Dilution to a trademark may be caused by ‘blurring’ or ‘tarnishment’. The final effect is the same, but these two factors have distinct differences, says Izabella Dudek-Urbanowicz.
Building a trademark is similar to bringing up a child. As parents devote their time and incur expenses to invest in the development of their child, expecting that this investment will bring profit in the future, from the very beginning owners of a trademark take care of its development to ensure that it achieves the status of a renowned mark.
The financial investments made by a trademark owner from the outset include promoting the mark, advertising and marketing it and improving the quality of the goods and services designated by the trademark.
Assessment of whether a trademark has really achieved the status of a renowned mark depends on numerous factors. Apart from the degree of awareness among consumers, other factors are also taken into account, such as:
- Market share (both in quantity and value of the sold goods), scope and duration of advertising of a product protected by the mark;
- Territorial and time range of the trademark’s use;
- Licences granted for use of the trademark;
- Quality of the designated goods;
- Valuation of the mark by independent financial institutions;
- Amount of expense on promotion of the trademark;
- Price in relation to substitute goods; and
- Whether the trademark is used by the third parties.
All the abovementioned factors are important for assessing an earlier trademark’s reputation, which may be damaged by the later use of identical or similar marks (judgment of Supreme Administrative Court of 21/11/2006, file number II GSK 181/06). When a trademark becomes well-known among consumers of the goods and services designated by the trademark, protecting its reputation becomes the key aim. It is no wonder that after making massive financial investments, trademark owners seek to protect their trademarks’ distinctiveness and stop them being tarnished.
When a trademark has achieved the status of a ‘renowned mark’, it reassures consumers that goods and services designated by this trademark are of a high quality or present a certain image of luxury, lifestyle and exclusivity (judgment of 18/06/2009, C-487/07 L’Oréal). Therefore, if someone else uses an identical or similar trademark it is obvious that he is taking unfair advantage of, and is being detrimental to, the distinctive character and reputation of the earlier mark.
"Sometimes goods/services designated by later trademarks are so different from the goods or services designated by the renowned trademark that it would be difficult to discern any association between them."
One of the factors when assessing whether a trademark has achieved renowned character is the public’s awareness of the mark. An infringer, usually acting in a different business line to the owner of the renowned mark, would like the consumers of his goods and services to consider that the goods are of the same quality as the goods marked with the reputable trademark. When this second company marks its products with the reputable trademark, that trademark becomes less distinctive.
But who is to judge whether such detriment has occurred? According to the jurisdiction it is an average consumer of goods and services for which this trademark is registered. This consumer is deemed to be reasonably well informed, reasonably observant and circumspect (judgment of 27/11/2008, C-252/07 Intel, para. 35).
Moreover, it should be underlined that not every renowned trademark will be tarnished. It is more difficult to prove that the use of identical or similar trademarks has detrimental influence if the earlier trademark consists of very common and frequently used signs. Fanciful trademarks enjoy stronger protection in this case.
Sometimes goods/services designated by later trademarks are so different from the goods or services designated by the renowned mark that it would be difficult to discern any association between them.
For example, such an opinion was presented by the Board of Appeals in its decision of 05/06/2000 R 802/1999-1 in the case of Duplo, in which the renowned mark was designed to designate chocolate while the latter one covered printing inks, staplers, hole punchers and photocopiers.
Detriment to the trademark’s distinctive character may have various forms, and dilution may be caused by ‘blurring’ or ‘tarnishment’. Although the final effect on the damaged trademark is the same, the actions causing this effect are different.
Dilution by blurring means using an identical or highly similar mark for marking identical or similar goods and services, or even completely different and unrelated to those marked by renowned mark, in order to evoke association with goods and services marked by the renowned mark. Such free-riding is weakening the distinctiveness of a famous mark and, at the end of the day, the value and strength of renowned mark is lower.
An often cited example of such dilution by blurring was the case of Botox v Botumax (T-131-09) where the court stated that use of the latter mark will no doubt result in dilution of the distinctive character of the earlier mark, especially because ‘botox’ relates to ‘botulinum’ and ‘toxin’, and is not descriptive but, rather, a constructed term.
Dilution by tarnishment also weakens the distinctiveness of an earlier renowned mark but it occurs when use of the latter mark creates offensive, inappropriate or unflattering associations with the earlier one. Such association diminishes the value of renowned mark.
The case where tarnishment was established was the decision of 12/03/2012, R 297/2011-5 regarding the ‘Kappa’ trademark. In this case, the earlier reputable mark was registered for sports clothing and footwear while the identical ‘Kappa’ mark (except for the figurative element) was filed generally for tobacco and smokers’ items. These products create an association with a rather unhealthy lifestyle that is contrary to sports products. Such negative connotations would arguably diminish the reputable character of the earlier mark.
Independently from reasons of blurring or tarnishment, if the renowned mark faces detriment to its distinctive character and reputation, the owner must aggressively protect its mark. The owner must prove that use of the latter mark would change the economic behaviour of its consumers by stopping or limiting purchase of renowned products.
It would be very difficult for a trademark owner to provide such proof. In practice, it must show a non-hypothetical risk of detriment, but it is sufficient to carry out an analysis on the basis of normal practice in the relevant commercial sector and draw logical conclusions.
Therefore, every time an identical or highly similar mark to the renowned one is used without due cause, and such use leads to its dilution, the owner is entitled to undertake all legal measures to cancel the registration and stop its use.
Izabella Dudek-Urbanowicz is head of the trademark and industrial design department at Patpol. She can be contacted at: email@example.com
This article was first published on 01 September 2013 in World IP Review
trademark, licensing, dilution, tarnishment