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Uppsala universitet

Author name : MD AKRAMUL ISLAM

Supervisor name Kacper sazkalej

Thesis for the Degree of Master of Laws (60 credits) LLM, 2JE660!

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Acknowledgment

I am very grateful to my supervision and all the staff of the university. My Supervisor help me

lots to complete this work. I am very grateful to him. I wish all the success for the university and

all of its faculty, student and Staff. Forever grateful to everyone.

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Content

Chapter 1: Introduction…………………………………………………………….…….page 5

Chapter 2: History of the Trademark …………………………………..……………….page

12

Chapter 3: Trademark and Responsible Capitalism…………………………………Page 16

Chapter 4: Trademark under European Union law………………………………….Page 25

Chapter 5: Trademark Function……………………………………………………….page 36

Chapter 6: Trademark and Human rights…………………………………………….Page 42

Chapter 7 Conclusion……………………………………….…………………………Page 48

Bibliography…………………………………………………………………………….page 51

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TRADEMARK FUNCTIONS AND TRADEMARK RIGHTS

Question: what is Trademark in the intellectual property law? Describe the European

Union law in relation to the trademark law. Further what is trademark function? Some

of the case of ECJ create some confusion regarding Trademark functions. Discuss

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Chapter 1

Introduction

Trade marks play an essential role in a market economy. By conferring “exclusive rights on the 1

owner of a registered trade mark, the owner is given an incentive to promote the reputation” of

the mark and goods or services sold under the mark in the knowledge that others will not be able 2

to exploit the mark’s reputation. Thus, as said by the Court of Justice of European Union 3

(“CJEU”) in Arsenal FC v Reed:

“Trade mark rights constitute an essential element in the system of undistorted competition

which the Treaty is intended to establish and maintain. In such a system, undertakings must be

1 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 2 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 3 SA CNL-Sucal NV v HAG G.F. A.G. (“Hag II”) (C-10/89) [1990] E.C.R. I-3711; [1990] 3 C.M.L.R. 571.

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able to attract and retain customers by the quality of their goods or services, which is made

possible only by distinctive signs allowing them to be identified.” 4

For some companies, trademarks may be their most valuable commercial assets. The trade mark,

‘Coca-Cola’ is almost universally recognizable; and in this age of global commerce, the product

to which it attaches is almost universally available too. Indeed, “the value of the Coca-Cola

brand far exceeds the worth either of the company’s tangible assets or of the trade secret which is

the Coca-Cola recipe.” An attractive trade mark may sustain the value of a medicine, even when 5

its patent protection has expired and there are cheaper generic alternatives on the market. The

difficulty of enforcing copyright in an age of digital technology and the internet has increased the

importance to rightsholders of merchandising as a means of profiting from their works, whether

they be movies, books, or music. “Trademarks play a crucial role in merchandising, both of

products and of characters.” 6

The importance of trademarks has significantly increased over recent decades due to their role as

information carriers through which direct contact between buyers and sellers is obtained and

maintained in the market place. Despite this increased importance, “confusion still exists as to 7

what exactly constitutes a trade mark, its functions, and the scope of legal protection it should

enjoy.” This confusion has created a deep tension at the heart of trade mark law and has 8

hindered attempts to formulate a coherent body of law. 9

What is trademark?

The words "trade mark" and "brand" are often used interchangeably. Both refer to signs which

are used by traders to differentiate their goods from those of other traders. Of the two 10

4 Arsenal FC v Reed (C-206/01) [2003] E.C.R. I-10273 at [47]. See also (C-10/89) [1990] E.C.R. I-3711 at [13], and Merz & Krell GmbH & Co v Deutsches Patent-und Markenamt (C-517/99) [2001] E.C.R. I-6959 at [21]. 5 6 L. Brancusi, ‘Designs determined by the product’s technical function: arguments for an autonomous test’ [2016] EIPR 23. 7 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293. 8 Ibid. 9 N. M. Dawson, ‘Bad faith in European trade mark law’ [2011] IPQ 229. 10 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012)

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expressions, "brand" contains within it a clue to the origin of branding. One common definition 11

of "brand" is a "mark made by a hot iron": in other words, a means for one herdsman to "mark"

his animals and so distinguish them from those of his neighbour. More simply stated, branding

was, and still is today, a way of saying "this is mine". 12

A development of this was for early potters to mark their pots with a thumb print or symbol: a

simple way of communicating to others, including customers, the message "I made this".

Today, brands or trademarks may be more sophisticated in design and expression, but they

operate in essentially the same way as they did centuries ago. Brands communicate information

about the product, or service, to which they are applied and the basic message remains, "I made

this". 13

Many memorable and, as a result, successful brands are simple symbols, but a brand may also be

encapsulated in a name, a label, a slogan, a jingle or simply the distinctive packaging or "get-up"

of a product. Brands are now not only more sophisticated in form but in the information they

communicate. A brand provides the consumer not only with reassurance about the origin of the 14

product but also about other features such as quality, luxury or economy. 15

So a trade mark is a “sign that a business uses to identify and distinguish its goods or services for

marketing purposes.” It can be a name, logo, mark, symbol or any other kind of “sign”. For a 16

trade mark to be effective at identifying and distinguishing one business’s products, its owner

should have the exclusive right to use it to identify and distinguish those products. Exclusivity 17

“can be secured through registration or, in some cases, through using the sign over time” (as an

11 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 12 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 13 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 14 Ibid. 15 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 16 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 17 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

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unregistered trademark could be protected by the tort of passing off). 18

In today’s markets trademarks and marketing are interdependent. A trade mark can performs a

number of roles/functions that are essential for the marketing of a firm’s products:

a. “It provides a name or other means of identification for the products that enables

them to be distinguished from others.” 19

b. “Consumers can use it as a basis for choosing among products, for expressing their

preferences and for making requests.” 20

c. “It provides a reference point for conveying or acquiring information about the

products and for connecting products that are available on the market to the

consumers’ own experience.” 21

d. “It can be used as a reference point in advertising and other promotional activity

with the aim of strengthening consumer loyalty and a creating a

reputation/goodwill that can be associated with the trade mark.” 22

For a trade mark to be useful in marketing, consumers must expect products that are marketed

under the same trade mark to be consistent. A trade mark owner has an incentive to ensure that 23

its products are consistent and that they acquire a good reputation with consumers. Consumers

will associate the trade mark with this reputation. Therefore, trade mark owners must have 24

unitary control over the product quality. In other words, the owner must have the legal or

practical power to control the quality of the marked products and therefore to ensure that they are

consistent with each other. IHT Internationale Heiztechnik GmbH v Ideal Standard GmbH 25

(C-9/93) [1994] E.C.R. I-2789:

18 Ibid 1. 19 L. Brancusi, ‘Designs determined by the product’s technical function: arguments for an autonomous test’ [2016] EIPR 23. 20 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 21 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293 22 J. Hunter and J. Thomas, ‘Lego and the system of intellectual property, 1955–2015’ [2016] IPQ 1. 23 J Phillips, Trade Mark Law: A Practical Anatomy (2003). 24 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 25 N. M. Dawson, ‘Bad faith in European trade mark law’ [2011] IPQ 229.

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“A trade mark may consist of any signs capable of being represented graphically, particularly

words, including personal names, designs, letters, numerals, the shape of goods or of their

packaging, provided that such signs are capable of distinguishing the goods or services of one

undertaking from those of other undertakings.” 26

(Article 2, Trade Marks Directive (89/104, now replaced by 2008/95) (TMD)). This definition

was incorporated in s.1(1) of the Trade Marks Act 1994 (TMA) and was “a major departure from

previous definitions under previous UK trade mark laws” (such as s.68 of the Trade Marks Act

1938, this issue was further discuss in the case of Philips Electronics NV v Remington Consumer

Products Ltd (No.1) [1998] E.T.M.R. 124). 27

As a result, colours and shapes signs are recognised as valid trade marks in the UK and the EU.

These so-called “unconventional trademarks include visual signs such as colours and

three-dimensional shapes, in addition to non-visual signs such as smell, sound and even taste

marks” (although in practice it may now be impossible to register smell and taste marks (Eli 28 29

Lilly & Co’s Community Trade Mark Application [2004] E.T.M.R. 4)). The Court of Justice of

the European Union (CJEU) decision in Sieckmann v Deutsches Patent- und Markenamt

(C-273/00) [2003] Ch. 487 highlights that the registration of unconventional marks is possible if

trade mark owners can fulfil two conditions:

a. they should be able to represent the mark graphically and that representation must

be “clear, precise, self-contained, easily accessible, intelligible, durable and

objective”; 30

26 IHT Internationale Heiztechnik GmbH v Ideal Standard GmbH (C-9/93) [1994] E.C.R. I-2789. 27 Lionel Bently, Jennifer Davis and Jane Ginsburg (eds), Trade Marks and Brands: An Interdisciplinary Critique (CUP, Cambridge 2008) 3). 28 Ibid. 29 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 30 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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b. They should demonstrate that “the non-conventional mark is capable of

distinguishing its owner’s products based on their trade origin.” However, it is 31

important to note that even if a proposed mark is not inherently distinctive, it could

be still registered if it has acquired, before the date of application for registration, a

distinctive character as a result of the use made of it. The exact meaning of 32

acquired distinctiveness through use and how to achieve it was a question that was

referred by the High Court to the CJEU in the case of Societe des Produits Nestle

SA v Cadbury UK Ltd [2014] EWHC 16 (Ch); [2014] E.T.M.R. 17.

Despite the difficulty associated with representing an unconventional trade mark graphically,

several cases demonstrate the possibility of successful registration. In Shield Mark BV v Kist (t/a

Memex) (C-283/01) [2004] Ch. 97, the CJEU held “that the use of a musical stave as a trade

mark is permitted if the criteria set by Sieckmann” (see above) are fulfilled. The same 33

reasoning was applied in Libertel Groep BV v Benelux-Merkenbureau (C-104/01) [2003] E.C.R.

I-3793, where the CJEU submitted that “a colour could be registered as a trade mark.” However,

please note the Court of Appeal recent decision in Cadbury (Societe des Produits Nestle SA v

Cadbury UK Ltd [2013] EWCA Civ 1174; [2014] 1 All E.R. 1079). This was a challenge by

Nestle to Cadbury colour Trade Mark, a distinct shade of purple which was extremely

well-known. The Court held that the trade mark, “which was shown as a as a purple rectangular 34

block, is not a “sign” since the sign in its current form could take multiple different permutations,

presentations and appearances, which were neither graphically represented nor described with

any certainty or precision.” See also the recent CJEU case on colour registration (Oberbank and

Santander, (Joined Cases C-217/13 and C-218/13) Oberbank AG v Deutscher Sparkassen- und

Giroverband eV (C-217/13) [2014] Bus. L.R. 786. 35

31 Ibid. 32 A. Santani, ‘Trade marks that are contrary to public policy or morality: the search for the right thinking man’ [2012] IPQ 39. 33 Ibid. 34 Lionel Bently, Jennifer Davis and Jane Ginsburg (eds), Trade Marks and Brands: An Interdisciplinary Critique (CUP, Cambridge 2008) 3). 35 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226

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Trade marks are ubiquitous. In modern society “the consumer is surrounded daily by images 36

designed to distinguish the goods and services provided by one trader from those of another. The

marks are designed to indicate the origin of the goods and services.” But, as will be seen in the 37

following discussion, “it is argued that a mark plays other roles, including that of a quality

indicator; a means of advertising goods and services; and a vehicle for investment.” These

“functions are increasingly reflected in provisions in trade mark law enabling the registration of a

broad variety of signs, and those which seek to protect the reputation of a mark against parasitic

and damaging use of the same or a similar mark by third parties.” 38

A key theme underpinning “trade mark law concerns the extent of the monopoly conferred by a

registered mark.” As will been seen in the next two chapters, registration of a mark does not give

the trader a monopoly in either the mark, or “the underlying goods and services in connection

with which the mark is registered, but only a monopoly over the use of the mark in conjunction

with the goods and services for which it is registered.” This leads to a constant tension between 39

traders, as proprietors of trade marks, who would like to see the scope of that monopoly

construed as broadly as possible so as to reserve to themselves as much exclusivity in the market

as possible, and competitors who wish to see the monopoly interpreted narrowly so as to enable

them to encroach and ‘free-ride’ upon a successful registered trade mark. In determining “where

the boundaries lie, a number of interests require to be accommodated within the trade mark

framework. Broadly they are of the trader, of competing traders, and of the consumer.” 40

A central question is as to how, and where, these respective interests should be taken into

account and balanced. While the focus of the essential function of a trade mark remains on

indicating the origin of goods and services and on consumer confusion, so the perception of the

consumer is paramount. Registration and the scope of protection conferred by the mark are

circumscribed by indications the consumer might find confusing, or which implicate the origin

36 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 37 Ibid. 38 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 39 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 40 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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function of the mark. As the range of signs and symbols that can be registered expands, so 41

concerns grow in some quarters as to the competitive disadvantage this may pose for other

traders. The first comer may “easily be able to establish a link between the more obvious mark in

the mind of the consumer and the goods and services.” This imposes a cost on the competing 42

trader who will have to invest more in building a link between the less obvious mark and the

consumer whilst trying to avoid allegations of consumer confusion. Once registered, and “the

broader functions of a mark are recognised, the interests of the consumer diminish.” Consumer

confusion is no longer relevant; the “focus is instead on safeguarding the reputation of the mark

against parasitic and detrimental uses by competing traders.” 43

41 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 42 ibid 43 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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Chapter 2

History of trademark:

Trade marks have been used since the early stages of civilisation, but “it is the last hundred 44

years or so that have seen the development of many features of the modern trade mark law” a 45

legal understanding of a “trade mark as a sign which indicates trade origin; the establishment of a

central registration system; and the conceptualisation of trademarks as an object of property.” 46

The use of “trade marks in the market place was considered a particularly important mode of

commercial communication in pre-literate communities and societies in which a number of

languages were used.” It “provided a concise and convenient way of communicating 47

information about the goods to which trade marks were affixed.” However, “the involvement of 48

the law in regulating this aspect of human activity did not take shape until the 18th and 19th

century, and British trade mark law did not visibly acquire its modern structure until the latter

half of the 19th century.” 49

Up until 1850, “the laws regulating the fraudulent use of a trader’s names and marks lacked any

consistency and were fragmented across a wide variety of jurisdictional sources.” UK traders 50

and industrialists exercised a great deal of pressure to reform the law and, as a result, the

Merchandise Marks Act was introduced in 1862 (1862 Act) (Hansard HC vol 167 col 1418 (4

July 1862) as cited in Bently). 51

44 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265. 45 Ibid. 46 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293. 47 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265. 48 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 49 Lionel Bently, Jennifer Davis and Jane Ginsburg (eds), Trade Marks and Brands: An Interdisciplinary Critique (CUP, Cambridge 2008) 3). 50 Ibid. 51 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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The 1862 Act provided wider protection for trade marks and was seen by many as a welcome

improvement to the law. Still, the 1862 Act was limited in value because its protection was

dependent on proving intent to defraud; “it also did not give a clear definition of a trade mark,

nor its specific characteristics or functions.” 52

The 1860s “witnessed a surge in case law on trade marks due to an increase in the use of trade

marks during the industrial revolution. (Another reason was the reforms of the judicial system at

the time, in particular, the procedural rules applicable to the courts of equity.” Improved means 53

of communication led to the development of large-scale production in factories that were located

in distant areas from the markets in which the products were sold. The loss of the personal 54

“relationship between the producers and the consumers necessitated the evolution of trade

marks” as symbols “which represent the goodwill of producers. Increased use led to more 55

disputes over the use of trade marks, and a new wave of cases contributed to the clarification of

the rules and established a level of consistency in the law.” This “new-found coherence in legal 56

principles was enhanced by the fact that commentators started to organise and collect the courts’

decisions and statutes.” 57

The needs and activities of international traders also drove the reform of international legal

regimes dealing with trademarks and regulating their use and led to the establishment, beginning

“in the late 19th century, of various international treaties and conventions regulating trade

marks” (such as the Paris Convention, which the UK joined in 1884). 58

The Trade Mark Registration Act 1875 (1875 Act) established a registration system restricted to

52 (Ida Maidieha Azmi, et al., “Distinctive Signs and Early Markets: Europe, Africa and Islam” in Alison Firth (ed), The Prehistory and Development of Intellectual Property Systems: Perspective on Intellectual Property (Vol.I Sweet & Maxwell, London 1997) 53 Ibid. 54 A A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 55 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 56 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 57 David Higgins, “The Making of Modern Trade Law: The UK, 1860-1914. A Business History Perspective” in Lionel Bently (ed), Trade Marks and Brands: An Interdisciplinary Critique (CPU, Cambridge 2008) 43). 58 (William Cornish & David Llewelyn, Intellectual Property: Patents, Copyright, Trade Marks And Allied Rights (6th Ed. Sweet & Maxwell, London 2007), 600)

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marks for goods. The mere act of registration meant that protection would be offered to traders

without the need for additional evidence (Hansard HC vol 226 col 703 (7 August 1875) as cited

in Bently).The 1875 Act was eventually incorporated into the Patents, Design and Trade Marks

Act 1883. 59

Many now famous trade marks emerged in the second half of the 19th century, such as “Singer”

in 1851, “Vaseline” in 1878, “Coca-Cola” in 1886 and “Kodak” in 1888. 60

During this period, “the legal system began to treat the concept of a “trade mark” as a term of art

that carried legal consequences.” Nonetheless, “the definition of the term became highly

contested, and it was not until the Trade Marks Act 1905 that a comprehensive definition of a

trade mark was introduced.” The Trade Marks Act 1919 divided the registration into parts A 61

and B (registration in part B allowed protection for trade marks that could not overcome the

qualifications for registration in part A, but successfully existed in the market place). Then, as a

result of the Goshen Committee Report ((1934) Cmd 4568) the Trade Mark Amendment Act

1937 was passed and then consolidated in the Trade Marks Act 1938 (TMA 1938) that stayed in

force for almost 50 years (Cornish, 597-603). The Mathys Committee in 1974 considered the 62

reform of the TMA 1938 and recommended the introduction of the registration of the service

marks. As a result, the Trade Marks (Amendment) Act 1984 was introduced, to be subsequently

amended and implemented by the Patent, Design and Marks Act 1986. 63

In the period 1973 to 1992 the EU Council adopted a series of 12 Directives concerning technical

harmonisation and standards in many industries ranging from (by way of example) toys to

telecommunications terminals, each of these Directives providing for the affixing of the mark

“CE” in a special style, in which the letter “C” and the back of the letter “E” are semi-circular. In

59 Lionel Bently, Jennifer Davis and Jane Ginsburg (eds), Trade Marks and Brands: An Interdisciplinary Critique (CUP, Cambridge 2008) 3). 60 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 61 Ibid. 62 A Griffiths, An Economic Perspective on Trade Mark Law (2011) Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

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a further Directive 93/68 [1993] O.J. L220/1 the earlier Directives have been amended and

rendered of a uniform design. A Council Decision 93/465 of July 22, 1993 [1993] O.J. 64

L220/23 provides for the “modules” for the various phases of the conformity assessment

procedures and the rules for the affixing and use of the “CE” marking. 65

Other EUTMs have been proposed in draft Directives concerning waste disposal to signify

different types of waste, e.g. paper, metal, glass, etc. Such EUTMs are communicated to the

central property offices such as the Registry for the United Kingdom to be treated there in a

manner analogous to Article 6ter marks under the Paris Convention. 66

64 65 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 66 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012)

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Chapter 3

Trade Marks and Responsible Capitalism

“Trade marks and the brands that they signify are an important mechanism for conveying and

acquiring information and assurance about the compliance of undertakings with CSR practices

and other details of organisational behaviour that lie behind products on the market.” Trade 67

marks enable “consumers and other parties to take account of organisational behaviour in their

decision-making and, depending on how far they do so, strengthen the incentives that

undertakings have to use organisational behaviour as a basis for gaining or maintaining a

competitive advantage and for improving their own competitiveness.” 68

This chapter has related the capacity of trade marks to convey information and assurance about

organisational behaviour to their recognised economic role of providing quality assurance. 69

Their performance of “this role helps to reduce search costs and the risk of disappointment that

consumers would otherwise face through lacking complete information about products on the

market.” This is turn generates dynamic benefits through strengthening the incentives that 70

undertakings have to maintain or improve product quality of their products, “to compete in terms

of product quality and to engage in various forms of innovation that might not otherwise be

feasible.” 71

67 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 68 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 69 Ibid. 70 Ibid. 71 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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Trade marks can “combat the problems associated with information asymmetry through

facilitating flows of information about products on the basis of likely consistency and through

enabling their owners to signal their commitment to maintaining or increasing the appeal of their

trade marks and in effect to offer their investment in this appeal as a stake to consumers and

other parties.” Trade marks can also provide assurance about organisational behaviour because 72

of the links they establish between “specific products on the market and a specific undertaking

that should be in a position to control or at least to vouch for the organisational behaviour that

lies behind these products and their presence on the market.” Being able to “offer credible 73

assurance about organisational behaviour may also strengthen and improve the terms of an

undertaking's dealings and relationships with its stakeholders in general and enable it to secure

more of the general economic benefits that it has been argued that CSR practices can generate.” 74

Nevertheless, “there are various limits and shortcomings in the capacity of a trade mark to link

organisational behaviour to specific products on the market and create pressure towards CSR.” 75

These include the lack of any generally accepted set of standards for assessing organisational

behaviour, the scale and complexity of the organisational arrangements that may lie behind a

particular trade mark and the fact that the strength of the incentive depends on the weight that

consumers and other parties give to organisational behaviour in practice and on the relative

strength of conflicting pressures. Moreover, a trade mark's masking capacity may help to shield

marked products from bad publicity concerning organisational behaviour that could be attributed

to them. And the organisational range and flexibility that a trade mark's guarantee of trade origin

can encompass enables and may even encourage undertakings to organise and reorganise the

production or procurement of marked products in ways that are not consistent with good CSR

practices. 76

72 Ibid. 73 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 74 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 75 Ibid. 76 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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However, despite these limitations and shortcomings, trade marks do provide a means of

publicising organisational behaviour and linking it to specific products on the market. They

reinforce the economic incentives that their owners have to improve their own organisational

behaviour and to monitor or verify the organisational behaviour of other parties which contribute

to marked products. The prominence of some trade marks in the minds of consumers and other

parties makes them especially vulnerable to bad publicity. The main impact of trade marks on

organisational behaviour may in fact be that undertakings seek to minimise the risk of attracting

publicity for “activity or incidents that fall below a minimum threshold of acceptable behaviour.”

The pressure to engage in or to enforce standards above this threshold is likely to be much 77

weaker and to depend on other legal mechanisms such as regulation and how far trade mark

owners regard good CSR practices as likely to serve their long-term economic interests in any

event. 78

The impact of “trade marks on organisational behaviour also depends on the legal rights of their

owners.” The scope of these may in turn depend on how far trade mark law is willing to treat 79

organisational behaviour as the “legitimate subject-matter of a reputation focused on a trade

mark and in effect as equivalent to product quality.” Doing so would strengthen “the ability of 80

the owner of a trade mark to control organisational behaviour downstream where this could

affect a reputation that the trade mark has acquired and its ability to protect the reputation from

activity designed to damage or unfairly exploit this reputation.” It would help to maximise the 81

pressure that trade marks create towards CSR. 82

Benefit of trademarks

77 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 78 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 79 Ibid. 80 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 81 Ibid. 82 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

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Suppose you like decaffeinated coffee made by General Foods. If General Food’s brand has no

name, then to order it in a restaurant or grocery store you would have to ask for ‘the

decaffeinated coffee made by General Foods’. This takes longer to say, requires you to 83

remember more, and requires the waiter or clerk to read and remember more than if you can just

ask for ‘Sanka’. The problem would be even more serious if General Foods made more than 84

one brand of decaffeinated coffee, as in fact it does. The benefit of the brand name is analogous 85

to that of designating individuals by last as well as first names, so that instead of having to say

‘the Geoffrey who teaches constitutional law at the University of Chicago Law School—not the

one who teaches corporations’. You can say ‘Geoffrey Stone—not Geoffrey Miller’. 86

To perform its economizing function a trademark or brand name (these are rough synonyms)

must not be duplicated. To allow another maker of decaffeinated coffee to sell its coffee under 87

the name ‘Sanka’ would destroy the benefit of the name in identifying a brand of decaffeinated

coffee made by General Foods (whether there might be offsetting benefits is considered later). 88

It would be like allowing a second rancher to graze his cattle on a pasture the optimal use of

which required that only one herd be allowed to graze. The failure to enforce trademarks would 89

impose two distinct costs—one in the market for trademarked goods and the other in the distinct

(and unconventional) market in language. 90

Since traders first began to offer goods and services to prospective buyers, it has been customary

for them to use a sign or mark to distinguish them from those of their competitors. 91

83 W. Landes and R. Posner, ‘Trademark law: an economic perspective’ (1987) 30 Journal of Law and Economics 265 at 268–70 84 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

85 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 86 W. Landes and R. Posner, ‘Trademark law: an economic perspective’ (1987) 30 Journal of Law and Economics 265 at 268–70 87 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 88 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 89 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 90 W. Landes and R. Posner, ‘Trademark law: an economic perspective’ (1987) 30 Journal of Law and Economics 265 at 268–70 91 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

21

The “commercial advantages gained are that the consumer is enabled to identify the source of the

goods or services, resulting in the creation of goodwill, and repeat business.” In addition, our law

recognises “that traders are entitled to claim legal rights, or monopolies, in such marks, thus

reinforcing their distinguishing function.” 92

The justification for this legal protection is, firstly, that “traders ought to be able to prevent

others from benefiting unfairly from the reputation and goodwill built up through the use of the

mark” and, secondly, “that consumers should be protected from being misled as to the source of

goods and services.” 93

The consumer may view the mark as indicating that the goods and services originate from a

particular source. The mark may also convey other messages, such as function, desirability, etc. 94

In selecting a new mark, there is a temptation to adopt one which is descriptive in some way of

the goods or services for which it will be used; indeed many such marks are in use. From a 95

legal standpoint, “this temptation should be resisted, since the courts are reluctant to grant a

monopoly in marks which may interfere with other traders’ legitimate rights to use ordinary

descriptions of their own goods or services, and descriptive marks are difficult, if not impossible,

to register.” 96

The rational basis for trade mark protection

92 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 93 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 94 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 95 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 96 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

22

The true functions of the trademark are, then, to identify a product as satisfactory and thereby to

stimulate further purchases by the consuming public. The fact that through his trademark the 97

manufacturer or importer may “reach over the shoulder of the retailer” and across the latter’s

counter straight to “the consumer cannot be over-emphasized, for therein lies the key to any

effective scheme of trademark protection.” To describe a trademark merely as a symbol of 98

goodwill will, without recognizing in it an agency for “the actual creation and perpetuation of

goodwill, ignores the most potent aspect of the nature of a trademark and that phase most in need

of protection.” To say that a trademark ‘is merely the visible manifestation of the more 99

important business goodwill, which is the “property” to be protected against invasion’, or that

‘the goodwill is the substance, the trademark merely the shadow’, does not accurately state the

function of a trade mark today and obscures the problem of adequate protection. The signboard 100

of a inn in stagecoach-days, when the golden lion or the green cockatoo actually symbolized to

the hungry and weary traveller a definite smiling host, a tasty meal from a particular cook, a

favourite brew and a comfortable bed, was merely ‘the visible manifestation’ of the goodwill or

probability of custom of the house; but today the trademark is not merely the symbol of goodwill

but often the most effective agent for the creation of goodwill, “imprinting upon the public mind

an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfactions.

The mark actually sells the goods.” And, self-evidently, the more distinctive the mark, the 101 102

more effective is its selling power. 103

Why register a trade mark?

Registration of trade marks is voluntary but advisable. A registered trade mark is:

97 Ibid. 98 F. I. Schechter, ‘The rational basis for trade mark protection’ (1926–7) 40 Harv. L. R. 813 at 818–19 99 Ibid. 100 A Griffiths, An Economic Perspective on Trade Mark Law (2011) Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

101 Ibid. 102 Ibid. 103 F. I. Schechter, ‘The rational basis for trade mark protection’ (1926–7) 40 Harv. L. R. 813 at 818–19

23

● A valuable commercial asset.

● Commercially exploitable.

● Relatively easy to protect and enforce.

● A deterrent to infringers.

● Renewable indefinitely.

Relative difficulty of protecting unregistered trade mark

A significant disadvantage of using an unregistered mark is that the brand-owner has to look to

the common law for protection and must rely on a passing off action to prevent infringement of

the mark.” Passing off actions are notoriously time-consuming and expensive. To succeed in 104

such an action, “the proprietor must produce evidence of their ownership of goodwill or

reputation in the mark, and evidence that the unauthorised use of his mark amounts to a

misrepresentation which is causing, or is likely to cause, damage.” Protection of a new, 105

“unregistered brand name or mark may be impossible since it may not have attracted sufficient

goodwill to support an action for passing off.” Gathering evidence to demonstrate that there is 106

a misrepresentation, usually in the form of evidence of confusion (or a likelihood of confusion) is

labour-intensive and costly, particularly where it is necessary to involve market research

companies and experts because survey evidence is the only means of showing that there is

confusion. 107

In some circumstances, an action for passing off can succeed where a trade mark infringement

claim cannot. For example, the makers of "Penguin" chocolate biscuits were able, by means of a

passing off action, to prevent the supermarket chain Asda from marketing its own brand of

104 Ibid. 105 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 106 Ibid. 107 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

24

biscuits in packaging deceptively similar to that used for "Penguin" biscuits (United Biscuits

(United Kingdom) Limited v Asda Stores Limited [1997] RPC 513). By contrast, they failed in

their claims in this action for infringement of registered trade marks (such as a claim that the

word mark PENGUIN was infringed by Asda's choice of "Puffin" as its brand name and a claim

that Asda's puffin bird device infringed registrations of penguin devices). 108

If the owner of goodwill in an unregistered mark has good grounds for preventing use of another

trader's mark by way of an action in passing off, that person will also be able to prevent that

other trader from registering its mark. The owner of the unregistered mark would have to prove

that passing off would occur if the applicant's mark were to be used as set out in the trade mark

application. 109

What rights does registration give?

Nature and scope of trade mark proprietor's exclusive right

A registration confers on its proprietor the statutory right to the exclusive use of the mark in

connection with the goods or services for which it is registered (section 9, TMA and Article

9, EUTM Regulation). Registration therefore gives the proprietor the right to sue for trade mark

infringement any person who uses an identical or similar mark (termed a "sign" in the

legislation) in the “course of trade in connection with identical or similar goods without

authorisation. The proprietor must also show that the use has caused or is likely to cause

confusion, except in cases where the marks are identical and the goods or services are also the

same” (section 10, TMA and Article 9, EUTM Regulation). 110

108 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 109 110 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012)

25

If the mark has a certain level of reputation in the UK, “there is a wider right to prevent others

from using the same or a similar sign for goods or services” (whether similar or not), where that

use, “being without due cause, takes unfair advantage of, or is detrimental to, the distinctive

character or the repute of the trade mark” (section 10(3), TMA and Article 9(2)(c), EUTM

Regulation).

Examples of the kind of use that can constitute infringement are listed in section 10 of the TMA

and Article 9(3), 9(4) and 10 of the EUTM Regulation, and include, for example, “putting the

offending sign on goods or packaging, importing goods under the sign, and using the sign in

advertising.” 111

The registered proprietor can authorise or license others to use the mark but, most importantly,

“registration gives the proprietor the right to sue for trade mark infringement if someone uses a

mark that is the same as his mark, or similar to it, and in a manner which is likely to damage it or

cause confusion in the target market.” 112

The registered proprietor can authorise or license others to use the mark (section 28, Trade

Marks Act 1994 (TMA) and Article 25, EUTM Regulation). For forms of trade mark licence

designed for different situations, see the following standard documents:

● Trade mark licence agreement

● Trade mark licence (short form)

● Letter of consent to use registered trade mark 113

As Arnold J discussed in Pinterest Inc v Premium Interest Ltd & Anor [2015] EWHC 738 (Ch)

(24 March 2015), trade mark registrations do not confer a positive right to use the mark, nor do

they override other types of right; see Legal update, High Court refuses stay in PINTEREST

111Ibid. 112 Ibid. 113 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012)

26

trade mark dispute. (In relation to EU Trade Marks, Article 137 and Article 138 of the EUTM

Regulation specifically state this principle.)

Chapter 4

Trademark under European Union law

What is trademark law under the European Union law?

It is usually sensible as a practising lawyer, and indeed when making an academic study of the

law, to go back to first principles. “Trade mark law is no exception, and it is at the beginning that

this chapter proposes to start.” 114

114 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149

27

 

Both art.4 of the EUTMR and s.1(1) of the Trade Marks Act 1994 (the TMA) define a trade

mark as any sign which is “capable of distinguishing goods or services of one undertaking from

those of other undertakings”, and which is capable of being represented in a manner which

enables the viewer to determine the “clear and precise subject matter of the protection afforded

to the proprietor”. 115

The law is clear; a trade mark must clearly show its scope of protection, and must serve as a

badge of origin. Without fulfilling these functions, it cannot, or rather should not, exist. 116

Why does this matter? We are all, as intellectual property student, well aware of the basic 117

requirements of a trade mark, and do not need to be taken through the EUTMR. Yet, it is these

“fundamental principles that are a continual burden to would-be proprietors attempting to

register any of the more complex marks, whether they are smell, sound, shape or colour.” They

fall at the hurdles set out in the fundamentals of the Act; time and time again the applications for

these marks fail to set out what exactly is protected, and/or are unable to fulfil the “origin

function”. 118

As with most intellectual property rights, a trade mark is a monopoly right. Indeed, as Sir John

Mummery points out in Nestlé v Cadbury,1 of which more below, trademarks are potentially a

monopoly right in perpetuity. The policy reason behind most, “if not all, trade mark legislation

is, therefore, to enforce the premise that it is neither fair nor acceptable for a right holder to

obtain a monopoly to which she is not entitled.” The scope of a trade mark is equally 119

important, not just for “the purposes of permitting those responsible for maintaining the register

to do so effectively, but also to prevent an unfair advantage from being conferred on the

proprietor of a mark, and keeping the monopoly to within its fair limits.” 120

115 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149 116 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149 117 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 118 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149 119 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 120 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149.

28

It is for this reason that trademarks are so scrupulously tested.

European case law appears to indicate that there are types of mark for which the burden is

arguably becoming too high; it is “no secret among practitioners and right holders that certain

categories of trademarks are harder to obtain registration for than others.” While one should 121

not have a hierarchy of “easy” trademarks, it is clear that, all other factors aside, “a simple word

or logo mark is far easier to obtain and defend than a colour, olfactory, touch or shape mark. It is

to two of these more unusual marks that this article now turns.” 122

The purpose of this chapter is to address the aspects of procedure specific to the EU trade mark.

A EU trade mark (“EUTM”) is a “unitary trade mark providing the same rights and protection,

and having equal effect, throughout the EU.” 123

The EUTM system has two aims: promoting the achievement of a single internal market in the

European Union (“EU”, formerly the European Community); and establishing a homogeneous, 124

stand-alone legal system for trade marks in it. From a trade mark proprietor’s point of view, it 125

“affords the great simplification of achieving EU-wide protection, utilising one or at most two

languages, by a single application for registration instead of separate applications for each

country.” Great costs may be saved thereby. Not even the “Madrid system” of international 126

registration can achieve such a unified procedure resulting in a single, unitary right. 127

A European Union trade mark (EUTM) (previously known as a Community Trade mark (CTM)

“grants exclusive rights in all current and future EU Member States. This chapter examines the

121 Ibid. 122 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149. 123 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 124 125 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 126 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 127 Ibid.

29

most important aspects of the EU trade mark legislation.” An applicant for a trademark within 128

the EU has choices. If “protection for the trademark is required on a national level, then the

application is made directly to the relevant national IP office; in the UK that is the role of the

Intellectual Property Office.” EU-wide protection is desired, then the applicant can apply for 129

an EUTM via the European Union Intellectual Property Office (EUIPO). The other option is to

apply for a worldwide trade mark, via the Worldwide Intellectual Property Office (WIPO). 130

The validity of that right may be maintained more easily as long as the EUTM is used on a

commercial scale in at least one Member State and enforced in a special EUTM court throughout

the EU. The right automatically extends (subject to certain relatively minor caveats) to new

States as they join the EU. Should “the right turn out to be invalid in one Member State because

of a prior right, it can be converted without loss of priority in the problem-free Member States to

national rights.” Finally, the unique EUTM concept of “seniority” holds out “the hope of

permitting more economies to trade mark owners by safely dropping national rights in favour of

identical EUTMs.” The law relating to EUTMs is developed by an “EU-wide unitary court 131

system from the European Union Intellectual Property Office” up to the two levels of the

European Court of Justice (ECJ), now known simply as the “Court of Justice”. 132

Regulation 40/94 created “a system for the protection of trade marks in the EU, in parallel to the

protection available at national level within Member States.” This regulation was codified in

2009 as Regulation 207/2009 (Community Trade Mark Regulation). The Community Trade 133

Mark Regulation has been substantially amended, and was therefore codified again, and the

codification is contained in Regulation 2017/1001 on the EU trade mark (EU Trade Mark

Regulation, or EUTMR). The EUTMR states that “trade marks enabling the products and

services of undertakings to be distinguished by identical means throughout the entire Union,

128 Ibid. 129 Ibid. 130 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 131 Ibid. 132 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 133 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

30

regardless of frontiers, should feature amongst the legal instruments which undertakings have at

their disposal” and its purpose is "to provide for Union arrangements for trade marks whereby

undertakings can by means of one procedural system obtain “EU trade marks to which uniform

protection is given and which produce their effects throughout the entire area of the Union”

(Preamble, paras(3) and (4)). 134

art.1 of the EUTM Regulation. Although the EC (“EC”) and the “EU were technically different

concepts, the two terms could both be used to refer to the geographical and political entity which

at the time when the EUTM system came into operation” (1 April 1996) comprised 15 Member

States: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the

Netherlands, Austria, Portugal, Finland, Sweden, and the UK. On 1 May 2004, a further 10

countries acceded to the EC and EU: Cyprus, the Czech Republic, Estonia, Hungary, Latvia,

Lithuania, Malta, Poland, Slovakia, and Slovenia. On 1 January 2007, Bulgaria and Romania

acceded. Croatia acceded on 1 July 2013. Following the entry into force of the Lisbon Treaty in

December 2009 the term “European Community” was replaced by “European Union”. The term

“Community trade mark” was finally replaced by “EU trade mark” with effect from 23 March

2016. 135

It can only be registered, transferred, revoked or surrendered in respect of the whole EU. Apart

from this important “EU-wide” aspect and from procedural matters relating to the administration

of the EUTM system, much of the law applicable to EUTMs is similar to the law governing

national trade marks in the UK and in other EU Member States. The main substantive 136

provisions of the EUTM Regulation are largely identical to the corresponding provisions of 137

134 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 135 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 136 137 Council Regulation (EC) 207/2009 on the EU trade mark ([2009] OJ L78, p.1), which replaced Council Regulation 40/94 on the Community trade mark ([1994] OJ L11, p.1). Regulation 207/2009 consolidated the numerous amendments that had been made to Regulation (EC) 40/94. Many of the articles were renumbered.

31

 

 

 

 

 

the TM Directive, which was implemented in the UK by the 1994 Act. The reader will 138

therefore be cross-referred to the sections in this work addressing the analogous UK law.

The EUTM was known as the “Community trade mark” or “CTM” until 23 March 2016. The

change of nomenclature was introduced by Reg.2015/2424. 139

The EUTM system “is administered by an agency of the EU which was originally given the

rather inappropriate” name “Office for Harmonisation in the Internal Market (Trade Marks and

Designs)”, frequently abbreviated to “OHIM”. The name was changed to “European Union

Intellectual Property Office” or “EUIPO” as from 23 March 2016. It has its seat in Alicante

(Spain). 140

The basic legislation governing the EUTM system is contained in the EUTM Regulation. The 141

Regulation, “which is directly applicable, establishes the EUTM system and provides a complete

code determining who is entitled to apply for a EUTM” what marks can be registered and what

rights are conferred by registration, without need for further national legislation. The original 142

version of the EUTM Regulation (Regulation 40/94) was adopted by the Council of the EU in

December 1993. The “Regulation was amended several times”, in particular by Regulation 143

422/2004. A new consolidated version (Regulation 207/2009) was adopted in February 2009. 144

In the meantime “the EU institutions had embarked upon a comprehensive evaluation of the 145

overall functioning of the trade mark system in Europe.” The Commission invited the Max 146

Planck Institute for Intellectual Property and Competition Law to carry out a study. The Max

Planck Institute published its “Study on the Overall Functioning of the European Trade Mark

138 Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008, to approximate the laws of the Member States relating to trade marks ([2008] OJ L299, p.25). This Directive replaced Council Directive 89/104/EEC ([1989] OJ L40, p.1). 139 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 140 Ibid. 141 Regulation 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the EU trade mark (“the EUTM Regulation”) ([2017] OJ L154, p.1). 142 Community Trade Mark Regulations 1996 (SI 1996/1908), which were replaced by the Community Trade Mark Regulations 2006 (SI 2006/1027). 143 Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark ([1994] OJ L11, p.1). 144 Council Regulation (EC) No 422/2004 of 19 February 2004 amending Regulation (EC) No 40/94 on the Community trade mark ([2004] OJ L70, p.1). 145 Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark ([2009] OJ L78, p.1). 146 Ibid.

32

 

 

 

 

 

 

 

System” on 15 February 2011. 147

As a result the Commission set in motion the procedure for amending the EU’s trade mark

legislation. This culminated in the adoption of Regulation 2015/2424 (which made a large 148

number of important amendments to Regulation 207/2009, including the aforesaid changes of

nomenclature) and Directive 2015/2436 (which replaced the previous version of the TM 149

Directive harmonising the national laws governing registered trademarks). Some of the

amendments effected by Regulation 2015/2424 applied as from 23 March 2016; the entry into

force of other provisions was deferred until 1 October 2017. Regulation 207/2009 was 150

replaced by Regulation 2017/1001 with effect from 1 October 2017. Regulation 2017/1001 did

not introduce any further changes to the law; it simply consolidated the changes made by

Regulation 2015/2424 and tidied up the numbering of the articles. Annex III to Regulation

2017/1001 contains a correlation table showing which articles of the new regulation correspond

to which articles of the previous regulation. Unless otherwise stated or clearly implied by the

context, all references in this chapter to the EUTM Regulation concern Regulation 2017/1001. 151

Detailed rules governing proceedings in the EUIPO were laid down in Commission Regulation

2868/95 (“the former Implementing Regulation”), which was amended several times. Further 152

procedural rules governing appeals to the EUIPO Boards of Appeal were contained in

Commission Regulation 216/96 (“the Appeals Regulation”), as amended by Commission 153

Regulation 2082/ 2004. The fees payable in respect of proceedings before the EUIPO were 154

originally set out in Commission Regulation 2869/95 (“the Fees Regulation”). The former 155

147 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 148 Regulation 2015/2424 of the European Parliament and of the Council of 16 December 2015 amending Council Regulation (EC) No 207/2009 on the Community trade mark and Commission Regulation (EC) No 2868/95 implementing Council Regulation (EC) No 40/94 on the Community trade mark. 149 Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks ([2015] OJ L336, p.1). 150 Regulation 2015/2424 art.4. 151 Ibid. 152 [1995] OJ L303, p.1. 153 [1996] OJ L28, p.11. 154 [2004] OJ L360, p.8. 155 [1995] O A Griffiths, An Economic Perspective on Trade Mark Law (2011) J L303, p.33.

33

 

Implementing Regulation was repealed in 2017, as were the Appeals Regulation and the Fees

Regulation. Detailed rules governing proceedings in the EUIPO are now to be found in two

separate Commission regulations, namely:

● Commission Implementing Regulation 2017/1431 of 18 May 2017 “laying down

detailed rules for implementing certain provisions of Council Regulation” (EC)

No 207/2009 on the EU trade mark (“the EUTM Implementing Regulation”).

● Commission Delegated Regulation 2017/1430 supplementing Council Regulation

(EC) No 207/2009 on the EU trade mark and repealing Commission Regulations

(EC) No 2868/95 and (EC) No 216/96 (“the EUTM Delegated Regulation”). 156

The EUTM Implementing Regulation and the EUTM Delegated Regulation both apply as from 1

October 2017, subject to certain exceptions set out in art.38 of the former and art.81 of the latter.

The fees payable in respect of proceedings before the EUIPO are now set out in Annex 1 to the

EUTM Regulation. Consolidated versions of the main legislative texts are published on the 157

EUIPO website. 158

Regulation 2017/1001 of 14 June 2017, on the European Union Trade Mark (the Regulation)

provides “the internal market with its own system of trade mark protection to enable companies

to adapt their commercial activities, from the outset, to the dimensions of the European Union’s

territory.” The European Union trade mark (the EU trade mark) allows the proprietor of the 159

trade mark to designate the goods and/or services concerned in the same way throughout

European Union territory, regardless of borders (the EU territory). 160

In this respect, the EU trade mark has a unitary character, i.e., within the meaning of art.1(2) of

the Regulation, in that it:

156 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 157 Many of the detailed rules that were previously laid down in the former Implementing Regulation are now provided for in the EUTM Regulation. 158 http://www.euipo.europa.eu [Accessed 30 April 2020]. 159 Ibid. 160 J Phillips, Trade Mark Law: A Practical Anatomy (2003)

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“shall not be registered, transferred or surrendered or be the subject of a decision revoking the

rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of

the whole Union” 161

This unitary character, established as a principle by the Regulation, therefore implies that EU

territory in its entirety must be understood as a single and indivisible whole. 162

However, “this definition of the unitary character of the EU trade mark refers to the title strictly

speaking, which logically, can only be registered, cancelled or prohibited for use throughout the

EU territory.” The restrictive terms of this definition raise an issue: “is the unitary logic 163

asserted for the title intended to govern, more broadly, every aspect of the existence of the EU

trade mark”?

A study of the Regulation and case law of the Court of Justice of the European Union (Court of

Justice or ECJ) reveals “that the conditions for protection and maintenance of the EU trade mark

form part of a unitary logic, as are (in principle) the effects of such protection.” 164

The ECJ has ruled that injunctions available under the IP Enforcement Directive against

intermediaries can apply to physical marketplaces. In Tommy Hilfiger Licensing LLC and others

v Delta Center a.s., Case C-494/15, 7 July 2016, the court held “that the tenant of market halls

who sublet the various sales points situated in those halls to market-traders, some of whom used

their pitches to sell counterfeit branded products, fell within the concept of an intermediary

whose services were being used by a third party to infringe an intellectual property right within

the meaning of the provision.” Further, “the conditions for an injunction against the 165

161 Regulation 2017/1001 art.1(2). 162 A Firth, G Lee, and P Cranford, Trade Marks: Law and Practice (3rd edn, 2012) 163 Ibid. 164 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 165 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226

35

 

 

 

 

 

 

intermediary were identical to those for injunctions that might be addressed to intermediaries in

an online marketplace” as set out by the ECJ in L’Oréal v eBay. 166

The conditions of validity of the EU trade mark and the unitary logic

The Regulation provides that, in order to be registered as an EU trade mark, a sign must satisfy

the validity requirements provided for throughout the EU territory. The existence of an absolute

ground for refusal in only part of the Union is therefore sufficient to prevent the registration of 167

a sign as an EU trade mark (the EU trade mark can only be registered for those Member States 168

in which such ground for refusal does not exist and for which only a conversion into a national

title is possible). Similarly, “an identical or similar prior right may prevent registration of the 169

EU trade mark even if it is only in force in the territory of a single Member State” and, in the 170

presence of non-identical signs and goods, “if there exists a likelihood of confusion on the part of

the public in the territory in which the earlier trade mark is protected” (which may therefore 171

be the territory of a single Member State). 172

The Court of Justice has specified that in such situations, it is “therefore not necessary to prove

the existence of an infringement” of the first trade mark “in all Member States and in all

linguistic areas of the Community”. 173

The EUTM has been an outstanding success. Year on year, “there has been an increase

in EUTM applications and registrations with 116,000 being filed and 126,000 being registered in

166 Ibid. 167 W. Landes and R. Posner, ‘Trademark law: an economic perspective’ (1987) 30 Journal of Law and Economics 265 at 268–70 168 Regulation 2017/1001 art.7. 169 Regulation 2017/1001 art.139. 170 Regulation 2017/1001 art.8.1(a). 171 Regulation 2017/1001 art.8.1(b). 172 Ibid. 173 Armacell (C-514/06 P) EU:C:2008:511, [2009] E.T.M.R. 52, point 56; Zipcar v OHIM (C-394/08 P) EU:C:2009:334, point 49; Dominio de la Vega (C-459/09) EU:C:2010:533, point 29; and ECJ, December Market Watch (C-402/16 P), EU:C:2016:924, point 7.

36

2016. Various trends can be identified from EUIPO’s statistics.” First, “whilst 174

direct EUTM filings are up, international registrations designating the EU have dropped.”

Secondly, the increase in “EUTM applications leading to registrations has increased

proportionately much more” (15 per cent) than the increase in applications (7 per cent). This may

be “due to the processing of a backlog of applications.” 175

Thirdly, oppositions were filed to 19,000 applications which suggest that broadly, one in five

applications are opposed. This is again not surprising. 176

Fourthly, most filed oppositions are eventually settled. Thus, in 2016, 16,500 oppositions were

settled as against 19000 oppositions being filed in 2016. This suggests that EUIPO’s standstill

provisions for oppositions to encourage settlement work well. 177

Fifthly, although there has been a drop in appeals filed to the Board of Appeals, there has been

an 11 per cent increase in appeals filed to the General Court with 331 being filed in 2016.

Perhaps more importantly, there has been a 26 per cent drop in appeals filed from the General

Court to the Court of Justice. This no “doubt reflects that the Court of Justice has become

increasingly dismissive of appeals from the General Court.” It is to be welcome as the Court of

Justice represents the third appellate tribunal from first instance decisions of EUIPO and its

resources are better deployed on other matters. 178

European harmonisation of IP rights enforcement

In recognition of the significant losses that “legitimate businesses suffer as a result of trade mark

infringement and other types of intellectual property infringement” as well as the threat to

174 Performance data over the years 2012-2016 is set out in Annex 3 of the Annual Report (see https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/contentPdfs/about_euipo/annual_report/ar_2016_annex_03_en.pdf [Accessed 18 April 2020]). 175 Ibid. 176 Ibid. 177 Ibid. 178 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

37

consumer health and safety which it poses, the European Council of Ministers adopted a

“harmonising directive relating to the enforcement of intellectual property rights, which set out

several remedies and penalties that can be sought against, or imposed on, infringers” (EC

Directive 2004/48/EC on the enforcement of intellectual property rights. 179

The Commission has indicated plans as part of its “IP strategy to update the IP Enforcement

Directive to better address the needs of rights-holders in a digital environment, saying that

several of its provisions need to be clarified in order to achieve consistent interpretation and

enforcement across the EU.” The Commission “has already done some work on this, having 180

fulfilled a legislative requirement to evaluate the impact and implementation of the IP

Enforcement Directive in member states. The European Commission has not yet published draft

legislation.” Towards the end of 2012 it commissioned a survey of IP enforcement measures in 181

place in member states. 182

In July 2014, the Commission issued two communications, one containing a ten-point action

plan for the improved enforcement of intellectual property rights within the EU, and the other a

strategy for the effective enforcement of IP rights in countries outside the EU. The

communication on EU infringement differed from previous ones in its focus on

commercial-scale infringers rather than their customers, and its emphasis on the importance of

due diligence on the part of all those involved in the production chain for IP-intensive products.

The Commission said that it will consider whether further, potentially legislative, measures are

necessary on the basis of the outcomes of the new action plan. 183

179 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 180 Ibid. 181 Ibid. 182 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 183 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

38

Chapter 5

What is the trademark functions?

During the 19th century, “when a consumer wanted to purchase particular goods, she had to rely

heavily on the expertise of the shopkeeper for advice as to the origin of the goods and their

quality.” It was not until 1875 that “a register was first introduced in the UK partly in response 184

to the growth in international trade where an increasing variety of goods were being traded under

marks normally associated with British manufacturers, such as ‘Sheffield’ cutlery.” Now, it is 185

said that “it is the association of a trade mark with goods and services (the origin) that sells

products to the consumer, rather than the expertise of the shopkeeper.” The ability to register 186

marks “brought a number of benefits to traders. Not only could marks be registered, and thus

184 A Vickery, ‘The Woman Who Shops ‘Til She Drops’, BBC Radio 4, Just Looking, 3 September 2001, 09:00–09:30. 185 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 186 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

39

protected, prior to being used, but in addition registration reduced the burden on the trader of the

need to prove goodwill and distinctiveness necessary for an action in passing off.” 187

In this “symbiotic relationship between the supplier who owns the trade mark and the consumer,

trade marks perform a vital function of indicating the origin of the goods and services being sold:

in other words, the trade mark functions as a badge of origin. This function is at the heart of 188

the existence of trade marks.” It is noted in literature:

The primary function of a trade mark, traditionally, has been to identify the commercial or trade

origin of the goods (or services) to which it is applied. 189

In case law:

the essential function of the mark, “which is to give the consumer or final user a guarantee of the

identity of the origin of the marked product by enabling him to distinguish, without any possible

confusion, that product from others of a different provenance.” 190

Trade mark rights constitute an essential element in “the system of undistorted competition

which the Treaty is intended to establish and maintain.” in such a system, undertakings must be

able to attract and retain customers by the quality of their goods or services, which is made

possible only by distinctive signs allowing them to be identified. … in that context, the 191

essential function of a “trade mark is to guarantee the identity of origin of the marked goods or

services to the consumer or end user by enabling him, without any possibility of confusion, to

distinguish the goods or services from others which have another origin.” For “the trade mark 192

to be able to fulfil its essential role in the system of undistorted competition which the Treaty

seeks to establish and maintain, it must offer a guarantee that all the goods or services bearing it

187 A Griffiths, An Economic Perspective on Trade Mark Law (2011) 188 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 189 S Ricketson, The Law of Intellectual Property (1984). 190 Centrafarm v American Home Products [1979] FSR 189. 191 inter alia, Case C-10/89 HAG GF [1990] ECR I-3711, para 13, and Case C-517/99 Merz & Krell [2001] ECR I-6959, para 21. 192 Ibid.

40

have been manufactured or supplied under the control of a single undertaking which is

responsible for their quality.” 193

Some further general comment is appropriate on the function of a trade mark under the Directive

(including the recast Directive) and the TMA 1994. Although, “as already mentioned1 the

traditional object of a trade mark was to denote the trade origin of goods, it was never necessary

that the identity of the proprietor of the mark should be known.” This was expressly confirmed 194

in the definition of a 'trade mark' in the TMA 1938, s 68(1). There is “no reason to suppose 195

that the Directive or the TMA 1994 changed the position in this respect.” The earliest trade mark

statutes did not attempt to define a trade mark in terms of its function. This was first done in the

Trade Marks Act 1905, s 3, which referred to use 'upon or in connexion with goods for the

purpose of indicating that they are the goods of the proprietor'; particular kinds of relationship

with the goods (manufacture, selection, certification, dealing with, or offering for sale) were

specified. The TMA 1938 definition adopted the general term 'connection in the course of trade',

which included all the kinds of connections previously specified. 196

When the law was extended in 1986 to cover service marks the definition of 'service mark'

required an indication 'that a particular person is connected in the course of business, with the

provision of those services'. 'Provision' in this context was defined as 'provision for money or 197

money's worth'; this itself gave rise to certain difficulties, which are mentioned below. The

concept of distinguishing goods or services of the proprietor from those of others was to be

found in the requirements for a mark to be registrable . Essentially, “whatever the wording 198

used, a trade mark or a service mark was an indication which enabled the goods or services from

193 Case C-206/01 Arsenal Football Club plc v Matthew Reed [2003] Ch 454, [2003] 3 All ER (EC) 1, [2003] 3 WLR 450, [2003] RPC 144, paras 47–48. Also Case C-102/77 Hoffmann-La Roche [1978] ECR 1139, para 7, and Case C-299/99 Philips v Remington [2002] ECR I-5475, para 30. 194 Birmingham Vinegar Brewery v Powell [1897] AC 710 at 715, 14 RPC 720 at 729 and 750; also the observations of Slade LJ in Re Dee plc Corpn [1990] RPC 159 at 181, line 26, to 182 line 4. 195 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265

196 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 197 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 198 Ibid.

41

a particular source to be identified and thus distinguished from goods or services from other

sources.” In adopting a definition of 'trade mark' which simply describes the function in terms 199

of capability of 'distinguishing the goods or services of one undertaking from those of other

undertakings' the Directive and the TMA 1994 are really saying precisely the same thing. 200

If proponents and opponents of the CJEU's jurisprudence on “trade mark functions can agree on

anything”, this would “probably be that the doctrine first articulated” in L'Oréal/Bellure that the

“functions of a mark protected under Art. 5(1)(a) TMD” include not only the essential function

of the trade mark, which is to guarantee to consumers the origin of the goods or services, but also

its other functions, in “particular that of guaranteeing the quality of the goods or services in

question and those of communication, investment or advertising” was an “unexpected step 201

which, depending on one's own position, can be qualified as bold and visionary” or as 202

unnecessary and dangerous. It is true that the Court's holding in L'Oréal came as a surprise, in 203

particular after Adam Opel/Autec, where the same Court had stated that, if the essential 204

function of the “Opel” mark was not affected by the use of the sign on toy models, protection (if

at all) could only be sought under the provision granting extended protection for marks having a

reputation (Art. 5(2)). However, with hindsight the step can also be interpreted as a legal

manoeuvre necessitated by a lack of clarity in the legal provisions. 205

Situation under the European Union law

The CJEU fails to “recognize that the key to these issues, where they become problematic, does

not necessarily reside in the field of trade mark functions.” Due to its genesis as a tool to sustain

199 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 200 This is clear from the Preamble to the Directive, see now para 11 of the Consolidated version, Directive 2008/95/E 201 CJEU Case C-487/07, [2009] ECR I-05185 — L'Oréal/Bellure, para. 58. 202 A particularly positive reaction in Germany was that of K.-H. Fezer who considered L'Oréal to be a “magic moment” of the functions theory (Fezer Fezer 2010). 203 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 204 CJEU Case C-48/05, [2007] ECR I-01017 — Opel/Autec. 205 A Griffiths, An Economic Perspective on Trade Mark Law (2011)

42

and limit “the scope of trade mark protection in case of infringement, the functions discussion

neither encompasses the way in which the trade mark was acquired, nor does it yield a basis for

evaluating and actively preventing abusive behaviour by the trade mark proprietor.” Cases like 206

Martin Y Paz therefore need a more comprehensive evaluation scheme which is equally based on

overarching principles such as equity and fairness, but without being limited to the aspects on

which the functions discussion is mainly focused. General principles informing such an 207

evaluation (like “unclean hands”; or “Treu und Glauben”) are found in practically every

organically grown legal system. In contrast, European law, at least for now, does not represent a

comprehensive, fully developed legal system providing for an overarching corpus of

fundamental fairness principles. That lacuna shows when non-harmonized national law impacts a

harmonized area like trade mark law in a manner which “such as time-barring the cancellation

claim in Martin Y Paz produces skewed results.” To posit that “the solution in such cases must 208

solely be found in trade mark law appears unfounded; after all, the problem itself results at least

in a substantial part from the impact of non-harmonized law.” This particular situation calls for 209

a cautious approach; “it would be wise not to interfere more than absolutely necessary with

national correction mechanisms.” Unfortunately, the “CJEU does not always muster the kind of

self-restraint one might wish for in such situations.” 210

An EUTM is a “property right enabling its owner to prevent uses in any form, including orally,

which interfere with the essential function of the EUTM, and that essential function is to

guarantee the origin of the goods or services for which the EUTM is registered.” The use has to

be in the course of trade, interpreted as being in the context of commercial activity with a view to

economic advantage and not as a private matter. 211

206 Ibid. 207 Sidney Diamond, “The Historical Developments of Trademarks” (1975) 65 Trademark Reporter 265 208 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 209 Ibid. 210 Ibid. 211 MA Naser, ‘Trademarks and freedom of expression’ (2009) 40 IIC 188

43

Acts of unauthorised use of a sign used in the course of trade as detailed in Art.9 do so interfere

and thus amount to infringement (subject to defences that may be available to a defendant). The

cornerstones of the law of infringement are the legal fiction of the “average consumer” who is

targeted by the use of the impugned sign, combined for “normal” trademarks with the concept of

the “likelihood of confusion”. For marks with a reputation, “the central concept is the harm done

to reputation of the mark by the use of the impugned sign even in the absence of confusion.” 212

The “likelihood of confusion” is analysed by comparing the differences, if any, between

the EUTM and the impugned sign, and the differences, if any, between the respective goods or

services. However, by another legal fiction, where there is complete identicality between

the EUTM and the sign as well as between the respective goods or services, the “likelihood of

confusion” is assumed and requires no proof. The analysis is by way of a “global appreciation”

test taking into account a number of mutually interdependent factors, chiefly the visual, aural and

conceptual aspects of the comparison of the marks, based on the dominant and distinctive

features of the EUTM and the sign. 213

The types of acts amounting to infringement include: affixing a sign to the goods or their

packaging; offering goods for sale; marketing the goods; stocking the goods for commercial

purposes; offering services; supplying services; importing or exporting the goods; using the sign

on business papers; and using the sign in advertising. 214

212 Ibid. 213 Ibid. 214 Ibid.

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Chapter 6

Trademark law and Human Rights

Clearly, the use of a trademark for the purposes of expressing ideas and conveying messages

requires the parodist to use the trademark. This “focuses upon using the mark in a manner 215

215 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293

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which aims to make an association with the owner's mark, so as to convey a message by

stressing the difference between the parodist's use and the owner's use.” Thus, “the mark forms

an essential tool for the parodist to freely express his/her views and to create a humorous image,

whether through the mark or on the owner's use of the mark.” 216

The consuming public, being “co-authors” of marks, should enjoy the inherent right of using

them for expressive purposes. Therefore, “this approach ab initio contradicts the dilution theory,

and there is little or no possibility of their co-existence.” As one scholar argues, “if trademark

holders were allowed to shut down parodic or critical speech involving the mark, dilution law

may prove to create a net social loss.” Such social losses are, in particular, what “this ongoing 217

argument fights against.” 218

While the use of the mark for parodistic purposes necessitates the use of the mark, the dilution

concept considers such use as blurring the owner's mark and as harming and eroding the

distinctive character of the mark. The parodist's use “might be on goods and/or services which 219

the owner might classify as being of inferior quality, and from the dilution concept perspective,

this shall tarnish the owner's mark.” This is especially “the case when the parodist's use is

directed towards mocking and ridiculing the owner's use. However, the damage that the dilution

rationale suggests is ill-defined and, as Farley puts it; such harm lacks any supportable

theorization.” 220

Consequently, according to Shaughnessy: “[U]nder the dilution theory… the rights of the

trademark owner seriously conflict with the parodist's first amendment rights.” Hence, the 221

dilution concept forms an unconstitutional means, which is responsible for hindering the public's

ability to express themselves. Indeed, as Aoki argues, “[s]trong anti-dilution laws grant

trademark owners increasingly strong veto power over downstream uses of such a trademark for

216 S Schnell, The Community trade mark: unitary EU right—EU-wide injunction?’ (2011) 33(4) EIPR 210–226 217 Michael Spence, “Intellectual Property and the Problem of Parody”, 114 L.Q. Rev. 594, 608 (1998). 218 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293 219 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293 220 Christine H. Farley, “Why we are Confused about the Trademark Dilution Law”, 16 Fordham Intell. Prop. Media & Ent. L.J. 1175, 1184 (2006). 221 Michael K. Cantwell, “Confusion, Dilution and Speech: First Amendment Limitations on the Trademark Estate: An Update”, 94 Trademark Rep. 547, 559 (2004)

46

purposes of social commentary and expression critically of or radically alternative to a trademark

owner's practices and products.” 222

All in all, the consuming public, in addition to their role in the creation of the trademark, are the

creators of the meaning of such marks. This requires the use of the confusion doctrine, which is

unlikely to occur because the parodistic nature of the use cuts any possibility of confusion.

However, it has been shown that the lack of any explicit statutory recognition of this right has

affected the public's enjoyment of their rights in this respect. It has also been argued that the

dilution doctrine, in addition to the inherent insufficiencies, is a tool which extinguishes the

public's rights in expressing and communicating their ideas. 223

The right to freedom of speech can be found in Art. 10(1) of the European Convention on

Human Rights, which reads: “Everyone has the right to freedom of expression. This right shall

include freedom to hold opinions and to receive and impart information and ideas without

interference by public authority and regardless of frontiers.”

The right has been construed widely by the Strasbourg court, which has stated that:

“Freedom of expression constitutes one of the essential foundations of a

democratic society and one of the basic conditions for its progress and

for each individual's self-fulfilment. Subject to para. 2, it is applicable

not only to “information” or “ideas” that are favourably received or

regarded as inoffensive or as a matter of indifference, but also to those

that offend, shock or disturb.” 224

However, the right to freedom of speech is not unlimited. Art. 10(2) states that:

“The exercise of these freedoms, since it carries with it duties and

responsibilities, may be subject to such formalities, condition

222 Clarisa Long, “Dilution”, 106 Colum. L. Rev. 1029, 1057 (2006). 223 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293. 224 Ibid.

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restrictions or penalties as are prescribed by law and are necessary in a

democratic society, in the interests of national security, territorial

integrity or public safety, for the prevention of disorder or crime, for the

protection of health or morals, for the protection of the reputation or

rights of others, for preventing the disclosure of information received in

confidence, or for maintaining the authority and impartiality of the

judiciary.”

Thus any restriction on free speech must be prescribed by law, in the sense that there is a clear

legal basis for the restriction. It must be necessary in a democratic society, in the sense that it

must meet a pressing social need and the restriction must be proportionate to that need. Finally,

“it must be in the pursuit of a legitimate aim. Most relevant with regard to trade mark law is the

need to protect the rights of others, and, in relation to the restrictions on the registration of

immoral marks, the need to protect morals and prevent disorder.” 225

Freedom of speech is clearly of relevance to trade mark law. The exact extent of its influence 226

is as yet untested but it appears that there is a complex balance of speech versus property rights,

which are also protected as human rights, to be made. Given this uncertainty, “it might be

expected that courts faced with trademarks which potentially restrict speech would attempt to

engage in this balancing exercise, or at least acknowledge the complications in this area.”

However, as can be seen from the cases discussed, this generally has not occurred. 227

In many of the cases discussed, free speech is used against trade mark rights to enable third

parties to make use of others' trademarks. However, in cases involving allegedly immoral marks,

trade mark owners have had significant success in using free speech to enable their marks to be

registered.23 Art. 3(1)(f) of the Directive (Secs. 3(3)(a) of the TMA 1994 and Art. 7(1)(f) of the

CTMR) prohibits the registration of marks which “are contrary to public policy or to accepted

principles of morality”. As Richard Arnold QC (as he then was) notes in French Connection

Limited's Application, there is a degree of irony inherent in this provision, since refusing such

225 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293 226 J Phillips, Trade Mark Law: A Practical Anatomy (2003) 227 J Phillips, Trade Mark Law: A Practical Anatomy (2003)

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marks registration as a trade mark means that anyone is free to use them, which is likely to lead

to greater dissemination of the offending sign.24 Nevertheless, “this provision is perhaps the

place (other than in relation to interim relief) where tribunals have felt most comfortable in

relying directly on human rights provisions in the trade mark context and have, as a

consequence, taken a relatively narrow view of when a mark should be considered immoral. This

observation though is only true in relation to allegedly immoral marks.” Where a mark is 228

contrary to public policy, in the sense that it incites violence of other criminal activity, tribunals

have been more willing to treat this as fact as sufficient per se to refuse registration, without

considering countervailing free speech interests.25

The CJEU has not ruled on the scope of the immorality exception. In the UK, the general

standard for assessing immoral marks was set in Ghazilian's Application. Simon Thorley QC, 229

sitting as the Appointed Person, found “that for a mark to be denied registration on this ground, it

had to cause outrage” or “be the subject of justifiable censure as being likely significantly to

undermine current religious, family or social values”, rather than being merely distasteful. This

sentiment had to be felt by an identifiable section of the public, rather than just being a mere

feeling or suspicion on the part of the Hearing Officer. Interestingly, “despite setting down this 230

high standard, Mr Thorley QC doubted whether the Human Rights Act added anything of value

to the discussion”, though it “would seem that his reasoning was infused with sensitivity 231

towards freedom of speech.” 232

The free speech-friendly approach was adopted by Geoffrey Hobbs QC, sitting as the Appointed

Person, in Basic's Trade Mark Application. There “the application was for JESUS for various

classes of goods, including clothing.” Again, the need for objectivity in the analysis of

immorality was stressed, as was the need for the decision not to be arbitrary. Where Basic's 233

Trade Mark Application goes further than Ghazilian's Application is that Mr Hobbs QC saw Art.

10 of the European Convention on Human Rights as providing the “disciplined approach” that

228 MA Naser, ‘Trademarks and freedom of expression’ (2009) 40 IIC 188 229 Ghazilian's Application [2002] ETMR 57. 230 Ghazilian's Application [2002] ETMR 57. 231 Ghazilian's Application [2002] ETMR 57. 232 J Phillips, Trade Mark Law: A Practical Anatomy (2003) 233 Basic Trade Mark SA's Application [2006] ETMR 24

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would ensure that the analysis of (im)morality was objective. Thus, for a mark to be refused 234

registration, it would have to be “seriously troubling”. In this case, “although not every used of 235

religious terminology would be offensive”, the use of the “ultimate Christian name” would be

considered “anti-social by reason of its ability to undermine an accepted social and religious

value”.31 Both believers and “those who believe in the need to respect the religious sensibilities

of others” would view the use of JESUS in a commercial context as unacceptable. 236

The trade mark cases in “which free speech issues have been considered reveals that, although

there are pockets of genuine engagement with free speech issues, trade mark law's explicit

grappling with free speech is patchy and often superficial.” Moreover, the CJEU, which plays 237

such a prominent role in European trade mark law, has barely discussed the subject, although its

Advocates General have in some depth. Key issues, such as the enforcement of trade marks in

cases of satire or parody, or when it is appropriate to grant interim relief which may interfere

with speech have remained the exclusive preserve of national court. 238

This is not necessarily a sign that there is something fundamentally wrong.164 While it would be

unfortunate if trade mark law was suppressing speech involving trademarks, it should not be

forgotten that trade mark law has a range of internal safeguards designed to prevent trade mark

rights from interfering with the communication needs of other traders and the general public. 239

These safeguards include: (i) the ban on the registration of marks which are descriptive or

generic, and the ability to revoke such marks if they become so during their lifetime ; (ii) the 240 241

need for any infringement to be “in the course of trade”; and (iii) preventing enforcement against

purely private speech (though uses where free speech is implicated may involve a commercial 242

element, e.g. if a trade mark parody is placed on a t-shirt, the junior user will seek to sell that

t-shirt). Indeed, the fact that trade mark rights are not absolute, and can only be relied upon when

234 Basic Trade Mark SA's Application [2006] ETMR 24 235 Basic Trade Mark SA's Application [2006] ETMR 24 236 I. Simon Fhima, ‘Trade marks and free speech’ (2013) 44 IIC 293 237 Ibid. 238 Ibid. 239 Burrell and Gangjee (2010), particularly p. 545–558 argue for the potential of internal safeguards in trade mark law, though they seem sceptical as to whether they are presently in place. 240 Art. 3(1)(c) and (d). 241 Art. 12(2)(a). 242 Arts. 5(1)(a) and (b), and 5(2); Geiger (2007), p. 323.

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the senior user suffers one of the forms of harm identified as infringement, or unfair

advantage,169 in itself reduces the possibility of a conflict between trademarks and speech. In

addition, the defences to trade mark infringement are also designed to prevent the use of trade 243

marks in situations where others may need to use them, as, potentially does the need for any

dilution action to be “without due cause” on the part of the junior user. 244

However, for these safeguards to work, “they need to be applied in a clear and consistent way.

Arguably this does not always happen in the trade mark context. One example is in relation to

whether trade mark use is required for infringement, in the sense that the junior user must use the

mark to identify the origin of its own goods or services.” Clearly, if there is such a 245

requirement, the scope of permitted use of others' trade marks will be wider; however, if it is

unclear whether or not such a requirement exists, junior users may be deterred from taking the

risk of others' marks, with the effect being the same as if there was no trade mark use

requirement at all.172 A further issue is that many of the restrictions on trade mark use are subject

to provisos.173 While this is not a problem in itself, and such provisos have a role to play in

ensuring that the exceptions to trade mark protection do not undermine the trade mark right, the

CJEU has had a tendency to interpret the provisos in a way that renders the restrictions all but

useless. 246

Chapter 7

Conclusion

243 Particularly Art. 6, though comparative advertising is also protected under the Misleading and Comparative Advertising Directive. 244 Ibid. 245 Ibid. 246 the account in Rutz (2005). Subsequent decisions adding to the uncertainty include Adam Opel, para. 24 and Case C-17/06 Céline SARL v. Céline SA [2007] ECR I-7041, para. 23.

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With the filing of Community trademark applications since April 1, 1996, and the flood of

applications that the Office for Harmonisation of the Internal Market in Alicante is now having

to cope with, “the time is drawing nearer when the first infringement cases involving Community

trademarks will have to be decided by the courts.” The legal systems of the Member States will

need to prepare for the enforcement of “the rights resulting from a Community trademark and for

the enforcement of prior national rights against a Community trademark.” There are hardly any

precedents for the solution of the issues that will arise. The autonomous protection system of the

Council Regulation on the Community Trade Mark creates unitary, Community-wide property

rights alongside national rights. 247

The CJEU case law is seemingly consistent in the message: it is not getting any easier to register

an unusual mark. Despite this, however, the boundaries are being increasingly clearly set out.

Marks require clear and precise definitions; applicants must avoid any word that offers the

possibility of interpretation, and descriptive additions to graphic representations, if they are used,

must clarify not confuse. 248

The advice to potential right holders remains the same: know the threshold that the mark needs to

beat, whether that is by way of evidence of acquired distinctiveness, or by use of a clear and

precise definition. 249

Fundamentally, however, when applying for a mark, defending it, or issuing infringement

proceedings, lawyers and right holders alike must all adopt the same mentality-go back to first

principles: is your mark capable of being a trade mark? If not, it’s time to remove the word

“approximately” from the description. 250

247 Ibid. 248 Ibid. 249 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149 250 Beth Collett, Have unconventional marks had their day? E.I.P.R. 2020, 42(3), 144-149

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The analyzed jurisprudence shows that the judgments of the CJEU do not merely interpret, but

substantially complement the European trademark legislation. As has been noted, the Court of

Justice “appears to have assumed substantial responsibility for the continued Europeanisation of

trademark law” and it openly contributes to the process of harmonization. This influential role

that the CJEU plays in the field of trademark law has already been well illustrated through the

development of the concept of trademarks with a reputation and its impact on the position of

trademarks in the marketplace.

The jurisprudence of the CJEU distinctly shows that for the purposes of the Community

trademark, the territory of the EU must be treated as a territory of one country. The national

borders of the Member States are not to impede its functioning as a right with a unitary character.

First, the Court stated that the territory of one Member State can be seen as a significant part of

the territory of the EU (trademarks with a reputation, see the PAGO case). Then, it went further

by clearly establishing that the national borders of the Member States should not influence the

assessment of the use of a trademark in the EU (trademark's genuine use, see the Leno Merken

case). These decisions develop and clarify the concept of the EU territory as a setting for the

functioning of the CTM. The message of the Court is clear and encompasses the idea that any

schematic approach that classifies the territories of the Member States is against the ideals of the

single market and, therefore, does not constitute a valid solution.

This dissertation is a small foretaste of what the courts of the Member States can expect upon

entry into force of the Community trademark system. This system will involve an enforcement of

rights within the European Community, compliance with new procedural rules and a

cross-border dimension to an extent hitherto unknown. The reluctance of the courts to decide on

facts of infringement in other Member States according to the law of such state, still noticeable

in patent infringement cases, cannot be maintained any longer in the system of the enforcement

of rights under the Community Trade Mark Regulation. The national courts will not be able to

avoid applying Community law and the laws of other Member States in compliance with the

criteria of European legal uniformity and legal harmonization. In this way, the harmonization

53

process could develop a dynamism in trademark law that might also include nonharmonized

areas and perhaps even parts of procedural practice. It is to be hoped that the enforcement of the

rights in the Community trademark system will advance the harmonization of national trademark

law, and result in a comprehensive European trademark law. 251

Finally, in January 2019, the requirement for marks to be capable of being represented

graphically has been removed from art.4 of the EUTMR. All of the case law discussed in this

article was determined under the old requirements, but it is certainly possible, and many would

argue expected, that these reforms may well make the registration of these unconventional

trademarks slightly easier. Whether it will or not is yet to be seen, but what is certainly clear is

that with any attempt to register a trade mark, the applicant must always go back to basics. 252

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