Trademark Holders Feel the Pain of the Intel Judgment
A discussion of the judgment of the Court of Leeuwarden
dated 29 April 2009 (Huis&Hypotheek/DSB)
Huis&Hypotheek Nederland operates mortgage advice offices in a
franchise construction, including an office in Leeuwarden. The
branch manager of Huis&Hypotheek Leeuwarden was apparently
successful and he decided to cash in on this success by selling his
company to DSB Bank. This was not to the liking of
Huis&Hypotheek Nederland. Huis&Hypotheek Nederland
terminated the franchise agreement and the various parties started
quarreling about the termination conditions. Huis&Hypotheek
opened a new branch with a new franchise holder two blocks further
on the road. The original Huis&Hypotheek Leeuwarden was renamed
DSB Leeuwarden. The parties ended up in court because in various
advertisements (website, advertising boards, mailings) DSB would
have used the designation Huis&Hypotheek in order to suggest
(in Huis&Hypotheek's view) that DSB Leeuwarden was a
continuation of Huis&Hypotheek
Leeuwarden.
Misleading Advertising?
The Court made a very detailed analysis of the various
advertisements and tested them against the ban on misleading
advertising of Section 6:194 of the Dutch Civil Code. A number of
announcements - such as the text in a direct mailing that "DSB
Bank and Huis&Hypotheek have merged" - indeed qualified as
misleading.
Trademark Use?
Another question is whether this same announcement - "DSB
Bank and Huis&Hypotheek have merged" - also implies an
infringement of the trademark HUIS&HYPOTHEEK. One of the
requirements for any regular trademark infringement is that the
party sued uses the sign "for goods or services", that is
as a trademark. In recent European case law (particularly the
Opel/Autec judgment and the O2 judgment) this requirement has been
elaborated in a very complex manner that is sometimes hard to
follow. The Court referred to these judgments without actually
addressing their content, and subsequently only said that
"against the background of these judgments"
Huis&Hypotheek should have further substantiated why there was
trademark use in this case. Now that insufficient substantiation
was given, no trademark use was assumed. That is a somewhat
unsatisfactory construction. The Court did not burn its fingers on
the interpretation of the European judgments and put the ball
entirely in the trademark holder's court. Thus an actual
problem, namely that the criterion to be used is still not clear,
is placed on the trademark holder's shoulders via the
obligation to furnish facts. Apart from that, the outcome (namely
that no trademark use is assumed) does seem to be correct in this
concrete case.
Protection Against Detriment or Free
Ride?
If a sign is used otherwise than as a trademark, in the Benelux,
under Article 2.20 (1) under d of the BTIP, there is still
protection against detriment to the distinctive character
(dilution), detriment to the repute (impairment) and taking unfair
advantage (free ride). This article constitutes the optional
implementation of Article 5 (5) of the Trademarks Directive. In the
Robeco/Robelco judgment it was decided that this stipulation falls
outside the scope of the European harmonization. These criteria,
however, overlap with those of Article 5 (2) of the Trademarks
Directive (protection of trademarks with a reputation) and it is
therefore obvious to take European case law on trademarks with a
reputation as a reference point. This is exactly what the Court has
done in this case.
The Court particularly fell back on the Intel judgment of 27
November 2008 (C-252/07). One of the questions addressed in this
judgment is what the trademark holder has to prove exactly with
respect to the detriment or free ride. If there is actually
detriment or free ride it suffices, of course, to prove this, but
it must also be possible to take action against a threat of
detriment or free ride. In the Intel judgment the Court of Appeal
argued (unlike the earlier judgments of the Court of First
Instance) that the trademark holder must prove that "there are
elements on the basis of which it can be assumed that there is a
serious risk that such an injury will occur in the future". In
particular the words "serious risk" make it hard to
comply with this requirement. This is therefore the message that
was picked up by the national courts. The Court of The Hague was
the first to rule in the G-Star/Pepsico judgment (15 December 2008)
that "the European Court of Justice sets high
requirements". The Court of Leeuwarden referred to this
judgment and also stated that "the requirements set for
furnishing proof were very high". It will not be a surprise
that against this background the various statements of fact of
Huis&Hypotheek were deemed insufficient.
Is Intel
the Standard Indeed?
Therefore, as a result of the Intel judgment an action pursuant
to Article 2.20 (1) under c (trademarks with a reputation) or d
(use other than as a trademark) of the BTIP has become more
difficult for trademark holders. However, one must realize that
case law of the European Court of Justice is rarely unequivocal.
Three weeks after the Intel judgment another judgment was rendered
(TDK, C-197/07), in which the European Court of Justice set a
different and lighter criterion, namely that "it is sufficient
that evidence be produced enabling it to be concluded prima facie
that there is a risk, which is not hypothetical, of unfair
advantage or detriment in the future". A not hypothetical risk
is of course completely different from a serious risk. It is now up
to the trademark holders (and their attorneys) to point this out to
the courts.