Attack on landmark INTEL decision from a wolf in sheep's clothing

In Environmental Manufacturing LLP v Office for Harmonisation in the Internal Market (OHIM) (Case T-570, May 22 2012), which concerned a wolf’s head logo, the General Court has issued a decision which reinterprets the landmark INTEL case on detriment to the distinctive character of a reputed mark.

This decision circumvents the extremely problematic requirement set out in INTEL to show detriment by means of a change in the economic behaviour of the average consumer of the earlier mark consequent on use of the later mark. This requirement was roundly criticised by trademark owners because of the difficulties in proving that any lost sales were due to the introduction of the later mark. Now, in place of this requirement is a much more lenient test requiring weakening of the earlier mark’s ability to identify its goods or services as coming from the earlier rights holder (Paragraph 54). This can be shown by logical deductions from an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector and other circumstances of the case (Paragraph 52).

These are the sections of the INTEL decision which caused consternation amongst owners of reputed marks and which the 'wolf’s head' decision reinterprets:

• Paragraph 76 - “[D]etriment to the distinctive character of the earlier mark is caused when that mark’s ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark.”
• Paragraph 77 “It follows that proof that the use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future.”

The 'wolf’s head' decision takes the unusual interpretative approach of quoting the description of detriment to distinctive character set out in Paragraph 76 and stating that no additional effect such as a change in economic behaviour can be required. The court justifies this by pointing out that such an additional condition is not set out in Article 8(5) of the Community Trademark Regulation (207/2009), which is correct. 

However, it also states that this additional condition was not set out in the INTEL decision. This appears to fly in the face of the clear wording of Paragraph 77 on change in economic behaviour and which was replicated exactly in the operative part of the INTEL decision. The court bases this reasoning on the use of the words “it follows” at the start of Paragraph 77, which the court implies somehow makes it subordinate to Paragraph 76. The implication is that the change in economic behaviour described in Paragraph 77 is merely an example of detriment, rather than being an additional requirement to be shown in all cases before detriment can be established.

This reflects an approach to interpretation which can be described, at its most charitable, as selective. The propriety of the General Court contradicting a decision of the Court of Justice of the European Union on a specific point of law must also be questioned. In spite of these issues, this fresh approach to detriment will be welcomed with open arms by owners of reputed trademarks.

Niamh Hall, FRKelly, Dublin and Belfast