27 June 2003

John Williams

It all seemed like kids' play when French clothing company Sadas launched a children's clothing range called 'Arthur et Felice' and registered the name as a word mark. The garments, items such as tiny red and white spotty trousers, were cute and so was the brand.

But Sadas was treading on the toes of another French clothing company, LTJ Diffusion, which already sold its products under the 'Arthur' name, and had registered the name in distinctive hand-writing as a figurative mark. A fight in the sandpit was quick to follow. LTJ applied to the French courts for an order restraining Sadas from using its mark. The Tribunal de Grande Instance in Paris in turn referred the question of the two Arthurs to the European Court of Justice (ECJ) to help determine the correct outcome of the case and clarify some legal issues.

In French law, the reproduction, use or affixing of an identical mark is prohibited on identical goods. In other words one clothing manufacturer cannot use the same mark as another clothing manufacturer. This applies even if there are other words added to the mark such as 'formula', 'style', limitation', 'type' or 'method'. This is an absolute rule. It does not matter if the consumer is not confused about the origin of the goods.

But over time, this rule had been construed to apply to cases where a particular distinctive element of a compound mark is used, as opposed to the entire mark. It also applied to cases where the mark is used in combination with additional elements deemed not to affect the identity of the mark – such as adding 'et Felice'. Under these terms, the 'et Felice' did not make the Sadas mark sufficiently different from LTJ's 'Arthur' brand.

Given the way that the French law had stretched itself over time, the French courts wanted some clarification from the ECJ about how this law should now be interpreted. The French wanted to know whether a sign had to be absolutely identical in the strictest sense of the word. Should 'Arthur et Felice' be deemed the same as 'Arthur' or not? Even if the marks are not identical, there is still some protection under French law. It is also possible for companies to argue that consumers would be confused as to the origin of the product if a similar mark is used on similar or identical items.

But this rule is not absolute; the proprietor of the original mark must show the court that there is likely to be real confusion between the two brands. If French shoppers weren't confused and saw 'Arthur' and 'Arthur et Felice' as two entirely different brands, there would be no case.

The ECJ maintained that the essential function of any trade mark is to guarantee the origin of the goods and services in question to the consumer. This means that anyone would be able to easily distinguish those goods and services, without confusion, from any other products. It was important for mark proprietors to have legal protection on this issue.

The ECJ said that the criterion of identity of the sign and the trade mark must be interpreted strictly since the very definition of identity implies that the two elements compared must be the same in all respects. There is therefore identity between a sign and a mark only where the former reproduces all the constituent elements of the latter without any modification or addition. This went against the French stretching of the rule to include parts of the mark or extra words, such as 'et Felice'.

But the ECJ also stated that the perception of identity between a mark and a sign must be assessed globally with respect to the average, reasonably well-informed, observant and circumspect consumer since the sign creates only an impression. In most circumstances, it is unlikely that a consumer will have the opportunity to make a direct comparison between the sign and the mark.

Consumers' perceptions of identity are based on imperfect-pictures held within their minds. It is therefore possible that insignificant differences between the sign and the mark may well go unnoticed by consumers, according to the circumstances. This means that even though a sign might not be identical, consumers may still see it as such in their minds.

The ECJ made a decision that encompassed elements of both sides of the argument. It said that the law should be interpreted as applying to signs that are identical in the sense that they reproduce all the elements of the trade mark without addition or modification.

But on the other hand, the law should also be applied to signs which, when viewed as a whole by the average consumer, contain only differences so insignificant that they are likely to go unnoticed. For example, consumers would probably think that if they saw 'Arthur' in its distinctive script, it was the same mark, whether it featured all the tiny elements of the logo or not.

This ruling meant that the meaning of the word "identical" in European directives has now been given a far wider definition than before, though narrower than the original French interpretation.

Now it is time for the French courts to take the new directives on board and settle the squabbling between LTJ and Sadas.

First published in the June 2003 edition of Brand Strategy.