Advocate general clarifies what constitutes 'substantial part' of the EU

European Union
Advocate General Eleanor Sharpston has delivered her opinion in PAGO International GmbH v Tirol Milch registrierte Genossenschaft mbH (Case C-301/07, April 30 2009), a reference for a preliminary ruling from the Supreme Court of Austria.
PAGO International GmbH owns a Community trademark (CTM) for, among other things, fruit drinks and fruit juices. The mark includes a representation of a green glass bottle which PAGO has used in marketing for a number of years, as well as a distinctive label and cap next to a full glass of fruit drink identified in large characters.
Tirol Milch registrierte Genossenschaft mbH sold a fruit and whey drink called ‘Lattella’ in Austria. Tirol's drink was packaged in glass bottles, the design of which resembled PAGO’s CTM in several respects (ie, shape, colour, label and cap). In the advertising for its drink, Tirol used a representation which showed a bottle next to a full glass. 
It was accepted that there was no likelihood of confusion since the bottle labels bore the names PAGO and Latella respectively, both being widely known in Austria. The parties proceeded on the basis that the conditions of Article 9(1)(c) of the Community Trademark Regulation (40/94) had been met in that:
  • Tirol's sign was similar or identical to that for which PAGO owned the CTM; and
  • the drink marketed by Tirol was not considered to be similar to that marketed by PAGO.
Article 9(1)(c) provides that the owner of a CTM is entitled to prevent third parties from using:
"any sign which is identical with or similar to the [CTM] in relation to goods or services which are not similar to those for which the [CTM] is registered, where the latter has a reputation in the Community 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 [CTM]."

PAGO sought an injunction before the Commercial Court of Vienna to prevent Tirol from infringing its mark by:
  • promoting, offering for sale, marketing or otherwise using its drink in the bottles at issue; and
  • advertising a representation of the bottles together with a full glass.
 The court granted the injunction, but its decision was reversed by the Higher Regional Court of Vienna. PAGO appealed to the Supreme Court, which referred the following questions to the European Court of Justice (ECJ) for a preliminary ruling:
"(1) Is a [CTM] protected in the whole of the Community as a 'trademark with a reputation' for the purposes of Article 9(1)(c) of the regulation if it has a 'reputation' only in one member state?

(2) If the answer to the first question is in the negative: is a mark which has a 'reputation' only in one member state protected in that member state under Article 9(1)(c) of the regulation, so that a prohibition limited to that member state may be issued?"
First, the advocate general stated as follows:
"A [CTM] is protected in the whole of the Community on the grounds that it has a 'reputation in the Community’ within the meaning of Article 9(1)(c) [...] if it has a reputation in a substantial part of the Community. What constitutes a substantial part of the Community for that purpose is not dependent on national boundaries, but must be determined by an assessment of all the relevant circumstances of the case, taking account, in particular, of (i) the public concerned by the products or services covered by the trademark and the proportion of that public which knows of the mark, and (ii) the importance of the area in which the reputation exists, as defined by factors such as its geographical extent, population and economic significance.

A [CTM] which has a reputation in an area which is not a substantial part of the Community in that sense does not enjoy, under Article 9(1)(c) of [the regulation], protection limited to that area. Consequently, a prohibition against infringement limited to that area may not be issued."
Of note is the advocate general's review of the ECJ's earlier jurisprudence in General Motors (Case C-375/97)and Nieto Nuño (Case C-328/06). The advocate general held as follows:
"It is first necessary to establish whether the trademark has a ‘reputation’. In order to do so, the national court must identify the public concerned by the trademark in the context of the Community as a whole, without regard to member states’ borders. Having identified the relevant public, the national court should proceed to determine whether the reputation exists amongst a significant part of the public concerned by the goods or services covered by the trademark.
The national court must then determine whether the trademark has a reputation ‘in the Community’. It should begin by accepting that the trademark proprietor need not demonstrate that the trademark has a reputation throughout the Community. It is sufficient, for Article 9(1)(c) to apply, if the trademark has a reputation in a ‘substantial part’ of the Community. General Motors does not provide further guidance as to how a ‘substantial part’ of the relevant territory is to be construed."
However, the advocate general pointed out that the case law of the ECJ indicates what is not a ‘substantial part’. In Nieto Nuño, the ECJ had established that:
"in relation to the kindred concept of whether a trademark is ‘well known’ under Article 4(2)(d) of the directive [...], the city of Tarragona and its surrounding area within Spain is not a substantial part of that member state. Applying the same reasoning by analogy to the concept of a ‘substantial part of the Community’, it follows that where the ‘part’ is, viewed objectively by reference to its size and economic weight, paltry in comparison with the Community as a whole and where the relevant public is more widely spread throughout the Community, that part cannot be deemed to constitute a ‘substantial part’ of the Community. That conclusion follows from the ordinary meaning of the term ‘substantial’. It also accords with common sense."
The advocate general further stated that:
"the scenarios that may be envisaged are many and various. At one end of the spectrum, a trademark covering a generic product marketed to the general public which enjoyed a significant reputation amongst that public would be expected to be known throughout a wide geographical area before it could be said to enjoy a ‘reputation in the Community’. At the other extreme, a trademark for a particular product marketed to a specialized regional public would be expected to be known over a much smaller area. A product that is marketed to a professional public might well cover a wide area (depending on how widespread membership of that profession was), but would probably be known to a smaller number of people, in absolute terms, than a product marketed to the general public."
The advocate general pointed out that "as with the concept of 'relevant public', the territorial aspect of ‘reputation’ cannot be defined by reference to an abstract figure or a particular number of member states". Therefore, the national court must evaluate several factors to determine whether a particular trademark enjoys a reputation in a substantial part of the European Union. According to the advocate general, such factors include, but are not limited to:
  • the economic significance of the territory within the European Union;
  • the geographical extent of the area where the trademark has a reputation; and
  • the demographics of the public concerned.
Finally, the advocate general stated that:
"in order to determine whether an earlier trademark enjoys a reputation in a substantial part of the Community for the purposes of Article 9(1)(c) of the regulation, the national court must therefore make an overall assessment of the case in conjunction with establishing the public amongst whom that earlier trademark is known. Any such test must necessarily be flexible."
Arguably, the opinion provides an appraisal of the phrase "substantial part of the Community" that looks at reality, instead of national boundaries.
Jeremy Phillips, IP consultant to Olswang, London

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