CJEU confirms "change of economic behaviour"
required to establish trade mark dilution
In its recent ruling in Environmental Manufacturing LLP v OHIM (Case C-
383/12) the Court of Justice of the European Union ("CJEU") has confirmed
that, in order to establish trade mark dilution, a trade mark owner must show
evidence of a change in economic behaviour of an average consumer, or a
serious likelihood that such a change would occur in the future.
Both the Community Trade Mark Regulation (Regulation 207/2009/EC) and
the Trade Marks Directive (Directive 2008/95/EC) provide a broader form of
protection to marks with a reputation (either in the Community or nationally, as
relevant), against the registration or use of a sign which is identical or similar
to the earlier sign, in relation to goods or services which are identical, similar,
or dissimilar, where the use without due cause of the later sign would take
unfair advantage of, or be detrimental to, the distinctive character or the
repute of the earlier trade mark.
Detriment to the distinctive character of a trade mark is often referred to as
In the 2008 Intel case (Case C-252/07 Intel Corp. Inc v CPM UK Limited),
concerning the relevant provision of the Directive, the CJEU established that
to satisfy the condition of detriment to the distinctive character, a national
court should make a global assessment of all factors relevant to the case, but
that it was not sufficient merely to establish a "link" between the marks, that is
to say that the later mark calls the earlier mark to mind for the average
consumer.. A link is a necessary condition for dilution, and can result from
factors including the similarity of the marks and goods and services, the
strength of the earlier mark's reputation and the likelihood of confusion.
However, a link alone is not sufficient: what is also required is evidence of a
change in the economic behaviour of the consumer, or a serious likelihood
that such a change will occur in the future.
This requirement has now been expressly confirmed in the present case
which concerned the relevant provision of the CTM Regulation. In this case,
the EU General Court departed from Intel and ruled that it would be sufficient
for the owner of the earlier mark to show that the mark's ability to identify the
source of the goods or services for which it was registered and used had been
weakened. [CHECK WORDING]. The CJEU set aside this ruling as an error of
law in light of the "explicit" ruling in Intel, and stated that "The concept of
‘change in the economic behaviour of the average consumer’ lays down an
objective condition. That change cannot be deduced solely from subjective
elements such as consumers’ perceptions. The mere fact that consumers
note the presence of a new sign similar to an earlier sign is not sufficient of
itself to establish the existence of a detriment or a risk of detriment to the
distinctive character of the earlier mark within the meaning of [the Regulation]
in as much as that similarity does not cause any confusion in their minds."
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2 Intellectual Property Client Alert December 2013
The CJEU was of the view that accepting the criterion out forward by the
General Court could lead to a situation in which economic operators
improperly appropriate certain signs, damaging competition.
Brand owners had previously considered that the requirement to show
evidence of a likely or actual change in economic behaviour blurred the lines
between dilution and conflicts based on a likelihood of confusion. Some
observers had even suggested that - after Intel - the provisions relating to
dilution had become more or less redundant in practice given the difficulty in
establishing a change in consumers' economic behaviour in the absence of
confusion. This latest judgment appears to confirm this view.
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