Intel Corporation recently attacked the Omnicom-owned brand ‘Intelmark’ This was registered in the name of the marketing services group’s customer contact strategy agency CPM. Detrimental to the chip corporation’s ‘Intel’ brand?
Topic: Intellectual Property
Who: Intel Corporation Inc and CPM United Kingdom Limited
When: August 06
The High Court pronounced judgement on an appeal by computer chip leviathan Intel Corporation in respect of its challenge to an INTELMARK registration obtained by marketing services group Omnicom.
In 1997, CPM United Kingdom Limited ("CPM"), a field marketing and telemarketing services company forming part of the Omnicom Diversified Agency Services group, registered "INTELMARK" as a UK trade mark for "marketing and telemarketing services" in class 35.
CPM says this mark was devised as a result of an employee competition for a new brand name and was created to represent the words 'Integrated Telephone Marketing'. The services offered under the INTELMARK brand included direct sales support, response handling, consumer care lines and database management.
Intel Corporation Inc ("Intel") claimed CPM was exploiting the reputation vesting in its "INTEL" brand. Intel had registered a series of trade marks including a number registered in the UK predominantly in respect of class 9 products. In the latest Interbrand survey of the world's most valuable brands, Intel was ranked fifth with a brand value of approximately $32.3bn.
The view of the UK Trade Mark registry
Intel lodged an application with the UK Trade Mark Registry in 2003 for a declaration of invalidity against CPM's trade mark under Trade Marks Act 1994 s47 (2)(a). This claim was brought on the grounds that CPM's use of INTELMARK would take unfair advantage of, or be detrimental to the distinctive character or the repute of Intel's earlier INTEL marks. To support its claim, Intel provided evidence asserting that "INTEL" marks were some of the most recognised marks in the world and that they enjoyed a strong reputation within the UK. Despite these arguments, the Trade Marks Registry dismissed Intel's application on the grounds that it:
1. was dissatisfied there would be any material damage to the distinctiveness or repute of the INTEL brand if INTELMARK was used in a normal and fair manner in respect of the services for which it had been registered; and
2. rejected evidence that Intel attempted to rely on to illustrate the effect that a number of companies trading using names that incorporated the word INTEL had, as the register from which the evidence had come provided insufficient information as to whether the companies' trading activities had any discernible impact on the public's perception of the INTEL mark.
The view of the High Court
Intel appealed against the Trade Marks Registry's decision on the grounds that amongst other things the Trade Mark Registry had failed to perform the global appreciation exercise required in relation to sections 5(2) and 5(3) Trade Marks Act 1994 when assessing potential unfair advantage or detriment. However, Intel did not have any more luck at the High Court as Mr. Justice Patten did not side with Intel either. Patten J. ruled against Intel after holding that a survey by Financial World magazine in 1993 ranking the INTEL brand as the third most successful brand in the world (behind only Coca-Cola and Marlboro) did not change matters.
No automatic detriment from "association" between marks
Mr. Justice Patten acknowledged that: (a) INTEL was a strong brand name; and (b) the reputation of the INTEL mark would indeed mean that the average consumer would probably focus on the INTEL element of INTELMARK but also pointed out that the addition of the letters "MARK" meant a "degree of dissimilarity" was created which could be further enhanced depending on the context in which the two marks were used.
The making of an association between two marks alone was not to be automatically treated as causing a "detriment" or the taking of unfair advantage. When assessing whether there had been a "detriment" to a trade mark, an association between marks and the products or services to which they related might be detrimental to the strength and reputation of the earlier mark if it tarnished it by association or made it less distinctive.
In this case, there was no evidence to show that telemarketing services were regarded as inherently undesirable in the minds of the public so as to diminish the reputation of Intel's marks as a result of any association between the two marks. The High Court therefore held the Trade Marks Registry had reached a conclusion it had been entitled to reach on the evidence before it.
Why this matters:
Many brand owners may now feel concerned that the decision of the High Court in this case is detrimental to their enjoyment of worldwide recognition and reputation and the power this brings to defeat alleged copycat brands. It will certainly be interesting to see if this case affects the chances of success that brand owners such as the Easy Group have when seeking to prevent others from using similar words and brands for unrelated products or services.
The Intel case reminds all brand owners that if they want to rely on claims that their brands have been diluted by the use of a similar brand, they need to be able to prove the likelihood of dilution and cannot simply argue this should be inferred by reason of the existence of some degree of similarity between the parties products or services and between the two marks concerned.
Where there is a difference evident between the goods and services of the two parties, a brand owner cannot simply rely on the strength of their brand to fill any gaps missing in their evidence. To establish unfair advantage brand owners must show that any creation of a link between the marks by the public has economic consequences beneficial to the user of the later mark as the making of an association between the marks alone will not automatically be considered "unfair advantage" or "detriment". There must be some form of a mental process in the minds of consumers that link the two marks and which causes a negative reaction. In the Intel case the court considered forms of "blurring" and "tarnishing" of a brand to equate to "detriment" for trade mark purposes, but did not find persuasive evidence of it occurring in this case. Telemarketing services are not viewed as inherently detrimental and none of CPM's publicity material sought to suggest a direct link between Intel and the quality or reliability of CPM's systems. Given the absence of any further evidence, this is where Intel's case fell down.