ECJ interpretation of 'identical' narrows trademark owners' rights

European Union

In LTJ Diffusion SA v SADAS Vertbaudet SA, the European Court of Justice (ECJ) has ruled that the term 'identical' in Article 5(1)(a) of the Community Trademark Directive should be interpreted strictly. This means that where an alleged infringer uses a sign that contains a registered mark as well as modified or additional elements, the trademark owner will have to rely on confusion, rather than the national equivalent of Article 5(1)(a), to obtain relief.

LTJ Diffusion owns the French figurative trademark ARTHUR for clothing. SADAS Vertbaudet operates a mail order business, selling clothing for children under the name 'Arthur et Félicie' (among others). SADAS registered that name as a word mark in France in a form that does not reproduce the handwritten script of the LTJ mark. LTJ initiated trademark infringement proceedings against SADAS before the Paris District Court. It argued that Article L713-2 of the French Intellectual Property Code (corresponding to Article 5(1)(a) of the EU directive) had been infringed. This article states that the use, in the course of trade, of a sign that is identical to a registered trademark for goods or services identical to those in respect of which the mark has been registered is an infringement of the mark owner's exclusive rights.

The district court referred to the ECJ the question of how the word 'identical', in the context of Article 5(1)(a) of the directive, should be interpreted.

The ECJ ruled that the 'identity' criterion under Article 5(1)(a) must be given a strict interpretation. It found that in order for a court to find infringement under this provision, the sign must reproduce all the elements of the mark "without any modification or addition". Identity must be assessed globally with respect to the average, reasonably well-informed, observant and circumspect consumer. However, "insignificant differences" may go unnoticed by this consumer and may, therefore, be disregarded in judging whether a sign is identical to a registered mark.

This decision confirms that the scope of a trademark owner's exclusive rights is narrower than many had understood it to be. Whereas there may be room for argument as to what additions are 'insignificant', trademark owners are likely to find increasingly that they can no longer rely on their national legislation's provision forbidding the use of an identical mark, but have to fall back on the provision that requires a likelihood of confusion between the mark and the sign - and confusion is notoriously difficult to demonstrate.

Joel Smith and Naomi Gross, Herbert Smith, London

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