From time to time we are receiving requests from some clients, particularly those acting as a distributor or a representative, for filing an application for registration of a trademark in their own name in respect of the trademarks they are selling and distributing in Turkey. Whenever we face such a request, our first question is always: "Have you received permission from the proprietor of trademark?" Some of the clients may even sometimes show a negative reaction to this question. Because as the proprietor of the trademark is seated abroad and is probably not yet seeing Turkey as an adequately wide and satisfactory market for itself, these clients – in their own way – are entirely acting in good faith indeed and are intending to ensure a protection for the trademark they are selling and distributing in this market. However, on our part, we are suggesting them in such cases and circumstances to nevertheless demand the proprietor to ensure a protection for the trademark in its own name in Turkey, and if they cannot get a positive response, to request a written consent of the proprietor, and if they cannot even get that consent, if still they deem it necessary, to take legal actions again within the frame of a mutual agreement entered into with the proprietor. So as to make sure that they do not face such processes as the one in the case we are now going to explain and share, and if nevertheless they face it, they are not seen as "acting in bad faith".
The story of the case starts with an application filed on 18 September 2013 by John Mills Ltd., acting for whatever intention we do not directly know, for registration of MINERAL MAGIC word mark in the European Union Intellectual Property Office (EUIPO).
The goods in respect of which registration was sought are:
Class 3: Hair lotions; abrasive preparations; soaps; perfumery; essential oils; cosmetics; preparations for cleaning and care of the skin, scalp and hair; deodorants for personal use.
At the stage of publishing of the application, Jerome Alexander Consulting filed an opposition to the registration of the contested mark in reliance upon the registered word mark for "face powder featuring mineral enhancements" and the non-registered word mark used for "cosmetics" in U.S.A. as shown below respectively:
The legislative provision underlying the opposition and later paving the way for EUIPO, EUIPO Appeal Board and the courts to give fairly different decisions and make fairly different comments thereabout, and thus, to be parts of a contentious process is article 8 (3) of the European Trademark Regulation:
"Upon opposition by the proprietor of the trade mark, a trade mark shall not be registered where an agent or representative* of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor's consent, unless the agent or representative justifies his action."
(*Hereinafter to be shortly referred to only as an 'agent')
In Turkey, the provision corresponding to the above quoted article is as follows:
"Turkish Industrial Property Law - Article 6 (2): Upon opposition by the proprietor of the trademark, an identical or undistinguishably similartrademark application shall be refused where an agent or representative of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor's consent, unless the agent or representative justifies his action.
Now, let us briefly summarize the previous process relating to the aforementioned judgment of the Court of Justice of the European Union, which you may reach via this link:
- First of all, the Opposition Division of EUIPO rejected the opposition to the publishing of application.
- The decision of the Opposition Division was appealed, and the Board of Appeal of EUIPO annulled the decision of the Opposition Division, and refused registration of the contested mark.
- Then, the applicant brought an action at the General Court for annulment of the decision of the Board of Appeal, and at the end of that action, this time, the General Court annulled the decision.
- EUIPO appealed against this decision, and thereupon, the Court of Justice of the European Union found the decision of the Board of Appeal justified, and held and issued the judgment being the subject of this article.
Now, we would like to outline and discuss the basic issues which have been taken into consideration in the light of the related article and have led to different comments in the course of interpretation of the article during this process:
- Trademark covered by the application for registration filed by the agent without the proprietor's consent being IDENTICAL or SIMILAR:
The question of debate in connection therewith is whether the enforceability of the subject article should only be dealt with in respect of the "identical" trademarks, or whether this law provision also covers "similar" trademarks or not.
As will be predicted, the applicant argues that this article cannot be applied for "similar" trademarks. It is essentially true that a look at article 8 (3) of the European Trademark Regulation, and at the French proviso of article 6 of the Paris Convention agreed to be based on if and when the European Trademark Regulation is interpreted differently by member states reveals that the text does not clearly refer to such words as "identical" or "similar", but only uses the words "cette marque" (i.e. this trade mark). Hence, this provision may be understood and interpreted in such manner to exclude the similar trademarks therefrom.
On the other hand, the Board of Appeal and the Court of Justice tackle with a very important point, and come to the conclusion that this article is misinterpreted and misunderstood, or to be more exact, it will be a mistake if it is construed and understood in such manner to restrict its scope "only for the identical trademarks", because they argue and defend that we must focus on the fact that the primary intention of the article is in fact "to prevent probable misuse of a trade mark by the agent of its proprietor". It is also opined that in order for one to come to such a conclusion, an overlap of the essential components of the subject trademarks will be adequate, and what's more, this is also required to be evaluated and considered together with the other components, because according to the Board of Appeal of EUIPO, again when the basic objective pursued by the subject provision is taken into consideration, the relevant criterion for the purposes of applying that provision is the equivalence, in economic or commercial terms, of the trademarks analysed as a whole.
At this point, the General Court is even criticized for its failure to take into consideration and account the basic objective of the relevant article. The cause underlying this criticism is the fact that the ambiguity of the wording of this article corresponding to Article 6 of Paris Convention is not discussed and scrutinized in details in the General Court proceedings. And for the sake of clarification of the subject of debate in the case in hand, the draft works (travaux préparatoires) relating to the revision of Paris Convention are studied. Even though it is known that several proposals as regards the addition of the words 'similar marks' to the wording of that provision were originally rejected by the Working Group, the General Court's relying on this fact only and inferring that the EU legislature intended to confine the application of that provision to identical marks only is found contradictory and wrong, because the concept of 'identity' is also absent from the wording of that provision, and in tandem with the principal objective, as mentioned above, it is possible to focus only on whether the agent imitates or misuses the earlier (primary) trademark or not. Thus, it is concluded that it is even possible to disregard the requirement of any identity or similarity for trademarks. At the stage of examination of the wording of the relevant provision of Paris Convention, even the Proceedings of the Lisbon Conference are opened for review and discussion, and references included in those proceedings as to applicability and enforceability of the provision also "in the case of similarity of trademarks" are put forward. What's more, it is stated that "it must be recalled that, according to settled case-law of the Court, the interpretation of a provision of EU law requires account to be taken not only of its wording, but also of its context, and the objectives and purposes pursued by the act of which it forms part." And it is also added that: "the legislative history of a provision of EU law may also reveal elements that are relevant to its interpretation."
It is also emphasized that in its previous decision, the General Court has contradicted with one of the keystones of the trademark legislation by arguing that the signs should be identical in order for one to mention about a misuse. Accordingly, it is repeated that a connection may be established between two signs with a similarity of varying degrees by taking into account not only the identity thereof, but also all other circumstances and elements of the case.
EUIPO submits that the General Court's approach fails to provide the flexibility needed by a trademark owner to preclude its agent from taking actions for attempting to misuse the trademark of its principal in different ways. Otherwise, in case of an application filed for registration of a trademark by the agent without an authorization received from the owner of earlier trademark, the trademark owner will be held obliged to wait for completion of the registration process in order to be able to have the application cancelled, while it is essentially unequivocal that it is required to take actions as soon as possible in connection therewith according to the laws, and this opportunity should therefore be provided also at the stage of initial application. Likewise, if the subject article is interpreted in such manner to be valid and applicable only for identical trademarks, it will pave the way for interrogation of the general schema of the Regulation, because in this case, the owner of earlier trademark will be deprived of its right to oppose the registration of a similar trademark in the name of its agent. Furthermore, it is further emphasized that "Since the European Union is a party to the TRIPS Agreement, it is under an obligation to interpret its trademark legislation, so far as possible, in the light of the wording and purpose of that agreement."
Again, in the light of the assessment of similarity between two signs, it is clearly observed that the agent only removes the manufacturer's name from the earlier trademark and files an application for registration by reversing the order of 'MINERAL MAGIC' words. Under these circumstances, it is opined that the earlier trademark is likely to be perceived by the relevant public in the European Union as a sign consisting of two components. First, the component "by Jerome Alexander" is likely to be perceived as a so-called 'house-mark', or in other words, as identifying the 'entity responsible for the product', and secondly, the component 'magic minerals' is most likely to be perceived as an identification of the product itself or of the product line. By doing so, the Board of Appeal first draws attention to the striking similarity between word components of the trademark covered by the application for registration. Thereupon, although the applicant tried to direct the discussion and debate in the Board of Appeal to the criteria used for assessment of the likelihood of confusion (evaluation according to the perceptions of general public and consumers of the relevant country, etc.), in the existing case, a determination of similarity arising out of overlapping of essential components of the subject trademarks is deemed adequate. As a matter of fact, in the existing case, this point of the relevant article has already been included in the scope of another article on the basis of the existence of the likelihood of confusion, and therefore, it could not be assessed, and even if assessed, it would not make a great impact thereon.
At the end, the decision of the General Court is cancelled particularly and mostly within this frame.
Now, let us continue with the other subjects of debate:
- The goods/services covered by the trademark for which an application for registration is filed by the agent without the proprietor's consent being IDENTICAL or SIMILAR:
Though not as detailed as the issue discussed in the preceding paragraphs, it is also separately discussed whether the goods covered by the application for registration are also required to be identical or whether their similarity should also be taken into consideration or not. At this point, the Board of Appeal puts forth that the relevant article is related not only with the situations where the goods or services are only "identical", but also the situations where they are "similar".
So much so that in the existing case, it is recorded that the goods covered by the subject trademarks are identical, because the "face powder featuring mineral enhancements" covered by the earlier trademark is seen identical with "cosmetics" and "preparations for skincare" covered by the application. As known, according to the settled case-law, in the course of evaluation of similarity of goods or services, all relevant factors regarding these goods or services should be taken into account. And included among these factors are particularly the nature, purposes and methods of use of these goods or services, and whether they are competing with or complementary to each other or not. Also in the existing case, they are assessed by taking these factors into account, and as also stated by the Board of Appeal, departing from the fact that the related products may contain the same contents, it is added that generally they will be produced by the same companies and be introduced for sales together in the same pharmacies or in the same retail store departments.
At the end, it is concluded that the goods are identical.
- Correct Interpretation and Determination of "Agent" Concept
The applicant claims that the Board of Appeal erred in considering it to be a "representative" or an "agent" of the proprietor, and for this reason, its application for registration cannot be refused.
In that regard, the Board of Appeal argues that the terms "representative" or "agent" should be interpreted broadly and determined correctly, and makes an assessment in details thereon.
The Board of Appeal found out that the distribution agreement between the related parties required John Mills to be responsible for distributing the goods of Jerome Alexander Consulting within the European Union. Furthermore, that agreement contained clauses regarding exclusivity of agreement, and non-competition obligations, as well as provisions relating to the intellectual property rights of Jerome Alexander Consulting. Finally, the Court has come to the conclusion that purchase orders carrying a date only two months prior to the date of filing of the application by Jerome Alexander Consulting for registration of the contested trademark reveals the existence of a material commercial relationship between the parties beyond a simple supplier / distributor relationship. For this reason, the Board of Appeal has not erred in coming to the conclusion that as of the time of filing of trademark registration application, there was an actual, ongoing and non-temporary business relationship between the parties leading to a general fiduciary relationship and loyalty duty, and therefore, John Mills can be considered and treated as an 'agent' within the frame of the related article.
In addition, again in the light of the objective and intention of the related article, the principal purpose is to prevent misuse of the related trademark or other marks similar to it by the agent, because the agent naturally acquires knowledge and experience during its business relations with the trademark proprietor and may misuse or abuse it. By doing so, the agent may inappropriately make use of the efforts and investments of the trademark proprietor. Therefore, both as for the correct identification of agent, and as for the point mentioned hereinabove, according to EUIPO, use of such types of knowledge by the agent without authorization can by no means be limited or restricted by the registration and use of the same trademark, and may also point out a wilful misconduct, because in the existing case, the agent has at the same time included in its application the essential components of the earlier trademark as well, and this in turn may be interpreted as its intention of misuse.
In summary, the Board of Appeal has also taken a correct decision by arguing that in reliance upon a contractual relationship wherein one of the parties represents the interests of the other, these concepts are required to be interpreted so as to cover all kinds of relations, and by directing its evaluation accordingly. For the purposes of this provision, the existence of an agreement or a commercial cooperation of a type leading to a an explicit or implicit fiduciary relationship of the applicant is sufficient, and accordingly, the agent is also expected to assume and perform a general fiduciary and loyalty duty in respect of interests of the proprietor of the earlier trademark.
If first we deal specifically with this case and its details and then we generalize the same for probable circumstances, the following facts have been correctly determined by the Board of Appeal one by one in respect of the subject article covered by the assessment hereunder:
- The opponent should be the proprietor of earlier trademark.
- The applicant should be a representative or an agent of the proprietor of the earlier trademark.
- The application should be filed in the name of the said agent or representative without a prior consent or authorization of the trademark proprietor and without any legitimate reasons justifying such action of said agent or representative.
- The application should be related to identical or similar signs and goods.
The most important point determined and emphasized by the judgment of the Court of Justice of the European Union, discussed in this article, is that the area of coverage of the following provision of the European Council Regulation on Trademarks: "Upon opposition by the proprietor of the trademark, a trademark shall not be registered where an agent or representative of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor's consent, unless the agent or representative justifies his action." is not limited or restricted by the "identical" trademarks, but "similar" trademarks may also be refused in reliance upon the same provision. And even it is believed that the area of coverage of the parallel provision contained in article 6(2) of the Turkish Industrial Property Law restricted and limited only by "trademarks identical or undistinguishably similar" may be considered as a new discrepancy between the Turkish and EU practices and may thus lead to new debates in the future years.
Another important message received by us from this judgment is that in case of any ambiguous or open-ended definitions or expressions in the law provisions in debate, it is essentially required to act or interpret according to the original intention of the related provision. In the case reported to you herein, the Court of Justice has acted so by going back to the proceedings of Paris Convention and its revision conferences.
Coming back to Turkey, from whom and how can we learn for which reasons the area of coverage of article 6(2) of the Turkish Industrial Property Law was restricted and limited only by "trademarks identical or undistinguishably similar" ? If you are saying that we must have a look at the reasoning of said law, let me say in advance that it will not be sufficient, because the reasoning states that: "Differently from the existing legislation, for the sake of determining the degree of similarity between the contested application and the contested trademark, an addition is made to the text of article to the extent needed for clarification purposes." But this explanation is devoid of clarifying why "similar trademarks" are excluded from the scope of article in Turkey.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
