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Thursday, 15 January 2009

WELLNESS? You can't even give it away ...

The Advocate General's Opinion, unkindly, is only in 14 official languages of the European Union including Maltese and Latvian (but neither Estonian nor Lithuanian - is there some subtle Baltic plot underfoot?) but not English. The judgment of the full court, posted today, however appears even in English. So what is Case C-495/07 Silberquelle GmbH v Maselli-Strickmode GmbH all about?

The story behind this reference from Austria's Oberster Patent- und Markensenat (Austria) goes like this. Maselli, which makes and sells clothing, owns the Austrian word mark WELLNESS for goods in Class 16 (printed matter), Class 25 (clothing) and Class 32 (alcohol-free drinks). When promoting sales of its clothing, Maselli used its mark on an alcohol-free drink which it handed out as a free gift in bottles marked WELLNESS-DRINK, along with its not-so-free clothing. Maselli's promotional documents actually referred to free gifts labelled with the WELLNESS mark. The company never however used the WELLNESS mark on any drinks that were sold separately from its clothing.

Silberquelle, an alcohol-free drinks maker, applied to cancel the registration of the WELLNESS mark in Class 32 on the grounds of non-use. Austria's Cancellation Division duly obliged; Maselli then appealed to the Oberster Patent- und Markensenat which stayed the proceedings and to referred the following question to the Court of Justice for a preliminary ruling:

"Are Articles 10(1) and 12(1) of the [Directive 89/104 on the approximation of trade mark law] to be interpreted as meaning that a trade mark is being put to genuine use if it is used for goods (here: alcohol-free drinks) which the proprietor of the trade mark gives, free of charge, to purchasers of his other goods (here: textiles) after conclusion of the purchase contract?".
The ECJ gave its answer today in impeccable German:
"Articles 10(1) and 12(1) ... must be interpreted as meaning that, where the proprietor of a mark affixes that mark to items that it gives, free of charge, to purchasers of its goods, it does not make genuine use of that mark in respect of the class covering those items".
The IPKat isn't hugely happy with this answer. This is how the Court's reasoning goes:
"17 It is settled case-law that ‘genuine use’ within the meaning of the Directive must be understood to denote actual use, consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin.... [so far, so good]

18 It follows from that concept of ‘genuine use’ that the protection that the mark confers and the consequences of registering it in terms of enforceability vis-à-vis third parties cannot continue to operate if the mark loses its commercial raison d’être, which is to create or preserve an outlet for the goods or services that bear the sign of which it is composed [this can't be right, surely!  Marks don't have a raison d’être; rather, mark-owners have a reason for registering and deploying marks], as distinct from the goods or services of other undertakings ....
19 ... it is essential, in the light of the number of marks that are registered and the conflicts that are likely to arise between them, to maintain the rights conferred by a mark for a given class of goods or services only where that mark has been used on the market for goods or services belonging to that class [but if the consumer will be confused between one trader's use of a mark on a freebie and another's use on paid-for goods, is the protection of the consumer's comprehension not at least as important as the number of marks on the register? ].

20 ..., that condition is not fulfilled where promotional items are handed out as a reward for the purchase of other goods and to encourage the sale of the latter [this seems like an assertion rather than a statement of law or a reasoned justification].

21 In such a situation, those items are not at all distributed with the aim of penetrating the market for goods in the same class. Under those circumstances, affixing the mark to those items does not contribute to creating an outlet for those items or to distinguishing, in the interest of the customer, those items from the goods of other undertakings [what makes the court think it knows what the interest of the customer is?]".
In the streets of London, Merpel observes, a variety of free newspapers are handed out by the tens of thousands, to commuters, shoppers and other innocent victims. The owners of the titles of those newspapers can register those titles as trade marks for advertising services, which is the market in which they compete with one another, but presumably they wouldn't be making any genuine use of those marks for printed papers in Class 16.  Is this right, or has her katty little brain missed something?  

Right: "Ding dong dell, pussy's in the well ..."

Tufty is even more puzzled: if putting a mark on to goods in Class 32 that are given away in order to promote the sale of goods in Class 25 is not a genuine use, can it be argued that the same giveaway use is not an infringing use in respect of an action brought by the proprietor of a trade mark registered for goods in Class 25, but that it might be an infringing use in respect of an action brought by the proprietor of a trade marks registered for goods in Class 32?

6 comments:

Anonymous said...

I do not agree with the ECJ (except if the judgment is given a very narrow interpretation for a very particular case). Rarely something is really given for free: often the "free gift" is either included in the price (as retail services are not free even though they are charged apart, see the praktiker case) or it is publicity for the goods given away. However, publicity is part of the proof of use for the goods in question.
If the condition is whether the goods are given for free, how to draw the line with goods that are given against a contribution to the costs? What is the next step: to ask whether the price is too cheap? Why sanctioning the trader who gives away his goods for free during a trial phase or as an incentive? I am not talking of real gifts where a supermarket donates old products to needy people.

mcvooty said...

The ECJ's true concern may be what they perceive is the unwarranted burden on the IP system caused by the registration and enforcement of trademarks by companies on sorts their promotional chochkas.

Aaron Wood said...

I don't think the "free-ness" is the point, it is the fact that the use on promotional items is not use to create a market for the promotional items, but rather for the "sold" item.

By the ECJ's reasoning, the use on class 32 product in this situation might be genuine use for class 25 goods (which follows the Ansul case) - although that wasn't a question in this case.

As for the infringement question of Tufty, I think even though the use by the proprietor wouldn't be deemed genuine use for class 32 goods, if a third party used it under the same circumstances then arguably it would still be infringement as I think it would affect the "primary function" of a mark registered for class 32.

I will have to go away and think about whether the use on class 32 promotional items (for the purposes of publicising class 25 goods) could infringe a class 25 registration...

Aaron

Anonymous said...

And what about promotions along the lines of "Buy X, get Y for just 1p". If the price is merely nominal, then arguably such a promotion falls foul of the reasoning "...that condition is not fulfilled where promotional items are handed out as a reward for the purchase of other goods and to encourage the sale of the latter...". But what if the price is 10p? Or £1?
Buy one Judgment and get a can of worms for free...

Anonymous said...

I also struggle to reconcile this opinion with the ECJ decision in Radetzky (C-442/07, 9 December 2008) where the court held in relation to a not-for-profit organisation that use of trade marks in relation to goods and services that are free at the point of delivery may constitute genuine use of trade marks.

Anonymous said...

LONDON LITE is registered in class 16 for newspapers by Associated Newspapers. THELONDONPAPER is a pending application in class 16 by a subsidiary of News International. Will anyone challenge the registration or in the case of the application file "obsevations"?
The Gideons did not sell goods or provide services on earth so their application failed.

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