EU Court of Justice clarifies scope of TM referential use exception in ZARA case (C-361/22)

In a recent decision (C-361/22) on the scope of the referential use exception in respect of trade mark infringement, the EU Court of Justice (the Court) clarified that the exception was extended by Directive 2015/2435 (the 2015 TM Directive), as it previously applied only where the use was necessary to indicate the intended purpose of a product or service.   

Background

In 2010, Buongiorno Myalert SA (Buongiorno), an Italian mobile apps and services provider, launched an advertising campaign for a paid subscription to a multimedia messaging service, marketed under the name ‘Club Blinko’. 

Subscribers to this service would be entered into a prize draw for a number of prizes, including a "ZARA gift card" said to be worth EUR 1,000, for use in purchasing items from the well-known clothing retailer, Zara. After clicking on a banner to access the prize draw, subscribers would be shown the "ZARA" sign within a rectangular shape which looked like a gift card.

Industria de Diseño Textil SA (Inditex), the owner of Zara's trade mark portfolio, brought an infringement action in Spain against Buongiorno claiming infringement in respect of the ZARA trade mark (the Mark), based on the sections of the Spanish Ley 17/2001 de Marcas (as applicable at the time of the alleged infringement) which transposed Articles 5(1)(b) and (2) of the first EU Trade Mark Directive 89/104/EEC (the First EU TM Directive) regarding likelihood of confusion and unfair advantage/detriment to reputation, respectively. 

Buongiorno denied any infringement, arguing that it had not used the sign as a trade mark, but only made referential use of it, to refer to one of the prizes available to winners, and could therefore rely on Article 37(1) of the Ley 17/2001, which transposed Article 6(1)(c) of the First EU TM Directive, which stated: 

"The trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of  trade [...] (c) the trade mark where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts"

The first instance court dismissed the infringement claim, finding that although the defence of referential use did not apply, the claim failed in any event to satisfy the requirements for infringement under the relevant provisions. 

Fashion Kat could do with a Zara gift voucher...

Reference to the Court

Inditex appealed to the Spanish Tribunal Supremo, which in turn made a reference to the Court for a preliminary ruling on a point of law concerning the defence on referential use. The reference was made on the basis of a query raised by the Tribunal Supremo regarding the difference in wording between Article 6(1)(c) of the First EU TM Directive, as set out above, and its amended version in Article 14 of the 2015 TM Directive, which included the additional wording underlined below: 

"A trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade [...]  (c) the trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark, in particular, where the use of the trade mark is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts."

The query from the Tribunal Supremo was whether Article 6(1)(c) of the First EU Directive 89/104 had to be interpreted as implicitly including the more general conduct now referred to in the underlined section of Article 14(1)(c) of the 2015 TM Directive, or whether the intention had been to purposefully expand the scope of the defence in the latter Directive.

The Court's ruling

Having held the reference to be admissible, the Court began by explaining that, according to settled case-law, the interpretation of a provision of EU law requires account to be taken not only of its wording, but also of the context in which it occurs, as well as the objectives and purpose pursued by the act of which it forms part. 

Also, the legislative history of a provision can be relevant to its interpretation (Towercast, C‑449/21).

 

The Court found that, based on a literal comparison of the two provisions in question, it was apparent that the entirety of Article 6(1) of the First EU Directive had effectively been subsumed into Article 14(1)(c) of the 2015 TM Directive, and consequently the scope of the former was necessarily more limited than the latter, in that Article 6(1)(c) only covered use of a mark where necessary to indicate the intended purpose of a product or service.

The Court noted that this interpretation was consistent with the First EU Directive's objective in Article 6(1)(c), namely to enable providers of goods or services that are supplementary to those of another trade mark proprietor to use that mark in order to provide the public with sufficient information on the intended purpose (see Gilette, C-228/03 and Portakabin, C-558/08). 

As for the legislative history, the 2013 Proposal for a Directive of the European Parliament and of the Council (COM(2013) 162) stated, in anticipation of the 2015 TM Directive, that it was "considered appropriate to provide … for an explicit limitation covering referential use in general", indicating that the purpose of Article 14(1)(c) was not merely to clarify the parameters of  Article 6(1)(c) of the First TM Directive, but to expand it. 

Consequently, the Court found that both the legislative history and the provision's objective were consistent with a more restrictive interpretation of Article 6(1)(c). 

It was however for the national court in this case to determine whether the use of the ZARA mark by Buongiorno was necessary, within context of Article 6(1)(c), to indicate the intended purpose of the  service offered, and in accordance with honest practices.

Comment

This decision is a helpful insight into the Court's process for interpreting legislation, and confirms that the scope of the current exception for referential use is in fact broader than its component parts, despite the use of "in particular" which trade mark practitioners have been carefully navigating since the 2015 TM Directive was introduced.