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Trade Marks Newsletter

No. 63

July 2012

July 2012

Article 6: Stop Press! Misleading Requests for Payment of CTM Registration Renewals

Editorial

Vivienne Coleman

We are counting the days to the 27 July but, already, London feels full of excitement for the Olympic Games. This newsletter brings you more information on potential pitfalls that brand owners and traders may come up against on the lead up to, during and after the Olympics. Please take care that you don’t inadvertently fall foul of the regulations as the rules are stringent. In case of doubt do contact your usual D Young & Co adviser.

A number of interesting cases have been reviewed for this edition. A very positive development in the Elmar Wolf case is an indication that it is not necessary to specifically show a change in the economic behaviour of the relevant consumer in order to establish detriment to the distinctive character of a mark with a reputation. We hope that this interpretation is confirmed in the near future by a decision of the CJEU.

On the BEATLE case, another relating to Article 8(5), we have clear confirmation that it is for the applicant to establish that they have ‘due cause’ to adopt the mark in question when challenged on the basis of an earlier mark with a reputation.

We hope that you enjoy these and the remaining articles in this issue and that you have a good summer. If the Games bring you to London let us know as we would very much like to welcome you to our offices.

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Article 1: Don't Overstep the Mark! Marketing and the London 2012 Olympics

Tamsin Holman

In our March 2012 newsletter, we looked at some of the principles underlying the Olympic brand and various ways in which the investment of the official partners and licensees, and thereby the Games themselves, are protected. We also gave a brief guide to some of the ‘do’s and don’ts’ of the regulations protecting the signs associated with the Olympic Games. Now just a few weeks away from the big event, we look in a little more detail at some of the special Olympics-related legislation and its impact on marketing activities prior to and during the London Games.

Advertising Regulations: London Olympic Games and Paralympic Games (Advertising and Street Trading etc) (England) Regulations 2011

These regulations, which restrict certain types of advertising and street trading in the vicinity of the London 2012 events, came into force in January 2012 (similar regulations are in force for events in Wales and Scotland). The Advertising Regulations have been drafted particularly to combat so-called ‘ambush marketing’ during the London Games. Ambush marketing is defined in the Regulations as a campaign (whether consisting of one act or a series of acts) intended specifically to advertise goods or services, or a person who provides goods or services, in an ‘event zone’ during an ‘event period’. There is also a non-exhaustive list of what counts as an ‘advertisement’, including non-traditional types of advertising, such as give-aways, distributing or providing articles (eg, t-shirts and flags) for the purposes of promotion, aerial advertising, laser projections and mobile advertising via media such as vehicles.

The Advertising Regulations specify 25 ‘event zones’ where the restrictions are to apply, typically for the period between the day before an event starts until the end of the last day of the event in that location. The London Organising Committee of the Olympic Games (LOCOG) has produced maps which show the precise area and roads within each ‘event zone’. These include areas such as around the marathon, cycle races etc. Essentially, there is a complete prohibition on any form of advertising activity in the ‘event zones’ within the relevant periods, unless authorisation has been obtained from LOCOG. The restrictions will not be limited to London as some of the events are in other locations such as Cardiff and Weymouth, and others (eg, cycling) cover large areas. The police and specially empowered ‘enforcement officers’ will have immediate powers to stop and prevent any unauthorised trading or advertising in the event zones. The penalty for breach of the Advertising Regulations is a fine (on criminal conviction) and this can apply to all those who are directly or indirectly responsible for the advertising activity, ie, the advertiser and potentially the athletes as well. More information and LOCOG’s guidance on the Advertising Regulations are on the official website1.

London Olympic Association Right (LOAR)

This is a civil right, created under the London Olympic Games and Paralympic Games Act 2006, preventing any unauthorised use of “any representation (of any kind) in a manner likely to suggest to the public that there is an association between the London Games and goods or services or a person who provides goods or services”. The LOAR is another temporary right, and is only applicable up to the end of 2012. A ‘representation’ can include combinations of words and images, for example on billboards, or other signage or online advertising, and also non-visual (eg, aural) forms of communication. However, LOCOG must prove that an ‘association’ has been created for there to be infringement. The concept of an ‘association’ between a person, goods or a service and the London Olympics includes, in particular, any kind of contractual or commercial relationship, corporate/structural connection, or sponsorship. In this regard, LOCOG have stated that certain words and imagery, particularly in combination, are likely (in their view) to create a relevant ‘association’. The list includes the following: use of the words ‘2012’ and ‘London’, depiction of Olympic venues or torch, use of the five Olympic colours and depiction of Olympic sports.

There are a number of defences to infringement of the LOAR, including that the materials do not constitute promotional or commercial use of a representation relating to the Olympics and that they ‘accord with honest commercial practices’. Genuine journalistic references are also exempt. LOCOG considers there to be various key factors when assessing whether a defence applies, including whether ‘unfair advantage’ is being taken ‘of the value in the 2012 Games’, and the ‘relevance’ (or irrelevance) of the Olympics to the goods or services being promoted. Sanctions from the Court for infringement of the LOAR include damages, order for disposal or erasure (of an offending sign) and, in appropriate cases, an injunction. Further information and LOCOG’s guidance on the LOAR are available on the official website2.

Advertising by athletes

The Olympic Charter, rule 40, prevents any competitor who participates in the Olympic Games from allowing his person, name, picture or sports performance to be used for advertising purposes during the Games. ‘Advertising purposes’ includes online advertising, including via social networking sites, blogs and viral ads. In the case of advertising featuring a participant who is not a member of Team GB, the approval of both the athlete’s own relevant National Olympic Committee and LOCOG will be required. Some types of advertising benefit from ‘deemed consents’, for example certain references to participants which were widely circulated in the UK continuously since before March 2012. However, deemed consent does not permit the advertiser to create an association with the Games or Team GB, for example in breach of the LOAR.

There is a wide range of potential sanctions against participants/athletes who breach rule 40 including, ultimately, disqualification from the Games and/or withdrawal of their accreditation. Accordingly, the potential consequences are serious, not only for the athletes but also in terms of adverse publicity for any business seen to have encouraged an athlete to breach rule 40. Further information and LOCOG’s guidance on rule 40 are on the official website3.

The impact so far

To date, there have been relatively few reported instances of LOCOG’s enforcement activities, with no cases yet before the courts, but the number of interventions is expected to increase over the coming weeks and will no doubt peak during the Games themselves. So far, there have been press reports about various preparations such as covering up of the ‘Ricoh’ name and logos at the Ricoh Arena in Coventry, which is being used as an Olympic football venue, the disablement of ATMs at venues so that they only take Visa cards, and the ‘cleansing’ of unauthorised logos, etc from fixtures and fittings in the Olympic village. LOCOG has also succeeded in recovering various unauthorised domain names, such as 2012londonolympicgamestickets.co.uk, get2012londonolympictickets.co.uk and mylondon2012.com.

Somewhat more controversial have been the warnings issued to local traders, particularly in towns outside London during the torch relay, over the use of Olympic-themed shop window decorations and, in one case, a café selling ‘Olympic breakfasts’ and ‘flaming torch baguettes’. When promoting a new service for Easyjet, the former Olympic athlete Sally Gunnell was also required to refrain from wearing a tracksuit and holding a Union flag overhead during a photo session, because it was deemed too reminiscent of her triumphant pose when winning gold in Barcelona 1992.

Some commentators have expressed concern that a too heavy-handed approach by LOCOG will stifle the nation’s ability to express its support and enthusiasm for the Games. On the other hand, the protection of the Olympic branding, which forms the foundation of the Olympic marketing programme, is said to be critical to the financial security and stability of the Olympic Movement. It is widely considered that the marketing and advertising restrictions surrounding the London Games are the most stringent there have ever been for any Olympics or other sporting event. Our word of caution is that businesses of all types need to be aware of the extent of the restrictions and potential consequences of breaching them, and to take specific advice if necessary.

There is little doubt that LOCOG and its teams of enforcement officers will have their work cut out for them. Perhaps one of the biggest challenges will be policing infractions which occur online, via viral advertising and social media networks. Coupled with the challenges of transport around London and keeping half an eye on the Games themselves, we are sure to have a summer to remember!

Useful links

London 2012 Olympic Games Advertising Regulations
London 2012 Olympic Games LOAR
London 2012 Olympic Games Rule 40 Guidelines for Athletes

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Article 2: General Court Advises Applicant to 'Let it Be' - Apple Corps Ltd Contest Use of 'BEATLE'

Jeremy Pennant

The General Court has recently issued its judgment in the case of the objection by Apple Corps Ltd against an application to register BEATLE for a range of goods in Class 12 limited primarily to wheelchairs and other transport to assist the disabled and those with handicaps. The question for the General Court was whether Apple, the record label behind The Beatles and owner of numerous trade marks for BEATLES had a valid ground to object, notwithstanding the complete dissimilarity between the two sets of goods.

Initially, Apple’s opposition was rejected by OHIM on the basis that Apple had not shown why the public would perceive there to be a link between the signs in question. However, the Board of Appeal upheld Apple’s appeal under Article 8(5) of the CTM Regulation and concluded that in relation to the two sets of goods, the relevant public would be likely to overlap. Also the Board found that, contrary to the decision of the Opposition Division, an enormous reputation had been shown for the core goods of interest, ie, sound recordings, together with a substantial reputation for a broad range of merchandise including even toy submarines coloured….yellow.

The Board also considered the question of whether the applicant was seeking to take an unfair advantage and concluded that they were, on the basis of the opponent’s reputation, with the result that there would be a serious risk of detriment. Importantly, the Board also noted that the applicant had failed to show or evidence due cause in their adoption of the trade mark BEATLE. This point has been raised in various previous cases, including the landmark judgments in Nasdaq and also Intelmark. The courts are quite clear that, when defending an opposition under Article 8(5) of the CTM Regulation, usually where there is a significant reputation and two sets of dissimilar goods, the onus lies with the applicant to show due cause.

The applicant appealed the decision to the General Court (GC); however, to no avail. The GC held the Board of Appeal was right to find that the opponent’s reputation was properly established both for the core goods as well as the related merchandise. They also reasoned that there would be an overlap in terms of the relevant public such that even taking into consideration the dissimilar goods, a link would be established. On the question of whether there would be an unfair advantage, the GC concluded that the opponent’s goods projected an image of freedom, youth and mobility and this was something that the applicant might use to gain an unfair advantage. As the applicant did not argue that it had due cause before the Board of Appeal, it was right to hold there was no such cause with the result that the appellant’s case was dismissed in its entirety.

This case confirms two things:

  1. An applicant must always seek to establish due cause when challenged under Article 8(5) of the Regulation; failure to do so will lead to an automatic assumption that the mark in question was adopted without due cause.
  2. Evidence to show a link between the two sets of goods/services is critical together with a possible overlap between the relevant public. Intel had demonstrably failed in seeking to object to the later mark INTELMARK, however, in this case evidence of the range and extent of products sold under the BEATLES brand and the reputation of the band was sufficient to satisfy the Court on the question of unfair advantage.

Useful links

Decision T-369/10 You-Q v Apple Corps-OHIM
Decision C-252/07 Intel Corps v CPM UK Ltd
Decision C-320/07 Antartica Srl v OHIM and The Nasdaq Stock Market Inc

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Article 3: Changes in Consumer Economic Behaviour - General Court Rules Not Necessary to Prove Detriment to Distinctive Character

On 22 May 2012, the General Court of the European Union (GC) concluded that the proprietor of an earlier trade mark was not required to produce evidence of a change in economic behaviour of the average consumer in order to show detriment to the distinctive character of such mark for the purpose of Article 8(5) of Council Regulation 207/2009 (the CTMR).

Environmental Manufacturing LLP (the applicant) filed a CTM application for the registration of a device mark for goods in Class 7 (figure 1). Société Elmar Wolf (the opponent) filed an opposition relying on a number of earlier French registrations, including the device mark (figure 2) registered for goods including Class 7.

The grounds relied on by the opponent were Articles 8(1) - likelihood of confusion - and 8(5) - unfair advantage or detriment to the distinctive character or repute - of the CTM Regulation. The Opposition Division rejected the opposition on both grounds. The opponent appealed and OHIM’s Second Board of Appeal allowed the appeal and annulled the decision of the Opposition Division. The applicant appealed to the GC on two pleas in law.

Proof of use

The applicant’s first plea related to the opponent’s proof of use of the earlier marks pursuant to Article 42(2) and (3) of the CTM Regulation. The applicant argued that the opponent had showed use of the earlier marks only in respect of garden machinery and tools intended for the general public, but not for machinery and tools for professional gardening. The applicant argued that OHIM’s Board of Appeal had failed to appreciate the distinction between the two categories when assessing genuine use, and that it should have done so and applied the so-called principle of partial use (ie, narrowed down protection to the particular sub-category for which the earlier marks had been put to genuine use).

The GC rejected the applicant’s contention and held that the principle of partial use should not be used to strip an earlier trade mark of “all protection for goods which, although not strictly identical to those in respect of which the mark is registered, are not in essence different from them and belong to a single group which cannot be divided other than in an arbitrary manner”. Therefore, the proprietor of a mark cannot be expected to prove use of all possible ‘commercial variations of similar goods and services’ and the principle should only be applied where the goods/services are ‘sufficiently distinct to constitute coherent categories or sub-categories’.

Evidence of detriment to the distinctive character of the earlier mark

The applicant also argued that the Board of Appeal in its assessment of the ‘risk of dilution’ pursuant to Article 8(5) of the CTM Regulation had failed to consider the economic effects of a connection between the marks at issue.

In particular, the Court of Justice of the European Union (CJEU) had expressly stated that “proof that the use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future” (Intel case, C-252/07, para. 77).

The GC held that the proprietor of an earlier mark, in order to adduce evidence that use of the later mark would be detrimental to the distinctive character of its mark, must show evidence of a future risk of detriment, without being required to demonstrate actual and present harm to its mark. This can be established:

  1. On the basis of logical deductions made from an analysis of the probabilities; and
  2. By taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case.

The GC concluded that neither Article 8(5) nor the Intel case introduce the additional requirement to show a change in the economic behaviour of the average consumer of the relevant goods and services. Accordingly, the GC interpreted the Intel case as saying that a change in the economic behaviour of the consumer is established if the proprietor of the earlier mark has shown that its mark’s ability to identify the goods or services for which it is registered and use is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark.

On the facts, the GC observed that the Board of Appeal had correctly considered inter alia (1) the highly distinctive character of the earlier mark, (2) the fact that the goods in question were identical or similar in character, and (3) that the devices were somewhat visually similar. In light of the above factors, the Board of Appeal was ‘fully entitled’ to find that the later mark was likely to be detrimental to the distinctive character of the earlier marks without having to show the economic effects of the connection between the marks at issue.

The GC’s interpretation of this point of law will no doubt please brand owners, as the Intel case had introduced a considerably high hurdle to adduce evidence of detriment to the distinctive character of the earlier mark. It remains to be seen whether its conclusions will be followed in the future, especially by the CJEU. Also, we query the potentially circular nature of the GC’s interpretation of the Intel case:

  1. Detriment to the distinctive character of the earlier mark occurs where the earlier mark is no longer capable of arousing immediate association with the goods for which it is registered and used (ie, risk of dilution);
  2. Risk of dilution must be evidenced by a change in the economic behaviour of the relevant consumer;
  3. ‘Change in economic behaviour’ is established if one shows that the ability of a mark to identify goods/services is weakened.

‘Inability to arouse immediate association with the goods/services’ (1) appears to be the equivalent of ‘a weakened ability to identify goods/services’ (3). How can the latter be evidence of the former? Should the proprietor of the earlier mark be required to adduce evidence of (3) and, if so, what type of evidence? We look forward to future decisions of the European courts on this point of law.

Useful links

Decision T-570/10 Environmental Manufacturing LLP v OHIM
Decision C-0252/07 Intel Corporation Inc v CPM UK Ltd

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Article 4: AdWords and Trade Mark Infringement - CJEU Clarifies Jurisdiction Issue Relating to Keywords in C-523/10 Wintersteiger AG v Products 4U Sondermaschinenbau

Angela Thornton-Jackson and Cam Gatta

This case from the Court of Justice of the European Union (CJEU) considers a jurisdictional issue in relation to the alleged infringement of a national trade mark by use of a sign identical to the mark as an AdWord. In particular, the CJEU looked at the interpretation of the phrase “place where the harmful event occurred or may occur” under Article 5(3) of Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Brussels Regulation).

The Austrian company Wintersteiger was the manufacturer and seller of various ski and snow board tools and accessories, and owned a trade mark registration for WINTERSTEIGER in Austria (the mark).

Products 4U, a company established in Germany, was a competitor of Wintersteiger also making and selling accessories for Wintersteiger’s tools. Products 4U reserved the keyword WINTERSTEIGER as a Google AdWord only in respect of Google’s German top-level domain, ie, google.de. It did not reserve that keyword on google.at (the Austrian Google site).

Wintersteiger brought an action for an injunction in Austria claiming that Products 4U’s use of the keyword on google.de infringed the mark and argued that the Austrian courts had jurisdiction on the basis of Article 5(3) of the Brussels Regulation, in that ‘google.de’ can be accessed in Austria and the referencing service is in German.

The key principle of the rules of jurisdiction under the Brussels Regulation is that a person domiciled in a Member State shall be sued in its country of domicile. Such a principle is subject to a number of exceptions (Special Jurisdiction), including Article 5(3), which provides that a person domiciled in a Member State may be sued in another Member State in matters relating to tort - ie, including trade mark infringement - in the courts of the “place where the harmful event occurred or may occur”. According to EU case law, these exceptions are to be construed narrowly.

The CJEU first observed that the derogation in Article 5(3) is “based on the existence of a particularly close connecting factor between the dispute and the courts of the place where the harmful event occurred” and jurisdiction is attributed to those courts “for reasons relating to the sound administration of justice and the efficacious conduct of proceedings”.

The CJEU confirmed that the last phrase of Article 5(3) means both:

  1. The place where the damage occurred (ie, where the event which may give rise to liability resulted in damage); and
  2. The place of the event giving rise to the damage.

How did the CJEU interpret these two concepts in relation to the facts of the case?

1. Place where the damage occurred

The place where the damage occurred is determined by identifying the ‘centre of interests’ of the person whose rights have been infringed. This criterion is intended to enable the claimant to identify easily the competent court and also to allow the defendant to foresee before which court it may be sued.

In relation to a national mark, the centre of interests of the registered proprietor will be the Member State in which the mark is registered. Reasons for this include: (1) the registered proprietor can only rely on trade mark protection in that territory, (2) the courts of that Member State are best able to assess issues of infringement, and (3) such choice would satisfy the requirements of foreseeability and sound administration of justice.

2. Place of the event giving rise to the damage

In the case of keyword advertising, the relevant event would be ‘the activation by the advertiser of the technical process’ aimed at displaying the advertisement (ie, the reservation of the AdWord). On that basis, the ‘place of the event’ would be the place of establishment of the advertiser and not of the provider of the referencing service. The former is to be preferred because it is foreseeable and would facilitate the taking of evidence and the conduct of the proceedings.

This meant that the action could be brought either in Germany, as the place of establishment of the advertiser, or in Austria (ie, where the damage occurred because of Wintersteiger’s national trade mark registration).

Whilst the CJEU’s decision seems to turn on its specific facts, we believe it is also likely to apply where the top-level domain of the referencing service provider is not necessarily a country code (.de, .fr, .co.uk) but also a generic one (.com, .net, etc). This means that there could be forum shopping in the case of a proprietor with national marks in different jurisdictions (although any injunctive relief should be limited to that country only).

Conversely, we think it is unlikely that the CJEU’s interpretation of the phrase “place where the harmful event occurred or may occur” will have an impact where a similar claim is brought in relation to a Community trade mark. When it comes to interpreting “the place where the damage occurred”, the fact that the place of the registration of a CTM is in theory every single Member State, such Member States should not allow trade mark owners to engage in ‘unbridled’ forum shopping. This is because the CJEU’s findings were in relation to a national mark and, even if such findings were applied by analogy to a CTM, a court is unlikely to recognise Special Jurisdiction under Article 5(3) of the Brussels Regulation if the choice of forum does not satisfy the requirements of foreseeability (ie, would the defendant expect to be sued in that jurisdiction?) and sound administration of justice. This is particularly so as Articles 97 and 98 of the Community Trade Mark Regulation set out a specific code dealing with issues of jurisdiction and the relief a court is permitted to grant.

Useful links

Decision C-523/10 Wintersteiger AG v Products 4U Sondermaschinenbau

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Article 5: OHIM Left in the Pits! Formula 1 Wins Appeal Against General Court in C-196/11 P Formula 1 Licensing v OHIM

Richard Burton

In April 2004, Racing-Live SAS (subsequently replaced by Global Sports Media Ltd) filed a Community trade mark application for a figurative trade mark in respect of various goods and services in Classes 16, 38 and 41 including ‘magazines; books; publications; reservation of tickets for shows; arranging competitions on the Internet’. The mark which included the words ‘F1-Live’ is shown in figure 1.

Formula One Licensing BV opposed the application. The opposition was based on an International Registration and two national registrations for the word mark ‘F1’ along with a Community trade mark, covering the same goods and services as those indicated in the Racing-Live application, as shown in figure 2.

OHIM upheld the opposition on the basis of the earlier International Registration for the word mark ‘F1’, finding that there was a likelihood of confusion.

On appeal, the Board of Appeal (BOA) dismissed the opposition in October 2008. The BOA found that there was no likelihood of confusion between the mark applied for and the earlier ‘F1’ marks. Further, OHIM stated that the word element ‘F1’ was descriptive in the trade mark.

Formula One Licensing subsequently brought an action for the annulment of OHIM’s decision before the General Court (GC). In February 2011 the GC dismissed the action and confirmed the BOA’s decision.

Formula One Licensing then appealed to the Court of Justice of the European Union (CJEU) to set aside the judgment of the GC.

The CJEU found that the validity of a national trade mark may not be called into question in CTM opposition proceedings, but only in cancellation proceedings brought in the Member State in which the national trade mark was registered.

The CJEU noted that OHIM (and consequently the GC) must verify the way in which the relevant public perceives the sign which is identical to the national trade mark, solely in relation to the mark applied for, and evaluate, if necessary, the degree of distinctiveness of that sign. However this verification has limits and a finding that a sign identical to a national trade mark is devoid of distinctive character would be likely to eliminate the protection which national trade marks are supposed to provide. Such a finding would not respect the system based on co-existence of CTMs and national trade marks.

In the circumstances, the CJEU held that, in finding that the sign ‘F1’, which was identical to the earlier national trade marks of Formula One Licensing, was descriptive, the GC had called into question the validity of those trade marks in proceedings for the registration of a Community trade mark, therefore infringing the CTM Regulation.

Accordingly, the CJEU set aside the judgment of the GC and, since it was not in a position to give final judgment in the matter, referred the case back to the GC.

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Article 6: Stop Press! Misleading Requests for Payment of CTM Registration Renewals

Some of our clients have received ‘invoices’ from third parties offering to renew their Community trade mark registrations at an exorbitant price. These are sent out on ‘official’ looking paperwork with the intention of misleading trade mark owners into believing that they originate from a national trade mark office or genuine IP organisation.

We would hate to see our clients deceived in this way. All our notifications and invoices are sent out via email from your attorney @dyoung.co.uk or on D Young & Co LLP headed paper. Any other communication requesting payment for trade marks we handle on your behalf may be safely ignored.

If you receive an unexpected invoice or notification and you are unsure whether you should pay it or not, please contact your usual D Young & Co trade mark attorney for verification.

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Related Resources

The Big Bad Wolf is Back! Detriment to the Distinctive Character of a Trade Mark With a Reputation

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