The Court was answering questions referred from the Court of Appeal in London in a dispute in which Intel sought to stop the use of the mark Intelmark, which is owned by CPM, on the ground that it would dilute its famous mark.
The case concerns the interpretation of Article 4(4)(a) of the EU Trade Marks Directive.
This Article bars the registration of trade marks that are identical or similar to earlier marks registered for non-similar goods or services, where the earlier mark has a reputation and the use of the later mark "would take unfair advantage of, or be detrimental to, the distinctive character or repute" of the earlier mark.
The Court said that the fact that an earlier mark has a "huge reputation"; that its goods or services are dissimilar to those of the later mark; that the earlier mark is unique; and that for the average consumer "the later mark calls the earlier mark to mind" is "not sufficient" to establish that the use of the later mark "takes or would take advantage of, or is or would be detrimental to, the distinctive character or the repute of the earlier mark".
The Court did say that the use of the later mark may be detrimental to the distinctive character of the earlier mark with a reputation "even if that mark is not unique". It added that a "first use" of the later mark may suffice "to be detrimental to the distinctive character" of the earlier mark.
But it said that proof of this detriment "requires evidence of a change in the economic behaviour" of the average consumer buying the goods or services covered by the earlier mark, "or a serious likelihood that such a change will occur in the future".
This means famous brand owners wanting to oppose or invalidate a later mark will have to provide evidence showing such a change in consumers’ "economic behaviour".
However, trade mark practitioners say it is likely to be difficult to find evidence that will satisfy the courts.
"It seems to be a very stringent test," said Julius Stobbs, a partner of Boult Wade Tennant in London. "Surveys will help you show confusion or that there is a link, but you will need to go that little bit further."
Louise Zafer, a partner of Lovells in London, added: "The judgment seems to require the brand owner to provide proof that they are losing sales due to the later mark – but how do you prove that?"
In cases where famous brand owners can show there is confusion, they should still be on safe ground. But if they are relying on showing that there is detriment, they have a much more difficult task.
Zafer added that there it might be easier to show unfair advantage, rather than detriment: "That could be an easier route to go down. You could ask: why would they have chosen this brand but to gain sales?"
The case, which began in 2003 when Intel sought a declaration that Intelmark (registered in January 1997 in class 35) was invalid, will now return to the Court of Appeal.
Intel’s application had been rejected by the UK Trade Mark Registry and the High Court before the Court of Appeal sought ECJ guidance.
But the ECJ’s judgment was not all bad news for brand owners.
The Court clarified that the fact that, for an average consumer, "the later mark calls the earlier mark with a reputation to mind" is tantamount to the existence of a link between the two marks, as defined in an earlier case involving adidas.
Stobbs said this is "a relaxation in relation to the UK position" and means that even a tenuous connection should be enough to establish a link between the two marks.
Intel was represented by barrister James Mellor and law firm CMS Cameron McKenna. Barrister Mark Engelman acted for CPM.
