyrighted work, but was not for an artistic work, the production of an actual bottle from the illustration would not infringe the copyright.

That being settled, what intellectual property rights can Fuggles acquire in the shape and design of the bottle?

The shape of an object can be registered as a mark. However, before a shape can be registered as a mark, it must pass certain test, it should not run fowl of S. 3(1) (b) – (e). It must be distinctive. It must be such that when a consumer looks at it he notices it and remembers it and associates it with a particular source. The relevant question would be whether the shape is different from the shape of goods or products of the same class? Whether the shape is merely functional or decorative. If the shape or packaging is merely descriptive, then it contravenes S. 3(1) (c).

For a shape not to run fowl of Art 3(1) (b) it has to be such that a consumer looking at it does not have to examine it closely in order to ascertain its origin. This means the shape or packaging must distinguish the product from that of other goods/products of same class. This was the position in the case of Procter & Gambble V Registrar Of Trade Marks where an application for a three-dimensional bottle with a label for a floor cleaning agent was rejected as not being distinctive. See also the case of Henkel KGAA V Deutsches Patent- Und Markenamt where the ECJ ruled that to assess distinctiveness, the test to apply is that of an average consumer who is “reasonably observant, circumspect and well informed” that would just by looking at the trade mark be able to distinguish a product from other similar product without the need to examine the mark carefully.

The court in Nestle Waters France V Ohimallowing the registration of the shape of a bottle for non- alcoholic beverage held that the board should assess the distinctiveness by looking at the overall impression it created. Since the bottle “gave an unusual appearance that would allow the public to distinguish it from those with a different commercial origin”, it qualified for registration.

The bottle to be used by Fuggles Brewery Ltd could be said to have an unusual appearance in the sense that it is neither round nor symmetrical and unlike any other beer bottle, the glass is pale yellow. These features are striking enough to enable the public distinguish it from any other beer with a different origin.

Conclusion.

Bearing the above arguments in mind, I would advice Fuggles that there is a likelihood of success in the registration of the shape and design of the bottle as a trade mark.

Use Of The Name “Fuggles”.

In Reeds Executive Plc V Reeds Business Information Ltd the court of appeal held that there was no infringement of S.10 (1) of the Trademarks Act 1994 in respect of the use of the name “REED” because the name was not used alone but was used in logos “REED ELSEVIER” and “REED BUSINESS INFORMATION”.

Also in the case of LTJ Diffusion Sa V Sadas Vertbaudet SA, the ECJ held inter alia that “Art.5 (1) (a) had to be interpreted as meaning that a sign was identical with the trade mark where it reproduced, without any modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contained differences so insignificant that they might go unnoticed by an average consumer.”

Fuggles Brewery Ltd intends to use the name “fuggles” alongside the name of the beer which would be either “Dolphin” or “Pterosaur”. From the result of the search carried out, it is clear that no one has a monopoly of the name “Fuggles”. Following the decision in Reeds Case, the fact that the name Fuggles would not be used alone but in a logo with the name of the drink, there should be no likelihood of confusion. Because anyone going to get a British style beer from the supermarket would not go in and ask for “fuggles” simplicita. He might however be opposed on the grounds of bad faith. The other marketers may claim that he wants to claim monopoly of the name by registering it.

Registeration Of The Word Mark “Pterosaur” For Ale.

Fuggles Brewery Ltd intends to use the word mark “Pterosaur” for a traditional British style of light ale but “Pterosaur” has already been registered as a word mark for carbonated soft drinks under class 32. The question is whether the earlier mark would restrict the use of a similar mark by Fuggles Brewery Ltd?

It is important to state here that the Trade Mark Register is divided into 45 classes so a person applying for registration of a trade mark would have to list all the goods and/or services he requires the registration for. Usually, the applicant would list the particular goods and/or services within a class for which the registration is required. However, even where a mark is registered for particular goods or services in a certain class, it could restrict the use of a similar mark in respect of goods in another class.

In the case of Lrc V Lilla Edets, the plaintiff carried on the business of selling household gloves and plastic pants for babies. He registered the mark “Marigold” in respect of household gloves and baby plastic pants. He also planned to expand his business so he could deal on nappy liners and disposable nappies. The defendant applied for the registration of a similar mark for selling toilet tissues. The plaintiff applied for an injunction restraining the defendants from registering the mark. Granting the injunction, the court held that “though the question had to be considered of how far beyond their own sphere of activity the plaintiffs’ protection should extend, in this case, considering the nature of the plaintiffs’ and defendants’ goods, present and proposed, and the plaintiffs’ reputation, an injunction was appropriate”.

One situation where a mark used in respect of goods in a particular class may restrict the use by another person of the same mark in respect of goods of a different mark is where the prior mark has got a wide reputation so that a consumer seeing that mark thinks of only one source. In the case of Lego Systems A/S V Lego M Lemelstrich Ltd. the plaintiff was a manufacture of children toys named LEGO. The plaintiff was well known as the in the market. He had a reputation as far as the name LEGO was concerned. The defendant company were manufacturers of certain goods which included plastic garden sprinklers and used the same mark LEGO. The plaintiff applied for an injunctive relief against the defendant on the ground that the use of the name would mislead the public. The court held that since the plaintiff has acquired a wide reputation in the market, it extended to goods such as the one the defendant manufactured. The injunction was therefore granted as the use of the mark by the defendant would mislead the public.

Flowing from the above, it could be argued against Fuggles Brewery that though the earlier trademark “Pterosaur” was used in respect of carbonated soft drinks which are different from the type of drinks which Fuggles intend to use the mark for, the earlier trade mark in the name could restrict Fuggles Brewery. Both products are drinks though of different types. One soft and another beer. The nature of the goods is close enough to cause confusion. The proprietor of the earlier mark could argue that he intends to expand his business to include the production of British style ale and the use of the mark by Fuggles could prevent that expansion.

In addition, as in the Lego case, the proprietor of the earlier mark could argue that he’s got a reputation in the market so wide that the use of “Pterosaur” by Fuggles Brewery would cause confusion in the mind of the consumer.

Sometimes the fact that a mark is registered in respect of goods in a certain class would not restrict the registration of a similar mark in respect of goods of a different class. An example of this is the case of Lyons Maid Ltd V Irebor Ltd where the plaintiff had since 1963 been in the business of marketing lollipops under the name “Zoom”. He brought an application for interlocutory injunction restraining the defendant form using the same name “zoom” for the marketing bubble gum. The court held that there was no evidence of confusion as the bubble gum and lollipops were different products with different appearance and the method by which they were sold was different. There was also no evidence of poor quality as to damage the plaintiff’s reputation.

In the Bowerbank’s Trade Mark Application Case, an applicant sought to register a mark which consisted of the word Michele X for goods in class 18 and class 25. The application was opposed by the proprietor of a figurative mark MICHELE THAT’S FASHION for trousers and slacks in class 25. The opposition was on the grounds that there is a likelihood of confusion in respect of the class 25 goods. The Trademark Registry in dismissing the opposition held that the mark registered for trousers and slacks was similar to the mark sought to be registered only to a low degree and were not in competition. It was further held that the words were visually dissimilar because of the way the words appeared on the products. “The visual effects of the marks could not be divorced from the conceptual associations, as the perception of the average consumer will be influenced by his or her experiences”. There was no confusion.

Also, in British Sugar Plc V James Robertson & Sons Ltd; British Sugar registered “Treat” as a trade mark for “Dessert sauces and syrups” called “Silver Spoon Treat” meant to be used as a dressing for desserts. James Robertson used the name “Robertson’s Toffee Treat” for a spread it produced. British Sugar instituted an action for infringement of trade mark on the grounds that there was likelihood of confusion. It was held that there was no likelihood of confusion as the products had different purposes and different presentation. They were also of different specifications. Therefore there was no infringement of trade mark.

Fuggles could however argue in line with the case of Lyons Maid Ltd that British style ale and carbonated soft drinks were different types of products with different appearance. In line with the Bower Banks Case, he could argue that the visual similarities were different. Considering the fact that the packaging intended to be used by Fuggles is of a very striking shape and colour and the appearance of the mark on the label would be under the name “Fuggles”. It would be so much different in appearance that there would be no confusion in the mind of the public.

Conclusion.

I would conclude by saying that Fuggles Brewery Ltd has a good chance of acquiring a number of intellectual property rights. But there would definitly be some form of opposition as already discussed above. Nevertheless, fuggles chances of success is high.

Bibliography

Books

• A. Christie and s. Gare, blackstone’s statutes on intellectual property(9th edn, oxford, newyork 2008)
• L. Bently and b. Sherman, intellectual property law(3rd edn, oxford, newyork 2007).

• • W. Cornish and d. Llewlyn, intellectual property: patents, copyright, trade marks and allied rights(6th edn, sweet & maxwell, london 2007)

Cases

• O2 holdings ltd v hutchison 3g uk ltd (c-533/06) [2009] bus. L.r. 339
• Bowerbank’s trade mark application case [2008] e.t.m.r. 31
• British sugar plc v james robertson & sons ltd[1997] e.t.m.r. 118
• Henkel kgaa v deutsches patent- und markenamt[2004] e.c.r 1-1725
• Ladbroke v william hill [2007] 1 all er 465, 469 per lord reid.
• Lego systems a/s v lego m lemelstrich ltd[1983] f.s.r. 155

• L’oreal sa v bellure nv [2009] e.t.m.r. 55
• Lrc v lilla edets[1973] r.p.c. 560

• Ltj diffusion sa v sadas vertbaudet sa(c-291/00) [2003] f.s.r. 34
• Lucasfilm ltd v ainsworth[2009] ewca civ 1328
• Lyons maid ltd v irebor ltd [1967] f. S. R. 146
• Reeds executive plc v reeds business information ltd[2004] r.p.c. 40
• Nestle waters france v ohi m [2003] ecr ii – 4115
• Procter & gambble v registrar of trade marks[1999] rpc 673

Journals

• Richard taylor,”sweet smell of success: how l’oreal won the battle of scents”. [2009] l s gaz, 1 oct, 14
• Christopher morcon, ‘l’oreal v bellure – who has won?’ [2009] e.i.p.r. 627
• Charles gielen and nauta dulith, ‘l’oreal v bellure (c-487/07) and dior v copad (c-59/08): eu-trade marks-protection of well-known brands [2009] e.i.p.r 31(10), n70-71

Legislation

• Copyrights, design and patent act 1988.
• Trade mark directive 89/104