Trade Mark Newsletter July 2002
Contents
ARSENAL V. REED: A Yellow Card For Counterfeiters
BABY-DRY - A High Watermark For Distinctiveness
Uk Domain Name Disputes
When Is A Shape Not A Trademark?
Return to full list
of Newsletters
ARSENAL V. REED: A Yellow Card For
Counterfeiters
In order to infringe a registered mark, must the unauthorised use
be a “trade mark use”, i.e. to indicate origin?
Following a referral by the English High Court to the European
Court of Justice last year, the Advocate General (who advises the
ECJ on how to interpret points of law for future guidance) has issued
his opinion on this point.
Much to the relief of brand owners, particularly football clubs
who engage in merchandising as a valuable source of income, the
opinion points strongly to the conclusion that unauthorised users
of registered trade marks on such merchandise cannot escape liability
for infringement by arguing that their use is not a “trade
mark use”. In his referral to the ECJ, the English judge had
suggested that it might not be an infringement if the ultimate purchaser
was motivated to buy the goods by a desire to demonstrate allegiance
to the football club; he suggested that the trade marks appearing
on the merchandise would not be operating as trade marks, but rather
as a badge of loyalty or allegiance akin to a mere decoration.
After a thorough analysis of the functions which trade marks perform
in today’s commercial arena (which include, according to the
Advocate General, serving as indications of quality, reputation
or the renown of the producer or provider of the goods or services,
as well as the classic indication of origin), the Advocate General
has suggested that all such uses in a commercial context may be
prevented by the trade mark owner.
Where any such use of the identical mark occurs on identical goods
or services, there will be a presumption of confusion which it is
for the defendant to rebut. In the case where the defendant is exploiting
the mark commercially, regardless of his motivation, the Advocate
General’s opinion strongly suggests that this is almost certainly
an infringement.
While the opinion has yet to be followed in a full decision from
the ECJ, it is usually strongly persuasive and points the way to
the ultimate conclusions of the court. The opinion will be popular
with all businesses who derive an income from merchandising, particularly
in the field of sports such as football or tennis.
The Advocate General’s opinion is also notable for quoting
extensively from a number of external sources which analyse the
importance of football to its fans and those who derive their living
from it. There is even a quote from the late great Bill Shankly
– “Football isn’t a matter of life and death. Its
far more important than that.” Clearly this Advocate General
is a football fan.
Back to top of page
BABY-DRY - A High Watermark For Distinctiveness?
The decision, in September 2001, by the European Court of Justice
that a mark such as BABY-DRY, which combines two descriptive words
in an unusual manner, should qualify as distinctive was greeted
with surprise and some dismay by the UK Trade Marks Registry and
the Community Trade Mark Office.
Current indications are that the decision may not have the revolutionary
effect on previous practice that some commentators suggested. Moreover,
in a recent opinion (published on 14th May 2002) in the COMPANYLINE
matter (case c-104/00P) the Advocate General has suggested that
there must be a perceptible difference between the mark applied
for and the normal descriptive term in context before the BABY-DRY
reasoning can apply. In a gloss on the original test, the opinion
states that “perceptible” does not mean “minimal”
and that a mere combination of two words which have an obvious meaning
(in casu COMPANY and LINE) is not enough to render the mark distinctive.
The Advocate General in COMPANYLINE also casts doubt on the suggestion
in BABY-DRY (which did contradict previous statements by the ECJ
in the WINDSURFING case) that it was unnecessary to take account
of the effect which registration might have on future users of similar
signs when assessing distinctiveness, i.e. the public policy aspects
of permitting registration of descriptive terms. In his opinion
in COMPANYLINE the Advocate General has called on the ECJ to resolve
this apparent conflict.
At the same time, in a surprise move, the Community Trade Mark
Office has indicated to the applicants for BABY-DRY, who might reasonably
have thought that their mark was now going forward to registration,
that the decision by the ECJ does not appear to have resolved the
point of objection originally raised under Article 7(1)(b) of the
CTM Regulation (i.e. that the mark was devoid of distinctive character).
This notwithstanding the clear statement by the ECJ that if a descriptive
term has a perceptible difference from the norm this is “apt
to confer distinctive character on the word combination” thus
enabling it to be registered as a trade mark and for Article 7(1)(c)
objections to be inapplicable.
To add to the confusion, the UK Trade Mark Registry have now issued
a Practice Note (PAN 4/02) concerning the effects of BABY-DRY, again
commenting on the differences in approach by the ECJ as between
BABY-DRY and WINDSURFING, and indicating the manner in which they
will interpret the test under the UK law provisions forbidding registration
of descriptive signs or indications.
According to the UK Registry, the difference between the trade
mark applied for and the “usual ways of designating the goods
or services” must be perceptible at first impression to the
average consumer for the mark to qualify as registrable.
Moreover, since they consider that the ECJ judgment in BABY-DRY
did not determine the full scope of Article 7(1)(b) of the Regulation
(which prohibits marks which are devoid of any distinctive character),
they reserve the right to refuse descriptive terms not because they
are descriptive, but because they are “just too commonplace”.
In particular, slogans may be refused on this basis.
A further UK Registry Practice Notice (PAN 5/02) also suggests
that non-obvious misspellings of descriptive words may be acceptable,
but words which are commonly misspelt, or where the public are not
used to seeing them written down, may still be refused, e.g. XTRA
for “extra”, or COLOR for “colour”.
It was perhaps inevitable that the “high water mark”
for trade mark owners represented by BABY-DRY would be eroded by
the innate resistance to change in the bodies who administer trade
mark registration on a day-to-day basis. It is, however, disappointing
that the reaction should have set in quite so soon. It should still
be remembered, however, that the interpretation of distinctiveness
of descriptive terms set out by the ECJ in the BABY-DRY decision
is still the most up-to-date and authoritative statement on this
topic and should therefore have strong precedent value.
Back to top of page
Uk Domain Name Disputes - Update
On 19 June, Nominet issued a press release calling on complainants
and their advisors to improve the quality of their submissions or
risk having the case dismissed. Nominet’s new dispute resolution
service has been running for 8 months, during which time 350 cases
have been dealt with. Many of these were deemed invalid because
they did not comply with the procedure. Many complaints, a significant
number of which were lodged by solicitors, failed to address the
key points of the policy procedure or to provide any evidence to
support their assertions. The Chairman of Nominet’s Panel of
Independent Experts has indicated that they are going to get tougher
with those submitting poor quality applications and that in future
common sense assumptions may not necessarily be made on the complainant’s
behalf.
Figures show that over 50% of the cases lodged with Nominet are
successfully resolved by Nominet’s mediation process which
lasts for a maximum of 10 days. Of those referred to an independent
expert, 85% have the complaint upheld.
Whilst this latter figure may be viewed as demonstrating a bias
towards brand owners (the majority of the complainants), it is countered
by Nominet who say that only with those with a strong case pursue
matters beyond the first, free, stage.
Recent cases have included Zippo Manufacturing Company v. Ronald
Robinson where the expert held that the registration or use of a
domain name which incorporates a well-known trade mark without the
express consent of the trade mark owner, should not necessarily
be regarded as unfair where it is genuinely registered and used
for the purpose of advertising authentic goods.
Nevertheless, registration of zippo-lighters.co.uk was held to
be an abusive registration, taking unfair advantage of and unfairly
detrimental to the complainant’s rights in the ZIPPO name.
This is because there was no indication on the respondent’s
web page that it was not operated or authorised by the complainant,
with the result that confusion was likely to arise.
In Ebel v. Sm@rtNet Ltd, it was held that the registration of only
4 domain names by the respondent was sufficient to find that they
were engaged “in the pattern of making abusive registrations”.
In addition to registering ebel.co.uk, the respondent had also registered
tagheuer.co.uk, patekphillippe.co.uk and breitling.co.uk; all these
domain names containing trade marks registered for luxury watches.
In the case of Tarmac Ltd v. Andrew Etches, the complainant was
successful in seeking the transfer of the domain name tarmacvandal.co.uk.
Whilst the respondent failed to answer the complaint, the expert
felt that as the domain name resolved to a website relating to performance
and modified road cars arranging “cruises or rave rallies in
cars” it amounted to an abusive registration on the basis that
it is being used in a manner which takes unfair advantage of the
complainant’s rights. The complainant tried to argue that there
was evidence of actual confusion; however, no such evidence was
submitted, with the result that the complainant only succeeded because
the list of factors which point to abusive registrations under paragraph
3 of the Dispute Resolution Policy is not exhaustive.
D Young & Co have been involved in a substantial number of
domain name dispute matters before not only Nominet, but also under
the UDRP. To date we have a 100% success rate for our clients and
hope to maintain this with complaints recently lodged, including
one against 42 domain names registered by a single entity. The majority
of our cases have involved acting for the proprietors of well-known
brands; however, we are happy to advise on all types of cases, both
before Nominet and under the UDRP.
Back to top of page
When Is A Shape Not A Trade Mark? -
The Ecj Decision In Philips V. Remington
Although the definition of “trade mark” in the UK Trade
Marks Act specifically refers to “the shape of goods”,
following the recent ECJ decision in Philips & Remington, it
seems that not many basic or functional shapes will qualify for
registered trade mark protection.
The case concerned a trade mark registration for a picture of a
3-headed rotary shaver owned by Philips. Following Remington’s
introduction of a rival 3-headed rotary shaver product in the UK,
Philips took action for trade mark infringement. In their counter-claim
Remington asserted that the registration was invalid. They relied
not only on alleged lack of distinctiveness and descriptiveness
but also on the special provisions in the Trade Marks Act which
preclude registration of certain types of shape (essentially those
which are functional or where the shape is intrinsic to the nature
of the product).
In the High Court the judge found that the registration was invalid
and not infringed. On appeal, the UK Court of Appeal referred a
number of questions of interpretation to the European Court of Justice
for guidance regarding the types of shape which would qualify for
trade mark registration under the new law.
In one of their arguments, Remington had claimed that there were
certain categories of sign, in particular shapes which, despite
being distinctive in fact, could not qualify for registration because
they could not fulfil the basic function of a trade mark i.e. to
signify origin. The ECJ rejected this argument; according to them
if by virtue of its intrinsic characteristics, or as a result of
the use made, the shape was capable of distinguishing the applicant’s
goods then it would be registrable.
Moreover the basic criteria for registration of shapes were not,
according to the ECJ, any higher than those for other types of sign
where trade mark protection is sought; in particular they held that
there was no need to have a “capricious addition” or embellishment
to the shape for it to be capable of performing a trade mark function.
Nevertheless they did indicate that where the applicant for the
shape mark was in a monopoly position at the time of filing for
trade mark protection, the standard of proof required to satisfy
the acquired distinctiveness requirement could be more onerous.
The test is still whether a substantial proportion of the relevant
public associate that shape with the trader and no other, or believe
that goods of that shape came from that trader, but the shape must
be seen by the public as having trade mark character. Proving that
this is in fact the perception of the relevant consuming public
is likely to be problematic.
Although their decision gives positive responses to the more general
questions as to whether shapes are to be given different treatment
to other types of sign when assessing their trade mark characteristics,
the ECJ concluded their judgement by finding that marks consisting
of the shape of goods “necessary to obtain a technical result”
should be refused - even if there are other shapes for the goods
that could achieve the same technical result. Moreover if the shape
mark fails this “technical result” test, then the fact
that it has acquired distinctiveness through use so as to satisfy
the test of trade mark recognition by the public is not going to
save it.
Thus, shape marks are to be treated differently and less favourably
than other signs for which trade mark registration is sought under
the law as interpreted by the ECJ. The rationale is that giving
perpetual trade mark monopoly rights to functional designs or shapes
of products is an undue extension of the system of IP protection
at the expense of the public interest. If a trader designs a new
product shape which has technical or functional characteristics
it should be protected under the Patent, Copyright or Design Right
provisions of IP law rather than through the perpetual monopoly
afforded by trade mark
Back to top of page
Return to full list
of Newsletters
|
