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intel ruling restricts protection for famous brands

2 December 2008

This case was a reference from the UKs Court of Appeal, principally concerning the extent of which famous brands (trade marks with a reputation) may be protected against dilution. In what is likely to be a defining decision on the ability of the famous brand owner to enjoy an extensive exclusion zone which other marks may not enter, the European Court of Justice (ECJ) has most definitely denied absolute trade mark protection for the super brand.

Background

Intel, the world famous computer chip manufacturer had failed to convince the lower UK Courts to invalidate the trade mark Intelmark held since 1997 by CPM United Kingdom Ltd in Class 35 for marketing and telemarketing services. Intel had registrations for the mark Intel in Classes 9, 16, 38 and 42 for computers and computer linked goods and services. The Court of Appeal asked a number of questions of the ECJ which Advocate General Sharpston back in June 2008 had summarised as follows:

"What factors are to be taken into account when assessing, and what is needed in order to establish:

  1. A link (a test previously established in Adidas v Salomon AG, the Fitness World Case) in the mind of the relevant public
  2. Unfair advantage taken of the distinctiveness or repute of the earlier mark (free-riding)
  3. Detriment to distinctiveness (blurring) and
  4. Detriment to repute (tarnishment)"

Lord Justice Jacob in making the reference to the ECJ had not hidden the fact that he had reservations about Intel (and consequently any famous brand owner) obtaining such a broad trade mark protection in areas in which it did not trade. He had also commented that a link in the mind of the relevant public should be more than a "tenuous association between the two marks". His view was that if a trade mark for particular goods or services is truly distinctive, it would be robust enough to withstand a mere passing bringing to mind when it or a similar mark is used for dissimilar goods or services.

Sharpston AG back in June 2008 had already opined that, a "huge reputation" for specific goods or services, the fact that an earlier mark was unique or that the goods or services covered by the later mark were dissimilar, was insufficient to establish detriment to distinctive character. However, in what is perhaps the most controversial element of the ECJs decision, the ECJ disagreed with her on one fundamental point, deciding that, in order to establish detriment or dilution of the earlier mark, the super brand owner is required to show a negative change (or a serious likelihood of such a change) in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered.

In summary:

  1. Existence of a link must be assessed globally, taking into account all relevant factors with evidence that the reasonable and circumspect consumer had brought into mind the earlier mark with the reputation being tantamount to establishment of a link
  2. Consistent with the Advocate Generals opinion, the fact that the earlier mark has a huge reputation, is unique in respect of any goods or services, or the fact that the goods or services for which the later mark is registered does not necessarily imply a link
  3. Whether a later mark takes unfair advantage of distinctive character or repute (free-riding) must be assessed globally taking into account all relevant factors. There was no real guidance given on this point but the long awaited decision in Loreal v Bellure may shed some light on this point.
  4. The use of the later mark may be detrimental to the distinctive character of the earlier mark with the reputation even if the mark is not unique; first use may be sufficient to be detrimental to the distinctive character; and proof that use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence or evidence of a serious likelihood of negative change in the economic behaviour of the average consumer of goods or services for which the earlier mark was registered

Conclusion

Famous brand owners when trying to establish the dilution or blurring of their mark, will now need to go much further than establishing the so-called mental link in the mind of the average consumer of goods or services covered by their mark and those covered by the later mark. Intel had argued that dilution should automatically be actionable on the first use of the later mark rather than once the impact of the first use became clear months or years later; death by a thousand cuts. Paradoxically, the ECJ agreed, while at the same time requiring evidence of a negative change or serious likelihood of negative change in the economic behaviour of the average consumer which is not likely until the detrimental effects of dilution have already taken place (usually over a period of time). The position would now appear to be if the average consumer continues to buy the same volume of the famous brand owners goods as before, then there is unlikely to be any dilution.

The result of this decision is that no brand owners, no matter how famous can expect automatically to prevent third parties from using their mark on dissimilar goods and services. It is now up to the famous brand owner to establish a link and, at least in the case where detriment to distinctive character is claimed, provide hard evidence of damage

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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