Company's Name Does not Violate Trademark

Brands such as "Xerox" and "Tempo" are often a major part of the assets of a company. This is why companies are anxious to ensure that their successful brands against misuse by third parties. The ECJ  however, has restricted this protection for trademark holders on November 11, 2007 (re C-17/06).

This case is about two organizations using the name "Celine". Celine SA has sold clothing and fashion goods in France since 1928 and registered the trade mark "Celine" in 1948 for clothes and shoes. Celine SARL sold clothing and had traded in France as "Celine" since 1950 and also registered the company name "Celine" in 1992. Celine SA claimed that Celine SARL infringed their trade mark by using the term as their shop name and company name. Can this be?

Art. (1) (a) Trademarks Directive provides that it is an infringement if a third party uses in the course of trade an identical sign to the registered trade mark in relation to goods or services which are identical to the goods or services for which the trade mark is registered.

Arti. ve 6 (1) Trademarks Directive provides that a third party will not be prohibited from using in the course of trade his own name or address provided he uses them in accordance with honest practices in industrial or commercial matters.

The ECJ set out what must to be shown for a claim under art. 5 (1) (a) Trademarks Directive to succeed:

1. the use must be in the course of trade;
2. it must be without the consent of the proprietor of the mark;
3. it must be in respect of goods or services which are identical to those for which the mark is registered; and
4. it must affect or be liable to affect the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods or services.

In relation to step 3 of the above test, the ECJ ruled that the purpose of a company, trade or shop name is not, of itself, to distinguish goods or services. The purpose is to identify a company or designate a business and therefore if the use of the name is limited to that purpose, it cannot be considered as in relation to goods and services.

There will be use in relation to goods where a third party affixes the sign constituting his company name, trade name or shop name to the goods which he markets. Even if the sign is not affixed, the requisite use will be shown where the third party uses the sign in a way that links the sign constituting a company name, trade name or shop name with the goods marketed or services provided.

The ECJ stated that it is for the national court to determine whether use of the mark by Celine SARL constitutes use in relation to the goods and services for the purposes of art. 5 (1) Trademark Directive and whether the use affects or is liable to affect the essential function of the "Celine" mark.

But what about the fact that the fashion shop was only using its business name? Can it really be that a company may not use its own name which just happens to be the same name of a trademark? The relates to art. 6 Trademark Directive. The court held if the company/trade/shop name is in accordance with honest practices in industrial or commercial matters then it legal to use it.

The ECJ again made it clear that it is for the national court to carry out this assessment, but they should consider the following:

1. the extent to which the use of the third party's name is understood by the relevant public as indicating a link between the third party's goods or services and the trade mark owner;
2. the extent to which the third party ought to have been aware of the link; and
3. the extent of the reputation enjoyed by the trade mark owner and the degree to which the third party may benefit in marketing the goods or services.

Comment

The ECJ makes it clear that having someone else's registered trade mark as your company name will not in itself interfere with the essential function of the trade mark and it is left up to the national court to decide whether subsequent use of the trademark will amount to infringement.

What does this French company need to do re German trademark law? Simple. First change the company's location to Germany and it is here. Second, European law has pretty much harmonized the trademark issue inside Europe. And, by the way, the ECJ just happens to be the highest court in the European Union.