ECJ issues preliminary ruling on well-known trademarks

In Nieto Nuño v Monlleó Franquet (C-328/06, November 22 2007), the European Court of Justice (ECJ) has issued a preliminary ruling on a question referred to it by the Third Barcelona Commercial Court on the scope of the geographical area in which a trademark must be well known under Article 4(2)(d) of the First Trademarks Directive (89/104).

Alfredo Nieto Nuño is the owner of the Spanish registered trademark FINCAS TARRAGONA for services in Class 36 of the Nice Classification (property management in sole or joint ownership, letting of property, sale of property, legal advice and property development). Leonci Monlleó Franquet is the owner of a real estate agency established in Tarragona; he has publicly and continuously used the unregistered mark FINCAS TARRAGONA for the purpose of designating his business since 1978.

Nieto Nuño brought infringement proceedings against Monlleó Franquet for a finding that the latter infringed Nieto Nuño's rights in the trademark FINCAS TARRAGONA. Monlleó Franquet counterclaimed for cancellation of Nieto Nuño's trademark. He alleged that the distinctive sign under which he carried on business was a well-known earlier trademark within the meaning of Article 6bis of the Paris Convention for the Protection of Industrial Property. On that basis, Monlleó Franquet sought protection for his trademark under Article 6(2) of the Trademark Law, which transposed Article 4(2) of Directive 89/104.

Under Article 4(2)(d) of the directive, a trademark shall not be registered or, if registered, shall be liable to be declared invalid if it is identical or similar to an earlier trademark which is well known in a member state, in the sense in which the words 'well known' are used in Article 6bis of the Paris Convention.

In the case at hand, it was demonstrated that the distinctive sign used by Monlleó Franquet was well known, but only in the city of Tarragona and its surrounding area. Taking this into account, the Third Barcelona Commercial Court decided to stay the proceedings and refer a question to the ECJ for a preliminary ruling. The court sought to determine whether Article 4(2)(d) of the directive is to be interpreted as meaning that:

• the earlier trademark must be well known throughout the territory of the member state or in a substantial part of it; or
  
  
• the protection granted by that provision also covers a situation where the area in which the earlier trademark is well known is confined to a city and its surrounding area.

The ECJ came to the following conclusions:

• Considering the customary meaning of the expression 'in a member state' in Article 4(2)(d) of the directive, this provision is not applicable to a situation where the well-known character of a mark is limited to a city and its surrounding area.
  
  
• As Article 4(2)(b) lacks a definition of the expression 'in a member state', a trademark cannot be required to be well known throughout the territory of the member state; it is sufficient for it to be well known in a substantial part of it (see General Motor (C-375/97)).
  
  
• In any event, unregistered trademarks may be protected under the following provisions:
  
  
  • Article 4(4)(b) of the directive, which allows a member state to provide that a trademark shall not be registered or, if registered, shall be liable to be declared invalid where the rights of an unregistered trademark were acquired earlier and where the legal order of that state grants exclusive rights to the owner of the earlier mark; and
    
    
  • Article 6(2) of the directive entitles a member state to authorize the use of an earlier right which applies only in a particular locality, if that right is recognized by the laws of the state in question and within the limits of the territory in which it is recognized.

The ECJ thus held that Article 4(2)(d) of the directive was to be interpreted as meaning that the earlier trademark must be well known throughout the territory of the member state or in a substantial part of it.

Marta Roig, Grau & Angulo, Barcelona