Publications > Well known marks: Well known law? (Part 2)

           
What is a well known mark?

 
Having clarified that a well known mark in European legislation extends to services, the question that hasn’t yet been answered, since not yet posed, is: what precisely constitutes a well known mark? This is needed for legal certainty as to when a trade mark owner can rely on Article 6bis, and yet ever since the time of the Paris Convention this issue has been problematic. Art 6bis does not provide a definition. TRIPS 16(2) gave some basic guidance: “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”. But this guideline itself leads to unanswered questions.[i] The ECJ, in FINCAS TARRAGONA, has ruled on the geographic extension required for a mark to qualify as well-known for the purposes of Art 4(2)(d) of the Directive: the earlier trade mark must be well known “throughout the territory of the Member State of registration or in a substantial part of it”. [ii] This was modelled on Case C-375/97, GENERAL MOTORS, for marks with a reputation.[iii] The recent opinion by Advocate General Sharpston (30 April 2009) on what constitutes a ‘substantial part’ of the Community in relation to protection of a Community Trade Mark with reputation – that it is not dependent on national boundaries - may be relevant by analogy for a well known mark.[iv] Finally, a set of guidelines drawn up by the Standing Committee on the Law of Trade Marks of the World Intellectual Property Organisation (WIPO)  was adopted in the form of a Joint Recommendation by the Assembly of the Paris Union and the Assembly of WIPO at their meeting in September 1999. Article 2 provides ‘factors for consideration’ to allow national authorities to draw up their own regulations, and (a somewhat convoluted) ‘factors which shall not be required’. Although ‘any circumstances’ at all can be taken into account in determining whether or not a mark is well known in any jurisdiction, six headings are listed for special consideration, viz.:
 
1.      the degree of knowledge or recognition of the mark in the relevant sector of the public;
2.      the duration, extent and geographical area of any use of the mark;
3.     the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;
4.    the duration and geographical area of any registrations, and/or any applications for registration, of the mark, to the extent that they reflect use or recognition of the mark;
5.      the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognised as well known by competent authorities;
6.      the value associated with the mark.
None of the above are preconditions for the determination, and there is a bewildering array of possible combinations that are given approval: “In some cases all of the factors may be relevant. In other cases some of the factors may be relevant. In still other cases none of the factors may be relevant, and the decision may be based on additional factors that are not listed... Such additional factors may be relevant, alone, or in combination with one or more of the factors listed... above.”[v]
By way of comparison, in GENERAL MOTORS, par 37, the factors that were highlighted in assessing ‘reputation’ included the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it (par.37). The valuation criterion, which is novel in a European context, was discussed in detail in the Memorandum of the Committee of Experts and discussed the three main methods of valuation, namely cost methodology, market methodology and income methodology.[vi] In its Annual Report for 2007, the State Department for Intellectual Property of Ukraine reported new standardised procedures for valuation of intellectual property rights.[vii]
With regard to what constitutes the ‘relevant sector of the public’, these could include:
(i)      actual and/or potential consumers of the type of goods and/or services to which the mark applies; (ii) persons involved in channels of distribution of the type of goods and/or services to which the mark applies; (iii) business circles dealing with the type of goods and/or services to which the mark applies.
The Joint Recommendation clearly differentiates a well known mark from a ‘famous’ mark in the US sense which by definition is a mark “widely recognized by the general consuming public of the United States”. Instead, it is sufficient if it is known in at least one relevant sector of the public in a Member State (2b). Also, quite a bit of leeway is given to allow authorities to go beyond what is required as a minimum. Thus it may be sufficient for the mark to be simply ‘known’ in order to give it well known status. Or, paradoxically: “A Member State may determine that a mark is a well-known mark, even if the mark is not well known” (2d). This refers to a situation where the mark may be only well known outside the State in which protection is sought.[viii]
In terms of what is not required, the Recommendation mentions use of the mark, or registration, or an application for registration in the Member State where protection is being sought; anything but use outside the Member State; having to be well known anywhere other than the Member State, and having to be known by the public at large.[ix]
The WIPO guidelines are in practice used by OHIM and also by the UK Courts.[x] Several countries have adopted them in their laws.[xi]
 
 
Register
 
One of the proposals that the Committee of Experts put forward in 1995 was the establishment of an international register of well known marks which, although without legal effect, would contain information on the marks which the government of an interested country considered well known on its territory and information on whether the owner of a well known mark is established on its territory. Consideration was also given to allowing owners of marks to directly file with WIPO an application for registering a mark as well known, this registration being effected in a special part of the WIPO register.[xii]
Even though this proposal was not taken up, many individual countries do have their own registers of well known marks, although the UK is not one of them. Brazil is an example, as is Ukraine. A problem of these registers, though, is that there are no established international guidelines as to their creation and maintenance, which leads to legal uncertainty. This lead INTA’s Board of directors in November 2005 to issue a ‘Request for Action’ on the subject of well known mark registries. Among the recommendations were that the rules setting forth the criteria and procedures used by the examining authority to determine whether a mark is well known be published; that there be a set term of 10 years for well known mark registration with an opportunity for the owner to apply for renewal; procedures for third parties acting in good faith to oppose the placement of a mark on a well-known mark registry and to move for cancellation of a registration on a well-known mark registry at any time; clarity in the law that, while inclusion on a well-known mark registry may facilitate a trademark-related legal claim, inclusion on the well-known registry is not a prerequisite for bringing a claim, nor should any negative inference be drawn that the mark is not well-known. Some of the background to these recommendations was described in the following terms:
“...inquiries and interviews revealed mixed views regarding well-known mark registries. On the one hand, registries are viewed by some as valuable tools in enforcing trademark rights. For example, the committee learned that in China, government officials will expedite a request for seizure of counterfeit goods if the goods bear a mark that appears on China’s well-known mark registry. In Mexico, as in other countries with well-known mark registries, inclusion on the list ensures protection of a mark outside its registered classes. Inclusion on a well-known mark registry, particularly in civil law countries, also may provide a presumption of fame that aids significantly in litigation.

On the other hand, others indicated that well-known mark registries have failed to meet their expectations. In-house counsel described the process as being saddled with unnecessary formalities. One brand owner, for example, expressed frustration with respect to its inability to get on a well-known mark registry, despite the fact that its brand is one of the most well-known in the world. Another brand owner noted that in at least one country with a well-known mark registry, the inclusion on the registry appears to have little or no impact on the protection of well-known marks in that jurisdiction because of the government’s lack of enforcement
[xiii]

Extension of protection to dissimilar goods and services
 
Protection against use of an identical or similar mark for goods or services which are non-competing or dissimilar is a well-established principle in European and UK law for marks having a reputation thanks to the Directive Art 5(2) and case law starting from Adidas- Salomon[xiv] , with recent clarifications on the concepts of dilution and unfair advantage having been announced by the European Court of Justice as a result of referrals by the UK Court of Appeal respectively in Intel and L’Oreal. Prior to the Directive European countries were guided by the principle of specialty - which stipulates that trademarks can only be protected in relation to the same or similar goods or services covered by their registration or use. This was the case under the 1938 Act in the UK, for example. If there were issues with truly famous marks being taken unfair advantage of or being harmed through dilution on non-competing goods, this could be handled through unfair competition laws, rather than trade mark law. In the UK the common law action of Passing Off would be where protection would be sought[xv].
 
In the US, protection against dilution has, since the Federal Trademark Dilution Act (1995),[xvi] been available on a Federal level to protect ‘famous’ marks i.e. marks “widely recognised by the general consuming public of the United States” against ‘dilution by blurring’ (impairing the distinctiveness of the famous mark) and ‘dilution by tarnishment’ (harming the reputation of the mark). The father of the doctrine of dilution in American jurisprudence is Frank Schechter, whose focus was on ‘blurring, the ‘gradual whittling away or dispersion of the identity and hold upon the public mind' when a mark begins to signify various things from various sources instead of a single thing from a single source. The selling power of a mark, he wrote, depends on its uniqueness and singularity, this being vitiated or impaired by its use on non-related goods, one example being if ROLLS ROYCE were to be used on cafeteria or on trousers. Schechter was not concerned with famous marks but marks with ‘uniqueness and singularity’, namely those which are ‘arbitrary, coined or fanciful.’[xvii] A year after Schechter’s work was published, US Judge Learned Hand noted:
“... it has of recent years been recognised that a merchant may have a sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner’s reputation, whose quality no longer lies within his own control. This is an injury, even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it has come to be recognised that unless the borrower’s use is so foreign to the owner’s as to insure against any identification of the two, it is unlawful.”[xviii]
Reflecting the move towards extended protection for famous household marks only,  the INTA President Anne Gundelfinger, in a testimony before US Congress in relation to the 2006 Amendment to the Lanham Act, made clear that: “Dilution protection was never meant for the average trademark. It was intended to provide extraordinary protection for extraordinary marks”.[xix]
Tarnishment, by contrast, harmed the image or reputation of a mark (injury to business reputation).[xx] An example frequently cited in the European Court is the Claeryn / Klarein decision of the Benelux Court of Justice . Claeryn was the mark for a Dutch gin, and “Klarein”, the defendant’s mark, for a liquid detergent. Both marks were pronounced identically. Since the similarity between the two marks might cause consumers to think of detergent when drinking “Claeryn” gin, its power of attraction now having been harmed, the “Klarein” mark was held to infringe.[xxi]
 US terminology and case law, although from a different legal context, has influenced Europe, and these terms are freely used and discussed in European and UK courts, the latest being in Intel and L’Oréal[xxii]. However, European case law is different from that of the States. In the Directive, dilution is expressed in terms of ‘detriment to the distinctive character’ or the ‘repute’ of the trade mark. Also, what is protected is not ‘famous marks’ but marks having ‘a reputation’, these having a lower threshold of knowledge or a more ‘niche’ fame than what is currently required in US law. In addition, taking ‘unfair advantage’ is prohibited under European law – which, as now has been clarified in L’Oréal , does not require proof of actual or likely harm , but is a misappropriation or unfair ‘riding on the coat tails’ of the mark with a reputationin order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image.” In Europe we have now a more developed sense of the social dimensions of marks protectable under Art 5(2), where in addition to the essential function of guaranteeing to consumers the origin of goods, other derivative functions might be protectable which give value to the mark, such as communicating a lifestyle message or an image of the product or company.[xxiii] These values provide the reasoning why trade mark owners legitimately seek more extended protection for their marks.
The EU Directive 5(2) is not a mandatory provision. The Community Trade Mark Regulation and the laws of most EU countries have implemented this provision as mandatory.[xxiv]
Paris Convention and TRIPS
 
Turning to well known marks in the Paris Convention sense, Article 6bis does not extend protection to non-competing goods for unregistered well known marks. This was long seen by brand owners as a serious limitation to the protection of their marks abroad. In 1954 AIPPI (International Association for the Protection of Industrial Property), at an international congress in Brussels, adopted a resolution to seek revision of Article 6bis such that protection be extended to ‘products which are not identical or similar’ if there is either ‘a risk of confusion’ or an ‘unjust advantage’ or a ‘substantial weakening of the distinctive character or the attractiveness of the mark’. The proposal did not go anyway at that time.
 

TRIPS 16(3), however, did go much further towards this type of protection:  Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.

 

 

 

 

This provision, which is a minimal level of protection required of signatories, provides protection for owners of well known marks that are registered ,[xxv] requiring that there be a ‘connection’ between the marks which is damaging to the owner.[xxvi] In so far as this does not provide protection for unregistered marks, it does not fully extend the scope of Article 6bis, despite making reference to it.[xxvii] What it does do is require Member States to provide an exception to the specialty principle for marks that are of high reputation, applying at least the criteria set out in Article 16(2), in those Member states where such provision for registered marks hitherto had not existed (such as, for example, China).[xxviii] The European Directive, likewise, only provides an exception to the principle of specialty (on an optional basis) in Article 5(2)toregistered trade marks, whether or not well known, since the Directive’s purpose is precisely to seek harmonisation of the laws of the European Member States in respect of registered marks (not unregistered).[xxix] This has also recently been confirmed by the European Court.[xxx]
 
Neither Art 6bis of the Paris Convention, nor TRIPS Article 16, therefore, provide well known (or ‘famous’) unregistered trade marks with any mandatory protection with regard to non-competing or dissimilar goods or services
 
Conscious of this hiatus in international law, WIPO in its Joint Recommendation provides for extended protection for both registered and unregistered marks, thereby expanding TRIPS 16(3) and at the same time including a dilution and unfair competition provision taken from the European Harmonisation Directive. It also provides for a higher threshold for those countries, like the US, that would prefer to keep this special exception to the principle of specialty for only a few marks with exceptional reputation or fame.[xxxi]
 



[i] See note xxxiv, above. Cf. The Advocate General’s Opinion in FINCAS TARROGONA, par. 41.
[ii] Alfredo Nieto Nuño v Leonci Monlleó Franquet (FINCAS TARRAGONA), Case C‑328/06: 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.  The phrasing here is a little surprising given that the question was to do with an unregistered mark. Indeed, the Advocate General’s opinion, which was not followed, shows this change of emphasis:  “Article 4(2)(d)... must be interpreted as not precluding the application of the grounds for refusal of registration of a mark and the grounds of invalidity of a mark provided for therein even where the earlier mark in question, used but not registered in a Member State, is well known not throughout the territory of the State or a substantial part of it but only in a more limited geographical area.” The Court, instead, relocated the discussion of unregistered marks to other provisions within the Directive and gave a general ruling for what appears to be registered trade marks . At par. 19 it states: “... it should be noted that an earlier non‑registered mark may, where appropriate, be covered in particular by: –  Article 4(4)(b) of the Directive, which allows a Member State to provide that a trade mark is not to be registered or, if registered, is not to be liable to be declared invalid where and to the extent that the rights of a non‑registered trade mark were acquired earlier and that that non‑registered mark confers on its proprietor the right to prohibit the use of a subsequent trade mark; –  Article 6(2) of the Directive 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.” The Court does not, in this writer’s opinion, actually exactly answer the referred question which was not concerned with registered rights. Perhaps one reason is that this was because there is no community harmonisation of unregistered trade mark law and the court did not intend to start the process?
[iii] Although the Court did not, unlike GENERAL MOTORS, refer to the ‘public concerned for the goods and services’, this meaning is probably to be inferred. In the latter the Court stated: Article 5(2) of the Directive is to be interpreted as meaning that, in order to enjoy protection extending to non-similar products or services, a registered trade mark must be known by a significant part of the public concerned by the products or services which it covers. In the Benelux territory, it is sufficient for the registered trade mark to be known by a significant part of the public concerned in a substantial part of that territory, which part may consist of a part of one of the countries composing that territory. Comment:It may well be that this court determination has gone a long way in helping to shape the present coalescence of the concept of ‘having a reputation’ and ‘well known’ as discussed above. Note also that in FINCAS TARRAGONA, the Court did
[iv] Case C-301/07 PAGO International GmbH v Tirol Milch. Reference for a preliminary ruling, 59: “What constitutes a substantial part of the Community ... is not dependent on national boundaries but must be determined by an assessment of all the relevant circumstances of the case taking account, in particular, of (i) the public concerned by the products or services covered by the trade mark and the proportion of that public which knows of the mark and (ii) the importance of the area in which the reputation exists, as defined by factors such as its geographical extent, population and economic significance.
[v] Art 2 (1)(c).
[vi] Memorandum, 20.
[vii]Ukraine Annual Report of the State Department for Intellectual Property, 8: In 2007 there was established a system of methodological and organizational back­ground for determining market and other types of intellectual property rights value, were deter­mined the peculiarities of intellectual property rights valuation. The National Standard No. 4 On the Valuation of Economic Intellectual Property Rights was approved by the Resolution of the Cabinet of Ministers of Ukraine of October 3, 2007 No. 1185. It was developed with active participation of the SDIP specialists.The Standard is obligatory to be used by practitioners of valuation activities while esti­mating economic intellectual property rights and by those who review valuation reports. It is also used to assessment of damages caused by Illegal use of intellectual property rights.The Standard sets the system of method­ological and organizational background for determining market and other types of eco­nomic intellectual property rights value, as well as the peculiarities of intellectual property rights valuation. It contains terms and defini­ tions of basic concepts used in valuation process, classification of valuation objects, requirements to the choice of the basis for assessment, main methodological approaches to such objects assessment.”

 

[viii] Notes on Article 2: 2.17. In the Spanish case  Pepsico v Researching and Artistics Creation SL (Provincial Court of Appeals, Valencia, 4 October 2000 no 745/2000, the Court stated that Art 6bis came into play when the mark is well known in its country of origin not in the country of protection.
 
[ix] Art 2 (3)(i)-(iii).
[x] Cf. Hotel Cipriani SRL v Cipriani (Grovesnor Street) Limited, [2008] EWHC 3032 (Ch) at 237; Le Mans Autoparts Ltd’s Trade Mark Application (O/012/05), 59.
[xi] For example Ukraine, Article 25 (2) of the Law of Ukraine on the Protection of rights to marks for goods and services, where Article 2(1)(b)1-6 of the Joint recommendation is transcribed exactly. The Baltic States have similarly incorporated this part of the guidelines into their legislation.
 
[xii] Memorandum, 38.
[xiv] Case C-498/01 Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd
[xv] In 1893 Eastman Photographic Materials Company obtained an injunction against the unauthorised use of KODAK in relation to bicycles in the UK: (Eastman Photographic Materials Co Ltd v John Griffiths Cycle Corpn Ltd (1898) 15 RPC, Ch. HARRODS Limited “the well-known company carrying on a large and extensive business in the Brompton Road”, London, was granted an injunction against R. Harrod Ltd to refrain from carrying on a business of money-lending under that name in the UK:  Harrods Ltd v R Harrod Ltd (1924) 41 RPC 74
[xvi] With subsequent amendment by the Trademark Dilution Revision Act of 2006 – where ‘likelihood’ of harm rather than actual harm was introduced
[xvii] Frank I. Schechter, ‘The rational basis of trademark protection', Harvard Law Review 1927, p. 813.
[xviii] Yale Electronics v Lambda Technology, Inc, 2nd circuit 1928
[xix] Quoted by Ilanah Simon Fhima, The Fame Standard for Dilution in the United States and European Union Compared, 12. 
[xxi] Case A 74/1, judgment of 1 March 1975, Jurisprudence of the Benelux Court of Justice 1975, p. 472. Cited in Advocate General Jacob’s Opinion Case C-408/01 Adidas v Fitnessworld, par38.
[xxii] E.g. L’Oréal par. 39 & 45 of the ECJ Court decision.
[xxiii] See the Advocate General’s Opinion in Case C-487/07 . L’Oréal v Bellure (10 Feb 2009), par 38ff. Also the discussion in HOLYWOOD, Decision of the Third Board of Appeal, 25 April 2001, Case R 283/1999-3, 66-67 and passim.
[xxiv] Estonia, for example, currently does not provide this protection except by virtue of a Community Trade Mark registration with effect in Estonia as part of the EU.
[xxv] Cf. Case T-150/04, Mülhens GmbH & Co. KG v OHIM (TOSCA), par.60. The German Trade Mark Law (October 25, 1994), however, gives such protection to unregistererd marks: sections 4 and 14(2)3.
[xxvi] This has certain similarities with Article 5(2) of the EU Directive, ‘connection’ being equivalent to the need for a ‘link’ in the sense of Adidas-Salomon and of Case C‑252/07, Intel Corporation Inc v CPM United Kingdom Ltd
[xxvii] It is curious that Article 6bis is referred to at all, since the very purpose of the provioisn was not to introduce the notion of a well known mark (for which it gives not definition) but to provide for protection prior to or outside of registration. Cf. Advocate General’s Opinion in GENERAL MOTORS:, par 32: ...it is useful to consider the terms and purpose of the protection afforded to well-known marks under the Paris Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Article 6 bis of the Paris Convention provides that well-known marks are to be protected against the registration or use of a 'reproduction, an imitation, or a translation, liable to create confusion‘ in respect of identical or similar goods. That protection is extended by Article 16(3) of TRIPs to goods or services which are not similar to those in respect of which the mark is registered, provided that use of the mark would 'indicate a connection between those goods or services and the owner of the registered trade mark and provided that the interests of the owner of the registered trade mark are likely to be damaged by such use‘. The purpose of the protection afforded to well-known marks under those provisions appears to have been to provide special protection for well-known marks against exploitation in countries where they are not yet registered. (emphasis mine)
 
[xxviii] Cf. Al-Leen Lim, “Protecting trade mark rights in China: rapid changes in legislation”, in ITMA Review, 368 (September 2009), 29.
[xxix] In its 9th recital the Directive states: “Whereas it is fundamental, in order to facilitate the free circulation of goods and services, to ensure that henceforth registered trade marks enjoy the same protection under the legal system of all the Member States; whereas this should however not prevent the Member States from granting at their option extensive protection to those trade marks which have a reputation.”
[xxx] TOSCA, ibid, 55.
[xxxi] Art 4 (1)(b) Irrespective of the goods and/or services for which a mark is used, is the subject of an application for registration, or is registered, that mark shall be deemed to be in conflict with a well-known mark where the mark, or an essential part thereof, constitutes a reproduction, an imitation, a translation, or a transliteration of the well-known mark, and where at least one of the following conditions is fulfilled: (i) the use of that mark would indicate a connection between the goods and/or services for which the mark is used, is the subject of an application for registration, or is registered, and the owner of the well-known mark, and would be likely to damage his interests; (ii) the use of that mark is likely to impair or dilute in an unfair manner the distinctive character of the well-known mark; (iii) the use of that mark would take unfair advantage of the distinctive character of the well-known mark. (c) Notwithstanding Article 2(3)(a)(iii), for the purpose of applying paragraph (1)(b)(ii) and (iii), a Member State may require that the well-known mark be well known by the public at large.
 

 First published in the ITMA Review of November 2009