The ECJ is The Champion for Famous Trade Marks in the Adidas Decision

Adidas, the owner of a Benelux mark consisting of the famous three stripes device brought proceedings against Fitnessworld, which markets fitness clothing bearing a similar motif of two parallel stripes of equal width. Adidas claimed that the activities of Fitnessworld created a likelihood of confusion on the part of the public. In 1997 it was successful in obtaining an interlocutory order that Fitnessworld cease using any signs similar to the triple stripe motif, as applied to specified articles of clothing, in the Benelux countries. The Dutch Regional Court of Appeal, however, set aside this order and dismissed Adidas’ claims. This was partly because of the appeal court’s finding that there was no likelihood of confusion given the sophistication of the relevant category of consumers

Adidas appealed to the Hoge Raad der Nederlanden, which stayed proceedings and referred several questions to the European Court of Justice on the interpretation of Article 5(2) of the Trade Marks Directive, which deals with the protection of marks with a reputation.

The Court confirmed that this question had been answered "yes" in the Davidoff and Gofkid (Case No C-292/00). wIn Davidoff the ECJ ruled that, if a Member State "transposes Article 5(2) [then it] must grant protection which is at least as extensive for identical or similar goods or services as for non-similar goods or services". The Court here expanded upon its earlier conclusion by clarifying that the option which Member States have in relation to Article 5(2) is limited to whether to grant this wider protection to marks with a reputation or not; there is no option or discretion relating to the scope of that protection once the Member State has decided to grant it.

The Court therefore concluded that where a Member State exercises the option under Article 5(2) it is "bound to grant the specific protection in question" where third parties use a later mark or sign which is identical with or similar to the registered mark with the reputation in relation to both goods or services which are not similar and those which are similar.

Question 1(b) concerned the relationship between Article 5(1)(b) and Article 5(2) but as it was reliant on a negative answer to question 1(a) it was not answered by the Court.

The Court confirmed existing case law that a likelihood of confusion on the part of the relevant section of the public is not a condition to obtaining protection under Article 5(2). The Court emphasised that the condition of similarity between the mark and the sign referred to in Article 5(2), although it does not require confusion, does require "the existence of, in particular, elements of visual, aural or conceptual similarity" sufficient to cause the relevant section of the public to establish "a link" between the sign and the mark. The Court went on to say that the existence of this link must be "appreciated globally taking into account all factors relevant to the circumstances".

The Court accepted that the public’s perception of a sign as a decoration or embellishment could effect the national court’s assessment of whether the sign was sufficiently similar to the mark. This was despite the Advocate General view that whether or not "the sign is viewed purely as a decoration does not…. assist in that assessment". The ECJ reiterated that the degree of similarity between the mark with the reputation and the sign must be sufficient for the relevant section of the public to establish a link between the sign and the mark. Therefore, protection conferred by Article 5(2) is not barred if a sign is viewed, by the relevant section of the public, as an embellishment if it is nonetheless sufficiently similar to the mark for them to establish a link between the sign and the mark. Conversely, where a national court makes a finding of fact that the relevant public views the sign "purely" as an embellishment then the sign may not be sufficiently similar to the mark for any link between them to be established. In the latter case Article 5(2) will not apply.

In light of Davidoff and the Sabel and Marca cases the responses of the ECJ to questions 1(a) and 2(a) are not surprising. Indeed, the Advocate General arrived at the same views in his Opinion of 10 July 2003. It is now clear that the ECJ will have very little sympathy for national courts who understandably feel constrained by the clear and unambiguous wording of "not similar" goods (transposed into their national legislation directly from the Directive) from extending this type of protection to use of a similar sign on similar or identical goods!

Perhaps more interesting is that the Court did not to follow the opinion of Advocate General Jacobs in its answer to question 2(b). The Advocate General clearly felt strongly that the application of Article 5(2) was conditional upon use of the allegedly infringing sign "as a trade mark" (i.e. that the mark was being used in order to distinguish the goods as originating from a particular source). He felt this condition could not be fulfilled where the sign is perceived purely as an embellishment. Instead, the ECJ once again sidestepped this still vexed issue by submerging it in the test of sufficient similarity. However, the Court’s apparent belief that perceiving something purely as a decoration (for example a red triangle central to an abstract pattern on a T-shirt) would prevent the average consumer from mentally linking it with a famous brand seems to bear little relation to real life and the extent to which famous brands have permeated the consciousness of modern man.

As this protection is bound now to be invoked in a great many cases where confusion evidence is not available, it is inevitable that there will be further references to the ECJ in order to clarify the full extent of this extension of protection for trade mark owners. For example what is the level of reputation required for a mark to benefit from Article 5(2) protection and in what circumstances will unfair advantage have been taken of or detriment caused to the distinctive character or repute of a mark?