July 24 2017 Harley-Davidson wins battle against bar restaurant over well-known bar and shield sign Grau & Angulo | Intellectual Property - European Union Intellectual Property FactsFirst-instance decisionAppealEU Trademark Court decisionIn a March 24 2017 judgment, the EU Trademark Court (Alicante Court of Appeal, Section 8) revoked in full the Commercial Court of Alicante Number 1 first-instance judgment of September 27 2016, which had dismissed all of the claims filed by H-D USA, LLC (Harley-Davidson).FactsThe plaintiff filed an infringement claim against a third party for its unauthorised use of the Harley-Davidson bar and shield sign (Figure 1) to identify and promote its bar restaurant.(Figure 1)In its writ of claim, Harley-Davidson alleged that its figurative EU trademarks protecting the bar and shield sign had been infringed. In particular, Harley-Davidson invoked:its trademarks covering restaurant services, which it uses in the events that it periodically organises throughout the European Union; andits trademarks covering motorcycles, which it claimed are well known.In addition, Harley-Davidson noted that the bar and shield sign is also the logotype which constitutes the motorcycle company's corporate image.In its response to the writ of claim, the defendant did not deny that it had used the invoked bar and shield trademarks owned by Harley-Davidson. However, the defendant stated that:the proceedings had failed to prove that Harley-Davidson uses the bar and shield trademarks for restaurant services. Therefore, the defendant raised a plea for lack of evidence of use of the earlier trademarks for restaurant services.the proceedings had failed to prove that the bar and shield trademarks for motorcycles are renowned. Thus the defendant also raised a plea for lack of evidence of the well-known status of the bar and shield trademarks.it had used the sign in its restaurant as a decoration, rather than a trademark.First-instance decisionThe first-instance judge accepted the defendant's arguments, stating that it was not proven whether:Harley-Davidson uses the bar and shield trademarks for restaurant services; andthe bar and shield trademarks for motorcycles are well known irrespective of the well-known status of the word trademarks HARLEY and HARLEY-DAVIDSON.Therefore, the judge did not assess the claimed infringement actions or whether the defendant's use of the sign constituted trademark use.AppealHarley-Davidson filed a writ of appeal against the first-instance judgment, claiming an error in the assessment of the evidence and maintaining its plea of infringement of its bar and shield trademarks.EU Trademark Court decisionIn a March 24 2017 judgment, the EU Trademark Court granted Harley-Davidson's writ of appeal and accepted all of the pleadings in its writ of claim.Effective useFollowing EU case law, the court affirmed that:the effective use of a trademark must be public and external;such effective use should relate to the market where the trademark owner carries out its commercial activities; andthere should be a record of the use.Advertising is one of the factors that must be considered when assessing whether a trademark is used.In accordance with EU case law, the court considered that the evidence attached to the proceedings proved the use of the bar and shield trademarks at Harley-Davidson events – in particular, the bar and restaurant tents known as 'Harley Bar' – to promote, advertise and exhibit its products with extensive media coverage. This, combined with the promotion of these events, was sufficient evidence that the bar and shield trademarks are used in a real and effective manner for the restaurant services for which they are registered and on which the claim was based.Well-known statusIn accordance with EU case law, the court defined the concept of a 'well-known' trademark, which requires a certain level of knowledge among the relevant public. In the same regard, the court pointed out that in such an assessment, the courts must consider either the general public or a more specific group, depending on the product or service for which the trademark is registered.The sufficient level of knowledge required will be met when the earlier trademark is known by a significant part of the public concerned with the products or services covered by that trademark. The relevant facts to be considered are:the market share held by the trademark;the intensity, geographical extent and duration of its use; andthe size of the investment made by the undertaking in promoting it.Notably, the court removed any conceptual difference between the words 'well known', 'renowned' and 'repute', as they are in the same perspective category and are used indistinctively.In applying the above criteria, the court considered that the evidence attached to the proceedings proved that the bar and shield trademarks are well known by the relevant public (ie, the motorcycle sector) not just at the EU level, but globally.Trademark useThe court considered that the defendant's use of the bar and shield sign in its bar restaurant constituted trademark use.Having confirmed the sign's well-known status, the court focused solely on Article 9.1c of the EU Trademark Regulation (207/2009), which concerns the infringement of well-known trademarks.The court analysed EU case law, according to which the owner of an infringed trademark does not have to prove that real damage is sufficient to prove a future risk, establishing on a logical basis the probability that the defendant will take unfair advantage of the distinctive character and repute of its trademark.Further, the court held that the bar and shield trademarks are so renowned that the defendant's use did not cause any harm to their repute and distinctive character.However, the court considered that the defendant had aimed to create an attractive image by linking itself to Harley-Davidson, thereby receiving a boost in popularity among a particular sector of the public. Hence, the use of the sign infringed Harley-Davidson's well-known bar and shield trademarks and took unfair advantage of their repute.SentenceThe court sentenced the defendant to pay damages. The amount was calculated using the price of the hypothetical licence criteria.The court affirmed that a licence is not required in order to use the price of the hypothetical licence criteria and that it is acceptable to use factors from other licences issued by third parties in the same sector to calculate the amount. As Harley-Davidson has no licence for restaurant services, the court found it appropriate that Harley-Davidson choose the price of the hypothetical licence criteria and used information from other licences to calculate the amount.Considering all of the above, the EU Trademark Court granted the writ of appeal filed by Harley-Davidson and revoked the Commercial Court of Alicante Number 1 judgment by accepting all of Harley-Davidson's pleadings in its writ of claim. It sentenced the defendant to pay Harley-Davidson damages and bear the costs incurred in the first instance.The defendant has filed an appeal of this resolution with the Supreme Court.For further information on this topic please contact Elisenda Perelló at Grau & Angulo by telephone (+34 91 353 36 77) or email ([email protected]). The Grau & Angulo website can be accessed at www.gba-ip.com.