Reported Trade Mark Cases August 2006

13 September 2006

Katharine Stephens

Relative grounds



















 Ref no. 

CFI
T-277/04
Vitakraft-Werke Wührmann & Sohn GmbH &Co. KG v OHIM; Johnson’s Veterinary Products Ltd
(12.07.06)

Application (and where applicable, earlier mark) 

VITACOAT
- grooming goods for animals (3, 5 and 21)

Four separate registrations for VITAKRAFT
- goods for animals including feeding dishes, veterinary preparations and grooming goods
(Germany)

Comment 

The CFI dismissed the appeal thereby upholding the decision of the BoA refusing the opposition under Art. 8(1)(b).

The CFI held that the earlier mark did not have a highly distinctive character. The submission of a price list alone did not prove how intensive any use had been. Further, neither of the two market surveys submitted took the matter any further; the first because the interviewees were shown the sign at issue and their answers were therefore not spontaneous, the second, carried out four years prior to the filing of the application on just the ‘vita’ part of the mark, did not demonstrate that ‘vita’ had a highly distinctive character.

The CFI therefore held there was no likelihood of confusion between the marks. Visually, despite both marks containing the ‘vita’ prefix, the ‘kraft’ and ‘coat’ elements of the marks were sufficient to outweigh the similarities. The marks were also held to be phonetically different on account of the difference in pronunciation between the respective third syllables. In Germany ‘kraft’ means strength and power, whereas ‘coat’ has no meaning and therefore, conceptually, there was a marked difference between the signs capable of counteracting the slight visual and phonetic similarities.

   


















 Ref no. 

ECJ (Third Chamber)
C-214/05
Sergio Rossi SpA v OHIM, Sissi Rossi Srl
(18.07.06)

Application (and where applicable, earlier mark) 

SISSI ROSSI
- leather and imitation-leather goods, bags and umbrellas (18)

MISS ROSSI
- footwear (25)

Comment The ECJ dismissed the appeal from the decision of the CFI (T-169/03) and held that there was no likelihood of confusion between the marks in question under Art 8(1)(b). The appellant argued, inter alia, that the CFI (1) erred in finding that the name ‘Rossi’ was well known to French consumers and therefore was not distinctive and (2) had made an incorrect analysis of the relevant factors for assessing the similarity of the goods concerned and, therefore, the likelihood of confusion between the marks in question. In dismissing the appeal, the ECJ stated that it was for the CFI to make an assessment of the facts of a case and to assess the value to be attached to the evidence adduced before it.  In this case the ECJ was satisfied that the CFI had made an overall assessment of the similarity of the goods and marks in question and the likelihood of confusion, taking into consideration all the relevant factors of the case, and had provided sufficient reasons for its findings. In the absence of any distortion of the facts or evidence, the ECJ would not substitute its own assessment for the CFI’s assessment.
   

 

Details to be included in decisions on absolute grounds

BVBA Management, Training en Consultancy v Benelux-Merkenbureau (Opinion of A.G. Sharpston; C-239/05; 6.07.06)

BVBA Management, Training en Consultancy (MT&C) applied to register ‘The Kitchen Company’ as a trade mark with the Benelux Trade Mark Office (BMB) for certain goods in classes 11, 20 and 21 and certain services in classes 37 and 42.

The BMB refused the application under Article 3(1)(c) of the Directive. The BMB did not particularise its conclusions in respect of each of the goods and services, instead it stated that the sign lacked distinctive character in respect of protection sought as a whole. MT&C appealed and the appellant court referred three questions to the ECJ:

1. Whether the trade mark authority is required to state conclusions in regard to each of the goods and services in its decision on an application;

2. In the event of an appeal against the decision of a trade mark authority, whether the relevant facts and circumstances taken into account in the appeal must be limited to those available at the moment the original decision was made; and

3. Whether it is consistent with the Trade Marks Directive for national law to preclude an appellate court, when examining the decision of a trade mark authority, from (i) taking into account any alteration in the relevant facts and circumstances since the original decision was made; or (ii) separately ruling on the distinctive character of the mark for each of the goods and services.

The AG was of the opinion that the first question should be answered in the negative. Although she agreed that where registration of a mark is sought for various goods or services the examination should be carried out with regard to each of those goods or services, it did not necessarily follow that the decision refusing registration of a mark on absolute grounds had to state conclusions separately for each. It would be sufficient, provided that it was apparent from the decision, to state why registration was refused for a particular category of goods and services to which the individual goods or services belonged.

The AG recommended that the second question and first limb of the third question be considered together as they appear to be two sides of the same coin. The former asked whether a court of review may take account of intervening facts and circumstances. The latter asked whether, in that light, a court of review may be precluded by national law from taking account of intervening facts and circumstances. The AG concluded that the answers to these questions were (i) it was for national law to determine whether a reviewing court could take account of facts and circumstances which were not available at the moment when the trade mark authority made its decision; and (ii) it was consistent with the Trade Marks Directive for national rules to preclude a reviewing court from taking account of such facts and circumstances.

For the second limb of the third question, the AG concluded that it was not contrary to the Trade Marks Directive for national law to preclude a reviewing court from ruling on the distinctive character of the mark for each of the goods and services separately, provided that those rules afforded the applicant an effective opportunity to seek partial registration of the mark in its application to the trade mark authority. The AG considered that this conclusion was consistent both with the preamble to the Directive, which requires that Member States remain free to fix the provision of procedure concerning the registration of trade marks, and the ECJ’s decision in Postkantoor (C-363/99), in which it was held that a court that was asked to review a trade mark application must have regard to all the relevant facts and circumstances, subject to the limits on the exercise of its powers as defined by the relevant national legislation.

Prohibition Orders

Nokia Corporation v Joacim Wärdell (Opinion of A.G. Sharpston; C-316/05; 13.07.06)

Nokia brought an action in the Swedish District Court against Wärdell alleging infringement of its Community trade mark NOKIA.  Nokia claimed Wärdell had imported adhesive stickers into Sweden bearing the NOKIA trade mark which he intended to affix to mobile telephones.  Article 98(1) of the CTM Regulation provides that where a defendant has been found to be infringing a CTM, a Court shall, unless there are special reasons for not doing so, issue an order prohibiting the defendant from continuing acts of infringement. The Regulation also provides that a Court shall take such measures in accordance with its national law as are aimed at ensuring that this prohibition is complied with. Sweden’s trade mark legislation provides that the Court may prohibit the infringer, under a penalty or a fine, from continuing the infringement. 

The District Court found that Wärdell had infringed Nokia’s CTM. The Court also found that there was a risk that he would infringe the trade mark in the future, and issued a prohibition on continuing infringement with a penalty.

Wärdell appealed to the Swedish Court of Appeal which confirmed the findings of the District Court. However, since Wärdell had not committed trade mark infringement previously, the Court of Appeal considered that the facts did not justify a prohibition order with a penalty attached. The Court therefore varied the lower Court’s order by removing the prohibition order and the penalty.

Nokia appealed to the Swedish Supreme Court. The Swedish Supreme Court referred a set of questions to the ECJ asking, in essence, whether Article 98(1) contained an obligation to issue a prohibition and attach a penalty to it which went beyond Sweden’s trade mark law.

AG Sharpston was of the opinion that the language of Article 98(1) was framed in mandatory terms; when a Court found a defendant had infringed a CTM it must as a general rule prohibit the continued infringement. The concept of “special reasons” should be interpreted narrowly, and was not satisfied solely on the basis that a Court considered that the risk of further infringement was limited.

In the AG’s opinion, the word “special” related to a set of particular facts in a case and not the law.  The AG also highlighted that, as signatories to TRIPS, Member States have an obligation to impose civil and criminal sanctions for infringement of intellectual property rights; consequently, the existence of a national law imposing a statutory general prohibition of infringement, even subject to a penalty, could not constitute a “special reason” not to order prohibition under Article 98(1). The AG stated that such a general prohibition on infringement could be less effective than an Article 98(1) prohibition.

The AG went on to say that national law should make available specific and effective measures to back up the Article 98(1) prohibition. Specific measures had to be taken to ensure that the prohibition was complied with, even where the conditions for adopting such measures would not be regarded as fulfilled in the case of a corresponding infringement of a national trade mark.

Seizing goods in transit

Montex Holdings Ltd v Diesel SpA (A.G. Maduro; C-281/05; 4.07.06) (opinion not yet in English)

According to the AG’s opinion, Articles 5(1) and 5(3) of the Trade Marks Directive should be interpreted so as not to confer on the owner of a registered trade mark the right to prohibit the mere transit of goods bearing a sign identical to the trade mark, when there is no indication that the owner of the goods will engage or has engaged in any acts the intention of which is to market the goods in the Member State where the trade mark is protected. In support of his opinion, the AG referred to the decisions Class International C-405/03, Commission v France C-23/99 and Rioglass v Transremar C-115/02.

This case involved the export of clothes bearing the DIESEL mark from Poland (where they were made without authority) to Ireland. They were detained by German customs.

The AG considered that a mere risk that the goods might leak onto the market was insufficient to establish that the goods in transit would have been put on the market within the meaning of the Directive. However, he also stated that the only significant factors on the basis of which an infringement could be found were factors showing that there was a real threat that the owner of the goods has an intention to put the goods on the market in the Member State of transit. The fact that the goods were manufactured in a third country where the trade mark was protected was not a decisive factor in itself, but infringements by the owner of the goods relating to the trade mark even in a third country might be an indication of an intention on the part of the owner to put the goods on the market in the Member State of transit and not in the country of destination. In this connection, the AG referred to the decisions in C-60/02 (Rolex case) and C-383/98 (Polo/Lauren case). The AG concluded that it was for the national court to make the evaluation of the existence of such indications.

Infringement - Section 5(3)

Intel Corporation Inc v CPM United Kingdom Ltd (Patten J: [2006] EWHC 1878 Ch: 26.07.06

CPM applied to register INTELMARK in class 35 for marketing and telemarketing services. Registration was completed in 1997 and in 2003, Intel applied for a declaration of invalidity based on, inter alia, Section 5(3) of the Act. The hearing officer rejected Intel’s application. Patten J dismissed the appeal. In doing so, he noted that an appeal was not intended to give a dissatisfied party a second opportunity to run its case. The appellate court needed to be satisfied that the hearing officer had reached a decision on the evidence which was clearly wrong.

In order to make the causal assessment necessary under Section 5(3) as to whether the later mark would either take unfair advantage or be detrimental to the distinctive character or repute of the earlier mark, it was first necessary to carry out a global appreciation of the earlier mark in a process similar to that conducted under Section 5(2). Thereafter, the judge had to consider what link was needed between the earlier and later marks. Patten J considered that the mere making of an association was not necessarily a detriment/taking of an unfair advantage in itself. In cases of unfair advantage, a claimant would need to show that the making of the link between the marks had economic consequences beneficial to the use of the later mark (see the decision of Mr Geoffrey Hobbs QC (sitting as a Deputy High Court Judge) in Electrocoin Automatics Ltd v Coinworld Ltd [2004] EWHC 1498).

Patten J noted that, when proving infringement, a claimant under Section 10(3) of the Act had to prove that the later mark “takes advantage, or is detrimental to” the distinctive character or repute of the earlier mark. In contrast, the wording in Section 5(3) only required that the use “would take unfair advantage or be detrimental to…” It was important not to confuse the need to prove a particular consequence with the means of providing that proof. Patten J entirely agreed with the analysis of the hearing officer when he said that “the tribunal must be possessed of sufficient evidence about the use of the earlier marks, the qualities and values associated with it and the characteristics of the trade etc. that it is a reasonably foreseeable consequence that use of the other side’s mark will have the claimed adverse consequence(s)”.

Patten J held that the hearing officer was entitled to come to the conclusion that although the reputation in the INTEL mark was huge it was not all pervasive. As a consequence, the average consumer who purchased telemarketing services from INTELMARK, being a corporate client who was able to make an informed choice, was not likely to assume that there was link between Intel and INTELMARK simply because the latter used computers in its business.

On the issue of detriment, the Judge repeated the hearing officer’s observation that it could take the form of either blurring or tarnishing. There was no evidence to show that telemarketing services were regarded as inherently undesirable and so diminished the reputation of Intel’s mark.

The issues on dilution were more difficult. As Neuberger J observed in Premier Brands UK Ltd v Typhoon Europe Ltd [2000] FSR 767, it occurred where the distinctiveness of the mark was eroded and this could occur where the mark was regularly used in connection with different or less exclusive types of product which diminished or lessened its link in the eyes of the public with the goods or services for which the mark was created. Patten J accepted that it was necessary to prove the likelihood of dilution and that it could not be inferred in this case given the dissimilarity between Intel’s products and the telemarketing services of CMP and the existence of dissimilarity between the two marks, although the latter should not be over exaggerated. The Judge referred to the most recent guidance contained in the decision of the Third Board of Appeal of OHIM in Elleni Holdings BV v Singla SA [2005] ETMR 7. The case of the prospect of dilution had to be made out. It was not established merely by the use of a similar or even identical sign for a dissimilar class of goods or services. The circumstances had to justify the conclusion that the character or repute of the earlier mark would actually be weakened in the eyes of consumers by its association through the later mark with a different class of goods or services assuming the fair and reasonable use of the later mark. Where the differences between the marks and the products or services indicated that no real connection would be made between them in the minds of the public, then that kind of damage could not occur.

Passing Off

A&E Television Networks v Channel 4 Television Corporation & anr (Fysh J; 07.04.06; no neutral citation)

Fysh J dismissed A&E Television Networks’ (AETN) action for passing off brought quia timet against Channel 4 (C4) and Betty TV Limited in respect of the use of the word "“intervention” in the title of a documentary-style television programme that “intervened” in the life of a person struggling with some form of compulsion or addiction. In Fysh J’s view the case was about competition and not about passing off. 

In March 2005, AETN began broadcasting its TV programme “Intervention” in the US. The programme concerned the story of real people afflicted with some form of compulsion or addiction and documented the effect of that person’s behaviour on their friends and family. A professional therapist, the “interventionist”, would arrange a confrontation with the person and the programme then followed the resulting impact on the patient. AETN sought to license the programme format to UK TV production companies and broadcasters and in May 2005, UK TV company, Diverse, bought an exclusive option on the programme, with Channel 5 showing interest in a collaboration. The option lapsed in February 2006, however, and it was AETN’s belief that this was due to C4's threat in July 2005 to broadcast a TV programme with essentially the same format entitled “Intervention: We're coming to get you”. AETN were still attempting to kindle interest in the UK market and were attempting to restrain C4’s efforts at making a programme of a similar nature and with a title containing the word “intervention”.

Fysh J stated that in his opinion the most important legal question in the case was that the law of passing off does not countenance the unfair monopolisation of descriptive words or terms (Office Cleaning Services v Westminster Window [1946] 63 RPC 39) unless that descriptive word has acquired a secondary meaning indicating a unique provenance from the claimant (Reddaway v Banham [1896] AC 199). Both parties called expert witnesses to give evidence about the practice of therapeutic intervention and adduced evidence about the etymology of the word and earlier UK TV programmes showing “interventions”.

Fysh J held that the word “intervention” was essentially descriptive in nature of the format of the AETN television programme and that, in light of this, the action failed in limine. He noted that the greater the descriptive power of the word or expression in question, the higher is the burden of proof required of a claimant to satisfy this element of passing off.

Although the action failed at the threshold level, Fysh J further went on to consider the three elements required to establish the tort of passing off.

Fysh J held that AETN had failed to show it had sufficient goodwill in the UK associated with the word “intervention” and its television series and therefore could not support the first ingredient of a passing off action.

Fysh J noted that where a trader uses a descriptive word, some confusion is likely and legally unobjectionable but that when a defendant uses the descriptive word in even a slightly different way in practice, such small differences tend to diminish or negate possible misrepresentation. Here, although there was some evidence that initial confusion might arise even among the “televisual cognoscenti” because of the use of the word “intervention”, there was no evidence to show that any potential customer had been put off by C4’s forthcoming programme, and in any event such customers would undertake due diligence to establish the facts.

Finally, Fysh J held that AETN had not demonstrated loss of opportunity to licence the format of “Intervention” in the UK as a result of C4’s threatened rival series. Fysh J stated that, to his mind, it was almost inconceivable that an industry person interested in the programme would simply just give up on hearing about C4’s programme without making any enquiries. Therefore, Fysh J held that there was no likelihood of actionable damage to AETN.   

Counterfeits – defence to prosecution

West Sussex County Council v Habib Kahraman* (Latham LJ, McCombe J, Dobbs J; [2006] EWHC 1703 (Admin); 13.06.06)

Kahraman, a market storeholder, was charged with four offences contrary to Sections 92(1)(b) and 92(6) of the Trade Marks Act for selling and offering to sell items of counterfeit clothing. The clothing bore labels of well known designer brands but were not the genuine products of the registered proprietors of the marks.

Kahraman relied on the defence under Section 92(5), namely that he believed on reasonable grounds that his uses of the signs did not infringe the registered trade marks. He claimed that he had obtained the stock from a third party (known only as ‘John’) and understood it to be “clearance stock”. As he had never seen the genuine articles, Kahraman argued that he had no reason to suspect that the items were counterfeit. He claimed that he was an inexperienced market trader and therefore was reliant on practices of other traders in the market, and pointed out that he had received no warnings from the Market Inspector or VAT officials when they visited his stall.

The Magistrates’ Court found that Kahraman had proved on the balance of probabilities that he believed, on objectively reasonable grounds, that he was not infringing the legislation and acquitted him of all the charges. The prosecution appealed.
The Administrative Court was asked to give its opinion on whether there was sufficient evidence that Kahraman’s belief was on reasonable grounds, given that there was no evidence that he took any action to establish whether the goods were counterfeit, and he had purchased the goods from an individual known only as ‘John’.
The Administrative Court held that a market trader who purchased goods bearing well-known designer names at a very low price from a person of unknown identity, with no positive evidence of trade reputation, did not begin to discharge the burden imposed on him by Section 92(5). This was the case even if the third party seller was not positively ‘disreputable’. Merely observing other traders in similar circumstances or arguing inexperience was not sufficient to discharge the burden. No reasonable person would have taken the risk of selling items marked with well-known marks in such circumstances. Therefore the question was answered in the negative.

The appeal was allowed and the matter was remitted to be reheard by a differently constituted Magistrates’ Court.

Reporter’s note: I am grateful to my colleagues Kukka Antila, Louise Aspinwall, Rachel Fetches and Zoe Fuller of Bird & Bird for their assistance with the preparation of this report.

ECJ and CFI decisions can be found at http://curia.eu.int/en/content/juris/index_form.htm and the reported cases marked * from the High Court can be found at http://www.bailii.org/databases.html#ew