Trademarks, Brands, Patents, Designs, Made in Italy, Copyrights, Competition Law, Contracts and Enforcement

17 gennaio 2008

Descriptive marks, even if well known, must bow to public interest the ECJ Advocate General's opinion on Adidas says

Fabio Angelini

The long awaited (at least by me) opinion by the ECJ Advocate General on the case C‑102/07, Adidas AG and Adidas Benelux BV v. Marca Mode CV, C&A Nederland, H&M Hennes & Mauritz Netherlands BV and Vendex KBB Nederland BV, has been issued on January 16, 2008.

With a somewhat surprising “middle of the road” opinion the AG Dámaso Ruiz-Jarabo Colomer has affirmed that:

1. while for originally non distinctive (due to their descriptive character) marks even an acquired distinctiveness or an elevate degree of renown cannot cure their original (I called it the genetic) defect, so that the public interest prevents their owners to oppose use of similarly descriptive marks,

2. for marks which were originally non distinctive for reasons others than descriptiveness (like in the case at hand, i.e. three stripes with little or none imaginative content) but have then become distinctive and well known due to the efforts of the TM owner, to deny protection against similar marks (two stripes, four stripes), would frustrate the Directive’s objective and rational, since there is no really public interest in keeping free signs which are per sè incapable to communicate to the consumers the origin or the qualities of the goods and services.

If confirmed by the ECJ the impact of this opinion may be a blow to the enforcement of many originally descriptive trademarks which have lately become well known through intense use and promotional investments and which now will see the possibility to oppose other similar marks severely curtailed. On the other hand, figurative marks and arbitrary marks should see the extent of protections quite enlarged.

The facts underlying the case are fairly straightforward. Adidas is famous for its three-stripe trademarks and owns many registered trademarks in this respect. When it became aware that several clothing companies were using a two-stripe pattern, it sought a court order to prevent them from marketing clothing with the three-stripe pattern or a similar pattern, such as the two-stripe pattern. The Dutch Court of Appeal decided that because of the repute of the three-stripe mark, its scope of protection was broad. Although initially the mark was not very distinctive, it had acquired distinctiveness through use.

However, the Court of Appeal also stated that the broad scope of protection did not mean that other stripe patterns fell within this scope. To that end, it stated that such patterns are common and should be available for third parties. Adidas appealed from this judgment to the Dutch Supreme Court, essentially disputing the role assigned by the Court of Appeal to the public interest. The Supreme Court decided that clarification from the ECJ was required and submitted a request for a preliminary ruling on three questions, the most important of which is whether or not the public interest (in not unduly restricting the use of certain signs by competitors) should influence the scope of protection of a trade mark that was not distinctive ab initio or that was strictly descriptive, but has acquired distinctiveness through use.

The AG’s opinion starts by recognizing that as a matter of law a sign that lacks distinctive character, can nevertheless acquire distinctiveness through use. Such a sign can therefore become a valid trade mark, able to denote the origin of products and/or services. However, this may come into conflict with the German based theory of "Freihältebedürfnis" (the need to keep certain signs free for use by all) which was already examined by the ECJ in its famous Chiemsee decision (cases C‑108/97 e C‑109/98, Windsurfing Chiemsee of May 4, 1999).

The AG declines to give a straight answer to the compatibility of the Freihältebedürfnis with EU law, but essentially denies that Freihältebedürfnis may be applied across the board. For the AG, there is a difference between non distinctive marks by reason of descriptiveness (i.e. when the sign falls into art. 3(1) (c) of the Directive) and non distinctive marks for other reasons (i.e. when the sign falls into 3(1) (b)). While the for the former no matter what, the TM owner cannot really expect to own a concept, for the latter, the efforts of the owner to “characterize” its mark and make the consumer aware of the nature of mark of a certain non originally distinctive mark should not be parasitized by third parties and accordingly Freihältebedürfnis should only apply to originally descriptive marks.

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