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Thursday, 3 June 2010

Reifen strife resolved

Apart from the Coty Lancaster ruling of the European Court of Justice, there was another important trade mark case from the same court today -- but it seems to have been missed. It's Case C‑569/08 Internetportal und Marketing GmbH v Richard Schlicht, a reference for a preliminary ruling from Austria's Oberster Gerichtshof. Since the hour is late and this ruling is rich in detail, this Kat is blogging in brief but reserves the right to return to this ruling in the fullness of time.

In short, IMG (the appellant in the main proceedings), an Austrian company, ran websites and sold products via the internet. To be eligible to apply to register domain names during the first part of phased registration provided for in Regulation 874/2004 on .eu registrations, IMG applied successfully to the Swedish trade mark register for registration of a total of 33 generic terms as trade marks, each incorporating the special character ‘&’ [the Court seems reluctant to call it an ampersand] before and after each letter (for example IMG registered the word mark ‘&R&E&I&F&E&N&’ for safety belts (Class 9). It seems IMG never actually planned to use that trade mark for safety belts, but it did succeed in registering the domain name ‘www.reifen.eu’ during the first part of phased registration on the basis of its Swedish mark &R&E&I&F&E&N& by eliminating from it the special character ‘&’ in pursuance of one of the transcription rules set out in Article 11 of Regulation 874/2004. Since ‘Reifen’ means ‘tyres’ in German, IMG's objective was to run ‘www.reifen.eu’ as an internet portal for trading in tyres. All in all, IMG played tricks like this in respect of 180 domain names, all consisting of generic terms.

Schlicht was proprietor of the Benelux word mark ‘Reifen’ for to ‘bleaching preparations and other substances for laundry use; cleaning preparations, in particular, cleaning preparations containing nanoparticles for cleaning window surfaces’ and ‘services which facilitate the marketing of such cleaning agents’. He tried to register a Community word mark Reifen for the same goods and services, planning to market on a pan-European basis cleaning products for surfaces akin to window glass. Schlicht's mark is based on the first three letters of the German words ‘Reinigung’ (cleaning) and ‘Fenster’ (window).

Schlicht challenged IMG's registration of ‘www.reifen.eu’ before the Arbitration Court, which upheld his complaint, withdrew that domain name from IMG and transferred it to him, taking the view that the character ‘&’ contained within a trade mark was not to be eliminated but had to be rewritten: IMG had clearly sought massively to circumvent the transcription rule laid down in the second paragraph of Article 11 of Regulation 874/2004 and had therefore acted in bad faith. IMG challenged this decision by proceedings under Article 22(13) of Regulation 874/2004. That action was dismissed as unfounded at first instance and on appeal, so IMG sought revision of the decision before the referring court, which stayed proceedings and referred the following questions to the Court for a preliminary ruling:

‘1. Is Article 21(1)(a) of Regulation ... 874/2004 to be interpreted as meaning that a right within the meaning of that provision exists:

(a) if, without any intention to use it for goods or services, a trade mark is acquired only for the purpose of being able to register in the first phase of phased registration a domain corresponding to a German-language generic term?

(b) if the trade mark underlying the domain [name] registration and coinciding with a German-language generic term deviates from the domain in so far as the trade mark contains special characters which were eliminated from the domain name although the special characters were capable of being rewritten and their elimination has the effect that the domain differs from the trade mark in a way which excludes any likelihood of confusion?

2. Is Article 21(1)(a) ... to be interpreted as meaning that a legitimate interest exists only in the cases mentioned in Article 21(2)(a) to (c)?

3. [If that question is answered in the negative,] does a legitimate interest within the meaning of Article 21(1)(a) ... also exist if the domain holder intends to use the domain – coinciding with a German-language generic term – for a thematic internet portal?

4. [If Questions 1 and 3 are answered in the affirmative,] is Article 21(3) ... to be interpreted as meaning that only the circumstances mentioned in points (a) to (e) of that provision are capable of establishing bad faith within the meaning of Article 21(1)(b) ...?

5. [If the answer to that question is in the negative,] does bad faith within the meaning of Article 21(1)(b) ... also exist if a domain was registered in the first phase of phased registration on the basis of a trade mark, coinciding with a German-language generic term, which the domain holder acquired only for the purpose of being able to register the domain in the first phase of phased registration and thereby to pre-empt other interested parties, including the holders of rights to the mark?’
Today the Court ruled as follows:
"1. Article 21(3) ... and the principles governing registration must be interpreted as meaning that bad faith can be established by circumstances other than those listed in Article 21(3)(a) to (e) ....

2. In order to assess whether there is conduct in bad faith within the meaning of Article 21(1)(b) ..., read in conjunction with Article 21(3) ..., the national court must take into consideration all the relevant factors specific to the particular case and, in particular, the conditions under which registration of the trade mark was obtained and those under which the .eu top level domain name was registered.

With regard to the conditions under which registration of the trade mark was obtained, the national court must take into consideration, in particular:

– the intention not to use the trade mark in the market for which protection was sought;

– the presentation of the trade mark;

– the fact of having registered a large number of other trade marks corresponding to generic terms; and

– the fact of having registered the trade mark shortly before the beginning of phased registration of .eu top level domain names.

With regard to the conditions under which the .eu top level domain name was registered, the national court must take into consideration, in particular:

– the abusive use of special characters or punctuation marks ... for the purposes of applying the transcription rules laid down in that article;

– registration during the first part of the phased registration provided for in that regulation on the basis of a mark acquired in circumstances such as those in the main proceedings; and

– the fact of having applied for registration of a large number of domain names corresponding to generic terms".
Says the IPKat, this looks like a pretty good result, not just for Mr Schlicht but for common sense. IMG's ruse was a cunning try-on and it complied with the letter of the law, but vague and amorphous concepts such as 'bad faith' are invoked precisely because there are businesses that conduct themselves like IMG. Merpel adds -- the Court of Justice has done well to turn this case round in only 18 months from receiving the reference. Could this be because the Court had so little of its own case law to consider before reaching its decision?

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