Questions on dilution protection referred to ECJ

United Kingdom

The Court of Appeal for England and Wales has made a reference to the European Court of Justice (ECJ) about the scope of Article 4(4)(a) of the First Trademarks Directive, which deals with protection of registered marks that have a reputation as against later marks where the use of the later mark, without due cause, would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier mark.

The reference arises in the context of a dispute between Intel Corporation, owner of the indisputably well-known INTEL mark as used and registered for goods and services in Classes 9, 16, 38 and 42 of the Nice Classification, and a UK company, CPM United Kingdom Ltd. CPM had registered INTELMARK (apparently derived from the phrase 'integrated telephone marketing') for "marketing and telemarketing services" in Class 35.

The questions referred explore the factors for a finding that registration (or use) of a similar mark for dissimilar services should be prohibited. The questions (paraphrased for brevity) were as follows:

  • is it enough that the second mark "brings to mind" the earlier mark for the average consumer;

  • if not, what significance is to be attached to the goods or services in the specification of the later mark; and

  • what is required to satisfy the condition of detriment to distinctive character in a case of this type?

Having formulated the questions, the UK court then went on to express its views.
It considers that mere bringing to mind is insufficient. Conversely, if the earlier mark is very strong, consumers may consider that there is an economic connection between the owners of the two marks, notwithstanding differences in goods or services.

As an alternative approach, the court suggested that the distinctive character which is to be protected might be linked to the goods or services for which the mark is registered. On this view, it is only detriment to distinctiveness for the goods or services of the earlier mark which matters. The enquiry should focus on whether the distinctive character of the earlier mark for the goods or services for which it is registered "is really likely" (sic) to be affected if the later mark is used for the specific goods or services covered by its registration.

The court suggested that the following factors should be relevant (while not ruling out other factors having application on specific facts):

  • real likelihood that the 'pulling power' of the earlier mark for its specific goods and services will be affected by the use of the later mark for its specific goods and services;

  • likelihood that the later user will get a real commercial advantage by reason of the repute of the earlier mark for its specific goods and services;

  • whether, if the earlier mark is unique, it really matters that it is used for the dissimilar goods or services of the later mark;

  • effect of differences in the later mark on the average consumer;

  • likelihood that the economic behaviour of the average consumer will be affected;

  • how inherently distinctive the earlier mark is; and

  • how strong the reputation of the earlier mark for its goods and services is.

The judgment reconfirms the reluctance of the UK courts to extend trademark rights beyond circumstances where consumers are likely to assume a connection in the course of trade. The referred questions provide an opportunity for the ECJ to clarify the scope of protection against dilution in EU trademark law.

In passing, the court noted that the UK trademark law defence to infringement of a UK national trademark registration based on the fact the defendant has its own trademark registration covering its use has no foundation in the directive. The court questioned whether this is a permissible derogation from the directive, noting the absence of any equivalent defence in the Community Trademark Regulation. Given the facts of the case, it did not refer this question. However, this comment will make defendants cautious over future reliance on this defence. It is particularly timely given the proposed change to UK examination practice later this year to cease automatic refusal of applications on relative grounds.

Vanessa Marsland, Clifford Chance LLP, London

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