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.

"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.

L’Oréal/Bellure: who speaks for the European majority?

The IPKat has received this letter from his respected friend Professor Dirk Visser (Trademark Law Institute & Leiden University, not to mention leading Dutch IP practice Klos Morel Vos & Schaap), which discusses last week's ruling of the European Court of Justice in L’Oréal/Bellure (see IPKat note here). Professor Visser's letter reads as follows:

"Dear friends of the Trademark Law Institute (and some other learned and honorable Trademark friends and colleagues),

I just would like to share with you my thoughts on this landmark decision by the ECJ and maybe you can give your views to get an idea how this decision is received throughout Europe.

To me, the L’Oréal/Bellure decision by the ECJ is a breath of fresh air after the often ambivalent, unpractical or systematically incomprehensible recent decisions in trade mark cases by the ECJ.

In my opinion in L’Oréal/Bellure the ECJ clearly states what is probably the most important basic moral emotion of IP and unfair competition law: “Thou shall not (1) intentionally, (2) without investment of one’s own and (3) without paying any compensation, reap profit of another’s considerable (creative, innovative or commercial) effort, investment or goodwill”. (“Thou shall not reap where thou has not sown”).

(Evidence of) misrepresentation is not required, (evidence of/ risk of) confusion is not required, (evidence of) harm is not required (although there probably always is harm in such a case).

You can like this result or not, but at least and for once, it is clear what the ECJ says.

Lord Justice Jacob will probably not like it, many other ‘free competition’-minded people in (and outside) the UK will not like it. But it does in my opinion probably reflect what most IP judges, lawyers and laymen basically believe and feel, at least on the continent.

Intent is (and probably always has been) an important factor, lack of own investment is too and so is of course not paying any compensation.

The decision also give clear guidance as to how to decide the case at hand: smell-alikes, designed or marketed as cheap copies, are not allowed. Again, you can like it or not, but at least it is clear, and it is in my opinion a better basis than copyright in the fragrance.

I do look forward to your views!"

The IPKat wonders how representative Professor Visser's views are of non-UK thought. If you have any special message to share with the readers of this blog, please post them below. If you'd rather share them with Professor Visser alone, you can email him here. Merpel says, it doesn't matter whether people think the ruling is good or bad: the real issue is whether it is right in terms of applying the existing law to the facts on which the reference is based. Tufty says, I've set up a poll in the sidebar where which you can "vote" for the position that reflects your view.

L'Oreal v Bellure at the ECJ

The morning the ECJ delivered its judgment in L'Oreal v Bellure, on whether 'knock off' imitation perfumes which clearly weren't the trade marked goods, but were marketed in a way that 'winked at' L'Oreal's famous perfume brands, infringed L'Oreal's trade marks and were protected as permissible comparative advertising.

Is harm needed for unfair advantage?

The court answered the 5th question first. This boiled down to whether there could be unfair advantage under Art.5(2) without (a) confusion or (b) detriment to the earlier mark.

Since only one of the types of harm mentioned in Art.5(2) is needed for there to be infringement, there could be no need for detriment to repute or distinctiveness for unfair advantage to be made out. [IPKat comment: quite right. The IPKat can see why the UK Courts might have wanted to introduce a harm to trade mark function requirement in here, but there was no basis for it on the face of the Directive].

How can unfair advantage be proved?

The ECJ's words bear repeating in full, since the IPKat reckons they're going to be the subject of much close textual analysis by legions of lawyers:

In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the mark, the Court has already held that, the stronger that mark’s distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. It is also clear from the case-law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark or is, or will be, detrimental to them (see, to that effect, Intel Corporation, paragraphs 67 to 69).

[IPKat comment: 2 huge problems with this - (1) all these factors go towards showing that there's a link between the marks, but they don't really show that the link has 'rubbed off' on the later mark to give its owner an unfair advantage; (2) these are the factors that were used in relation to detriment to distinctive character, but the court has just said that these are two different types of harm; (3) the ECJ in Intel v CPM said such factors are insufficient for showing unfair advantage. ]

The ECJ also said: ' In addition, it must be stated that any such global assessment may also take into account, where necessary, the fact that there is a likelihood of dilution or tarnishment of the mark.'

[IPKat comment: aaargghhh - you just said that the various types of harm are different. Anyway, if there is likely dilution or tarnishment, why do you need unfair advantage on top? Also, note the use of the word 'likely'.]

On the facts

The defendants had created a link, they had done so for commercial advantage and had done so with the intention of creating a link. Thus, there was unfair advantage.

[Let the IPKat be the first to welcome the law of unfair competition to the whole of the EU, even if you do need a registered trade mark to qualify for it (but how hard is that now - you could just apply your distinctive word/device mark to your relatively straightforward product shape, register the whole bangshoot as a CTM a la Whirlpool v Kenwood and hey presto, you qualify for protection.]

The harm in a nutshell

The ECJ sums up:

'The advantage arising from the use by a third party of a sign similar to a mark with a reputation is an advantage taken unfairly by that third party of the distinctive character or the repute of the mark where that party seeks by that use to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image.'

The comparison lists

Here the question was whether the use of the names of L'Oreal's perfumes in price comparison lists could amount to infringement under Art.5(1)(a), seeing as the ability of L'Oreal's marks to idenify the origin of L'Oreal's goods (the essential function) wasn't harmed.

The ECJ noted that price comparison lists were a form of comparative advertising, and it had already held in O2 that the use of a mark in comparative advertising could infringement, but also had Art.3a(1) of the Comparative Advertising Directive to save it.

The court revisited its line of case law on the scope of Art.5(1)(a), noting that it encompassed not only harm to the essential function, but also to the other functions of a trade mark which are 'in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising'. Art.5(1)(a) is wider than Art.5(1)(b) [thus confusion isn't required] and while descriptive use, e.g. Holterhoff, isn't covered, price comparisons aren't purely descriptive as they are for the purposes of advertising. The court noted that Art.5(2) might also apply in price comparison cases.

[IPKat comment: this sounds very nice in theory, but the court doesn't give us a clear understanding of what sorts of activities can harm the other functions of a mark. It seems though that the Court of Appeal in Arsenal got it right when it said that the effect of Holterhoff was to exclude descriptive use only.]

The Compartive Advertising Directive

In relation to Art.3a(1)(h) (comparative advertising must not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name), this didn't require the goods to be counterfeit, nor did it require the advert to be misleading for it to be prohibited. The imitation could be implicit or explicit. Moreover, the imitation didn't have to be of the product as a whole, and could be of one aspect, e.g. its smell. In this case ' It is not in dispute that the object and effect of the comparison lists at issue in the main proceedings are to draw the attention of the relevant public to the original fragrance of which the perfumes marketed by Malaika and Starion are purportedly an imitation. Those lists thus attest to the fact that those perfumes are imitations of the fragrances marketed under certain marks belonging to L’Oréal and Others, and they consequently present the goods marketed by the advertiser as being imitations of goods bearing a protected trade mark within the meaning of Article 3a(1)(h) of Directive 84/450.'

In relation to Art.3a(1)(g) (omparative advertising must not take unfair advantage of the reputation of a trade mark), unfair advantage appeared both here and in Art.5(2), and had to be interpreted in the same way in both. in this case, in the words of the court: '... since, under Directive 84/450, comparative advertising which presents the advertiser’s products as an imitation of a product bearing a trade mark is inconsistent with fair competition and thus unlawful, any advantage gained by the advertiser through such advertising will have been achieved as the result of unfair competition and must, accordingly, be regarded as taking unfair advantage of the reputation of that mark.'

[IPKat comment: some circular reasoning going on here. Because the advertising was contrary to Art.3a(1)(h), it was unfair under Art.3a(1)(g). At least though this is an attempt to articulate the unfairness, rather than just stopping at the fact that there has been an advantage. Generally though, this makes it very hard for people to tell consumers that their products are like trade marked products in some respect.]

IPKat concluding comment

If Intel was the low point of Art.5(2) protection for trade mark owners then this has got to be the high point, particularly when taken in conjunction with the approach to comparative advertising. Although the ECJ didn't explicitly adopt the Advocate General's position that any advantage is unfair, in bascially stopping once the link has been established if there is a commercial motivation for making that link, it may as well have. It looks like we're stuck with something which looks rather like a tort of unfair competition. The escape route is that only marks with a reputation will qualify. This makes it crucial for us to have a clear understanding of the standard for establishing when marks have a reputation - something which so far has been rather imprecise.

Hands off our news says Associated Press

The IPKat has learned from the Financial Times that Associated Press is planning to crack down on sites which make unauthorised use of its members' content. The AP Chairman told the AP annual meeting

'We can no longer stand by and watch others walk off with our work under misguided legal theories. We are mad as hell, and we are not going to take it any more'.

He went on to say that AP would pursue 'legal and legislative remedies' against those making unauthorised use. AP also plans to develop new search pages for breaking news stories, and a rights management system.

The announcement takes place against a background of declining newspaper revenues.

The IPKat finds this troubling on a number of levels. Protecting news sounds a bit like protecting facts, which the UK doesn't like (though the US does have an action for the misapproriation of news). He's not sure about the 'misguided legal theories' - is this fair use? If so, what makes it misguided? Likewise, pursuing legal remedies is fair enough but pursuing legislative remedies sounds rather like not liking the law and therefore assuming that the legislator will change it for

ECJ Antartica case - trade mark use and dilution

The IPKat draws his readers' attention to the short and sweet judgment of the ECJ in Antartica Srl v OHIM (Nasdaq intervening) from last Thursday.

Antartica applied to register Nasdaq as a CTM for various types of sporting goods and clothing. This was successfully opposed before the OHIM Second Board of Appeal and CFI by Nasdaq under Art.8(5) of Regulation 40/94, based on its Nasdaq registration for financial and stock market quotation services.

Antartica appealed but the ECJ rejected its main arguments:

• Proof of use - Antartica argued that Nasdaq hadn't used its mark as its stock market indicies were available free of charge in the press and on TV. This was rejected by the ECJ, which noted 'even if part of the services for which the earlier mark is registered are offered by The Nasdaq Stock Market free of charge, that does not of itself mean that that commercial company will not seek, by such use of its trade mark, to create or maintain an outlet for those services in the Community, as against the services of other undertakings.'
• Unfair advantage - The ECJ repeated what it said in Intel about criteria for establishing a 'link'. The court noted that the CFI had correctly considered potential consumers of Antartica's (the applicant's) goods as the relevant public for establishing whether an unfair advantage had been taken.
  
• Extent of reputation required under Art.8(5) - Antartica had argued that the degree of reputation required under Art.8(5) is knowledge of the mark among the general public (as opposed to among the consumers of either party's goods/services). The ECJ did not reject this out of hand. Instead it noted that in this case it wasn't necessary to consider the point in detail because 'the reputation of the earlier mark reaches further than the professional public specialising in financial information'.
  

The IPKat reckons that, for the most part, this case doesn't say too much which is new, but it does restate some important principles. In particular, the use point must be right, otherwise all the companies which offer services which are free at the point of use, but which are funded by advertising (e.g. many email services) wouldn't be using their trade marks. However, the court's treatment of whether reputation needs to be amongst the general public (as is now the case in the US) is unfortunate. It would have been very easy for the ECJ to have dismissing this summarily - it's clear from past case law (e.g. General Motors v Yplon) that pan-market fame isn't required. By confining its comments to the facts here, the court has introduced unnecessary uncertainty (unless, of course, the court is thinking of introducing a pan-market fame standard by the back door).

L'Oreal v Bellure: unfair advantage aspects; IBIL seminars online

L'Oreal v Bellure

The IPKat is still scratching his furry little head over L'Oreal v Bellure. He thinks he might have cracked the AG's comments on Art.5(2) though - and they're not all bad. However, there is one fatal flaw...

The Court of Appeal asked whether there could be infringement by unfair advantage, even though the earlier mark did not suffer any harm to its essential function or to its distinctiveness or repute.

The AG (correctly in the IPKat's opinion) opined that what's important for unfair advantage is the benefit to the later user, rather than harm to the well-known mark. Such a benefit could occur without the earlier mark being harmed [IPKat comment: in fact, it's in the later user's interests here that the earlier mark isn't harmed, as this would mean that there would be less to take advantage of].

The fact that consumers connect the sign wouldn't be enough. Instead, what is needed, according to the AG, is that marketing of the later goods is made easier. However, it need not be the case that, but for the use of the offending mark, no sale would have been make. Instead, what is needed is that the link to the earlier mark must be a 'boost' to the later mark [IPKat comment: this has got to be right - how many sales depend purely on the trade mark that they bear?]

This begged the question though - when would such a boost be 'unfair'? The AG used a neat trick to get around this - use is only fair when there is no 'due cause' for the later user to use the mark. [This is the bit that the IPKat has problems with. The UK courts have taken the position that 'due cause' is very narrow - essentially just earlier rights or necessity. This would mean that almost every advantage would be unfair. It would also mean that the courts would have to ignore the word 'unfair' and just rely on whether or not there is unfair advantage. To the IPKat's mind, the really unfortunate thing here is that the AG wants everything to rest on whether there is 'due cause' but the ECJ has never defined what is meant by that term. The AG doesn't acknowledge this which means that, even if he is right, his decision doesn't clarify when an advantage is unfair at all.]

IBIL seminars online

Don't just rely on the IPKat's opinions on this case though. The slides and an audio recording of last week's UCL IBIL seminar on dilution are available here. You can also find a recording of IBIL's seminar on the European Commission's interim report into the pharmaceutical industry in the same place.

Citibank wins dilution case

Citigroup, the company responsible for Citibank has won a dilution case before the Court of First Instance.

Citi applied to register CITI in fancy script as a CTM for ‘customs agencies, property valuers, real estate agents, evaluation and administration of house contents’. Citigroup opposed, based on its family of marks consisting of or containing the word "Citi".

OHIM rejected the opposition with regard to the services of customs agencies under Art.8(5). The Board found that Citigroup didn't have a reputation in a family of marks containing the "citi" element. Only the CITIBANK mark had a reputation, and that reputation was limited to banking. Moreover, the applied-for CITI mark and the CITIBANK mark weren't similar.

The CFI avoided ruling on whether there was a family of "citi" marks with a reputation because it was possible to proceed on the basis of the CITIBANK mark having a reputation.

However, OHIM had slipped up in finding that CITI and CITIBANK were not similar since "citi" was the distinctive and dominant element of both marks. Thus the marks were visually, aurally and conceptually similar to the required degree.

OHIM hadn't got as far as ruling on whether there was dilution of the sort required to satisfy Art.8(5). Here there was an overlap between the two parties' clients, and those clients would most probably be familiar with CITIBANK, which could

"lead to free-riding, that is to say, it would take unfair advantage of the well-established reputation of the trade mark CITIBANK and the considerable investments undertaken by the applicants to achieve that reputation. That use of the trade mark applied for, CITI, could also lead to the perception that the intervener is associated with or belongs to the applicants and, therefore, could facilitate the marketing of services covered by the trade mark applied for. That risk is further increased because the applicants are the holders of several trade marks containing the component ‘citi’".

The IPKat reckons this was the correct decision. The Board's position on similarity of marks was always a bit strange here - so strange in fact that OHIM appears to have been arguing against the Board's decision. The Board saw the CITIBANK mark as a whole and didn't see CITI as distinctive or dominant. Moreover, Citigroup's reputation for CITIBANK bolstered the need to treat the mark as a whole, and not to single out the CITI element. The Kat is somewhat disappointed by the unfair advantage analysis though. In particular, rather a lot of it seems to come down to a likelihood of consumers being confused. If the EU wants a ground based on confusion where the parties' goods are disimilar, this should be explicit, rather than hiding behind unfair advantage.