In the case of PAGO International GmbH v Tirol Milch registriete GmbH Advocate General (AG) Sharpston has advised the ECJ to find that the owner of a Community Trade Mark (CTM) may only sue for trade mark infringement, for use of a sign identical or similar to their own on dissimilar goods, where they are able to show that the CTM has a reputation in a substantial part of the Community. If the ECJ follows this opinion, the judgment could have significant implications for brand owners with a CTM but which trade in only a small part of the EU.
Article 9(1)(c) of the Community Trade Mark Regulation (40/94) provides:
“A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(c) a sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community Trade Mark is registered where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.”
Pago, an Austrian company, was the proprietor of a CTM for fruit drinks and fruit juices. The CTM consisted of a green glass bottle with a distinctive label and cap next to a full glass of fruit drink. PAGO appeared on both the bottle and the glass.
Tirol sold in Austria a fruit and whey drink called ‘Lattella’ in glass bottles which resembled (in shape, colour, label and cap) the bottle depicted in Pago’s CTM. In its advertising, Tirol used a representation of a bottle next to a full glass, much like Pago’s CTM. Pago brought proceedings in Austria for trade mark infringement seeking, in particular, an injunction to prohibit Tirol from marketing or selling its drink in its current bottle and from advertising using a representation of the bottle together with a full glass.
The parties agreed that the sign being used by Tirol was identical or similar to Pago’s CTM and that Tirol’s drink was not similar to Pago’s. The question for the court was whether Pago’s CTM had the necessary “reputation in the Community” to be successful in an action under Article 9(1)(c). The Austrian court made a reference to the ECJ for guidance on the meaning of “reputation in the Community”. In particular, it was clear that Pago’s CTM was well known in Austria but nowhere else in the EU. Was a reputation in only one Member State a sufficient “reputation in the Community”?
AG Sharpston advised the ECJ to find that “reputation in the Community” in Article 9(1)(c) required a CTM proprietor to show that its CTM had a reputation in a substantial part (rather than the whole) of the EU, looking at the EU as a single and indivisible whole without frontiers between Member States. It was for the national court to decide in the circumstances of each case whether the reputation of the CTM in question did extend to a substantial part of the Community taking into account all the circumstances of the case but in particular (i) the public concerned by the products or services covered by the CTM and the proportion of that public which knows of the mark and (ii) the importance of the area in which the reputation exists, as defined by factors such as geographical extent, population and economic significance. What amounted to a substantial part would differ from case to case depending on the nature of the goods or services (generic or specialised) and the target market for them (the public at large or a specialised class). In some cases a reputation in one member state might be enough to amount to a reputation in a “substantial part of the Community” but in others it would not. No hard and fast rule could be set.
AG Sharpston also advised the ECJ to find that where a proprietor of a CTM was not able to show that its mark had a reputation in a “substantial part of the Community” the proprietor should not be granted relief for trade mark infringement in respect of that part of the Community in which the proprietor was able to establish that its CTM had a reputation. In other words, the courts could not carve out the small area in which the CTM had a reputation from the rest of the EU and grant relief in respect of just that part. CTM’s have a unitary character. They apply throughout the EU or not at all. If the CTM proprietor was unable to establish a reputation in a substantial part of the Community then it had not met the conditions for protection of the CTM and was not entitled to any relief.
This case will be of interest to brand owners with CTM’s but which trade in only a small part of the EU. In these circumstances, there is a risk that, where an identical/similar mark is used for different goods by a third party, the brand owner may not be able to establish that its CTM has a reputation in a substantial part of the Community. The CTM could not be used to attack the third party for trade mark infringement. In light of this case, brand owners should review their trade mark portfolios. They should, in particular, consider whether national marks would more appropriately reflect the manner in which they trade in the EU. National marks would be easier to use against third parties infringing in that territory as it would only be necessary to show that the mark had a reputation in a substantial part of the Member State concerned rather than a substantial part of the Community as a whole.