Under EU trade mark laws, the owners of trade marks "with a reputation" are given additional rights to prevent third parties from registering or using an identical or similar trade mark, whether for identical, similar or dissimilar goods or services to those covered by their registration. Those rights apply where the use of the later mark would, without due cause, take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark. These are often referred to as "riding on the coat tails", "dilution" and "tarnishment" respectively.
Following an ECJ judgment relating to the well-known Intel trade mark, the ability of trade mark owners to rely on the "dilution" provisions was severely curtailed. This was due to the court ruling that, where a trade mark owner wished to claim that the use of another trade mark or sign would be detrimental to the distinctive character of its own trade mark, it had to adduce evidence of a change in the economic behaviour of the average consumer of the goods or services for which its mark was registered consequent on the use of the later mark, or evidence of a serious likelihood that such a change would occur in the future.
However, the spirits of owners of well-known trade marks were raised by a recent decision of the EU General Court in a case involving an application to register a mark comprising a depiction of a wolf's head for wood chippers and shredders (Environmental Manufacturing LLP v OHIM, Case C-383/12 P). The owner of an earlier mark sought to oppose the application, relying on the "dilution" grounds available to owners of trade marks with a reputation. In ruling in favour of the opponent, the General Court held that it was not necessary to show an effect on the economic behaviour of average consumers and that this was effectively established if the proprietor of the earlier mark had shown that his mark's ability to identify the goods or services for which it had been registered as coming from the proprietor was weakened, due to the fact that use of the later mark led to dispersion of the identity and hold upon the public mind of the earlier mark.
The General Court's ruling was however appealed, and the CJEU has dashed the hopes of the owners of trade marks with a reputation. The CJEU has made it clear that the position set out in the Intel case remains good law and the General Court had been mistaken.
As a result, where the owner of a trade mark with a reputation wishes to oppose an application for a later mark or to sue for infringement on the basis of dilution it will face the often difficult task of either proving a change in the economic behaviour of the average consumer or showing that there is a serious likelihood that this will occur. With regard to the latter requirement the CJEU has stated that case-law does not require evidence to be adduced of actual detriment or change in economic behaviour, but that this can be established by the use of "logical deductions", which however must be founded "on an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case". Quite what that means in practice and whether the national courts across the EU will interpret that requirement in the same way remains to be seen.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.