On 10 May the EU's second highest court, the Court of First Instance (DFI) rejected efforts by an Italian company, Antarctica, to register a Community trade mark containing the word "NASDAQ", on the basis that use of the mark would take unfair advantage of the repute of an earlier registered trade mark, for dissimilar goods and services.
Antarctica had attempted to register the trade mark for various sporting goods. The American company, NASDAQ Stock Market opposed the application under article 8(5) of the Community Trade Mark Regulation (CTM Regulation) alleging detriment or unfair advantage, without due cause, in respect of its own Community trade mark for the word NASDAQ.
In brief, the registration of a Community trade mark will only be refused under article 8(5) if the owner of the earlier trade mark opposes registration. Additionally, the requirements which are to be satisfied for Article 8(5) to apply are:
- The main application must be identical or similar to the earlier mark.
- The earlier mark must enjoy a reputation in the relevant territory.
- The use of the new mark must take unfair advantage of or be detrimental to the reputation of the earlier mark.
- Use of the new mark must be without due cause.
The first requirement was not disputed by Antarctica. In relation to the second point, Antarctica argued that the NASDAQ name did not enjoy a strong enough reputation in Europe to grant the Stock Market the sole rights to the NASDAQ brand. In reaching its decision, CFI stated that the earlier mark should be known to a sizeable portion of the public concerned by the services covered by the mark. CFI stated that the reputation of the NASDAQ trade mark in the EU for services had been substantiated, taking into account the highly distinct character and reputation of the mark in the specialised financial arena and also that section of the general public who regularly consult the financial markets.
With reference to the third requirement the CFI stated that it would be easier to prove detriment where a trade mark, like NASDAQ, was highly distinctive and widely known beyond the boundaries of the financial sector. It ruled that Antarctica "would not have to spend any money on advertising to draw the attention of the public to its goods" and would effectively be free riding on the Stock Exchange's reputation. As the NASDAQ name was highly distinctive and widely known the CFI stated that there was therefore a risk to reputation, and unfair advantage was likely to result.
It is important to note that the CFI ruled that the establishment of a future risk was sufficient under Article 8(5), and did not require proof of actual harm.
Turning to the fourth requirement CFI confirmed that it was for the applicant to prove that it has due cause to use the mark. Antarctica's only argument was that this was the only suitable name from a selection of names under consideration, and that it was an acronym of the primary part of its business. CFI ruled this to be insufficient.
This case illustrates the wide-ranging effect of the provisions of article 8(5) of the CTM Regulation, in light of evidence which was brought before CFI. CFI appear to have been persuaded by the high profile of the NASDAQ mark, and the resulting reputation it has in the financial sector and among the general public.
Aspects of the NASDAQ case can be contrasted with the INTEL trade mark case (Intel Corporation Inc. v CPM United Kingdom Limited, 15 May 2007) which has recently been referred from the Court of Appeal to ECJ for guidance in establishing whether a later trade mark has taken unfair advantage of or is detrimental to the reputation of an earlier trade mark.
Particularly, the Court of Appeal has asserted that harm or potential for harm must be real and tangible, and not simply a possibility. Furthermore, it has cautioned against a wide approach being taken in relation to the notions of unfair advantage and reputation, which could result in trade mark owners wielding exclusive and obstructive powers.
We await the response of the ECJ to the questions referred to it in the Intel case which will hopefully further clarify the law in this area and bring the interpretation in the UK and Europe closer together. One lesson that we can learn from these cases is the value of having a highly distinctive mark when it comes to establishing reputation. Therefore when selecting a brand or company name it would be wise to create something original rather then to rely on existing words or phrases.