ECJ rules on extended protection for CTMs with reputation

In Iron & Smith v Unilever (Case C-125/14), the ECJ has ruled that a Community trademark which has acquired a reputation in a substantial part of the European Union may, in certain circumstances, benefit from the extended protection conferred on such marks in a member state where the mark does not have a reputation.

In 2012 Iron & Smith applied to register the figurative sign BE IMPULSIVE with the Hungarian Intellectual Property Office (HIPO). Unilever opposed, relying on its earlier Community trademark IMPULSE. The HIPO found that as Unilever had advertised and sold large quantities of the goods protected by the IMPULSE mark in the United Kingdom and Italy, the reputation of the Community trademark had been proved with respect to a substantial part of the European Union. Therefore, it was likely that use of BE IMPULSIVE would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier Community trademark.

Iron & Smith appealed to the Budapest Municipal Court, complaining that the HIPO had relied on the fact that Unilever’s products represented 5% of the market in the United Kingdom and 0.2% in Italy to find that the Community trademark’s reputation was established.

The court referred several questions to the ECJ for a preliminary ruling, essentially asking as follows:

• Which conditions must be met in order for a Community trademark to be regarded as having a reputation in the European Union pursuant to Article 4(3) of EU Directive 2008/95/EC?
• In which circumstances is Article 4(3) applicable if the earlier Community trademark has acquired a reputation in a substantial part of the territory of the European Union, but not in the member state in which registration of the later national mark is sought?

The ECJ held as follows:

• Under Article 4(3), if the reputation of an earlier Community trademark is established in a substantial part of the territory of the European Union – which in some circumstances may coincide with the territory of a single member state – then that mark has a reputation in the European Union.
• If the earlier Community trademark has acquired a reputation in a substantial part of the territory of the European Union, but not in the member state in which registration of the later mark is sought, the Community trademark owner may benefit from the protection afforded by Article 4(3) where it is shown that a commercially significant part of the public is familiar with that mark and makes a connection between it and the later mark, and that there is either actual and present injury to its mark or a serious risk that such injury may occur.

Counsel comment:

This ruling concerns the establishment of a reputation within the European Union and whether it may be invoked in an opposition in a member state where the mark does not have a reputation. It may be assumed that the ruling also applies by analogy to prohibiting use of a later mark in a member state. There is also the question of which party must prove injury to the earlier mark, or lack thereof: does the burden of proof lie with the trademark holder or should it be placed on the defendant, which will in essence reduce the Community trademark’s unitary protection by claiming that the mark does not have a reputation in the state where it wants to register a (similar) mark?

Tobias Cohen Jehoram, partner, and Robbert Sjoerdsma, senior associate, at De Brauw Blackstone Westbroek