Flexible approach to dilution outlined by Advocate General

In Intel Corporation Inc v CPM United Kingdom Limited (Case C-252/07, June 26 2008), Advocate General Sharpston has provided her opinion on the meaning of 'unfair advantage' and 'detriment' with respect to the distinctive character of a well-known trademark.

Intel Corporation Inc owns a series of Community and UK registrations for the trademark INTEL for computers and computer-linked goods and services in Classes 9, 16, 38 and 42 of the Nice Classification. These registrations pre-date 1997.

In 1997 CPM United Kingdom Limited registered the trademark INTELMARK in the United Kingdom for marketing and telemarketing services in Class 35. Intel applied to the UK Trademark Registry for a declaration of invalidity of CPM's mark on the basis of Article 4(4)(a) of the First Trademarks Directive (89/104/EEC), which was incorporated into the Trademarks Act 1994. Article 4(4)(a) states that where a trademark is identical with or similar to an earlier national mark, but has been designated in dissimilar goods or services, the later mark may be invalidated provided that:

the earlier trademark has a reputation in the member state concerned; and
use of the later trademark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trademark.

The case made its way to the Court of Appeal of England and Wales, which referred questions to the European Court of Justice (ECJ) for a preliminary ruling. In her opinion to the ECJ, Sharpston advocated a flexible approach to assessing dilution, taking account of all factors relevant to the circumstances of the case. These included:

looking for similarities in the trademarked products;
the uniqueness of the earlier mark; and
whether consumers would think of the INTEL mark when they see products bearing the trademark INTELMARK.

Sharpston stated that, as a general rule, similar or even identical trademarks can coexist for dissimilar products without confusing consumers or harming traders. However, she noted that this was not true in all circumstances, giving the example of COCA-COLA, where the brand could be eroded even if used in association with unrelated products, such as low-grade engine oils or cheap paint strippers.

With regard to the INTEL mark, Sharpston held as follows:

The fact that the earlier mark would be brought to mind by the average consumer on encountering the later mark is in principle tantamount to establishing a link in the mind of the relevant public;
The fact that the earlier mark has a huge reputation for specific goods or services, that the goods or services covered by both marks are dissimilar and that the earlier mark is unique are not sufficient in themselves to establish unfair advantage or detriment; and
While the nature of the goods or services may be relevant in determining whether there is a link, an absence of similarity cannot be taken to imply the absence of such a link, and a presumed economic association between the marks is not a necessary criterion.

According to Sharpston, in order to establish detriment to distinctive character:

the earlier mark does not have to be unique;
a first conflicting use is not in itself sufficient; and
an effect on the consumer's economic behaviour is not necessary.

Trademark owners will gain little comfort from this somewhat Delphic opinion. In the absence of a clear rule as to when Article 4(4)(a) applies, a careful assessment will be necessary in each case, taking account of all the facts. Whether the ECJ can frame an opinion giving more certainty to trademark owners remains to be seen.

Inbali Iserles, Ashurst LLP, London

Flexible approach to dilution outlined by Advocate General

Related Topics