ELIZABETH EMANUEL RULING; LIDL OPINION

Diana dress designer loses control of name, even though consumers may be deceived

The IPKat brings you news of the latest European Court of Justice ruling, Case C‑259/04 Elizabeth Florence Emanuel v Continental Shelf 128 Ltd.

Elizabeth Emanuel, a well-known designer of wedding wear, traded under her own name from 1990. 1996 she formed a company called Elizabeth Emanuel Plc, to which she assigned her business of designing and selling clothing, all assets of the business including its goodwill and an application to register the trade mark ELIZABETH EMANUEL, which was granted in 1997. In September 1997 EE Plc assigned its business, goodwill and the registered trade mark to Elizabeth Emanuel International Ltd, which employed Ms Emanuel for just one month.

In November 1997 EE International assigned the registered trade mark to another company, Oakridge Trading Ltd which, in March 1998, applied to register the trade mark ELIZABETH EMANUEL. In January 1999 Ms Emanuel opposed that application was filed and, in September of the same year, she sought to revoke the mark that had already been registered. The opposition and the application for revocation were both dismissed on the ground that, while the public had indeed been deceived and confused, into thinking that Ms Emanuel was connected with her eponymous trade mark when she was not, such deception and confusion was lawful and the inevitable consequence of the sale of a business and goodwill previously conducted under the name of the original owner. Continental Shelf 128 Ltd then became the assignee of the trade mark and the late application.

Below: Elizabeth Emanuel's new label.

On appeal the Appointed Person decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:

"1. Is a trade mark of such a nature as to deceive the public and prohibited from registration under Article 3(1)(g) [of Directive 89/104] in the following circumstances:

(a) the goodwill associated with the trade mark has been assigned together with the business of making the goods to which the mark relates;

(b) prior to the assignment the trade mark indicated to a significant proportion of the relevant public that a particular person was involved in the design or creation of the goods in relation to which it was used;

(c) after the assignment an application was made by the assignee to register the trade mark; and

(d) at the time of the application a significant portion of the relevant public wrongly believed that use of the trade mark indicated that the particular person was still involved in the design or creation of the goods in relation to which the mark was used, and this belief was likely to affect the purchasing behaviour of that part of the public?

2. If the answer to question 1 is not unreservedly yes, what other matters must be taken into consideration in assessing whether a trade mark is of such a nature as to deceive the public and prohibited from registration under Article 3(1)(g) [of Directive 89/104] and, in particular, is it relevant that the risk of deception is likely to diminish over time?

3. Is a registered trade mark liable to mislead the public in consequence of the use made of it by the proprietor or with his consent and so liable to revocation under Article 12(2)(b) [of Directive 89/104] in the following circumstances:

(a) the registered trade mark and the goodwill associated with it have been assigned together with the business of making the goods to which the mark relates;

(b) prior to the assignment the trade mark indicated to a significant proportion of the relevant public that a particular person was involved in the design or creation of the goods in relation to which it was used;

(c) after the assignment an application was made to revoke the registered trade mark; and

(d) at the time of the application a significant portion of the relevant public wrongly believed that use of the trade mark indicated that the particular person was still involved with the design or creation of the goods in relation to which the mark was used, and this belief was likely to affect the purchasing behaviour of that part of the public?

4. If the answer to question 3 is not unreservedly yes, what other matters must be taken into consideration in assessing whether a registered trade mark is liable to mislead the public in consequence of the use made of it by the proprietor or with his consent and so liable to revocation under Article 12(2)(b) [of Directive 89/104] and, in particular, is it relevant that the risk of deception is likely to diminish over time?’".

In response to these somewhat lengthy and inelegant questions the ECJ has just ruled as follows:

"1. A trade mark corresponding to the name of the designer and first manufacturer of the goods bearing that mark may not, by reason of that particular feature alone, be refused registration on the ground that it would deceive the public, within the meaning of Article 3(1)(g) of Council Directive 89/104 ..., in particular where the goodwill associated with that trade mark, previously registered in a different graphic form, has been assigned together with the business making the goods to which the mark relates.

2. A trade mark corresponding to the name of the designer and first manufacturer of the goods bearing that mark is not, by reason of that particular feature alone, liable to revocation on the ground that that mark would mislead the public, within the meaning of Article 12(2)(b) of Directive 89/104, in particular where the goodwill associated with that mark has been assigned together with the business making the goods to which the mark relates".

In other words, a name is a commercial asset that can be traded in like any other commodity - so long is the user creates no further deception (as happened in France in the recent Inès de la Fressange litigation, to be reported in full, in English, in a forthcoming issue of the European Trade Mark Reports.

The IPKat believes this decision is both correct and uncontroversial. If it were not, celebrities would no doubt receive a lot less for the right to use their names, which would doubtless peeve them even more.


A Lidl goes a long way

Yesterday Advocate General Tizzano delivered his opinion in Case C-356/04 Lidl Belgium GmbH & Co. KG v Etablissementen Franz Colruyt NV. Lidl, a German company, operates a chain of retail stores in Belgium. Colruyt, a competing chain with more than 170 supermarkets in Belgium, sent its customers a leaflet which read:

"Dear customer, Last year, 2003, you were able once again to make significant savings with Colruyt. On the basis of our average price index for the past year we have calculated that a family spending EUR 100 each week in Colruyt stores saved between EUR 366 and EUR 1 129 by shopping at Colruyt’s rather than at any other supermarket (such as Carrefour, Cora, Delhaize, etc.); and saved between EUR 155 and EUR 293 by shopping at Colruyt’s instead of a hard discounter or wholesaler (Aldi, Lidl, Makro). On the reverse side you will see the evolution of the price differential vis-à-vis other stores in the course of 2003. … In order to be able to continue to guarantee the lowest prices, we compare daily 18 000 prices in other stores. … Each month we use those prices to calculate the price differential between Colruyt and the other stores. We refer to this as our price index which is certified by Quality Control, the independent Instituut voor Kwaliteitscontrole. The result: at Colruyt’s you enjoy, every day and at any time of the year, the lowest prices. In 2004 also we remain true to this guarantee".

Colruyt also used the following text on its checkout receipts, referring customers to its website for further explanations in regard to the system of price comparison which it applied:

"How much did you save in 2003? If you spent EUR 100 at Colruyt’s each week, then, according to our price index, you will have saved between EUR 366 and EUR 1 129 in comparison with another supermarket (such as Carrefour, Cora, Delhaize, etc.); between EUR 155 and EUR 293 in comparison with a hard discounter or wholesaler (Aldi, Lidl, Makro)".

Colruyt then launched a selection of basic products under the name BASIC. Some passages in its advertising leaflets contained the following statements:

"BASIC: absolutely the lowest prices in Belgium. Even cheaper than the comparable selection of the hard discounters (Aldi, Lidl) …’; ‘BASIC – ABSOLUTELY ROCK-BOTTOM PRICES – In addition to a significant overall price reduction we can offer you from now on a large number of products that you can compare with those of the typical hard discounters (like Aldi and Lidl) and with the ‘Eerste prijs/Premier prix’ products of other supermarkets. These are our BASIC products: everyday basic products at absolutely rock-bottom prices".

Lidl sued Colruyt for unfair comparative advertising under Belgian law. The court stayed the proceedings and referred the following questions to the ECJ for a preliminary ruling:

"(1) Must Article 3a(1)(a) of Directive 84/450 ... be construed as meaning that the comparison of the general price level of advertisers with that of competitors, in which an extrapolation is made on the basis of a comparison of the prices of a sample of products is impermissible inasmuch as this creates the impression that the advertiser is cheaper over its entire range of products, whereas the comparison made relates only to a limited sample of products, unless the advertisement makes it possible to establish which and how many products of the advertiser, on the one hand, and of the competitors used in the comparison, on the other, have been compared, and makes it possible to ascertain where each competitor concerned by the comparison is positioned in the comparison and what its prices might be in comparison with those of the advertiser and of the other competitors used in the comparison?

(2) Must Article 3a(1)(b) of Directive 84/450 ... be construed as meaning that comparative advertising is allowed only if the comparison relates to individual goods or services that meet the same needs or are intended for the same purpose, with the exclusion of product selections, even if those selections, on the whole and not necessarily in regard to every sub-division, meet the same needs or are intended for the same purpose?

(3) Must Article 3a(1)(c) of Directive 84/450 ... be construed as meaning that comparative advertising in which a comparison of the prices of products, or of the general price level, of competitors is made will be objective only if it lists the products in the comparison that are being compared and makes it possible to ascertain the prices being charged by the advertiser and its competitors, in which case all products used in the comparison must be expressly indicated for each individual supplier?

(4) Must Article 3a(1)(c) of Directive 84/450 ... be construed as meaning that a feature in comparative advertising will satisfy the requirement of verifiability in that article only if that feature can be verified as to its accuracy by those to whom the advertising is addressed, or is it sufficient if the feature can be verified by third parties to whom the advertising is not addressed?

(5) Must Article 3a(1)(c) of Directive 84/450 ... be construed as meaning that the price of products and the general price level of competitors are in themselves verifiable features?".

AG Tizzano proposes the following answer:

"(1) The condition with regard to permissibility referred to in Article 3a(1)(b) of Directive 84/450 does not preclude advertising which makes a comparison between selections of goods or services.

(2) The requirements in respect of the ‘objectivity’ and ‘verifiability’ of the comparison, laid down in Article 3a(1)(c) of the Directive, do not preclude advertisements which do not expressly mention the goods and prices that are being compared when the advertisements in question indicate where and how an average consumer can find those elements easily or in any case clearly make it possible for the consumer to ascertain what they are from the context and the circumstances of the case.

(3) Comparative advertising which compares the price levels in various supermarkets on the basis of an extrapolation from selected data and which gives rise to the belief that the price differences cited apply to all the products sold by those supermarkets is misleading within the meaning of Article 3a(1)(a) of the Directive".

In other words, advertisers are advised to say which brands or goods the comparison is based on. The IPKat likes this approach, since it encourages comparative advertisers to keep consumers better informed - and thus better empowered. On the assumption that time is money, Merpel adds, it would be nice if they added how long you can expect to line up waiting to pay for what you buy, as well as how much time to have to ferret around looking for the cheaper products that the comparison is based on.

Lidl online here; Colruyt here
Somewhere a bit classier, but more expensive, here