UK: ECJ Radically Expands Anti-dilution Claims

On 9th January 2003, in the case of Davidoff & Cie SA and Zino Davidoff SA v Gofkid Ltd, the ECJ delivered an unexpected judgment of potentially great significance to holders of trade marks who would seek to protect reputation in those marks against so called ‘dilution’. The ECJ held that current anti-dilution measures, which protect well-known trade marks on goods from similar or identical signs being used by third parties on dissimilar goods can be extended to protect use of similar and identical signs on similar goods even where no confusion has resulted.

Davidoff has the word mark and device, Davidoff, registered in Germany for goods in classes 14 and 34 including various tobacco products and gentlemen’s accessories. Gofkid is the proprietor of the word mark and device, Durffee, which was registered in Germany after the Davidoff marks for various goods also in classes 14 and 34. Both marks were in the same script and the distinctive ‘D’ and ‘ff’ in the two device marks were virtually identical.

Davidoff brought proceedings in Germany against use of the Durffee mark, which it considered to have been designed deliberately to take advantage of the reputation attached to its own mark in order to sell lower quality products, thus ‘diluting’ the reputation of its own mark. Having been unsuccessful at first instance and appeal, the case reached the German Federal Court of Justice.

Under Articles 5(1)(b) and 4(1)(b) of the Directive (equivalent to Sections 10(2) and 5(2) of the Trade Marks Act 1994 in the UK), there will be infringement of a mark by a similar mark where that similar mark is used on similar or identical goods, if there exists a likelihood of confusion on the part of the public between the mark and the similar sign.

The German Federal Court of Justice considered that the two marks were similar and that the goods on which the Durffee mark was used were in some cases similar and in others identical to the Davidoff products. However, the Federal Court was unable to establish at that stage a likelihood of confusion in the minds of the public between the marks for the purpose of satisfying Article 5(1)(b).

However, Article 5(2) of the Directive (equivalent to S.10(3) Trade Marks Act 1994) allows a proprietor to protect a trade mark against use of an identical or similar sign on goods which are not similar to those of the proprietor where (a) the mark to be protected has a reputation; and (b) use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. This article effectively provides anti-dilution protection to well-known marks and does not require a likelihood of confusion on the part of the public.

Davidoff claimed that, on a literal reading, Articles 5(1)(b) and 5(2) were inconsistent, because the latter appears to offer broader protection against the use of identical or similar signs on non-similar goods than it does for use on similar goods. Therefore, they argued that Article 5(2) should be interpreted so as to permit a court to grant protection in cases where there was use of the marks on similar goods as well as on dissimilar ones.

The ECJ decided that Articles 5(2) and 4(4)(a) are to be interpreted as:

"entitling the Member States to provide specific protection for well-known registered trade marks in cases where a later mark or sign, which is identical with or similar to the registered mark, is intended to be used or is used for goods or services identical with or similar to those covered by the registered mark."

In other words, it appears that anti-dilution protection is to be extended to identical or similar signs used on similar goods as well as non-similar goods, regardless of confusion.

This decision represents a radical development in trade mark law. The extent to which European trade mark law should permit dilution claims is an issue that has been hotly debated ever since the implementation of the Directive. It is a debate whose flames have been fanned by the historically different approaches to such claims in different Member States. The issue was first addressed in the case of Sabel v Puma¹ where it was held that a claim was not available under Article 5(1)(b) where only "mere association" with the trade mark could be shown, even if that association resulted in damage to the reputation of the trade mark. Confusion was necessary. However, arguments have nonetheless still raged as to whether this interpretation means that a gap exists between the protections granted under Article 5(1)(b) and 5(2).

The Advocate General, who gave a detailed and carefully reasoned opinion in this case, concluded that the alleged gap was for the most part illusory. In short, he accepted the argument that in so far as offending activity under Article 5(2) occurred in relation to similar goods, then confusion was likely to occur and Article 5(1)(b) would be satisfied.

Whilst the ECJ recognised that the existence or otherwise of such a gap was "the question debated before the court", there was no real analysis of this point in its judgment. For the ECJ to have signalled such a radical development in the law without undertaking such an analysis is far from satisfactory. Nevertheless, it is a development which will be welcomed by many trade mark owners. It remains to be seen whether this decision will herald a series of further references to the ECJ as to the exact scope of protection offered by Article 5(2) to a trade mark owner.

1 Case C-251/95 SABEL [1997] ECR I-6191.

© Herbert Smith 2003

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