Jewellery mark held to take unfair advantage of LA PERLA

European Union
In Nute Partecipazioni SpA, formerly Gruppo La Perla SpA v Office for Harmonisation in the Internal Market (OHIM) (Case T-59/08, December 10 2010), the General Court has annulled a decision of the Second Board of Appeal of OHIM insofar as it dismissed an application for a declaration of invalidity filed by Nute Partecipazioni SpA, formerly Gruppo La Perla SpA.

In 2002 Nute Partecipazioni applied for a declaration of invalidity of the mark NIMEI LA PERLA MODERN CLASSIC, registered for “jewellery, gold articles, watches; precious metals; pearls; precious stones” in Class 14 of the Nice Classification. Nute Partecipazioni relied on two earlier Italian registrations for the figurative mark LA PERLA, registered in Class 25 for "swimwear, sportswear and clothing in general" and in Class 14 for "jewellery products and watches". The General Court issued a first decision in 2007 (Case T-137/05). The case was subsequently reallocated to the Second Board of Appeal.

Under Article 52(1)(a) of the Community Trademark Regulation (40/94), combined with Article 8(5), a Community trademark (CTM) might be declared invalid if:
  • there is an earlier registered trademark, as referred to in Article 8(2) of the regulation;
  • the earlier mark and the CTM are identical or similar;
  • the earlier mark has a reputation in the member state concerned; and
  • use of the CTM without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the reputation of the earlier mark.
It is not necessary to demonstrate an actual injury.

The court pointed out that the infringements covered by Article 8(5) are the consequence of a certain degree of similarity between the earlier and later marks, by virtue of which the relevant public establishes a link between the marks, even though it does not confuse them. The existence of such a link is a condition which is necessary, but not sufficient, to establish the existence of one of the types of injury against which Article 8(5) ensures protection. The injury must be assessed by reference to the average consumers of the goods for which the earlier mark is registered, who are reasonably well informed, observant and circumspect. However, where the injury consists of unfair advantage taken of the distinctive character or repute of the earlier mark, it must be assessed by reference to the average consumers of the goods for which the later mark is registered, who are reasonably well informed, observant and circumspect.

The issue was whether the use, without due cause, of the mark NIMEI LA PERLA MODERN CLASSIC allowed its proprietor to take unfair advantage of, or was detrimental to, the distinctive character or the reputation of LA PERLA mark.

The concepts of ‘taking unfair advantage', ‘parasitism’ and ‘free-riding’ relate to the advantage taken by a third party as a result of the use of the later mark - including cases where there is clear a exploitation on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark, and from the marketing effort expended by the proprietor of the earlier mark.

To determine whether the use of the later mark takes unfair advantage of the distinctive character or repute of the earlier mark, a global assessment must be made, taking into account all the relevant factors. As regards the strength of the reputation and the degree of distinctive character of the earlier mark, the stronger the mark’s distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. In addition, the more immediately and strongly the earlier mark is brought to mind by the later mark, the greater the likelihood that the use of the sign is taking, or will take, unfair advantage of the distinctive character or repute of the earlier mark. Any such global assessment may also take into account the fact that there is a likelihood of dilution or tarnishment of the earlier mark.

With regard to the issue of detriment, the court referred to a bikini with pearls bearing the mark NIMEI LA PERLA, which had been presented at the most important fashion shows and covered by the specialised press, as well as a twinset fringed with pearls at the cuffs and a ‘jewel sweater’ created for the company Blumarine. On this basis, the court found that the specialised press and professionals of the sector thought that these items were connected to Nute Partecipazioni. In these circumstances, an injury or likelihood of injury could not be ruled out; according to Intel (Case C-252/07), the proprietor of the earlier mark is not required to demonstrate actual injury to its mark, but must prove that there was a serious risk of injury.

The court recalled that, in its 2007 decision, it had held that:
  • the reputation of the earlier LA PERLA mark was established for lingerie and swimwear; and
  • insofar as the goods covered by this mark and those covered by the later mark belonged to adjacent market segments, a certain degree of similarity between the marks was sufficient for the relevant public to establish a link between them.
In addition, the court noted that pearls may be used in the production of swimwear and other women’s clothing. Therefore, the consumers of jewellery may know the lingerie and swimwear marketed by Nute Partecipazioni. Furthermore, a likelihood of confusion was established in the present case with regard to products from groups adjacent to the swimwear and lingerie covered by the mark LA PERLA, that is, bikinis, twinsets and sweaters, all decorated with pearls, even if these clothes are not, in themselves, covered by the later mark. The court thus concluded that Nute Partecipazioni had demonstrated that the proprietor of the mark NIMEI LA PERLA MODERN CLASSIC took unfair advantage of the LA PERLA mark or that there was a serious risk that such an injury would occur.

The final issue was whether the use of the later mark had a due cause. The owner of the mark NIMEI LA PERLA MODERN CLASSIC claimed before OHIM that there was a due cause for using the term ‘la perla’: the term related to jewellery made with pearls and the cause was connected to the need and desire to indicate the common name of the material with which the jewellery had been made. The court found this cause to be insufficient to justify the use. No other justification was presented to the court.

The court concluded that the owner of the mark NIMEI LA PERLA MODERN CLASSIC sought to ride on the coat-tails of the LA PERLA mark to benefit from its power of attraction, reputation and prestige, and to exploit the marketing effort expended by Nute Partecipazioni. The advantage resulting from such use must be considered to have been unfairly taken advantage of the repute of the LA PERLA mark.

The court found that the Board of Appeal had erred in its application of Article 8(5) and annulled its decision.

Richard Milchior, Granrut Avocats, Paris

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