Red Bull v Bulldog: Advocate General clarifies meaning of 'due cause'

Taking advantage of the distinctive character or reputation of another's trade mark is something of a no-no in terms of European trade mark law -- but only if the person taking advantage does not have 'due cause' to do so.  Accordingly it's good to know what the words 'due cause' mean, in theory and in practice.  When asked, the Court of Justice of the European Union can supply the theory bit, leaving it for the trial court, having done the asking and receiving its answer, to apply it to the facts in practice.  This is the process which is currently underway in Case C-65/12 Leidseplein Beheer, in which Advocate General Kokott's Opinion was published online on 21 March 1013 in various official languages of the European Union, but not in English.  It is therefore with great relief that the IPKat publishes the following note by Stephen Vousden:
"Red Bull makes the 'Red Bull' energy-drink. It also owns the word and image mark 'Red Bull Krating-Daeng', which was filed on 1 July 1983 for Class 32 (alcohol-free drinks). For a number of years, Red Bull had been trying to stop a Dutch person, a Mr de Vries and his company 'Leidseplein Beheer', producing and selling an energy drink the packaging of which is emblazoned with the sign 'Bull Dog'. Red Bull's attempt to invoke trade mark law to stop Mr de Vries ran into difficulty, ostensibly because of why Mr de Vries was using his signs in the first place. That is to say, on 14 July 1983 he had filed a word and image mark 'The Bulldog' and had done so for Class 32 (alcohol-free drinks). Moreover, he had been using his mark well before Red Bull had even filed its mark. Indeed since 1975, Mr de Vries had been using his sign for various commercial and sales activities ranging from Dutch 'coffee-shops', to cafés, a hotel, and even a cycle-hire shop. Only in 1997, however, had he begun using 'The Bulldog' for an energy-drink.

Red Bull's litigation ended up in the Dutch Supreme Court which did not know whether, for the purposes of EU trade mark law, Mr de Vries had 'due cause' to use his sign. More specifically, it asked the CJEU:
'Is Article 5(2) of Directive 89/104/EEC to be interpreted as meaning that there can be due cause within the meaning of that provision also where the sign that is identical or similar to the trade mark with a reputation was already being used in good faith by the third party/parties concerned before that trade mark was filed?'
On 21 March 2013, Advocate General Kokott proposed an answer (unofficial translation):
'When assessing whether a third party who, without due cause, uses a sign similar to a well-known mark takes unfair advantage from the distinctive character or the reputation of that well-known mark within the meaning of Article 5(2) of Directive 89/104/EEC … the fact that the third party has already been using that sign in good faith for other products or services prior to the mark with a reputation having been filed or having acquired its reputation, should be taken into account and favour the third party.'
Her reasoning recognised that the versions of Article 5(2) of the Directive in different languages do not match. Thus Red Bull may well refer to the Dutch version of the Directive, where 'due cause' is couched in terms of 'valid reason' and do so in order to support its submission that the phrase should be interpreted restrictively, but the fact was that the wording of the English, French and German versions did not connote such a restrictive interpretation. Indeed, she believed that those versions suggested that it could suffice if 'use' was based on a legitimate interest, an interest which might outweigh the trade mark holder's interest. And at first blush, she could see no impediment as to why the earlier use of a sign could not form the basis to an interest which outweighed that of the right holder. In any event, Article 5(2) required a balancing exercise. The relevant circumstances to be taken into account were: 
  • the extent of the reputation and the scale of distinctive character; 
  • the degree of similarity between the conflicting marks; 
  • the nature of the goods and services concerned, and 
  • the degree to which they are related. 
In so far as the extent of the reputation was concerned and the degree to which the older mark had a distinctive character, the greater the distinctive character and the reputation of that mark, the easier it will be to make a finding of detriment. The more directly and strongly the mark was evoked, the greater the likelihood that the use of the sign, either at that moment or in the future, would take advantage from, or be detrimental to, the distinctive character or the reputation of the older mark. She also thought the referring court should also keep in mind that where the same goods were involved, the association was going to be made very quickly with the goods of the well-known mark. Yet the marks in the present case were not identical and corresponded only in their use of the word 'bull' - and the word 'bull' used in De Vries' sign was but one element in the word 'Bulldog', and was linked to a completely different image. 
Introducing the BullKat ...
Advocate General Kokott proceeded to explain the concept of 'unfair advantage'. The concept was characterised by the fact that a third party attempts to use signs corresponding to trade marks with a reputation, to ride on its coat-tails in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark. In that context, it was important that the sign 'The Bulldog' was filed for alcohol-free drinks as early as 1983. Although the trade mark 'Red Bull' was older by only a few days, it was doubtful whether Red Bull was already well-known at that particular moment. She thought that Mr De Vries could, in so far as this mark was concerned, rely on the principle recognised in EU law of protected acquired rights in order to justify the use of the sign for an alcohol-free energy-drink. Further, when weighing the interests, account should also be taken of the use of a sign. After all, the use was also the result of the third party's efforts. The earlier use of a sign could also give rise to a power of attraction, reputation and prestige. Current use could also be an appropriate means of satisfying the necessary origin-denoting function of the mark, and thereby contribute to informing the consumer. It was thus quite possible in the present case that consumers in Amsterdam would sooner associate the sign of 'The Bulldog' with a specific company than they would, say, with the names of 'De Vries' or 'Leidseplein Beheer' or some other new indication. Nor was Mr de Vries' legitimate interest neutralised by the fact that he potentially only started his trade in energy-drinks after Red Bull had scored considerable success with its product. 
Trade mark law should not preclude specific companies from participating in the competition that exists in specific markets. As was apparent in the Interflora judgment [noted by the IPKat here], this form of competition in the internal market was actually desirable. And companies must in principle have the right to use the signs with which they are known in the marketplace unless there is a risk of confusion. Therefore, Advocate General Kokott concluded, when assessing whether the use of a sign without due case takes an unfair advantage of the distinctive character or reputation of a well-known mark, the referring court should take account of each of the above factors".
Red Bull v Bulldog: Advocate General clarifies meaning of 'due cause' Red Bull v Bulldog: Advocate General clarifies meaning of 'due cause' Reviewed by Jeremy on Thursday, April 04, 2013 Rating: 5

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