Essay Trade Marks
Executive Summary
The essay intention is to critically evaluate and discuss on the European Court of Justice Judgement towards the unfair competition in the case of L’Oreal v Bellure into the UK law. This serves the purpose for evaluation of the case statement in order to determine the recent developments in the trademark law for the UK. Trademark is defined as word, symbol, and piece of equipment and name that provides identity to the product or service in the competitive selling market of products and services.
Trademark includes different types of functions which help the company in getting registered its products in European Trademark Directive. At the same time, this study also helped in understanding the Trade Marks Act 1995 and accordingly helped in identifying the changes or development in trade mark law after such existence of case.
There have been harmonisations of the EU trade mark law for the UK and different member states in the European region towards making a unified system for the protection of trade marks. There have also been reforms in the directives and regulation and its implementation for the Trade marks in the UK but there is still uncertainty towards an actual harmonisation for trade mark law.
Trade Marks are using recognized as a brand name for a business that uniquely distinguish its product or service brand from the competitors with similar offerings. These are a tool of protection the business once it is trademarked to stop other from using similar sign, words or symbol to confuse the customers.
Trade Marks provide a legal protection to a business or the original manufacturers under its legal regulations and trade mark protection laws. However, the increase in market competition among the trade competitors has increase the relevance of law-based legal system and competition law framework towards anti-competitive ways and behaviour and against the act of ‘unfair competition’[1]. The unfair competition is linked to the economic torts liability.
In the United Kingdom, the legal communities place different meaning to the unfair competition such as unjust trading practices by businesses in their customer dealings and under the intellectual property context, it attract the torts of passing off and malevolent falsehood against those who have damaged the trading reputation and misappropriated the important intangibles. The trade mark law for the United Kingdom is governed by the national law as well as the European Union law.
The purpose of this essay is to present a critical evaluation of the statement,’ The judgment of the European Court of Justice in the case of L’Oreal v Bellure has imported a tort of unfair competition into UK law’ in relation to the current development in the trade mark law.
To analyze this statement, the essay will discuss and provide description of trade mark and the different function of a registered trade mark. The essay will cover the Trade Marks Act 1995, relevant case laws and the recent European Court of Justice (ECJ) case law. The essay will also draw attention towards and discuss the harmonisation under the EU Trade Marks Directive.
Trade Mark can be described by a name, word, slogan, sign or a symbol, or piece of equipment that provides an identity and differentiate from other competing product or services in the marketplace. This definition can be elaborated by considering the definition given under the EU directives.
Under the European parliament and the council directive (EU) 2015/2436, Article 3 of Section 1 defines trademark as sign that may comprises of any signs, personal names, words, letters, designs, numeral. It also includes the shape of goods of the packaging shape and colours and sounds.
However, all these sign and symbols much be able to different their goods from other and be on register at UK Intellectual Property Office so that public can be distinguish one undertaking form other and the legal authorities can determine to offer protection to the original manufacturer or marks proprietor.
According to Calboli & de Werra (2016), a trademark serves the purpose to identify the products or services within a specific company as well as also support in recognizing the ownership of the brand of an organization[2]. In simple words, trademark is identity proof of the products or services and also help in identifying the products and services on the basis of marks.
Trademark is something which develops an image in the minds of people for the products and services which are offered particularly to prospective consumers. A registered trademark is very important as it can protect indefinitely as far as mark perform continuously its indicated functions. In instance, Coca-cola brand also uses Coke name as its trademark and similarly, Apple Computer Corporation also represents the trademark as “Apple with a side bite”.
As per Greene & Wilkerson (2012) trademark law is actually based on the two different concepts i.e., similarity in distinctiveness and deceptive[3]. However, a trademark may be used for identifying the manufacturer goods but also for indicating the particular served quality.
While studying, Candek-Potokar et al. (2018) also explained that for protecting the trademark award for that organizations are dependent on different categories such as arbitrary mark, suggestive mark, descriptive mark and coined mark[4]. All these marks represent the language, qualities, features, distinctiveness and also no relationship between the goods and mark.
In a competitive market, trademarked goods or services are usually considered as a figure of property which helps in protecting the products from being used by the consumer without the permission of the company under the European Law. However, there are most of the countries which have designed patent laws against the copyright infringement.
In addition, trade mark can be brought or sold in the market in order to increase the sales as well as to develop company image in competitive situation. Bartholomew (2013) determined that trademarks can also be used by the other companies in form of licenses for certain period of time in specific condition and that could result into the crossroad brands[5].
The importance of trademark has been raised in a period when there is need to distinguish the products as per legal system but as per customer needs. In concern to this, the trademark registration is important under the European Union law because this help in protecting the rights of the business owners efficiently.
The intellectual property office in United Kingdom (UK) is related to trademark in which official responsible bodies are responsible for performing the intellectual property rights in the UK as well as it is also considered as an executive agency.
Further, Helmers et al. (2011) also mentioned that first trademark act was passed in the year 1266 under the control of Henry III that was required by all bakers for creating a distinctive mark for the product bread which they sold[6].
The trade marks act 1938 have brought a change in the UK system in regards to permit registration which is based on intent – to- use in order to examine based process and also for creating an application of the publication system.
The functions of a registered trade mark
In order to serve, the main purpose of identifying the source of goods then, there are four different functions of trademark that are performed by an organization as follows:
- Help to identify the product and its origin
- Help to advertise the product through trademark
- Focus on creating product image in people’s mind[7]
- Propose towards its product guarantee
In context to case, it is identified that L’oreal and Bellure face an unfair advantage practices under which unfair competition was began which affected negatively and that resultant into attraction towards the liability.
The function of trademark got harm because L’oreal and Bellure are selling a similar kind of product in a market i.e., same fragrance of perfume which lead to unfair competition efficiently. In concern to this, Setchi & Anuar (2016) stated that the advantage that third party has been undertaken because of reputation of the mark will always be considered as an unfair[8].
During the analysis of the case, it is also observed that third party is taking an advantage of registered trademark where they are getting a commercial advantage but there is found to have a confusion or risk to the reputation of registered mark. In context to this, Lunney Jr (2018) also explained that with the application rules of law and similarly those laws are applied for attaining national wide trade marks in all members states[9].
Therefore, companies will their identity themselves in a familiar environment on a large scale basis[10]. The function of developing a product image in people’s mind in attain only when the company have a specific and creative identity in the market and people recognize them on that mark.
On the other hand, trademark works as roadmap for the customers in order to protect or prevent from any thief who use trade mark as its identity. Trademark is also determined as preventive measures and legal protections that register a product at the federal & state level[11]. The trademark also functions as biggest advantage which provides a constructive notice to the public in order to prevent from any claim that they were not aware about the existence of trademark.
Thus, it can be said that the registered trade mark provides robust rights to the holders, rights for its protection from other’s undertaking and under registration take the function of a valuable asset.
The function varies from having a strong right to use a trade mark to attract and gain benefits from the prestige and reputation it bring along with it once it is registered to offer protection to the holder form from other to copy or take advantage of the trade mark in the market competition[12]. Thus, its function is clear to provide a string right to use as well as to protect from the other competitors in making use of similar sign. The purpose is also understood to make the process easier and fast in the situation of any act of infringement.
In addition, this also takes in the passing off tort action where the owner can gain some rights without registering the mark in the intellectual property office as it the business has acquired some strong goodwill in relation to a sign or symbol in the market. Here, only the registered trademark owner can sue other business traders who make use of similar mark where there is possibility that customer gat confused for the offered products or services.
Thus, in other words, the infringement act is faster and affordable for a registered trademark when compared with the passing-off action. It also serves the function of making a mark safer under its licensing or registration thus, it provides a good platform in overseas countries.
Thus, a registered trade mark gives information of warning to other competitors offering similar products or services in making their claim. It can be said that a registered trade mark function as a restriction for other player competing in the market. Thus, it can be said that there are many functions associated with registered trade mark and also in opposition to having some right over a mark that is not registered in the intellectual property office in the UK.
The main purpose behind the Trademark act in year 1995 is to provide the organization a way for collective trademarks, registration of the trademarks, defensive trademarks and certification trademarks through which rights are protected.
The Trademark Act 1995 is administered by European Union trade mark which is reflecting the pending registration as a while in European Union. The EU trade mark system develops a unified the trade mark registration in Europe where one registration provides a high protection in different members states of European Union. In other words, Fox (2017) stated that EU trademark system is unitary in its character[13].
The trademark registration under this act 1995 provides advantages such as nationwide rights and constructive notice[14].
The objection behind an EU trade mark application in different EU members states that can defeat the whole application because EU trademark is enforceable on its all member’s states. Moreover, De Búrca (2013) also explained that EU trade mark is administered by the European Union under Intellectual Property Office that is found to be located in Alicante, Spain[15].
The adoption of Trademark act 1995 provides the guidance and strengthens the owner business with the procedure and policies and this also focuses on fulfilling the essential functions related to Trademark.
Generally, EU trade mark is widely used by the manufacturing company in order to register their production process or product quality as a mark which cannot be copied by anyone else[16].
However, if any other company uses same product quality then its lead to unethical business practices as well as violation of the trademark law and for that penalties are bear by the company who used same or similar types of products and services.
As per the case study of L’oreal and Bellure, it is very much clear that L’oreal has registered its products and services under trademark act but Bellure somewhere selling similar perfume in the market which affecting the trademark policies negatively as per act 1995.
While studying, it is also identified that EU trademark registration is obtained only when it get register in the EUIPO. When the trademark is registered or transferred to lapse then this effect such types of actions widely in EU.
The trademark value or registration is done only for 10 years period as per Trademark Act 1995 but it may also get renewed accordingly[17]. Under the case law, it has been also established that this entitlement is applied in respect of goods and services which are different or similar for those the mark was registered under European Union.
According to European Court of Justice (ECJ), it is clearly stated that there are relevant section of the public which establishes a link between third party mark and registered mark in question which found to be sufficient for establishing the similarity[18].
Thus, there is no specific need to prove the likelihood of risk or confusion. As per European Union Court of Justice, this case law faced three different injuries which affect the trademark act and policies adversely such as detriment to repute the mark, detriment of distinctive character to the mark, under taking unfair advantage because of distinctive character or repute of the mark[19].
As per Trade Marks Act 1995, the Court of Justice of the European Union (CJEU) jurisprudence is encompassed with the three distinct counts i.e., General Court, Court of Justice and Civil Service Tribunal.
These all courts exercise the European Union judicial function in such a manner that they aim to achieve greater economic integration and political support among all its European Union members states (O’Meara, 2011). However, European Court of Justice (ECJ) is somewhere different from Court of Justice of the European Union (CJEU) jurisprudence as ECJ is a part of CJEU.
On the other hand, it is also determined that UK Intellectual Property Office has clearly clarified that they support the trademark policy in which they focus on identifying the creative work which can be considered as an asset or physical property.
Bently & Sherman (2014) also added his point of view by stating that Intellectual Property Office in UK represents the equivalent rights by using normal application process for the purpose of register trademarks[20]. However, the Intellectual Property Office found to be no available remedy which exists for trademark infringement in a situation when earlier trade mark is unregistered[21].
Harmonisation under the EU Trade Marks Directive and recent ECJ case law
It was commonly accepted that there was no unfair competition law however; there are a number of torts in the UK for breach and malicious practices and tort of passing off in area of different jurisdictions territory and majorly the EU territory in the law for unfair competition.
Thus, the statue law along with the torts (common law torts) and the different regulation and statues overlapped in other jurisdiction towards the unfair competition law[22]. The UK law is different from other in terms of refusal to take in a remedy like misappropriation and unjust enrichment or when consideration is given to the passing off tort as a remedy in opposition to the unfair competition.
The trend of harmonization of laws was seen in the domain of trade mark law. The harmonization of the trade mark law has allowed their role to play a significant role in the business economy towards the protection of trademark under a unitary legal system/ framework.
The harmonization of trademark law has been an endeavor towards the getting away level mismatch in intellectual property law among the exercise of the legislative power and the realities of economic and political aspects[23]. Under harmonisation, the nation is the single governing body for protection of trade mark rights and have break away from the territorial role in trademark law enforcement.
The trade mark law in the United Kingdom have been notably harmonised with the European Union jurisdictions over the last two decades[24]. Under this, the rights of mark are given to the first registration. In UK, there has been rights also reserved for an unregistered marks for business that have been well-established goodwill in the marketplace.
Considering the algal framework, in UK the trade mark law is majorly governed by the EU trade mark regulations, Misleading and Comparative Advertising Directive, Trade Marks Act, trade mark rules 2008, Paris convention and TRIPS Agreement[25].
The Trade Marks Act (1994) has put into practice the EU Trade Marks Directive 89/104 EC. The council directive 89/104/EEC was to fairly accurate the trade marks laws of the UK and other EU member states.
Article 7(1) interprets as the permission of the property owner of a trade mark to the goods marketing with mark by a third party (with no economic relation with owner) in the European Economic Area may be implied and in national court outlook it is clearly reveal that the owner has abandon the exclusive intellectual property rights[26].
Under this directive, the European Court of Justice has given a clear guidance on the trade market that can be distinguished and regarded as the lack of unique nature for characteristics goods/ services under the article 3(1) (b) and (c) of the TMD that can be refused registration under the Trade Marks Directive (89/104/EEC)[27].
This is also included under the articles 7(1) (b) and (c) of community trade mark regulation. However, it is argued that that harmonisation of laws has not been fully achieved for members of the EU states and this has partially been achieved by only eight trademarks directives[28].
Considering the level of trade mark law harmonization in Europe for the UK law, it can be argued that the trade marks with a reputation are considered to be an unfair competition law for the luxury brands. This required a change to the UK laws as the there has been controversies regarding the standard of providing wider shield to the trade marks with a reputation.
The case of L’Oreal v Bellure is towards the protection of reputation in opposition to matching and comparable infringing goods or services. There was a definite lack of confusion for identical goods for the infringing marks.
In the UK, it was initially considered towards the extra protection for reputation trademarks that it applies to infringing entity that were unrelated for which the trademark was registered and it did not include the possibility of confusion when the infringing entity were similar. As in the case of Davidoff v. Gofkid [2003] ECR I 389 where it was held by the Court of Justice of the European Union (CJEU) that there is additional protection for marks with a reputation in situation of identical or similar infringing goods/services for which it is registered[29].
In the European Court of Justice case law the focal point was community trade market regulations for refusal (as absolute grounds -article 7) but later the article 8 (relative grounds) was given high relevance towards the prospects of confusion[30]. Also, in absence of no general law against unfair competition in the EU member states, the application of Article 5(2) of the Trade Marks Directive has been a reason of worry.
The judgment of the European Court of Justice in the case of L’Oreal v Bellure have brought in unfair advantage where Bellure has budget perfume that smelled similar to the luxury brand, L’Oreal. The CJEU held the budget manufacturer; Bellure has possibility of taken unfair advantage of the marks with a reputation of L’Oreal.
Though no evidence was found that this is affecting the sales of L’Oreal products but it was considered illegitimate and unfair for the Bellure to exploit the L’Oreal market benefits of reputation and prestige in market competition even in the situation whether or not harm was caused to L’Oreal marks. This unfair advantage brought into the light the concept of unfair competition in the UK law[31].
Thus, the trademark infringement against Bellure towards the manufacturing and marketing of similar smelling L’Oreal perfumes under section 10 (3) of the Trade Mark Act 1994 was guided using the concept of unfair advantage and its scope and meaning under the Atricle 5(2) of the Trade Mark directives and also the Article 3 (a) (g) of Comparative Advertising Directive in the situation when the trade mark with reputation infringement did not lead to any cause confusion[32] or put at risk the L’Oreal trademark function in relation to the guarantee of origin.
However, it was argued over the demonstration of unfairness in case when the defendant part is well-established in the marketplace with a known brand and good will and does not requires taking ride on the other reputation and prestige. This was clear in the case of Whirlpool v. Kenwood Limited [2009] EWCA Civ 753 where it was held by the the English Court of Appeal that Kenwood has not taken unfair advantage of Whirlpool mark[33].
Thus, it can be said that in this case the advantage arise from a sign that is similar to the mark with reputation of the distinctive character (reputation) can be taken in an unfair manner by the other party for early registered and from the already established mark attraction, prestige and benefit of marketing effort to create its image which is high in moral content.
It can be added that in L’Oreal case the claimant’s attempts were rejected towards convincing the court for a new tort of unfair competition that dissimilar to the passing off tort and does not need misrepresentation[34].
In a recent case, Caspian Pizza Limited and others v. Maskeen Shah and another [2015] EWHC 3567 (IPEC) address the concern of the local good will of small business and national trade mark registration of pizza restaurant[35]. The claim for infringement and passing off was defeated and the case clarified the rights of unregistered marks and registered marks towards the earlier rights of trade mark and creation of good will and later registrant of identical mark in the UK law.
There have been development in the European law of trade mark as from 1993, first council Trade Marks Directive 89/104 to harmonize the UK and national laws of trade marks.
There are uncertainties in relation to the directives thus, there have been changes to replace to directive 2008/95 to support the underlying law and regulations of the trade mark. There reform has been undergoing as a new directive was reached in December 2015 as EU Trade Mark Directive 2015/2436. In addition, the existing EU Trade Mark Regulation (Regulation 207/2009/EC) was replaced by a new one as Regulation (EU) 2015/2424[36].
There have been changes to the infringement provisions to take action for the label, packaging and other material that poses a risk to the mark that is registered. Thus, there have been additional options in the UK law to take action against infringements in relation to range of counterfeiting items, for intrusion risk existing towards the goods and services and for unaware producer to act without the make owner permission.
It can be concluded that the European Court of Justice Judgement brought in tort of unfair competition from the case of L’Oreal v Bellure into the UK law. From the above study, it can be concluded easily that EU Trademarks provides a business owner with a protection against the unfair competition practices among all member’s states of EU. The trademark Act 1995 clearly reflects character and advantages of using trademark policies as strengths at European Level.
The harmonisations of the trade mark law have been implemented in the UK for the protection of marks and are subjected to same rule as the other EU member states for the ease of intellectual property owner and facilitate the trade flow based on the trade mark directives. It is also concluded from the evaluation of the above points that there is still some space to be achieved for an authentic harmonisation of laws.
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