Saturday, December 09, 2006

Alexander V. Mühlendahl on dilution law

Alexander V. Mühlendahl, Vice-President (retired) of the Office for Harmonization in the Internal Market (OHIM); Bardehle, Pagenberg, Munich, Germany: German and Benelux cases are the most prominent examples of non-confusion-based TM protection.

The types of cases: (1) use or registration of a protected mark for dissimilar goods or services in the absence of confusion: ODOL (the German Listerine) [the example used by Schechter in 1927 where use was rejected as a mark for metal goods], DIMPLE, KODAK (refused protection for bathtubs). (2) Detriment to reputation – tarnishment-type cases, MAC Dog/MAC Cat for pet food; Claeryn v. Klarein (gin v. washing detergent, and the similar sound is going to harm the gin on the “rat poison” theory that you don’t want the name to sound like a bad-tasting/dangerous substance). (3) Use of a protected mark as a vehicle for the promotion of goods or services, as when you show a Rolls Royce in an ad for your own products to give them luxury cachet. (4) Use in nontraditional circumstances, such as on the Internet – metatags, etc. (5) Comparative advertising. (6) Noncommercial settings such as criticism.

The first legislation in Europe was confusion based and initially protected only against use on identical or similar goods. Early German case law began in the 1920s, and applied unfair competition law in cases of noncompeting goods (which is conceptually difficult!) and also applied the tort concept of intentionally causing harm to someone else. Eventually people recognized that unfair competition was not the right theory and used theories of interference with names (a right granted by the Civil Code) and interference with existing business (likewise). In recent times, the courts have come back to unfair competition. Even though the goods don’t compete, the user of a famous mark is putting itself in a competitive relationship with the owner and is thus unfairly competing. These rights initially required uniqueness/singularity of the mark – no longer true under the new theory, as long as the mark is well-known to the public.

Benelux law: 1970 law created general tort claim for using the TM in a way which damages the interests of the TM proprietor; no confusion required. Courts held that fame/high reputation was not required either.

The Paris Convention provides for relief when there is a “connection” between goods and services that is detrimental to the TM owner, which has been read as a dilution provision even though connection implies confusion.

EU: The 1988 TM directive and 1993 Community TM Regulation: rights are granted to marks with a “reputation” against use of an identical/similar mark where the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character of the the TM. This is a property theory, and quite a broad one.

Elements of the offense: (1) the earlier mark must have a reputation; (2) the later mark must be identical/similar; (3) the use must be unfair and without due cause; (4) the use must be detrimental to the earlier mark’s reputation, detrimental to its distinctiveness, take advantage of its reputation, or take advantage of its distinctiveness.

ECJ cases: Chevy for detergents – what is the definition of “reputation” and its territorial scope? Answer: some sort of quantitative requirement, but we can’t say how much – a significant proportion of the public to whom the mark is addressed. Geographically: It’s enough if the reputation exists in one part of Benelux, even less than the whole country.

Davidoff and Adidas cases: Can dilution protection be applied to competing goods? Yes, you can still apply a reputation theory even in the absence of confusion. Otherwise TM owner would get broader protection against noncompeting goods than against competing goods, which is senseless. The similarity much be such that the public creates in its mind a link between one mark and the other. He would have thought that the test should be more objective.

The issues still to be decided: What is protected: These days, registered TMs and all other business identifiers. What are “detriment” and “taking advantage”? What is “due cause”?

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