• European Perspectives

    Marks with a reputation get even broader rights

    Under the EU Trade Marks Directive, it was open to legislators to introduce a provision based on Article 5(2). That Article of the Directive allowed the owner of a registered trade mark with a reputation in that Member State to prevent the use in the course of trade of a later sign, which is identical with or similar to the registered mark, in respect of goods or services which are not similar to those covered by the earlier registration. This provision only applies if the use of the later sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the earlier mark. All EU legislatures, including Germany, did include Article 5(2) in their trade mark law during the 1990’s.

    A significant advantage of this provision is that it is not necessary to prove a likelihood of confusion in order to succeed. On the other hand, a perceived anomaly of Article 5(2) was that it appeared to apply only to goods and services which are dissimilar to those registered. On this basis, the owner of a registered trade mark with a reputation seemed, in some circumstances at least, to have broader rights in respect of a third party selling dissimilar goods or services (where showing a likelihood of confusion was not necessary) than he did against the seller of similar goods or services (where a likelihood of confusion appeared to be a prerequisite for a finding of infringement).

    A recent ECJ case (Davidoff & Cie and Zino Davidoff v Gofkid) addressed this important point to trade mark law. The Davidoff companies had sued the Hong Kong based company Gofkid in Germany in relation to the latter’s sale of precious metal articles, which they sold under the trade mark Durffee. Davidoff owned German trade mark registrations for Davidoff (stylised) covering goods which were identical with or similar to Gofkid’s products. However, Gofkid also owned a German trade mark registration for a stylised form of Durffee claiming the goods of interest to them.

    Davidoff argued that there was a likelihood of confusion between their stylised mark and that used by Gofkid given the type of script used in both marks. They also argued that the sale of the Durffee products in Germany would be detrimental to the reputation of the Davidoff mark since the German public did not tend to associate China with high quality, exclusive products.

    Davidoff’s action failed before the German Court, on the basis that there was no likelihood of confusion. However, given the reputation of the Davidoff trade mark in Germany and given the apparent anomaly referred to above that, in the case of marks with a reputation, broader infringement rights appeared to exist in respect of dissimilar goods and services compared to similar goods and services, the German court asked the ECJ for a ruling on the protection given under Article 5(2) of the Directive.

    The ECJ ruled as follows:

    • Article 5(2) cannot be given an interpretation which would lead to well-known (sic) marks having less protection where a sign is used for identical or similar goods or services than where a sign is used for non-similar goods or services.
    • Article 5(2) therefore entitles Member States to provide specific protection for well-known (sic) registered trade marks in cases where a later mark or sign, which is identical with or similar to the registered mark, is intended to be used or is used for goods and services identical with or similar to those covered by the registered mark.
    • The above ruling also applies to Article 4(4)(a) of the Directive which deals with the right of the owner of a registered mark with a reputation to oppose (or cancel) a later trade mark on the basis of unfair advantage/detriment.

    Comment

    This ECJ ruling appears to close what had been widely recognised as a loophole in EU trade mark legislation. It seemed illogical, for example, that the owner of the trade mark Monopoly would probably find it harder to prevent the use of Anti-Monopoly for board games (because of the need to show a likelihood of confusion) than he would to prevent the use of Anti-Monopoly for estate agent services (where no such proof would be required).

    It is unlikely that this interpretation of Articles 4(4)(a) and 5(2) of the Directive will have a significant impact in many cases. However, in those few cases, involving identical or similar goods or services, where no confusion can be found but the earlier mark has the required reputation and that reputation is being tarnished (or similar), then the ECJ’s interpretation of the Directive should avoid anomalous and unfair results.

    The case is also interesting for the manner in which the ECJ avoided a literal interpretation of the Directive but instead made its decision on the basis of what it (the Court) thought the legislature must have intended.