“Scalextric compatible” claim condemned in Spain

Topic:  Brands
Who: Spanish Court
Where: Spain
When: May 2007
Law stated as at: 30 May 2007

What happened:

Scalextric is, in the UK, virtually synonymous with slot racing cars.  The iconic brand is part of Hornby, the UK toymaker which is also well-known for its scale model train sets.  However, for historic reasons, Hornby lost control of the Scalextric name in Spain a few years ago, and the Spanish Scalextric is currently owned by a completely separate entity called Tecnitoys.  As a result, Hornby markets its own slot racing cars in Spain under the brand name Superslot.

As it happens the Superslot track, cars and accessories products are compatible with those made by Tecnitoys, and as a result Hornby included references to this fact on the packaging of its Spanish products.  Unfortunately Tecnitoys were not so keen on the association between the two products, and subsequently brought legal action on the basis that this amounted to the unauthorised use of the Scalextric brand (which of course it owns in Spain).  This gave rise to the slightly odd situation that the manufacturer of Scalextric was being sued over the use of the Scalextric brand on its products!

European rules

Trade mark law across the European Union is to a large extent harmonised under a single European Trade Marks Directive, and it is established EU law that a registered trade mark is not infringed by its use by a third party where it is necessary to indicate the intended purpose of a product or service (in particular, as accessories or spare parts), provided that the use is in accordance with honest practices in industrial or commercial matters.

The European Court of Justice (ECJ) has looked at this exception recently, in a case relating to a manufacturer of razor handles and blades which were compatible with the Gillette Sensor products.  Although much argument was spent on whether the razor handles and blades were or were not spare parts, the ECJ noted that the "accessories" or "spare parts" were merely examples of the types of scenarios covered by the provision, and were not exhaustive.

The ECJ stated that use of someone else's trade mark will be "necessary" to indicate intended purpose if the use is being made in order to provide the public with "comprehensible and complete" information on the intended purpose of the product or service being provided by the user, and where there is no other practical way to communicate that information, taking account of the existence of any widely recognised technical standards which might otherwise be used.

The ECJ also noted that the honest use requirement could be breached in a number of ways, including:

– use that wrongly implies a commercial connection with the trade mark owner;
– use that takes unfair advantage of the distinctive character or repute of the trade mark and thus affects its value;
– use that discredits or denigrates the mark; and
– use that presents the product as an imitation or replica of the branded product.

It is unclear whether the Spanish court believed any of these aspects were present in the Scalextric case, but nevertheless it ruled that the references actually used by Hornby on its packaging broke European Union rules on industrial property and fair competition. 

We understand that Hornby intends to appeal this decision, so watch this space for further developments.

Why this matters:

This case is a timely reminder that any usage of a third party's registered trade mark can easily lead to serious and expensive court action if not handled with particular care.

Although there is an established exception which permits advertisers to use another party's trade mark to indicate the intended purpose of their product or service (particularly in respect of spare parts), ultimately an advertiser would be well advised to seek professional advice to ensure it stays within the limits of this exception.