While the years leading up to 2004 clarified many of the bigger questions of EU trademark law, such as the registrability of novel marks, now seems to be the time for the EU courts and regulators to tidy up loose ends and bring national laws and practices under one EU hat. Stéphanie Bodoni reports
On August 29 1998 German company Medion had its trademark LIFE, for leisure electronic devices, registered in Germany. The mark is globally well-known, covering products from PC systems to MP3 players, and every year earns Medion millions of euros in turnover. No surprise then that Medion became nervous when one of the world leaders in the leisure electronic device sector, Thomson Multimedia Sales Germany & Austria GmbH, started marketing several of its products as THOMSON LIFE.
Medion sued for trademark infringement before a German regional court, asking that Thomson be stopped from using its confusingly similar name on certain leisure electronic devices.
Though Medion did not convince the court at first instance that there was a likelihood of confusion between the Thomson name and its registered mark, on appeal the higher regional court found that the answer lay in Article 5(1)(b) of the EU Directive (89/104/EEC), which approximates EU member states' trademark laws. Accordingly, the trademark owner can prevent anyone from using signs that are confusingly similar to the trademark and could confuse the public as to the origin of the goods, or that could lead to a likelihood of association between the sign and the trademark.
The court added that, according to German case law under the so-called theory of impression, adding the manufacturer's name Thomson to the registered mark LIFE was fine as Thomson contributed "in an essential manner" to the overall impression of the THOMSON LIFE sign, so that the LIFE component became largely secondary.
But, when the German court asked whether this approach was in line with Article 5(1)(b), the European Court of Justice (ECJ) responded in October 2005 that, even if the registered mark (LIFE) did not alone determine the overall impression of the composite sign (THOMSON LIFE), it still had an "independent distinctive role therein". It clarified that, because of the earlier mark's independent distinctive role, the public was likely to attribute it to the third party's products as well as those of the owner of the earlier trademark, in particular where the relevant products are identical.
A disparate Union
The Medion case is key in clarifying the EU's approach to likelihood of confusion, alleviating trademark owners' fears that under German case law their registered rights or well-known marks could be usurped by third parties by adding their own name. More crucially, the case shows there are remaining discrepancies in EU trademark practice, despite member states having implemented the EU Trademark Directive more than 10 years ago.
"This is perhaps the most important case in this area," says David Stone, a partner at Howrey, and one of the panelists on today's European Union Update session. Another case Stone will discuss today is Gillette v LA Laboratories, in which the ECJ last March responded to the Finnish Supreme Court that it was "necessary" for third parties to refer to a company's trademark if it was the "only means" of informing consumers about the purpose of a product, clarifying also that this was not limited to spare parts alone.
The number of trademark-related cases coming out of the ECJ over the past 12 months shows that EU attempts to harmonize residual variations in national practices are in full flow.
In March this year alone the ECJ issued 10 new trademark decisions. "Many of the big issues of European trademark law, such as genuine use or the registration of non-traditional trademarks, have been settled already. We're now beginning to get some fine-tuning from the ECJ about what various bits and pieces mean," says Stone.
Shaping trademark practice
Though likelihood of confusion concerning word and figurative marks remains a big issue, an increasing number of rulings on the distinctiveness of novel marks, many of them test cases, have come out of the ECJ in the past year. Shape marks, in particular, are popular, ranging from dishwasher tablet and torch (flashlight) shapes to lighter and bottle shapes. But so far, hardly any have passed the ECJ's test.
In the Maglite case in October 2004, the ECJ rejected Mag Instrument's bid to register the shape of its torches (flashlights) as Community trade marks (CTMs), ruling that the shapes applied for were not distinctive enough from other torches. It established that finding distinctiveness in shape marks could prove more difficult than in word or figurative marks, ruling: "Only a mark which departs significantly from the norm or customs of the sector and thereby fulfills its essential function of indicating origin, is not devoid of any distinctive character."
Then there was the attempt by Eurocermex, European licensee of the beer brand CORONA, to register a CTM for a bottle with a slice of lime in the neck, which the ECJ rejected last June based on the shape's overall impression lacking distinctiveness in the eyes of the average consumer.
However, some practitioners are convinced the Maglite and Corona cases could have succeeded based on acquired distinctiveness. Considering the current shape mark frenzy, the first test case is probably already on its way through the European courts.
Then there were the famous tablet cases, which tested the boundaries of which shapes qualify as EU trademarks. In nine related rulings the ECJ in April 2004 rejected Procter & Gamble's and Henkel's attempted registrations of detergent and dishwashing tablets as CTMs, adding that such three-dimensional shapes can only be registered if they distinguish the products of one company from those of another in the eyes of the normal consumer. In this case, the ECJ ruled, this criterion had not been met. Henkel agreed, saying at the time that under pressure from its competitors it wanted to apply for the shapes to make a point that such shapes were not distinctive in the EU.
But, regardless of whether there is distinctiveness or acquired distinctiveness, could such shapes not be protected in another, easier way across the EU? Yes, says Katalin Szamosi, of S.B.G. & K. Patent & Law Office. The Community design is an effective short-term protection mechanism, which is still being ignored by many. Szamosi will today explain how trademark owners can make the best of both CTM and Community design protection, and when they can register both for the same product, logo or shape.
The most important shape mark decision, in her view, was the 2002 ECJ ruling in the Philips/Remington case clarifying that 3D marks that fulfills a technical function cannot be registered. The case was a blow for Philips, which failed to hold on to its famous clover-shaped 3D shape mark for shaver heads and prevent Remington from using a similar design on its shavers. "The whole understanding of the case has a larger impact on future trademark practice," says Szamosi. "Every EU court now rejects trademarks with functionality." Trademark owners should file parallel CTM and Community design applications for 3D shapes, she suggests.
Enforcing rights effectively
2006 is the year in which IP enforcement laws are finally being harmonized across the EU. April 29 was the deadline for EU member states to transpose the EU Directive on the enforcement of intellectual property rights into their national laws. "The draft law appears to have taken what's best from all member states and made it the minimum standard across the EU," says Stone. But, only a few weeks before the deadline passed, no member state had notified the European Commission, which monitors when and how countries implement EU Directives, that it had transposed the directive into its national law.
The Commission said that only some 12 of the 25 EU member states were expected to implement the Directive in time. One of the reasons is that the Directive is "complicated", says the Commission's official Harrie Temmink, because it will rewrite countries' civil procedural codes on IP rights for the first time and will apply "horizontally" to all IP rights. Further delays will happen because of the positions taken by different stakeholders, and elections happening in a number of member states, but also because member states have different competences to deal with different IP rights.
That is why the Commission has had several meetings with member states' representatives, encouraging them to share any problems they have with the transposition of the Directive. However, member states are warned: "Until 29 April we will be cooperative, but we will take legislative proceedings after that."
Come along
If you have not had the chance to keep up to date with recent developments and possible future trends in the EU, this is the time. "This is the chance for everyone to get an update in one and a half hours of the most important developments in the past 12 months and to walk away feeling they know all about EU trademark law," says Stone.
Do you need to change your registration strategy in Europe? The session will help you decide. "Trademark owners will get an impression of what they can get easily protected across the EU," says Andrea Lensing-Kramer of Freshfields Bruckhaus Deringer.
The EU consists of some 450 million people, making it an attractive commercial market for trademark owners, and an important commercial market in which to get their trademark protection right. As moderator Catherine Mateu says, this is the chance to get the views from three panelists representing a new EU country, a large EU jurisdiction and the common law approach from the UK. N
The Directive put into context
The Enforcement Directive has caused heated debates about its scope and how much of it member states will have to put into their national laws since the Commission first unveiled it in January 2003. IP owners, lawyers, industry groups and anti-piracy enforcement bodies pushed hard to have stringent measures against IP infringements included in the Directive, and they continue to do so, often pushing governments to implement more than the Directive requires them to do. On the other side, consumer and civil rights groups point to the risks that implementing inflexible new enforcement measures in EU countries could pose to consumers.
The Directive aims to ensure that laws governing the enforcement of IP rights are the same across the EU, introducing a consistent series of remedies in line with international requirements as set out by treaties, such as the TRIPs Agreement. It does not include any provisions on criminal sanctions, but it confirms that "in appropriate cases" criminal sanctions constitute an additional means to civil and administrative procedures to enforce IP rights.
The Commission clarified in April 2005 that the Directive covered all IP rights, including copyright, trademark rights, design rights, patent rights and geographical indications, "in so far as these are protected as exclusive property rights in the national law concerned". But concerns about the scope of some of the measures introduced in the Directive remain. Lobby groups from all sides have in recent months been trying to convince governments and patent offices about how stringent or flexible they should be in transposing these measures into national laws.
But practitioners are convinced that the Directive will help fight counterfeiters more effectively. "The new measures will be extremely useful for trademark owners to enforce their brands," says Stone.
