Austria is a substantial part of the European Union, says ECJ

European Union
In PAGO International GmbH v Tirolmilch registrierte Genossenschaft mbH (Case C-301/07, October 6 2009), the European Court of Justice (ECJ) has ruled on whether reputation in one member state is sufficient to give protection against use of a trademark which would take unfair advantage of, or be detrimental to, the distinctive character of a Community trademark (CTM).
Some aspects of EU trademark law require that the trademark owner provide factual evidence as to use, distinctiveness or reputation. These include:
  • defence against revocation actions on the grounds of non-use;
  • proof of acquired distinctiveness; and
  • reliance on Articles 8(5) or 9(1)(c) of the Community Trademark Regulation (40/94) (marks with a reputation).
These requirements raise questions as to what evidence will be sufficient - specifically, must the evidence cover the whole of the European Union, or is it sufficient to meet the requirements in one member state?
In the present case, PAGO International GmbH's mark had been used for a number of years for marketing fruit drinks and fruit juices in Austria. The mark included the representation of a green glass bottle with a distinctive bottle and cap, next to a full glass of fruit drink bearing the PAGO name. Tirolmilch registrierte Genossenschaft mbH was using bottles in similar shapes and colours, with similar caps and labels, for fruit drinks. In the advertising for its drink, Tirolmilch also showed a bottle next to a full glass of fruit juice. It was taken as established that the PAGO mark had a reputation in Austria.
The case made its way to the Austrian Supreme Court, which referred to the ECJ two questions relating to Article 9(1)(c) of the regulation:
  • whether proof of reputation in one member state (here, Austria) was sufficient to give the mark the added protection envisaged by this article; or
  • if not, whether the national court could still recognize that extended protection through grant of a national (as opposed to EU-wide) injunction.
On April 30 2009 Advocate General Eleanor Sharpston opined that the answer to the first question needed to be based on a flexible approach. Noting that a CTM is a unitary right, she concluded that:
  • focusing on national boundaries was "fundamentally misconceived"; and
  • the starting point should be to look at the territory of the European Union regardless of frontiers, as a single and indivisible whole.
From this starting point, it becomes necessary to identify the relevant public in the context of the European Union as a whole, and to assess whether the mark has a reputation among a significant part of that public. Where that reputation is limited to the relevant public in certain parts of the European Union, it is necessary to assess the importance of the area in which the reputation exists, as determined by factors such as geographical extent, population and economic significance.
The advocate general went on to say that it was implicit in her answer to the first question that a trademark which has a reputation in only one member state does not qualify as a trademark with a reputation in the European Union. Arguably, in presenting this as an absolute proposition, she was inconsistent with her own requirement to look flexibly at the facts - perhaps not ruling out completely the possibility that a mark with a strong reputation in one member state could ever be entitled to protection under Article 9(1)(c) (for example, if the relevant product market were limited by cultural factors). In any event, her approach has now been put in doubt by the ECJ's rather brief decision.
In setting out the argument, the ECJ cited the same authority relied upon by the advocate general, General Motors v Yplon (Case C-375/97). General Motors was brought under the First Council Directive (89/104/EEC), as opposed to the regulation, but involved a finding that a reputation in a part of one of the Benelux countries might be sufficient to amount to a reputation in the Benelux. In PAGO, the ECJ simply stated that:
"[a]s the present case concerns a [CTM] with a reputation throughout the territory of a member state, namely Austria, the view may be taken, regard being had to the circumstances of the main proceedings, that the territorial requirement imposed by Article 9(1)(c) of the regulation is satisfied."
The ECJ went on to say - without giving any factual support for this proposition - that:
"in view of the facts of the main proceedings, the territory of the member state in question may be considered to constitute a substantial part of the territory of the Community".
With regard to the second question, the advocate general had drawn a clear distinction between the protection of marks at EU level (as a unitary right) and the protection of national rights. In her opinion, it was not appropriate to blur the question of whether to afford protection under the regulation with the possibility that protection would have been afforded had the right relied on been a national right. Accordingly, it would not have been open to the national court to grant a territorially limited injunction based on a finding of solely 'local' infringement.
However, the ECJ chose not to answer the second question in view of its findings on the first question.  
The approach taken by the ECJ in this case can be contrasted with recent decisions of the Court of First Instance, in which it was held that evidence showing acquired distinctiveness among a significant part of the relevant public may not be sufficient if certain countries are "left out". Therefore, the correct approach to assessing evidence of use and reputation on the range of issues in which it may be relevant would seem ripe for further systematic consideration as part of the proposed review of the regulation.
For further details on the advocate general's opinion please see "Advocate general clarifies what constitutes 'substantial part' of the EU").
Vanessa Marsland, Clifford Chance LLP, London

Unlock unlimited access to all WTR content