BrandsThatNameDrop

10 November 2003

Ravinder Chahil

It used to be common to see with words “compatible with IBM” when you were buying computer products. In this way the purchaser knew that the goods that they were using were going to work on the computer that they had. In this case, by using a registered trade mark (IBM), another seller informs the purchaser that in purchasing the compatible goods they are guaranteed that the goods will be suited.

First things first. This kind of use of a registered trade mark is permitted to a certain extent, which we will examine in the rest of this article. However, just how far can you go in doing this? When do you cross the line between using the other person’s registered trade mark as, on one hand, a reference or, on the other hand, a means to trade off the reputation of another person’s trade mark to promote your own goods. Such a question has come up before the European Court of Justice (ECJ) which could have a significant bearing on the extent to which one trader can make use of another person’s registered trade mark to refer to spare parts or accessories.

Before turning to the facts of this particular case, it is worth taking a moment to look at the law that governs the way in which one trader can use another trader’s registered trade mark. All the members of the European Union have harmonised their respective national trade mark laws to comply with the terms of the Council Directive 89/104/EEC. In the United Kingdom this was enacted via the Trade Marks Act 1994. In Article 6 of the Directive there is a provision that prohibits a registered trade mark owner from enforcing their registered trade mark in certain circumstances. One such circumstance (Article 6(1)(c)) is where the use of the trade mark is “necessary to indicate the intended purpose of the product or service, in particular as accessories or spare parts”. It was thought that the purpose of this part of the Directive was to enable a third party to use a registered trade mark to refer to the particular goods or services. Such an instance would arise if you wanted to sell spare parts or accessories for another person’s goods.

In the present case, the Gillette Company brought trade mark infringement proceedings against LA-Laboratories Ltd before the Finnish Courts over their “Gillette” and “Sensor” registered trade marks. LA-Laboratories sold razor handles and, in separate packages, razor cartridges under the name “Parason flexor”. On the packaging of the LA-Laboratories razor cartridges were the words “This razor is SUITABLE for all Gillette SENSOR HANDLES”. Both Gillette and Sensor are registered trade marks in Finland. Gillette brought proceedings for trade mark infringement before the Finnish Court, and LA-Laboratories claimed the benefit of the defence under Article 6 as it was drafted into Finnish law (Section 4 of the Trade Mark Act 1993). The case went all the way up to the Finnish Supreme Court who, in turn, has referred certain questions to the ECJ to assist the Finnish Court in interpreting the Directive. Some of these points raise interesting questions that are worth thinking about if you are planning to refer to a third party’s registered trade mark.

Firstly, the question that was raised was “Just what is a spare part or accessory in this context?” Remember that in the Gillette case LA-Laboratories were selling the razor cartridges and also, in separate packs, the handles. What Gillette sells is the wet shaving system, which consists of a razor handle and a razor cartridge. The Original District Court and the Court of Appeal in Finland took different positions on this. The District Court decided that that the razor cartridge was not a spare part and the Court of Appeal decided that it was, despite the fact that LA-Laboratories also sold razor handles.

The Supreme Court in Finland has referred this matter to the ECJ for assistance in deciding this question. In some cases what amounts to a “spare part” or “accessory” may be easy to assess, but in other cases this may not be a straight forward question. For instance, how do you go about deciding if a spare part is a spare part? Is a toner cartridge for a photocopier a spare part or is it a separate product in its own right, and does it depend upon the goods which we are talking about? The reason why the answer is important is that if you can show that you are selling a spare part or an accessory, you may be able to claim the benefit of the protection of Article 6(1)(c).

The second question that has been referred asks, “If you cannot show that you are selling a spare part, what are the criteria for assessing whether you can claim the benefit of the exemption?” Article 6(1)(c) uses the words “in particular” in relation to spare parts and accessories that imply that the exemption or defence goes wider than just spare parts and accessories.

There are then two further points of interest in this particular reference. In order to claim the benefit of the defence you have to show that it is “necessary” to refer to the registered trade mark. What does “necessary” mean in this context? To give you an idea of the importance of the question, how do you say “compatible with IBM” without using the trade mark IBM? Is it necessary to use IBM, and if so, what are the guidelines for deciding when it is necessary? Is it, for instance, not necessary if there is another way to do it?

The last question that has been referred is in relation to the last part of the defence in Article 6(1)(c). As well as showing the elements referred to above, you must also show that the use, to which you have put the third party’s registered trade mark, is in accordance with honest commercial practice. The ambit of this expression has also been referred for consideration by the ECJ.

Given that this matter still has to be considered by the ECJ, we are left with more questions than answers. What is important to note is that whilst it is permissible to use a third party’s trade mark to make reference to their goods (for instance, in spare part sales) the exact ambit of this defence is being explored by the Courts at the moment. Questions to ask yourself when considering this kind or marketing include: “Do I need to refer to the other trade mark?”; “Is there another way of making the same point?”; and “Is my reference in accordance with honest commercial practices?”. Once this guidance comes down from the ECJ, which could take up to eighteen months, we should be in a better position to know.

First published in the November 2003 issue of Brand Strategy.


Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.