The recently1 delivered decision in Canon Kabushiki Kaisha -v- Metro Goldwyn Mayor Inc., (formerly Pathe Communications Corporation) is the second ECJ decision on the interpretation of article 4(1)(b) of the Trade Mark Harmonisation Directive2. In the first, Sabel BV -v- Puma AG, Rudolf Dassler Sport3, the ECJ held that "... the mere association which the public might make between two marks as a result of their analogous semantic content is not in itself a sufficient ground for concluding that there is a likelihood of confusion within the meaning of [article 4(1)(b)]". In so holding, the ECJ appeared to endorse the decision of the English court on the issue of whether a mere likelihood of confusion is sufficient for a finding of infringement in Wagamama Ltd -v- City Centres PLC 4. The decision in the Canon case, however, in which the ECJ held that in the context of an opposition, the reputation of the earlier registered trade mark "must be taken into account when determining whether the similarity between the goods or services covered by the two trade marks is sufficient to give rise to the likelihood of confusion" represents a marked divergence of approach between the ECJ and the English courts on the assessment of the "likelihood of confusion."

The "Objective" Approach Applied by the Engl;ish Courts

Under the old UK trade marks law5, the reputation of an earlier trade mark was an irrelevant factor in the assessment of likelihood of confusion in infringement proceedings6 and also in opposition and invalidity proceedings if the objection to the registration of a later mark was based on an earlier trade mark registration. The issue of likelihood of confusion was assessed "objectively", that is to say by reference to the use of the earlier trade mark in a normal and fair manner for any of the goods or services covered by the specification7.

The reputation of an earlier trade mark was of course a relevant factor in passing off proceedings (where the right being relied upon is the goodwill acquired by the use of the earlier mark) and in opposition and revocation proceedings if the objection to the registration of the later mark was based on the common law right to prevent the use of such a mark by means of passing off proceedings. 8

Under the new trade marks law 9 which, inter alia, implements the provisions of the Directive, the English courts have continued to assess the "likelihood of confusion" in opposition, invalidity and infringement proceedings using the same "objective" approach as that applied under the old trade marks law i.e., by reference to the notional use of the earlier registered mark on any of the goods or services covered by the specification and without regard to the reputation of the earlier registered mark.

Thus, in British Sugar PLC -v- James Robertson & Sons Ltd10 ("the Treat case"), Jacob J re-affirmed that, as originally stated by him in Origins Natural Resources Ltd -v- Origin Clothing Ltd 11 and as relied upon by Laddie J in the Wagamama case, the approach to infringement under the new trade mark law:

"[requires] the court to assume the mark of the plaintiff is used in a normal and fair manner in relation to the goods for which it is registered and then to assess the likelihood of confusion in relation to the way the defendant uses its [sign], discounting added matter or circumstances. The comparison is mark for [sign]."

Both the Origins and Wagamama cases were concerned with identical goods and non-identical marks. In the Treat case, however, Jacob J had to decide whether there was infringement, inter alia, on the basis of identical marks and non-identical goods. Jacob J broke the issue of infringement down into three separate questions:

(a) is the sign used in the course of trade?

(b) are the goods for which the sign is used similar to those covered by the registration? and

(c) is there a likelihood of confusion because of that similarity?

Jacob J considered that he was justified in separating the second and third questions i.e., the assessment of similarity of goods or services and the assessment of the "likelihood of confusion" on the basis that:

"... if one elides [them] then a "strong mark" would get protection for a greater range of goods than a "weak" mark. For instance, "Kodak" for socks or bicycles might well cause confusion, yet these goods are plainly dissimilar from films or cameras. I think the question of similarity of goods is wholly independent of the particular mark the subject of the registration or the defendant's sign."

It is to be noted that although Jacob J considered that this approach was confirmed by the general structure of the tenth recital to the Directive, he did not specifically refer to or explain the meaning of the statement in the tenth recital that: "...the likelihood of confusion depends on numerous elements and in particular, on the recognition of the trade mark on the market..."

To summarise, therefore, the English courts have to date applied an "objective" approach to the assessment of the "likelihood of confusion" under the new UK trade marks law which implements the provisions of the Directive i.e., the reputation of the earlier registered trade mark is not a relevant factor in the assessment of whether the similarity of goods or services or the marks in issue is sufficient to give rise to a "likelihood of confusion on the part of the public."

The "Flexible" Approach Adopted by the ECJ

The Canon case itself was a reference from the German Supreme Court in an opposition by Canon to the registration of the trade mark "CANNON" in respect of video film cassettes by MGM based on Canon's prior registration of the mark "Canon" in respect of video film recorders. The German Patents Court had held under the old German trade marks law that the two sets of goods were not similar. However, under the old German trade mark law, no importance was ascribed to the identical nature of the two marks nor the reputation of the earlier trade mark "Canon". MGM had appealed to the German Supreme Court against the Order of the German Patents Court and the German Supreme Court in turn had referred the following question to the ECJ for a ruling:

"May account be taken, when assessing the similarity of the goods or services covered by the two marks, of the distinctive character, in particular the reputation, of the mark with earlier priority ... so that ... likelihood of confusion ... must be taken to exist even if the public attributes the goods and/or services to different places of origin ..."

The ECJ broke this question down into two parts.

The First Part of the Question

Relying principally on the tenth recital to the Directive which states that likelihood of confusion depends, inter alia, "...on the recognition of the trade mark on the market, [on] the association which can be made with the used or registered sign and [on] the degree of similarity between the trade mark and the sign and between the goods or services identified..." and also its previous finding in the Sabel case that "likelihood of confusion" should be determined globally taking into account all factors relevant to the circumstances of the case, the ECJ held that:

"... the distinctive character of the earlier trade mark, and in particular its reputation, must be taken into account when determining whether the similarity between the goods or services covered by the two trade marks is sufficient to give rise to the likelihood of confusion."

The ECJ stated that both the specific wording of the tenth recital and also a global determination of the issue of likelihood of confusion implied an interdependence between all of the relevant factors and such interdependence meant that:

"a lesser degree of similarity between these goods or services may be offset by a greater degree of similarity between the marks and vice versa"

and therefore

"... registration of a trade mark may have to be refused, despite a lesser degree of similarity between the goods or services covered, where the marks are very similar and the earlier mark, in particular its reputation, is highly distinctive."

The ECJ emphasised that even in cases where the later mark was similar to an earlier trade mark with a highly distinctive character, it was still necessary to adduce evidence of the similarity between the goods or services covered by the two specifications and that such an assessment entailed taking into account all relevant factors relating to the goods or services including

"their nature, their end users and their method of use and whether they are in competition with each other or are complementary."

In the course of its decision, the ECJ rejected the argument put forward by the UK Government that such a "flexible" approach would prolong the registration process. It noted that, according to the French government, this was not the case in France. It also commented that it was beneficial not to register marks whose use could be successfully challenged subsequently in the courts.

The Second Part of the Question

Relying again on the tenth recital to the Directive which states that the function of the protection conferred by a trade mark is primarily to guarantee an indication of origin and also its previous comments in particular, in the Hag II case 12 to the effect that the essential function of the trade mark is to guarantee the identity of origin of the marked product to the consumer or end user, the ECJ held that:

"There may be a likelihood of confusion ... even where the public perception is that the goods or services have different places of production. By contrast, there can be no such likelihood where it does not appear that the public could believe that the goods or services come from the same undertaking or, as the case may be from economically linked undertakings."

Commentary

Scope of Protection

The decision in the Canon case did not provide any specific guidance on the limits of this "flexible" approach other than the fact that, as noted above, the ECJ reiterated that it would still be necessary to adduce evidence of the similarity of the goods or services in issue.

In the Treat case, Jacob J expressed concern that eliding the issues of similarity of goods and services and the likelihood of confusion would mean that the protection accorded to "strong" marks like Kodak could extend to dissimilar goods to films and cameras like socks or bicycles. In addition to the comments of the ECJ regarding the need to continue to adduce evidence of the similarity of the goods or services in issue, in one of the leading French decisions on the protection accorded to famous marks which involved Ritz and Charles of the Ritz13, the French Supreme Court refused to extend the protection accorded to the trade mark RITZ under French trade mark law from hotels to perfumes on the ground that the two sets of goods were dissimilar and to do so would therefore contravene the "rule of trade mark specialty."

Although there are two more infringement cases pending before the ECJ, the decisions in neither of them are likely to provide any further guidance on the matter. In the short term, therefore, it will be left to the national courts to develop the approach on a case by case basis. It is presumed that in the absence of English authority, the English courts and the UK Trade Marks Registry, would be prepared to look at how this "flexible" approach has been applied previously in other countries such as France.

Cost

One consequence of the "flexible" approach adopted by the ECJ14 is likely to be a tendency for parties to seek to adduce evidence of actual confusion or lack of it in order to assist their primary case on the assessment of the similarity of the goods or services or the marks in issue and thereby an increase in the costs of trade mark infringement proceedings.

Clearance for Use

Finally, the adoption by the ECJ of a "flexible" approach to the assessment of the "likelihood of confusion" is subject to the same criticism levelled at the proponents of a mere "likelihood of association" criterion for a finding of infringement namely, that whilst the ECJ's "flexible" approach may of course extend the protection accorded to "strong" marks, it will also increase the burden on brand owners to select and clear new marks for use.

First published in Trade Mark World in December 1999.

1 29 September 1998
2 Council Directive 89/104/EEC to approximate the laws of the Member States relating to trade marks
3 [1998] ETMR 1
4 [1995] FSR 713
5 UK Trade Marks Act 1938 (as amended)
6 N.B The issue of similarity of goods or services did not arise in infringement proceedings because infringement could only take place if the later mark was being used on goods or services falling within the scope of the specification of the earlier registered trade mark.
7 See Smith, Hayden [1946] RPC 97 and Bali [1969] RPC 472 (HL)
8 Again see Smith, Hayden ibid and Bali ibid
9 UK Trade Marks Act 1994
10 [1996] RPC 281
11 [1995] FSR 280
12 [1990] ECR I-3711
13 Court of Cassation, 27 May 1986
14 Lloyd Schuhfabrick Meyer & Co GmbH -v- Klijsen Handel BV again concerns article 4(1)(b) of the Directive but appears to cover the same ground already covered by the Sabel and Canon cases and General Motors Corp. -v- Yplon SA concerns Article 5(2) of the Directive and in particular, the meaning ascribed to the term "reputation".

Authors