IMPULSE case: no sweat as advocate general gives his view

European Union

Advocate General Wahl has given his opinion in Iron & Smith Kft v Unilever NV (Case C‑125/14), a request for a preliminary ruling by the Court of Justice of the European Union (ECJ) from the Hungarian Fővárosi Törvényszék (the Budapest Municipal Court).

Relying on its earlier Community word mark IMPULSE, leading brand owner Unilever NV opposed an application by Iron & Smith Kft. to register a colour figurative sign featuring the words ‘be impulsive’ as a Hungarian trademark. The Hungarian Intellectual Property Office (HIPO) found that Unilever had sold large quantities of and publicised the goods designated by its Community word mark IMPULSE in the United Kingdom and Italy, with that mark enjoying a 5% market share in the United Kingdom and a 0.2% market share in Italy (the product seems to be some sort of perfumed and/or deodorant body spray). Even though this market share finding did not relate to Hungary, HIPO found that the reputation of the Community trademark had been proved in a substantial part of the European Union and refused the application, adding that a risk of the later mark taking unfair advantage of the earlier mark could not be ruled out.

Iron & Smith applied to the Fővárosi Törvényszék for annulment of the decision refusing the application for registration. Entertaining doubts as to the correct interpretation of Article 4(3) of the Trademarks Directive (2008/95/EC), the referring court requested a preliminary ruling on the following questions:

(1) Is it sufficient, for the purposes of proving that a Community trademark has a reputation within the meaning of Article 4(3)…, for that mark to have a reputation in one member state, including where the national trademark application which has been opposed on the basis of such a reputation has been lodged in a country other than that member state?

(2) May the principles laid down by [the ECJ] regarding the genuine use of a Community trademark be applied in the context of the territorial criteria used when examining the reputation of such a mark?

(3) If the proprietor of an earlier Community trademark has proved that that mark has a reputation in countries other than the member state in which the national trademark application has been lodged - which cover a substantial part of the territory of the European Union - may he also be required, notwithstanding that fact, to adduce conclusive proof in relation to that member state?

(4) If the answer to [Question 3] is no, bearing in mind the specific features of the internal market, may a mark used intensively in a substantial part of the European Union be unknown to the relevant national consumer and therefore the other condition for the ground precluding registration in accordance with Article 4(3) of the directive not be met, since there is no likelihood of detriment to, or unfair advantage being taken of, a mark’s repute or distinctive character? If so, what facts must the Community trademark proprietor prove in order for that second condition to be met?

On March 24 2015 Advocate General Wahl proposed that the ECJ answer the first two questions referred by the Fővárosi Törvényszék as follows:

For the purposes of Article 4(3) ...  it may - depending on the specific mark which is described as enjoying a reputation and, accordingly, on the public concerned - be sufficient that a Community trademark enjoys a reputation in one member state, which does not need to be the state in which that provision is relied upon. In that regard, for the purposes of determining whether a reputation exists within the meaning of Article 4(3), the principles laid down in case-law in respect of the requirement to show genuine use of a trademark are not relevant.”

Arguably, the advocate general answered questions 1 and 2 correctly. He then stated as follows:

Where the earlier Community trademark does not enjoy a reputation in the member state in which Article 4(3) ... is relied upon, in order to prove that, without due cause, unfair advantage is taken of, or detriment is caused to, the distinctive character or repute of the Community trademark for the purposes of that provision, it is necessary to show that a commercially pertinent proportion of the relevant public in that member state will make a link with the earlier trademark. In that regard, the strength of the earlier mark constitutes an important factor for the purposes of proving such association.”

Arguably, this interpretation is right too. Some big brand owners might not like it, but it will not make a practical difference in many cases since, even if no unfair advantage is taken and no detriment inflicted, the chances of there being a likelihood of confusion will generally prevent the later mark from being registered.

It is expected that the ECJ will to go along with Advocate General Wahl's opinion.

Jeremy Phillips, IP consultant to Olswang LLP, London

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