Feature By Tobias Cohen Jehoram and Maarten Santman

Below The toy car at issue was a 1:24 scale model of an Opel Astra V8 Coupé Aftershocks of Opel/Autec

In early 2007 the ECJ issued a decision on the use of an trademark holder absolute protection. Unlike Article 5(1)(b), it does automobile manufacturer’s mark by a third party on not include the condition that there is (a risk of) confusion among the relevant public between the particular products or services its toy cars. The decision supposedly clarified what involved. As Article 5(1)(a) refers only to identical signs and goods or constitutes infringement under Article 5(1)(a). One year services, confusion is deemed to be present automatically. Hence, on, some are now arguing that the ruling may have Article 5(1)(a) provides the trademark owner with a strong weapon, unforeseen consequences at least in theory. Applying the directive to the facts of the case at hand seemingly suggests an infringement under Article 5(1)(a): the sign used by Autec The European Court of Justice (ECJ) is sometimes likened to the was identical to Opel’s registered trademark and was used for the same oracle at Delphi, who was renowned for her famously ambiguous products as those for which Opel has registered its trademark (toys). pronouncements. Similarly, in a number of the ECJ’s rulings on trademark matters, it is often hard to grasp what the court has Focus on functions of a trademark actually determined, leading to excited debates between Like the German Landgericht before it, the ECJ chose to follow a practitioners as to the exact meaning of the decision. The different path. As has become standard practice in its recent rulings Opel/Autec decision (Case C-48/05), issued in January 2007, is no on trademark law, the ECJ reiterated the raison d’être of trademark exception. Whether those in the industry like it or not, it is now a law. Referring to the Arsenal/Reed Case (Case C-206/01) from 2002, it leading source of law in relation to infringement under Article 5(1)(a) noted that the exclusive right under Article 5(1)(a) is meant to allow of the First Trademarks Directive (89/104/EEC), which is certainly the rights holder to ensure that the trademark can fulfil “its one reason to look further into its practical consequences. essential functions”. The most important of these essential functions, according to the court, is that the mark guarantees that Background the relevant goods or services originate from the trademark owner. A German court, the Landgericht Nürnberg-Fürth, had asked the ECJ Through such reasoning, the ECJ hints that Article 5(1)(a) does for a preliminary ruling on a case involving automobile giant Adam not in fact confer an absolute protection. There is an additional test Opel AG and toy manufacturer Autec AG. Autec manufactures and to be applied, which cannot be found in the article itself: the third- sells remote-controlled cars in Germany. One of those cars is a 1:24 party use of the trademark is infringing only when it harms one of scale model of an Opel Astra V8 Coupé. the functions of the trademark and especially when the guarantee of The toy car closely mirrors the original Opel car. Opel’s well- origin function of a trademark is endangered. known lightning logo is depicted on the grille of the remote- Is this news? It is for those who, from earlier ECJ decisions, were controlled car. Opel has registered this device as a trademark not only led to believe that under Article 5(1)(a) the mere affixing by a third for cars, but also for toys. Besides Opel’s device, Autec also uses its party of another’s trademark on a product identical to the goods for own trademarks in relation to its products: its CARTRONIC and which the trademark is registered is an infringing act. And it might AUTEC trademarks appear in the instruction manual and on the also be news to the people who drafted the directive: Article 6 remote control itself. One of the key questions from the German expressly sets out the exceptions that prevent a finding of court to the ECJ was whether Opel could object to the use of the Opel infringement under Article 5. device on the toy cars on the basis of Article 5(1)(a) of the directive. In Opel/Autec, the ECJ further defined its case law-based exception by indicating that the public should see a link between Scope of Article 5(1)(a) the (use of the) trademark and the origin of the goods (ie, do the Article 5(1)(a) provides as follows: “The proprietor [of a trademark] goods originate from the trademark owner or from a company shall be entitled to prevent all third parties not having his consent commercially linked thereto?). So, according to the ECJ, only if the from using in the course of trade… any sign which is identical with relevant public were to perceive the Opel logo on the remote- the trademark in relation to goods or services which are identical to controlled cars as an indication that these cars originated from Opel those for which the trademark is registered.” would the essential guarantee of origin function of the trademark be It has been widely accepted that Article 5(1)(a) grants the affected, leading to infringement of Article 5(1)(a). By taking this www.WorldTrademarkReview.com March/April 2008 World Trademark Review 13 Feature: Aftershocks of Opel/Autec

14 World Trademark Review March/April 2008 www.WorldTrademarkReview.com approach, the ECJ is broadening still further the exception it created in earlier case law. The Opel/Autec ruling has

Relevance of the BMW/Deenik Case far-reaching consequences, Following the Opel/Autec Case, it appears that Article 5(1)(a) of the directive can be applied only when the claim made under it serves to which probably go further than protect the functions of a trademark, among which is the function to distinguish goods or services from those of another party. However, the ECJ has realized one question remains: is there an infringement under Article 5(1)(a) when the trademark is used by a third party in order to distinguish the goods of the trademark holder, or does the article apply only when the trademark is used for the third party’s own goods? What is at stake here is the meaning and merit of an ECJ decision, BMW/Deenik (Case 63/97), handed down in 1999. In that case, a car service station in the Netherlands, Deenik, used the wording “specialist in BMW” to indicate that it sold second-hand BMW automobiles and was specialized in repairing them. The ECJ held that such use of the BMW trademark could fall within the scope of Article 5(1)(a), briefly stated, because the services Deenik provided trademark holder. The same applies to trademark use in were directly related to the original BMW products. Unmistakably, comparative advertising. Comparative advertising involves claims this meant that the scope of Article 5(1)(a) was widened. After all, the such as “our product is cheaper than trademark X” or “our product is BMW trademark was used not to distinguish the products of the just as good as trademark Y”. Generally, such trademark use serves to service station itself, but only to identify the goods of the trademark distinguish the goods of the advertiser from the goods or services of owner (ie, BMW cars). its competitor (and therefore not to distinguish the goods of the In Opel/Autec, this is recanted. The ECJ found that only in the advertising party). Following Opel/Autec, the conclusion appears to specific circumstances of BMW/Deenik (in which a third party uses be: no trademark infringement under Article 5(1)(a) of the directive. the trademark for services relating to the marked goods) can there For such cases one will have to rely either on national be an infringement under Article 5(1)(a). BMW/Deenik, according to implementation of Article 5(5) of the directive or on implementation the ECJ, was an exceptional matter, having relevance only for cases of the standards as defined in the Misleading and Comparative with those particular facts and circumstances. Thus, in ‘normal’ Advertising Directive (2006/114/EC). situations only when the trademark distinguishes the goods or The various ways in which trademarks are used on the Internet services of the third party itself can there be an infringement under are less easy to qualify. Online, trademarks are used, for example, in Article 5(1)(a). If, therefore, the trademark is (merely) used for domain names, on websites or in order to influence search engines (referring to) the goods or services of the trademark holder, there is through, among other things, keyword advertising. Taking this latter no infringement under Article 5(1)(a). category as an example, a producer of sodas marked X instructs a The Opel/Autec ruling has far-reaching consequences, which search engine to provide on its search site a link to the producer’s probably go further than the ECJ has realized. Articles 5(1)(a), 5(1)(b) and website when visitors to the search engine type the search term 5(2), which all share the same wording in this area, require that the ‘Coca-Cola’. In view of Opel/Autec, it is now possible to defend the trademark is used “in relation to goods or services” (whereas Article view that such trademark use falls outside the scope of Article 5(1)(a), 5(5) relates to “other use” of the trademark). If indeed all use of a since the mark is not being employed to distinguish the products of trademark identifying the goods of the trademark owner falls outside the entity using it as a keyword. the scope of Article 5(1)(a), it then necessarily also falls outside the scope of Articles 5(1)(b) and 5(2). This means that all such use would be Out of control? beyond the scope of harmonized European trademark law. Opel/Autec suggests that when invoking Article 5(1)(a) of the directive, merely fulfilling its requirements is not enough. One Further consequences should also show that the attacked use damages one of the Although one could still question the exact meaning of the ECJ’s functions of a trademark, such as in particular that the public sees judgment and, moreover, precisely in which situations a trademark the use of the trademark as an indication of a link between the is deemed to be used to distinguish the own goods of the third party goods and the trademark owner. itself, the reasoning can be applied to some of the most common Furthermore, by declaring BMW/Deenik an exception, and by situations of trademark use, such as referring use, use in indicating that “use in relation to goods or services” (at least in comparative advertising and online use. principle) means “use in relation to the goods or services of the In this context, ‘referring trademark use’ means use in party using the sign”, the ECJ takes all referring use of a trademark statements such as “coffee pad for use in Senseo machines” or “these (including use in comparative advertising) out of the scope of cartridges will fit the Gillette Sensor holder”. The ECJ’s decision that (harmonized) trademark law. It is unclear whether the ECJ is aware of Article 5(1)(a), apart from the exceptional situation of BMW/Deenik, the consequences of its decision. WTR applies only when the trademark is used for (distinguishing) the products or services of the alleged infringer means that such referring use will not be covered by Article 5(1) or 5(2). In a standard Tobias Cohen Jehoram is a partner and Maarten Santman is an referring use case, the trademark is used not so much to sell and associate with De Brauw Blackstone Westbroek in The Hague advertise the goods of the seller/producer of the goods (ie, the entity [email protected] using the trademark), as to refer to the goods or services of the [email protected] www.WorldTrademarkReview.com March/April 2008 World Trademark Review 15