The ruling can be found here: http://curia.europa.eu/juris/document/document.jsf?text=&docid=115783&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=6211.

India and China both have an established and successful generics based pharmaceutical industry and as tens of billions of pounds of  patent protected drugs come off patent soon (known as the “patent cliff”), they look set to benefit by releasing cheaper generic  alternatives – making themselves a small fortune in the process. Both the Wall Street Journal and BBC News have reported on the most recent victim of the patent cliff in which India-based firm Ranbaxy Laboratories Limited confirmed the release of an FDA-approved generic version of the 10 billion dollar a year drug “Lipitor” owned by the global pharmaceutical company, Pfizer. The new generic drug will be called “Atorvastatin” and with Lipitor’s patent having now expired, there is nothing Pfizer can do about it – except try to develop itself or buy in the next big thing from another research and developer.

With such a Robin Hood approach to pharmaceuticals there are mixed opinions about the impact the patent cliff is having on the pharmaceutical industry as a whole. The large pharmaceutical companies claim that the patent cliff is affecting their ability to raise funds for research and development which in turn is inhibiting advances in new and improved pharmaceuticals, to the detriment of patients. The smaller generic based companies and some consumer groups however are hailing the patent cliff as an opportunity to offer a wider-ranging and affordable selection of medicines to both the public and private sectors.

Laura Mole, from Matthew Arnold and Baldwin LLP’s Pharmaceutical and Life Sciences Sector Group Team, says, “Whilst I appreciate continued research and development in the pharmaceutical industry as a whole is vital for the production of new, more advanced drugs to combat human illness, I cannot help but see good quality, affordable alternative medicines as a good thing for the consumer and the NHS in these difficult financial times. More drugs will cost less so more patients will benefit. The important thing in the long-term, though, is that there is sufficient funding in the industry to incentivise continued research and development so that patients continue to benefit with further medical advances. More of the early-stage development is being done by start-up companies, with big pharma companies stepping in if the prospects look good.”

There are two totally independent Merck companies. This arose out of the Treaty of Versailles at the end of World War I, under which the two different Merck companies were each given exclusive rights to the brand in different territories.

German Merck claims that it held the rights to material on the web page at www.facebook.com/merck, but it has recently discovered that those rights were now being allocated to the US company. German Merck has no argument with US Merck – its complaint is with the social networking site, which it claims has been less than helpful over the issue.

This case shows the issues that can arise with owners of parallel brands existing in an ever-smaller global market.

The Court dismissed Folly’s arguments that “STALKER” had been used in conjunction with “tackle” as that was not always the case on its website. It also did not agree that “STALKER” was used in a descriptive sense, as that was not how Folly had used it. The Court also had no time for the arguments that “STALKER” was generic or had no distinctiveness.

All in all, the case brought was pure folly and the defendant should have found a better angle to win.

The Department’s response to the consultation responses can be found here: http://www.culture.gov.uk/images/publications/GovtResponse_advertising_trade_london2012.pdf. The revised draft regulations are here: http://www.legislation.gov.uk/ukdsi/2011/9780111515969.

On appeal, the European Court of Justice has reversed that decision. Average consumers did not generally make assumptions about the origin of products based on the shape of the product or the packaging in the absence of a word mark on the packaging. It could be difficult to pass the threshold for establishing distinctive character. However, that did not mean that whether the threshold had been passed should not have been considered at all. It was not the case that since no bottle had been sold without a label, only the word mark would be a distinguishing feature for consumers. It was possible that the colour and matting of the glass of the bottle could have fulfilled the functions of a trade mark, but a proper test should have been done to assess that.

The European Court of Justice has backed up the French Competition Board’s decision. The ECJ looked specifically at the question of selective distribution networks. It said that establishing those networks are not prohibited by Article 101 if resellers are chosen based on objective criteria, where those criteria are applied uniformly and non-discriminately, where the characteristics of the products need to preserve the quality and ensure proper use, and the criteria only go as far as is necessary. However, provisions within those networks may still end up offending against competition law. The ECJ has not accepted arguments relating to the need to provide individual advice to customers and to ensure their protection against incorrect use of products in the context of non-prescription based products to justify an Internet sales ban. Contract provisions that effectively prohibited Internet sales meant that the benefit of the block exemption did not apply. That said, it would still be for the national court to ascertain whether the contract had an individual exemption, as the failure of an agreement to fall within block exemption parameters does not automatically mean that it will not be found to be individually exempt on other criteria.

The ECJ has now delivered a dramatic ruling as follows:

• Where goods are advertised from outside of the European Economic Area and they have not been put on the market within the EEA with the brand owner’s consent, there is trade mark infringement even where the goods are just targeted as being offered or advertised for sale within the EEA without having to show further that they were actually put on the market in the EEA.
• It would be for a national court to rule on what was meant by “targeted”, but the mere fact that a website was accessible from a particular country would not be enough to satisfy that. The national court would need to consider the context of the offer, such as whether the territory was included in a list of countries to which the seller was willing to send the goods.
• Consumers do not “use” the brand in a trade mark sense when they use the eBay service. However, in this particular case, the people using eBay were deemed to be businesses as they were selling goods in the course of a trade, so they were “using” in a trade mark sense.
• The operator of an online marketplace like eBay does not generally “use” a third party’s trade marks (like L’Oréal’s) when its users advertise goods under those marks.
• However, its exemption from liability for its users’ actions under the E-Commerce Directive is removed when, as in eBay’s case, the operator of an online marketplace buys advertising keywords that are identical to the trade marks in order to optimise the presentation of the online offers. In that case, it is playing an “active role”.
• For the “active role” to apply and the operator to have liability, the trade marks have to be used on the site itself rather than in a sponsored link.
• Where an Internet service provider does not play an “active role”, such that it does not have knowledge or control of the unlawful advert, it is exempt from liability under the E-Commerce Directive, assuming it acts expeditiously in taking down the offending material as soon as it discovers the offending material.
• An online marketplace is not deprived of the exemption from liability merely because it stores offers for sale on its servers, sets terms of service, is paid for the service or provides general information to its users. However, the line is crossed if the online operator helps its customers in other ways such as by promoting or optimising its customers’ adverts. It was then no longer taking a neutral position and had taken an active role.
• Member States must ensure that trade mark owners can obtain an effective, proportionate, dissuasive injunction to stop infringers. This means ensuring effective protection for intellectual property rights. To do this, national courts should have the power to require online service providers to take steps not only to prevent a current infringement but also further infringement. It could be too much to expect ISPs to actively monitor all the data of its customers, but if it is aware of a particular problematic customer, it should not be able to wait until it is told again but there may, for example, be the need for an injunction ordering the ISP to suspend the account of the infringer so as to prevent further infringements by that user.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case creates two interesting developments. Firstly, taking an active role by optimising the material on its site could leave an ISP open to liability. Online intermediaries should therefore reduce their active involvement where they may be at risk of having liability for that content. Previously, they had assumed that they were not liable for their users’ activity unless they were informed otherwise.

“The second major impact is the wider-ranging injunctions mentioned by the ECJ. This could lead to actions by rights holders to try to get an injunction against ISPs to require them to shut down serial infringers’ accounts.”

The European Court of Justice has ruled that Fiorucci could object to Edwin’s registration, despite the fact that the rights in the mark had been sold. A well-known person can take advantage of these rights and stop a Community Trade Mark being registered if national law allows that person to object, so said the EU’s top court.

The court said that the Bangladeshi airline’s name was so similar to the US airline name that consumers would ignore any difference between “airline” and “airways” and as the services were the same (despite the routes being different), Section 10(1) was breached. Section 10(1) says that it is an infringement of registered trade mark rights if the same mark is used in respect of same services. Section 10(2) deals with similar names or similar services but with a likelihood of customer confusion. Section 10(3) relates to taking unfair advantage of another strong brand for example use of a name in bad faith. As to passing off, the US’s goodwill was made out, and it was clear that the Bangladeshi company’s use of the name would mislead consumers and cause confusion. There was no realistic prospect of defending any of those four claims, let alone all of them, and so summary judgment was awarded.

However, ICANN is building safeguards into the new system. It would cost US$185,000 to apply for a relevant suffix and the organisation would need to show that they have a genuine claim to that name. They would also need to prove that they meet high technical standards, with IT robustness and intellectual property protections for the brand. The application form would also involve about 50 questions to answer, with each question about 2-3 pages. It will not be easy, but domain name addresses will not look the same again in just a few months’ time as global brands start to change the look of the Internet landscape.

• Continued push for a single European Union patent system.
• Modernisation of the European Community Trade Mark system. This would include speeding up the registration procedure and increasing certainty over what constitutes a registrable trade mark.
• Creating a comprehensive framework for copyright in the digital single market. That would include multi-territorial collective management of copyright so that there would be online copyright licensing. There would also be a consultation on user-generated content to see if there should be more freedom for amateur producers of non-commercial film to be exempt when incorporating other copyright works. In addition, the Commission said it would propose a Directive on permitted uses of orphan works, and it actually proposed the Directive this at the same time as the strategy document.
• Replacement of the Customs Regulation to strengthen enforcement of intellectual property rights. As with the orphan works proposal, this was also introduced at the same time as the publication of the strategy.

For more on the strategy, click here: http://ec.europa.eu/commission_2010-2014/barnier/headlines/news/2011/05/20110524_en.htm.

In response, Espana’s Spanish representatives put forward a strong position defending Espana’s rights. They stated that Best Buy US’s use of the mark in Europe and particularly in Spain at the time created a conflict with its intellectual property rights, which would entitle it to take appropriate legal action to protect its interests. It added that its “Best Buy” brand had become distinctive and reputed. Use by the US group would cause confusion and lead to an unacceptable association with Espana’s products, causing irreparable and irreversible damage. Examples were given. The letter finished with three paragraphs that opened the door to a negotiated solution if there was sufficient compensation, but that the US group should refrain from using the mark until a negotiated solution was reached. The letter suggested a process to reach agreement.

An agreement was not reached and Best Buy US sued for unlawful threats, contrary to UK trade mark law. Under Section 21 of the Trade Marks Act, it is unlawful to threaten someone else with proceedings for registered trade mark infringement except for their application of the mark to goods or their packaging, their importing of the goods or the supply of services under the mark. The High Court threw out Best Buy US’s claim. However, on appeal, the Court of Appeal has sided with Best Buy US.

The Court of Appeal ruled that Espana’s response letter could amount to a threat. Despite the last three paragraphs of the letter that attempted to settle the matter amicably, the question to be answered was what a reasonable person receiving the letter with knowledge of all relevant circumstances at that time would have understood the writer of the letter to have intended. Following that test, a threat of proceedings had been made by Espana’s representatives, as it stated that the registered marks were distinctive and reputed and it would entitle Espana to take appropriate legal action to defend its interests. A reasonable recipient would have interpreted that to mean not just that Espana was asserting its legal rights but was intending to enforce those rights against Best Buy US. It was clear that the threat related to all of the EU and this included the UK. Accordingly, this threatened legal proceedings in the UK, thus bringing into play the UK’s unlawful threats provisions. The Court of Appeal added that although the letter related to use of the mark in connection with services (retail), it also referred to use of the mark in advertising and the media, which brought it outside of the exceptions to Section 21.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case illustrates the dangers of sending threats of trade mark infringement. Letters and emails need to be carefully written to come within the law. Otherwise, the person looking to strongly assert its own rights may end up being the wrong-doer. The particular facts of this case also show the dangers of non-UK lawyers communicating in a way that could impact on UK use of the rights, which could bring the UK Trade Mark law into play in a way that may not have been envisaged. This area is a minefield and specialist UK trade mark law advice should be sought when seeking to protect brands.”

The brand was launched by Tesco earlier this year in an attempt to compete on a higher level in the yogurt industry. However, Eckes-Granni argues that the ‘Yoo’ name is too similar to its ‘Yo’ branding used for fruit syrups, and for which it has held a European Community Trade Mark since 2009. Tesco has countered by arguing that consumers would not be confused between the two brands.

The filing of an opposition is similar to issuing court proceedings. The Intellectual Property Office will now collect evidence and try to decide whether Eckes-Granni’s trade mark rights would be infringed by the later mark.

Whoever said yogurt was good for you (or should that be “yoo”)?

The consultation on the draft regulations ends on 30 May 2011. The consultation can be found here: http://www.culture.gov.uk/images/consultations/ConsDoc_Regulations_on_Advertising_and_Trading_London_2012.pdf.

The High Court has agreed with Kingspan. Rockwool had used Kingspan’s trade marks. However, the comparative advertising was not objectively fair and therefore did not comply with the Misleading and Comparative Advertising Directive. Accordingly, the misleading comparative adverts could not be justified under the Trade Marks Act. The adverts had not only wrongly used the same mark in respect of the same goods, but it had also taken unfair advantage of and was detrimental to the distinctive character of a mark with a reputation. The judge found several things wrong with Rockwool’s campaign that made it fail the test, including falsely representing: that Kingspan’s products were not safe when properly installed; they had huge implications in respect of escape times and structural damage; what happened in real life, when the products were not installed as they would be in real life; and that two of the products were roof boards and not surface products.

Many businesses from hot dog stands, to cafes, to hotels to transport companies see a great opportunity to make some money off the back of the London 2012 Olympics. However, the official organisers of the Games have significant intellectual property rights in the brand and also specially passed Acts of Parliament within their armoury. Businesses need to be very careful before associating themselves with the Games unless they are official sponsors, because they may receive fines and court orders if they step over the line.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “We are no doubt going to see ever more attempts by counterfeit suppliers to make illegal money off the back of the Olympics. At the same time, there is going to be ever increased attempts by official Olympic organisers to stop this. There should be plenty more high profile cases in the next year and a half.”

Based on the evidence before the judge, he was satisfied that this would meet the elements of passing off as follows: the claimant had obtained a reputation in the domain name ‘offshorelsm.com’, there had been a misrepresentation by the way the domain names had been used that could lead visitors to the site into thinking that the web sites were Lifestyle Management’s, and there was damage. In addition, it was argued that the actions could amount to reverse passing off as the copy web sites had content that was potentially untrue, which would damage Lifestyle Management’s reputation and credibility.

It must be emphasised that this was an interim ruling and not a full hearing, so this does not amount to a final decision on all the facts. However, the award that the court made is of interest. The High Court ordered an interim injunction against continued use of the domain names. For now, they should merely be used to be directed to a blank web page. As to whether or not the claims had substance and the domain names would be transferred to the ex-client, that would all depend on the outcome of the parties’ full arguments at the main trial.

As Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, told Intellectual Property Magazine: ‘The purpose behind trade mark law is to protect consumers and provide them with guarantees of origin so they know there is a certain quality attached to the branded product. The Government needs to consider whether the origins of tobacco brands are worth protecting? The Government may think not for products that are considered to harm the public’s health. However, if the number of counterfeit products increases, could this actually make the products less safe? Is it a case of better the devil you know, and at least work with suppliers that at least agree to do business legitimately?’

For more on the ECJ’s ruling, please click here: http://www.mablaw.com/2010/03/european-court-of-justice-gives-eagerly-awaited-ruling-in-google-keyword-search-terms-trade-mark-cases-google-v-louis-vuitton/.

After their first dispute, the parties entered into a trade mark co-existence agreement in 1981 and this was replaced by another one in 1991. Under those agreements, the parties agreed not to encroach into each others’ areas of business. The dispute reignited in the 21^st century when Apple Inc launched iTunes as a music download service, even though it was over the Internet. In a case in 2006, the High Court ruled that Apple Inc did not do anything wrong as it only used the Apple name in respect of the shop and not the music. It looked like the parties would soon come to an agreement about making The Beatles’ music available on iTunes, but after what Apple Inc’s CEO and apparent Beatles fan  – Steve Jobs – has called a ‘long and winding road’, the parties have now at last settled their differences again.

Some domain names will be hotly contested. For example, the ‘BA’ trade mark is registered at the Intellectual Property Office by 42 rights holders. If there is more than one verified application, an auction of the domain name will take place, with the proceeds from the highest bidder going to the Nominet Trust, which is a charity focused on increasing access, safety and education on Internet issues.

Pedro Cruz Villalon stated that, in principle, a prohibition issued by a national court in relation to a European Community Trade Mark had effect throughout the EU. He qualified his opinion to the extent that the decision would only have effect in other countries where there was actual or threatened infringement. However, the national court producing the decision could only enforce breach of the decision within that nation. Breaches in another country would have to be enforced by the national court of that particular country.

Advocates General provide guidance to the ECJ by producing opinions. The ECJ is not under any obligation to follow the views expressed in the opinions, but tends to do so. We therefore await the final decision of the ECJ, but if followed this ruling would significantly simplify and cheapen the cost of enforcing trade mark rights around the EU. For more on the Advocate General’s opinion, click here: http://curia.europa.eu/jcms/upload/docs/application/pdf/2010-10/cp100100en.pdf.

The ECJ said that all shapes had some element of being part of achieving a technical result, so ‘necessary’ and ‘exclusively’ should not be interpreted such as to preclude all shapes from being registered. However, the mere addition of a few arbitrary elements should not get around the exclusion. Nor should the exclusion of registrability be stopped from applying if the particular shape for which registration was being applied was not the only way – in other words, if there is more than one way of achieving the same result, the trade mark application could still fail. The ECJ was keen to emphasise that technical solutions have limited duration of protection under intellectual property law; for example, patents last for a maximum of 20 years before competitors can then copy them. If trade marks were to be granted for purely technical solutions, this would effectively extend the exclusive rights indefinitely. That must not happen.

M-Tech’s objection here was that Oracle had conducted its business in a way in which it was not possible for traders to ascertain whether the goods had originated inside the EEA or outside. In particular, it had deliberately chosen not to make publicly available its database of product serial numbers – and those could have identified where the goods had been first marketed.

The High Court had awarded Oracle summary judgment but on appeal the Court of Appeal agreed that M-Tech had an arguable case. It thought that it was possible that Oracle’s actions amounted to an artificial partitioning of the European market, contrary to the Treaty on the Functioning of the European Union (previously the EC Treaty), with the aim of maintaining price differences in each country rather than any legitimate wish to protect its brand. The Court of Appeal did not award victory to one party or the other, but said that M-Tech’s arguments warranted a full trial and the case should probably end up being referred to the European Court of Justice to make a ruling.

The matter has come to light because Skype has had to admit to the business risks as part of its plans to float. It has also admitted that if Sky wins then this may encourage other third parties to oppose its brand and also for them to take legal actions for trade mark infringement. If Skype loses, this could prove costly and ultimately end up either in a re-brand or a requirement to pay expensive licence fees.

In an earlier round, the High Court agreed with Diageo that sellers of vodkat had been passing their drink off as vodka. ‘Vodka’ had a reputation and goodwill relating to a particular class of clear, tasteless, distilled, high-strength alcohol; vodkat had been marketed in such a way as to deceive a substantial number of members of the public; and sufficient numbers were actually confused, resulting in lost sales and erosion of the distinctiveness of the vodka brand. The High Court ruled that, as with certain other defined classes – like Champagne, Sherry, Scotch Whisky, advocaat and Swiss chocolate in previous court cases – vodka was a clearly defined class of goods too, meaning that vodka traders collectively shared the goodwill in the vodka name.

The ruling was appealed and the Court of Appeal has now upheld the High Court’s ruling. IB argued one point: that the rights for collective distinctiveness applicable to a class of product as in this case should only apply to products having a certain cachet – ie that they were perceived by the public to have a superior quality or be a premium product, and vodka did not have that quality. Nonsense, said the Court of Appeal. There was nothing to suggest that that further hurdle had to be overcome. The Court dismissed IB’s argument that this would open the door to other products sold in large quantities such as white paint arguing the same thing. White paint was a purely descriptive term and paint manufacturers could not argue that they had acquired goodwill in the type of product that was white paint (as opposed to the paint manufacturer’s own particular brand of white paint) in the way that vodka manufacturers had to that collective brand. IB was therefore liable under the extended form of passing off.

Since Diageo won in the High Court and now the Court of Appeal, they could make that a double.

Currently in most European countries, following a complaint, Google will act to stop use of another entity’s trade mark as a keyword that generates an advert. That is now changing. Google has extolled the virtues of the new system, by highlighting the fact that Internet users may now be able to see relevant and helpful adverts from resellers, review sites and competitors when users search for a particular brand. Advertisers can still complain if the use of their trade mark generates an advert where the specific text confuses users about the origin of the goods or services and Google will remove the advert if it is not happy. This change will apply to nearly every country in the world.

Meanwhile, Google is making a second change to its keyword policies. In the US, resellers can already use another company’s trade mark in the actual advertising text. This practice will be extended to the UK, Ireland and Canada.

Both changes will come into effect on 14 September.

In 2007, the engineering company applied to register a trade mark for OMEGA in the UK in classes 9 and 14 on the trade marks register. Class 14 of the register covered several things including watches. It was the application in that class that the watch company officially opposed with the trade marks registry. Whilst the parties were battling it out on that front, the manufacturing company applied to the High Court for summary judgment against the watch company’s breach of contract for opposing the trade mark application.

The High Court agreed with the manufacturing company. The court said that the words in the original agreement were sufficiently clear and it did not matter which classes on the register the use or application were in – classes on the register were purely for the registry’s administration purposes. It was the specification for which the goods to be used that mattered. The High Court added that someone who had consented to another’s use of the trade mark in a particular way could not later oppose that use or registration, unless they agreed something different.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This case shows that courts will enforce trade mark co-existence agreements between businesses that have overlapping brands. Parties should also ensure that the agreements are not specific to any particular class of goods or services but are described in terms of the goods or services themselves. They should also seek to ensure the agreements are future proofed, where possible, because co-existence agreements entered into a long time ago can have an impact many years down the line, as the watch company found out to its cost here.’

In this particular case, Portakabin made and supplied mobile buildings. It owned a registered trade mark for ‘PORTAKABIN’, Primakabin sold and leased new and second-hand mobile buildings, some of which were owned by itself and others by other suppliers such as Portakabin. Primakabin sponsored ‘Portakabin’, as well as similarly spelt words such as ‘portocabin’, with Google so that Primakabin would appear prominently in response to a search engine query for those terms. Its advert was headed ‘used portakabins’. Portakabin objected and claimed that this was an infringement of its registered trade mark rights. The case worked its way through the Dutch courts, which made a reference to the ECJ to rule.

The ECJ stated that use of a third party trade mark as a keyword would infringe that trade mark unless the advert made it clear that the advertised goods or services do not come from the trade mark owner or licensee. Where this was not clear, European Union trade mark law would not normally provide a defence on the grounds of a mere description of the goods. Trade mark owners can stop unauthorised use of their marks as keywords if the advertising does not enable average Internet users or only with difficulty to ascertain whether or not the advertised goods or services originate from the trade mark owner.

The ECJ also said that legitimate resellers should have special protection. They could not be prohibited from reselling second-hand goods of the relevant trade mark owner, alongside other goods, unless the sale of those other goods risked seriously damaging the image of the proprietor’s trade mark.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This judgment reinforces the recent Louis Vuitton ruling, which can be found here: http://www.mablaw.com/2010/03/european-court-of-justice-gives-eagerly-awaited-ruling-in-google-keyword-search-terms-trade-mark-cases-google-v-louis-vuitton/. Keyword advertisers are treading on thin ice if they sponsor another trade mark to generate search results for their websites, unless they can show that users are not confused as to the commercial connection. Meanwhile, this latest case also enables legitimate use of trade marks by resellers.’

This case surrounds an action brought by L’Oréal for trade mark infringement against Bellure. Bellure sold look-alike/smell-alike perfumes – perfumes that looked and smelt like some of L’Oréal’s established fine fragrance brands. This case was not about the fact that the perfumes smelt similar but about the get-up of the infringing articles and use of the brand names in comparison lists. The High Court had ruled in favour of L’Oréal. The defendants appealed, and the Court of Appeal referred questions to the European Court of Justice to answer so as to interpret EU trade mark law.

The ECJ came down in L’Oréal’s favour, particularly that the general get-up took unfair advantage of the more famous brands and free-rode on the coat-tails of that brand. The ECJ also said that using comparison lists could amount to trade mark infringement. Comparative advertising may be trade mark use, but could not be stopped by a trade mark owner if it satisfied the list of conditions in Article 3a(1) of the Comparative Advertising Directive. However, that list included not taking unfair advantage of the reputation of a trade mark, and not presenting goods or services as imitations of goods or services bearing a protected trade mark. The ECJ said that the Directive prevented an advertiser from stating or suggesting in comparative advertising that the product or service was an imitation or replica of something with a well-known mark. That would take unfair advantage of the reputation of that mark. The ECJ said use of a competitor’s trade mark in comparative advertising was allowed where the comparison objectively highlighted differences and did not give rise to unfair competition. Unfair competition arose because the imitator was effectively free-riding on the coat-tails of the more famous brand and benefiting from its reputation, despite no one actually being confused.

The Court of Appeal has applied that decision in its own judgment. It had no option but to rule that Bellure had infringed L’Oréal’s trade marks because it had used the brand names in respect of identical types of goods in advertising and, on the ECJ’s analysis, that was trade mark (rather than purely descriptive) use which could not be justified under comparative advertising law, even though there was no question of customers being confused. Lord Justice Jacob criticised this. He said that the comparison lists merely gave consumers buying perfumes at the lower end of the market an opportunity and informed choice as to which perfumes smelt a bit like the much more expensive branded products. Referring to someone else’s trade mark in that way when no one was confused and simply telling the truth that a product was a much cheaper imitation was a positive thing, he thought. He felt that trade mark law now effectively stopped people from telling the truth about comparing someone’s products with those of their competitors in a non-confusing way, and this could have a chilling effect on being able to compete.

This case contrasts with different results in a similar recent case brought against eBay in France by Louis Vuitton. That case is reported here: http://www.mablaw.com/2009/12/ebay-louis-vuitton/. eBay has also had mixed success in other cases brought against it around Europe by the luxury brands. In a case brought by L’Oréal last year in the High Court, eBay was able to show that it was not responsible for counterfeit products sold by its users; but the Court went on to refer questions to the European Court of Justice to rule on whether use of L’Oréal’s brand in sponsored links to direct users to listings for infringing goods on its site constituted trade mark infringement and, if so, whether eBay had a defence under the E-Commerce Directive for acting as a mere host without actual knowledge of the infringing activity. We await that decision from the European Court.

In this subsequent case, Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmueller (BergSpechte) owned a trade mark for travel arrangements. A competitor called trekking.at Reisen used particular marks that Bergspechte considered to be too similar to its own registered trade marks to generate paid-for ads using Google’s AdWords service. The case proceeded through the Austrian courts and the matter was referred to the ECJ to rule.

The ECJ has ruled that the EU’s Trade Marks Directive enables a registered trade mark owner to prohibit an advertiser from advertising, based on a keyword identical with or similar to the trade mark through an Internet referencing service (eg Google), goods or services identical with those for which the mark is registered, such that the advertising does not enable an average Internet user without difficulty from ascertaining whether the goods or services originate from the trade mark owner or an entity economically connected with it or instead by a third party. The selection of the keyword by the advertiser was use in the course of trade and in relation to its own goods or services, even where the mark did not appear in the advert itself. It is for the national court to decide whether the signs are sufficiently similar and also whether the average Internet user could ascertain that the advertiser is not connected to the trade mark owner.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘In other words, there is no advance from the Google / Louis Vuitton ruling. We don’t know how the national courts are going to interpret these rulings. Things are still unclear.’

The case arose from luxury goods supplier Louis Vuitton’s concerns over use of its trade marks on Google’s AdWords system by two competitors who were trying to sell competing products and by a third person who supplied counterfeit Louis Vuitton goods. The cases proceeded initially through the French courts and then ended up at the European Court of Justice. The ruling was keenly awaited because of its impact on the ability to protect your own brand and use others using the growing advertising medium that is Google. The ECJ ruled as follows:

• A trade mark owner could prohibit a third party from advertising a keyword identical to its registered trade mark where the advert does not enable a normally informed and reasonably attentive Internet user without any difficulty to ascertain whether the goods or services referred to in the advert originate from the trade mark owner or whether the parties are somehow economically connected. It is for the national courts to decide on each case whether a trade mark’s distinguishing function is affected.
• An Internet referencing service provider (such as Google) which stores a keyword identical to the trade mark and displays adverts based on that does not itself infringe the registered trade mark owner’s trade mark rights.  
• Google also has protection against someone else’s acts in misusing trade mark rights because it is a mere host of the information within the meaning of the E-Commerce Directive and did not play an active role as to give it knowledge over the data stored. The mere fact that Google’s service was subject to payment, Google set the payment terms and it provided general information to advertisers did not prevent Google from being exempt. It would lose that protection, though, if it did not act expeditiously in removing access to the data involved with the third party’s misuse of trade marks.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘This was a long-awaited ruling. Unfortunately, though, the result is not particular clear. Brand owners will be pleased that the ECJ agrees with protecting their brands; Google will be pleased that it is not responsible for third parties who pay Google money to advertise using competitors’ trade marks; and people will be pleased that they can use another party’s brand to advertise on the Internet as long as users are not left in any doubt as to the fact that the parties are not economically linked.

‘On the other hand: brand owners will be disappointed that competitors may be able to free ride on the back of their brand and push up the price that they have to pay Google; competitors will not be clear as to where the boundaries are for using someone else’s brand in search terms; and Google will be left unclear as to whether it needs to take down someone’s use of a keyword upon being told to do so by the brand owner (and failure to take down when it should have done could leave Google without a defence to being an innocent host).

‘The result is therefore somewhat confusing. Who has won and who has lost? It would have been more useful to have had some more guidance such as a clear statement as to whether use of the trade mark term in the result was ok or not. Instead, we will need to await further court rulings to clarify the position which goes to the heart of doing business online. This was a good opportunity for the ECJ to give clarity in an important commercial area, and they failed to do so.’

In the High Court action, the Court threw out the defendant’s argument that it was simply using its ‘own name’. Although there was an ‘own name’ defence that could apply to companies as well as to individuals, the defendant did not use its full company name (apart from the ‘Ltd’ bit) as it was required to do to take advantage of this defence but it instead used a much shorter version of its name. In any event, the Court said that its use had not been ‘in accordance with honest practices in industrial and commercial matters’ as it should have known of the existing registered trade mark when starting up.

On appeal, the Court of Appeal has agreed with the High Court ruling, but not with all of its findings. The Court of Appeal said that a company could claim that its trading name benefited from the ‘own name’ defence. Whether it was the company name or trading name, though, the position had to be that the use was in accordance with honest practices. The right to use one’s own name was not an absolute right. Much depended on the trading name adopted and in what circumstances it had been adopted. In this particular case, the use of the same name as the already established brand did not amount to honest practices as the infringer did not already have concurrent rights in the name, so the ‘own name’ defence was thrown out.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.upload-IT.com, comments: ‘Cases like this bring to the fore how important it is to obtain domain names relating to your brand before cybersquatters do. Although there are useful procedures to obtain the transfer of domain names quickly as happened here, cybersquatters can do untold damage to your brand before you obtain the transfer. They may persuade you to pay significant sums of money for what should really be your brand, just for you to avoid the uncertainty of going to an arbitration service where you may not win, and to enable you to obtain a transfer quickly. In the meantime, to keep the pressure on you and to increase the price you may be willing to pay, they may link from sites containing the domain names to your competitors or to porn sites. Far better to have a brand protection strategy and register in advance all common spellings and mis-spellings of your brand and across all top-level domains such as ‘.com’, ‘eu’, ‘.biz’ and ‘.uk’. But as IHG saw here, there may be a huge number of possible domain names that may be based on your brand, so the task of definitively registering everything relevant may not be easy.’