Infringement of the trademark: the broadest possible protection for the right holder - the reputed trademark

Legal Insight

October 2021

Ioannis Psarakis, Lecturer, LL.M (III), PhD  Cand.

(republished from Ot.gr)

Summary: There are certain situations in which a trademark will have achieved such levels of recognition that the legislature will deem it worthy of expanded protection, as compared, invariably, to a "common" trademark. This is largely based on the way in which the human brain works, the fact that immediate familiarity with a particular indication may lead him to prefer products bearing it (i.e. the indication) to the detriment of others, but also on the now scientifically documented and accepted assumption that man is by nature a non-rational being. In those cases we will speak of a 'reputation mark'. However, from a legal point of view, the cases in which a reputation mark is infringed is a highly technical issue, which requires a good understanding of the concepts and constant monitoring of the case law on the subject. Indeed, it is only with the appropriate legal support that the proprietor of a trade mark will be able in practice to make effective use of any possibilities offered by the legislation and to benefit from the preferential treatment enjoyed by the trade mark.

Ι. The numbers

As we have mentioned in a previous article, the trademark is an important growth tool for a business. At the same time, it is a key asset with great potential. Based on data and scientific studies, it generates profits. The market itself recognises this: according to official data from the European Union Intellectual Property Office (EUIPO), since 2008 there has been a steady increase in EU trademark applications. In 2020, 176,992 applications were filed, more than double the 87,498 applications recorded in 2008. 

In the light of the above findings, the special treatment reserved by businesses to protect their trademarks from potential infringements is justified. 

The reason for infringement of a trade mark most frequently encountered in administrative and judicial practice is the 'likelihood of confusion', which also includes the likelihood of association. It is extremely useful for every businessman to familiarise himself with these terms, as we have attempted to do in our previous article. 

The purpose of this article is to introduce another key concept for trademark protection, that of the reputation mark. Because a "reputation mark" is distinguished from a "common mark". It is "something more", as is its protection. We have a common trade mark from the moment of registration in the Trade Mark Register, for which (i.e. registration) a trade mark application must first be filed by the party concerned. But a mark of reputation also requires something else: high recognition. It is in the entrepreneur's interest to consider that his mark has risen to the level of reputation: the protection there is broader, compared to the common mark.

II. But what is a reputation trademark? 

When we speak of a reputation trademarkmark, we are referring to that mark which enjoys "high recognition". In such cases, the relevant public perceives the sign much more directly and easily than a mere "common" sign. The feeling of familiarity is created almost reflexively. Without much effort, the public immediately associates the mark with the quality and characteristics of the familiar product with which it is already familiar.  It is precisely this 'instantaneous' association, which takes place unintentionally (usually and unconsciously) in the mind of the consumer, which is the underlying reason why reputation marks are given broader protection. The case law is aligned with the findings of neuroscience on how the human brain works and with the dictates of marketing science. Because of the "subcutaneous" effect of the reputation mark, enhanced protection is provided, especially in these cases. 

The special protection of the reputation mark is due to its special interaction with the human brain. A typical quote from Daniel Goleman's book (Emotional Intelligence, 2011, Katoptro): 

"If the amygdala feels a sensory model [i.e., a familiar past state] emerge, it is led to a conclusion and reacts before there is not merely full evidence, but not even a trace of confirmation". 

This seems, moreover, to be plausible; the strong impression which a reputation trademark enjoys in the public's memory gives - even the slightest similarity - additional significance, and thus the possibility of 'associating' in the mind the earlier mark with the later one. The consolidation of a particular indication in the consumer's memory is a very powerful weapon in the battle of the markets.

This is also recognised by commercial practice. For example: during the intermission of the 2021 Super Bowl, goods and services of Bud, T-Mobile, Guinness, Toyota and Anheuser-Busch, among others, were advertised. The purpose of the companies was not to get known; they already were. Nor was their purpose to announce the launch of a new product; nothing new was announced in these advertisements. Their purpose in investing in the advertising was to strengthen the subcutaneous effect of their brand, an objective which they are well aware of how important it is. The relevant departments of these giant companies considered that their profit would be greater than the cost of their one-minute advertising trailer, which amounted to more than USD 10 million.

So fame means "name recognition and only name recognition". Factors - quantitative and qualitative criteria, as mentioned by Greek case law and by the case law of the Court of Justice of the European Union (CJEU) - such as long use of the mark, long-term advertising with high advertising expenditure and so on, are useful indicators, but only indicators. What is crucial is the recognition of the mark; that is the only thing that matters. As the Advocate General of the Court of Justice of the European Union (CJEU), Melchior Wathelet, put it in his Opinion in Case C 564/16 P (Puma SE): '[...] it is a factual finding: "reputation" is a reality'. 

It is true, of course, that this will usually be the case because of systematic advertising and correspondingly high advertising expenditure. However, it is not excluded, however, that a reputation can exist without it. A typical example is that of the super markets Sklavenitis, which until relatively recently were significantly behind the market in terms of advertising expenditure (this was explicitly stated in the Competition Commission's decision no. 637/2017, in Plenary Session); indeed, there were many times when media reports stated that saving money from advertising allowed for better remuneration of employees, as well as social actions (social corporate responsibility), thus creating further "sympathy" among the public. 

Reputation therefore means 'high visibility'. According to the case law, this must be the case "in respect of a significant part" of the public to whom the goods covered by the trade mark relate (either the public at large or a more specialised public, e.g. a specific professional sector). It is also sufficient that it exists in a significant part of a certain territory. 

All of the above, of course, are questions of proof. A general rule is that when we bring a specific claim before a court or a competent authority in general, we must also prove it. Thus, a marker who claims that his mark has risen to the level of reputation will produce and cite various evidence in support of his claim, such as market shares, advertising expenditure and even specific surveys of consumers who have been subjected to certain tests. It is necessary to seek specialist legal advice in order to introduce such evidence as will be considered appropriate in each case, in the light of the constantly evolving case law, in particular that of the CJEU.

III. Why do we say that broader protection is provided?

In the case of a reputation mark, the protection afforded is broader, compared to a "common" mark. The broader protection lies mainly in two points:

1. As we noted in our previous article, while in the case of common mark protection, at least minimal similarity is required between indications and products distinguished from them (on/off criteria), in the case of a reputation mark we are satisfied with minimal similarity between the indications (and only minimal similarity). Thus, in the case of reputation, the similarity of the products is not a necessary condition for protection, as it was in the case of the likelihood of confusion and the likelihood of association. If, of course, this condition (i.e. the similarity of the goods) is also fulfilled, the chances of obtaining protection will be substantially increased.

2. At the same time, whereas in the case of a common mark protection requires a similarity which gives rise to a likelihood of confusion, in the field of reputation the similarity (note: even if only in the indication, as described above) is sufficient to a lesser degree, i.e. such that it merely gives rise to a 'likelihood of association', i.e. merely a 'likelihood of association'. As recently held by the Athens Court of First Instance in its judgment No 1025/2021 on a related issue, in the case of a trade mark of reputation: '[...] it is not necessary for there to be such a degree of similarity between the mark with a reputation and the sign used by the third party that there is a likelihood of confusion on the part of the public concerned, but a slight degree of similarity is sufficient, since the average consumer, who is reasonably observant and circumspect and has the usual information, will recall the earlier mark associatively when he sees the later sign'.

Therefore: 

1.  In a trade mark with a reputation, the goods distinguished by the indications on both sides do not even have to be identical (a condition necessary for a "common mark") - the similarity of the indications alone is sufficient. 

2. But even on the similarity of the indications alone, a lesser degree of similarity is sufficient for a reputation mark compared to a common mark. 

The criteria on the basis of which the Court or the competent authority calculates the similarity between two signs are highly case-specific and will be the subject of a future article. However, certain issues have also been raised in what we have already written to date.

IV. By way of example

In connection with the above, the most basic cases in which protection under the reputation mark will be sought will be where the distinct goods marketed by a third party under a sign which is similar to our mark bear no resemblance to our goods (the parameters on the basis of which the similarity of goods is considered is a whole topic - again, some principles have been set out in our previous articles).

In this case, and if we are talking about a "common mark", protection cannot be granted. This is because a necessary condition for common mark protection is the similarity of indications and goods. It would have to be argued (and proven) that it is indeed a trade mark with a reputation, so that the similarity of the indications alone would be sufficient. 

Moving on to a typical example, let us consider what would happen if a third party - and not Nike - were to market a car with its famous "Swoosh" mark (by the way: currently worth more than thirty billion dollars). The third party obviously takes advantage of the subcutaneous effect of the mark and derives benefit from it as the consumer feels an immediate familiarity with its goods. This is a very important competitive advantage. It is possible that some people might even think that Nike has started to trade in cars - that would not be absurd, nor is it impossible that this will indeed happen in the future. 

However, protection under the common provisions on likelihood of confusion (or association) cannot be granted if we assume that Nike has not registered its specific trade mark for such goods (cars), as the necessary condition of similarity - however slight - of the goods would not be met. 

Protection will ultimately be granted under the provisions on trade mark infringement if it is shown that the third party derives an unfair advantage from the fact that it markets its products (cars) under Nike's well-known 'Swoosh' mark, thus taking advantage (free riding) of the reputation that the latter has built up over the years, after much effort and expense.

V. Cases of infringement of a trade mark - the conditions for protection

Of course, similarity - even in the indication - is not in itself sufficient to establish infringement of the distinctive character of a trade mark: it must also be shown that the use of the third party's sign 'will take unfair advantage of the distinctive character or the reputation of the earlier mark or that its use will be detrimental to that distinctive character or reputation' and, in particular - as the case-law adds - it must be shown either that there has been actual and present infringement of the mark or, if that is not possible, that there is a serious risk of such infringement occurring in the future. Exceptionally, it has been held that if the mark has an extremely high reputation, it is possible that the 'likelihood of a future and not hypothetical risk that the mark applied for will cause damage or take unfair advantage' is so obvious that the proprietor of the mark is not required to plead or prove any other factual circumstances in that regard'. In fact, in the latter case, it would in fact be necessary to have an extraordinarily high reputation and a virtually identical indication. This was held by the General Court of the European Union (CJEU) in Case T 62/16 (Puma).

Therefore, in addition to the minimal similarity and the risk of association (associative revocation), there must also be one of the grounds for infringement of a trade mark as listed in the case-law of the CJEU: taking unfair advantage (parasitism-free riding), tarnishment and blurring-dilution.

Each specific case of infringement is governed by its own particularities and conditions; guidance is primarily provided by the case law of the CJEU.

VI. In short

An undertaking's investment in its trade mark to such an extent that it is considered to be a 'reputable trade mark' is doubly advantageous: it provides it with a very powerful weapon in the battle against competition (scientific studies have shown that the same product tastes better if it bears a well-known trade mark than if it bears a common mark or is anonymous), but it also significantly strengthens the protection of the trade mark against third parties. We have explained the reasons why protection over a trade mark with a reputation can be granted (i) even over non-similar products and (ii) even in cases where the similarity of the indications on both sides is not sufficient to give rise to a likelihood of confusion or association. In all these cases, building a reputation mark provides a strong advantage to the marker in more than one field.

Having said this, in order to prove the requirements for the protection of a reputation mark, it is necessary, above all, to have a thorough knowledge of the case law of both the Greek courts and the CJEU; sometimes, in borderline cases, knowledge of foreign case law (for example, of the USA) is also decisive. It will be crucial to cite similar examples of cases that have already been decided (by submitting case law) and to identify the methods by which in other cases courts or competent authorities have been convinced of the high recognition of the sign and of the infringement of the sign or the derivation of unfair advantage from it.