Trade Mark Newsletter November 2003
Contents:
Focus On Madrid As United States Of America Joins
System
Legal 500 Recommends D Young & Co
Stripes As Decorative Elements - Adidas-Salomon
Ag And Adidas Benelux Bv V Fitnessworld Trading Limited
Pharma Marks - How Close Is Close?
Shorter Non-Use Terms - Is This A New Trend?
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Focus On Madrid As United States Of
America Joins System
Under the Madrid Protocol System for International registration
of marks it is possible for a trademark owner to apply (based on
a suitable home trademark registration/application) for a single
International registration covering a number of designated member
countries.
The system involves payment of a basic fee and also fees for each
designated country. The designation fees can vary; however the system
is generally cheaper than individual national filings.
Since the United Kingdom joined the Madrid Protocol System in the
mid 1990s it is probably fair to say that the system has been under-used
by UK companies.
However the recent announcement of the United States accession
to the Madrid Protocol System is likely to encourage brand owners
to focus on Madrid as a potential filing method for trademark protection
programmes.
The United States deposited its accession documents in August and
the Protocol will enter into force with respect to the United States
on 2 November 2003.
The United States has (as expected) announced that it will set
an individual filing fee, equivalent to the national filing fee.
Trade Mark clearance searches for the United States remain advisable
to assess the availability of a mark for use.
From 2 November 2003 it will be possible:
- To designate the United States in any International trademark
application under the Madrid Protocol.
- To add the United States (by means of a subsequent designation)
to any existing International trademark registration under the
Protocol.
For US trademark owners to use the Madrid Protocol System for
trademark filing programmes.
- To assign International registrations under the Madrid Protocol
to US companies (in cases where such transfers where previously
blocked due to US non-membership of the system).
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Legal 500 Recommends D Young &
Co
For the second year running D Young & Co has been voted one
of the top tier UK trade mark and patent mark attorney firms by
clients and senior practitioners in the Intellectual Property field.
The Legal 500 provide an annual qualitative assessment of UK Law
firms in order to provide independent advice to clients seeking
the best firm for their work. The Legal 500 recognises that “what
clients really want are individuals on whom they can rely to deliver
prompt, responsive and high-quality service, and efficient project
and case management.” (Martha Sellers Klein, Editor of The
Legal 500, 2003).
In order to achieve this commendation D Young & Co has demonstrated
that our attorneys have both the breadth of experience and the resources
to provide good IP solutions to our clients.
Legal 500 Evaluation of D Young & Co’s Trade Mark Practice:
“D Young & Co’s chairman Penelope Nicholls and
partner Jeremy Pennant are excellent. Nicholls has advised Procter
& Gamble, Arsenal FC, and Anheuser-Busch (Budweiser) on contentious
matters. The firm is also strong on the non-contentious side,
while its reputation for training is second to none in the profession.
Major departmental client gains in 2002 included LVMH, UPS and
Kangol.”
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Stripes As Decorative Elements -
Adidas-Salomon Ag And Adidas Benelux Bv V Fitnessworld Trading Limited
When choosing a trade mark which consists of a motif, design or
other decorative feature, trade mark owners should be aware of the
possibility that it will not be recognised or protected as a trade
mark unless they take positive steps to reinforce this association
amongst consumers. The report below concerning the “well known”
three stripe device used by Adidas on sports clothing and footwear
reinforces this point. Indeed, the Advocate General’s opinion
must represent something of a pyrrhic victory for Adidas; although
he has recognised that the European law provisions giving enhanced
protection to “well known” marks when used on dissimilar
goods extend to unauthorised use on similar goods (a surprising
conclusion given the literal wording) he has suggested that traders
who are using “simple and long accepted decorations and motifs”
may not obtain trade mark rights in such features.
It will be recalled that Article 5(2) of the Trade Marks Directive
provides that Member States can provide an additional level of protection
to well known marks with a “reputation” under their national
laws. The wording of this provision states that trade mark proprietors
can prevent third parties from using in the course of trade any
sign which is identical with or similar to the earlier registered
mark in relation to goods or services which are not similar to those
for which the earlier mark are registered. Whilst the proprietor
of the earlier trade mark must also demonstrate that it has a “reputation”
in its mark, and that the use of the later sign “without due
cause, takes unfair advantage of, or is detrimental to, the distinctive
character or your repute of the trade mark”, it is not necessary
to prove that there is a likelihood of confusion.
Advocate General Jacobs has now confirmed the ECJ’s interpretation
of this provision given in Davidoff & Cie, SA, Zino Davidoff
S.A. v Gofkid Limited (‘Davidoff II’) and has stated that,
in his view, Article 5(2) must be interpreted as also granting to
the owner of a trade mark with a reputation in a Member State the
right to oppose the use of an identical or similar sign in respect
of identical or similar goods, even where there was no likelihood
of confusion as a result of the contested use.
The Adidas case was a referral from the Hoge Raad der Nederlanden
(the Supreme Court of the Netherlands) to the ECJ. Adidas is the
owner of the well known ‘three stripe’ trade mark, which
is registered in Benelux in respect of clothing. The stripes are
of equal width, run parallel to one another, and appear on the side
and down the length of articles of clothing. Fitnessworld Trading
Limited offered for sale articles of clothing on which two parallel
stripes of equal width were applied to the seams. Adidas brought
an action for trade mark infringement against Fitnessworld, and
claimed that the use of the two stripe motif a) created a likelihood
of confusion on the part of the public, and b) took unfair advantage
of its well known three stripe mark, in that the exclusivity of
the logo would be impaired.
At first instance, Adidas had succeeded in their claim of trade
mark infringement and also a claim that the use by Fitnessworld
of their two stripe logo diluted Adidas’ rights in their well-known
mark. On appeal to regional Court of Appeal in Arnhem this judgement
was set aside, the Court finding that customers would not in fact
be confused and that the defendant was only using their two stripe
motif for embellishment or decoration.
The case was appealed further to the Hoge Raad where, for the first
time, Adidas argued that because their mark was well-known it should
enjoy enhanced protection against unauthorised users on similar
goods (and not merely dissimilar goods/services) since this also
constituted unfair competition of the type contemplated by Article
5(2) of the Directive.
In referring the case to the ECJ, the Dutch Supreme Court asked
explicitly whether Article 5(2) of the Directive, which, as noted
above, is expressed to apply only where the sign is used in relation
to goods or services which are not similar to those for which the
trade mark is registered, must also be interpreted as applying in
relation to similar goods and services.
The ECJ was also asked whether the fact that the public would view
the allegedly infringing sign as an embellishment or decoration
(as opposed to an indication of origin) is relevant as regards the
question of alleged infringement under Article 5(2).
In answering the Dutch Court’s first question the Advocate
General referred to the ECJ’s Decision in Davidoff and pointed
out this explicitly states that Article 5(2) cannot be given an
interpretation which would lead to well known marks having less
protection where a sign is used in relation to identical or similar
goods or services, than where it is used in respect of non-similar
goods or services (as would be the case if the literal wording of
Article 5(2) were followed). This is contrary to the view held by
the United Kingdom Government, which submitted representations to
the effect that EU member states should be allowed to decide to
follow the literal wording of Article 5(2) and limit the additional
protection conferred by the provision to non-similar goods and services
only.
If the ECJ follows the Advocate General’s Opinion and holds
that Member States are not allowed to limit the protection conferred
by Article 5(2) to dissimilar goods only, the rights conferred on
proprietors of well known marks will be significantly widened, in
that they will be able to take action against third parties using
their marks in relation to identical or similar goods, notwithstanding
the fact there may be no likelihood of confusion; in particular,
the UK Courts will have to follow this interpretation.
As regards the question as to whether or not the public perception
of the infringing sign as a mere decoration affects the protection
conferred, the Advocate General held that, “if the relevant
section of the public perceives the given sign as doing no more
than embellishing goods, and in no way as identifying their origin,
that sign cannot be regarded as used for the purpose of distinguishing
those goods”.
He also pointed out that the essential function of a trade mark
is to identify of the origin of the marked goods, and that that
function cannot be fulfilled if the public perceive the sign as
pure embellishment or decoration. Further, he commented that it
would be undesirable as a matter of principle to extend the protection
of trade marks to preclude the use of common decorations. His conclusion,
therefore, is that it is a condition of the protection conferred
by Article 5(2) that the infringing sign is used as a trade mark.
He distinguished the contrary statements by the European Court of
Justice in Arsenal Football Club vs Matthew Reed on the basis that
that case involved use of the identical mark on identical goods
to those covered by Arsenal’s registrations.
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Pharma Marks - How Close Is Close
A recent decision by the appointed person (Geoffrey Hobbs QC) in
UK trade mark opposition proceedings involving the marks TARGOCID
and XAROCID has highlighted a much debated question as to whether
assessment of confusing similarity between marks for pharmaceuticals
involves application of a different test to the norm in other categories.
In the field of pharmaceutical marks, there is a greater tendency
for the debate in opposition proceedings to centre on the nature
and structure of the marks themselves, often because they are invented
words and contain similar or identical prefixes and/or other parts
of the overall mark.
In this case, Bayer AG applied to register XAROCID for “pharmaceuticals,
diagnostic preparations and reagents for medical use”. Merrel
Pharmaceuticals Inc opposed in reliance on their prior registration
of TARGOCID, which covered pharmaceuticals in Class 5 and was also
in use. Apparently TARGOCID was used for antimicrobial preparations
since 1990 in a number of countries, although the Appointed Person
held that the evidence of use filed did not add anything of significance
to the objection under section 5(2)(b) of the UK Trade Marks Act
1994.
In the instant case the two marks had the same suffix “-CID”
but the Registry Hearing Officer had found that people exposed to
the marks would not attach real weight or significance to this element;
he held that the differences between the respective prefixes (in
particular saying that “XARO-” in the applicant’s
mark was an unusual and visually arresting first element) was sufficient
to permit co-existence.
On appeal that decision was upheld, albeit with some reluctance,
by the Appointed Person. He was unhappy with the Hearing Officer’s
view that the distinctive power of the marks in question was frontloaded
rather than evenly dispersed throughout the marks as a whole; if
this were to be ignored, the only clear difference between the marks
was the inclusion of the letter “G” in the opponent’s
mark and he wondered if this was sufficient to render the marks
as a whole distinguishable.
He also considered the general issue of confusing similarity under
Section 5(2)(5), referring to the ECJ decision in the Canon Case,
and the need to demonstrate that the public could believe that the
goods or services covered by the trade marks in issue come from
the same undertaking or economically linked undertakings. He suggested
this involved the need to show that the marks are “distinctively
similar” in order to induce this belief. This latter term introduces
yet another element into the assessment of confusing similarity.
The Appointed Person also suggested that marks which contained the
same element, e.g. an identical prefix or suffix may nevertheless
still not be confusingly similar depending on the “propensity
of the particular mode of element of expression (in common) to be
perceived in the context of the marks as a whole as origin specific
or origin neutral”.
He then stated that the level of attention and effort required
to perceive and remember the differences between the two marks was
in this case likely to be greater than people in the relevant market
would actually bring to bear on them; nevertheless he concluded
that on balance he could not overturn the Hearing Officer’s
initial view since it was not clearly erroneous.
The case is interesting from a practitioner’s perspective
because it seems to cast doubt on a number of well accepted guidelines
followed by practitioners/tribunals when assessing likelihood of
confusion between invented words in the pharmaceutical field.
In particular there has been a long standing tendency not to consider
that an identical suffix is sufficient to render the marks as whole
confusingly similar when they are both invented words.
That this approach may be too simplistic is reinforced by another
recent unreported decision in opposition proceedings involving the
marks TWINHALER and TWISTHALER where the Hearing Officer found that
the two were confusingly similar when intended for use on identical
goods (in both cases, asthma inhalers).
There has also been a growing trend on the part of the regulatory
authorities within the pharmaceutical industry, in particular, the
US Federal Drugs Administration (“FDA”) and its European
equivalent (EMEA) to refuse new product names which most practitioners
would not see as anything like existing brands. The rationale is
that any confusion (even one incident) could lead to significant
harm to the customer - especially if mis-prescribed a new drug.
In the past, the UK Trade Mark Registry (at least) have not adopted
a similarly cautious approach and have often taken new marks in
Class 5 which differ from the earlier right only by one or two letters,
even where the suffix is identical. It seems this more liberal approach
may now have ceased to apply.
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Shorter Non-Use Terms - Is This A
New Trend?
Traditionally, in most jurisdictions, trade mark owners have been
allowed up to five years after registration to put marks into use
before they become vulnerable to cancellation. This arrangement
was considered to strike an acceptable balance between the need
to keep the marks free for use by other traders, and thus avoid
perpetual monopolies, as against the needs of the trade mark owner,
who may require a period of several years to get his new product
ready for the market.
Whilst many jurisdictions, (including the European Union (CTM)
and the USA) still allow trade mark owners five years within which
to commence use of their mark before it is open to challenge, there
has been a growing trend in the Far East and Australasia to reduce
this period to three years.
In particular, Australia, China, Indonesia, Japan and Taiwan have
recently all reduced their statutory non-use periods to three years.
This year, both Hong Kong (whose Trade Marks Ordinance came into
effect on 4th April 2003) and New Zealand (where the new Trade Marks
Act came into effect in August 2003) have similarly reduced the
non-use cancellation period to three years.
If this trend continues, trade mark owners will need to act more
quickly to introduce their new products or services to the commercial
market place. They should also note that there are now significant
discrepancies as between various countries insofar as the non-use
provisions are concerned.
If further advice is required as to the position in an individual
country, or what type of use might be considered sufficient to maintain
the registration, clients should contact one of the firm’s
trade mark advisers.
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