Autumn a golden season for Interflora

Pumpkin by Flowers by Walter

As summer gives way to autumn and the golden leaves tumble, the prettiest flowers are those that come the florists -- which brings the IPKat on to today's decision in Case C-323/09 Interflora Inc and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Limited, a reference to the Court of the European Union (ECJ) for a preliminary ruling from the High Court of Justice of England and Wales.

Essentially, the problem here was that Marks & Spencer bought the word 'interflora' as a keyword for Google's AdWord paid referencing service, so that people who were looking for the world-famous Interflora flower delivery service would find an advertisement for Marks & Spencer's rival service at the top of the non-organic, paid-for search results. This did not make Interflora very happy since (i) they were proprietors of the hugely famous INTERFLORA trade mark, (ii) internet users who keyed in "interflora" as a search term were obviously looking for their website and not Marks & Spencer and (iii) worst of all, this was just before the onset of St Valentine's Day, which is one of the biggest events of the year for the flower trade. This just had to be trade mark infringement, said Interflora. The ECJ's ruling in Google France that neither the sale nor the use of terms protected by trade marks as keywords constituted a per se trade mark infringement didn't help them -- but that was a "5(1)(a)" case, where same goods/same mark (double identity) infringement was alleged. Here Interflora had a '5(2)' argument, based on a use which allegedly damaged the mark's reputation or distinctive character without due cause.

The trial judge, Mr Justice Arnold, painstakingly analysed both the relevant law and the facts, before referring a raft of ten questions for preliminary rulings. Following some helpful correspondence between the referring judge and the ECJ's registry, the ten questions were pruned down and clarified to a miserly four.

Today the Court of Justice ruled as follows:

"1. Article 5(1)(a) of ... Council Directive 89/104 ... and Article 9(1)(a) of Council Regulation ... 40/94 ... must be interpreted as meaning that the proprietor of a trade mark is entitled to prevent a competitor from advertising – on the basis of a keyword which is identical with the trade mark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent – goods or services identical with those for which that mark is registered, where that use is liable to have an adverse effect on one of the functions [which raises the interesting question of how many functions a trade mark has. The Court has identified four by name, but it was reported last week in the MARQUES conference that up to 17 have been identified] of the trade mark. Such use:

– adversely affects the trade mark’s function of indicating origin where the advertising displayed on the basis of that keyword does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services concerned by the advertisement originate from the proprietor of the trade mark or an undertaking economically linked to that proprietor or, on the contrary, originate from a third party;

– does not adversely affect, in the context of an internet referencing service having the characteristics of the service at issue in the main proceedings, the trade mark’s advertising function; and

– adversely affects the trade mark’s investment function if it substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.

2. Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94 must be interpreted as meaning that the proprietor of a trade mark with a reputation is entitled to prevent a competitor from advertising on the basis of a keyword corresponding to that trade mark, which the competitor has, without the proprietor’s consent, selected in an internet referencing service, where the competitor thereby takes unfair advantage of the distinctive character or repute of the trade mark (free-riding) or where the advertising is detrimental to that distinctive character (dilution) or to that repute (tarnishment).[this looks like good news for Interflora ...]

Advertising on the basis of such a keyword is detrimental to the distinctive character of a trade mark with a reputation (dilution) if, for example, it contributes to turning that trade mark into a generic term.["for example"opens the door to a large categories of actually or arguably genericising uses. This will be a litigation growth area, predicts Merpel]

By contrast, the proprietor of a trade mark with a reputation is not entitled to prevent, inter alia, advertisements displayed by competitors on the basis of keywords corresponding to that trade mark, which put forward – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark with a reputation – an alternative to the goods or services of the proprietor of that mark". [while this is expressed as a general principle, the Kat thinks that, in practice, it will become a narrow exception].

This IPKat team member is going to give this some further thought to this ruling and test it out a bit over a refreshing pint of Badger when the opportunity arises. In the meantime, he's quite struck with the relatively intelligible mode of expression of the Court's ruling which seems to him, prima facie, to be about as good as we can hope for when applying twentieth-century pre-internet trade mark legislation to a set of facts that is not provided for by the Directive and Regulation and which is scarcely within the radar of the Recitals.

Coffee wars plunge into shape protection

In the early hours of every morning, this Kat performs a ritual which will be very familiar to some readers. She (a) takes her clean cafetiere from the cupboard; (b) adds two big scoops of ground Italian coffee; (c) adds boiling water; (d) pushes the plunger down and, (e) hopes for the best. Accordingly, she has been reading with interest the recent decision in Australia concerning an alleged case of misleading and deceptive conduct and passing off between two manufacturers of cafetieres.

Peter Bodum A/S ('Bodum'), a Danish company, was founded in 1944. Since at least April 1986, Bodum widely advertised the Bodum Chambord Coffee Plunger (BCCP) and made substantial sales in Australia. The BCCP possessed a number of readily identified and reasonably distinctive features, being marked with the Bodum name in a number of places. When sold it also bore a prominent sticker on which the Bodum logo appeared.

DKSH Australia Pty Limited ('DKSH'), an Australian
company, was a subsidiary of a Swiss company DKSH Holdings Ltd. DKSH imported into Australia, and sold by wholesale, homeware and kitchen products including the Euroline Coffee Plunger. The Euroline Coffee Plunger possessed almost all the same physical features as the BCCP but is not marked in the same way. When sold it carried a sticker on its base which says 'Made in Taiwan'.

Not surprisingly, Bodum was far from pleased by DKSH's Euroline Coffee Plunger product on account of its similarities to the BCCP. It commenced actions for misleading and deceptive conduct under ss 52 and 53 of the Trade Practices Act 1974 and for passing off in the Federal Court. In particular, Bodum contended that the BCCP is packaged for sale in packaging that prominently depicts a photograph of the coffee plunger, thus giving prominence and emphasis to the design features of the plunger within, rendering, it is said, the packaging, in a practical sense, transparent to the consumer. According to Bodum, it had acquired a substantial and valuable reputation in the features and distinctive shape of the BCCP -- which meant that the sale in Australia of coffee plungers which embody those features (or a significant number of them) and the shape signifies to consumers that such a coffee plunger is the BCCP or is otherwise authorised by Bodum. Finally, Bodum contended that (independent of trade marks) a secondary meaning or independent reputation can subsist in the features and shape of an article or the get-up for a product which operates to associate products of that shape or those features in the mind of consumers with a particular trader although it is not necessary that the consumer knows the name of that trader.

At first instance in the Federal Court Justice Middleton found that DKSH had not engaged in misleading or deceptive conduct or passing off by marketing and selling its Euroline coffee plunger: Playcorp Group of Companies Pty Ltd v Peter Bodum A/S [2010] FCA 23. At [82] he stated:

'I should state from the outset that while I am of the view that the Bodum brand itself has a significant reputation in the homewares/ housewares market, I do not consider that Bodum has the secondary meaning or reputation in the Bodum Chambord Coffee Plunger ... features it identifies. I consider that Bodum’s reputation is distinctly tied to its products being properly labelled and sold in conjunction with reinforcing packaging and, significantly, by reference to the Bodum name. Bodum’s reputation does not exist in the naked Coffee Plunger features ... (without its logo in place) alone. If I am wrong about this, and if Bodum does have a secondary reputation in the features alone, then I am not satisfied that the accused products ... in the way they are packaged or exposed to potential customers in Australia are sufficiently similar to give rise to the misrepresentation alleged by Bodum'.

Bodum appealed to the Full Court of the Federal Court, being was critical of Middleton J's findings that the BCCP had not acquired a secondary meaning or independent reputation. In particular, it submitted (at [66]) that Middleton J 'did not look at the vast body of advertising material put in evidence and relied upon by Bodum as the foundation of its secondary meaning or independent reputation for the features of the product'.

A majority of the Full Federal Court (Greenwood and Tracey JJ; Buchanan J in dissent) reversed the decision of Middleton J and found in favour of Bodum: Bodum v DKSH Australia Pty Ltd [2011] FCAFC 98.

So what changed?

Writing the majority judgment, Greenwood J reviewed the relevant advertising material and was satisfied (at [197]) that

'the evidence establishes a very significant secondary reputation in the features of the Bodum Chambord Coffee Plunger associated in the mind of consumers with Bodum as the manufacturer of the product and, with respect to the primary judge, that reputation is not “distinctly tied” to Bodum in the sense that in the absence of the name Bodum there cannot be a secondary reputation in the features of the product'.

On this basis, according to Greenwood J (at [198]), the real question in the case is 'whether DKSH has done enough having regard to all the relevant differentiation factors to distinguish its rival product from the Bodum product'. Greenwood J answered the question in the negative. His Honour considered that:

• The BCCP enjoyed a substantial or significant reputation by reference to its features and shape (at [220]).


• 'Sales' of the BCCP were substantial, 'dwarfing the respective sales of ... DKSH' (at [222]).


• DKSH had not undertaken any retail advertising of its Euroline Coffee Plunger during 2008 or 2009 (at [223]).


• BCCP's features were 'strikingly similar' to the EuroLine Coffee Plunger (at [225]). Further, 'for all practical purposes, the overall appearance of the two products is the same' (at [227]).


• The Euroline Coffee Plunger had no branding, such as symbol, name or logo, on the product itself (at [231]). The branding was only on the packaging and this was not sufficient.
  


• The Euroline brand was 'not well known', being an 'unknown brand' (at [235]). It was 'not distinctive' and was thus 'very likely to be regarded as an abbreviated description of a product having a provenance as a product within a line of European products' (at [236]).

Having regard to these factors Greenwood J found (at [236]) 'it difficult to accept that DKSH has distinguished its product'.

This Kat says this decision should be welcomed by those seeking to rely on misleading and deceptive conduct and passing off claims to protect their product designs or 'get up'. However, he wonders whether the decision could mark the start of a slippery slope for seeking quasi protection for shapes rather than obtaining a registered trade mark or design.

Merpel, rather cheekily, questions whether the following cartoon (as shown on the Bodum website when trumpeting its success against DKSH) is the best way to encapsulate the majority decision of the Full Federal Court...

When Edge is on the brink ...

Overwhelmed by the sheer excitement of living-- and by the pile of examination scripts which piteously mew "let me pass, let me pass!" -- this Kat has only just got round to writing up the decision of Mrs Justice Proudman, of the Chancery Division (England and Wales) in Future Publishing Ltd v Edge Interactive Media Inc, Edge Games Inc and Dr Timothy Langdell [2011] EWHC 1489 (Ch), the sort of case which makes this Kat at any rate very pleased he doesn't have to deal with litigants in person (as was the third defendant in this case), despite his fabled patience. The Kat would probably have left it for a bit longer, were it not for a nudge from Mike Lynd (Mark & Clerk).

The facts go back a long way, almost to the dawn of computer games.  Future published various computer gaming magazines, one of which was EDGE.  A popular read with the British games community since its launch in 1993, EDGE bore a logo in which the two letters 'E' extended the cross bar on the left hand side, with a corresponding shortening on the right, and there was a sharp scalpel-like point at the edge of the extension (you can see what it looks like here, on the right). EDGE had a large circulation and its website was visited by over 400,000 visitors every month. Many jobs in the computer gaming industry were advertised in its pages, it had many corporate subscribers and it won a number of awards over the years, including Games Magazine of the Year 2008’.

But now we're jumping the gun. Returning to the 1980s and early 1990s one Dr Timothy Langdell -- who exclusively controlled the first and second defendant companies (EIM and EGI) -- ran a business which composed games software initially as Softek and subsequently as Edge. Langdell was at that time well known for pursuing third parties who used the name ‘Edge’ and sought payment of licence fees, failing which he pursued them for damages for trade mark infringement [Says Merpel, are you trying to tell me that there were trade mark trolls even back in the previous century?]. Langdell was a United States resident and the first and second defendant companies were incorporated in the United States.

In 1993 Langdell commenced passing-off proceedings against Future, alleging that he held unregistered rights in the trade mark EDGE and, in 1994, Langdell applied to register the word EDGE in the UK as a trade mark for printed matter, including gaming magazines, in Class 16. The action was stayed pending payment by Langdell of security for costs and the proceedings were settled by an agreement dated 4 December 1996, by which time Future, as well as EIM, had applied to register the word EDGE for printed matter in Class 16.

Under this agreement EIM would keep its registered mark and would be given Future’s trade mark application in return for a royalty-free licence under which Future would be permitted to use the mark EDGE in relation to EDGE magazine in any form; Future was also to pay EIM £20,000. In return, EIM agreed not to publish or license any other party to publish a magazine substantially similar to EDGE magazine under the name EDGE or under any colourably similar mark. In addition, EIM agreed not to assert the existence of any association or connection with EDGE magazine or with Future save that, in response to an unsolicited request, EIM could confirm that it had licensed the mark EDGE to Future in relation to EDGE magazine.

Cat on the edge, or is it the e***?

As the success of EDGE magazine grew, Langdell’s behaviour became increasingly burdensome to Future, which sought to abrogate the licensing agreement and to buy all the necessary trade marks from the defendants. The mechanism for achieving this was a Concurrent Trading Agreement (the ‘CTA’) between Future on the one side and EIM and Langdell on the other, and a separate deed between the same parties. The main effect of these instruments was to assign to Future those parts of the trade marks owned by EIM which included the word EDGE, and which covered EDGE magazine. The assignment included all rights in the agreed part of the trade marks, including all goodwill attaching to the use of the agreed part of the trade marks and all rights of action, powers and benefits arising from ownership of the agreed part. The CTA defined 'trade marks' as including not only registered trade marks but also all unregistered trade mark rights of EIM in relation to those marks. Under Clause 2.4 of the CTA, EIM undertook not to permit the use by any other person of any of the trade marks in a way which was or could reasonably cause confusion with Future’s use of them.

Langdell, EIM and EGI subsequently used three versions of an EDGE logo, each of which was based on a stretched version of the Franklin Gothic or Helvetica fonts. In all three cases, the slashed middle bar of the 'E' was retained, as well as the stretching effect of the letters. Future accordingly commenced proceedings against all three defendants, claiming breach of contract, infringement of copyright and passing off.

In this action Mrs Justice Proudman was asked to determine among other things, (i) whether the breaches of the CTA and the deed by EIM and Langdell were fundamental breaches of contract and, if so, whether Future had accepted the repudiation. That was an important issue since the claimant was restricted by the CTA from using the mark EDGE for any purpose other than the publication of computer game magazines and certain ancillary uses, (ii) whether Future’s passing off claim was justified and (iii) whether all of EIM’s registered trade marks were invalid for non-use under the Trade Marks Act 1994, s.46.

Proudman J allowed all Future's claims.

First, she concluded that the breaches of contract by the defendants were fundamental and entitled Future to repudiate: they had been deliberately calculated to cause confusion, which necessarily caused substantial damage to Future's reputation. The assignment to Future of the goodwill and registered trade mark rights in the name EDGE and the payments made by Future to EIM and Langdell did not prevent termination of the CTA so far as the future (with a small 'f') was concerned: each side was entitled to retain the benefits which it had already received. By its conduct, Future, having accepted the breaches as being repudiatory in their nature, was thus entitled to treat the contract as being at an end on account.

The passing off claim succeded too.  The judge was content to assume the existence of damage where the goodwill associated with Future’s title was being used and eroded by the defendants’ actions. On the facts, Langdell had sought to appropriate for his own business the goodwill associated with EDGE magazine by making statements which led the public to believe that EIM was responsible for that magazine or that EIM’s games were in some way approved or authorised by it.  Accordingly the pleaded breaches of the CTA which were committed within the jurisdiction of the court also comprised acts of passing off as representations which were likely to lead to confusion. Additionally, being associated with EIM was likely to cause serious damage to Future and to EDGE magazine.

The copyright infringement claim was also upheld.  All three versions of the EDGE logo used by the defendants were copies which infringed Future’s copyright. Langdell’s defence was that he had in fact invented the EDGE logo in 1991. That claim would be rejected on the basis that the evidence given by Future’s creative director that he had designed the logo for the magazine in the course of his employment and that he had been unaware of the existence of any logo used by Langdell at that time. This evidence had not been seriously challenged in cross-examination.

Since the defendants' infringing acts had taken place within the jurisdiction of the court and Langdell had continued to threaten to infringe copyright through use of the EDGE logo, an injunction was both justified and appropriate.

Finally, since on the facts there was no cogent evidence that the defendants had any presence in the United Kingdom market during the relevant period for the purposes of non-use of a trade mark over a continuous period of five years, the defendants' mark would be revoked.

The IPKat believes that every creator of a brand or trade name is entitled to protection against its misappropriation by others, but is deeply saddened by litigation such as this which results from the apparent abuse of the mechanism of a concurrent trading live-and-let-live agreement.

Are you living too close to the edge? here
Timothy Langdell and trade mark trolling here, here, here and here

Laughing all the way to the Banksy? Graffiti guru opts for tapioca trade mark

Banksy's cat -- or is it a rat? 

Love him or loathe him, the mysterious Banksy is an entertaining and provocative feature of the modern art scene. His highly contemporary, politically pointed and generally well-executed graffiti -- often containing his signature rat -- are a vibrant, satirical contribution to debate and a great way to force us all to confront our own prejudices and cherished beliefs.

Every popular cultural icon -- and Banksy is no exception -- has to face a choice between the following options:

• cash in on one's output and exploit it commercially;
• ignore the commercial dimension of one's reputation and output and refuse to be part of the system that creates this commerciality;
• dabble in the protection and commercialisation of one's name and reputation, but justify it on moral, not commercial, grounds.

Banksy's own position can be seen from the statement on his website:

"You're welcome to download whatever you wish from this site for personal use. However, making your own art or merchandise and passing it off as ‘official’ or authentic Banksy artwork is bad and very wrong.

Banksy neither produces or profits from the sale of greeting cards, mugs or photo canvases of his work. He is not represented by any of the commercial galleries that sell his paintings second hand and cannot be found on facebook/twitter/myspace etc.".

Notwithstanding this, Banksy (who trades under cover of Pest Control Office Limited), has been busily filing for trade mark protection with the UK's Intellectual Property Office (many thanks go to the Kat's friend Edward Smith for spotting this). This company secured, back in 2008, registration of the word BANKSY in no fewer than 20 Classes of goods and services, for, among other things

"Class 03: Cleaning, polishing, scouring and abrasive preparations [Merpel notes how handy these goods can be for, er, removing graffiti];
Class 19: statues and sculptures of stone, concrete or marble [good idea: Banky goes in for sculpture too -- witness The Drinker, parodying Rodin's The Thinker, stolen here]; floor tiles, wall tiles.
Class 20: goods of horn, bone, ivory, whalebone [Ooh, not an animal rights man, is he? Particularly after getting into trouble for elephant abuse], shell, amber, mother-of-pearl, meerschaum and substitutes for all these materials, or of plastics.
Class 29: edible oils and fats [BANKSY edible fats will literally run off the shelves, predicts Merpel].
Class 30: tapioca, sago [one member of the Kat family, having experienced these products in his youth, has always been puzzled as to why they've been classed as foods. In his opinion, this could be one of those rare cases in which the goodwill in the mark is damaged by the badwill in the product to which it is attached -- good luck with this one, Banksy]".

Graffiti men at work here

GIPI3: how do you rate?

Recently this Kat was fortunate to attend the launch of the Third Report of the Global Intellectual Property Index (GIPI) at the London office of European law firm Taylor Wessing. After a helpful introduction by team leader Roland Mallinson, there was then a lively discussion of the findings of the survey, with key team members from Taylor Wessing on hand to answer specific questions.

For those unfamiliar with the concept of GIPI, it is an evaluation of the attractiveness of 24 national jurisdictions for obtaining, exploiting, enforcing and attacking the key IP rights (trade marks, patents, copyright and designs). In a new twist, this year the survey also considers personal data requirements for the first time. The survey combines and weights 43 instrumental factors from 14,000 individual responses. It functions to give a better insight on doing business in a particular jurisdiction rather than relying on anecdotal evidence such as ‘trials of patents in Country A take years’ or ‘it is quick to register a trade mark in Country B than Country C’. In doing so, it hopes to create a melting pot of empirical evidence to encourage better laws for doing business in those jurisdictions.

In theory, five kinds of rights, across 24 jurisdictions according to 43 instrumental factors would be enough to strike fear into the hearts of most Kats. However, to their credit, the team at Taylor Wessing has produced a highly readable report. In particular, it provides a number of tables which group jurisdictions into five tiers of competitiveness for each individual right as well as an interesting commentary on significant changes since GIPI2.

The key table is:

Some important insights from this table include:

· Germany scored three 1st positions in the individual IP indices but last for the personal data index.· Russia has pulled away from the other BRIC countries.
· Common law countries made up seven of the top 11 jurisdictions.
· India ranked last overall in three of the five indices.
· Apart from Australia, all six of the top tier jurisdictions ranked consistently well for all individual IP indices except for the personal data index. This in turn raises the concern that data regimes in these countries are weighted too much against business.

In addition to the detailed discussion of the individual IP rights, some general overarching themes also emerged from the survey. These include:

• 62% of respondents said that they had spent more time on IP issues over the last three years.
• 60% of respondents felt that IP law needs updating to keep up with technological and online business developments.
• Value for money is increasingly important for businesses in choosing where to litigate.
• There are improved perceptions of EU harmonisation: 8% decrease in variance between the lowest and highest ranked EU Member States.

The IPKat says that the team at Taylor Wessing are to be congratulated for collating, analysing and presenting such an important and accessible report. He looks forward to GIPI4 to see whether the laws of individual jurisdictions have responded to the interesting questions raised in GIPI3.

Merpel wonders whether the UK could score as highly in the Eurovision Song Contest as it does in the GIPI3.

Hours and minutes: the Advocate General speaks

The Court of Justice of the European Union is being kept very busy by intellectual property matters these days. Today's batch of Curia posts includes the Advocate General's Opinion in Case C‑190/10 Génesis Seguros Generales Sociedad Anónima de Seguros y Reaseguros (GENESIS) v Boys Toys SA and Administración del Estado, a reference for a preliminary ruling from Spain.

The question has been published in English:

"May Article 27 of Council Regulation ...40/94 ... on the Community trade mark be interpreted in such a way as to enable account to be taken not only of the day but also of the hour and minute of filing of an application for registration of a Community trade mark with OHIM (provided that such information has been recorded) for the purposes of establishing temporal priority over a national trade mark application filed on the same day, where the national legislation governing the registration of national trade marks considers the time of filing to be relevant?".

The AG's Opinion alas, is in a smattering of Euro-tongues, including Latvian -- but again not in English. The French version reads like this:

«En l’état actuel du droit de l’Union, l’article 27 du règlement (CE) nº 40/94 du Conseil, du 20 décembre 1993, sur la marque communautaire, exclut qu’il soit tenu compte, au‑delà du jour de dépôt de la demande de la marque communautaire, également de l’heure et de la minute dudit dépôt.»

With the aid of Google's translation service this reads:

"In the current EU law, Article 27 of Regulation (EC) No 40/94 of 20 December 1993, the CTM, it does not take into account beyond the date of filing of the CTM, also an hour and minute of that deposit".

We get the message.  Merpel adds, this was no easy question, it seems.  The AG needed nearly 80 paragraphs and over 40 footnotes ...

Court upholds Dutch claim to Bavaria

Solving the name problem is
the easy bit: but how can I get
the top off the bottle?

Fancy a beer? You can ask for a 'Bavaria' and be sure of getting ... a brew of Dutch origins. The decision in Case C-120/08, Bavaria NV v  Bayerischer Brauerbund eV, a reference to the Court of Justice of the European Union for a preliminary from the German Bundesgerichtshof, was posted yesterday on the Curia website.

In short the Brauerbund, "a German association with the objective of protecting the common interests of Bavarian brewers", owns the registered collective trade marks ‘Genuine Bavarian Beer’ (since 1958), ‘Bayrisch Bier’ and ‘Bayerisches Bier’ (since 1968), and ‘Reinheitsgebot seit 1516 Bayrisches Bier’ (since 1985). Bavaria, a Dutch brewer which trades internationally, began using the word ‘Bavaria’ in 1925, this word being incorporated into its name in 1930. Bavaria owns several registered trade marks and figurative elements containing the word ‘Bavaria’. The registration dates include 1947, 1971, 1982, 1991, 1992 and 1995. Protection in Germany of some of those trade marks was refused in 1973, 1992 and 1993.

‘Bayerisches Bier’ (the German term for 'Bavarian beer') was covered by bilateral agreements on the protection of indications of provenance, designations of origin and other geographic names between Germany and the French Republic (1961), the Italian Republic (1963), the Hellenic Republic (1964), the Swiss Confederation (1967) and the Kingdom of Spain (1970) -- but not The Netherlands.

In September 1993 the Brauerbund, in agreement with two other Bavarian associations, submitted to the German Government an application for registration of a Protected Geographical Indication (PGI) under Article 17(1) of Regulation No 2081/92. In January 1994 the German Government informed the Commission of the application for registration of ‘Bayerisches Bier’ as a PGI in accordance with the simplified procedure under that provision.  Following some correspondence, the application was finalised in May 1997 but the final version of the specification wasn't sent to the Commission until March 2000.

The Brauerbund eventually applied to the Landgericht München for an order requiring Bavaria to agree to renounce the protection of its international trade mark, protected in Germany with priority from April 1995 and consisting of the word 'Bavaria'. That court's decision to allow this application was upheld on appeal by the Oberlandesgericht München.  Bavaria's appeal on a point of law to the Bundesgerichtshof was stayed, pending the reference to the Court of Justice of the following questions for a preliminary ruling:

‘1. Does Article 14(1) of Regulation … 510/2006 apply in the case where the protected indication has been validly registered in accordance with the simplified procedure under Article 17 of Regulation … No 2081/92 …?

2. (a) If the answer to Question 1 is in the affirmative, what date should be taken as the basis for determining the classification in time of the protected geographical indication for the purposes of Article 14(1) of Regulation … 510/2006?

(b) If the answer to Question 1 is in the negative, what provision governs the conflict between a geographical indication validly registered in accordance with the simplified procedure under Article 17 of Regulation … 2081/92 and a trade mark, and what determines the classification in time of the protected geographical indication?

3. May the national provisions on the protection of geographical designations be applied in the event that the indication “Bayerisches Bier” fulfils the conditions for registration under Regulation … 2081/92 and Regulation …  510/2006, but Regulation … 1347/2001 [which registered 'Bayerisches Bier' as a PGI] is invalid?’

This reference was itself stayed pending delivery of the judgment in Case C‑343/07 Bavaria and Bavaria Italia [in which the Court ruled that Bavaria could keep its Bavaria trade mark in Italy: see IPKat note here]. The Advocate General in this case then gave an Opinion which was fairly pro-Bavaria in its substance [see earlier IPKat note here].  But what would the Court itself say? Now we know:

"Article 14(1) of Council Regulation ... 2081/92 ... is applicable for resolving the conflict between a name validly registered as a protected geographical indication in accordance with the simplified procedure under Article 17 of that regulation and a trade mark corresponding to one of the situations referred to in Article 13 of that regulation relating to the same type of product, the application for registration of which was submitted both before the registration of that name and before the entry into force of Council Regulation ... 692/2003 ... amending Regulation ... 2081/92. The date of the entry into force of the registration of that name constitutes the reference date for the purposes of Article 14(1) of Regulation ... 2081/92.".

The IPKat is delighted with this decision, which he considers to be entirely correct.

See reports in Deutsche Welle here, PR Newswire here

Singing the White Shark Grey Goods Blues ...

Great White Sharks can be pretty scary ...

From the IPKat's Australian friends at Allens Arthur Robinson comes news of a recent decision that might appeal to his trade mark readers.  It's Sporte Leisure Pty Ltd v Paul's International Pty Ltd (No 3) [2010] FCA 1162, of 20 October 2010.  In this dispute Nicholas J, in the Federal Court of Australia, held that Paul's Retail infringed some 'Greg Norman' registered trade marks held by Great White Shark Enterprises (GWSE) -- even though the allegedly infringing merchandise was made by and bought from an authorised licensee.  Readers will instantly sense the problem here -- parallel importation.  The judge rejected Paul's Retail defence under section 123(1) of the Trade Marks Act 1995 (consent of the trade mark owner) because the licensee of the trade marks was not allowed to sell the goods it made outside the Union of India without consent and knew in advance that the goods made for Paul's Retail were to be sold outside India.

There are three key points to appreciate here:

1. According to the judge, when the registered owner of a trade mark consents to another person applying that mark to goods on condition that those goods must not be supplied outside a designated territory, the trade mark owner is not usually regarded as having consented to the application of the mark to goods which the other person knows, when the mark is applied, are to be supplied outside the territory. However, this a principle may be restricted to the specific facts of this case, because the evidence demonstrated that the licensee only made the goods after receiving a purchase order for them which was to be delivered outside the territory. It is not clear if the same conclusion would apply if the licensee was unaware of the destination of the goods or if the order was met from an existing stockpile.

2. In considering the authorities and concluding that the sole director of Paul's Retail, Paul Dwyer, was not liable for trade mark infringement as a joint tortfeasor, the Court considered that if a director is to be liable as a joint tortfeasor, something more than a finding that the director caused or directed his company to perform infringing acts is required. The extent of the director's personal involvement and his state of mind is important.  Whether the director held an honest belief that the acts which he directed or procured were not unlawful is also a significant (and, in this case, decisive) consideration.

3. Obiter, the court rejected Paul's Retail's submission that there is an onus on GWSE to show that the consent defence under section 123 of the Act does not apply. As a matter of construction, because section 123 of the Act creates an exception to infringement, the burden of proof lies on the person invoking the section.  However, in certain circumstances, it may take little for the evidential burden to shift to the registered owner.

... but the IPKat is not
easily intimidated

So now you know.  Says the IPKat, in the European Union -- where trade mark enforcement cannot be separated from principles of competition law and protection of the integrity of the single market -- the burden of proof of consent to marketing trade mark-protected goods is a complex issue. In Case C-244/00 Van Doren + Q GmbH v Lifestyle + Sportswear Handelsgesellschaft mbH [2003] ETMR 75, the Court of Justice of the European Communities (as it then was) fixed the burden of proof on the alleged infringer, unless that party could demonstrate that the effect of that burden was to enable the trade mark owner to partition the single market, in which case the burden would shift to the trade mark owner.  The Australians have spared themselves this horror, but there still seem to be some grey areas in grey area consent, as the comments on this decision show.

Great White Shark here
Great White Sharks here
Great White Shark recipe here
Three Little Fishes here [not-to-be-missed performance by Frankie Howerd]

Reifen strife resolved

Apart from the Coty Lancaster ruling of the European Court of Justice, there was another important trade mark case from the same court today -- but it seems to have been missed. It's Case C‑569/08 Internetportal und Marketing GmbH v Richard Schlicht, a reference for a preliminary ruling from Austria's Oberster Gerichtshof. Since the hour is late and this ruling is rich in detail, this Kat is blogging in brief but reserves the right to return to this ruling in the fullness of time.

In short, IMG (the appellant in the main proceedings), an Austrian company, ran websites and sold products via the internet. To be eligible to apply to register domain names during the first part of phased registration provided for in Regulation 874/2004 on .eu registrations, IMG applied successfully to the Swedish trade mark register for registration of a total of 33 generic terms as trade marks, each incorporating the special character ‘&’ [the Court seems reluctant to call it an ampersand] before and after each letter (for example IMG registered the word mark ‘&R&E&I&F&E&N&’ for safety belts (Class 9). It seems IMG never actually planned to use that trade mark for safety belts, but it did succeed in registering the domain name ‘www.reifen.eu’ during the first part of phased registration on the basis of its Swedish mark &R&E&I&F&E&N& by eliminating from it the special character ‘&’ in pursuance of one of the transcription rules set out in Article 11 of Regulation 874/2004. Since ‘Reifen’ means ‘tyres’ in German, IMG's objective was to run ‘www.reifen.eu’ as an internet portal for trading in tyres. All in all, IMG played tricks like this in respect of 180 domain names, all consisting of generic terms.

Schlicht was proprietor of the Benelux word mark ‘Reifen’ for to ‘bleaching preparations and other substances for laundry use; cleaning preparations, in particular, cleaning preparations containing nanoparticles for cleaning window surfaces’ and ‘services which facilitate the marketing of such cleaning agents’. He tried to register a Community word mark Reifen for the same goods and services, planning to market on a pan-European basis cleaning products for surfaces akin to window glass. Schlicht's mark is based on the first three letters of the German words ‘Reinigung’ (cleaning) and ‘Fenster’ (window).

Schlicht challenged IMG's registration of ‘www.reifen.eu’ before the Arbitration Court, which upheld his complaint, withdrew that domain name from IMG and transferred it to him, taking the view that the character ‘&’ contained within a trade mark was not to be eliminated but had to be rewritten: IMG had clearly sought massively to circumvent the transcription rule laid down in the second paragraph of Article 11 of Regulation 874/2004 and had therefore acted in bad faith. IMG challenged this decision by proceedings under Article 22(13) of Regulation 874/2004. That action was dismissed as unfounded at first instance and on appeal, so IMG sought revision of the decision before the referring court, which stayed proceedings and referred the following questions to the Court for a preliminary ruling:

‘1. Is Article 21(1)(a) of Regulation ... 874/2004 to be interpreted as meaning that a right within the meaning of that provision exists:

(a) if, without any intention to use it for goods or services, a trade mark is acquired only for the purpose of being able to register in the first phase of phased registration a domain corresponding to a German-language generic term?

(b) if the trade mark underlying the domain [name] registration and coinciding with a German-language generic term deviates from the domain in so far as the trade mark contains special characters which were eliminated from the domain name although the special characters were capable of being rewritten and their elimination has the effect that the domain differs from the trade mark in a way which excludes any likelihood of confusion?

2. Is Article 21(1)(a) ... to be interpreted as meaning that a legitimate interest exists only in the cases mentioned in Article 21(2)(a) to (c)?

3. [If that question is answered in the negative,] does a legitimate interest within the meaning of Article 21(1)(a) ... also exist if the domain holder intends to use the domain – coinciding with a German-language generic term – for a thematic internet portal?

4. [If Questions 1 and 3 are answered in the affirmative,] is Article 21(3) ... to be interpreted as meaning that only the circumstances mentioned in points (a) to (e) of that provision are capable of establishing bad faith within the meaning of Article 21(1)(b) ...?

5. [If the answer to that question is in the negative,] does bad faith within the meaning of Article 21(1)(b) ... also exist if a domain was registered in the first phase of phased registration on the basis of a trade mark, coinciding with a German-language generic term, which the domain holder acquired only for the purpose of being able to register the domain in the first phase of phased registration and thereby to pre-empt other interested parties, including the holders of rights to the mark?’

Today the Court ruled as follows:

"1. Article 21(3) ... and the principles governing registration must be interpreted as meaning that bad faith can be established by circumstances other than those listed in Article 21(3)(a) to (e) ....

2. In order to assess whether there is conduct in bad faith within the meaning of Article 21(1)(b) ..., read in conjunction with Article 21(3) ..., the national court must take into consideration all the relevant factors specific to the particular case and, in particular, the conditions under which registration of the trade mark was obtained and those under which the .eu top level domain name was registered.

With regard to the conditions under which registration of the trade mark was obtained, the national court must take into consideration, in particular:

– the intention not to use the trade mark in the market for which protection was sought;

– the presentation of the trade mark;

– the fact of having registered a large number of other trade marks corresponding to generic terms; and

– the fact of having registered the trade mark shortly before the beginning of phased registration of .eu top level domain names.

With regard to the conditions under which the .eu top level domain name was registered, the national court must take into consideration, in particular:

– the abusive use of special characters or punctuation marks ... for the purposes of applying the transcription rules laid down in that article;

– registration during the first part of the phased registration provided for in that regulation on the basis of a mark acquired in circumstances such as those in the main proceedings; and

– the fact of having applied for registration of a large number of domain names corresponding to generic terms".

Says the IPKat, this looks like a pretty good result, not just for Mr Schlicht but for common sense. IMG's ruse was a cunning try-on and it complied with the letter of the law, but vague and amorphous concepts such as 'bad faith' are invoked precisely because there are businesses that conduct themselves like IMG. Merpel adds -- the Court of Justice has done well to turn this case round in only 18 months from receiving the reference. Could this be because the Court had so little of its own case law to consider before reaching its decision?

Settlement in Styriagra/Viagra trade mark disupte

Some of our readers may recall the curious trade mark dispute between Mr Mandl, an Austrian pumpkin seed oil producer, and pharmaceutical company Pfizer over Mr Mandl's use of the mark "Styriagra" on blue coloured pumpkin seed pills which were offered as natural erectile dysfunction remedy (see the IPKat's report here).

Even though Mr Mandl had always maintained that the STYRIAGRA product name derived from the word "Styria", which is the Latin name of the Austrian province Steiermark, where his business is located, and the words "agra" and "Agrar", meant to be denoting the agricultural origin of his product, Pfizer was not amused and took the matter to court. The matter had already gone all the way to the Austrian Supreme Court (OGH) which in provisional proceedings had decided in Pfizer's favour (case reference case reference 17 Ob15/09v, retrievable by clicking here (in German)). This case was of particular interest not only because it applied the ECJ's guidance in L'Oreal v Bellure but also because it most notably introduced the German concept of "trade mark parodies" to Austrian trade mark law.

While we were eagerly awaiting further proceedings at the first instance court in Vienna, Austrian news sites Die Krone and Kleine Zeitung now report that both parties have reached an out of court settlement in this matter. No details of the settlement have been given.

While this Kat would have been very interested to see the first instance court's decision and reasoning in this particular case, the settlement will be welcome news for poor Mr Mandl. Not only did we learn that his marriage broke down over this dispute, according to the Austrian report, he also had to file for bankruptcy earlier this year. Mr Mandl hopes to be able to make a fresh start in life, now that the case has been settled. Let's just hope that he will stay away from trade mark parodies for a little while.

Trade marks at Fordham: some thoughts

One strand of this afternoon's programme at the Fordham IP Conference was dedicated to trade marks -- starting with premium products and the brands with which they are associated.

Speaking first, Monika Tomczak-Górlikowska (Miller Canfield, Warsaw) contrasted bricks & mortar shopping with internet commerce within the context of vertical sales restraints in the European Union. She cited former EU Commissioner Neelie Kroes's call for changes in vertical restraints in order to meet the needs of the new order brought about by internet trade. A new draft Regulation has been tabled, since the existing Regulation expires in May 2010. At present, the internet is considered internet sales as 'passive', but brand owners would like to be able to control or restrict online sales by retailers. Premium brand owners are also anxious to reduce or prevent piracy, for which the internet is a convenient trade medium. The reputation and feel-good factor for luxury brands is also at stake: can websites replicate the luxury aura of an up-market shop?

Dr Joseph Fesenmair (Bird & Bird, Munich) then gave an explanation of the Court of Justice of the European Union's ruling last year in Case C-487/07 L'Oréal v Bellure. Note: the decision of the Court of Appeal in the underlying dispute that led to this reference is expected later this month and will be the subject of an AIPPI UK meeting on 29 April starring Henry Carr QC and Willem Hoyng of Howrey -- please mark your diaries). Following this, Professor Marshall Leaffer (Indiana Uni Maurer School of Law) was up next, tackling the grey (or gray) market; this, he observed, seems to be an insoluble problem. Marshall discussed the sale of genuine goods with the barcoded data removed constituted a trade mark infringement in the US, reviewing Davidoff's successful COOL WATER action against CVS (here) and the bizarre manner of its expression.

Dr Peter Ruess (International School of Management, Frankfurt) then examined the Court of Justice of the European Union ruling in Court C-57/08 COPAD v Dior. This ruling gave heart to trade mark owners by clarifying that an action of trade mark infringement can be brought where breach of a 'channel of sale' obligation in a contract leads to the entry of luxury goods into the market without the brand owner's consent and thus puts the goods' aura at risk. Peter asked some highly pertinent questions: can a brand owner define its brands into achieving the status of being prestige or luxurious, or does it depend on objectively verifiable criteria? And has the consequence of parallel risk of trade mark infringement and breach of contract been fully considered?

After moderator Professor Susan Scafidi (Brooklyn Uni, NY) opened the topic for discussion, the panellists added their contributions. Professor Ann Bartow (Uni of South Carolina), questioned the practice of pixillating trade marks on garments worn by persons arrested for various offences. Paul Maier (President of the Boards of Appeals, OHIM), with whom Professor David Llewelyn (Kings/Singapore) agreed, said that the current state of European case law represented the high point of recognition of protection of reputation of trade marks in Europe -- but, David said, it is important to understand how these ruling, arguably justified in themselves, are used by lawyers in seeking unjustifiably to press for wider protection than that countenanced by the courts. Professor Sheldon Halpern (Albany Law School) deprecated the metamorphasis of the term "free rider" from a neutral and descriptive term for a person carrying out an activity which may or may not be acceptable and into a pejorative term. Professor Spyros Maniatis (QMIPRI) reminded the participants that the rulings of the European Court of Justice should not be divorced from the circumstances of their specific facts: the court could easily go back on its generous interpretation of trade mark law in instances where extra factors, such as comparative advertising issues, were not additionally present.

It's Time to Teach about Branding; Or Is It?

One of the things that this insomniac Cat does between 2:00 am and 6:00 am is plot out his next MBA class. Twenty years of teaching law students did little to prepare me for the challenge of translating IP into a framework that resonates with the totally different orientation of an MBA student. Facing a classroom filled largely with upwardly mobile high tech and start-up types, the most challenging part of IP is how to present trade marks in an meaningful way to MBA students, and that means dealing with the issue of branding. It's that time of the course to address this issue, so here we go ....

The challenge in addressing trade marks and branding is threefold. First, the trade mark paradigm is so very different than it is for patents and copyright. Second, the notion of "brands' can be, how should we say it, fuzzy at best. Third, it is unlikely that the branding function is handled in a centralized manner within the company. Let's look briefly at each of these elements.

I. As for the difference in the nature of the trade mark paradigm, if you don't believe me, try to
characterize each of the principal basic IP rights. For patents, copyright, and even for trade secrets (if you want to venture further out), the following three-part framework will do just nicely, (i) the creator of the right; (ii) the entity commercializing the right; and (iii) and the public interest. Just about the time that students have figured out this paradigm (or any other comparable paradigm that you might propose for patents, copyright and trade secrets), you then have to disclose the dirty little secret, namely, it does not work for trade marks.

Challenge number one, therefore, is to come up with a working paradigm for trade marks.

II. Second, what do mean by "branding"? I like to bring the following definitions for consideration:

(i) "Information about a particular product or service, the core trademark behind the brand, other trademark supporting the brand, any family of marks, domain names, sub-brands, product packaging, the manufacturer and the trade name, advertising of the product, distribution of the product, celebrity endorsements and even shelf displays ... Essentially, the brand comprises all publicly available knowledge with a particular product, service or company. The trademark is just the legally protectable portion" (Freno, "Trademark Valuation: Preserving Brand Equity", The Trademark Reporter, vol. 97, no. 5, 2007).

(ii) "The interest in the economic value of brands as corporate assets that create wealth for the stakeholders in a corporation. Brand equity embraces brand-name awareness, brand loyalty, perceived brand equity and positive subjective associations. This leads to the proposition that brands are a form of intangible property which may be protected by the trade mark, copyright and patent laws, and by common law principles of passing off" (Belson, "Brand Protection in the Age of the Internet" [1999] European Intellectual Property Review 481).

Observing that a brand "comprises all publicly available knowledge associated with a particular product, service or company", or that brand equity is "the economic value of brands as corporate assets that create wealth for the stakeholders in a corporation", is illuminating, but the scope of each of these descriptions is extremely broad. From the point of view of useful information, the question arises: What one is meant to make of these characterizations? There is no ready answer, either singularly or in the aggregate, to the question.

How to keep this uncertainty within meaningful bounds for the students is challenge number two.

III. Third is the question: Who within the organization is charged with dealing with the issue of brands and brand equity? The potential disconnect between trade marks and branding was brought home me last summer before an audience in Mumbai. The topic there was "trade mark valuation", and in the back-and-forth with a member of the trade mark department of a world leader in the entertainment industry, I asked the question: "At what point are you called in to take part in the process." Her answer was straight to the point--"Never. Issues of branding and valuation are for another department." End of discussion.

So who takes care of branding? Presumably, for companies, such as those in the luxury goods business, where branding is their raison d'etre, such the organizational chart will attempt to provide an answer. There are other companies that have sought to place branding somewhere within the organizational chart, if not quite front-and-centre as in the luxury goods business. But for many companies, my sense is that the issue is scattered and diffuse within the organization. In such a case, while one can inculcate a sharpened awareness within students about branding, how it will play out will differ radically between companies.

Challenge number three, therefore, is to bridge between the need to translate the broadly-cast definition of brands into terms that are at once general for all the understand, on the one hand, with providing sufficient nuanced meaning to enable students to adapt these concepts to the needs of their particular circumstances.

It's 6:00 am and the alarm clock has gone off. The time for rumination is over. Now I need how to figure out how to face those students later in the day.

"Styriagra" - The curious case of the little blue pumpkin seed pills

Austrian news site Der Standard recently reported on the next chapter in a curious trade mark dispute between an Austrian pumpkin seed oil producer and pharmaceutical company Pfizer over the use of the mark "Styriagra" on pumpkin seed pills.

About a year ago, the Class 46 blog reported that Richard Mandl, a pumpkin seed oil producer from the Austrian region of "Styria" (German: Steiermark), was selling chocolate coated pumpkin seeds under the name "Styriagra". Those (oval shaped) Styriagra pumpkin seeds were dyed in a blue colour and offered as natural erectile dysfunction remedy. Mr Mandl had also filed for trade mark protection: International trade mark No. 957917 Styriagra covering class 30 and 31 and designating Switzerland and the European Union based on an Austrian national mark.

Even in those early days, Mr Mandl was adamant that there was no connection between Pfizer's Viagra and his Styriagra pumpkin seeds. His product name derived from the word "Styria" which is the Latin name of the Austrian province Steiermark, where his business is located, and the words "agra" and "Agrar". The latter were meant to be denoting the agricultural and organic origin of his product. Even the choice of the colour blue was coincidental Mr Mandl told the interested readers of Austrian newssite Krone and German newspaper Die Sueddeutsche Zeitung and he revealed that he also offered pumpkin seeds coated in other colours. Pharma giant Pfizer was neither sidetracked nor impressed by this argument, in particular since Mr Mandl's mark also used the colour blue, and early reports suggested that Pfizer intended to take legal action against Mr Mandl.

One year on, the Austrian Oberste Gerichtshof (OGH) has decided (case reference 17 Ob15/09v ). Pfizer had indeed taken the matter to court. While the court of first instance had decided in Mr Mandl's favour, the court of Appeal as well as the OGH found that Mr Mandl's little organic pills had taken unfair advantage of the distinctive character and the repute of Pfizer's Viagra trade mark.

Mr Mandl had used a mark (Styriagra) that was similar to an earlier mark with a reputation (Viagra). Referring to the ECJ's decision in L'Oreal v Bellure, the OGH took the view that Mr Mandl had attempted "to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation" and had unfairly taken advantage of the distinctive character or the repute of that mark.

The OGH also rejected Mr Mandl's argument that "Styriagra" had to be considered as a so-called 'trade mark parody' (Markenparodien), a concept established by the German Federal Supreme Court in the famous purple post card case (Lila Postkarte, BGH case reference I ZR 159/ 02). The German court had decided that trade mark parodies could, under certain circumstances, be considered as satire and thus be protected under the constitutional rights of freedom of art and freedom of expression. In cases of conflict freedom of art/expression have to be balanced with the conflicting trade mark rights. The OGH in principle agreed with the German court's approach. However, while "Styriagra" could be considered as a humorous reference, it was not an expression of artistic creation. Furthermore, Mr Mandl's main motives were clearly of a commercial nature.

The OGH's decision can be retrieved by clicking here (in German).

Further reading: the IPKat recommends Austrian blogger and lawyer Maximilian Schubert's (aka Austrotrabant) detailed review of this case, please click here (in English!).

This Kat can't help feeling a little sorry for Mr Mandl, in particular since news site Krone also reports that Mr Mandl's marriage has broken down over this court case and he only ever sold 1200 units with a turnover of 1824 Euro. Given that the OGH's decision appears to be a preliminary ruling at the appeal stage, further chapters in this slightly surreal dispute can be expected.

Dilution, free-riding, damage and the 'investment climate'

The IPKat's friend, Advokat Mats Björkenfeldt (Hjalmar Petris Advokatbyrå HB, Sweden) is known to have some strong opinions on various areas of intellectual property law (see earlier IPKat posts here, here and here). Well, now he's having another rage! This time he writes:

"The more I read about European Trade Mark Law and Unfair Competition, the more confused I get. The latest is this: I read in EU Competition Law in Context, Hart Publishing, 2009 [details here], the following:

Nina Korjus, réferendaire to a judge at the General Court of the European Union, has in that book an article called "Unfair Competition and Trade Marks". When it comes to ‘Dilution and free-riding’ she says that there are ‘three types of injury against which Article 5(2) of the [Trade Mark] Directive ensures such protection for the benefit of trade marks with a reputation…’ But when she analyses the LÓréal case [see earlier IPKat posts here and here], she could not find any injury; instead she gives this answer to the outcome of the case in the end of her article (p. 181):

‘Protection of trade mark rights is important not only for the right owners but also for the society as a whole. In fact, it is in the interest of countries to have the strongest possible enforcement mechanism to protect the investment climate and labour markets and also to reduce the loss of tax revenues that are directly affected by the lack of efficient protection against, inter alia, trade mark counterfeiting. Efficient protection of trade mark rights against unfair competition should thus be provided…’

But, one question is still unanswered: if there's no injury in sight, in what way is the ‘investment climate’ influenced by a free-rider?"

Good point, says the IPKat, if my return on investment is not diminished by another's activity, why should I worry? Merpel says, I'm not so sure the question is a valid one: a failure to obtain a maximised profit is as much a part of the 'investment climate' as the likelihood of actual damage, is it not?