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CTMs: Registration does not equal reputation

Under Article 4(3) of the EU Trade Mark Directive, a Community Trade Mark (CTM) shall not be registered where it is identical or similar to an earlier CTM that has a reputation in the Community such that use of the CTM  would, without due cause, take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier CTM. This is the case whether or not the goods or services of the CTM are similar to those of the earlier CTM.

Where questions about the application of the EU Trade Mark Directive arise, the courts of EU member states may refer those questions to the Court of Justice of the EU (CJEU). The matter is first considered by the Advocate General of the CJEU, who issues their opinion on the matter, and the eventual judgement of the CJEU usually, but not necessarily, follows that opinion.

The question at issue in this case concerns whether registration of a national trade mark can be validly opposed under Article 4(3) of the EU Trade Mark Directive on the basis of an earlier CTM that has a reputation within the EU, but not in the member state where registration is sought.

The Advocate General has now issued their opinion on this matter and has noted that Article 4(3) requires two conditions to be met, namely:

• the earlier CTM must enjoy a reputation in a substantial part of the EU; and
• use of the later trade mark must take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier CTM.

Regarding the first condition, it has been determined in earlier cases that, for a mark to have a reputation in a substantial part of the EU, it must be well known by a significant part of the public concerned in a substantial part of that territory. It is for a national court to establish whether a mark enjoys a substantial reputation in a substantial part of the EU, taking into account all the relevant circumstances, such as the nature of the relevant goods or services and the types of people that consume those goods and services.  Indeed, it cannot be ruled out that, in certain circumstances, one part of one member state could be considered to be a substantial part of the EU. Furthermore, the criteria for genuine use must be distinguished from those used to assess reputation, as the principles used pursue a different objective and are not relevant to one another.

Regarding the second condition, it is possible that a CTM could fulfil the first condition without fulfilling the second, and that would depend on the situation in the country where the CTM owner seeks to enforce their rights. The Advocate General has considered that where a CTM does not enjoy a reputation in the Member State in which Article 4(3) was relied on, in order to prove that, without due cause, unfair advantage would be taken of, or detriment would be caused to the distinctive character or repute of the CTM, it is necessary to show that a commercially pertinent proportion of the relevant public in the Member State would make a link to the CTM.

If a national court establishes a link between the marks in the minds of a commercially pertinent proportion of the relevant public, then it has to decide whether there is sufficient evidence of a risk of damage, or actual damage, to the earlier CTM. The national court should look at, in particular, how widely the mark is known, the image it conveys, and whether any advantage would be, or had been, transferred to the later mark. The knowledge of the relevant public in the Member State in question is important, as the stronger the mark’s reputation in the Member State, the more immediately and strongly it would be brought to mind by the later mark, and the greater the likelihood that use of the later mark will take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier CTM.

This opinion, if followed by the CJEU in its judgement, will make it more difficult to object to national trade mark registrations in EU member states on the basis of earlier CTMs that, whilst effective throughout the EU, are not well known in all parts of the EU.

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