The Good, the Bad and the Priority : EU trade marks, legal certainty and good faith in conflicts with senior users of a distinguishing sign

(1)

THE GOOD, THE BAD AND THE

PRIORITY

EU trade marks, legal certainty and good faith in conflicts with senior

users of a distinguishing sign

Abstract:

The globalisation of commerce has caused brands to build up international significance. This is furthered by the internet, enabling a single branding strategy to apply world-wide. The European Union Trade Mark Regulation supports this strategy, providing an EU trade mark that should enable the free movement of goods throughout the Union without fear of conflicting national rights. But does it? The EU trade mark may conflict with prior established use of a sign in a member state, causing legal uncertainty for its proprietors. This thesis focuses on such conflicts of rights and the uncertainties it causes. It poses the question whether legal uncertainty in conflicts between EU trade mark proprietors and prior users of a sign used in the course of trade may be solved by reference to standards of due care or a ‘know or should know’-rule within the framework of the Regulation. It finds that, while a standard of due care may solve some conflicts, the current design of the Regulation will still require undertakings to take caution when registering and using their EU trade mark throughout the Union. Standards of due care do not provide an all-encompassing solution. Fear of conflict remains, caused by an absence of uniformity of laws on unregistered trade marks and the prevalence of merely local rights against EU trade marks. Reliance on concepts of coexistence may provide some solutions, but the exact application of coexistence remains understudied by the European Court of Justice.

Geert Lokhorst

Master’s Thesis Research Master Information Law

Thesis coordinator: Dr. S.J. van Gompel

1 May 2019

(2)

1 Introduction

Suppose an organization established in the UK exploits a chain of cafés and wants to open branches throughout the European Union, providing bar and restaurant services and selling merchandise indicating the café. It first starts with a couple of local branches in the larger European cities to get sense of the market in the different territories. At some point, it finds that there is a competing pub in Heidelberg, Germany, operating under the same name and selling merchandise under a confusingly similar brand name.1_{The organization may, quite understandably, be upset: it was the first to use the} brand name, has amassed international recognition since the local competing pub was established, and had no way of knowing that this local pub in Heidelberg was using the same sign. It has used its brand as a distinctive sign for its goods and services for years but is now posed with a competitor that could possibly block the further expansion of their brand or put at risk their current brand recognition.

Central in this dilemma are intellectual property rights known as trade marks. Trade mark law concerns the recognition of exclusive rights over signs capable of distinguishing goods or services of one undertaking from those of other undertakings.2_{It aims to provide exclusivity of use of such distinctive} signs in order to inform consumers of the origin of goods or services, and incentivize investment in quality products.3_{From a broader perspective, trade marks enable producers to communicate with the} consumers about their goods or services, in order to promote a reputation in the market without competitors being able to exploit this reputation.4_{Trade mark law therefore also differs from most other} intellectual property laws. Patents, copyrights and designs temporarily restrict competition for certain intangible objects to promote inventiveness,5_creativity,6_{and new product designs.}7_{Trade marks, on the} other hand, are designed to enable competition by channelling demand resulting from market success.8 Trade marks do not protect an object of achievement, e.g. the sign itself or the product bearing the trade

1 German Federal Supreme Court 15 August 2013, I ZR 188/11, GRUR 2013/1161 (Hard Rock Cafe). 2 Article 15(1) TRIPS and Article 4 EUTMR.

3 CJEU Judgment of 12 November 2002, Arsenal Football Club, C-206/01, ECLI:EU:C:2002:651, para. 49.

4 A.G. Mengozzi in CJEU Judgement of 18 June 2009, L’Oreal v. Bellure, C-487/07, ECLI:EU:C:2009:378, point 54; Richard Davis et al., Tritton on Intellectual Property in Europe (London: Thomson Reuters, 2014), 355.

5 Article 52 European Patent Convention 2000.

6 CJEU Judgment of 16 July 2009, Infopaq, C-5/08, ECLI:EU:C:2009:465, para. 37. 7 Recital 7 Community Design Regulation 6/2002.

8 Annette Kur and Martin Senftleben, European Trade Mark Law - a Commentary (Oxford: Oxford University Press, 2017), 4.

(5)

mark, but only the function of the sign as a communicative channel between the producer and consumer.9

Within the EU, trade mark law is harmonized in the member states through the EU Trade Mark Directive (EUTMD). However, the café organization may want to look at the EU Trade Mark Regulation (EUTMR), which will also be the focus of this thesis. This Regulation provides a unitary right applicable and enforceable throughout the entire community in order to enable undertakings to adapt their activities to the scale of the Union.10_{These rights are acquired by application and registration at the EU trade mark} registry (the EU Intellectual Property office or EUIPO),11_{making it generally knowable for any third party} that rights to the café chain’s brands have been claimed throughout the EU territory.12

The Directive and Regulation are not the only protection mechanism for signs used in the course of trade, i.e. signs that function to identify an economic activity engaged by their proprietor or user.13_A broad range of subjective rights to such signs exist, which may be invokable by competitors to limit an EU trade mark right. This is due to a recognized priority based on a prior trade mark registration, or a prior qualified use for which national law recognizes exclusivity, as may be the case for unregistered trade marks and trade names. Furthermore, earlier use may lead to a legitimate interest against appropriation by competitors, leading to protection based on unfair competition.14

This is also where some of the issues described in the opening paragraph begin. The pub in Heidelberg may rely on a senior trade name with higher priority in the German territory,15_{or it may even claim that} the café organization registered its trade marks in bad faith. Furthermore, it could argue that use of the sign by the international café organization in Heidelberg and its surrounding territory would amount to unfair competition, due to consumer deception or misappropriation of their goodwill.16_{This situation is}

9 Kur and Senftleben, 4.

10 Recital 2 Regulation 207/2009 on the Community trade mark (CTMR). 11 Recital 9 and Article 1(1) EUTMR.

12 Tobias Cohen Jehoram, Constant Van Nispen, and Toon Huydecoper, Industriële Eigendom - Deel 2: Merkenrecht (Deventer: Kluwer, 2008), 278.

13 CJEU Judgment of 29 March 2011, Bud, C-96/09 P, EU:C:2011:189, para. 149.

14 This thesis will use the term ‘unfair competition’ for any relative right against abuse of a competitor’s sign, relying on the finding of Henning-Bodewig that there is no significant difference between this and other terms for such civil liability: Frauke Henning-Bodewig, Unfair Competition Law - European Union and Member States (Den Haag: Kluwer Law International, 2006), xv.

15 German Federal Supreme Court 15 August 2013, I ZR 188/11, GRUR 2013/1161 (Hard Rock Cafe); Birgit Clark, “Between a Rock and a Hard Place? Bundesgerichtshof Decides Hard Rock Cafe Trade Mark Dispute,” Journal of

Intellectual Property Law & Practice 9, no. 7 (2014): 546, https://doi.org/10.1093/jiplp/jpu067.

16 Similarly, the international café organization may claim that the pub in Heidelberg unfairly competes, as the pub owner knew about the original café in London when it started exploiting the sign in Heidelberg. See German Federal Supreme Court 15 August 2013, I ZR 188/11, GRUR 2013/1161 (Hard Rock Cafe)

(6)

not unique to Germany. EU member states recognize these and other protection mechanisms beyond EU trade mark law. The EU trade mark is not in replacement of these national rules, but merely in addition to them, providing an EU-wide right where national law is generally limited to the territory of the member state.

European trade mark law also recognizes, in principle, that earlier rights following from these national provisions provide a superior right. Trade mark law – and most other protection mechanisms – are guided by the principles of priority, exclusivity and territoriality.17_{The rightsholder with the highest} priority, i.e. the most senior right, enjoys the exclusive use of the sign in the territory of protection.18_The exclusivity and priority principles thereby require ‘availability’ in the territory of protection:19_{while a sign} does not have to be absolutely novel as required in patent law, it should in principle not be subject to pre-existing rights.20_{The importance of this cannot be overstated: it provides that a junior EU mark may} not enjoin a senior rightsholder,21_{and the senior rightsholder may be able to claim infringement, oppose} use, oppose registration or invalidate the EU trade mark.22

A problem that arises here is that EU trade mark proprietors may not always be able know all senior users that can file such actions in the entire European Union. An international company can hardly be expected to know every bar in Heidelberg, let alone every bar in the entire Union. For one, their names may not be maintained in a public register,23_{in contrast to EU trade marks and national harmonized} trade marks. As such, the café chain may apply for an EU trade mark without knowing or being able to know about conflicting prior use. 24_{In that case, he will be acting in good faith, but may still be prevented} from using his mark by senior users.

17 Burkhart Goebel and Manuela Groeschl, “The Long Road to Resolving Conflicts between Trademarks and Geographical Indications,” The Trademark Reporter 104, no. 4 (2014): 831–32.

18 Goebel and Groeschl, 832.

19 Frank Gotzen and Marie-Christine Janssens, Europees En Benelux Merkenrecht (Gent: Larcier, 2016), 63.

20 Eric Gastinel and Mark Milford, The Legal Aspects of the Community Trade Mark (The Hague: Kluwer Law International, 2001), 2001.

21 See Article 9(2 & 4) EUTMR.

22 See Articles 8(4), 59, 60, 137 and 138 EUTMR.

23 While EU member states generally maintain a company register, this register does not necessarily maintain the actual names under which companies are known to the public or participate in trade, but merely the official name under which the company is formally established and registered.

24 Martijn W Hesselink, “The Concept of Good Faith,” in Towards a European Civil Code, ed. A.S. Hartkamp et al., 4th rev. a (Alphen aan den Rijn: Kluwer Law International, 2011), 619–20.

(7)

This problem does not occur in other fields of intellectual property. Patents,25_{registered designs,}26_(most) geographical indications and appellations of origin,27_{and plant variety names are all registered rights:}28 they come into existence only after public registration, or publication in statutory law. A company cannot claim ignorance about the existence of such rights, as their registration makes them generally knowable. Copyrights, unregistered designs, personal names and rights to personal portrayal are generally not subject to such publicity requirements,29_{but these rights do not provide protection unless the protected} object has actually been copied.30_{Derivation will have to be proven by the rightsholder,}31_{even though} the burden of proof will sometimes be reversed.32_{In contrast, unregistered trade marks and other rights} to signs used in the course of trade protect against consumer confusion and misrepresentation, not some act of copying itself. Consequently, a junior user may be held liable regardless of whether he knew or should have known about the priority. The thesis will therefore be limited to discussing such rights to signs used in trade.

The priority of senior users in absence of registration poses an issue. According to Dinwoodie, the EUTMR should enable free movement of goods throughout the EU without fear of conflicting national rights.33_{The priority of unregistered senior users may thwart the effective provision of a unitary right} that is applicable and enforceable in the entire community, and thereby also the free movement without fear of national rights.34_{Related to this issue is that it is not always clear what rights under what} circumstances are able to limit the unitary EU trade mark right. This is partly due to vague language in the EUTMR itself, relating to ‘rights of proprietors’ or ‘bad faith’.35_{The relation between trade marks and}

25 Article 127 European Patent Convention. 26 Recital 18 Community Design Regulation 6/2002.

27 Geographical indications and appellations of origin may protected through statutory law and/or bilateral agreements (see, for example, CJEU Judgment of 29 March 2011, Bud, C-96/09 P, EU:C:2011:189). However, most of such rights are also registered in the European E-Bacchus database.

28 Article 22 Regulation 2100/94 on Community plant variety rights.

29 Stefano Sandri, “Community Trade Marks and Domestic Laws,” in European Community Trade Mark

-Commentary to the European Community Regulations, ed. Mario Franzosi (The Hague: Kluwer Law International,

1997), 418.

30 CJEU Judgment of 13 February 2014, Gautzsch Großhandel, C-479/12, ECLI:EU:C:2014:75, para. 44, Dutch Supreme Court, 29 November 2002, ECLI:NL:HR:2002:AE8456 (Una Voce Particolare), para. 3.3. Ester Derclaye and Matthias Leistner, Intellectual Property Overlaps: A European Perspective (Oxford: Hart Publishing, 2011), 14. 31 Dutch Supreme Court, 29 November 2002, ECLI:NL:HR:2002:AE8456 (Una Voce Particolare) para. 3.3

32 See, for example, Dutch Supreme Court 21 February 1992, ECLI:NL:HR:1992:ZC0513, NJ 1993/164 ( Barbie v.

Sindy).

33 Graeme B. Dinwoodie, “Territorial Overlaps in Trademark Law: The Evolving European Model,” Notre Dame Law

Review 92, no. 4 (2017): 1680.

34 Max Planck Institute, “Study on the Overall Functioning of the European Trade Mark System” (Münich, 2011), 230.

(8)

unfair competition has also become more complex in light of the European harmonization of unfair commercial practices.36_{In light of these developments, and the recent overhaul of both national} harmonized and EU trade mark systems,37_{clarification is in order.}

The central question in this thesis is whether legal uncertainty in conflicts between EU trade mark proprietors and senior users of a sign used in the course of trade may be solved by reference to standards of due care or a ‘know or should know’- rule within the framework of the EU Trade Mark Regulation. It will propose that, in absence of systems of public registration, conflicts between EU trade marks and senior users of an identical or similar sign may be limited by assessing whether the EU trade mark proprietor knows or should have known about the prior use. It is hypothesized that such knowledge requirements in these conflicts of rights are already to a large extent covered by specific provisions in the EUTMR.

The central question has been broken down into five sub questions, which form the chapters of this thesis. Chapter 2 discusses what exact issues are caused by the existence of senior users with non-harmonized and unregistered rights to signs used in trade. It will provide the conceptual framework, based on doctrinal literature, from which the issue of good faith will be studied further. Chapter 3 will provide the different rights to signs used in trade in France, Germany, the United Kingdom and the Netherlands. Special emphasis is given to the differences between national practices and possible public recognition required for the coming into existence and infringement of these national rights. Chapter 4 will assess how the EUTMR deals with conflicts between EU trade marks and senior users. This will provide an overview of the possible actions and limitations against the EU trade mark. Chapter 5 will discuss the concepts of knowledge and good faith as a general norm in civil liability and EUTMR provisions introduced in chapter 4. It will assess the standard or standards of knowledge required for actions and defences against the EU trade mark right, including normative positions on how provisions can be interpreted to reflect knowledge standards. Finally, in chapter 6, the question will be raised to what extent the conflict between EU trade marks and prior rights may still cause uncertainty for EU trade mark proprietors, even when they are acting in good faith.

36 See the Unfair Commercial Practice Directive 2005/29EC and CJEU Judgment of 19 September 2013, Martin Y

Paz Diffusion, C-661/11, ECLI:EU:C:2013:577.

37 Regulation 2015/2424 Amending the trade mark regulation (ATMR); Trade Mark Directive 2015/2436, to be implemented by 15 January 2019 (Articles 54-56 TMD).

(9)

1.1 Methodology

As follows from the sub-questions described above, this thesis mainly looks at the functioning of the trade mark system and possible changes that could be made in order to ameliorate conflicts between EU trade mark proprietors and senior users of a sign used in trade. As such the thesis takes an internal perspective on the law, i.e. a legal doctrinal approach to the interpretation of EU trade mark law. This legal doctrinal approach is described by Westerman as the interpretation of concepts in the law as both the object of enquiry and the conceptual framework from which this object is studied.38_{In this view,} concepts on a legal system are theory-driven, but the theory itself is derived from existing rules, principles and precedents within the legal system.39_{In more practical terms, doctrinal research analyses} authoritative texts such as statutes, treaties and case law, and scholarly legal writings as a secondary source to find support and meaning for certain interpretations. It is therefore important for the validity of the thesis to clarify what sources are used.40

Chapter 2 will explore the doctrinal literature on conflicts between the EU trade mark and non-harmonized, unregistered rights. 41_{This is necessary to enable critical reflection on the issue and explore} underlying problems of the conflict. 42_{Based on doctrinal literature, policy papers by lobby organizations,} and an extensive report on the functioning of the European trade mark system by the Max Planck Institute, this chapter aims to define where the issues lie, and propose alternatives.

Chapter 3 provides an overview of national protection mechanisms in France, Germany, the United Kingdom and the Netherlands. This will be based on prior assessments on rights to signs used in the course of trade by the EUIPO and the International Association for the Protection of Intellectual property (AIPPI).43_{Furthermore, handbooks on intellectual property and trade mark law in the member states} have contributed to providing an overall understanding of the different rights to signs. In addition,

38 Pauline Westerman, “Open or Autonomous? The Debate on Legal Methodology as a Reflection of the Debate on Law,” in Methodologies of Legal Research - Which Kind of Method for What Kind of Discipline?, ed. Mark Van Hoecke (Oxford: Hart Publishing, 2011), 87, 90.

39 Mark Van Hoecke, “Legal Doctrine: Which Methods for What Kind of Discipline,” in Methodologies of Legal

Research - Which Kind of Method for What Kind of Discipline?, ed. Mark Van Hoecke (Oxford: Hart Publishing,

2011), 16; Rob Van Gestel and Hans-W. Micklitz, “Revitalizing Doctrinal Legal Research in Europe: What about Methodology?,” EUI Working Paper (Fiesole, 2011), 26.

40 Eva Brems, “Methods in Legal Human Rights Research,” in Methods of Human Rights Research, ed. Coomans, Grünfeld, and Kamminga (Antwerp: Intersentia, 2009), 89.

41 Terry Hutchinson, “Doctrinal Research - Researching the Jury,” in Research Methods in Law, ed. Dawn Watkins and Mandy Burton (London: Routledge, 2013), 22.

42 Hutchinson, 22.

43 OHIM, “National Law Relating to the Community Trade Mark and the Community Design,” 2006; AIPPI Executive Committee, “QUESTION 104 Trademarks : Conflicts with Prior Rights,” Yearbook (Tokyo, 1992).

(10)

comparative studies on unfair competition in the member states has informed the use of standards of unfair competition to prohibit misrepresentation and confusing marketing.44_{The member state selection} is discussed further below (§ 1.1.1).

Chapter 4 provides classic doctrinal legal research, analysing the EUTMR and clarified and construed further through the case law of the Court of Justice of the EU (CJEU). CJEU preliminary references arising from identical provisions in the trade mark Directive will also be considered. The CJEU has on multiple instances determined that identical provisions in the Trade Mark Directive and Regulation should be given the same meaning.45_{The official Guidelines of the EUIPO will be used as a further source for} interpretation.46_{While these guidelines are not legally binding, they provide many important references} and interpretations to cases of the EUIPO Board of Appeal, the General Court and the CJEU. Still, this approach will not provide a full answer. Not all provisions have been subject to questions before the courts, and discussion often remains on the correct interpretation of CJEU case law. As such, this chapter will aim to provide a balanced discussion on the different viewpoints in the literature. The historical legal documents to the EUTMR are not central in the interpretation. While the original Directive and Regulation were not even accompanied by a publicly available explanatory memorandum,47_some documents have been made available over the years.48_{However, none of these documents have} appeared especially relevant for this thesis.

This thesis will venture beyond interpretation by also discussing recommendations for further development of the law in chapters 5 and 6.49_{While the core of doctrinal research lies in identifying the} law in a certain area, it is often accompanied with a statement of difficulties and a recommendation of

44 See, e.g., Bodewig, Unfair Competition Law - European Union and Member States; Frauke Henning-Bodewig, “Nationale Eigenständigkeit Und Europäische Vorgaben Im Lauterkeitsrecht,” GRUR Int., no. 549 (2010); H.C. Eugen Ulmer and Friedrich-Karl Beier, Het Recht Inzake Oneerlijke Mededinging in de Lidstaten Der Europese

Economische Gemeenschap (Zwolle: Tjeenk Willink, 1968); Thomas Wilhelmsson, “Misleading Practices,” in European Fair Trading Law: The Unfair Commercial Practices Directive, ed. Geraint Howells, Hans-W. Micklitz, and

Thomas Wilhelmsson (Hampshire: Ashgate Publishing, 2006).

45 See, for example, ECJ Judgment of 27 June 2013, Malaysia Dairy Industries, C-320/12, ECLI:EU:C:2013:435, paras. 34-35.

46 EUIPO, “Section 4: Rights under Articles 8(4) and 8(6),” in Guidelines for the Examination of European Union

Trade Marks (EUIPO, 2017), 1–64.

47 Charles Gielen, “Likelihood of Association,” in European Community Trade Mark - Commentary to the European

Community Regulations, ed. Mario Franzosi (The Hague: Kluwer Law International, 1997), 336.

48 Alexander Tsoutsanis, Trade Mark Registrations in Bad Faith (Oxford: Oxford University Press, 2010), 68; CIPIL, “Community Trade Mark Regulation - Centre for Intellectual Property and Information Law,” accessed March 12, 2019, https://www.cipil.law.cam.ac.uk/projectseuropean-travaux/community-trade-mark-regulation.

49 Anne Ruth Mackor, “Explanatory Non-Normative Legal Doctrine,” in Methodologies of Legal Research - Which

(11)

changes in order to achieve more effective laws.50_{The ambitions are often broader than just describing} the rules; it often also provides a normative or reformative viewpoint.51_{Still, these recommendations} should fit a normative ‘ought’ fitting a (dominant) viewpoint on the legal system.52_{Recommendations} should not appear out of thin air, but be supported by existing viewpoints within that system.53_{For this} reason, chapter 5 will aim to provide an overview of knowledge and good faith in EU trade mark law. This will enable the construction of ‘good faith’ in EU trade mark law to be supported by law and legal opinions. Chapter 6 will provide an even more prescriptive standpoint, looking at possible recommendations to align trade mark conflicts with prior users to the principle of good faith. Support for such alignment will be sought in the legal framework and discussions on peaceful coexistence.

1.1.1 Country selection approach

This thesis is supported by an overview of national laws on trade marks and national protection mechanisms for signs used in trade. A broad understanding on these conflicts has been sought. For this reason, a diverse system selection approach is used to obtain cases representing a broad variation of national mechanisms in the 28 EU member states (the indicator variable).54_{This is aimed to provide as} much information as possible on conflicts with EU trade marks (the interaction variable).

The selected member states are representative for three legal families in the EU: Napoleonic, Germanic and common law. There is a strong overlap within and broad divergence between these legal families regarding both unfair competition and unregistered trade marks. The Napoleonic legal system (generally) does not recognize unregistered trade marks (including France, Spain and the Benelux countries),55_but may provide protection based on unfair competition through general civil liability and acknowledges unregistered well-known marks following Article 6bis Paris Convention.56 _{Unregistered trade marks are} generally recognized in Germanic countries, including Germany, Denmark, Italy, Czech Republic, Slovakia,

50 Hutchinson, “Doctrinal Research - Researching the Jury,” 23. 51 Hutchinson, 23.

52 Richard a Posner, “The Present Situation in Legal Scholarship,” Yale Law Journal 90, no. 5 (1981): 115–16; Jan B.M. Vranken, “Methodology of Legal Doctrinal Research: A Comment on Westerman,” in Methodologies of Legal

Research - Which Kind of Method for What Kind of Discipline?, ed. Mark Van Hoecke (Oxford: Hart Publishing,

2011), 117.

53 Vranken, “Methodology of Legal Doctrinal Research: A Comment on Westerman,” 115.

54 Jason Seawright and John Gerring, “Case Selection Techniques in Case Study Research: A Menu of Qualitative and Quantitative Options,” Political Research Quarterly 61, no. 2 (2008): 296–97.

55 Verena von Bomhard and Artur Geier, “Unregistered Trademarks in EU Trademark Law,” The Trademark Reporter 107, no. 3 (2017): 688.

56 Annette Kur and Thomas Dreier, European Intellectual Property Law - Text, Cases & Materials (Cheltenham: Edward Elgar, 2013), 191.

(12)

Sweden and Finland.57_{These countries generally require some qualified use in the sense of market} recognition (Verkehrsgeltung), except for Denmark, which provides protection from first use.58 Furthermore, this legal family generally provides for specific legislation against unfair competition, in contrast to the Napoleonic practice of applying general rules on civil liability.59_{The common law} countries have a singular approach, providing protection of goodwill in a sign through the tort of passing off. This resembles protection of unregistered trade marks, albeit through tort law.60_{Still, it should be} stated that national rights can be very country-specific. A variety of local idiosyncrasies can develop due to the influence of history and culture.61_{For example, Italy is the only EU country recognizing sui generis} protection for the commercial use of personal names that are famous in a non-commercial sector.62

Based on these families, the countries chosen are France as representative for the Napoleonic legal system, Germany for the Germanic legal system and the UK for the common law. Furthermore, the Netherlands has been added as a Napoleonic system with a unique twist.63_{The Benelux Convention on} Intellectual Property (BCIP) explicitly denies any protection based on civil liability for unregistered signs which can be defined as trade marks, i.e. are signs which identify the origin of goods or services, and are not well-known following Article 6bis Paris Convention.64

57 Kur and Senftleben, European Trade Mark Law - a Commentary, 239.

58 Kur and Dreier, European Intellectual Property Law - Text, Cases & Materials, 191.

59 Henning-Bodewig, “Nationale Eigenständigkeit Und Europäische Vorgaben Im Lauterkeitsrecht,” 559. 60 Henning-Bodewig, 559.

61 See, in general, Henning-Bodewig, “Nationale Eigenständigkeit Und Europäische Vorgaben Im Lauterkeitsrecht.” 62 CJEU Judgment of 5 July 2011, Edwin v. OHIM, C-263/09 P, ECLI:EU:C:2011:452.

63 Cohen Jehoram, Van Nispen, and Huydecoper, Industriële Eigendom - Deel 2: Merkenrecht, 293.

64 See Article 2.19 Benelux Convention on Intellectual Property (BCIP); See also Benelux Court of Justice 23 December 2010, ECLI:NL:XX:2010:BP4851 (Engels v. Daewoo), where the court concluded that this negation of general civil liability was not in conflict with Article 10bis Paris Convention.

(13)

2 Legal uncertainty in EU trade mark law

The Max Planck Institute for Innovation and Competition called for full harmonization of all rights to unregistered signs used in the course of trade in their study on the overall functioning of EU trade mark law in 2011.65_{It stated that the lack of harmonization of these rights has created practical difficulties, in} particular in interferences between these signs and the EU trade mark, but also as “a general problem and a source of insecurity for cross-border commercial activities”.66

However, it did little to define why and how these issues arise. Stating that non-harmonization is ‘a general problem’ especially provides very little context. This chapter will aim to define why, exactly, the existence of ‘alternative’ protection mechanisms may pose an issue for EU trade marks. Reliance on doctrinal literature will be sought for the question how prior rights interfere with the EU trade mark and cause cross-border insecurity. This will enable critical reflection on existing theories and provide complementary theories to explore the underlying problems in this conflict of rights.67

2.1 Interferences and cross-border insecurities

The EU trade mark aims to create an exclusive right applicable in the entire European Union.68_{While the} trade mark rights are negative rights – a right to prohibit use by others – the purpose of the unitary right is to allow use of the sign without fear of (local) conflict, in order to incentivize cross-border trade.69_As such, the unitary right should make possible the free movement of goods and services throughout the EU “without fear of a conflicting national right.”70_{Other rights to signs used in trade may thwart this} purpose. Under some circumstances, prior rightsholders may claim infringement, oppose or invalidate registration, or block use of EU trade marks.71_{Götting therefore argued that the EU trade mark is} weakened by countries that provide generous protection for prior rights.72_{Kur similarly argued that}

65 Max Planck Institute, “Study on the Overall Functioning of the European Trade Mark System,” 231. 66 Max Planck Institute, 230–31.

67 Hutchinson, “Doctrinal Research - Researching the Jury,” 22. 68 See Article 1(2) EUTMR (“Unitary character”).

69 Dinwoodie, “Territorial Overlaps in Trademark Law: The Evolving European Model,” 1691–92. 70 Dinwoodie, 1680.

71 Articles 8(4), 60(1), 137(1) and 138 EUTMR.

72 Horst-Peter Götting, “Protection of Well-Known, Unregistered Marks in Europe and the United States,” IIC

(14)

generous protection of unregistered signs might distort competition in the internal market, due to these rights prevailing over EU trade marks.73

Trade mark ‘user associations’ have also contributed to this discussion on unharmonized rights. Their arguments are reminiscent of the one made by Götting. The International Trademarks Association (INTA), a global association of brand owners and trade mark professionals, has argued that divergence of national laws leads undertakings to take a country-by-country-approach in determining whether rights are established and what consequences this has for their own rights.74_{As such, the divergence causes} insecurities for trade mark proprietors wanting to embark upon cross-border trade. INTA therefore urged for harmonization, in order to achieve a system where countries provide similar tools of protection trade mark proprietors can rely on.75

The preceding arguments are not (entirely) satisfactory. The ‘interference with the EU trade mark’ argument by Götting and Kur seem entirely focused on protecting and broadening the interests of EU trade mark proprietors. It puts forward that the prevalence of national rights as such are an issue as they weaken the EU trade mark. It thereby not only favours the EU trade mark proprietor above any legitimate interests of users enjoying generous protection in certain member states, it entirely ignores the legitimacy of such interests. Furthermore, harmonization as such would not solve the problem posed by Götting and Kur, especially if the newly harmonized rights were to arise out of first simple use. In that case, full harmonization would provide similar tools in all countries, but will not provide certainty on what signs are already established and in use in every member state. A country-by-country assessment will therefore have to be made in any case, even if harmonization is achieved.

Von Bomhard and Geier take a more balanced approach to the interaction between the EU trade mark and non-harmonized protection mechanisms. They argue that use-based rights are important to ensure a right to continue use after another party files for registration.76_{Kur similarly argues that denying} registration of a trade mark because a third party has already attained market recognition fits the overall normative idea of trade mark law in reducing consumer confusion.77_{Taking such legitimate interests into}

73 Annette Kur, “Two Tiered Protection – Designs and Databases as Legislative Models?,” in Common Principles of

European Intellectual Property Law, ed. Ansgar Ohly, series Gei (Tübingen: Mohr Siebeck, 2012), 105.

74 International Trademark Association, “Policy Development and Advocacy - Study on the European Trademark Systems,” 2010, 45; International Trademark Association, “INTA Comments on the Review of the European Trade Mark Systems” (Brussels, 2011), 4.

75 International Trademark Association, “Policy Development and Advocacy - Study on the European Trademark Systems,” 52.

76 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law,” 699. 77 Kur, “Two Tiered Protection – Designs and Databases as Legislative Models?,” 106.

(15)

account, Von Bomhard and Geier still conclude that harmonization is desirable. Not due to a weakened EU trade mark right, but because “the diversity of the legal conditions makes availability searches far from exhaustive.”78_{Most significant is their criticism on Denmark for recognizing trade mark rights based} on first simple use; obliging applicants to find all such rights could lead to insurmountable search costs.79

2.2 Is full harmonization a realistic approach?

As can be concluded from the preceding section, doctrinal literature generally proposes harmonization as the solution to legal uncertainty in the conflict of rights.80_{However, actual ambitions for such} harmonization have been absent. Ulmer and Beier’s comparative study on unfair competition of 1968 already evaded the question of unregistered rights.81 _{And there has been little guidance since. On} unregistered trade mark rights, the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) allows members to provide trade mark rights based on mere use without requiring registration,82_{but does not provide further qualifications. On the protection of trade names, the CJEU} has concluded that national law may establish certain thresholds, without further delineating these thresholds.83_{Some commentators have similarly argued that the Paris Convention’s general prohibition} of creating confusion regarding a competitor’s establishment, goods or other activities allows member states to set their own thresholds.84

Comparing national systems shows sharp divisions for which a resolution may be far away, as will be shown in the next chapter.85_{According to Götting, the harmonization of unregistered rights in the Trade} Mark Directive was given up or postponed because a common solution did not seem feasible.86_{With the} number of member states more than doubled since the first trade mark directive (from 12 to 28), consensus may be even less plausible. The Max Planck Study also concluded, in view of the complexity

78 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law,” 699. 79 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law.”

80 Max Planck Institute, “Study on the Overall Functioning of the European Trade Mark System”; Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law.”

81 Ulmer and Beier, Het Recht Inzake Oneerlijke Mededinging in de Lidstaten Der Europese Economische

Gemeenschap, 232–33.

82 Article 16(1) final sentence TRIPS.

83 Max Planck Institute, “Study on the Overall Functioning of the European Trade Mark System,” 230. CJEU Judgment of 16 November 2004, Anheuser-Busch, C-245/02, ECLI:EU:C:2004:717, para. 97.

84 Article 10bis(3)(1) Paris Convention; Alexander Peukert, “The Coexistence of Trade Mark Laws and Rights on the Internet, and the Impact of Geolocation Technologies,” IIC International Review of Intellectual Property and

Competition Law 47, no. 1 (2016): 70–71. A.G. Leclercq in Benelux Court of Justice 23 December 2010,

ECLI:NL:XX:2010:BP4851 (Engels v. Daewoo), NJ 2013/120 m.nt. Spoor.

85 Kur, “Two Tiered Protection – Designs and Databases as Legislative Models?,” 106–7.

(16)

and without proper guidelines, that proposals on unharmonized rights to business identifiers should be kept to a minimum.87

2.3 Alternative solutions to uncertainties

In absence of a realistic prospective of full harmonization, a different solution could be sought in Von Bomhard and Geier’s statement that national divergence makes ‘prior art’-searches far from exhaustive.88_{Registered trade marks are generally knowable due to their public registration, making it} easy to assert whether a specific sign has already been claimed and therefore subject to exclusive rights.89_{This is different for unregistered trade marks recognized under a first-to-use system. In these} cases, the trade mark proprietor will also enjoy exclusive rights, but the trade mark he uses will not be commonly perceivable.90_{This contrast with the register-based system means that there is no guarantee} that there are no third parties already using the sign, even after spending time and money searching for prior use.91_{The issue of non-exhaustiveness therefore arises when national law provides (legal)} protection to signs which are not registered. Uncertainty is therefore not (just) caused by diverging legal standards, but by insecurity in the practical question what legitimate interests of third parties are recognized and provide protection against an EU trade mark.

The easiest solution for this predicament would be to deny all protection for unregistered signs.92 However, this would conflict with international obligations. Denying protection for well-known marks would conflict with Article 6bis Paris Convention; and denying protection for unregistered trade names would directly conflict with Article 8 Paris Convention. Furthermore, it could also clash with the general prohibition of confusing marketing in Article 10bis Paris Convention.

A solution may therefore be sought by relying not purely on ‘register knowability’, but also other ‘sufficient knowability’ of a sign used in the course of trade. The AIPPI – an international organization dedicated to the development and improvement of intellectual property regimes – argued that an unregistered trade mark should only be able to challenge a registered trade mark where the registrant

87 Max Planck Institute, “Study on the Overall Functioning of the European Trade Mark System,” 230. Keeping harmonization strategies confined to well-known trade marks, which every member state should already recognize following Article 6bis Paris Convention.

88 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law,” 699.

89 Recital 9 and Article 1(1) EUTMR; Cohen Jehoram, Van Nispen, and Huydecoper, Industriële Eigendom - Deel 2:

Merkenrecht, 278.

90 Tsoutsanis, Trade Mark Registrations in Bad Faith, 14–15.

91 Tsoutsanis, 14. Robert Burrell and Michael Handler, “The Intersection between Registered and Unregistered Trade Marks,” Federal Law Review 35, no. 375 (2007): 376.

(17)

cannot reasonably invoke ignorance of its existence.93_{For trade names, these should be used or} sufficiently known in the country.94_{Visser similarly advanced that legal uncertainty is diminished due to a} growing ‘Google clarity’: the ability to find prior use of a sign through internet search engines.95_While such internet searches are not fool proof, limited by, i.a., personalized or geographically-bound results and limitations of language, they enable broader availability searches than were possible before the internet existed.

2.4 The unitary, autonomous, but coexisting EU trade mark

The issue of non-exhaustiveness of prior users can be viewed through the framework of the EU trade mark regulation (EUTMR). The European Union trade mark is a unitary right with equal effect throughout the union.96_{This unitary right was deemed necessary to remove barriers for branded goods and services,} enabling undertakings to adapt their activities to the scale of the community.97_{In order to achieve this,} Article 1(2) EUTMR provides that the EU trade mark has equal effect throughout the union. Unless the EUTMR provides otherwise, registration, transfer, surrender, revocation, invalidity and prohibition of use can only apply in respect of the whole union. Its unitary character also means that it is autonomous of national legal systems. The EU trade mark system is governed by European Union law and principles,98 meaning that it is guided by the primacy of EU law over national laws.99_{This is also recognized in Article} 17 EUTMR, providing that the effects of the EU trade mark are governed solely by the provisions of the Regulation, except in other respects not provided in the Regulation.

Limitations to the autonomy and unitary character of the EUTMR, as provided by the Regulation itself, can be found in the principle of coexistence.100_{The European legislator has aimed to balance the} ambition of enabling free trade with the continued validity of national legal systems. The EUTMR does not replace national trade mark laws.101_{This requires coexistence, where prior rights to a sign recognized}

93 AIPPI Executive Committee, “QUESTION 104 Trademarks : Conflicts with Prior Rights,” 1. 94 AIPPI Executive Committee, 2.

95 Dirk Visser, “Het Niet-Geregistreerde Merk En de Google-Duidelijkheid,” BIE 2010, no. november (2010): 398. 96 Article 1(2) EUTMR.

97 Recitals 3-5 Community Trade Mark Regulation 40/94 (CTMR).

98 Alexander Von Mühlendahl et al., Trade Mark Law in Europe (Oxford: Oxford University Press, 2016), 7.

99 CJEU Judgment of 15 July 1964, Costa v. ENEL, 6/64, ECLI:EU:C:1964:66; and CJEU Judgment of 9 March 1978,

Simmenthal, C-106/77, ECLI:EU:C:1978:49.

100 The principle of coexistence should not be confused with trade mark coexistence, which is the de facto practice of two or more similar trade marks coexisting within a territory. This is often caused by the inability of the proprietor with the earliest right to obtain an injunction due to acquiescence, coexistence agreements, or, in some specific circumstances, other long-term concurrent use, see CJEU Judgment of 22 September 2011, Budějovický

Budvar, C-482/09, ECLI:EU:C:2011:605.

(18)

in a member state can be used to oppose and invalidate an EU trade mark (Articles 8(4) and 60(1) EUMTR), or in defence of infringement (Article 9(2) EUTMR).102_{Furthermore, the actual use of an EU} trade mark in certain (local) territories may be blocked through the so-called ‘Emmenthaler Cheese provisions’ in Articles 137 and 138 EUTMR. Following Article 137 EUTMR, a prior right of more than mere local significance can claim infringement against the EU trade mark; proprietors of prior rights that are not more than merely local may continue their use and oppose use of the EU trade mark in their territory following Article 138 EUTMR. . As such, the principle of unitary character of the EU trade mark is not absolute but limited by the principle of coexistence.103_{This also means that the registration of an} EU trade mark does not provide an affirmative right to use it in all member states.104

What thus results is a complex interaction between European and national law. The Regulation is superior to national law based on the primacy of EU law and the autonomy of the EU trade mark system. However, the exclusive rights created by the EUTMR are equal to and coexists with national rights. Therefore, the EUTMR is autonomous from national laws, except where the Regulation itself provides otherwise.105_{This also means that the EUTMR is not a strict first-to-file system, i.e. recognizing only} registered rights. While EU trade mark rights are only obtained by registration, the Regulation does explicitly recognize the validity of unregistered rights as prior and superior rights if they are recognized as such under national law.

2.5 Going forward

This chapter aimed to define why, according to trade mark literature, it may pose an issue to protect signs used in trade beyond the (EU) trade mark law. Most authors argued that, in absence of full harmonization, EU trade mark proprietors would be posed with conflicting rights, which they may not know or could have known about. These authors therefore propose full harmonization of all rights to signs used in the course of trade. However, there does not seem to be an actual prospect for such a development. Furthermore, even if full harmonization was provided, this would not ensure that EU trade mark proprietors cannot still be confronted with third parties it did not and/or could not have known about.

102 See, e.g., Articles 8, 9 and 60 EUTMR.

103 CJEU Judgment of 12 December 2013, Rivella International v. OHIM, C-445/12 P, ECLI:EU:C:2013:826, paras. 56-58; EGC Judgment of 12 July 2012, Rivella International v. OHIM, T-170/11, ECLI:EU:T:2012:374, para. 36.

104 Alberto Casado Cerviño et al., Concise European Trade Mark and Design Law, ed. Charles Gielen and Verena von Bomhard (Alphen aan den Rijn: Kluwer Law International, 2011), 269.

(19)

As an alternative, this thesis will continue on the axioma that legal uncertainty is caused by the absence of general knowability of all signs which have been established by third parties. In absence of a system of registration, the good faith ignorance of undertakings may cause conflicts which could not have been easily evaded through a ‘prior art’-search. Following this assertion, the concept of good faith within the EUTMR may provide (further) solutions to conflicts between the EU trade mark proprietor and senior users of signs in trade.

The unitary character and autonomy of the EU trade mark system may provide a foundation for legal certainty of the EU trade mark proprietor. Actions and limitations against the EU trade mark are based on the rules of conflict and coexistence within the Regulation itself. Standards of good faith as ‘constructive knowledge’ or ‘due diligence’ could therefore be sought in these rules of coexistence provided by the EUTMR, providing (some) legal certainty for EU trade mark proprietors. The exact rules on conflict and coexistence will therefore have to be unearthed. However, before describing these provisions in chapter 4 and discussing their relation to good faith in chapter 5, chapter 3 will first describe in more detail the different national rights to signs used in the course of trade.

(20)

3 Prior rights and other prior uses

Before venturing further into the EU Trade Mark Regulation (EUTMR), it is important to obtain a general overview of the relevant national protection mechanisms in France, Germany, the United Kingdom and the Netherlands (the selected member states in § 1.1.1). These countries are exemplary for the diverging approaches in the rights discussed in this chapter: unregistered trade marks, business identifiers (e.g. trade names) and reliance on civil liability and unfair competition, with special significance for EU harmonized unfair commercial practices.106_{These rights do not aim to prohibit copying, but aim to} prevent consumer confusion. A junior user may therefore be held liable regardless of whether he knew about the priority.

The types of protection mechanisms, including their object of protection and exclusive rights provided, deviate between national laws.107_{With regard to the exclusive rights provided, an extensive overlap} seems present for most national rights.108_{As will be shown in this chapter, all protection mechanisms are} based on a notion of ‘consumer confusion’ reminiscent of the likelihood of confusion in trade mark law. Furthermore, most jurisdictions also recognize reputation-based interests as found in EU trade mark law. Deviations are more notable on the actual object(s) national law protects. As will be shown below, the types of business identifiers actually protected differ widely per member state, and unfair competition remains divided even after partial harmonization through the Unfair Commercial Practices Directive (UCPD).

Domain names and unregistered geographical indications will not be discussed (separately), as they form part of the three rights mentioned above. While domain names are ‘registered’ at the Internet Corporation for Assigned Names and Numbers (ICANN) or a regional affiliate, the rights are not attributed by the register, but by the use made as a distinguishing sign.109_{Their legal protection is defined} by national requirements for unregistered trade marks, trade names (and other business identifiers) or unfair competition.110_{The same applies for unregistered geographical indications, which may be} protected through unfair competition or the tort of passing off.111

106 Unfair Commercial Practices Directive 2005/29/EC.

107 Götting, “Protection of Well-Known, Unregistered Marks in Europe and the United States,” 392. 108 EUIPO, “Section 4: Rights under Articles 8(4) and 8(6),” 6.

109 EUIPO, 9. 110 EUIPO, 9.

(21)

3.1 Absolute and relative rights to signs

The different protection mechanisms discussed in this chapter are divided into absolute and relative subjective rights. Both rights are assigned to individual (legal) subjects and are therefore subjective rights. But they differ in their third-party effects. Absolute rights are erga omnes, invocable against any person and therefore of a (quasi-)proprietary nature. Relative rights, on the other hand, can be invoked only against specific persons, notably contractual parties or tortfeasors.

Intellectual property rights – including trade marks and trade names – are absolute rights; they provide erga omnes protection on specific subject matter.112_{They grant exclusivity for the object of protection,}113 albeit limited to certain ‘rights’ described in specific laws. The exclusivity of absolute rights is, principally, based on priority: the earliest in right has a superior right that can block all use by parties later in priority. This is also the case for intellectual property rights, with the exception of independently created objects in copyright law and unregistered design law.

An action of unfair competition, on the other hand, is based not on the grant of rights, but the consideration that certain unfair acts or omissions in trade should be prohibited.114_{Actions of unfair} competition are not based on property, but on a case-by-case assessment of unfairness.115_{For example,} unfair competition may arise out of misdirecting consumers or misappropriating a competitor’s investments by copying a sign, but also deceitful pricing practices or misleading omissions are subsumed under unfair competition.116_{An action of unfair competition is therefore based on a case-by-case} assessment of whether a specific party acted unfairly in trade.117_{It does not confer a ‘priority’ in right} which may lead to erga omnes exclusivity, but (merely) an action in law against specific behaviour when this behaviour occurs. Even when a claimant successfully obtains an injunction based on unfair competition against the use of a “their” sign by a competitor, (s)he will not obtain an exclusive right to

111 World Intellectual Property Organization, “Introduction to Geographical Indications and Recent International Developments in the World Intellectual Property Organization (WIPO,” in Symposium on the International

Protection of Geographical Indications (Montevideo, 2001), 4, 7.

112 World Intellectual Property Organization, “Protection against Unfair Competition - Analysis of the Present World Situation” (Geneva, 1994), 10. See also Article 16 TRIPS: trade mark right provides an ‘owner’ to an ‘exclusive right to prevent all third parties’.

113 World Intellectual Property Organization, 10. 114 World Intellectual Property Organization, 10.

115 Henning-Bodewig, Unfair Competition Law - European Union and Member States, 176. See also CJEU Judgment of 14 January 2010, Plus Warenhandelsgesellschaf, C-304/08, ECLI:EU:C:2010:12, para. 45.

116 See, inter alia, Annex I to the Unfair Commercial Practice Directive 2005/29/EC.

117 Derclaye and Leistner, Intellectual Property Overlaps: A European Perspective, 271; Henning-Bodewig, Unfair

Competition Law - European Union and Member States, 176. CJEU Judgment of 14 January 2010, Plus Warenhandelsgesellschaf, C-304/08, ECLI:EU:C:2010:12, para. 45.

(22)

prohibit use erga omnes. No (quasi-)property right will be created, only the right to stop the unfair behaviour of the specific defendant. This distinction also complies with general principles of private law, where superiority in right is the basis for property law, while such sequence of rights plays no part for relative rights.

Intellectual property and unfair competition overlap with regard to the subject matter they (intend to) protect. The World Intellectual Property Organization (WIPO) – a United Nations agency for the protection of intellectual property – has stated that unfair competition is a necessary supplement when intellectual property laws are insufficiently comprehensive. Furthermore, WIPO formulated unfair competition as a grant of protection that no intellectual property law can provide in order to ensure honest practice in the marketplace.118_{In contrast to these supplementary functions, unfair competition} could also be defined as an overarching or underlying principle in intellectual property, in that competitors should not misappropriate another party’s investment or cause a misrepresentation of their company or products.119_{This connection is most clear in the use of a sign in trade to distinguish goods or} services, falling within both the exclusive trade mark rights and standards of fair competition. It is therefore sometimes argued that trade mark law is a specific part of unfair competition, concerned with ensuring fair competition by conferring an exclusive, (quasi-)property right.120_{The supplementary or} overarching function of unfair competition necessarily means that it is indeterminate, as it is difficult to exhaustively define what acts or omissions are unfair in the abstract. It will in some respects clearly fall outside any conception of proprietary rights, such as antitrust and deceptive pricing.

3.2 Absolute rights to signs used in the course of trade

3.2.1 Unregistered trade marks

While trade mark rights under EU law can only be obtained by registration,121_{Article 16 TRIPS also} recognizes trade mark protection based on first use. A prior right can therefore be established by first (qualified) use in trade. Such unregistered trade marks are not recognized in all EU member states. France and the Netherlands only recognize unregistered trade marks if they are well-known following 118 World Intellectual Property Organization, “Protection against Unfair Competition - Analysis of the Present World Situation,” 10, 12.

119 Dirk Visser, “Misprepresentation and Misappropriation – Two Common Principles or Common ‘Basic Moral Feelings’ of Intellectual Property and Unfair Competition Law,” in Common Principles of European Intellectual

Property Law, ed. Ansgar Ohly (Tübingen: Mohr Siebeck, 2012), 248–49; Frauke Henning-Bodewig, “Relevanz Der

Irregührung, UWG-Nachahmungsschutz Und Die Abgrenzung Lauterkeitsrechte/IP-Rechte,” GRUR Int., 2007, 986– 90.

120 World Intellectual Property Organization, “Protection against Unfair Competition - Analysis of the Present World Situation,” 13.

(23)

Article 6bis Paris Convention. 122_{However, France does provide some protection for unregistered signs} through concurrence déloyale, which will be discussed further in § 3.3.2.123

In Germany, unregistered trade marks are established as exclusive rights upon accumulation of sufficient recognition by the relevant public in the territory of use (Verkehrsgeltung).124_{The territorial scope of the} trade mark is limited to the specific area where it has such Verkehrsgeltung.125_{Recognition by the} relevant public in the area needs to be at least 20-25 percent for inherently distinctive marks and about twice as high for descriptive signs.126_{An unregistered trade mark with only local Verkehrsgeltung may} only prohibit use in that locality; and only unregistered trade marks with nation-wide recognition can invalidate junior registrations.127_{The exclusive rights for German unregistered trade marks are equal to} registered trade marks.128

The protection of distinctive signs in the United Kingdom is found in the tort of passing off, a specialis to the general tort of deceit.129_{To apply passing off, the senior user must prove the existence of goodwill,} misrepresentation and damage.130_{Passing off does not protect the distinctive sign as such, but the} goodwill associated with it. Passing off does not provide an exclusive right to the sign itself, but the goodwill accrued by its use in trade and public recognition by actual customers.131_{This also means that} passing off does not apply outside the territory where the trade has obtained a reputation,132_{as there} will be no consumer deception outside of this territory.133_{The scope of protection is limited to}

122 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law,” 688. Article 7-11-4(a) Code de la Propriété Intellectuelle; Article 2.19 Benelux Convention on Intellectual Property.

124 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law,” 689. S. 4 No. 2 Gesetz über den Schutz von Marken und sonstigen Kennzeichen (MarkenGesetz 1994).

125 OHIM, “National Law Relating to the Community Trade Mark and the Community Design,” 61.

126 Roland Knaak, “Deutschland,” in Gemeinschafsmarke Und Recht Der Mitgliedsstaaten, ed. G. Schricker, E.-M. Batian, and R. Knaak (Munich: C.H. Beck, 2006), 202, 209.

127 S. 4, no. 2 and S. 12 MarkenGesetz; Claudius Marx, Deutsches Und Europäisches Markenrecht: Handbuch Für

Die Praxis (Berlin: Luchterhand, 1997), 51.

128 S. 14 MarkenGesetz; OHIM, “National Law Relating to the Community Trade Mark and the Community Design,” 61.

129 Christopher Wadlow, The Law of Passing-off: Unfair Competition by Misrepresentation (London: Sweet & Maxwell, 2011), 12.

130 UK House of Lords Reckitt & Colman v. Borden [1990] 1 All E.R. 873.

131 UK Supreme Court Starbucks (HK) Ltd and others v. British Sky Broadcasting Group PLC and others [2015] UKSC 31.

133 Albeit that thee territorial scope of reputation is interpreted extensively, see UK Court of Appeal Chelsea Man

Menswear v. Chelsea Girl [1987] RPC 189: nation-wide injunction where the senior user sold clothing only in

(24)

misrepresentation causing consumer deception.134_{. Passing off does not protect proprietary-based} interests as found in EU trade mark law,135_{i.e. from the “misappropriation” of competitive advantage.}136

The modern definition of passing off also deviates from classic tort requirements in the sense that it does not require any intent or negligence of the tortfeasor.137_{However, it is difficult to conclude that a} trader is not at least negligent if the senior user can show goodwill. The presence of goodwill may indicate that the junior user should have been aware of a competitor’s reputation.

3.2.2 Famous marks doctrine

All members of the Paris Convention, including France and the Netherlands, are to refuse or cancel registration and prohibit use of a trade mark for identical or similar products that is liable to create a confusion with a mark considered to be well known in the country.138_{Such well-known marks play a} minor role in practice, as most signs will be registered far before they are considered to be well-known.139_{In that case, the trade mark proprietor can simply rely on its registered trade mark, which will} provide protection without requiring proof of their well-known status. The threshold for these marks is also unclear. German courts are strict, requiring at least 50% recognition by the relevant public.140_Dutch courts have also been strict, requiring a higher level of recognition than repute marks protected through Article 9(2)(c) EUTMR.141

3.2.3 Business identifiers

Business identifiers are signs used to identify a business of a natural person, a legal person, an organization or an association. Article 8 Paris Convention requires all members to protect trade names without prior filing or registration.142_{However, this does not mean that EU member state law provides} identical protection, nor is there any indication of harmonization at the EU level.143_{The Court of Justice}

134 Mary Lafrance, “Passing off and Unfair Competition: Conflict and Convergence in Competition Law,” Trademark

Reporter 102, no. 1096 (2012): 1101.

135 The UK is very restrained when it comes to recognizing unfair competition without consumer deception. See, for example, Lafrance, 1104.

136 See, in general, CJEU Judgment of 18 June 2009, L’Oreal v. Bellure, C-487/07, ECLI:EU:C:2009:378, para. 50. 137 Wadlow, The Law of Passing-off: Unfair Competition by Misrepresentation, 12.

138 Article 6bis Paris Convention.

139 Bomhard and Geier, “Unregistered Trademarks in EU Trademark Law,” 680. 140 Bomhard and Geier, 681.

141 District Court The Hague 23 October 2013, ECLI:NL:RBDHA:2013:19445, IER 2014/32 (Screentime v. SBS) m.nt. Verschuur.

143 Ulmer and Beier, Het Recht Inzake Oneerlijke Mededinging in de Lidstaten Der Europese Economische

Gemeenschap; Max Planck Institute, “Study on the Overall Functioning of the European Trade Mark System,” 127–

(25)

of the EU (CJEU) has condoned divergence, accepting in Anheuser Busch that member states may create and maintain their own thresholds for protection of trade names.144

Trade or company names distinguish a business or identify a company. Therefore, and in contrast to trade marks, the purpose of these signs is not to distinguish specific goods or services originating from an undertaking, but the business itself.145_{Still, conflicts between business identifiers and trade marks are} one of the most common.146_{Consumers will often establish a link between a trade or company name} and certain goods or services provided by the company.147_{For example, the name of a clothing store may} induce consumers to think that the store owner is also the origin of clothing bearing the same name as the store.148_{This has also led the EU legislator to specify that use of a sign as a trade or company name} may be prohibited by the trade mark proprietor under the same circumstances as infringing trade mark use.149

Trade marks and trade names could even be conflated to a certain extent, as trade marks function to indicate the origin of a product, which is the company producing it. For example, company Unilever NV maintains registered trade marks for the word mark ‘Unilever’ and uses it on most of their consumer goods. Still, a distinction could be sought in Gielen’s argument that trade marks indicate a predictability of experience, without having to provide the actual name of the specific undertaking producing a good or service.150_{A trade mark indicates a certain quality connected to the (potential) control of an} undertaking, without the consumer actually having to know the trade or company name. This also means that goods bearing the Unilever trade mark may not even be produced by the company Unilever NV itself, but by a licensee or subsidiary company.151_{Furthermore, a trade mark may be used without} any indication of actual source of production, and still maintain its validity.

144 CJEU Judgment of 16 November 2004, Anheuser-Busch, C-245/02, ECLI:EU:C:2004:717, para. 97.

145 CJEU Judgment of 11 September 2007, Céline, C-17/06, ECLI:EU:C:2007:497, para. 21, Judgment of 16 November 2004, Anheuser-Busch, C-245/02, ECLI:EU:C:2004:717, para. 64.

147 CJEU Judgment of 11 September 2007, Céline, C-17/06, ECLI:EU:C:2007:497, paras. 23, 27.

148 This was exactly the situation in fact in Celine, where the junior user was a shop owner who used a trade name identical to the name of a pre-existing clothing brand.

149 See Article 1(11) Amending Regulation 2015/2424; Article 9(3)(d) EUTMR. 150 Davis et al., Tritton on Intellectual Property in Europe, 405.

151 A.G. Cruz Villalón in CJEU Judgment of 19 September 2013, Martin Y Paz Diffusion, C-661/11, ECLI:EU:C:2013:577, point 75.

The Good, the Bad and the Priority : EU trade marks, legal certainty and good faith in conflicts with senior users of a distinguishing sign