I OVERVIEW

The European Union (EU) consists of 28 Member States. The EU has detailed legislation on trademarks. On the one hand, there is EU legislation approximating the national trademark laws of the Member States. On the other hand, the EU has created the European Union Trade Mark (EUTM) system, which is an innovative tool of European law and is a unitary trademark right that is acquired by way of a single, central filing with the European Union Intellectual Property Office (EUIPO) and applies to all Member States. Similarly, the EU has harmonised the national laws of its Member States on industrial designs and has created a unitary design right (also acquired by a single, central filing with EUIPO) and a unitary non-registered design right, both of which extend to all Member States. The EU has also adopted legislation to facilitate the enforcement of all intellectual property rights, including trademarks and designs. This legislation facilitates the collection of evidence in cases of alleged infringement, as well as the quantification of damages.

The EU has also set up a system whereby national customs authorities can inspect and control the movement of counterfeit goods and arrest such goods passing through EU customs. There is also EU legislation obliging Member States to use special courts for cases relating to the EUTM. As a result, these courts usually have a greater level of expertise on trademark issues. EUIPO has created a network of cooperation and communication, promoting a uniform application of trademark law by national trademark offices in all Member States, which have also adopted common guidelines and policies on specific issues.

II LEGAL FRAMEWORK

i Legislation

The major EU legislation on trademarks and designs consists of the following:

  1. Directive (EU) 2015/2436 on the approximation of national laws of the Member States on trademarks;
  2. Regulation (EU) No. 2017/1001 regarding the EUTM;
  3. Directive 1998/71/EC on the approximation of national laws of the Member States on industrial designs;
  4. Regulation (EC) No. 6/2002 on community designs;
  5. Directive 2004/48/EC on the enforcement of intellectual property rights; and
  6. Regulation (EU) No. 608/2013 on customs enforcement of intellectual property rights.

Moreover, the EU is party to the following international conventions regarding intellectual property matters:

  1. Paris Convention (1883) as amended on 28 September 1979;
  2. World Trade Organization and the Protocol on Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement (1994);
  3. Nice Classification, established by the Nice Agreement (1957) (as amended in 1979), on the international classification of goods and services in trademark applications;
  4. Vienna Agreement (1973, as amended in 1985), on the classification of figurative elements of trademarks;
  5. Protocol Relating to the Madrid Agreement concerning the International Registration of Marks (1989) through the World Intellectual Property Organization (WIPO);
  6. Trademark Law Treaty (1994);
  7. Singapore Treaty (2006), on the law of trademarks;
  8. Locarno Agreement (1968, as amended in 1979), on the international classification of design rights; and
  9. Hague Agreement Concerning the International Registration of Industrial Designs, known as the Hague System (Geneva Act 1999).

ii Authorities

Trademark registration process

EUIPO, which is based in Alicante, Spain, is the organisation administering the EUTM registry; it receives and examines EUTM applications, oppositions, cancellations, etc.

EUIPO examines oppositions and cancellations in two stages. The first is an examination of the opposition or cancellation by the Operations Department of EUIPO. The second stage is carried out by the EUIPO Boards of Appeal, which examine appeals filed against decisions of the Operations Department.

The decisions of the EUIPO Boards of Appeal can be appealed before the General Court of the EU (GCEU). Judgments of the GCEU can be appealed before the Court of Justice of the European Union (CJEU). An appeal to the GCEU is referred to as an ‘application’.

In cases such as oppositions and cancellations, which are inter partes cases, an appeal to the GCEU against a decision by the EUIPO Boards of Appeal is addressed only against EUIPO and not against the other litigant party to the proceedings before EUIPO. As a result, the defendant in appeal proceedings before the GCEU and the CJEU is always EUIPO. The other litigant party to EUIPO proceedings is given the chance to intervene in the proceedings before the GCEU by filing a written response to the appeal, within two months of notification of the appeal. EUIPO is always a party to proceedings before the GCEU.

Trademark enforcement

Enforcement of EUTMs is achieved through the national courts of the Member States. Article 123 of Regulation (EU) No. 2017/1001 provides that Member States shall designate in their territories a limited number of possible national courts and tribunals of first and second instance, which shall have competence to deal with infringements of EUTMs. As a result, the national courts in all Member States dealing with trademark infringement cases have developed a relatively high level of expertise in trademark cases.

iii Substantive law

Infringement of registered EUTMs is established in the following cases: (1) unauthorised use by a third party in the course of trade, resulting in the likelihood of confusion, or the likelihood of association; (2) unauthorised use of a mark with reputation by a third party in the course of trade, resulting in dilution; and (3) illegitimate parallel imports, where trademark rights have not been exhausted.

Likelihood of confusion and likelihood of association

Unlike US trademark law, likelihood of association is deemed to be part of likelihood of confusion and not a separate type of infringement. All types of likelihood of confusion are actionable (i.e., forward confusion, reverse confusion, post-sales confusion and initial-interest confusion). The test for likelihood of confusion is a multifactor one, taking into account the level of similarity of the different marks and goods or services, the level of consumers’ attention and awareness, distribution channels, the level of recognition of the earlier mark (assessed on the basis of longevity of use, market shares, geographical expansion of use, volume of advertisement expenditure, etc.) and actual confusion, as well as intent of the unauthorised user (if it can be established). Similarity of marks can be visual, aural or conceptual. Goods are similar if they are made of the same raw materials, serve similar needs or are addressed to the same group of consumers. The level of similarity of the marks and goods or services can be low, average or high. The comparison is based on the overall impression created by the individual marks, and likelihood of confusion is considered globally.

Well-known marks – dilution and bad faith

Well-known marks (i.e., marks with reputation) enjoy additional protection, including protection against the likelihood of dilution. Reputation is assessed on the basis of market shares, volume of sales, volume of advertising investment, longevity of use, etc. (the test is again a multifactor one).

The prerequisites for establishing dilution are (1) similarity between the earlier and the later marks; (2) likelihood of a link in consumers’ minds between the earlier and the later marks; (3) unfair advantage in favour of the later mark from the reputation of the earlier mark, or detriment to the reputation of the earlier mark; and (4) lack of any due cause justifying such unfair advantage or detriment.

Dilution may consist of one or more of the following:

  1. free-riding on the reputation of another; that is, when the later mark becomes recognisable to consumers more easily, faster and using less advertising expense;
  2. the later mark is affixed to products of inferior quality, or there is some other negative publicity or negative connotations or implications against the earlier well-known mark; or
  3. there is a lessening of the distinctive value of the earlier well-known mark.

Under Regulation (EU) No. 2017/1001, well-known marks are also protected, according to Article 6 bis of the Paris Convention, against registration of later marks in bad faith. In addition, any mark, even if not well known, may be revoked and cancelled if it can be established that it has been registered in bad faith.

Parallel imports and exhaustion of rights

Under EU law, trademark rights are exhausted only if the trademark owner, or a party acting with his or her consent, has put the specific goods (i.e., those that have been imported in an EU Member State by a parallel importer) on the market in another EU or European Economic Area (EEA) country. The consent of the trademark owner is not assumed, but must be established on the facts. For example, the CJEU has clarified that an authorised distributor in a non-EEA country that exports goods in an EEA country is, in principle, not acting with the consent of the trademark owner. The burden of proof is on the parallel importer. As a result, parallel imports from non-EEA countries are in principle prohibited and amount to trademark infringement, while parallel imports from EEA countries are in principle allowed, provided that it can be established that the goods were first put on the market by the trademark owner or with his or her consent.

III REGISTRATION OF MARKS

i Registrability

Types of marks

Any sign may be registered as an EUTM if it can distinguish the goods or services of one business enterprise from those of another,2 and if it can be represented in a clear, precise, self-contained, easily accessible, intelligible, durable, objective, unambiguous and consistent way.3

An EUTM may indicatively consist of one or more of the following:

  1. words affixed to products or used in the course of providing services;
  2. letters, abbreviations, numbers, names (both first names and surnames);
  3. slogans and short phrases;
  4. colours and colour combinations;
  5. designs, including 3D designs, provided they are distinctive and not of a merely decorative nature;
  6. the shape of the product, or of its packaging, product labels and product trade dress;
  7. company names and distinctive titles used to identify the premises where goods or services are offered to consumers;
  8. surface designs, colour patterns and design patterns, provided they are distinctive; or
  9. collective marks and certification marks.

Non-traditional marks, such as sounds, tastes, smells, touch, position marks, 3D representation of a state, holograms or movement marks, are in principle registrable, provided they are distinctive and capable of being represented in a clear, precise, self-contained, easily accessible, intelligible, durable, objective, unambiguous and consistent way.4

Absolute grounds

Absolute grounds for rejecting an EUTM application include (1) lack of distinctiveness, (2) the mark being generic or descriptive, (3) commonplace, (4) deceptive, (5) functional, either technically or aesthetically, or (6) contrary to public policy, or morality. In addition, marks are excluded from registration if they are similar to designations of origin, geographical indications, traditional terms of wines, guaranteed traditional specialities or plant varieties that are protected under EU law or under international conventions to which the EU is a party.

Absolute grounds are assessed in view of the goods or services applied for (i.e., a mark may be descriptive in respect of some goods but not of others), as well as in view of the perception of the public (i.e., whether the public perceives a mark as an indication of origin or not).5 Although the same criteria are used for all types of marks, public perception may differ for certain types of marks. Because of linguistic or cultural differences among the Member States, a mark may be descriptive, or commonplace, or may lack distinctiveness in some Member States, but not in all of them. Owing to the unitary nature of the EUTM, a mark qualifies for registration as an EUTM only if it is free of any objections based on absolute grounds in all Member States. Therefore, if a mark is descriptive in only one Member State, it cannot be registered as an EUTM and the application will fail.

Acquired distinctiveness through use is taken into account to compensate for lack of inherent distinctiveness, descriptiveness, or the fact that a mark is commonplace. However, acquired distinctiveness must exist throughout the EU and must be evidenced in respect of every single Member State.6

The following are other notable examples from case law on absolute grounds.

  1. Adidas’ much-disputed figurative mark consisting of ‘three black parallel stripes before a white background’ was cancelled by the EUIPO Boards of Appeal for lack of (inherent or acquired) distinctiveness. Interestingly, the decision noted that it was unclear whether the mark actually used in the market by Adidas was always ‘three parallel black stripes before a white background’ or ‘two white (or other light colour) stripes before a black (or other dark-coloured) background’.7
  2. Word marks like ‘Biomild’ for foodstuffs such as yogurt and ‘Doublemint’ for chewing gum were found to be descriptive (biological and mild, and double mint) and were refused registration. Combinations of descriptive terms in a single new word cannot escape the absolute ground of descriptiveness, unless there is a perceivable difference among the combination and its parts.8
  3. The following word marks have been refused registration for lack of distinctiveness: ‘eco’ (denoting ‘ecological’),9 ‘medi’ (denoting ‘medical’)10 and ‘universal’ (denoting ‘goods fit for universal use’).11
  4. The mark ‘Revolution’ for financial consulting services in Class 36 was found to lack distinctiveness and was refused registration.12
  5. The mark ‘Restore’ for surgical and medical instruments was found to be descriptive.13
  6. The mark ‘Caffè Nero’ for coffee products and cafeteria services was refused registration on the ground that, in Italian, ‘caffè nero’ means ‘black coffee’ (i.e., coffee without sugar or milk). Therefore, if an EUTM is intended to apply to all Member States, lack of distinctiveness or descriptiveness in only one Member State may be fatal.14
  7. The mark ‘Deluxe’ for several goods and services in Classes 9, 35, 37, 39, 40, 41, 42 and 45 was refused registration as merely laudatory, descriptive and non-distinctive; the CJEU affirmed this decision.15
  8. The mark ‘Real’ for foodstuffs in Classes 29, 30 and 31 was refused registration as a descriptive term; the GCEU held that ‘Real’ had the meaning ‘not artificial or simulated, genuine’ and that it was therefore descriptive in connection to foodstuffs.16

The filing and registration process

An application for an EUTM can be filed either electronically (online) or in writing, sent by fax or mail. The application contains details of the applicant, its professional representative acting on its behalf before EUIPO, as well as the mark applied for and the goods or services associated with it. The application is accompanied by a power of attorney appointing the professional representative. The power of attorney and the application need no legalisation, neither certification, nor the Hague Convention Apostille. If the mark includes colours, the applicant is required to identify the colours by reference to a generally accepted colour index, such as the Pantone Index. If the mark includes figurative elements, the applicant can, on an optional basis, identify these figurative elements by reference to EUIPO’s Figurative Classification Manual (version 3.0, 15 March 2013), which is based on the codes provided in the Vienna Convention (1973) on the classification of figurative elements of marks (seventh edition, 2012).

The goods or services applied for are identified by reference to the Nice Classification Agreement (1957), currently consisting of 45 classes.

Applications are assessed by a single examiner. If the examiner finds the application acceptable, it is published through the EUIPO website. Upon publication, the application is open to opposition for a period of three months. If no opposition is filed, the mark is registered. The whole process from the filing of the application to registration usually requires a period of four months, if no obstacles arise. An examiner’s decision rejecting an application can be appealed to the EUIPO Boards of Appeal within two months of its notification to the applicant.

ii Relative grounds – prior rights

Prior rights include:

  1. earlier applications or registrations of EUTMs;
  2. earlier applications or registrations of national trademarks in the EU Member States;
  3. earlier applications or registrations of international trademarks filed with WIPO designating the EU or a Member State;
  4. earlier well-known marks in the sense of Article 6 bis of the Paris Convention;
  5. earlier non-registered national signs used in the course of trade in one or more Member States of the EU; and
  6. earlier designations of origin, geographical indications and applications thereof.

EUIPO does not carry out an ex officio search for prior rights on its own initiative. As a result, prior rights must be invoked by way of formal opposition proceedings, otherwise an EUTM application will succeed in being registered, even if it is confusingly similar to an earlier mark.

There follow some notable recent cases on likelihood of confusion.

Cases where likelihood of confusion was established

  1. A figurative and position mark consisting of two parallel stripes appearing on athletic shoes was found to be confusingly similar to the Adidas earlier three-parallel-stripes mark, although the stripes had a different orientation in each case.17
  2. A figurative mark consisting of an animal (a member of the cat family) jumping to the right was found to be confusingly similar to an earlier mark consisting of a member of the cat family jumping to the left. The fact that the animals were facing towards different directions was insufficient to render them dissimilar. Both marks were used in connection to clothing in Class 25. The GCEU rejected, on the evidence, the argument that the image of a jumping cat is widely used in connection to clothing and that it therefore has a weak distinctive character precluding the likelihood of confusion.18
  3. The marks ‘Smith’ and ‘Anna Smith’, both for clothing and leather products in Classes 18 and 25, were found to be confusingly similar, although the common element ‘Smith’ was a common surname.19
  4. The marks ‘Aquaperfect’ and ‘Waterperfect’, both in Class 7, were found to be confusingly similar because of their conceptual similarity, as ‘aqua’ means ‘water’ in Latin and is considered to be a Latin vocabulary term that European consumers clearly understand.20 In another similar case, likelihood of confusion was established between the marks ‘Vitaminwater’ and ‘Vitaminaqua’ in Classes 30 and 32.21
  5. The mark ‘Colombiano House and device’ for restaurant and food services in Class 43 was refused registration, because of an earlier protected geographical indication ‘Café de Colombia’.22
  6. The mark ‘Beyond Retro’ for clothing in Class 25 was found to be confusingly similar to the mark ‘Beyond Vintage’ for clothing and accessories in Classes 18 and 25; however, there was no likelihood of confusion with watches and jewellery in Class 14, for which an application for ‘Beyond Vintage’ was also made, as these goods were considered to be sufficiently dissimilar to clothing in Class 25.23
  7. The marks ‘Pentasa’ and ‘Octasa’, both for pharmaceuticals in Class 5, were found to be sufficiently similar, although their respective first parts differ.24
  8. The marks ‘Ginraw’ and ‘Raw’, both for household and kitchen utensils and containers, glassware and other goods in Class 21, were found to be confusingly similar, as the term ‘gin’ was likely to be associated with the alcoholic beverage and was hence rather descriptive of the goods.25

Cases where likelihood of confusion was not established

  1. The marks ‘Easy Air-tours’ and ‘Airtours’, both for transport services in Class 39, were not found to be confusingly similar, because their common components were descriptive terms.26 Similarly, the following pairs of marks were not found to be confusingly similar, because the common elements they shared were merely descriptive:
    • ‘Magnext’ and ‘Magnet 4’, both for toys in Class 28;27
    • ‘Capital Markets and device’ and ‘Carbon Capital Markets’, both for financial and similar services in Class 36;28 and
    • ‘Premium and device’ and ‘Suisse Premium and device’ both for foodstuffs in Class 30.29
  2. ‘Real estate services’ was found to be dissimilar to ‘financial and banking services’, although ‘real estate appraisal services’ was found to be similar to ‘financial services’.30
  3. In other cases, ‘retail services’ was found to be dissimilar to ‘distribution services’;31 ‘watches and jewellery’ in Class 14 was found to be dissimilar to ‘clothing’ in Class 25, although both are usually traded through the same channels;32 ‘compotes’ was found to be dissimilar to ‘dairy products’,33 although ‘restaurant and bar services’ was found to be similar to ‘foods and beverages’.34

Dilution cases

  1. The well-known mark of Calvin Klein ‘CK’ was found not to be diluted by the mark ‘CK Creaciones Kennya’ (both for clothing and leather goods in Classes 18 and 25), because the two marks were so dissimilar (although CK was incorporated as such in the later mark) that a link between them could not possibly be established.35
  2. In a similar case, the marks ‘Kinder’ (for food products in Class 30) and ‘Ti Mi Kinder Joghurt’ (for yogurt-based products in Class 29) were so dissimilar that consumers could not possibly establish a link between the two, although ‘Kinder’ was incorporated as such in the later mark.36 In these cases, the CJEU reasoned that, in assessing the level of similarity of the marks, the reputation of the earlier mark shall not be taken into account and that its reputation will be considered only at a later stage, to assess the likelihood that consumers might make a link between the two marks, but this later stage will not follow at all, unless sufficient similarity is established in the first place.
  3. The well-known ‘Volvo’ mark was found not to be diluted by the mark ‘Lovol’ in Classes 7 and 12 because the two marks were sufficiently dissimilar, although they shared the letters ‘v’, ‘o’ and ‘l’, as well as the syllable ‘vol’.37
  4. The mark ‘Vina Sol’ (meaning vineyard of the sun in Spanish) was found not to be diluted by the mark ‘Sotto il Sole’ (meaning under the sun in Italian). Although the goods associated with the respective trademarks were identical, and although the earlier mark enjoyed a reputation, likelihood of dilution was not established because the notion of the ‘sun’ was widely used by many other wine producers and was therefore of merely low distinctiveness.38
  5. The mark ‘MacCoffee’ for food and beverages in Classes 29, 30 and 32 was found to dilute the marks ‘McDonald’s’, ‘McNuggets’, ‘McFlurry’, ‘McChicken’, etc.39
  6. The Adidas figurative mark consisting of three parallel oblique stripes was found to be diluted by a trademark consisting of two parallel oblique stripes filed by Shoe Branding, although the stripes were oriented in a different direction in each case.40

iii Inter partes proceedings

Inter partes proceedings before EUIPO include (1) oppositions to EUTM applications; (2) applications for invalidity of registered EUTMs; and (3) applications for revocation of registered EUTMs.

Oppositions to EUTM applications

Since EUIPO does not take into account earlier rights on its own initiative, opposition proceedings are the only means of invoking such earlier rights to prevent the registration of an EUTM application. The time limit to file an opposition against an EUTM application is three months from its publication.

Applications for invalidity of registered EUTMs

If an application for an EUTM has been registered, although there were absolute or relative grounds that should have resulted in its rejection, then this registration is open to cancellation (invalidity). There is no time limit restricting the filing of an application for invalidity. The effects of invalidity are retrospective and date back to the filing of the contested EUTM registration.

Applications for revocation

A registered EUTM can be revoked if:

  1. the mark has not been used for a period of five consecutive years and there are no proper reasons justifying non-use;
  2. because of acts or inactivity of the proprietor, the mark has become a common name in trade for a product or service for which it is registered; or
  3. as a result of the use made of it by its proprietor, the mark has become misleading to the public.

There is no time limit for filing an application for revocation.

The effects of revocation are retrospective and date back to the date of filing of the application for revocation, or to another date fixed by the decision revoking the registration.

In respect of the form of the proceedings for oppositions, applications for invalidity and revocations, see Section II.ii.

iv Appeals

Decisions of the EUIPO Operations Department on oppositions, applications for invalidity or revocations, as well as decisions of the examiners on absolute grounds preventing trademark registration, can be appealed before the EUIPO Boards of Appeal, which can review cases on matters of both fact and law. The decisions of the EUIPO Boards of Appeal can be appealed before the GCEU on matters of law only. The judgments of the GCEU can be appealed before the CJEU on matters of law only (see Section II.ii).

IV CIVIL LITIGATION

The European Union Trade Mark

Infringement cases relating to EUTMs are dealt with by national courts of the Member States according to local rules of civil procedure. Article 123 of Regulation (EU) No. 2017/1001 provides that Member States shall designate in their territories as limited a number as possible of national courts and tribunals of first and second instance, which shall have competence to deal with infringements of EUTMs.

Directive 2004/48/EC on enforcement of intellectual property rights

Directive 2004/48/EC establishes a legal regime that is favourable to trademark owners regarding the collection of evidence relevant to trademark infringement and remedies. In particular, trademark owners may request a court order enabling them to inspect third parties’ premises where infringing goods are likely to be found, or to make a list of allegedly infringing goods and obtain samples of these, or even provisionally arresting allegedly infringing goods, as well as any other measure that could make it possible to preserve evidence relating to trademark infringement. Such measures can be ordered by a national court under either ordinary or summary proceedings, and may be ordered by a national court without notifying the defendant in advance or hearing its arguments. Furthermore, the Directive provides practical criteria for the quantification of damages on the basis of (1) the amount of royalties that would have been due if the infringer had requested a licence; (2) loss of profits suffered by the trademark owner; or (3) the profits made by the infringer.

V OTHER ENFORCEMENT PROCEEDINGS

The EU has developed a particularly efficient system to trace and seize counterfeit goods within customs authorities. The system functions at a European level. The system is established by Regulation (EU) No. 608/2013, and the following are its main characteristics:

  1. the system covers goods infringing any intellectual property right based on EU law, such as trademarks, patents, utility models, supplementary protection certificates, plant varieties, semi-conductor topographies, copyright and industrial designs, as well as protected geographical indications;
  2. there is an accelerated procedure to secure destruction of infringing goods without a court order; and
  3. there are provisions dealing with counterfeit products imported by post or courier in small consignments.

The Regulation has reduced administrative costs and has ensured that more substantial information is made available so that the customs authorities can be better prepared to take proper action.

Many complexities are raised by counterfeit goods in transit through the EU territory. Article 9.4 of Regulation (EU) No. 2017/1001, expressly provides that:

the proprietor of that EU trade mark shall also be entitled to prevent all third parties from bringing goods, in the course of trade, into the Union without being released for free circulation there, where such goods, including packaging, come from third countries and bear without authorisation a trade mark which is identical with the EU trade mark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trade mark.

VI RECENT AND PENDING CASES

i Kerrygold and Kerrymaid

The CJEU has clarified that the peaceful coexistence in two Member States of marks that are confusingly similar (such as ‘Kerrygold’ and ‘Kerrymaid’) does not prevent likelihood of confusion in other Member States. On the evidence, Kerrygold and Kerrymaid (both for dairy products) coexisted peacefully for many years in Ireland and the United Kingdom. It was argued that, because of the unitary nature of the EUTM, peaceful coexistence in two Member States prevented likelihood of confusion in other Member States as well. The CJEU turned down this argument, confirming that likelihood of confusion depends greatly on the relevant public and, hence, may be assessed differently in each Member State; this is not in conflict with the unitary nature of the EUTM. It was further argued that peaceful coexistence in two Member States establishes sufficient grounds to argue in favour of limitation of trademark rights in other Member States, but the CJEU turned down this argument as well. Finally, it was argued that in the context of dilution, peaceful coexistence in two Member States establishes ‘due cause’ to use the same mark in other Member States as well and, hence, it prevents a dilution claim raised in other Member States where the marks do not coexist; the CJEU also rejected this argument.41

ii Cotton-flower mark42

The Bremen Cotton Exchange (VBB) had registered an EUTM consisting of the figurative representation of a cotton flower. The mark was filed and registered as an individual mark, but it was actually used as a collective one. VBB was not producing its own products but only licensing the mark to other manufacturers of textiles, who promised to comply with good quality standards. There were certain concerns as to whether VBB was exercising efficient quality control on the goods produced by its licensees. VBB brought infringement proceedings against a manufacturer who was using the mark without having obtained a licence. The CJEU, responding to a request for a preliminary ruling submitted by the national court, clarified that ‘genuine use’ of an individual mark exists only if this mark is used as an indication of origin, since this is the essential function of trademarks. In the present case, the use was not one as an indication of origin, but one as an indication of quality. Therefore, the mark was open to revocation for non-use. The CJEU was also requested to consider whether the cotton-flower mark was deceptive and hence open to invalidation, because, on the evidence, it seemed that VBB was not exercising sufficient quality control over its licensees. The CJEU responded that a mark is deemed to be deceptive if it is deceptive per se as from its filing; in this respect, the subsequent management and behaviour of the trademark owner or its licensees is irrelevant. Note, however, that a mark is open to revocation if it is likely to mislead the public because of the use made of it by its owner after its filing and registration. This issue, however, was not brought to the attention of the CJEU. Finally, this case was decided under the provisions of Regulation (EC) No. 207/2009, as those provisions were phrased before the amendment by Regulation (EU) 2015/2424, which resulted in Regulation (EU) No. 2017/1001. At that time, Regulation (EC) No. 207/2009 provided for individual marks and collective marks. Regulation (EU) 2015/2424 also supplemented provisions in respect of certification marks, which became effective from 1 October 2017. The cotton-flower mark was actually used as a certification mark and it could be accommodated as such under the new provisions.

iii AdWords and online marketplace cases

Use of trademarks on the internet raises many complicated and controversial issues. The CJEU has delivered several preliminary rulings that shed some light on how such complexities can be overcome.

Google France43

In the Google France case, three French companies alleged that Google had infringed their trademarks by making it possible for other companies to use their trademarks as keywords for internet advertising and promotion. In its preliminary ruling, the CJEU reasoned that a ‘keyword use’ of a sign identical to a trademark cannot establish infringement for an internet referencing provider such as Google on the ground that such use does not qualify as use of the trademark as such; however, such a keyword use could possibly establish infringement on the part of the company that uses a third party’s trademark as a keyword to promote its own goods or services. According to the CJEU, infringement is established when the trademark functions, particularly the origin function, are frustrated. This mainly depends on how the internet advertisement appears. If it appears in a way that an average internet user can understand that it does not originate from the trademark owner, then there is no adverse effect on trademark functions and no infringement is established. On those grounds, the CJEU concluded that when the internet advertisement does not enable an average internet user to ascertain whether the goods or services referred to in a website originate from the trademark owner or from a third party, trademark infringement is established.

BergSpechte44

BergSpechte and Trekking at Reisen were both selling trekking and nature tours and, hence, were direct competitors. Trekking at Reisen used two keywords for internet advertisement purposes. The first was identical to one of BergSpechte’s trademarks, while the second was only similar to an earlier trademark of its competitor. In its preliminary ruling, the CJEU followed the reasoning of the Google France judgment and concluded that in cases of a keyword that is identical to an earlier trademark, infringement is established if trademark functions are frustrated (i.e., if the internet advertisement does not enable an average internet user to ascertain where the goods or services originate). On the other hand, when the keyword use is only similar (but not identical) to an earlier trademark, then trademark infringement depends on whether likelihood of confusion or likelihood of association can be established.

L’Oréal v. eBay45

This case related to the sale through the eBay online marketplace of counterfeit goods, as well as of goods constituting parallel imports to the EU from non-EEA countries. L’Oréal alleged that eBay was liable for trademark infringement in making such sales possible through its online marketplace. In its preliminary ruling, the CJEU reasoned the following:

  1. Trademark rights are enforced only against traders, not against consumers; therefore, sales of goods in online marketplaces can possibly infringe trademark rights if committed by entities acting on a commercial scale, but not if committed by consumers as a private activity.
  2. Sales through online marketplaces are subject to the same rules on parallel imports as traditional sales; therefore, sales originating from non-EEA countries destined for EU countries are illegitimate parallel imports and can be prevented by trademark owners.
  3. Trademark owners can prohibit an online marketplace from advertising products, through Google AdWords, using a keyword that is identical to an earlier trademark when such advertising does not enable an average internet user to ascertain where the goods originate.
  4. The mere fact of displaying goods for sale in an online marketplace does not by itself amount to use of the trademarks affixed on such goods. Therefore, an online marketplace does not commit an infringement simply by making available to potential purchasers goods bearing trademarks of third parties. In such cases, use of the trademarks is made by the sellers of the goods, but not by the marketplace itself.
  5. An online marketplace may not be able to avail itself of certain defences that are available to other information society service providers under EU law (Directive 2000/31/EC, Article 14) if it plays an active role in the promotion of the products concerned and thus has knowledge and control over the goods and their status.
  6. Trademark owners must have available efficient injunctions, sufficient to prevent both current and future infringements.

Interflora46

Interflora was a US-based worldwide flower delivery service. Marks & Spencer, the well-known English retailer, operated its own flower delivery service and used the Interflora trademark as a keyword for internet promotion. In its preliminary ruling on possible trademark infringement, the CJEU repeated the principles laid down in the Google France judgment. However, this time, the court went further and examined the potential dilution of the Interflora trademark through its use as an AdWord. The court observed that trademarks with reputation have an additional function, called the ‘investment function’. It is possible that this function may be adversely affected by the use of the trademark as a keyword by a third party. If this is the case, trademark infringement in the form of dilution is established. However, this requires something more than a mere necessity for the trademark owner to adapt its efforts to increased competition and to additional strain to preserve its reputation and retain the loyalty of its clients. Dilution, in the form of free-riding and detriment to the distinctive character of the trademark concerned, is likely when the goods displayed on the internet are imitations of the goods of the trademark owner, but imitating goods is not necessarily the case, because the goods displayed may not be imitating goods.

Christian Louboutin red shoe sole

A recent case that has been very much discussed and publicised is the case of the ‘red sole’ of Christian Louboutin shoes. The case arose from a referral to the CJEU from the District Court of The Hague. Christian Louboutin had registered a coloured position mark consisting of the red colour applied to the sole of high-heeled shoes. On the evidence, it was found that the red colour gives substantial value to the shoes traded by Christian Louboutin, and plays an important role in the consumer’s decision to make a purchase. The question referred to the CJEU was whether the mark could be invalidated on the ground that it was functional. Functionality may be either technical or aesthetic. As a result, the shape of a product that gives substantial value to the goods may be functional. The CJEU dissented from the two opinions delivered by the Advocate General and reasoned that the doctrine of functionality applies only to ‘shapes’, while the mark under consideration consisted of a colour. Therefore, this mark could not be challenged on the grounds of functionality.

VII OUTLOOK

The European Commission has released information advising that it intends to initiate the procedure for the amendment of Directive 2004/48/EC regarding enforcement of intellectual property rights. This Directive has a great impact on how infringements are dealt with by civil courts in the EU Member States. Although a certain level of approximation of the laws of the Member States has been achieved, it is true that there are still important differences from country to country.


Footnotes

1 Christos Chrissanthis and Xenia Chardalia are partners and Antonia Vasilogamvrou is an associate at Christos Chrissanthis & Partners.

2 CJEU, C-321/03, 20 January 2007.

3 CJEU, C-273/00, 12 February 2002 and C-104/01, 6 May 2003.

4 See GCEU, T-305/04, 27 October 2005 concluding that smells cannot be represented graphically. However, sound marks can be represented graphically by way of musical notations (stave), showing a clef and musical notes (CJEU, C-283/01, 27 November 2003) or by way of an MP3 file accompanied by additional suitable graphical representation (EUIPO Decision EX-05-3, 10 October 2005).

5 CJEU, C-265/09, 9 September 2010 and C-64/02, 21 October 2004.

6 CJEU, C-98/11, 24 May 2012; see also CJEU, C-215/14, 16 September 2015 and GCEU, T-359 and 360/12, 21 April 2015; T-409/10, 22 March 2013; T-411/14, 24 February 2016; T-76/13, 12 February 2015; and T-262 and 263/04, 15 December 2005.

7 EUIPO Boards of Appeal, R-1515/2016-2, 7 March 2017.

8 CJEU, C-265/00, 12 February 2004 (Biomild); C-191/01, 23 October 2003 and GCEU, T-193/99, 31 January 2001 (Doublemint).

9 GCEU, T-328/11, 24 February 2012.

10 GCEU, T-470/09, 12 July 2012.

11 GCEU, T-435/11, 2 May 2012.

12 GCEU, T-654/14, 2 June 2016.

13 CJEU, C-21/12, 17 January 2013.

14 GCEU, T-29/16, 27 October 2016.

15 CJEU, C-437/15, 17 May 2017.

16 GCEU, T-798/16, 30 November 2017.

17 CJEU, C-396/15, 17 February 2016. To the same effect, see also GCEU, T-85 and 629/16, 1 March 2018. Note, however, that the Adidas three-parallel-stripes mark was found to be non-distinctive and was cancelled by the EUIPO Boards of Appeal, as discussed in Section III.i.

18 GCEU, T-113/16, 30 January 2018.

19 GCEU, T-295/15, 18 April 2016.

20 GCEU, T-123/14, 28 January 2015.

21 GCEU, T-410/12, 28 November 2013.

22 GCEU, T-387/13, 18 September 2015.

23 GCEU, T-170/12, 30 April 2014.

24 GCEU, T-501 and 502/12, 9 April 2014.

25 GCEU, T-258/16, 7 June 2017.

26 GCEU, T-608/13, 13 May 2015.

27 GCEU, T-604/11 and 292/12, 4 February 2014.

28 GCEU, T-563/08, 22 June 2010.

29 GCEU, T-60/11, 22 May 2012.

30 GCEU, T-323/14, 17 September 2015.

31 CJEU, C-400/14, 16 July 2015 and T-372/11, 26 June 2014.

32 GCEU, T-170/12, 30 April 2014.

33 GCEU, T-21/15, 26 April 2016.

34 GCEU, T-711 and 716/13, 18 February 2016.

35 CJEU, C-254/09, 2 September 2010.

36 CJEU, C-552/09, 24 March 2011.

37 GCEU, T-524/11, 12 November 2014.

38 GCEU, T-637/15, 31 May 2017.

39 GCEU, T-518/13, 5 July 2016.

40 GCEU, T-85 and 629/16, 1 March 2018. On the same case, see also GCEU, T-145/14, 21 May 2015, which was upheld by the CJEU, C-396/15, 17 February 2016.

41 CJEU, C-93/16, 20 July 2017.

42 CJEU, C-689/15, 8 June 2017.

43 CJEU, C-236, 237 and 238/08, 23 March 2010.

44 CJEU, C-278/08, 25 March 2010.

45 CJEU, C-324/09, 9 December 2010.

46 CJEU, C-323/09, 22 September 2011.