Emma Barraclough, London
Much to the relief of brand owners, Europe's highest court has confirmed that a Community trade mark that has a reputation in a single member state will be regarded as having a reputation in the Community.
In Pago v Tirol Milch, the European Court of Justice ruled that a single member state can be regarded as a substantial part of the Community.
The decision on reputation is important because, under European trade mark law, marks that are deemed to have a reputation in the Community can be protected against dilution and misappropriation as well as against confusion.
The dispute began when Pago sued drinks maker Tirol Milch for selling fruit drinks in a glass bottle similar to its own, and advertised the product in a way similar to Pago's own trade mark (a bottle alongside a full glass of juice). Pago obtained an injunction against its rival. When that was overturned on appeal, Pago appealed to Austria's Supreme Court. The Court asked the European Court of Justice whether a Community trade mark could have a reputation in the Community if, like Pago, it only had a reputation in one member state.
The ECJ's decision was eagerly awaited by trade mark lawyers after the Advocate General had suggested in her opinion in April that a Community trade mark must be known in a "substantial part" of the Community if it was to qualify for protection against dilution and that a reputation in one member state did not qualify as a reputation in the Community.
If the ECJ had sided with Advocate General Sharpston, brand owners would have had to consider applying for or maintaining national trade marks alongside their CTMs to protect their brands more comprehensively in Europe.
Christian Hauer, a partner at Schoenherr who advised Pago, said this would have been an outcome that "definitely was not intended by the European Community legislators when implementing the CTM Regulation".
"This decision, recognising Austria as a 'substantial part of the territory of the European Community' definitely strengthens the Community trade mark system," he added.
Lovells' partner Verena von Bomhard agreed, saying that the ECJ ruling means that the CTM continues to be a fully-fledged equivalent of, and often more advantageous than, national marks in the EU.
After the cost of applying for a CTM was cut by 40% in May, Community trade marks have become even more attractive to IP owners.
But von Bomhard told Managing IP that national marks can still be very useful. For those brand owners who only plan to use a trade mark in one member state, or who want to obtain – and enforce – a mark particularly quickly, national trade mark applications can still be very useful. Similarly, companies that have a mark that is not inherently distinctive may find it easier to register their right nationally rather than to try and prove acquired distinctiveness in each member state of the European Union.
Tove Graulund of Zacco agreed that the ECJ's decision – though welcome – does not mean that national marks are redundant. "Even if I am a great fan of the Community trade mark, CTMs are not a natural choice for everyone," she said. "It would be wrong just to look at filing costs – you need to look at the wider costs as well. We are fortunate to have three options for protection, but I would advise people not to be too greedy by trying to get more rights than they need."
The question of what constitutes "use" of a trade mark in the Community is expected to be part of a study into the overall function of the trade mark system in European. The European Commission put the study to tender earlier this year.
Georg Schoenherr of Schwarz Schoenherr acted for Tirol Milch in the Pago case.
