EUROPEAN PERSPECTIVES

Chevy Chases Its Reputation

In 1909, William Durant, a successful buggy manufacturer, and Louis Chevrolet, a well known racing driver, joined forces to design a car that would compete with the Model T Ford. Three years later, the Chevrolet Motor Car Company introduced its first product, the Classic Six to the US market. This five seater sedan had four doors, electric lights, a folding top, a windshield and even its own tool box. It could reach a top speed of 65 mph.

From these humble beginnings grew one of the most successful motor companies in the world. By the 1950s, and particularly after the introduction of the 1957 Bel Air model, a car that was later to become a design classic, the name Chevrolet, as well as the diminutive Chevy, had become established as part of the American landscape. This fame had also spread to Europe, not only through the sales of Chevrolet’s products in that region, but also through numerous references to the cars in songs, films and television programmes.

Recognising the value of its rights in both Chevrolet and Chevy, the Chevrolet company, which was purchased by the General Motors Corporation in 1918, sought to register both marks on a widespread basis.

Thus, as long ago as 1961, the trademark Chevy was protected in Belgium for inter alia motor vehicles. This Belgian trade mark registration was converted into a Benelux registration 10 years later. The Chevy trade mark was (and still is) used in Belgium to identify vans and similar vehicles produced by General Motors.

Yplon is a Belgium company specialising in the production and sale of household and personal care products. In 1988, they decided to introduce a new range of detergents and cleaning products to the Belgian market. For reasons best known to themselves, they chose the trade mark Chevy for this new line of goods. They therefore obtained a Benelux trade mark registration for the mark covering Class 3 goods and subsequently (three years later in 1991) a further Benelux registration for the mark covering Class 1, 3 and 5 goods. They then began selling Chevy detergents / cleaning products in Belgium.

General Motors allowed the situation in Belgium to continue until the end of 1995. Then, with the introduction of the new (harmonised) Benelux trade mark law imminent, they applied to the Tribunal de Commerce (situated in Belgium) for an injunction restraining Yplon’s use of the trade mark Chevy.

General Motor’s case was based on the “dilution” provisions that were to be introduced under the new harmonised law. Article 13(A)(1)(c) of the harmonised Benelux law, which mirrored the optional Article 5(2) of the Trade Mark Harmonisation Directive, provided that

“.... the exclusive rights in a trade mark shall entitle the proprietor to oppose: ....

(c) any use, in the course of trade and without due cause, of a trade mark which has a reputation in the Benelux countries or of a similar sign for goods which are not similar to those for which the trade mark is registered, where use of that sign would take unfair advantage of, or would be detrimental to, the distinctive character or the repute of the trade mark; ....”

Since General Motor’s action raised difficult issues of European trade mark law, the Belgian Tribunal sought guidance from the European Court of Justice on two questions. These were

i) What type of trade mark qualifies as “a trade mark with a reputation”?, and

ii) Does such “a reputation” have to exist throughout the Benelux or only in part of that territory?

In an important judgement (General Motors Corporation v Yplon S.A.), the European Court of Justice made the following rulings

• Only where there is a sufficient degree of knowledge of the earlier trade mark amongst the relevant public will they possibly make an association between the earlier and the later marks, even when the later mark is used in relation to dissimilar goods or services. Such a degree of knowledge is also required before damage to the distinctive character or the repute of the earlier trade mark can be found.

• The relevant public, when trying to establish the necessary reputation, is determined by the goods or services marketed under the earlier trade mark. Thus, this could be the public at large or a more specialised public, such as traders in a particular sector.

• A sufficient degree of knowledge of the earlier trade mark is reached once it is known (emphasis added) to a significant part of the relevant public. What constitutes “a significant part” must be determined on a case by case basis and not by reference to strictly defined percentages.

• When deciding whether a sufficient degree of knowledge has been reached, the national court must take into account all relevant factors but, in particular,

- The market share held by the earlier trade mark;

- The level of use of the earlier trade mark;

- The geographical area of use and the length of use of the earlier trade mark, and;

- The level of spending on advertising and promoting the earlier trade mark.

• The stronger the distinctive character and reputation of the earlier trade mark, the easier it will be to accept that it has been detrimentally affected by the later trade mark.

• The necessary reputation required under the Directive’s Article 5(2) is achieved in the Benelux if such reputation exists amongst a significant proportion of the public concerned in a substantial part of one of the three Benelux countries.

 

Comment

It seems clear from this European Court of Justice case that the level of fame or notoriety required to establish that a trade mark has a reputation in the European Union will not be as high as that required to show that a mark is well-known. This is to be welcomed since it is believed that “well-known” status should be accorded to a very limited number of trade marks indeed. In the author’s view, well-known trade marks, such as Kodak, Coca Cola, Nescafe and Nike, should be internationally well-known, that is immediately recognised by a substantial proportion of, at least, the industrialised world’s population. This is a severe test.

It would appear from the present case that the threshold for establishing that a mark has a reputation will be somewhat lower than this. Thus, marks that are known to only a limited audience should qualify according to the test set by the European Court of Justice. For example, marks such as Stanley (hand tools), Abu (fishing tackle) and WAGN (rail operator) should qualify even though they would only be known to the building trade ( and DIY exponents), fishermen and rail travellers in the Eastern part of England respectively.

If this is the case, will such trade marks have enhanced rights extending to dissimilar goods and services? It is submitted that they will not because the later registration and use of identical or similar marks on dissimilar goods and services will not take advantage of or be detrimental to the distinctive character or the (limited) repute of the earlier trade marks (as required by the second part of Article 5(2) of the Directive). It follows that the owners of the above-mentioned marks should not be in a position to inhibit the registration and use of Stanley footballs, Abu beer or WAGN web page designers.

In the present author’s opinion, the enhanced protection offered to registered trade marks with a reputation under the Harmonisation Directive, should in general be limited to internationally well-known marks and marks that are widely known to the public at large in a particular member state. In the UK, examples of such widely known marks would be Tesco and Asda (supermarkets), Cadburys (chocolate) and Strongbow (cider). These marks would all be instantly recognised by the majority of the UK public but would not (yet) qualify as internationally well-known brands. They therefore fall into the second tier of marks which, together with the first tier of internationally well-known marks, should, it is submitted, qualify as marks with sufficient reputation to warrant serious consideration for the enhanced protection offered by the dilution provision of the Directive.

The writer believes that registered trade marks that fall outside these first two tiers of internationally well-known and nationally, widely known marks, should only be offered enhanced protection, that is trade mark rights that encompass dissimilar goods, if actual confusion as to the origin of the later (dissimilar) goods can be shown. It would be difficult to deny the taking of an unfair advantage or detriment in such a case involving confusion in the European Union. The Chevy case, together with the UK trade mark dilution cases reported at pages ??? of this edition of Make Your Mark also begin to shed some light on the type of trade marks that are likely to be granted protection against a broader range of competition in the European Union.

It is submitted that the following groups of trade marks stand a greater chance of success in a dilution action (opposition, cancellation, infringement) than other types of mark,

• Invented word marks such as Viagra;

• Dictionary word marks, such as Virgin, where the brand has already been extended to a wide variety of unrelated commercial areas;

• Dictionary word marks, such as Visa, where the mark is associated with a narrow range of goods or

• services but will be seen (and used) in a wider range of commercial contexts, and Distinctive device marks, such as the Nike swoosh or the Michelin man.

Although the present European Court of Justice case offers useful guidance, it will be some time yet before the outcome of most European Union trade mark actions based on the dilution provisions of the Directive (or the CTM Regulation) can be predicted with a high degree of certainty.