Trademark Infringement only if Trademark Functions are Affected

Perhaps most importantly, in delimiting the exclusive rights of a proprietor, European jurisprudence has looked to the intended function of trade marks in order to determine whether the rights holder can prevent a third party from using a mark. The essence of this line of case law is that the proprietor of a mark is only able to prevent actions of a third party in relation to the trade mark where the function of that mark is liable to be affected by those actions.

Legislative Recitals

The EU Trade Mark Directive and the Regulation contain, in their recitals, references to the intended function of trade marks. Recital 8 of the Regulation, for example, states:

The protection afforded by an EU trade mark, the function of which is in particular to guarantee the trade mark as an indication of origin, should be absolute in the case of identity between the mark and the sign and the goods or services.

Please note that this recital labels the ‘indication of origin’ function as “in particular” the function of trade marks. On this basis, recent decisions of the ECJ have expanded the categories of ‘function’ from merely origin to other functions such as those of advertising, investment and communication.

ECJ Decisions that mention the function of trademarks

Trade mark functions have also over a series of decisions come to play a key role in demarking the rights of a proprietor.

In discussing the concept of ‘use in the course of trade’, the ECJ in Arsenal Football v. Reed found that Art 5(1)(a) must be interpreted with the functions of a trade mark in mind. The exclusive right under Article 5(1)(a) was found to be conferred in order to “guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin”.(para 48). For this reason:

“The exercise of that right must therefore be reserved to cases in which a third party’s use of the sign affects or is liable to affect the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods.”(para 5)

On the facts of Arsenal, it was not relevant that the signs had been used as a badge of origin, support or affiliation to a football club rather than ‘as a trade mark’ per se. The Court concluded that the use of the signs created the perception of a link between the goods and the trade mark proprietor (i.e. they indicated origin), and there was therefore infringing use.

Following this, various cases came before the ECJ on the scope of Art 5(1)(a) in which trade mark functions were used as a touchstone for determining trade mark infringement (In Google France v Louis Vuitton para 82 – identify essential function of mark to guarantee identity of the origin of goods or services by enabling the end user to distinguish goods/services from those of a different origin. In Adam Opel – para 21).

In cases such as Google France v. Louis Vuitton and later Interflora v Marks & Spencer one can see the ECJ expand upon the essential function of indicating origin, recognizing the legitimacy of guaranteeing quality of goods and services as well as communication, investment and advertising as functions.

The functions are therefore important in delimiting the exclusive rights in Article 5 Directive and Article 9 Regulation. As the ECJ stated in L’Oreal v eBay:

“Trade mark protection applies only to the use of a sign as a trade mark in the course of trade and covers only uses that are relevant for the various functions of trade marks” (para 47).

On the facts of that case, eBay were found not liable for trademark infringement since, although trade in counterfeit goods did negatively affect the origin function, it was not the marketplace operator’s use of the sign which generated that adverse effect. As for who carried out the relevant use, the Court said that “the use of signs identical with trade marks in those listings is not use by the electronic marketplace operator in relation to the goods in question but use by the users of the marketplace”.

It is understandable that the ECJ has sought to delimit trade mark rights in this way. Trade marks are not intended to confer an absolute monopoly upon proprietors and, by looking to what the legislature intended in developing the exclusive rights, the ECJ has more clearly defined the use in the course of trade concept.

Singapore courst decisions that mention the function of a trademark

The Singapore courts have similarly adopted function-based analysis in their decisions. For example, in Nation Fittings (M) Sdn Bhd v Oystertec Plc and Another [2006] 1 SLR 712; [2005] SGHC 225, Phang J in the High Court noted the acceptance of the requirement by the House of Lords and other UK courts and stated:

“I am of the view that there ought to be the requirement that there be use as a trade mark in the context of alleged trade mark infringement. I draw support …from the fact that such a requirement will also ensure that the legal protection of the rights of registered trade mark holders is so well-justified that it cannot be said that such holders are exploiting what might otherwise be labelled, in effect, as unnecessary or excessive monopoly rights. After all, trade marks have, in the final analysis, to do with the origin of the goods concerned” (para 62)

 

Conclusion – Why the Function of a trademark is important for trademark infringements

It is key that these conditions are cumulative. For example, whilst a party may be acting in the course of trade, they may not have used the mark in a way which affects its essential functions. Where this is the case, no infringement action lies as no ‘use’ in the sense of Article 5 or Article 9 has been carried out.

 

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