VICTORY TROUGH HARMONY! This well known slogan
of the Arsenal F.C. came into reality after contradictory judgements of the
European Court of Justice and English High Court through ECJ’s interpretation
of harmonized European Trademark law. The Arsenal Court, with its historical
judgement rather than providing a clarification to the case before it, bring
out many crucial questions regarding to the European trade mark law from the
legitimacy of the post sale confusion to functions of trade mark, from
definition of trade mark use to merchandising rights and even to the real
competences of the European Court of Justice. Rather than answering questions
of the referring Court, ECJ’s reinterpretation of the facts and analysing the
case with its own facts by giving special focus on the functions of trade mark,
Advocate General’s wide, even in most part economical, considerations and
substantial justifications, High Court’s rejection but Court of Appeal’s
confirmation and interpretation of the ECJ judgement, all these development
reserved the Arsenal case one of the most discussed and extraordinary cases of
the European case law. Within this
context one of the most important effects of the Arsenal case arguably was its
substance in a way to cause further questioning the rationale for the trade
mark protection. Arsenal court’s approach to the trade mark infringement Sub
rose reminded the world wide anxieties about the propertization and erosion
in the public functions of the trade mark law. The main argument of this
paper will be built on consumers are the legitimizing element of the trademark
protection in the trademark infringement cases. Thus very legitimate boundary
of the trademark protection in the infringement cases is determined by the
trademarks capability to perform its positive functions in regard to consumers.
In the part I, paper will discuss expansionist nature of European trademark law
in the light of Arsenal and subsequent case law. In the Part II expansion of
trade mark law and trend toward the propertization of trademark will be
analysed. Part III will focus on the indispensable place of confusion under the
trademark infringement law and will try to justify any attempt to ignore
confusion criteria in the infringement cases would undermine basic foundations
of the legal protection of trademarks.
Part I - THE ARSENAL CASE AND ITS AFTERMATH
The case concerned with defendant’s, Mr Reed’s, sale of unauthorised
Arsenal merchandise carrying Arsenal words and Logos in his stall where he also
located a large warning stating that ‘the words or logos on the goods offered
for sale, are used to adorn the product and does not imply or indicate any
affiliation or relationship with the manufacturer’[1]. Case when came before
the English High Court, Laddie J dismissed the passing off claims of the
Arsenal F.C. due to plaintiff’s failure to prove the actual consumer confusion
and in regard to trade mark infringement claims of the plaintiff referred two questions
to the European Court of Justice.
Laddie J, asked whether
the trade mark use only indicate trade origin or use as a badge of support,
loyalty or affiliation can also amount a trade mark use, thus may lead to an
infringement?[2] Court’s reply actually
did not provide clear guidance for the questions. Rather Court firstly focused
on the essential function of the trade mark. After defining the essential
function by referring the established case law[3] [a]s to guarantee the identity of origin of the marked
goods or services.[4]
Judgment proceed with reemphasizing the
absolute protection granted in the directive in regard to use of identical
signs in relations with identical products by the virtue of tenth recital of
the preamble and the protection in that sense should be granted [a]gainst competitors wishing to take unfair
advantage of the status and reputation of the trade mark by selling products
illegally bearing it. The crucial point in the Judgment was the para. 51
where the Court interpreted the rationale for the article 5 (1)(a) of
the Directive[5] as;
[e]xclusive right under Article 5(1)(a) of the
Directive was conferred in order to enable the trade mark proprietor to protect
his specific interests as proprietor, that is, to ensure that the trade
mark can fulfil its functions. The exercise of that right must therefore
be reserved to cases in which a third party's use of the sign affects or is
liable to affect the functions of the trade mark, in particular its essential
function of guaranteeing to consumers the origin of the goods.[6] (Emphasize added)
In addition the
decision made it clear that the warning in the Mr. Reed’s stall, which is
designed to distinguish the official and non official products, can not effect
the conclusion that the function of trade mark to guarantee the indication of
origin jeopardized. That is within the meaning guaranteeing that [a]ll the
goods or services bearing it have been manufactured or supplied under the
control of a single undertaking which is responsible for their quality[7] has been jeopardized. While in reaching this conclusion
Court introduced a new concept in the European Trade Mark law when it highlighted that, the
warning in the Mr. Reed’s stall does not prevent the possibility for after sale
confusion in the mind of public [i]f they come
across the goods after they have been sold by Mr Reed and taken away from the
stall where the notice appears, may interpret the sign as designating Arsenal
FC as the undertaking of origin of the goods.[8] Thus Court concluded that [i]t is immaterial that
in the context of that use the sign is perceived as a badge of support for or
loyalty or affiliation to the proprietor of the mark.[9]
When the case came once before the High Court, Laddie J. interpreted the
answer and concluded that there is no infringement if there is no trade mark
use which is prejudicial to the essential function of registered trade mark.[10] On the other hand he
ignored ECJ’s final conclusion by finding that ECJ exceeded its jurisdiction by
finding facts instead of only providing guidelines about the law.[11] On Appeal, Court of
Appeal for England and Wales decided in favour of Arsenal by concluding As found by the judge, the trade marks, when
applied to the goods, were purchased and worn as badges of support, loyalty and
affiliation to Arsenal, but that did not mean that the use by a third party
would not be liable to jeopardise the functions of the trade marks, namely the
ability to guarantee origin[12].
Court therefore interpreted as trade mark use is irrelevant if the use is jeopardizing
the functions, in particular essential function of the trade mark.
IMPLICATIONS OF THE ARSENAL
It is noteworthy to
simplify the essential underlying points of the Arsenal case. The case was
concerned with ordinary merchandising case which was necessitating
interpretation of the Article 5(1) (a) of the directive. On the other hand
because it was a Merchandising case, it was a very appropriate platform to
discuss the rationale for the trade mark protection. It is just because in a
Merchandising case a [t]rade
mark is sold, not as a source indicator, but desirable feature of a product.[13] There are many convincing arguments that granting
protection at this point, without an evidence of confusion, will harm the
consumers and competition which undermines the rationale for trade mark
protection.[14]
Thus in its judgments in order to justify its findings, Court also
underlined the scope of protection under the European trade mark law.
At the first point Court
was simply transferred what article 5(1) (a) mandated. If the marks and products are identical,
according to the wording of the article 5(1) (a) there is no requirement for
the existence of confusion in the minds of public[15] and there is per se infringement. Secondly in
defining the scope of protection under European Trademark Law, not
surprisingly in the Arsenal case, ECJ did not limited itself to a narrower
scope of origin function in the trade mark use. As Barresi also underlined, the
[t]ext of the directive does not leave much room for a different approach.[16]
Since the 10th Recital reads that [t]he function is in particular to
guarantee the trade mark as an indication of origin.[17]
According to Annett Wagner “This shows that the origin function is not
considered to be exclusive, but that the Directive is open for a broader
understanding of the trade mark's performance.” Moreover Geigen at this
point argues that “The Directive had to leave other functions open since it
provides for the possibility of wide protection of reputed marks even if no
confusion arises. Such protection can only be given if one accepts that the
trade mark has functions other than being an indicator of origin.” [18]
Thus as a matter of law, Court clarified that directive mandates protection of
all functions of the trade mark. Within this scope, by the Arsenal case Court
also first time recognized the Post sale confusion as another actionable form
of confusion.[19]
This without doubt Court’s endorsement of widened the scope of protection
under the European trademark law rather than being restricted to
confusion as to origin function.[20] In the remaining part
paper will discusses longitudinal diversion of European trade mark law form the
consumer protection and orienting into trade mark owner centred orbit.
PART II - PATRONIZING THE CONSUMER PATRONAGE OR
DEMOCRATIZING THE EXCLUSIVITY
This part will discuss the ebbs and flows
of Trade mark law between the consumers and trade mark owners. It is the
subject matter of the trade mark law is that law grants exclusive right to
protect trademark owners’ ability to use its reputation to sell its products. [21]
However as Shanahan put forward trade marks serves [t]wo complementary policy
objectives: the protection of the trader's business and the protection of the
consuming public.”[22]
The underlying rationale for trademark protections is that trademarks fosters
competition and provides advantages to the consumers. These benefits are seen
as the most important justifications for the trademark protection. Trademarks
grant an exclusive right to its proprietor but it is generally accepted that
this right '[a]ims to promote more
competitive markets by improving the quality of information in those markets'[23] Without doubt trademark
law does not there to protect firms from the competition. Surely it is not the
aim of the trade mark law.[24] Landes
and Posner at this point outline the main pro-competitive essentials of the
trade marks as “the benefits of trademark in reducing consumer search costs require that
the producer of a trademarked good maintain a consistent quality over time and
across consumers.”[25] Therefore the
justification for the legal protection is competition and ultimately customer
oriented. Next part in turn will discuss this justification in order to asses
the legitimate boundaries of the trademark protection. To this end it would be
appropriate firstly to focus on the functions of trademark in order to
understand effective functioning of trademarks.
FUNCTIONS
OF TRADEMARK
Although there are theoretically complex
views regarding to the performance of functions of trademarks, it is also
confirmed in the findings of ECJ’s Arsenal case law that the scope of
protection is determined by the true definition of these functions. There are
at least three accepted functions of the trademarks by which commentators
frequently underlines. Origin function, Quality or Guarantee function and
Investment or Advertisement function.[26] The Origin function[27]
of trademarks is traditionally explains that trademarks are the indicators of
the trade source.[28]
Therefore trademark law emerged as the protection of origin function of
trademarks by enabling information transmission from the trade source to public
without being exposed to consumer confusion.[29]
Furthermore there are certain views abut all other functions are relative and
derivative.[30]
However increasing complexity in the trade relations by inclusion of fragmented
distribution networks, changing foundations of the marketing techniques clearly
expanded the scope of protection and consequently studies on consumers’
behaviour expanded the boundaries of the trademark protection.[31]
Trademarks then became indicators of liability[32],
rather than indicators of origin. This fact is also underlined by ECJ in the Hag
II when the court emphasised the essential function of the trademarks as “For
the trade mark to fulfil its role, it must offer a guarantee that all goods
bearing it have been produced under the control of one single undertaking which
is accountable for their quality.”[33]
The
advertisement function on the other hand represents a 20th century
introduction to the trademark literature especially widely recognized after
Frank Schechter authorized his famous article on the Rational Basis of the Trademark Protection. The challenge toward
the classical expression of origin function at this point put forward by the
Schechter as; [t]he true functions of the trademark are to identify a
product as satisfactory and thereby to stimulate further purchases by the
consuming public[34].
Schechter’s argument through ‘the mark
actually sells the goods’[35]
advocated for the expanded protection of the trademarks and prepared a
doctrinal background for the anti-dilution laws.[36]
One of the most important implications for the general acceptance of the
advertisement function of trademarks is the recognition of the goodwill of the
trademark rather than the goodwill of the product or its maker.[37]
This implication also repeated by the Advocate General Colomer in Arsenal
opinion when he indicated that a trademark ‘[a]cquires a life of its own, making a statement about quality, reputation and even, in
certain cases, a way of seeing life.’[38]
TRADE MARK: MONOPOLY OR PROPERTY
Trade marks are practically due to they confers exclusive right to use to
its owner at least by some commentators identified with the monopolies.[39] Most shared anxiety among
the ‘trademark as a monopoly’ proponents is that such monopoly would harm the
competition rather than expectedly fostering competition. Timberg summarizes the main arguments
of the ‘trademark as a monopoly’ proponents by underlying the ideas of two
important figures Ralph Brown and Edward Chamberlain.
“[t]he result of effective
trade-mark promotion is to differentiate the trade-marked article from other
trade-marked and nontrade-marked articles possessing the same general physical
and chemical characteristics and the same utility to the consumer, and to
create for the trade-marked article a monopoly and an immunity from the rigors
of competition. The trade-mark creates for its specific product an entirely
separate market, where demand becomes inelastic and prices are established
which are independent of the prices of other articles of the same class that
would otherwise be competitive with it.”[40]
Monopolists argued that distinguishing nature of the trademarks leads
trademark monopolies. Since they are by
distinguishing certain product out of its general class and place them into
their own class, trade marks like the patents and copyrights have monopolistic
aspects.[41] This monopoly based
approach strictly challenged by the Property based approach to the trade marks.[42] The property-based approach tends to assume
that the property right in a trade mark is the right to prevent confusion.[43] Under property-based
doctrine however ‘confusion becomes not just a
question of probable confusion as to source, but possible confusion over any
connection between the plaintiff and the allegedly infringing use.’ [44]
Another major assumption of the property based school is that the approximation
of goodwill as a property.[45] There are plenty of possible different
definitions of the Goodwill within the context of trade mark law, however a
common touch might be for all definitions is that Goodwill is something has to
do with the Customer Patronage[46]. On the other hand one
important metaphor for the Goodwill is its vagueness but at the same time its
conclusiveness that it can not be “seen, felt and tasted,”[47] but exist only “in the minds of the buying
public.”[48] Bone explains the
difficulty in the definition of the Goodwill as [f]or one thing, any single
concept meant to capture all the factors that affect consumer choice was bound
to be vague and open-ended.[49]
Proponents of trademark law as the legal system of goodwill
protection come to recognize that trademarks are the merely symbols of goodwill
and without proper goodwill protection the trademark law is meaningless. To
this end Carter emphasize that
“A trademark, then, is a
"distinguishing" mark, a way of identifying the good. The mark serves
no other function and enjoys no legal existence independent of the goodwill that
it symbolizes. Without goodwill, marks
have no meaning, and the law has traditionally treated meaningless marks as
unworthy of protection.”[50](Emphasize
added)
However as accepted dual aim of the
trademarks necessitates both protection of public and trademark owner, trademarks
are neither confers property rights but, if it is appropriate as McCabe
underlines, ‘remain a quasi-property right.’[51] It is the protecting
consumer interests that legitimate the protection of the trademarks. All the
grammar of the trademark law is rests on the concept of confusion[52] and as Beebe emphasis the ‘consumer, we are led to believe, is
the measure of all things in trademark law.’[53] Since it is well established that trade marks
foster competition, increase the quality, reduce customer search cost[54], all these effects of
the trademark protection is at the end consumer oriented. Consumers are the one
of the core beneficiaries of the modern trade mark protection. It is the
consumers that are democratising the exclusivity provided by the legal
protection and [t]rademarks deserve legal protection
to the extent that such protection allows them to serve the function of
communicating information to consumers.[55]
Torremans at this point urges that;
“Goodwill
essential element of a trade mark for its owner, but it will only exist if the consumer distinguishes the product or
services labelled with the trade mark from other products or services. The
guarantee for consumers or users that the product or service labelled with the
trade mark is of a standard quality is essential in order for the goodwill, be
it negative or positive goodwill to be created."[56]
PART III – CONFUSION PREVENTION OR GOODWILL
PROTECTION
Place of confusion in the law of trade mark
infringement has been set under the article 5 of the trade mark directive in a
following way; when there is an identical sign of defendant with the trade mark
proprietor’s in relation to the identical goods or services, the confusion
is assumed[57],
when the sign of the defendant identical or similar with the trade mark
proprietor’s in relation to identical or similar goods or services likelihood of confusion sought[58]
and if the trade mark is in question is a trademark with reputation, then
confusion is no more a condition.[59] The confusion criteria under directive find
its very application in Art. 5.1(b). Recent
SABEL Court confirmed the expanded scope of
likelihood of confusion test [T]he concept of likelihood of association is not an alternative to that of
likelihood of confusion, but serves to define its scope.[60] In regard to article 5.2 cases, established
European case law indicate that although there is no need for confusion in the
mind of public, due to similarity between the sign and mark, a link has to be
established in the mind of public.[61] The article 5.2 is considered as European
anti-dilution law.[62] A major expansion beyond
the dilution theory in the trademark protection occurred after the Davidoff and Adidas cases.[63]
Prior to Adidas case the article 5.2 of the Directive was applicable to the
trademarks with reputation in respect to the non-competing protects. Since it
is the Anti-Dilution theory in fact seeks protection of well-known trademarks,
try to extend protection against diluting acts such blurring or tarnishment.[64]
McCarthy handles this subject delicately when he argues that [d]ilution is and
should be a separate legal theory positing a different kind of damage to a mark
caused by a different form of consumer perception.[65]
Furthermore he underlines that Davidoff and Adidas cases which ECJ confirmed
the application of anti-dilution statute to the competing goods would meant
unnecessary expansion of trademark protection and undermines the competitive
goals of the trademark protection. In this respect he also emphasises,
likelihood of confusion test is the sole test for the competing products and
for the sake of basic rationale of the trademark protection [66]should
not be expanded into the non-confusion bases. Beside the anti-dilution law,
expansion of the concept of confusion by the Courts assertion of more
actionable confusion forms can be explained as a matter of changing trade
relations, increasing recognition of the trademarks ability to the sell the
product as all discussed in part II of this paper. As Anne M. McCarthy argued
limitation on the scope of confusion alone might cause harm to the trade mark
proprietor.[67]In
the last part, the proper limit of this expansion will be discussed.
IT IS MINE! ™
A Trade mark, in conformity with its functions
represents sense of expression which utters this basic phrase, “it is mine”.
Although it might be called as a simplistic reductionism,[68]
as seen even historically all the functions of the trademark have been built on
this phrase. It is freedom of trade mark
owner to say with all its features, its pros and cons, this product belongs to
me. As an illustration what actually trade marks law attempt to protect is this
freedom of expression. Therefore the operation area of the trade mark is between
the trade mark owner and customers where this expression has been flowed
and what the law actually protects neither the trade mark owner nor the
customers but provides a safe journey of the expression flow from the trade
mark owner without being exposed to any obstruction resulted from the
confusion.[69]
In this sense the trade marks enables informed customers by proving them
ability to distinguish one owner’s product from another and (but) set them free
in their choices.
On the other hand Goodwill, as we have described
above, serve as a key tool for the customer patronage. It is created by the
customers repurchases resulting from their satisfaction by the product. It is
the goodwill turns the customers purchasing decision into a custom, a habit.[70]
However this custom, as every customs, subject to change by the Opinio Juris
depending on the customers’ satisfaction. Thus it is better to illustrate the
Goodwill as the fuel for the continuation of flow of expression from trade mark
owner to customer. Trademark law surely concerns with the appropriation of this
kind of fuel when it is asserted that one of the dual aims of the trademark law
is to protect sellers’ ability to use its reputation to sell its products.[71]
However there are at least two important reasons why the trademark infringement
law might not be focused to the goodwill protection. It is first because
protecting the “goodwill”, but only goodwill, is not within the scope of trade
mark infringement law, trade mark law deal with the safe delivery of the
expression which is possessed by the trade mark. On the other hand Goodwill is often
described as something created by the producers’ efforts and customer response
to this efforts and every time subject to change between these two dynamics.
Thus sole protection of this dynamic notion will both affect the producers’
efforts to gain and regain customer satisfaction and also would meant
interference to the customer choice. None of these are expected outcome of the
trade marks within the competitive markets.[72]
Secondly protecting goodwill without any clue of confusion would put the
trademark law into the same foot with the manual or handbook of marketing
departments. Moreover it would lead, if not exaggeratedly intervention to the
consumer autonomy by law. It is generally accepted that [W]ithout advertising,
that is goodwill could hardly be established[73].
For instance a more sceptical view on
this line was given nearly half decade before by Ralph Brown as ‘the choice
between one highly advertised dentifrice and another is, in important respect,
no choice at all.… It is only choice between one illusion and another’.[74]
What Ralph Brown indicated according to 1948’s advertisement techniques, was
that advertisements have a persuasion function and protection of this function
will meant interference to the consumer choice. Today persuasion function of
the advertising has turned into manipulation.[75]
Thus logic can be established that superfluous protection to
the goodwill will automatically lead protection of advertising function of the
trademark and so helps the manipulation of the public by law.
CONCLUSION
Arsenal case was a typical merchandising case, which is the reason why
the case was achieved to open Pandora’s Box about scope of protection of the
trade mark law. Should it be consumer oriented or proprietor oriented. In other
words should it be confusion based or property based. Balance of interest in
the trade mark law was the main issue before the Court; public interest and
proprietor’s interest. The Arsenal trademark, as in every merchandising case,
was the product itself[76], just as
attracting consumer to purchase the product in question only because of the
Arsenal logo on it. That is the mark’s goodwill was the essential seller of the
product. Thus case might ease the Court to take a property-based approach.
Perhaps, in spite of critics regarding to Courts piddle of public interest in
the case, or its reluctance to concentrate on the typical trade mark use
question, Court’s judgement might be tolerated due to message given by the
case. Within the very ambit of a Merchandising case, Court recognized that
trademark owner needs to have a broader protection in the wake of developed and
complex marketing wars, changing selling methods. It is just because the
information flow from the trademark owner and the customer is now more vulnerable
to the confusion than ever before. Moreover
court’s recognition of post sale confusion also illustrated this fact. Since
the existence of such kind of confusion was vital in the judgement.[77]
On the other hand the subsequent Opel case somewhat provided
an evidence that Court is seeking a balance between the dual aims of the trade
mark protection. The Opel judgement of the Court made it clear that confusion has a vital
importance in assessing the infringement by determining the trade mark use.[78] Therefore
it would be appropriate to consider the Arsenal case as an opportunity before
the Court to illustrate the main rationale for the harmonised European trade
mark law by which the Court manifested its intention to not stick into a single
function of the trade mark but it will consider other functions of the trade
mark as well.
Confusion
is the primary criteria for the all the trade mark infringement cases, however
all the cause of actions which affects the core definitional functions of the
trade mark also should be also subject to greater scrutiny under every trade
mark regime. In the previous sections paper has been discussed the expansion of
the trade mark law due to globalization, increasing international commerce,
advancing marketing techniques, reshaping consumer behaviours, and complicated
advertisement techniques. Without a shadow of doubt all these late 20th
century developments effected the definition of trade mark as well. All these
developments, in order to enable trade marks active assistants of the
competitive markets, installed new functions to the trade marks. Furthermore
most importantly make the trade mark owners more vulnerable to an inf
[2] ‘1. Where a trade mark is validly registered and (a) a third party uses in
the course of trade a sign identical with that trade mark in relation to goods
which are identical with those for [which] the trade mark is registered; and
(b) the third party has no defence to infringement by virtue of Article 6(1) of
[Directive 89/104/EEC]; does the third party have a defence to infringement on
the ground that the use complained of does not indicate trade origin (i.e. a
connection in the course of trade between the goods and the trade mark
proprietor)? 2. If so, is the fact that the use in question would be perceived
as a badge of support, loyalty or affiliation to the trade mark proprietor a
sufficient connection?’ Laddie J.'s 1st judgment at 6th April 2001 Arsenal Football Club plc v. Matthew Reed.
[3] Case 102/77 Hoffman-La
Roche [1978] ECR 1139, para. 7, and Case C-299/99 Philips [2002] ECR I-0000,
para. 30
[5] Council Directive 89/104 of December 21, 1988 to approximate the
laws of the Member States relating to trade marks [1989] O.J. L40/1.
[6] Ibid.
para.50
[7] Ibid.
para.48
[8] Ibid.
para.57
[9] Ibid.
para.62
[10] Laddie
J.'s 2nd judgment at para.20 at 12th December 2002 Arsenal Football Club plc v. Matthew Reed.
[13] Dogan,
Stacey L., Lemley, Mark A., The
Merchandising Right: Fragile Theory or Fait Accompli?. Emory Law Journal,
Vol. 54, 461-505, 2005 p.465
[14] Ibid.
p.465 Dogan and Lemley supports that " When a trade mark is sold, not as a
source indicator, but desirable feature of a product, competition suffers -an
consumer pay- if other sellers are shut out of the market for that
feature." From this point of view the goodwill protected in the Arsenal
case nothing to do with the Arsenal's Goodwill. See also Kilbey, Ian: The Ironies of Arsenal v. Reed, European
Intellectual Property Review, 479-482, 2004 p.480 Ian Kibley
pointed out Arsenal's reputation, like that any other sports club, is made on
the field, not in the market. Thus it is arguable at this point that increasing
the range of support to the team by providing more cheaper and affordable memorabilia
would harm the goodwill of the arsenal. Instead it might be argued that this
kind of use contributed to the Goodwill of the trade mark owner.
[15] Case
C-291/00 LTJ Diffusion v. Sadas
Vertbaudet [2003] ECR I-2799. para. 49 “Article 5(1)(a) of the directive does not require evidence of such a
likelihood in order to afford absolute protection in the case of identity of
the sign and the trade mark and of the goods or services” There are also views about the presumption
of confusion within the context of article 5(1) (a) See in
particular AG Jacobs opinion in Case C-291/00 LTJ Diffusion v. Sadas Vertbaudet [2003] ECR I-2799. at [35], See
also Paul L.C. Torremans, The likelihood
of association of trade marks: an assessment in the light of the recent case
law of the Court of Justice, Intellectual Property Quarterly, 3, 295-310,
1998, p. 300
[16] Barresi, Francesca Romana: The
"Arsenal" of the ECJ for the Protection of Trademarks Rights,
Legal Issues of Economic Integration, 157-165, 2003 p.164
[17] Annett
Wagner , Infringing trade marks:
function, association and confusion of signs according to the E.C. Trade Marks
Directive, European Intellectual Property Review, 21(3), 127-132, 1999,
p.131
[18] Charles
Gielen, Harmonisation of Trademark Law in
Europe: The First Trademark Harmonisation
Directive of the European Council, European Intellectual Property Review 14
(8). 262-269, 1992 p.264
[19] See also Paul
Torremans, Holyoak and Torremans Intellectual Property Law, (4th edition,
Oxford University Press, United
States, 2005) p.401 “that confusion element
is vital in this context”
[20] Dyrberg,
P. and Skylv, M., Does Trade Mark
Infringement Require that the Infringing Use be a Trade Mark Use and, if so,
what is Trade Mark Use?, European Intellectual Property Review 25(5), 229-233,
2003
p.232 Broad notion of origin function in the Arsenal case
[t]ends to encompass the other functions of trade mark. See also Jukka Snell, European Courts and Intellectual Property: a
tale of Hercules, Zeus and Cyclops, European Law Review, 29(2), 178-197
p.184, 2004 Jukka Snell points out this fact as; “According
to the Court, trade marks have more than one function, and the essential origin
function is to be interpreted broadly (and) use liable to affect this function
for example by undermining the distinctive character of the mark through
generalised use can be prohibited.”
[21] The
subject matter of the European trademark law is defined by the ECJ in the
Centrafarm case. Case 3/78
Centrafarm BV v American Home Products Corporation [1978] ECR 1823 para.11
“[I]n particular the guarantee to the proprietor of the trade mark that
he has the exclusive right to use that trade mark for the purpose of putting
into circulation for the first time and therefore his protection against
competitors wishing to take advantage of the status and reputation of the mark
by selling products illegally bearing that trade mark.” See also Robert G.
Bone, Hunting Goodwill: a History of the
Concept of Goodwill in Trademark Law, Boston University Law Review, Vol. 86(3), 547-622, 2006
p. 567
[22] D.
Shanahan, The Trademark Right: Consumer
Protection or Monopoly? Trade Mark Reporter, 72, 233-251, 1982 p. 234
[23] Supra
Note 11 p.471
[25] Landes,
William and Richard Posner, Trademark
Law: An Economic Perspective, Journal of Law and Economics, 30, 265-309,
1987 p.269
[26] Cornish and Llewelyn, Intellectual Property: Patents, Copyright, Trade
Marks and Allied Rights (6th Ed., Sweet and Maxwell, 2006) p.620.
Another accepted function of the trade marks is differentiation function. A
trademark distinguish product of one trader to another rather than simply
identification of product Although this function by some commentators accepted
as a part of origin function, there are different arguments regarding to the
differentiation function is a much broader and separate from the origin
function.
[27] See in
particular Friedrich-Karl Beier “A Trademark serves to distinguish the goods of
one manufacturer from the goods of another. The trade mark should identify the
origin of the good with a particular company. The exclusive right to use
granted to the trademark owner by statute serves to protect only this function
and limited by this basic purpose of trade mark protection.” Friedrich-Karl
Beier, “Territoriality of Trade Mark Law and International Trade” [1970]
International Review of Industrial Property and Copyright Law 48-72 p. 61.
Cited in Elson
Kaseke, Trademark Dilution: A Comparative Analysis, PhD Thesis, 2006, University of South Africa. p.7
[28] See
Cornish and Llewelyn, Supra Note 25, p.620
[30] See D.
Shanahan, Supra Note 21, pp. 238-241 D. Shanahan describes that primary
function of the trademark is source-origin function; other functions such as
what he defines descriptive and marketing functions are derivative or secondary
functions.
[31] Elson
Kaseke, Supra Note 26, p.10
[32] Lionel Bently and Brad Sherman, Intellectual
Property Law, (2nd edition, Oxford University Press, United States,
2001), p.694
[33] Case C-10/89 SA CNL-Sucal NV v Hag GF AG [1990] para 13. See also Opinion
of Advocate General Colomer delivered on 7 March 2006
in Case C-48/05 Adam Opel AG v Autec AG [2007] ECR-I
1017. para. 26
“According
to settled case-law, the essential function of a trade mark is to guarantee the
identity of the origin of the product or service to the final purchaser by
enabling him, without any possibility of confusion, to distinguish the product
or service from others which have another origin, confirming that they have
been manufactured or provided by a single undertaking which is responsible for
their quality.” Judgments inter alia in Case 102/77 Hoffmann La Roche
[1978] ECR 1139, paragraph 7; Case C‑299/99 Philips [2002] ECR I‑5475,
paragraph 30; and Case C‑40/01 Ansul [2003] ECR I‑2439), paragraph
43.
[34] Frank I.
Schechter, The Rational
Basis of Trademark Protection, Harvard Law Review, 40, 813-833,
1927 p.819 Schechter defined trademark as the [m]ost effective agent for the creation of good will, imprinting upon
the public mind an anonymous and impersonal guaranty of satisfaction, creating
a desire for further satisfactions
[36] Opinion of Advocate
General Jacobs delivered on 10 July 2003 in Case C-408/01 Adidas-Salomon AG and
Adidas Benelux BV
v Fitnessworld Trading Ltd. Para. 37
[37] Spyros
M. Maniatis and Anselm Kamperman Sanders,
A Consumer Trade mark: Protection Based on Origin and Quality, European
Intellectual Property Review, 15(11), 406-415, 1993, p.408
[38] Opinion
of Advocate General Colomer delivered on 13 June 2002 in Case C-206/01, Arsenal Football Club plc v. Matthew
Reed, [2002]
ECR I-7945.para. 46
[39] See Rosler Hannes, The
Rationale for European Trade Mark Protection, European Intellectual Property Review, 29(3), 100-107, 2007. p.100,
see in particular Timberg Sigmund, Trade-Marks,
Monopoly, and the Restraint of Competition, Law and Contemporary Problems, 14, 323-361, 1949, p. 325
See also Glynn Lunney, Trademark
Monopolies, Emory Law Journal, 48(2),
367-488, p.368, 1999 see Spyros M. Maniatis, Supra Note 36, p.406
[40] Timberg, Sigmund, Supra Note 38, p.325
[41]
Borchardt, Kurt, Are Trademarks an
Antitrust Problem, Georgetown
Law Journal, 31(3), 245-261, 1942.p.245
[42] See
Glynn Lunney , Supra Note 38, p.369, “property refers to a set
of legal relationship or rights with respect to absence of substitutes for the
thing in the market.” See also Swann, Jerre B.; Davis, Theodore H. Jr.,
Dilution, an Idea Whose Time Has Gone; Brand Equity as Protectable Property,
the New/Old Paradigm, Journal of Intellectual Property Law, 1, 219-259, 1993.
p.225
[43] Bannon, Elizabeth Cutter “Revisiting the rational
basis of trademark protection: Control of Quality and dilution-estranged
bedfellows” John Marshall Law Review, 24, 65-117, 1990.p.71
[44] See
Glynn Lunney
, Supra Note 38, p.369,
[46] Irene
Calboli, Trademark Assignment “With Goodwill”: A Concept Whose Time Has
Gone, Florida Law Review, 57(4), 772-941,
2005.p. 801 See also Robert G. Bone, Supra Note 20, p.571
Bone underlines that ‘No one might know exactly what goodwill was, but everyone
could reason as if some thing actually existed which the term goodwill named
See also Irene Calboli for the difficulty in defining Goodwill and its
consequences. Calboli in page 814 emphasize that [T]he uncertainty surrounding the idea of goodwill created many
misunderstandings in its application. Trademark owners used goodwill to protect
the investments in their brands and exploited the vagueness of its definition
to argue in favour of extended trademark protection.’
[47] J.
Thomas McCarthy, McCarthy on trademarks and unfair competition, (4th ed. 2004)
cited in Irene Calboli, Supra Note 44,p. 809
[48] Ibid. p.
809
[50] Stephen
L. Carter, The Trouble with Trademark, Yale Law Journal, 99, 759 -765, 1990. p.762
[51] See McCabe, Kathleen B., Dilution-by-Blurring: A Theory
Caught in the Shadow of Trademark Infringement, Fordham Law Review, 68,
1827-1877, 1999. p.1830 “A property-right-in-gross is one that is
similar to the rights attached to real property. On the other hand, a
quasi-property right in trademark is one with limited protections, based
primarily on the protection of the public from confusion.”
[53] Beebe, Barton Search
and Persuasion in Trademark Law, Michigan
Law Review, 103, 2020-2073, 2004. p.2021
[54] See
Landes, William and Richard Posner, Supra Note 24, pp. 269-271 see economizing
function of trademark. See also Michael Pulos, A
Semiotic Solution to the
Propertization Problem of Trademark, UCLA Law Review, 53, 854-861, 2006. p. 837 “The
consumer-search-costs rationale maintains that "trademarks lower
consumers' search costs by providing them with valuable information about
brands and encourage quality control rather than create social waste and
consumer deception.”
[55] Michael Pulos, A Semiotic
Solution to the Propertization Problem of Trademark, UCLA Law Review,53, 854-861, 2006. p.835
[56] Paul Torremans, Holyoak and Torremans Intellectual Property Law, (4th
edition, Oxford University Press, United States, 2005), p.431
[57] Article
5.1(a) of Trademark Directive See Supra Note 13. Case C-291/00 LTJ Diffusion v. Sadas Vertbaudet [2003]
ECR I-2799.
[58] Article
5.1(b) of Trademark Directive
[59] Article
5.2 of Trademark Directive
[60] Case
25/95 Sabel v. Puma [1997] ECR
I_6191. para.18
[61] Case
C-408/01 Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd, [2003] 1 C.M.L.R. 14. para.41
[62] Thomas J. McCarthy,
Dilution of a Trademark: European and
United States Law Compared, The
Trademark reporter, 94, 1163-1181, 2004. pp.1163-1164
[63] Ibid.
p.1177
[64] McCabe, Kathleen B, Supra Note 50, p.1828
“Trademark dilution occurs when a person or company uses a mark identical or
substantially similar to a pre-existing trademark, triggering a mental
association on the part of the consumer between
the two marks, thereby eroding the strength of the original mark.”
[66] Ibid.
p.1177
[67]McCarthy, Anne, M. Post-Sale
Confusion Doctrine: Why the General Public Should Be Included in the Likelihood
of Confusion Inquiry, Fordham Law Review, 67, 3337- 3371, 1998.
p. 3337
[68] Opinion
of Advocate General Colomer delivered on 13 June 2002 in Case C-206/01, Arsenal Football Club plc v. Matthew
Reed, [2002]
ECR I-7945.para. 46
[69]Lisa H. Jonston, “ Drifting Towards Trademark
Rights in Gross” The Trade Mark Reporter, 85, 19-54, 1995, p. 20 “In a
regulated free market economy; trademarks perform an important role in
facilitating the free flow of information to the consumer and thereby reduce
market transaction cost. “
[70] See
Supra Note 20.
[71] Ibid.
[72] For a
more sceptical view regarding the protection without confusion See Robert G.
Bone, Supra Note 20, p.619
Bone further argues that "As long as consumers are not confused or
misled -so the information that the defendant communicate is accurate - using
the plaintiff’s mark saves social resources that would otherwise have to be
invested in building the same meaning into different mark"
[73]
International Bureau of WIPO, Economic Importance of Trademarks and
Geographical Indications and Their Use in Commerce, Wipo National Seminar
on the Protection of Trademarks and Geographical Indications, Beirut, March 17
to 19, 2003. p.13
[74] See Ralph S. Brown Jr, Advertising and the Public Interest: Legal
Protection of Trade Symbols, Yale Law Journal, 57, 1165-1206,
1948. Reprinted in Yale Law Journal, 108, 1619-1659, 1999.
p.1636 For Ralph Brown advertising has two main functions; Information
function and Persuasion function. The latter can not be protected by the trade
mark law.
[75] Graeme
W. Austin, Tolerating Confusion About Confusion: Trademark Policies And Fair
Use, The University of Arizona,
Arizona Legal
Studies, Discussion Paper No. 07-18, November 2007. p.4
[77] See also Paul
Torremans, Supra Note 19, p.401
[78] Case C-48/05 Adam Opel AG v Autec AG [2007] ECR-I 1017 In the Adam
Opel AG v Autec AG case which was concerned with the defendant’s (Autec), a
toy car manufacturer, copying Opel’s car model in which Opel has registered
trade mark for motor vehicles as well as toys, German court referred a
remarkable question to the European Court of justice which shed some lights to
the Arsenal turbulence. German court directly asked whether such kind of
copying of a real car in a reduced scale including the trade mark of the
proprietor of the trade mark as applied to the real car, is a trade mark use.
Interestingly this time Court after revisiting its Arsenal judgement, held in
para. 24 that “If, by those explanations,
the referring court intended to emphasize that the relevant public does not
perceive the sign identical to the Opel logo appearing on the scale models
marketed by Autec as an indication that those products come from Adam Opel or
an undertaking economically linked, it would have to conclude that the use at
the issue in the main proceedings does not affect the essential function of the
Opel logo as a trade mark registered for toys.”
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