Electronics giant TDK had not registered its brand for clothing, so could it stop ‘af 21 November 2001′ from registering TDK as a CTM for clothing? And why was sponsorship of music festivals relevant? Simon Maughan records an important ECJ judgment.
Topic: Brands
Who: TDK and Aktieselskabet Af 21 November 2001
Where: The European Court of First Instance
When: 6 February 2007
What happened:
Danish clothing company, Aktieselskabet Af 21 November 2001, owner of the Only, Vero Moda and Jack & Jones brands, applied to register the word mark "TDK" as a Community Trade Mark ("CTM") in respect of clothing, footwear and headgear in class 25. The application was opposed by TDK Corp, who already had a CTM and 35 separate national registrations for the mark in class 9 (in connection with the recording, transmission and reproduction of sound and images).
The Office for Harmonisation in the Internal Market ("OHIM") upheld TDK's opposition on the basis of article 8(5) of the CTM Regulation. That provision states, in brief, that no trade mark shall be registered where it is identical with or similar to an earlier CTM (even in respect of goods or services which are not similar to those for which the earlier CTM is registered) where the earlier CTM has a reputation in the Community and where the use of the new trade mark would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier CTM.
The OHIM Board of Appeal subsequently dismissed the applicant's appeal against OHIM's decision.
The applicant then appealed to the Court of First Instance of the European Court of Justice ("CFI"). It argued that TDK had failed to provide adequate evidence of the alleged reputation of the mark in the Community. It also argued that the mark applied for would not take unfair advantage of TDK's mark because its clothing would be sold through different distribution channels, in particular because TDK's application of the mark to clothing was limited to athletes' clothing (through TDK's sponsorship of athletics events).
The CFI rejected the applicant's appeal on the following grounds:
Reputation
The CFI found that TDK had had a long-term commercial presence in Europe and had achieved a significant share of the UK and European market for its products. Furthermore, it had a long tradition of sponsoring athletics and musical events in Europe and around the world, many of which attracted large numbers of spectators. As a result, the TDK marks were known to a significant part of the public and had attracted a reputation and goodwill which went beyond that which would attach to goods bearing those marks.
Unfair advantage
As the public was already used to seeing the TDK marks on sporting clothing, footwear and headgear, the public would likely assume that any clothing displaying the word mark "TDK" had been manufactured by, or under licence from, TDK. Accordingly, such use would attract the goodwill currently associated with TDK as a sponsor of musical and sporting events. In the circumstances, there was a real risk that use of the mark applied for by the applicant would take unfair advantage of the reputation of the TDK marks.
Why this matters:
This ruling extends the traditional scope of trade mark protection: even if a trade mark is not registered in a particular class of goods or services, its proprietor may be able to prevent another company using a similar mark in that class subject to the test described above.
It also highlights the impact of sponsorship in terms of developing a brand reputation which is capable of protection in the courts. First, establishing a connection between a brand and a popular sporting or musical event increases the public perception of the mark and enhances its goodwill. Secondly, the stronger the brand's reputation, the easier it will be for the courts to conclude that free-riding, and therefore detriment, has been (or is likely to be) caused to the mark.
