Open UKLSR Volume 1(2) - Uklsa

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18 The Legality of Google AdWords pointed out by the English courts of the difficulty in applying the ECJ test, it is submitted that it would be difficult in practice to demonstrate that the advertising function of the trademark has been infringed. This supports the assertion that from a legal perspective, competitors need only be concerned with not causing consumer brand confusion. If no such confusion results, there is very little likelihood that rival advertisers who purchase keywords of their competitor’s trademark would be held to have breached the indicating origin or advertising functions of the latter’s trademark. II(b)(3) – Investment Function Pertaining to the investment function, the ECJ has noted expressly in Interflora that a trademark may also be capable of attracting customers and retaining their loyalty based on the acquired reputation of the trademark. In such a situation, use of a trademark may be prohibited if such third-party use substantially interferes with the proprietor’s use of the trademark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Interestingly, however, the ECJ goes on to consider the relation between the function of indicating origin and the investing function of a trademark as follows: “However, it cannot be accepted that the proprietor of a trade mark may – in conditions of fair competition that respect the trade mark's function as an indication of origin – prevent a competitor from using a sign identical with that trade mark in relation to goods or services identical with those for which the mark is registered, if the only consequence of that use is to oblige the proprietor of that trade mark to adapt its efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Likewise, the fact that that use may prompt some consumers to switch from goods or services bearing that trade mark cannot be successfully relied on by the proprietor of the mark”. 25 The above guidance seems to indicate once again a high threshold in determining whether the investment function of a trademark has been infringed. What is more interesting, however, is the ECJ’s relation to the function of indicating origin in the first sentence. This seems to be an implicit recognition by the ECJ that the way to balance the inherent tension between trademark owners and competitors is to ensure that the function of indicating origin of the trademark is not infringed. Once it is clear, however, that the function of indicating origin has not been infringed, the courts will only examine whether the other functions (i.e. advertising and investment functions) of the trademark has been infringed to the extent that it has been used for those other functions. Even so, the ECJ has set a high threshold for these other functions to be regarded as having been infringed so as to balance the interests between free competition and trademark protection. The very fact that the ECJ has provided detailed guidance to competitors as to what constitutes infringement of the other functions, but on the other hand has failed to do the same for trademark owners, supports the assertion that the ECJ is not as concerned about the infringement of the other functions of the trademark and that the practical effect of its judgments is that the use of Google AdWords is allowed as long as it does not result in consumer brand confusion. Moreover, as pointed out by the UK Court of Appeal in L’Oreal v Bellure, it is hard to imagine what is to be regarded as infringement of the investment function, 25 Supra Note 20, at [64].
UK Law Students’ Review – 2013 – <strong>Volume</strong> 1, Issue 2 since all comparative advertising is likely to affect the value of the trademark owner’s investment, yet the ECJ has held that it is an acceptable practice. II(c) – Section 10(3) – Confusion unnecessary; Issue is whether dilution, tarnishment or unfair advantage has resulted As for s.10(3), it has been held in General Motors 26 that confusion is not required under this section. There are three possible types of damage recognised under this section, namely (i) dilution (where the trademark’s ability to identify the goods and services for which it is registered is weakened), (ii) tarnishment (i.e. the trademark’s power of attraction is reduced) and (iii) unfair advantage (defined as exploitation on the coat-tails of the mark with a reputation). Section 10(3) offers additional protection for trademarks with a reputation, since it is possible to bring an action under this head as long as a similar sign has been used, even if the advertiser is selling completely different goods. II(c)(1) – Dilution Dilution is caused when the trademark’s ability to identify the goods or services for which it is registered is weakened. This is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so. The ECJ in particular have held that the stronger the earlier mark’s distinctive character and reputation, the easier it will be to accept that detriment has been caused to it. However, the ECJ has also sought to balance this by requiring that such detriment to the distinctive character of the mark must be proven, which would require evidence of a change in the economic behaviour of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future. 27 Such an evidentiary threshold is in fact not easy to prove, as noted in the Och-Ziff case, where the High Court was not satisfied that the plaintiffs had adduced any evidence where it would be proper to infer a change in economic behaviour on the part of consumers. Moreover, the High Court has also pointed out that the trademark must have a sufficient reputation before it can enjoy protection under s.10(3). More importantly, though, the High Court also observed that where trademarks involved a combination of words, it could very well be the case that the separate words themselves constituted an independent distinctive element (such that the reduction in distinctiveness of one of the words could not automatically lead to a presumption that either the distinctiveness of the other word, or that of the combined words, was reduced). To summarise, it is therefore clear that both the ECJ and the High Court set a relatively high evidentiary threshold for trademark owners to prove that there has been dilution of their trademarks as a result of “AdWords”. 26 [1999] Case C-375/97. 27 Intel Corporation Inc v CPM United Kingdom Ltd [2008] Case C-252/07, at [77]. 19
Page 1 and 2: January 2013, Volume 1: Issue 2
Page 3 and 4: The UK Law Students’ Association
Page 5 and 6: Acknowledgements The UK Law Student
Page 7 and 8: IN WHOSE BEST INTERESTS? RECONSIDER
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