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Tuesday, 28 March 2006

ADAM OPEL: TRADE MARK USE LIVES TO FIGHT ANOTHER DAY (SORT OF)


The IPKat is grateful to Simon Malynicz, who has provided him with a copy of Eversheds’ rather marvellous English translation of Advocate General Ruiz-Jarabo Colomer’s Opinion in Adam Opel. The IPKat apologises for the length of this post, but he though it was justified, considering the importance of the case.

Opel manufactures cars and has used OPEL BLITZ as a trade mark for its cars for many years. In 1990 it successfully registered OPEL BLITZ as a German figurative mark for various products, including toys. The mark was used for model cars which were manufactured under licence and distributed through Opel’s parts distribution network. Autec produced remote-controlled toy scale model cars which it sold under the mark CARTRONIC. These model cars were replicas of the Opel Astra V8 Coupe and bore the protected mark on their radiator grills in the same place as the full-sized car did. However, the CARTRONIC and AUTEC marks appeared on instructions for use, packaging and remote controls. Opel argued that the use of the marks on the remote-controlled cars was the use of identical marks on identical goods and thereby constituted infringement under Art.5(1)(a) of Directive 89/104. This argument was countered by Autec. The Landgericht Nurnberg-Furth referred questions to the ECJ asking whether the use of a trade mark on model cars would infringe that trade mark and if it did, whether a defence would be available.

The Advocate General advised the ECJ to rule as follows:

* The interpretation of Art.5(1)(a) arises out of the BMW case. There the ECJ stated that the application of the article depends on whether the use of the mark is to distinguish goods, i.e. whether it is used as a trade mark or for other purposes. These alternatives formed the basis of the analysis of the ECJ’s case law on the matter.

* The effect of the Arsenal case is that the trade mark owner is given ‘absolute’ protection, in the sense that he is granted protection independently of the risk of confusion since confusion is presumed. However, this does not meant that the trade mark owner gets complete protection against all parties in all circumstances. Generally, the ECJ has taken a teleological approach to construing Art.5(1)(a), stating that it protects the specific interests of the trade mark owner, so that the mark may fulfil the functions which are proper to it, i.e. of guaranteeing to consumers the origin of the product.

* In this case, the OPEL emblem figured on the body of the scale models with a resemblance that enabled recognition, in principle, of the identity of the products in question for the purposes of Art.5(1)(a), but this was a matter for the national judge to evaluate.

* Arsenal also laid down the limits beyond which the trade mark owner cannot exercise his powers under Art.5(1), namely, he cannot stop an identical sign from being used if the later use cannot harm the rights of the registered owner. This means that some later sues for purely descriptive purposes are excluded from the scope of the provision.

* The Budweiser case described how one can ascertain whether damage has been done to the earlier mark, saying that damage has occurred where the later use accredits a material link in the course of trade between the products of the later user and those of the trade mark owner. It should be determined whether the relevant consumers perceive the later user’s sign as designating the trade mark owner. This is a matter for the national court to determine.

* The use of a sign in accordance with the rules described in BMW is the only use not to fall within the scope of Art.5(1)(a). The defences in Art.6 come into play where the registered sign does exercise the function of a trade mark but, for public interest reasons, later users are entitled to profit from the advantage of their use. This lies in contrast to use for a purely descriptive purpose that does not damage the function of a trade mark and so which is not counted as infringement under Art.5(1). Use which does not damage the function of a trade mark is an open category which must be completed on a case-by-case basis. Unlike the Art.6 defences, these non-damaging used are not derogations from protection and so do not require a restrictive interpretation.

* In this case, the use of the OPEL BLITZ trade mark constituted use which differed from the proper function of a brand. It is only recently that car manufacturers have realised the economic potential of scale models realisable through merchandising, meaning that it was difficult to imagine that the public would automatically associate the emblem with the cars of the manufacturer of the full-sized cars. Moreover, there was a risk that too strict a view of infringement would give car manufacturers a monopoly in the miniatures market. Also, on the facts referred by the national court, consumers did not make the requisite material link in the course of trade between the later user’s products and those of the registered proprietor. While consumers established a link between the miniature and Opel’s real car, they did not establish a link between the later goods and the model cars manufactured for Opel by its licensees, which would be necessary under Art.5(1)(a). Furthermore, the miniature cars and the real cars could not be classed as identical goods.

* Since the second and third questions were posed only if the answer to the first question was positive, it was not strictly necessary to answer them. However, the Advocate General made a number of comments.

* Since the Art.6 defences are a derogation from Art.5, they had to be interpreted strictly. Here it was hard to argue that the reproduction of Opel’s trade mark on the miniature cars could be considered to be an indication of the type of classification. However, the use of the emblem was within the scope of other characteristics as referred to in Art.6.

* The recent case law of the ECJ gave clear guidelines as to the nature of honest practices in industrial and commercial matters, which the Advocate General summarised briefly. Miniatures toys could not be considered to be imitations or replicas of the trade marked gods (Gillette mentions whether the defendant’s goods imitate the claimant’s goods as a factor relevant to honesty) since the toys imitated the cars themselves, rather than the models of the cars. In Budweiser, the ECJ had said that honest practices should be assessed by taking into account whether the commercial name of the defendant would be understood by the target public as indicating a link between the defendant’s products and holder of the trade mark and also, whether the defendant should have been aware of this. The renown of the earlier mark in the Member State where it was registered was also relevant. The use by Autec of its own AUTEC and CARTRONIC trade marks meant that Autec’s behaviour was honest in full compliance with commercial practice. There was no abuse of the OPEL trade mark, which was exactly where nay consumer would expect to find it, on the radiator grill.
In principle the IPKat welcomes the Advocate General’s attempt to clarify how BMW, Arsenal and Budweiser can co-exist (though he notices that Robelco is not mentioned) but in practice his solution is messy. He tries to balance trade mark use language with the Arsenal approach of the need to damage the way in which the trade mark functions, even though they don’t fit together easily. His attempt to define which uses don’t harm the function of a trade mark is to be welcomed, and is wider than the Court of Appeal in Arsenal’s holding that any use which isn’t descriptive will cause such harm.

However, his use of a material link as the test for such harm is difficult to understand. We can’t be talking about a mistaken belief about confusion because he himself says confusion is not required. What are we talking about then?

The IPKat wonders what the fate of BMW would have been under this test. The case there was run rather differently. Here the question is would consumers have linked the model Opel cars made by Autec with the model cars made under licence of the trade mark owner. In BMW, the argument was whether the use of the term BMW in Deenik’s statement that he serviced BMW cars counted as use of the BMW sign to refer to the cars that were the subject-matter of the servicing. In this case, the equivalent argument would be that the use by Autec of the Opel mark referred to Opel’s full-sized cars as the subjects of the depiction by the models, rather than to the models made by Opel.

Viewing the Art.6 defences as a derogation is problematic. Trade mark rights are themselves a derogation from the free movement of goods, and in the past the ECJ has been willing to recognise the defences as the meeting-point between free movement and private intellectual property rights and so as a generally good thing. The logic of the Advocate General’s decision is that the defences are a derogation from a derogation (that of trade mark protection from free movement of goods). This would leave the honest practices proviso as a derogation from a derogation from a derogation. The IPKat can’t begin to imagine what this must do to the width with which the honest practices proviso must be construed.

The IPKat is also refraining from making any comments about the AG’s foray into the nostalgic qualities of model vehicles. He won’t say anything about the AG having said that such toys appeal to those ‘requiring more imaginative contact with their postulates’. Filthy-minded Merpel however can’t resist a small snigger.

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