EU Trademark law spreads far beyond the Union external borders

Fabio Angelini

One of the mainstays of IP law is that of “territoriality”. Meaning that each country has its own laws and does not care much of what other countries say, unless, as it is in the case of the EU, Harmonization Directives or Regulations basically wipe out internal rules.

However, and quite interestingly, EU-based case law is beginning to influence and contaminate more and more global trademark laws and the way these laws are practically implemented. Certainly, it helps a lot that UK is part of the Union and therefore it is a legal system to which common law countries once part of or still member of the British Commonwealth look up in order to find a reference or a principle or set of principles or guidances to resolve their own cases. But if the principles and solutions adopted by the European Court of Justice did not appear sound and reasonable they would not be followed or used as guidance.

The case in question regards New Zealand which I find to be the furthest country from Europe one can find and is reported in the latest INTA Bullettin by Nick Holmes, of Davies Collison Cave, Melbourne, Australia. Thanks Nick.

Basically, Ferrero, owner of TIC-TAC for mints had argued that registration of the TICK TOCK by Wistbray for tea would contravene Section 25(1)(c) of the Trade Marks Act, which essentially relates to well-known marks. However, on appeal the Court found that the earlier decision did not explain whether use of the TICK TOCK mark for tea would “be taken as indicating a connection in the course of trade” between Wistbray’s tea and Ferrero’s TIC TAC mints. To determine what is required for there to be “a connection in the course of trade,” the New Zealand court looked up the reasoning of a UK Court in the Intel Corp. Inc. v. CPM United Kingdom Ltd’s case subsequently appealed to the ECJ. According to the New Zealand court, this case provided “a useful contemporary analysis on the requirements under subsection 25(1)(c)."

The New Zealand perhaps went a little too wide, because it held that one should ascertain whether having regard to the nature of the goods or services for which the later mark is used, the average consumer would consider that there is an economic connectionbetween the owners of the two marks and whether the distinctiveness or repute of the earlier mark for the goods or services for which it is registered is really likely to be affected if the later mark is used for the specific goods or services covered by its registration (emphasis in original). The New Zealand Court’s approach may sound a little harsh to the many who believe that trademark rights are bestowed to trademark owners as inherent and majestically given, but basically has my endorsement: “trade mark law is there to protect a proper system of competition, not to provide trade mark owners with overreaching rights which may obstruct trade”. In other words, stop with the nonsense.

In applying that double test, the court held that the dissimilarity between tea and mints was a strong indication there was not a trade connection between TICK TOCK tea and TIC TAC mints. Even though New Zealand consumers “might well have TIC TAC ‘brought to mind’ when confronted with TICK TOCK tea,” it’s unlikely that such consumers would “go on and assume from the similarity of name that there was a connection between the producers of the dissimilar products.” Then, demonstrating a concern that trademark owners may be hypersensitive to the existence of similar marks in the wider marketplace, the court went on with the second step to note that “a loyal buyer of TIC TAC mints is hardly likely to think less of that product (or its manufacturer) because of an adverse experience with TICK TOCK tea.” The lower decision was therefore reversed.

A brief comment.

The first step, in itself is sound on its face, but also devious. Of course mints and tea do not give rise to an idea of economical connections between the two manufacturers. But here we are discussing the protection of famous brands which are products insensitive, otherwise they would be protected by the standard likelihood of confusion test. This is why this test is devious. It says too much and does not prove the point. Or, it only gives a “plus” if one can prove the possibility of an economic connection. But if I’m dealing with a famous pharmaceutical like VIAGRA and I want to oppose a VAIAGRA for bathroom appliances, the absence of an economical connection should not preclude me the possibility to assert that VAIAGRA dilutes the distinctive character of VIAGRA.

The second step works only in the context of dilution by tarnishment, but it seemingly ignores dilution by blurring and the taking of an unfair advantage of the distinctive character or repute of the earlier mark. However, in most cases decisions are the results of the arguments made during the proceedings, so we’ll never know if the Court willingly decided to restrict its analysis on the tarnishment or simply the parties failed to raise the other two grounds.