Publications > ECJ a Step Closer to Defining the Meaning of a ‘Well Known’ Mark

Case C-328/06 Nieto Nuño, Reference for a Preliminary Ruling , ECJ (Second Chamber) 22 November 2007

This judgment, together with the related Advocate General’s Opinion, sheds more light on the meaning of a well known mark, as found in Article 6bis of the Paris Convention, and clarifies that to be well known the mark must be known throughout the territory or in a substantial part of it, and not as AG Mengozzi recommended in his Opinion delivered on 13 September 2007, well known in a more limited geographical area.

Background to the case

A certain Mr Nieto Nuño was the proprietor of the Spanish trade mark FINCAS TARRAGONA which had been registered for services in class 36 of the Nice Agreement relating to management and letting of property, sale of property, legal advice and property development. He brought proceedings for infringement against a Mr Monlleó Franquet, an estate agent from the north eastern Spanish town of Tarrogona, where Mr Nuño himself was based, who had been operating under the non-registered identical name of FINCAS TARRAGONA (or its Catalan equivalent FINQUES TARRAGONA), his business being to provide agency services, buying, selling and managing property.

Mr Franquet, the defendant, maintained in his defence that the name under which he carried on his business was a well known earlier trade mark within the meaning of Article 6bis of the Paris Convention which he had been using since the late 1970’s. He also counterclaimed for the annulment of the registered mark according to Spanish law on this ground and also on bad faith grounds. Mr Franquet’s business was indeed known widely under his trading name in the city of Tarragona and its environs, but not in the whole of Spain or a significant part of it.

The question that the Spanish Court hearing the case - the Juzgado de lo Marcantil 3 de Barcelona - had to consider was whether or not the wide recognition of a mark within a confined geographical area is enough to confer on it Convention protection of well known mark status. The Court stayed the proceedings and referred the following question to the ECJ for a ruling:

Must the concept of trade marks which are “well known” in a Member State, referred to in Article 4 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1), be taken to indicate solely and exclusively the degree of knowledge and establishment in a Member State or in a significant part of the territory of that State, or may the determination of whether a mark is well known be linked to a territorial scope which does not coincide with that of the territory of a State but rather with an autonomous community, region, district or city, depending on the goods or services which the mark covers and the persons to whom the mark is actually addressed, in short, depending on the market in which the mark is used?

Legislation and interpretation: what is a ‘well known’ mark?


Paris Convention

Nowhere is there actually a definition of a ‘well known’ mark. Article 6bis of the Paris Convention (included at The Hague revision conference, 1925) provides as follows in paragraph 1, giving in Mengozzi’s words ‘the minimum content of international protection’:

The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.

Note that this provision is not designed to prevent dilution or ‘tarnishment’ and requires that the goods be identical or similar, and that its application be subject to the existence of some likelihood of confusion. Also, note that although use of the mark for which protection is sought is not expressly required, neither is there actually an obligation on a Convention country to protect a well known mark that is not being used (a proposal to the contrary was rejected at the 1958 Lisbon revision conference).

TRIPS

Article 16 of TRIPS (Agreement on Trade Related Aspects of Intellectual Property Rights) of the World Trade Organisation, on the other hand, extends the scope of protection of well known marks beyond that of the Convention. Article 16(2), in particular, extends protection to service marks and to marks that have not yet been used in the State where protection is sought but have been extensively promoted through advertising campaigns or as a result of reputation:

2. Article 6 bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In determining whether a trademark is well known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark.

Signatories to TRIPS are therefore required to provide more protection to well known marks than countries who are members of the Convention alone.

In order to clarify, unify and supplement the above mentioned international provisions, the Standing Committee on the Law of Trade Marks of the World Intellectual Property Organisation (WIPO) drew up a Joint Recommendation concerning Provisions on the Protection of Well Known Marks which were then adopted by the respective Assemblies of the Paris Union and of WIPO in September 1999. These were guidelines, not rules, to assist the competent authorities in determining whether the mark could be considered well known (text at: http://www.wipo.int/about-ip/en/development_iplaw/). Some national authorities in Europe have actually implemented these recommendations, or parts of them, into national trade mark law (examples from Eastern Europe being the three Baltic States of Estonia, Latvia and Lithuania, and Ukraine). In these guidelines, knowledge of the mark is linked more to the market for the products or services in relation to which the mark is used than to territory. However, there is no attempt to give an actual definition of a well known trade mark.

Directive 89/104

Community law, as found in Article 4(2)(d) of Directive 89/104, merely refers to the Paris Convention without expanding on it when it refers to a well known trade mark as an ‘earlier trade mark’ :

“Earlier trade marks” within the meaning of paragraph 1 means:

...

  • (d) trade marks which, on the date of application for registration of the trade mark, or, where appropriate, of the priority claimed in respect of the application for registration of the trade mark, are well known in a Member State, in the sense in which the words “well known” are used in Article 6 bis of the Paris Convention.

Rationale

The rationale behind well known mark protection is expressed succinctly by Mengozzi in the following terms:

The intention is clearly to discourage unfair practices made attractive by the reputation of the mark, so as to ensure that third parties are not able to appropriate it by registering or using it in a country where it is not yet protected, the result of which would be to prevent the proprietor from having access to the market in question or to make him feel that he should pay for the trade mark right to be transferred to him. (par. 30)

Advocate General’s Opinion

Spanish case-law had a prevalent trend requiring that a mark be well known throughout the entire territory of the State or a substantial part of it. The French and Italian Governments and the Commission submitted that the concept of ‘well known trade mark’ appearing in Article 4 (2)(d) of Directive 89/104 refers to the extent to which the mark is known in the territory of a Member State or a substantial part of it. AG Mengozzi, however, came to another conclusion, considering the issue in the wider context of, among other things, the ‘non-territorial’ nature of the Paris Convention and of the flexibility given to Member States to determine the effects of non-registered or ‘de facto’ marks in their law systems, these not having been subject to any laws of harmonisation. Important to note was Article 4 (4)(b) of the Directive which states:

Any Member State may furthermore provide that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid where, and to the extent that:

...

  • (b) rights to a non-registered trade mark or to another sign used in the course of trade were acquired prior to the date of application for registration of the subsequent trade mark, or the date of the priority claimed for the application for registration of the subsequent trade mark and that non registered trade mark or other sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.

This provision is optional for Member States (note the use of the modal verb “may”). (Its application in the UK, for example, is found in Section 4 of the Act:

A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented

(a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade
......
A person thus entitled to prevent the use of a trade mark is referred to in this Act as the proprietor of an “earlier right” in relation to the trade mark.)

If a State is able to enact its own laws with regard to earlier rights, in particular unregistered marks, which preclude use or registration of a later sign, and if such a right can be recognised even if use of the mark is restricted to a limited territorial area (such as in passing off), then likewise - so the argument runs in essence - the same should be true for the flexibility given to States to determine the legal context of a well known mark in its territory. It should not be based on territoriality (i.e. in the territory of the State or substantial part therof), since the Paris Convention itself constitutes an exception to the principle of territoriality (by extending the protection afforded to a mark within one system of national law to another system of law).

AG Mengozzi’s conclusion was as follows:

In my opinion, therefore, in the light of the scheme and the aims of Directive 89/104, Article 4(2)(d) thereof does not, for the interpretation and application of the national provision transposing that article, raise any obstacle to regarding as well known within the meaning of Article 6 bis of the Paris Convention in the Member State in question a mark used in that State which is not well known throughout national territory or a substantial part of it but only in a smaller geographical area. (par. 51).

Ruling of the Court

The ECJ, on the other hand, in its decision of 22 November 2007, chose not to follow Mengozzi’s opinion. It argued that the expression ‘well known in a Member State’ is analogous to the expression ‘has a reputation in a Member State‘ found in Article 5(2) of the Directive. The principle of territoriality was already established in case law.
In Case C-375/97 General Motors, 14 September 1999, par. 28, the ECJ had stated:

Territorially, the condition is fulfilled when, in the terms of Article 5(2) of the Directive, the trade mark has a reputation ‘in the Member State’. In the absence of any definition of the Community provision in this respect, a trade mark cannot be required to have a reputation ‘throughout’ the territory of the Member State. It is sufficient for it to exist in a substantial part of it.

After this analogy, the Court then referred to semantics:

... the customary meaning of the words used in the expression ‘in a Member State’ preclude the application of that expression to a situation where the fact of being well known is limited to a city and to its surrounding area which, together, do not constitute a substantial part of the Member State. (par. 18)

It then noted that an earlier non-registered mark may be covered by Article 4(4)(b), cited above, or Article 6(2), which entitles a Member State to authorise the using of an earlier right which only applies in a particular locality, within the limits of the territory in which it is recognised.

In the light of these short considerations, the Court ruled as follows:

Article 4(2)(d) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks is to be interpreted as meaning that the earlier trade mark must be well known throughout the territory of the Member State of registration or in a substantial part of it.
Comment

Underlying the whole of the Nieto Nuño case is the Spanish Court’s recognition that their nationals are accorded the protection of the Convention within their own Spanish State. In other words, a Spanish mark registered, used or promoted only in Spain can be recognised as well known within Spain as long as it meets the requisite criteria. UK legislation, on the other hand precludes this by virtue of TMA 1994 s. 56(1) in conjunction with s. 55 (1)(b).

s.56 (1) states:

References in this Act to a trade mark which is entitled to protection under the Paris Convention or the WTO agreement as a well known trade mark are to a mark which is well-known in the United Kingdom as being the mark of a person who-

  • (a) is a national of a Convention country, or
  • (b) is domiciled in, or has a real and effective industrial or commercial establishment in, a Convention country,

whether or not that person carried on business, or has any goodwill, in the United Kingdom. References to the proprietor of such a mark shall be construed accordingly.

s. 55(1)(b) states:

a “Convention country” means a country, other than the United Kingdom, which is party to that Convention. [emphasis mine]

In the UK, therefore, a practitioner is never able to put down in a statement of grounds, for example in opposition proceedings, that a client’s mark, if only registered or used in the UK, is entitled to protection as an earlier trade mark in the UK ‘under the Paris convention or the WTO agreement as a well known trade mark’ (cf. s.6 (c)).

This approach which excludes application of the provisions of Article 6bis of the Convention to purely internal situations for one’s own nationals, reflects the theoretical or academic position that the Convention is all to do with ‘foreigners’ and extending the benefits of the Convention to these alone within one’s own national territory. The opposite and alternate approach (taken by Spain and many other countries) is to see the Paris Convention as a minimum harmonisation of laws from the substantive point of view for all Convention countries. This is implemented by an amendment of domestic legislation such that equal treatment is given to both foreigners and to one’s own nationals. Under this approach, according to the proponents, there is no ‘discrimination’ detrimental to the latter.

Which interpretation of the Convention is correct is quite unclear. What is now clear, however, is that if you (but you have to be a ‘foreigner’) want your mark to be recognised as well known, make sure it is known not just in and around a city like Cambridge.

This article first appeared as a feature in the March 2008 issue of the ITMA Review