|The new European Union Trade Mark Regulation (the “Regulation,” which replaces the existing Community trade mark (CTM) Regulation) and the recast Trade Marks Directive (TMD), which harmonizes the national trademark laws of EU member states), both provide for new limitations of the rights conferred by a trademark.
The relevant provisions can be found in Article 12 of the Regulation and Article 14 of the TMD. The wording of these two provisions is widely identical and will result in significant changes for trademark owners. They deal with the following situations:
The text of Article 12 of the new Regulation reads as follows:
- The “own name defense”;
- The use of descriptive terms;
- Referential use, e.g. spare parts.
“Article 12: Limitation of the effects of an EU trade mark.
The underlined terms are new in relation to the current version of this provision.
- An EU trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade:
- the name or address of the third party, where the third party is a natural person;
- signs or indications which are not distinctive or which concern the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of the goods or services;
- the EU trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark, in particular, where the use of that trade mark is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts.
- Paragraph 1 shall only apply where the use made by the third party is in accordance with honest practices in industrial or commercial matters.”
1. The “Own Name Defense”
So far, existing Article 12 refers to “his own name or address.” This provision has been interpreted by the CJEU to include not only personal names but also trade names and company names (CJEU C-245/02, judgment of November 16, 2004, No. 81 – Anheuser-Busch). Based on this CJEU decision, trademark courts in EU Member States have applied the fair use provision also to company names irrespective of whether the rights as to the company name were established prior to the plaintiff’s trademark right or not. The CJEU case law had shifted the discussion entirely to the requirement of existing Article 12(2), i.e. “in accordance with honest practices in industrial or commercial matters.” Thus, trademark owners often could not enforce their trademark against the use of an identical or similar company name, also in cases where the right to the company name had been established only after the priority date of the trademark.
The new Regulation and the corresponding provision in the Directive will change that situation. After the entry into force of the new provisions, the own name defense will be limited to personal names or addresses of a natural person. This is a welcome amendment that will lead to more legal certainty and harmonization among EU Member States.
2. Use of Descriptive Terms
The new text is no longer limited to the use of descriptive terms, but covers generally also nondistinctive signs. This amendment mirrors the provisions on absolute grounds for refusal of a trademark application in Article 7 of the current CTM Regulation. According to this provision, not only will descriptive terms be unregistrable, but also trademarks which are devoid of any distinctive character. There may be cases in which a registered word trademark is similar to a nondistinctive term and the trademark owner might try to enforce its trademark against the use of this non-distinctive sign. In such a situation the trademark only enjoys protection because and insofar as it is different from the nondistinctive term. It is therefore a logical step to extend the fair use provisions also to the use of nondistinctive signs.
3. Referential Use
The text of Article 12 of the Regulation has been amended by adding “for the purpose of identifying or referring to goods or services as those of the proprietor of that trademark.” According to the Explanatory Memorandum of the European Commission published in March 2013, this amendment is a limitation which shall take into account the ruling of the CJEU of June 12, 2008, case C-533/06, 02. In this decision the CJEU stated that the use of a trademark as identification of the trademark owner’s own goods may constitute use of the mark in relation to a third party’s goods.
4. Parody, Artistic Expression and Freedom of Expression, Parallel Imports and Use to Show an Alternative Product or Service
During the legislative process, the European Parliament proposed further amendments to this provision that would have justified the fair use defense in cases of use to show an alternative product or service (trying to inadequately codify the CJEU Interflora case C-323/09), parallel imports (also trying to inadequately codify the CJEU Parfums Christian Dior case C337/95) and use for the purpose of parody, artistic expression, criticism and comment.
INTA strongly opposed these proposed amendments of the Parliament. In particular, the reference to “parody” and “comments” would have permitted such uses in the course of trade. It would have opened the way even for use of famous trademarks for goods in a manner which could have been detrimental to the reputation of a trademark. Such uses should continue to constitute a trademark infringement, even if the defendant claims this to be a “joke.” It is good news for trademark owners that this part of the proposed text of the EU Parliament has not been included in the final compromise text.
Vestiges of this idea can, however, still be found in the recitals of the new instruments. Both Recital 21 of the Regulation and Recital 27 of the TMD mention the resale of genuine goods, artistic expression and the respect for fundamental rights and freedom.
Recital 21 of the Regulation reads as follows:
(21) The exclusive rights conferred by an EU trade mark should not entitle the proprietor to prohibit the use of signs or indications by third parties which are used fairly and thus in accordance with honest practices in industrial and commercial matters.
In order to create equal conditions for trade names and EU trade marks in the event of conflicts, given that trade names are regularly granted unrestricted protection against later trade marks, such use should be only considered to include the use of personal name of the third party. It should further permit the use of descriptive or non-distinctive signs or indications in general. Furthermore, the proprietor should not be entitled to prevent the fair and honest use of the EU trade mark for the purpose of identifying or referring to the goods or services as those of the proprietor.
Use of a trade mark by third parties to draw the consumer’s attention to the resale of genuine goods that were originally sold by or with the consent of the proprietor of the EU trade mark in the Union should be considered as being fair as long as it is as at the same time in accordance with honest practices in industrial and commercial matters.
Use of a trade mark by third parties for the purpose of artistic expression should be considered as being fair as long as it is at the same time in accordance with honest practices in industrial and commercial matters. Furthermore, this Regulation should be applied in a way that ensures full respect for fundamental rights and freedoms, and in particular the freedom of expression.”
Recital 21 introduces new concepts that will need to be interpreted by the courts, in light of other concepts traditionally linked with copyrights, such as respect for the freedom of expression. Courts will need to address the definition of fair use in this particular context. For instance, would a sign “used fairly” be automatically considered as “in accordance with honest practices”? This seems inconsistent with another reference in the Recital to use “being fair as long as it is at the same time in accordance with honest practices,” which gives the impression that use may be one but not the other. The courts will also need to interpret the difficult concept of fair use in industrial and commercial matters for the purpose of artistic expression,
In conclusion, trademark owners should anticipate some changes regarding the fair use exception in trademark infringement proceedings in the EU. Some aspects of the provisions have been clarified, but it remains to be seen how national courts and the CJEU will apply new concepts embedded in the provisions.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.
© 2015 International Trademark Association