IPKAT GUEST BLOG: CAN THE ECJ REWRITE NATIONAL STATUTES?

The IPKat is pleased to welcome back London barrister Ashley Roughton as a guest blogger. Ashley, of Hogarth Chambers, is an intellectual property specialist who has appeared in many recent cases, including Arsenal v Reed.

Much comment has been made about the apparent widening of the test for infringement as set out in Article 5 of Council Directive 89/104 (the trade marks directive) following the ECJ judgment in Adidas v Fitnessworld. Two points emerge. The first is the issue of the "link" between the registered trade mark in issue and the sign. The test for infringement is said to be less than confusion (or at least different): any "link", whatever that means, will do. The second is to do with the fact that the ECJ appear to have re-written Article 5(2) of the directive so that the reputational protection available to proprietors of registered trade marks also applies to goods or services which are identical or similar to those for which the registered trade mark in issue is registered, provided, that the registered trade mark has a sufficient reputation.

Assuming that the ECJ is right, what does this mean in practice? Here considerable difficulties arise. At first it seems impossible, without the intervention of the legislature, to delete section 10(3) of the Trade Marks Act 1994 so that a claimant relying on section 10(3)(b) of the Act need not show that the defendant's goods or services are dissimilar to those set out in the trade mark registration document. Since the ECJ says it does not matter whether the goods or services in question are similar to those set out in the registration document, section 10(3)(b) should not be there.

How, then, does one formulate a claim under section 10(3) of the Act? To this there are two possible answers. The first is to say that the directive has horizontal direct effect. In other words, private litigants can rely upon the directive -- and only the directive -- as setting out the basis for a cause of action, without recourse to the subsidiary legislation (in this case the Act). Standing well in the way of this argument is the well established notion that there is to be no horizontal direct effect so far, at least, as directives are concerned and so far as concerns private rights. The position so far as governments are concerned is different, but this is a separate notion known as vertical direct effect and does not concern the point being made. The "no horizontal direct effect" rule is one which has, in the past, been repeatedly made by the ECJ (see, for example, Case C-192/94 El Corte Ingles SA v. Rivero [1996] I E.C.R. 1281). The second, more attractive, answer is to say that if a provision of a domestic statute offends European law, that provision must be ignored. There is sparse but strong authority for this proposition: see Case C-269/80 R. v Tymen [1981] E.C.R. 3079. Therefore, the argument goes, ignore section 10(3)(b) of the Act.

While this second point is procedurally attractive to brand owners, at least it leaves one with a sense of discomfort; the sort of discomfort which gives legislators a bad name. Article 5(2) of the directive is reasonably clear and section 10(3)(b) of the Act is a reasonable transposition of the directive in that regard. The ECJ may be able to declare national transpositions of directives as being incompatible with European law but it seems it has developed a new power to declare directives to mean something which they don't. Whether this opinion stands the test of comment on the IPKat web site remains to be seen.