GEROLSTEINER, KERRY SPRING AND THE WATERING DOWN OF A GERMAN TRADE MARK

At the monthly IP Chat, hosted by Ilanah and Jeremy at the Queen Mary Intellectual Property Research Institute, some interesting points cropped up concerning the ECJ decision in Case C-100/02 Gerolsteiner Brunnen v Putsch (blogged by the IPKat on 8 January). In Gerolsteiner the ECJ held that the use of a term of geographical origin (KERRY SPRING) did not infringe the German GERRI trade mark for the same goods if it was "in accordance with honest practices", even if the use of that term (i) was a use as a trade mark and not as a mere descriptor and (ii) that use was likely to cause confusion.

The interesting point is this: the ECJ (at para.16 of its judgment) says that "Art.6 [of Council Directive 89/104, the provision which contains the "honest use" defence] seeks to reconcile the fundamental interests of trade mark protection with those of free movement of goods ... in the common market in such a way that trade mark rights are able to fulfil their essential role in the system of undistorted competition which the [EU] Treaty seeks to establish and maintain". But how can this balancing act be done? If German consumers are going to be confused between two different products bearing similar trade marks, the earlier German mark is incapable of fulfilling its essential function of identifying the origin of its owner's goods.

There seems to be a pendulum effect at work. In HAG I the ECJ's decision had the result that free movement of goods overrode the trade mark's essential function. In HAG II the ECJ reversed its position and said that the essential function was entitled to protection even if it meant restricting that free movement of goods. Now in Gerolsteiner we have swung to the opposite extreme again.

The role played by honesty in the Art.6 defence is also open to question. Whether the importation into Germany and subsequent sale of KERRY SPRING is an "honest use" or not is a matter of no concern to the German consumer, who will be just as confused by similar marks where the use of the later mark is honest as where it is dishonest. It is easy to imagine a scenario in which an honest use of this nature will destroy the earlier mark in its entirety, where the honest invader is a well-resourced big brand competing with a small national brand.

The Gerolsteiner decision appears to be unobjectionable in itself. The main problem is in the manner in which the ECJ seeks to couch the justification of its decision.

For an explanation of HAG I and HAG II click here
More on Kerry Spring here and here
Gerri and nutrition here and here; Geri here