The adoption of the EU's directive on harmonization of trademark law between the member states and the regulation creating the Community trademark have resulted in a number of cases relating to them coming before the European Court of Justice on referral from national courts on questions as to the meaning of the directive or before the Court of First Instance on appeal from the Office for Harmonization of the Internal Market in Alicante.

The Sabel decision on confusion by way of association between marks having analogous semantic content and the Silhouette decision on exhaustion of rights were reported in our March 1999 Information Letter (N.S. 190). In addition the EU courts have addressed issues relating to the directive or the regulation in the following cases.

Use of Trademarks in Advertising

In Parfums Christian Dior S.A. v. Evora BV the Court of Justice analyzed the interaction of Articles 5 and 7 of the directive. Article 5 defines the rights of the trademark owner as including the right to prevent others from using its trademark in the course of trade, including use in advertising. Article 7 provides that in the absence of "legitimate reasons to oppose further commercialization of the goods", a trademark owner cannot prohibit the use of its trademark by another when that use is in relation to goods which have been put on the market within the EU by the trademark owner or with its consent. In the case before the court the question was whether a retail chain which was not an authorized distributor of Dior products and had obtained such products by way of legitimate parallel imports could be enjoined from advertising that it had such products for sale. The court decided that the rights given by Article 7 should not be confined to a simple right to resell the goods under the trademark but also included the right to "use the trademark in order to bring to the public's attention the further commercialization of those goods". This conclusion would not be affected by the fact that most of the other goods sold by the reseller in question were of a lower quality than those sold under the trademark in question as long as the reseller normally sold goods of the same general type as those sold under the trademark and there were no specific circumstances such that the use complained of would seriously damage the reputation of the mark. As an example of a situation that could cause such damage the court referred to advertising that might seriously detract from the image the trademark owner has succeeded in creating around the mark. The court specifically noted that in the case of luxury goods resellers should endeavor to prevent their advertising from "affecting the value of the mark by detracting from the allure and prestigious image of the goods in question and from their aura of luxury". The question of what would be the position if the reseller normally dealt in a different type of goods was not addressed by the court.

Bayerische Motorenwerke AG v. Ronald Karel Deenik was a somewhat similar case although in this case the advertising was for second hand cars and for the repair and maintenance of BMW cars. The advertising stated that Deenik "specialized in BMW's". Deenik was not an authorized BMW dealer but had in fact specialized in BMW's. So far as the question of advertising the second hand cars was concerned, the court reached the same conclusion as in the Dior case. In this case the court pointed out that the trademark owner might have legitimate grounds for objection if the form of the advertising might lead the public to believe that there is a commercial relationship between the reseller and the owner of the trademark. However, the mere fact that the use of the mark might "lend an aura of quality" to the reseller's business was not a legitimate ground for objection. Nor was a genuine statement that the reseller specialized in BMW's. On the question of the advertisements relating to maintenance and repair, the court found that the provisions of Article 7 of the directive relating to exhaustion of rights did not apply since the acts being advertised did not affect the further commercialization of the goods in question. Such acts did, however, fall within the provisions of Article 6 of the directive which permits the use of a trademark by persons other than the owner or those having the owner's consent "where it is necessary to indicate the intended purpose of a product or service ... provided ...(the use is) ... in accordance with honest practices ...". Therefore this use was also legitimate since use of the mark was the only way open to Deenik to describe the services he rendered.

Free Flow of Goods

Sebago Inc. v. GB-Unic SA also related to the application of Article 7 of the directive. In this case, the defendant in a trademark infringement action, who had acquired genuine goods bearing the trademark in question outside the EU and imported them into the EU, argued that notwithstanding the Silhouette case, its actions were not infringements because the trademark owner had granted a consent to its actions. The basis for claiming consent was that the trademark owner had consented to the sale of one batch of similar goods that had been imported from outside the EU. The defendant claimed therefore that the trademark owner had by doing this consented to all imports of goods of the type in question. The court would have none of this and held that for there to be consent such that the exhaustion provisions of Article 7 applied, that consent had to be given in relation to "each individual item of the product in respect of which exhaustion is pleaded".

Likelihood of Confusion

Moving away from exhaustion and similar cases, two cases have addressed the question of likelihood of confusion.

The first is Canon KK v. Metro-Goldwyn-Mayer. In this case, the issue was whether the German Patent Court had been right to dismiss an opposition brought by Canon against an application by MGM for registration of the mark CANNON. The argument focused on whether the goods for which MGM sought registration, namely, "films recorded on video tape cassettes; production, distribution and projection of films for cinemas and television organizations", were sufficiently similar to the goods for which Canon KK had registered its mark CANON. These included "still and motion picture cameras and projectors; television filming and recording devices, television receiving and reproduction devices, including tape and disc devices for television recording and reproduction". The CANON mark was recognized as having a significant reputation. The relevant part of the German law corresponds to Article 4 of the directive which provides that a mark shall not be registered if the mark and the goods or services for which coverage is sought are identical with or so similar as to cause confusion with an earlier mark covering identical or similar goods or services. The key question was whether in determining whether there was sufficient similarity between the goods and services as to be likely to cause confusion, any account should be taken of the distinctiveness of the mark itself. The German Patent Court had taken the view that the public's perception was that films recorded on video cassettes on the one hand and video recorders on the other did not come from the same manufacturers so that if there was no recognition of the reputation of the CANON mark, it followed that there could be no confusion of the CANNON mark with it and the opposition should properly be dismissed. The European Court of Justice held that when considering the likelihood of confusion between two marks,


The court referred back to its decision in the Sabel case where it had said that questions of the likelihood of confusion on the part of the public should be appreciated globally. The court explained this as follows:


The second case on the issue of likelihood of confusion is Lloyd Schuhfabrik Meyer & Co GmbH v. Klijsen Handel BV, where the issue was whether mere aural similarity between two marks might give rise to a likelihood of confusion. In this case, also referred to the European Court from a German court, the question was one of whether there was likelihood of confusion between two marks such as to result in infringement. The registered trademark in question was LLOYD, registered for shoes. The alleged infringement was LOINT'S, also used on shoes. The owner of the LLOYD mark claimed that as pronounced in German there was aural similarity between the two marks. The defendant argued that in the shoe business because the shoes had to be tried on before purchase the key element in deciding likelihood of confusion was visual as opposed to aural similarity. After referring to the global appreciation test discussed in the Canon case, the court commented


In the light of this when determining a degree of similarity it is necessary to "determine the degree of visual, aural or conceptual similarity between" the marks and to "evaluate the importance attached to those different elements, taking account of the category of goods or services in question and the circumstances in which they are marketed". Thus the court held that it is possible that aural similarity between trademarks may create a likelihood of confusion. The matter was one of global assessment. In general in carrying out a global assessment of likelihood of confusion,

Procedure in OHIM

In Procter & Gamble Company v. OHIM the issue before the Court of First Instance was whether the applicants for a trademark should have been allowed to introduce evidence of acquired distinctiveness before the Appeal Board of the Community Trademark Office (OHIM) after an application for registration of a mark had been rejected by the examiner as lacking distinctiveness, no evidence of acquired distinctiveness having been produced during the initial examination. The Court held that because there is "continuity in terms of their functions between the Examiner and the Board of Appeal," the board should have been willing to consider the evidence and either decide on its effect itself or remand the case to the examiner for further consideration.

In addition to the above cases relating to the EU's Trademark Directive or Regulation, the Court of Justice has also dealt recently with two other trademark cases. Both were as a result of questions from the Vienna Commercial Court.

Trademarks and Indications of Geographical Origin

The first was Cosorzio per la Tutela del Formaggio Gorgonzola v. Käserei Champignon Hofmeister GmbH & Co. KG. In this case, the issue was whether the defendant could sell soft blue cheese in Austria under the trademark Cambozola despite an agreement between Austria and Italy restricting the right to sell cheese in Austria as "Gorgonzola" to cheeses made in a specific geographical location in Italy and an EU regulation having a similar effect. A second question related to the validity of the defendant's Austrian trademark registration for Cambozola. The EU's regulation on protection of geographical indications and designations of origin protects registered designations from inter alia any "evocation" of the protected name for similar goods, even if their actual origin is made clear. The Court noted that "it is possible ... for a protected designation to be evoked where there is no likelihood of confusion between the products concerned". It was for the national court to decide whether there was in fact an evocation of the protected name. However, the Court of Justice noted evidence that impled that the mark Cambozola had been chosen for its phonetic similarity to Gorgonzola and stated that this should be taken into account. On the question of the defendant's trademark registration, the Court pointed to a provision in the regulation preserving prior trademark rights that had been secured in good faith and held that it was a matter for the Austrian courts to determine whether that good faith requirement had been complied with.

Trademarks and Rights of Freedom of Establishment

The second case from Vienna was Pfeiffer Großhandel GmbH v. Löwa Warenhandel GmbH. In this case the issue was whether the EU's law relating to free flow of goods and freedom of establishment could prevent application of national law to enjoin the use of a trade name as the specific designation of an undertaking where there is a risk of confusion. The case arose from the defendants (part of a German discount chain) changing the names of many of their stores in Austria to be similar to the name used in Germany. In Germany, and other countries the name used is Plus. The name that was adopted in Austria is Plus prima leben und sparen. The plaintiffs owned the Austrian trademark registrations Plus Kaufpark and Plus wir bieten mehr. They sued for unfair competition. The Austrian court found there to be a risk of confusion. The defendants argued that to prevent them from operating in Austria under the same name as in other countries would constitute:


The defendants also invoked the EU's provisions relating to freedom of establishment in other EU countries arguing that this provision should allow it to operate in other EU countries under the same name as in the country of the group's parent company. The Court of Justice noted the force of these arguments but went on to say:


Therefore an injunction against the use of the new name by the discount chain in Austria would not offend EU law.