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Thursday, 26 June 2008

Intel v CPM - AG's Opinion

The IPKat brings news of the AG's Opinion in Intel v CPM. Here the Court of Appeal referred the following questions when Intel took on the proprietors of INTELMARK for telemarketing services and the like, based on the registration of the INTEL mark for computers etc.:

(1) For the purposes of Article 4(4)(a) of [the Directive], where:

(a) the earlier mark has a huge reputation for certain specific types of goods or services,

(b) those goods or services are dissimilar or dissimilar to a substantial degree to the goods or services of the later mark,

(c) the earlier mark is unique in respect of any goods or services,

(d) the earlier mark would be brought to mind by the average consumer when he or she encounters the later mark used for the services of the later mark,

are those facts sufficient in themselves to establish (i) “a link” within the meaning of paragraphs 29 and 30 of [Adidas I] and/or (ii) unfair advantage and/or detriment within the meaning of that Article?

(2) If no, what factors is the national court to take into account in deciding whether such is sufficient? Specifically, in the global appreciation to determine whether there is a “link”, what significance is to be attached to the goods or services in the specification of the later mark?

(3) In the context of Article 4(4)(a), what is required in order to satisfy the condition of detriment to distinctive character? Specifically, [(i) does] the earlier mark have to be unique, (ii) is a first conflicting use sufficient to establish detriment to distinctive character and (iii) does the element of detriment to distinctive character of the earlier mark require an effect on the economic behaviour of the consumer?

AG Sharpston began by setting out the context. She noted that US and EU dilution law has sometimes been criticised for not conforming to Frank Schechter's view that highly distinctive marks (rather than famous marks) should be protected, and also for not being as wide as Schechter's protection. However, the task of the ECJ was to interpret the word of a Community directive. Schechter's discussion could not govern. In line with this, she found that AG Jacob's discussion of the meaning of the various types of dilution in Adidas v Fitnessworld was in the nature of a historical and contextual discussion, rather than an expression of the extent of Community protection.

She also noted the need to balance the public interest in protecting trade marks with than in avoiding the abuse of trade mark protection.

She reformulated the referred questions into 4 questions - what is required to establish

  1. a link
  2. unfair advantage of distinctive character/repute
  3. detriment to distinctiveness
  4. detriment to repute
Establishing a link

According to the AG, establishing a link is a necessary precondition for establishing Art.5(2) infringement but it isn't sufficient. It bound up with the preliminary conditions of reputation and similarity of marks. However, factors used in establishing a link may also be relevant a second time in establishing the various types of harm.

The language of the referring court, bringing to mind, was effectively the same as establishing a link or making an association, in that all imply a mental process above the threshold consciousness.

As for how the link can be established, the AG noted the factors referred by the Court of Appeal (huge reputation, dissimilarity of goods or services and uniqueness of the mark on any market) were relevant, but probably not sufficient by themselves.

She notes that the Adidas court stated that the link must be appreciated globally 'just like a likelihood of confusion'. She then mentions the factors considered in the likelihood of confusion analysis and also considers the factors used in the US under s.43(c) of the Lanham Act as amended in 2006, which she notes are 'fully consistent with the Court's approach to the assessment of likelihood of confusion'. [IPKat comment: this is very confused. First of all, she's borrowing too greatly from confusion analysis if she approves s.43(c) as being consistent with the ECJ case law on confusion. More worryingly, she's looking at what the US uses to prove, blurring not what they use to prove an association between the marks. But she previously said that although the same factors may be relevant to both things that need to be proven, they 'must be assessed separately' and the factors 'may have to be taken into account in different ways'.]

She also notes that a link between the parties' goods may be relevant to establishing a link, but is not a requirement. Such a requirement would fly in the face of the wording of the Directive, which talks about dissimilar goods.
[IPKat comment: a sensible balance between the reality of how consumers will think and the wording of the Directive.]

She also throws in an observation that in Adidas the ECJ spoke aobut the existence of a link, rather than the likelihood of one.
[IPKat comment: this isn't helpful. Side observations could like this could give fuel to those who want an actual dilution requirement. Such a step shouldn't be taken lightly. In the US, the requirement eviscerated dilution as a cause of action and led to major legislative reform.]

Establishing unfair advantage

Unfair advantage was said to focus on the benefit to the later mark, rather than harm to the earlier mark. What is needed is 'some sort of boost given to the later mark by its link with the earlier mark'. A dampening or merely neutral effect just won't do.

Again, the referred factors were necessary, but weren't, on their own, enough to support a finding of free-riding. Having said that, the greater the reputation and distinctiveness of the earlier mark, the more likely is it that a later mark could derive an advantage from it. However, that still wasn't enough. To show that the earlier mark would enhance the performance of the later mark, the 'relationship between the prestigious connotations of the earlier mark and the context in which the later mark isn't used.' Where the earlier mark has been used, survey evidence might be helpful.

[IPKat comment: The IPKat isn't feeling too much the wiser. He suspects this is quite a flowery way of saying that it all depends on the facts of the case. Also, he's willing to offer a fabulous prize to anyone who can come up with a survey to demonstrate that a later mark has 'been enhanced' by the 'prestigious connotations' of an earlier, the construction and carrying out of which manages to survive our Court of Appeal.]

Establishing blurring

The AG also wasn't too impressed by the factors suggested by the Court of Appeal for demonstrating blurring. Once again, a link wouldn't be enough. The mark also didn't need to be 'unique', although a truly unique mark would be particularly distinctive, and very distinctive marks are more prone to having their distinctiveness impaired by the presence of similar marks. Likewise, not effect on consumers' economic behaviour was needed, though if an effect could be shown, it would 'buttress' the proprietor's case. Other factors mentioned by the Court of Appeal were relevant but not decisive one way or the other.

[IPKat comment: the Kat now knows what isn't enough to prove blurring. Will someone please put him out of his misery and tell him what is enough? Actually, the question may be flawed, and the answer may be that it will depend on balancing the mix of factors in every case, which brings us on to the AG's next point...]

None of the factors could be said to have a 'threshold' to which they had to be shown, since a global appreciation was required where the overall balance is decisive.
[IPKat comment: probably the right approach, but not great for legal certainty.]

The AG also cautioned that a first conflicting use would not normally be enough to cause detriment. Thus it would be appropriate to look instead at the likelihood of the harm being caused by repeated use.
[IPKat comment: this takes care of one of the problems with an actual dilution standard.]
Establishing tarnishment

Since tarnishment wasn't raised in the referred questions, the AG didn't say much about it, but she did observe that what is required is 'to compare the connotations of each mark, in relation to either the goods or services covered or to the broader message which they may convey, and to evaluate the damage entailed.' [The IPKat is intrigued by this 'broader message' - is it the advertising function?]

Concluding comments
The AG had 3 parting messages in relation to all 4 issues:
  1. It should be remembered that the assessment is always a global one, taking into account all relevant facts. Those facts are interdependent.
  2. Less evidence is likely to be available in registrability cases than in infringement cases. Suitable inferences will be needed in registrability cases.
  3. Actual harm isn't required in registrability cases, but evidence of a future risk which is more than hypothetical must be show.
[IPKat conclusion: generally a sound opinion, which stresses the need for the assessment to be based on the facts of the specific case, and how they fit together in a global analysis. This means that there shouldn't be an overly rigid approach, but isn't great for legal certainty. Some blips though, notably a lack of clarity on actual versus likely dilution and a confusing about of borrowing from confusion case law in testing for association. The Kat would have liked to have seen dilution related back to the essential function of a trade mark - in his opinion blurring certainly is on all fours with it.]

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