Last year's round-up of choice trade mark cases from Europe was dominated by pronouncements from Luxembourg and Alicante. From Luxembourg come the rulings of the European Court of Justice (ECJ) while Alicante provides the platform from which Community trade mark law and practice has launched its assault on the old oligopoly of national trade mark systems. This year, too, the main trade mark law developments have turned on the Luxembourg-Alicante axis.
Partitioning the market
A difficult reference for a preliminary ruling by the ECJ came from Denmark in Pharmacia & Upjohn v Paranova [1999] ETMR 937. It is a cardinal principle of European competition law that a trade mark proprietor cannot use his trade marks in order to create an artificial partitioning of Europe's single internal market. But was Upjohn's trade mark portfolio for the antibiotic clindamycin an implement of artificial partitioning? Following a series of agreements and undertakings going back to 1968, Upjohn held the trade marks DALACIN in Denmark, Germany and Spain, DALACINE in France and DALACIN C everywhere else. Repackaging importers Paranova bought clindamycin in France and Greece, repackaged them for the Danish market and sold them there after changing the DALACIN C and DALACINE trade marks to DALACIN. Upjohn's application for an interim injunction was refused, then granted on appeal. In proceedings to make the injunction permanent, the Maritime and Commercial Court asked the ECJ to rule if Upjohn's right to sue for infringement of DALACIN was exhausted by its consent to the marketing of DALACIN C and DALACINE.
The ECJ's answer was Delphic. In determining whether there has been an artificial partitioning of markets, one must assess ?whether the circumstances prevailing at the time of marketing in the member state of import make it objectively necessary to replace the original trade mark by that used in the member state of import in order that the product in question may be marketed in that state by the parallel importer?. In other words, the ECJ has empowered national courts to make their own decisions on their own view of whether the trade mark owner is an innocent victim of historical circumstance (as Upjohn would have itself viewed) or whether it is a vicious and predatory market-divider for the purpose of emasculating parallel trade and maximizing its own market control.
Distinctive character
Another dramatic decision to empower national courts to make up their own minds and stop referring everything to Luxembourg came in Lloyd Schuhfabrik Meyer v Klijsen Handel [1999] ETMR 690. Lloyd and Klijsen were rival footwear manufacturers; Lloyd sold shoes under the German LLOYD trade mark, while Klijsen marketed LOINT'S. Anxious that consumers would confuse LOINT'S shoes with its own, Lloyd commenced infringement proceedings. Demonstrating a typically Germanic determination to quantify the degree of recognition its brand enjoyed, Lloyd ascertained that, in surveys compiled between late 1995 and Spring 1996, 36% of the total German population of between 14 and 64 years of age, as well of 10% of all males aged 14 and over recognized LLOYD as being a brand of shoes. Did this large degree of recognition confer upon Lloyd a ?special distinctive character? so as to confer upon it an enhanced scope of protection?
Always more comfortable with legal principles than statistical probabilities, the ECJ chose not to get involved in the percentage game. ?It is not possible to state in general terms, for example by referring to given percentages relating to the degree of recognition attained by the mark within the relevant section of the public, when a mark has a strong distinctive character?. Effectively this leaves it open to national courts to decide for themselves whether, and when, a mark possesses a high degree of distinctive character, a low degree or indeed no degree of distinctiveness at all.
Additional evidence on Appeal
The third ECJ case selected for this review is Procter & Gamble v Office for Harmonization in the Internal Market [1999] ETMR 767. The real dispute in this case was not the registrability of the marginally distinctive trade mark BABY-DRY for nappies, but the attitude which the OHIM Boards of Appeal should take when suddenly, on appeal, applicants seek to introduce evidence of distinctiveness acquired through use which was not placed before the examiner in the first place. The Boards of Appeal had hitherto taken the easy way out and dismissed these appeals on the basis that the examiner's decision was correct in relation to the material put before him by the applicant, material which excluded the evidence of acquired distinctiveness.
P&G, having failed to secure the registration of BABY-DRY and having been unable to persuade the Board of Appeal to consider its evidence of distinctiveness, appealed to the ECJ for a ruling that OHIM was obliged to take such evidence into account. The ECJ considered that the Community Trade Mark Regulation, as interpreted by it, both entitled and mandated the Boards of Appeal to consider even material that had not been put before the examiner. The ECJ thus effectively presented the Boards with a choice: consider the application afresh or remit it to the examiner for further reconsideration. Faced with this choice, the Boards have indicated that they will resist, with all the guile and craft at their disposal, the consideration of evidence not put before the examiner. In Harcourt Brace & Co's application (Case R 130/1999-1, December 22 1999, unreported), when the applicant appealed against the unsurprising refusal of the examiner to accept the word IDEAL for registration, having in any event failed to comply with OHIM time limits, the Board refused to consider the previously unsubmitted evidence of acquired distinctiveness and commented:
The Board does not believe that parties to proceedings before the Office should be entitled to disregard ... time limits, thus provoking a negative decision, and then produce in their statement of grounds of appeal evidence that they should have produced at an earlier stage. The Board does not believe that the appeal procedure ... was intended to have the effect of excusing non-compliance with time limits. Such a result would not, in the Board's view, be consonant with ?the principles of procedural law generally recognized in the member states', which the Office is required to take into account ...
If the Board could not dispose of the matter in its entirety by dismissing the appeal, it was certainly in no mood to do the examiner's job and look at the evidence. So back to the examiner went the application, incurring further delay and expense in the process.
OHIM's impact
What, apart from demonstrating its reluctance to consider fresh evidence, has been the contribution of the OHIM Boards of Appeal to the year's development of European case law? Two decisions are of particular interest on account of their impact on important sections of the economy.
For years it has been accepted by all except the occasional misguided trade mark applicant that the registration of a service mark cannot be secured for a service which consists of the retail sale of goods. This principle has been created in national law and espoused by one and all as a matter so fundamental as to be beyond dispute. However, in Giacomelli's application (to be published in ETMR, April 2000) the Board of Appeal courageously allowed an appeal by an applicant who sought to register his mark in respect of ?bringing together, for the benefit of others, of a variety of goods ? excluding transport ? to enable consumers to view and buy the products; organization of exhibitions in halls and showrooms for commercial or advertising purposes'. In reaching its decision that the specified retail services could now be the subject of trade mark registration the Board added:
It is a matter of common experience that the consumer prefers the service provided by one particular shop over that of another. It may be the totality of the service offered which influences choice. There may be different factors which to go to make up the retail service offered, for example, the range of goods provided; the way in which the goods are laid out; the location; the overall convenience it affords; the attitude and commitment of the staff; the attention given to customers; and so on. The extent or quality of the service, however, is not a matter to be taken into account in assessing an application. The fact that a retail store is, for example, ?self-service', should not lessen its prospects of gaining trade mark registration as a retail service. By and large, the goodwill of a retail business is built on the service it provides.
In reaching this decision the Board refused to let itself be bound either by statements of the President of the Office or by joint statements contained in the Minutes of the Council Meeting, made at the time the CTMR was adopted in 1993, to the effect that service marks were not available for retail services.
But if the Board of Appeal was bold and audacious in this decision, it was correspondingly cautious in Nationsbanc Montgomerie Securities LLC's application [2000] ETMR 245. Here the applicant sought to register as a trade mark the sign WWW.PRIMEBROKER.COM. The examiner refused the application and the Board upheld this decision. Since the public at large would view the sign as a domain name, they would not see it as serving the function of a trade mark: it was therefore not inherently distinctive.
The exhaustion debate rages on
Around the national jurisdictions the question of parallel trade and exhaustion refuses to lie down. We have previously noted the legal culture clash between the EFTA Court and the ECJ. In the Mag Instruments case, the EFTA Court ruled that European Economic Area countries had the option of operating regional (ie European) or global exhaustion of rights, so long as they did not provide merely for national exhaustion. The ECJ, in the Silhouette case, said in effect that pan-European exhaustion was the new norm and that any greater or lesser degree of exhaustion was contrary to the policy of the European harmonized trade mark.
In NGK Spark Plug v Biltema (Decision Ö 1360/99, Stockholm, unreported) the Swedish Court of Appeal had to decide whether Biltema had infringed NGK's trade mark by importing lawfully marketed liquidation stock from Norway (an EEA member which operated global exhaustion) for resale in Sweden. That court made it plain that Sweden's obligations to the European Union overrode those of EFTA and granted NGK injunctive relief.
The Danish Supreme Court, in two pharmaceutical trade mark cases (Astra and Bayer v Paranova, March 1 and July 2 1999, unreported), has evolved a doctrine that has had substantial repercussions: the doctrine of necessary repackaging. In Astra, Paranova argued that, for commercial reasons, it was preferable to repackage Astra's products (aerosols and blister packs) rather than to import them as they were and overstick them with labels. In Bayer, the repackaging involved a change in quantities, since 30-piece and 60-piece packs were changed to 100-piece packs; Paranova maintained that it had to repackage the units, since Bayer itself only marketed 100-piece packs in Denmark.
The Supreme Court held in the Astra case that Paranova had infringed because there was no physical necessity for the goods, once lawfully marketed, to be repackaged. In reaching this decision the court reversed the decision of the Maritime and Commercial Court that there was a defence of ?commercial necessity?. In the Bayer case, the same court held that there was no trade mark infringement: a ?national practice? existed for the pack size to be a 100-piece pack and that it was therefore necessary for Paranova to repackage the imported products before it could sell them in Denmark.
The repercussion of this set of decisions came in the form of a decision in the United Kingdom handed down by one of Europe's most provocative judges, Mr Justice Laddie, in Glaxo v Dowelhurst (No 2) February 29 2000, unreported). In this, reputedly the longest single judgment ever delivered in a trade mark infringement trial, Laddie J analyzed all the ECJ judgments in the greatest length and concluded that there was no doctrine of necessity in repackaging and that the question of liability for trade mark infringement turned on whether the repackager was damaging the trade mark owner's products or his reputation.
Two further cases from national courts will close this survey. In the first, VNU Business Publications BV v The Monster Board BV [2000] ETMR 111, a Dutch court gave a clear and unambiguous ruling that the use of a trade mark as a ?magnet word?, leading an Internet user to the advertisements of the trade mark owner's competitor, was an infringing act for which relief would be sought. It did not matter that the keying-in of the trade mark was done by the Internet user when searching the web, rather than the competitor himself: the making of arrangements with a search engine operator that another's trade mark would be used in this way was itself a trade use of another's mark. Finally, Mega Press and Sumo Editions v Pressimage and Guidicelli (12 Paris 1999, Cour d'appel de Paris) gets the prize for the most audacious defendant. Seeing that two other businesses owned and exploited commercially the MEGA FORCE and SUPER POWER trade marks respectively for Sega and Nintendo games magazines, the defendant decided to plunder the market of each of them, establishing the Super Mega magazine. The court upheld his contention that you can only infringe one trade mark at a time: you can't aggregate the two marks, belonging to two different proprietors, and sue for the infringement of a bit of each of them.
© 2000 Jeremy Phillips. The author is intellectual property consultant, Slaughter and May, London and editor of the European Trade Mark Reports. Brief notes on all of these cases may be accessed on the MARQUES website (www.martex.co.uk/marques)
