Trade marks with a reputation enjoy an extended form of protection in the European Union. Under EU legislation (Article 4(4)(a) and Article 5(5) of Directive 89/104/EEC to approximate the laws of Member States relating to trade marks (the “Directive”) and equivalent provisions in Article 8(5) and Article 9(1)(c) of Regulation 40/94/EEC on the Community trade mark), special protection is afforded to a reputable registered mark where the use of another similar or identical mark “without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the [reputable trade mark]”. This test provides grounds for infringement actions and for challenges against the registration of a later mark. As confirmed in previous case law of the ECJ, unlike the protection available to trade marks generally (whether reputable or not), this extended form of protection is available whether the later mark is used in relation to goods or services similar to those for which the reputable mark is registered, or in relation to dissimilar goods or services, and there is no requirement to show likelihood of confusion. In its ruling of 27 November 2008 in the Intel Corp Inc. v. CPM United Kingdom Ltd. case (case C-252/07) the Court provides much needed guidance on the question in which circumstances in practice should the use of a later mark be deemed to be ‘taking unfair advantage’, or to be ‘detrimental to the distinctive character or the repute’ of the claimant’s reputable registered trade mark.
Intel Corporation, proprietor of the UK national word mark INTEL for computers and computer-related goods, sought to invalidate CPM’s registered mark INTELMARK (registered for marketing and telecommunication services). The application was dismissed by both the Hearing Officer and the High Court. Intel Corporation appealed to the Court of Appeal arguing that Article 4(4)(a) of the Directive protects a proprietor of a registered trade mark with a reputation against the risk of dilution. Intel Corp. argued that the use of any mark similar to its well-known (and it argued, unique) trade mark “INTEL”, regardless of the goods or services for which the other mark is used, endangers the distinctive character of the mark INTEL and that “it is important to stop any encroachment at the outset, otherwise that mark will suffer a death by a thousand cuts”.
In its previous ruling in Adidas-Salomon and Adidas Benelux  ECR I-12537 the ECJ held that in order to enjoy the protection in Article 4(4)(a) of the Directive (and the other equivalent provisions) it is necessary to establish that the defendant’s mark would be ‘linked’ in the relevant consumers’ minds with the earlier mark as a result of the similarity between the two. It is enough that the defendant’s mark brings to mind the claimant’s reputable trade mark. It is not necessary to show that such link leads to confusion. Relying on that decision, Intel Corp. argued it was sufficient to warrant protection for its mark under Article 4(4)(a) that such a link was established.
The ECJ acknowledged that the legislation protects against three types of harm to the claimant’s interest - taking unfair advantage of the reputation of the mark (piggy-backing); causing detriment to that reputation (for example, by disparagement or negative associations); and causing “detriment to the distinctive character” of a reputable mark which concerns the risk of “dilution”, “whittling down” or “blurring”. The latter was the one at issue in the Intel case. However, the Court rejected Intel’s broader proposition that where it is established that a ‘link’ between the marks is created in consumers’ minds, dilution should, at least in some cases, be assumed. The Court held that the legislation requires the claimant to adduce proof of the harm to its reputable trade mark, in addition to and independently of the requirement to establish a ‘link’ (even though there is often a relationship between the two issues).
The Court held that the proprietor of the reputable mark has to demonstrate either actual and present injury to its mark or that there is a serious risk that such an injury will occur in the future. Once either of those is established, the burden will shift to the defendant to demonstrate ‘due cause’ as a defence.
The Court first analysed the type of circumstances that should be taken into account in relation to the question whether a link would be made by consumers between the defendant’s mark and the claimant’s reputable mark. The general rule, it was held, is that one must take into account all factors relevant to the circumstances of the case and the existence of the link must be assessed globally. More particularly, the Court referred to the following factors:
- the degree of similarity between the conflicting marks – although even if the conflicting marks are identical, this is not sufficient to conclude that a link would be made;
- the nature of the respective goods or services for which the conflicting marks are registered or used – the greater the difference between the respective goods or services the less likely it is that consumers exposed to the defendant’s mark would be familiar with the claimant’s mark. The Court acknowledges that in the case of some reputable marks all groups of consumers may be aware of the claimant’s mark. Even if there is awareness, in some cases the dissimilarity of goods or services could be such as to make it unlikely that consumers would make the link between the two marks; in other cases, the Court noted, consumers could make the link despite the goods or services being wholly dissimilar;
- the strength of the reputable trade mark’s reputation – the stronger it is the stronger the likelihood of consumers making the ‘link’;
- the degree of reputable mark’s distinctive character – the more distinctive it is (inherently or through use) the higher the likelihood of a link being made; and
- the existence of the likelihood of confusion on the part of the public (although likelihood of confusion is not a requirement, if it is established the existence of a ‘link’ is proven).
If the defendant’s mark is linked, in the mind of the average consumer (who is reasonably well informed and reasonably observant and circumspect) to the claimant’s mark then the existence of a link is established. However, the existence of a link between the conflicting marks does not dispense the proprietor of the earlier trade mark from having to prove actual and present injury to its mark or a serious likelihood that such an injury will occur in the future.
Similar factors as those considered in relation to the question of the ‘link’ would be relevant in assessing the question of detriment to the distinctive character of the mark, or the ‘dilution’. However, the fact that the earlier mark has a huge reputation, that those goods/services are dissimilar to the goods/services of the later mark, that the earlier mark is unique in respect of any goods or services and that for the average consumer the later mark calls the earlier mark to mind, is not sufficient to establish the detriment to the distinctive character of the earlier mark. The national court must assess all of these as well as other factual circumstances to reach an independent factual conclusion on the question of dilution.
Perhaps the most significant comment the Court made was that in order to prove detriment to the distinctive character of the claimant’s mark, evidence has to be presented that as a result of the use of the later mark, the “economic behaviour” of the average consumer (of the claimant’s goods or services) “has changed”, or that there is “a serious likelihood that such a change will occur in the future”. The Court did not elaborate on the nature of that change of economic behaviour but it is clear that impact on sales of the claimant’s goods/services is at least one important element.
The Court commented further that, in assessing detriment to the distinctive character of the claimant’s reputable mark, it is immaterial whether the defendant drew any commercial benefit from the distinctive character of that mark. (If proven, such commercial benefit could support an independent argument based on ‘taking unfair advantage’).
In the future, both claimants and defendants will seek to rely on the decision in Intel v. CPM in the context of ‘dilution’ claims. Claimants will emphasise that the legislation seeks to protect against their marks being blurred or diluted. In addition, there is plenty in this decision for claimant’s to rely on in demonstrating that consumers are likely to make a ‘link’ between the two competing marks. Defendants, on the other hand, will emphasise that dilution cannot be assumed and that claimants have to meet two separate hurdles (showing a ‘link’ on the one hand and ‘detriment’ or ‘unfair advantage’ on the other). Defendants will also seize on the Court’s comments regarding the need to adduce evidence demonstrating a change in the relevant consumers’ economic behaviour as a result of the use of the defendant’s mark, or at least a “serious likelihood that such a change will occur”.