Global marcomms group CPM did not lie down when told to by IT behemoth Intel when it sought to knock out its INTELMARK name. The 11 year battle reached the European Court of Justice, who had to decide if Intel’s registered trade mark was being “diluted” by CPM’s mark. Emily Devlin reports.
Who: Intel Corporation Inc v. CPM United Kingdom Limited
When: 27 November 2008
Where: European Court of Justice ("ECJ")
Law stated as at: 27 November 2008
Late last year the ECJ provided new guidance for trade mark owners in a key judgment concerning the increasingly important issue of trade mark dilution (or the prohibition on the use of well known marks for goods and services dissimilar to those protected by registration). In its judgment the ECJ indicated trade mark owners will now need to provide evidence that the use of the later trade mark is causing a change in the economic behaviour of its customers, or that there is a serious likelihood that such a change will occur in the future. This will make it much tougher for owners of well known to prevent the use of well known marks.
CPM describes itself as the UK’s (and Europe’s) number one field marketing company and a leading telemarketing company. This case concerned the registration by CPM of the trade mark INTELMARK for marketing and telemarketing services. Intel (the well-known microcomputer components manufacturer) owns a number of earlier registered trade marks consisting of the word INTEL for essentially, computers and computer linked goods and services.
Intel applied to invalidate the CPM mark despite the fact that it was registered in respect of different services to those covered by Intel's marks.
Intel was unsuccessful in the UK IPO and in the High Court. On appeal, the Court of Appeal considered whether the basis of the "dilution" theory set out in Adidas-Salomon, where a mere "bringing to mind" of the earlier mark was sufficient to establish a "link" between the two marks, could properly result in a finding of invalidity. Further, Intel argued that where an earlier mark is both unique and has a strong distinctive character, detriment will be caused by virtually any use regardless of the goods and services in question.
Article 4(4)(a) of the Trade Marks Directive (89/104/EEC) provides that a trade mark is invalid if it is similar to an earlier national trade mark with a reputation, even though the two marks may be registered for dissimilar goods or services, if "use of the later trade mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark". In other words, in cases where there is dilution (or detriment) or cases where there is free-riding (unfair advantage) the existence of the earlier mark will invalidate the later mark.
The Court of Appeal referred the following questions to the ECJ.
The questions referred
1. For the purposes of Article 4(4)(a) of the Directive, if:
(a) The earlier mark has a huge reputation for certain types of goods or services;
(b) Those goods or services are dissimilar or substantially dissimilar to the goods or services of the later mark;
(c) The earlier mark is unique in respect of any goods or services; or
(d) The earlier mark would be brought to mind by the average consumer when he or she encounters the later mark used for the services of the later mark;
Are those facts sufficient in themselves to establish (i) "a link" as set out in Adidas-Salomon; and/or (ii) unfair advantage and/or detriment within the meaning of that Article?
2. If no, what factors should the national court take into account in deciding whether such facts are sufficient? Specifically, in deciding whether there is a "link", what importance is to be attached to the nature goods or services in which the later mark is to be used in connection with?
3. In the context of Article 4(4)(a), what is required in order to satisfy the condition of detriment to distinctive character? Specifically: (i) does the earlier mark have to be unique?, (ii) is a first conflicting use of the later mark sufficient to establish detriment to distinctive character? and (iii) does the requirement of detriment to distinctive character of the earlier mark require an effect on the economic behaviour of the consumer?
Point (i) of Question 1 and Question 2
- A "link" will be established if the later mark calls to mind the earlier mark with a reputation (scenario 1(d)) or where there is a likelihood of confusion.
- The factors set out in 1(a)-(c) do not of themselves result in a link being made, within the meaning of Adidas, between the conflicting marks.
- Whether the circumstances set out in 1(a)-(c) will establish such a link between the earlier mark with a reputation and the later mark must be assessed globally, taking into account all factors relevant to the circumstances of the case.
Relevant factors include the standard global appreciation test factors:
- the degree of similarity of the marks (the more similar the marks, the greater the likelihood of a link) and the nature and degree of similarity between the goods or services (if the marks are used in connection with different goods and services and are used in completely different markets where there is no overlap in consumers then there it is less likely that a link will exist);
- the strength of the earlier mark's reputation (the more well known the earlier mark, the more likely there will be a link to the later mark); and
- the degree of the earlier mark's distinctive character (the more "unique" the earlier mark, the greater the likelihood that a link will be established).
Point (ii) of Question 1
The fact that the earlier mark has a huge reputation for certain specific types of goods or services, where those goods or services are dissimilar to those covered by the later mark, that the earlier mark is unique in respect of any goods or services, and that for the average consumer the later mark calls the earlier mark to mind, are not sufficient factors establishing that the use of the later mark would be detrimental to the distinctive character of the earlier mark.
- The use of the later mark may be detrimental to the distinctive character of the earlier mark with a reputation even if that mark is not unique, although the more unique the mark is, the greater the likelihood of such detriment occurring.
- A first use of the later mark may suffice to be detrimental to the distinctive character of the earlier mark.
- Detriment to the earlier mark's distinctive character will occur when the mark's ability to identify the goods and services of the proprietor is weakened. Proof of detriment requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered as a result of the use of the later mark (or there exists a serious likelihood that such a change will occur in the future).
Why This Matters:
The key point for brand owners is the requirement in dilution cases for evidence of a change in the economic behaviour of the average consumer, or a serious likelihood that such a change will occur in the future.
If, as in this case, the alleged infringer is operating in a completely different market to the registered trade mark owner, it will be difficult for the latter to gather evidence to prove that their business will suffer as a consequence of essentially non-competing use.
Even if sales figures are produced as proof it may be difficult to show that a decline in figures was caused by the dilution of the mark and not other external factors (for example the economic recession). Where a major brand owner has several licensees it is likely that unchecked third party use will upset a famous brand owner's licensees and may result in such parties terminating, or threatening to terminate, their licences. This may suffice as evidence of a change in economic behaviour. Otherwise, mere confusion may not suffice.