In a case between the Austrian companies Pago International GmbH and Tirolmilch registrierte Genossenschagt mbH, the ECJ recently held that Austria may, under the circumstances of that case, be regarded as a "substantial part" of the European Community for the purposes of establishing whether the CTM in question has a "reputation in the Community" within the meaning of Article 9(1)(c) of the Community Trademark Regulation ("CTM Regulation"). Under this provision, the owner of a well-known mark can oppose the use of his mark (or a similar sign) if by such use unfair advantage is taken of, or detriment is caused to the repute or distinctiveness of his mark.

The case was the result of a dilution action brought before the Vienna Commercial Court by Pago, the owner of a (figurative) CTM consisting of the image of a juice bottle and a glass of juice. Pago opposed the imitation of the characteristic design and packaging of its bottles by Tirolmilch, claiming, for the purposes of Article 9(1)(c) of the CTM Regulation, that Tirolmilch was, without due cause, taking unfair advantage of the reputation, in Austria, of its CTM. In connection with this claim, the Austrian Supreme Court expressed uncertainty as to the meaning of the words "has a reputation in the Community" used in that provision.

Pago applied for an EU-wide injunction prohibiting the alleged dilutive use of its CTM, although its CTM was only well known in Austria. The Austrian Supreme Court asked the ECJ to determine (i) whether a CTM is protected in the whole Community as a trade mark with a "reputation" for the purposes of Article 9(1)(c) if it has a reputation in only one Member State and, if not, (ii) whether a CTM which has a "reputation" only in one Member State is protected in that Member State under Article 9(1)(c) so that an injunction limited to that Member State may be issued.

Applying by analogy its earlier judgment in the 1997 "Chevy" case (General Motors/Yplon) — which involved the protection of a Benelux trademark under Article 5(2) of the Trademark Directive (the equivalent of Article 9(1)(c) CTM Regulation) — the ECJ held that a CTM must be considered to have a reputation if it is known by a significant part of the public concerned by the products or services covered by that trademark, in a substantial part of the territory of the European Community. Whereas in the Chevy case the ECJ concluded that a substantial part of the Benelux territory may consist of a part of one of the Benelux countries, in the Pago case it concluded that a substantial part of the European Community may consist of a single Member State.

In reaching the latter conclusion, the ECJ refers explicitly to the "circumstances of the main proceedings". One of the most important circumstances is probably that the public concerned by the products and services covered by the Pago trademark is limited to the national Austrian public. In other words: the relevant public concerned by the CTM consists of the national public of only one Member State. It is questionable whether the ECJ would have reached the same conclusion if the relevant public concerned by the CTM had been dispersed over several Member States. Furthermore, it is still unclear whether the ECJ will also accept that the owner of the CTM that is well-known in one Member State only, can obtain a EU-wide injunction. One should not forget that for a successful dilution (or other non-confusion infringement) action the owner of such a mark will have to show that unfair advantage is taken of, or detriment will be caused to the repute or distinctiveness of his mark, which he will find difficult to argue regarding use in Member States where the mark is not well-known. We think that the ECJ did not take a decision for such a situation, since it clearly referred to the circumstances of this case, which is that the alleged infringing use only takes place in Austria. The question whether a CTM court must grant an EU-wide injunction as a matter of law, has recently been referred to the ECJ by the French Supreme Court in the “Webshipping”-case (DHL Express France SAS v Chronopost SA, Case C-235/09) which is still pending.

Still, it can be argued that the ECJ has too easily applied the "Chevy rule" to a Community- wide situation. After all, the Benelux is a far smaller territory than the European Community so (part of) a Benelux country is more likely to form a substantial part of the Benelux territory than that a single Member State is likely to form a substantial part of the European Community.

The second question raised by the Austrian Supreme Court – i.e. whether if the CTM's reputation in only one Member State is insufficient to obtain protection against dilution under Article 9(1)(c) in the entire European Community, such protection can still be obtained in the Member State in question — was deemed no longer relevant.  

Conclusion  

This means that there is still no general rule that for protection under Article 9(1)(c) of the CTM Regulation it is sufficient that a CTM has a reputation in only one Member State. The basic rule given by the ECJ is that reputation should exist in a significant part of the territory of the European Community, and that under the circumstances of the Pago-case, reputation in Austria is sufficient. It can be argued that in case, for example, a company is using a CTM in more than one Member State and the alleged infringing use also covers more than one Member State, reputation that is limited to only a single one of these Member States might not suffice. The current decision therefore raises some further interesting questions.