UK: Use of third party trade marks permissible provided use is honest

Last Updated: 21 April 2005
Article by Nick Beckett, Lucy Kilshaw and Tom Scourfield

The ECJ ruled on 17 March 2005 in Gillette v. LA– Laboratories (Case C-228/03) that a third party competitor was permitted to use the trade mark 'Gillette' and 'Sensor' on the packaging of their product, where such use was necessary to indicate the intended purpose of the product.

The decision contains an interesting discussion of the circumstances in which a trade mark may be used without the consent of the proprietor, including an explanation of the extent to which a third party's trade mark can be displayed on spare parts, accessories and primary products. The decision will be of particular interest to companies whose products and product accessories are interchangeable with those of their competitors.

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Full Article

The ECJ ruled on 17 March 2005 in Gillette v. LA– Laboratories (Case C-228/03) that a third party competitor was permitted to use the trade mark 'Gillette' and 'Sensor' on the packaging of their product, where such use was necessary to indicate the intended purpose of the product.

The decision contains an interesting discussion of the circumstances in which a trade mark may be used without the consent of the proprietor, including an explanation of the extent to which a third party's trade mark can be displayed on spare parts, accessories and primary products. The decision will be of particular interest to companies whose products and product accessories are interchangeable with those of their competitors.

Background

The case had been referred from the Supreme Court of Finland, where Gillette had claimed that LA-Laboratories infringed its Finnish trade marks 'Gillette' and 'Sensor' by referring to them on the packaging of their razor blades. LA-Laboratories' packaging displayed a notice stating 'all Parason Flexor and Gillette Sensor handles are compatible with this blade'. Gillette Group Finland claimed that the display of this notice gave the consumer the impression that the third party was licensed to use its trade marks, and that this was taking unfair advantage of Gillette's established goodwill and reputation.

The ECJ was asked to clarify the meaning of Article 6(1)(c) of the EU Trade Marks Directive 89/104/EEC. This Article provides that a trade mark owner cannot prohibit a third party from using a trade mark in the course of trade if such use is 'necessary' to indicate the intended purpose of a product or service, and where such use is in accordance with 'honest practices in industrial and commercial matters'. The Article also makes reference to 'spare parts and accessories', and the ECJ was asked to clarify whether third party trade mark use is permitted only on these categories of product, or whether it extends also to primary products themselves.

Judgement

'Necessary to indicate the intended purpose of a product or service'

The judgment established that under Article 6(1)(c), third party use of a trade mark is permitted where it constitutes the only means of providing consumers with 'comprehensible and complete information on the intended purpose of the product'. The ECJ stated that third party use of a trade mark is necessary in cases where information about the third party's product cannot in practice be communicated to the public without reference being made to the trade mark. The rationale behind this is to inform consumers about the transferable functions of products, ensuring that the market for that product remains competitive and undistorted.

The ECJ said that ascertaining the precise circumstances required for third party use to be 'necessary' was to be decided by the national courts. The ECJ did note, however, that national courts should consider if there are any other means of providing the same information to consumers, and whether the possible existence of technical standards or norms known to the public would assist in this regard. In the absence of such technical standards or norms, reference to a competitor's product or trade mark may be the only way of providing consumers with the relevant information detailing the functions of their product.

Spare parts and accessories

It had been previously thought that Article 6(1)(c) may have been restricted in application to 'spare parts and accessories' only, as these types of product were specifically listed in the Article. However, the ECJ stated that 'spare parts and accessories' are listed in the Article only as examples, and that third party use of a trade mark is also permitted on a primary product itself, where the third party markets the primary product together with, and also separately from the spare parts and accessories intended to be used with it.

Honest practices in industrial and commercial matters

Although leaving to the discretion of the national courts the question as to what constitutes 'honest practices in industrial and commercial matters', the ECJ did summarise previous judicial authority on this point, and offer further guidance and comment.

Citing the well known BMW case (Case C-63/97), the ECJ re-iterated that 'honest use' of a third party's trade mark imposes the obligation to act fairly in relation to the legitimate interests of the trade mark owner. The third party user must not give the impression that there is a commercial connection between themselves and the trade mark owner, nor must they discredit or denigrate the trade mark they use. The ECJ also stated that where a third party presents its product as an imitation or replica of the product bearing the trade mark, such use will not comply with 'honest practices' within the meaning of Article 6(1)(c).

In considering whether the use was 'in accordance with honest practices', the overall presentation of the product should be taken into account by the national court, and in particular whether the third party had made an effort to ensure that consumers distinguish its products from those of the trade mark owner.

The ECJ also outlined a further requirement, stating that the third party use must not 'affect the value of the trade mark by taking unfair advantage of its distinctive character or repute'. The first part of this requirement is satisfied relatively easily, as a proportion of Gillette's sales are likely be lost to the third party user as a result of their use of the trade marks, thereby affecting the value of the trade marks. It seems therefore that the key aspect of this requirement is construction of the phrase 'taking unfair advantage of its distinctive character or repute'. Further guidance on the meaning of this phrase was not provided here by the ECJ however, which leaves open to debate the point at which the use of a third party's trade mark will amount to taking unfair advantage of its reputation.

Comment

The decision provides a useful clarification as to when third party use of a trade mark will be permitted. Following the decision it is now apparent that third party use under Article 6(1)(c) (as reflected in Section 11 of the Trade Marks Act 1994) is not limited to use on accessories and spare parts, but can also extend to primary products.

Under the Trade Marks Act 1994, there is a similar ground under Section 10(6) (which does not originate from the Trade Marks Directive) allowing a third party mark to be used to identify goods or services as those of the proprietor, subject again to "honest practices". This section is frequently utilised by third parties in comparative advertising campaigns.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 14/04/2005.

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