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Tuesday, 2 December 2008

Intel v CPM: what the experts say ... so far

The European Court of Justice ruling last Thursday in Intel v CPM (noted here by the IPKat) has not just attracted a fully-fledged Rapid Response Seminar. It has also generated a batch of swift responses, some of which the Kat lists below.

Ben Evans (Lawdit): "It is therefore for the earlier trade mark to show that they have suffered economic loss, or a likelihood of the same. This is likely to be very difficult to show and it will be interesting to see how this decision is applied by the courts".

Andy Millmore (Harbottle & Lewis), whose quote was picked up by FT.com: "For the brand to be able to complain now there has to be a 'change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered'. In other words, it is not enough that people may buy more of the second brand – they have to buy less of the first. The mere fact that it seems unfair or trading on an earlier brand's reputation seems not to be enough."

Lee Curtis (Out-law.com, Pinsent Masons): "It's unlikely that this ruling will provide a green light for traders to trade on the back of trade marks which are obviously very well known such as Coca-Cola. If someone used the Coca-Cola name for, say, roofing tiles, I'm certain that courts would find a way to stop them. The use would upset the drinks company's licensees, for instance – and that’s economic behaviour. If nothing else, judges would apply their common sense. Sometimes infringement will be blatantly obvious and they still have discretion to use that".

Sahira Khwaja (Lovells, quoted in Times Online): “In a case like Intel and Intelmark where the two companies operate in different sectors, it is going to be very difficult for the existing brand to prove it has lost out specifically because another company is using a similar brand”.

Joel Smith (Herbert Smith, quoted in Times Online): "“The big message is that superbrands are denied absolute protection and the ECJ has reined in their monopoly of famous names".

Paul McClenaghan (Stephenson Harwood, quoted in Times Online): "This ruling is likely to come as a blow to owners of well-known brands in Europe because the ECJ has refused to follow the American courts in giving brand owners a wide ability to protect against dilution. Instead the court has adopted a more pragmatic view where injury or likelihood of injury to the brand is required".
It's curious, the IPKat says, that some people consider this decision to be bad news for brands. Anyone might be forgiven for thinking that INTEL is a brand but INTELMARK is not.

3 comments:

Ilanah said...

I read through these comments with an increasing sense of annoyance. It has never been the case that well-known marks or brands have had absolute protection, or a 'monopoly' - a cursory reading of the wording of the legislation makes that obvious.

I agree that it's not easy to show a change to the economic behaviour of consumers, but I'm not sure that Andy Millmore is right to say that it's not sufficient for consumers to buy more of the second brand. Most of the ECJ's comments were addressed to detriment to distinctive character, where one would expect harm (i.e. fewer sales of the first) rather than an advantage to the later brand to be the decisive factor.

Finally, contrary to what Paul McClenaghan has said, the US courts haven't given that much of a wider ability to protect against dilution. Just look at the 2008 Victoria's Secret case - the US District Court required a likelihood of dilution - does that sound familiar? It should - it's the standard the ECJ is using. Frankly, big brand owners were lucky to get away with a likely dilution standard - the alternative was actual dilution, and then they'd be in a pickle.

Christopher Morcom Q.C. said...

I really do not think that the ECJ's ruling should come as a surprise. Article 4(4)(a) of the Directive specifically requires proof of of one or both of two ingredients, ie that use of the mark takes or would take unfair advantage of, or is or would be detrimental to the distinctive character or the repute of the earlier mark. There is no room for expansion into the concept of 'dilution as applied by the American courts. In most cases, I suspect, it will be fairly obvious when the requirements of art 4(4)(a) are met, and not very much evidence would be required. If the court is satisfied that the use is (or would be) 'unfair', or 'trading on an earlier mark', than that is enough. But in a case such as INTEL v INTELMARK, in view of the fact that the parties operate in different sectors, the matter is not obvious and therefore evidence is needed. As Lee Curtis suggests, judges would apply their common sense. Is the ruling, as a matter of reality, 'bad for brands'?

Dr Schoen said...

Just picked up on these comments having read the case in full and am not persuaded by Ilanah's view that it is not right to say that it's not sufficient for consumers to buy more of the second brand.

See para 78 where the Court says that it is immaterial whether the "proprietor of the later mark"[sic] draws real commercial benefit from the distinctive character of the earlier mark.

The Court has got it right here. The mischief that Ilanah is looking at is free-riding (and not dilution)(currently being considered by the Court in L'oreal v Bellure).

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