The Court of Appeal has referred questions to the ECJ concerning the test that must be met by trade mark proprietors bringing infringement claims under s.10(3) Trade Marks Act 1994 (the "1994 Act") / Article 5(2) Trade Marks Directive (the "Directive") and the equivalent test for registration under s.5(3) of the 1994 Act/ Article 4(4)(a) of the Directive.
In particular, the Court of Appeal is asking whether merely "bringing to mind" an earlier mark with a reputation is enough to constitute a "link" as set out in Adidas Salomon [C-408/01 (2004) FSR 21] and/or whether this takes unfair advantage or causes detriment to the earlier mark which is sufficient a) to prevent registration of the later mark and b) to amount to infringement of the earlier mark.
Intel Corporation Inc ("Intel Corp"), is the proprietor of a number of CTM and UK trade marks with a "huge reputation" for and including the invented word "Intel" for computer related products (the "Intel Corp Marks"). CPM United Kingdom Limited ("CPM") later registered a trade mark for the word "Intelmark" in class 35 for marketing and telemarketing services (the "CPM Mark"). Intel Corp sought a declaration of invalidity of the CPM Mark in order to enable it to bring trade mark infringement proceedings under s.10(3) of the 1994 Act without CPM having recourse to the "own TM defence" provided by s.11(1).
Following the failure of their application for a declaration of invalidity in the Trade Mark Registry, Intel appealed to the High Court. Patten J held that the reputation of the Intel Corp Marks was such that a consumer faced with the CPM Mark would focus on the word "Intel" and this would cause the earlier Intel Corp Marks to be bought to mind. However, he also held that despite this, there was no suggestion of a trade connection between CPM and Intel Corp, the difference between the goods and services could not be bridged by the strength of the Intel Corps Marks and the appeal was dismissed.
Intel Corp brought a second appeal to the Court of Appeal, based on "dilution" or "blurring" arguments (described by the US commentator Schecter as "the gradual whittling away or dispersion of the [mark’s] identity and hold upon the public mind") to back their position that use of the CPM Mark is detrimental to and/or takes advantage of the distinctive character or repute of the Intel Corp Marks.
Intel Corp relied on General Motors v Yplon C-375/97,  All ER 1007 where it was held that the stronger the earlier mark is, the easier it is to make a finding of detriment. However this is in contrast to the later findings in Premier Brands v Typhoon Europe  FSR 767 where Neuberger J (as he then was) held that s.10(3)/Article 5(2) was not intended to allow the proprietor of a well known mark to object to other’s signs as a matter of course just because they might remind people of the earlier mark and in Electrocoin Automatics  FSR 7, Deputy Judge Geoffrey Hobbs QC said that "calling to mind" was not sufficient and it was suggested that to show the necessary advantage or detriment, a later mark should have or be likely to have an effect on the economic behaviour of the consumer.
Questions have been referred to the ECJ but in the meantime brand owners should note that the Court of Appeal clearly believes that trade mark law would be stretched too far and would be tantamount to supporting a monopoly if it were to extend protection in the way sought by Intel Corps.
In Adidas Salomon v Fitness World C-408/01 (2004) FSR 21, in the context of identical goods, the protection afforded by Article 5(2) of the Directive was stated to extend past scenarios in which there was a likelihood of confusion to circumstances where the relevant consumer would establish a "link" between sign and mark. Intel Corp argued this meant any mental association so that "bringing to mind" was sufficient. However, the Court of Appeal’s view is that a "link" must be more than tenuous and if a trade mark is truly distinctive it should be able to withstand a mere "bringing to mind".
Consequently, it appears that it is Jacob LJ’s view that trade mark registration should be denied and protection against infringement should be available only where the use of a similar or identical sign or mark is such as to make consumers believe there is a trade connection/link or licensing arrangement between the trade mark proprietor and the user of the later sign or mark.
Jacob LJ observes that brand owners want "more protection than they really need" and that marks can co-exist. However, viewing distinctive character as tied to the specific goods/services for which the mark is registered fails to acknowledge the wider inherent value of brand names and marks which will be diminished by third party use of a similar or identical sign regardless. Furthermore, regarding the necessary link as established only where consumers perceive a "trade connection" between the two companies means that s.10(3) of the 1994 Act only effectively differs from s.10(2) by extending s.10(2) style protection to non-similar goods when it is clear from the wording of the 1994 Act and the Directive that different kinds of harm were envisaged.
The Court of Appeal considers that a finding of detriment must depend upon a "realistic global appreciation of the position" where harm is real and tangible and more than mere speculation. If the ECJ follows this line of reasoning brand owners will wonder how to protect their trade marks whilst the infringer is a relatively small entity. It cannot be fair on either the brand owner or the potential infringer if both must wait until the latter has made sufficient investment and achieved a certain level of success before the suspected damage becomes apparent and the law finally regains its teeth.