Céline ruling - only infringing uses will infringe a trade mark

The European Court of Justice has ruled this morning in Case C‑17/06, Céline SARL v Céline SA, a reference for a preliminary ruling from the Cour d'appel de Nancy, France. This reference arose from a dispute between two businesses, each of which claimed an entitlement to the word Céline. The claimant, which had a registered trade mark, sought to prevent the defendant appropriating Céline as a company name and shop name. As the Court put it,

"By its question, the national court essentially asks whether the unauthorised use as a company, trade or shop name by a third party of a sign which is identical to an earlier word mark, in connection with the marketing of goods which are identical to those for which the mark was registered, constitutes use which the proprietor of the mark may stop in accordance with Article 5(1) of the directive".

The Court ruled:

"The unauthorised use by a third party of a company name, trade name or shop name which is identical to an earlier mark in connection with the marketing of goods which are identical to those in relation to which that mark was registered constitutes use which the proprietor of that mark is entitled to prevent in accordance with Article 5(1)(a) of ... Council Directive 89/104, where the use is in relation to goods in such a way as to affect or to be liable to affect the functions of the mark.

Should that be the case, Article 6(1)(a) ... can operate as a bar to such use being prevented only if the use by the third party of his company name or trade name is in accordance with honest practices in industrial or commercial matters".

This may seem a little delphic, but the principle seems clear: the use of another's trade mark is only an infringement when it constitutes an infringing use. Of particular interest is what the court said at paragraphs 21 and 22, integrating this case into its existing jurisprudence:

"21 The purpose of a company, trade or shop name is not, of itself, to distinguish goods or services (see, to that effect, Case C-23/01 Robelco [2002] ECR I‑10913, paragraph 34, and Anheuser‑Busch, paragraph 64). The purpose of a company name is to identify a company, whereas the purpose of a trade name or a shop name is to designate a business which is being carried on. accordingly, where the use of a company name, trade name or shop name is limited to identifying a company or designating a business which is being carried on, such use cannot be considered as being ‘in relation to goods or services’ within the meaning of Article 5(1) of the directive.

22 Conversely, there is use ‘in relation to goods’ within the meaning of Article 5(1) of the directive where a third party affixes the sign constituting his company name, trade name or shop name to the goods which he markets (see, to that effect, Arsenal Football Club, paragraph 41, and Adam Opel, paragraph 20)".