essential functions of tm loreal v bellure

The Implications of L’Oréal v Bellure—A Retrospective and a Looking Forward: The Essential Functions of a Trade Mark and when is an Advantage Unfair?

By

Audrey Horton

Reprinted from E.I.P.R. Issue 9, 2011

Sweet & Maxwell 100 Avenue Road

Swiss Cottage London

NW3 3PF (Law Publishers)

The Implications ofL’Oréal v Bellure—ARetrospective and aLooking Forward: TheEssential Functions ofa Trade Mark andwhen is an AdvantageUnfair?Audrey Horton*

Bird & Bird LLP

Comparative advertising; Essential function; EU law;Infringement; Trade marks; Unfair advantage

This article reviews the judgment of the CJEU in L’Oréalv Bellure, and its application by the English Court ofAppeal in L’Oréal itself and subsequent cases. Therelevance of “intention” to take advantage of a famousmark is considered and general proposals for the futuredevelopment of the law are drawn. The impact of thedoctrine of the “essential functions” of a trade mark isconsidered in the light of L’Oréal, comments made by theAdvocate General in his Opinion in Interflora v Marks& Spencer and the recently published Max PlanckInstitute’s Study on the European Trade Mark System.

BackgroundThis article reviews the guidance of the Court of Justiceof the European Union (CJEU) in L’Oréal v Bellure NV(C-487/07) in its judgment of June 18, 20091 andconsiders the application of that guidance by the EnglishCourt of Appeal in the L’Oréal case itself,2 by the EnglishCourt of Appeal inWhirlpool Corp v Kenwood Ltd,3 andthe English High Court in Daimler AG v Sany Group CoLtd4 and Specsavers International Healthcare Ltd v AsdaStores Ltd.5 The criticisms of the CJEU judgment by theEnglish Court of Appeal in the L’Oréal v Bellure caseare reviewed in a wider context, and in the light of theapplication of the judgment in subsequent cases. Therelevance of intention to take advantage of the famousmark is considered. Finally a particular fact scenario inthe entertainment field is considered in the light of theL’Oréal v Bellure principles, and some general proposals

for the future development of the law including furtherreferrals to the CJEU, in this area are drawn. In particularthe impact of the doctrine of the “essential functions” ofa trade mark is considered in the light of the L’Oréal vBellure case, and comments made by the AdvocateGeneral in his Opinion in Interflora v Marks & SpencerPlc (C-323/09)6 of March 24, 2011, and in the Study onthe Overall Functioning of the European Trade MarkSystem by the Max Planck Institute (the Max PlanckStudy) of February 15, 2011.

L’Oréal v Bellure: the judgment of theCJEUThe L’Oréal case concerned so-called “smell-alike” orimitation perfumes and the use of well-known registeredmarks (TRESOR,MIRACLE,NOAandANAIS-ANAIS)in price and smell comparison charts. The first issuereferred to the CJEU concerned whether the use ofregistered word marks in the comparison lists fell withinart.5(1)(a) of the TradeMarks Directive/art.9(1)(a) of theTradeMarks Regulation (2009/207) (identical marks andidentical goods). The CFEU was asked whether the useof a registered trade mark on a comparison list for thepurposes of indicating the characteristics, in particularthe smell of the goods, in such a way that it did not causeany likelihood of confusion, did not affect sales underthe well-known mark, did not jeopardise the essentialfunction of the trade mark as a guarantee of origin, anddid not tarnish or blur the registered trade mark, butplayed a significant role in the promotion of the product,could constitute infringement under art.5(1)(a)/art.9(1)(a).The CFEU held that an effect on any of the functions ofthe trade mark, such as the guarantee of quality of thegoods or services, and those of communication,investment or advertising, and not just the origin function,is sufficient to sustain a claim under art.5(1)(a)/art.9(1)(a).The case also involved infringement under

art.5(2)/art.9(1)(c) of L’Oréal’s registeredmarks for bottleshapes and packaging in respect of the defendant’slook-alike packaging (which did not incorporate L’Oréal’sword marks). Trade mark infringement occurs underart.5(2)/art.9(1)(c) where there is unauthorised use of aCommunity trade mark “which has a reputation in theCommunity”, in relation to identical, similar ornon-similar goods and services, and where use of the sign“without due cause takes unfair advantage of, or isdetrimental to, the distinctive character or repute of theCommunity trade mark”.The defendants were using the registered trade marks

for the purposes of comparing the characteristics, inparticular the smell of the goods, in such a way that it didnot cause confusion, did not impair sales under the

*The author would like to thank Trevor Cook of Bird & Bird LLP for kindly reading and commenting on this article.1 L’Oréal v Bellure NV (C-487/07) [2009] E.C.R. I-5185.2 L’Oréal v Bellure NV [2020] EWCA Civ 535; [2010] E.T.M.R. 47.3Whirlpool Corp v Kenwood Ltd [2010] R.P.C. 2 CA (Civ Div).4Daimler AG v Sany Group Co Ltd [2009] EWHC 2581 (Ch).5 Specsavers International Healthcare Ltd v Asda Stores Ltd [2010] EWHC 2035 (Ch); [2011] F.S.R. 1.6 Interflora v Marks & Spencer Plc (C-323/09) Opinion March 24, 2011.

550 European Intellectual Property Review

[2011] E.I.P.R., Issue 9 © 2011 Thomson Reuters (Professional) UK Limited and Contributors

well-knownmark, did not jeopardise the essential functionof the trade mark as a guarantee of origin, and did nottarnish or blur the registered trade mark. The questionwas whether this could still amount to the taking of “anunfair advantage”. The CJEU judgment similarly decidedin relation to art.5(2)/art.9(1)(c) also that a trade markowner can prevent use not only where the essentialfunction (namely the guarantee of origin) of the mark isjeopardised but also where any of the mark’s otherfunctions are affected, such as the guarantee of qualityof the goods or services, and those of communication,investment or advertising.The CJEU decision clarified that it is not necessary to

show all three types of injury to infringe the trade mark;any one will suffice. It follows that there can be a findingthat unfair advantage has been taken of the repute of aregisteredmark under art.5(2)/art.9(1)(c) without the needto show any detriment to the distinctive character(dilution) or detriment to the repute of the registered mark(tarnishment). All the usual factors, including thelikelihood of confusion, dilution or tarnishment, will betaken into account as part of a global assessment, butnone of these are necessary ingredients for an unfairadvantage to be found.The CJEU also held that:

“Where a third party attempts, through the use of asign similar to a mark with a reputation, to ride onthe coat-tails of that mark in order to benefit fromits power of attraction, its reputation and its prestige,and to exploit, without paying any financialcompensation and without being required to makeefforts of its own in that regard, the marketing effortexpended by the proprietor of that mark in order tocreate and maintain the image of that mark, theadvantage resulting from such use must beconsidered to be an advantage that has been unfairlytaken of the distinctive character or the repute ofthat mark.”7

A pre-condition to establishing infringement underart.5(2)/art.9(1)(c) is that the relevant public must makea connection between the allegedly infringing sign andthe registered mark, or establish a “link” between them,which results from the similarity between the mark andthe sign. In the L’Oréal case the defendants’ ownwitnesses had said that the perfume packaging wasdesigned to give “a wink of an eye” towards the originalperfumes. There was no confusion: the public knew thatthe look-alike perfumes were not the real thing and hadno trade connection with L’Oréal but the “link” that wasmade enabled the defendants to charge higher prices andhelped them to market their products.The focus in L’Oréalwas on the commercial advantage

obtained by the defendants rather than damage to the trademark owner’s business. Even if no one is confused andthere is no harm, the competitor may have still benefitedfrom the investment which has gone into creating the

iconic status or cachet of the well-known brand. All thetrade mark owner need show is that the defendant hasobtained a commercial advantage from the reputation ofhis mark by establishing a link with the well-knownmarkthrough use of an identical or similar sign.Such a form of trade mark infringement is broadly

comparable to the continental concept of unfaircompetition or “parasitical trading” and, at least for theparticular circumstances of this case involvingwell-known marks used on look-alike or imitationproducts, goes well beyond what would be protected bycommon law passing off in the United Kingdom.

The English Court of Appeal applies theCJEU judgment to the facts ofL’Oréal v BellureFollowing the CJEU decision the Court of Appeal, in ajudgment given by Jacob L.J., in L’Oréal v Bellure,reluctantly held that trade mark infringement had indeedoccurred. Lord Justice Jacob however made it clear that,if he were free from the opinion of the CJEU, his strongpredilection would be to hold that trade mark law shouldnot prevent the defendants from telling the truth, namelythat their smell-alike perfumes, which in themselves werenot unlawful, smelled like the corresponding famousbrands. He prayed in aid principles of freedom of speechand freedom of expression. He also referred to the rightof freedom to trade, and potentially in other cases (sincethe parties were not in competition with each other in thiscase) to compete honestly. He considered that suchcompetition would be distorted if, for example, traderswere not allowed to state truthfully that their goods werethe same as brand X (a famous registered trade mark),but half the price. In his view, preventing comparisonlists which necessarily refer to well-known brands, suchas lists of generic versions of branded drugs or equivalentprinter cartridges and the like, clearly distorts what maybe proper or lawful competition.Specifically, Jacob L.J. said he regretted that the CJEU

“has not addressed the competition aspects of what it calls‘riding on the coat-tails’”. This raises some interestingquestions about where the line should be drawn betweenwhat the judge thought of as permissible andimpermissible “free-riding”. In Jacob L.J.’s view, theremay be cases where there is no confusion, where theparties are not directly in competition with each other sothat the activity involved does not impinge on the tradeof the trade mark owner, but nevertheless the defendantmay get some benefit from the fame of the mark. As hepointed out when he originally referred the question tothe CJEU, that sort of case may or may not involve someadverse effect on the fame, distinctiveness or repute ofthe trade mark. In other words the fact of benefit to thedefendant does not necessarily cause harm to the trademark owner. The CJEU decided that benefit (the “unfairadvantage” element) is enough; you don’t also have to

7 L’Oréal v Bellure NV (C-487/07) [2009] E.C.R. I-5185 at [49].

The Implications of L’Oréal v Bellure—A Retrospective and a Looking Forward 551


show harm (detriment to distinctive character or repute).The L’Oréal v Bellure decision by the CJEU thus focuseson the benefit gained by the defendant rather than on anydirect harm caused to the trade mark owner.In Jacob L.J.’s view the pendulum has swung too far

towards the interests of the trade mark owner, away fromwhat is required for the protection of the consumer (sincehe is not deceived or confused) and in doing so fails toprotect the consumer’s interest in free competition.Where the line should be drawn has been much

debated8 and remains controversial. As Jacob L.J. pointedout the famous brand has lost no sales from poorconsumers of “smell-alikes” who cannot afford the realthing which is “beyond their wildest dreams”. In theparticular fact pattern of this case it is also hard to seehow the defendants could have got their “smell-alike”message across without referring to the famous brands.If a trader may refer to a famous trade mark in order todescribe spare parts that are suitable for use with productssold under that famous mark, why was the use by thesmell-alike defendants not also legitimate descriptiveuse? The CJEU’s answer is that the use is not “for purelydescriptive purposes”: its use may affect thecommunication, advertising and investment functions ofthe mark, concepts Jacob L.J. considered to beconceptually “vague and ill-defined”.Concern has also been expressed by the European

Commission about the vagueness of the scope andapplicability of the “other functions” of trademarks (otherthat is than the essential one of guaranteeing origin). Thewritten observations of the Commission in the referenceto the CFEU in Interflora v Marks & Spencer, which arenot publicly available but were referred to in the judgmentof Arnold J. of the English High Court in that case onApril 29, 2010,9 also expressed concern that the existingjurisprudence of the CJEU including specifically L’Oréalv Bellure “might not have defined the precise scope ofthe exclusive rights of trade mark proprietors with therequired degree of clarity” and suggested that the CFEUshould take the opportunity presented by the reference toclarify these issues, including reconsidering its judgmentin L’Oréal v Bellure.In the meantime the English courts have applied or

considered the CJEU guidelines in L’Oréal v Bellure inthe following cases.

The requirement of intention to take anadvantage:Whirlpool Corp v Kenwood LtdIn a case involving shape marks for kitchen mixers, theEnglish Court of Appeal in Whirlpool Corp v KenwoodLtd10 found that there was no unfair advantage.Whirlpoolhad failed to prove that consumers were misled by theappearance of Kenwood’s kMix product into believingthat it was Whirlpool’s KitchenAid Artisan mixer and,since there was no likelihood of confusion, it relied onthe extended form of protection under art.9(1)(c).Although the kMix would remind people of the Artisan,so that the necessary “link” existed, Whirlpool failed todraw an analogy with the facts of the L’Oréal v Bellurecase. Kenwood had its own existing reputation and didnot need to ride onWhirlpool’s coat-tails. There was alsono evidence of intent to do so. Even if a commercialadvantage had been obtained as a result of the perceivedsimilarity between the shapes of the mixer, there was noevidence that this was unfair. Although it might bepossible for something other than intention to turn anadvantage into an unfair one, no other factor had beenidentified.

Daimler AG v Sany Group Co Ltd11

In this case Daimler claimed inter alia that Sany’s logoused on construction machinery would call to mind theMercedes star and thereby incite consumer interest inSany’s goods by imbuing them with allure and prestige.As a result Daimler claimed that Sany had obtained anunfair advantage under art.5(2). The trial judge failed tofind the necessary link: in her view the Sany mark wouldnot call to mind the Mercedes star, but she also held that,if she had found such a link, there was no evidence ofany “leg up” being achieved as a result of any similaritybetween the marks. Crucially, given that Sany’s logo hadbeen innocently adopted and promoted as its house markin China many years previously, there was no evidenceof intent. This fact scenario contrasts with that in the nextcase considered below.

Specsavers v Asda Stores12

In this case the English High Court held that the use byAsda Stores of the strapline “Be a real spec saver at Asda”infringed Specsavers’ Community trade marks for theword mark “SPECSAVERS” under art.9(1)(c) of theRegulation on the basis of an intention to take advantageof the mark.13

8C. Morcom QC, “L’Oréal v Bellure—Who HasWon?” [2009] E.I.P.R. 627; C. Morcom QC, “L’Oréal v Bellure—The Court of Appeal Reluctantly Applies the ECJ ruling:L’Oréal SA v Bellure NV” [2010] E.I.P.R. 530; D. Meale and J. Smith, “Enforcing a trade mark when nobody’s confused: where the law stands after L’Oréal and Intel”(2010) 5(2) Journal of Intellectual Property Law & Practice 96; M. Björkenfeldt, “The genie is out of the bottle; the ECJ’s decision in L’Oréal v Bellure” (2010) 5(2)Journal of Intellectual Property Law & Practice 105.9 Interflora v Marks & Spencer [2010] EWHC 925 (Ch).10Whirlpool [2010] R.P.C. 2.11Daimler v Sany [2009] EWHC 2581 (Ch). The author’s firm represented Sany Group Co in this matter.12 Specsavers International Healthcare Ltd v Asda Stores Ltd [2010] EWHC 2035 (Ch); [2011] F.S.R. 1.13 Specsavers failed to establish trade mark infringement of their logo marks featuring two overlapping ovals (with and without the word “Specsavers”) under art.9(1)(b)which requires a likelihood of confusion or a likelihood of association, arising from Asda Stores’ use of a logo in the form of two non-overlapping ovals bearing the words“ASDA Opticians”. Specsavers’ claim in passing off also failed.



The evidence in the case showed that in relation to thelogo Asda Stores had started with Specsavers’ mark andmoved away (rather than happening to devise a markwhich turned out to be close to Specsavers’ mark). Theirlegal department had advised them not to adopt a logowith overlapping ovals, and suggested a reversal ofcolours which would help to achieve a safe distance. Asregards the straplines the reference to Specsavers wasintentional because the intention was to parody and, asthe judge observed, you cannot parody something unlessyour material contains a reference to what you areparodying. The judge also found on the evidence thatAsda Stores intended in their overall campaign, by theuse of the strapline, to import a reference to Specsaversin relation to three “pillars” of the brand, namely price,range and professionalism.Mr Justice Mann referred to the guidance from the

CJEU in L’Oréal v Bellure and extracted the followingguidelines:

• Assessing whether there has been an unfairadvantage requires a global assessment ofall relevant circumstances;

• The advantage taken will be unfair if theuse amounts to riding on the coat-tails ofthe mark, by which is apparently meant “ause which uses the mark and its inbuiltreputation to create or enhance thereputation of the infringing product”;

• It is relevant to the assessment that theoffending sign was created deliberately inorder to create an association in the mindof the public (the required “link” betweenthe registeredmark and the offending sign).

He then referred to the Court of Appeal decision inWhirlpool Corp v Kenwood Ltd, concluding thatsomething more than a mere advantage is required; theadvantage must also be unfair and the advantage will berendered unfair if it is intended. The unfairness of theadvantage can be demonstrated by something other thanintention, but intention was the factor that was shown inL’Oréal and not present inWhirlpool v Kenwood.In the Specsavers case Mann J. found the relevant

“link” had been established: the whole purpose of theplay on words in the strapline “Be a real spec saver atAsda” was to call to mind Specsavers and its word mark.He also found that the use of “spec savers” gave Asda anadvantage in that “it was, at the very least, a referencepoint for its intended message—you will get a better dealat Asda than at Specsavers” and thus it was “clearlyreferencing people’s knowledge of Specsavers and itsreputation for value”. The judge also considered that thestrapline did more than that because, although focusingon value, it was also referencing the brand in a wider way.By bringing to mind Specsavers, a brand with areputation, which was Asda’s intention, inevitably andpredictably other aspects of the Specsavers’ brand (other

than value), namely range and professionalism, were alsocalled to mind. It followed that there was an unfairadvantage within the meaning of art.9(1)(c). Specsavershad an established reputation for value and Asda soughtto draw on the value of the inbuilt reputation alreadyestablished by the Specsavers brand. Since Asda intendedto do that, the ingredient of intention made the advantageunfair. Even if Asda did not intend to convey parity orsuperiority with the other two pillars of range andprofessionalism, it nonetheless intended to use the brandas a brand, with all that brings, and that too was enoughto make the advantage unfair.The case also demonstrates that an unfair advantage

can be taken where there are two companies with bigreputations: Asda had its own reputation for value andprice. The facts of L’Oréal, where an unknown brandsought a marketing advantage by packaging whichsuggested a luxury brand, were held not to be the onlyfacts which could give rise to an unfair advantage. Asdahad argued that they had no need to ride on the coat-tails(or as the judge preferred “stand on the shoulders”) ofSpecsavers. Since Asda had an existing reputation as aprovider of value, it argued that it could not be getting anunfair advantage by a statement about value. The judgerejected this logic: the question was whether the use ofthe mark was fair. This was not a case of an objectivelyprovable comparison merely identifying a competitor,but an intention to suggest the qualities inherent in thecompetitor’s brand and thereby to reference thecompetitor’s reputation by using its mark. As such it wascapable of being an unfair advantage.

Chippendales v Superstar14

This case, which settled before trial, illustrates a situationof double identity (identical marks/signs and identicalservices) and involved the use of a well-known mark.The claimant was the well-known male dance troupeknown as “the Chippendales” and is the proprietor ofCommunity and UK trademark registrations for the wordmark CHIPPENDALES, registered in class 41 for interalia “entertainment services, namely discotheque, maledance-exhibitions …”.Superstar Entertainment set up a male dance group

modelled on the Chippendales dance troupes. The group,“Here Come the Boys”, included a number of individualswho had many years previously been Chippendalesdancers, but it had no connection in the course of tradewith any Chippendales dance troupe. When promotingand advertising the Here Come the Boys’ UK tourSuperstar repeatedly used the name CHIPPENDALES,and inter alia distributed a flyer to theatre venues andticket agents referring to Here Come the Boys as “TheOriginal Chippendales”.As a result of Superstar’s various uses of the

CHIPPENDALES name, journalists and photographerswere confused into believing that the male dance group

14Chippendales USA LLC v Superstar Entertainment Ltd. The author’s firm, Bird & Bird LLP, represented the Chippendales USA LLC in this matter.



Here Come The Boys and its forthcoming tour either werethe Chippendales, or were somehow connected in thecourse of trade with, the Chippendales or theChippendales’ business. For example references appearedin the press and other media such as “The Chippendalesare back” or describing the Here Come the Boys dancegroup as being “re-united” and “re-branded”.The Chippendales alleged infringement under

art.9(1)(a), 9(1)(b) and 9(1)(c). In relation to art.9(1)(c),before launching its business, Superstar had no reputationor goodwill in relation to men’s dance shows. TheChippendales alleged that, had Superstar launched itsbusiness without using the CHIPPENDALES name, itwould have had to spend a great deal more time, effortand money on promoting and advertising its business tobring it to the attention of its target customers and forexample to secure bookings at theatre venues. By relyingon the Chippendales’ reputation and goodwill in theChippendales’ business, it was alleged that Superstar hadattracted the Chippendales’ customers and potentialcustomers to itself, thereby taking unfair advantage ofthe reputation and distinctiveness of theCHIPPENDALES trade mark.An interesting aspect of this case is that it is possible

that not all the customers and potential customers of thegroup Here Come the Boys were necessarily confused inthat theymay have been (or become) aware that the group,although containing former Chippendales, was not, andwas not connected to, the presently performingChippendales. However, the motivation of the audienceto attend the performance by Here Come The Boys wouldin most if not all cases have been primarily because ofthe link with the iconic brand the Chippendales whoalleged that Superstar intended to use the Chippendalesname to take advantage of the famous brand name. Inline with the Whirlpool and Specsavers cases, suchintention would make the advantage unfair.Like the L’Oréal case itself this case also raises

questions of legitimate descriptive use in the light of theformer Chippendales performers, although, following theCJEU’s reasoning, the use of the mark was as in L’Oréalnot for purely descriptive purposes, but use which mightaffect the communication, investment and advertisingfunctions of the mark.

How should European trade mark lawdevelop?In the United Kingdom art.5(2)/9(1)(c) was originallyimplemented into law in such a way as to precludeprotection under that heading for identical or similargoods. Thus the three categories of infringementcorresponding to art.9(1)(a), 9(1)(b) and 9(1)(c) did notinvolve an overlap. Article 9(1)(a) dealt with cases of“double identity” (identical signs and identical goods/services). In such a case infringement may be established

without the need to show confusion or a likelihood ofconfusion (although such confusion will be the inevitableresult in most cases where use has occurred). Article9(1)(b) dealt with identical or similar signs andidentical/similar goods/services. In such casesinfringement required a showing of a likelihood ofconfusion or association. Article 9(1)(c) dealt withidentical/similar signs and dissimilar goods/services, andrequired a trademark with a reputation in the Community,use without due cause and the taking unfair advantageof, or detriment to the distinctive character or repute ofthe CTM. As discussed below it was confirmed by theCJEU that a likelihood of confusion or association is notrequired under the third category of infringement.Following the Opinion of the Advocate General in

Adidas Salomon v Fitnessworld (C-408/01),15 followedby the ECJ in that case and in Davidoff II,16 it was heldthat art.5(2)/9(1)(c) could and should equally apply toidentical or similar goods/services, disregarding the literalwords of that article. In part this was in response to thecurtailment of art.5(2) by national courts (such as theEnglish High Court in Baywatch Productions Co Inc vThe Home Video Channel17 which had held that this formof infringement also required confusion), on the reasoningthat it would be illogical for non-similar goods to beaccorded greater protection than similar goods bydispensing with the ingredient of the likelihood ofconfusion. The ECJ held that the protection accorded byart.5(2) to marks with a reputation was not conditionalon a finding that there existed a likelihood of confusion.As a result the United Kingdom also amended its law todelete the reference to non-similar goods, thus extendingthe protection of art.5(2)/9(1)(c) to identical and similargoods/ services. TheMax Planck Study has recommendedat para.2.197 that art.9(1)(c) should likewise be changedto express the principle that protection is grantedirrespective of whether the sign is used for identical,similar or dissimilar goods.With hindsight, the extension of art.9(1)(c) to identical

and similar goods/services can be seen as the reason forthe current unease about the unclear extent of protectionaccorded by it. The original framework involvednon-overlapping categories: art.9(1)(b) was to apply tosimilar goods/services where there exists a likelihood ofconfusion, and art.9(1)(c) was intended to apply tonon-similar goods/services where there is a trade markwith a reputation and unfair advantage or detriment todistinctive character or repute (but with no need to showconfusion). In other words if the goods/services wereidentical or similar it should be possible for the trademarkowner to establish confusion and there would be no needfor the type of extended protection accorded underart.9(1)(c). If the trade mark owner cannot establish suchconfusion in the case of identical or similargoods/services (such that the essential function of thetrade mark as a guarantee of origin is not liable to be

15Adidas Salomon v Fitnessworld (C-408/01) [2003] E.C.R. I-12537; [2004] 1 C.M.L.R. 14.16Davidoff & Cie v Gofkid Ltd (C-292/00) [2003] E.C.R. I-389; [2003] E.T.M.R. 42.17Baywatch Productions Co Inc v The Home Video Channel [1997] F.S.R. 22 Ch D.



affected) it might be said it is going too far to accord suchmarks the kind of anti-dilution protection which wasoriginally framed to cover cases where confusion wouldbe extremely difficult to show because of the disparityof the goods/services involved. The contrary argumentmade is that very well-known marks paradoxically mayfind themselves so well known that it becomes verydifficult to establish confusion or association, even in thecase of the use of the mark on identical or similar goods.If only dissimilar goods/services were protected by

art.9(1)(c), L’Oréal v Bellure would have been decidedunder art.9(1)(b) and the absence of confusion wouldhave been decisive. Of course the clock cannot be turnedback and cases such as L’Oréal v Bellure, Specsavers vAsda Stores andChippendales v Superstar Entertainmenthave been, or would have been, decided under the newregime when the third category of infringement appliesto identical, similar and dissimilar goods/services.The issue is further complicated by the requirement,

which is not in the CTM Regulation, nor in the TradeMarks Directive, that, in order for there to be trade markinfringement, including infringement under art.9(1)(a)(double identity cases), the use in question must be liableto affect the essential functions of the trade mark, inparticular its essential function of guaranteeing tocustomers the origin of the goods or services. Thisjurisprudence of “essential functions” stems from thecases ofArsenal Football Club v Reed (C-206/01),18AdamOpel AG v Autec (C-48/05),19 culminating in what havebecome known as theCéline principles, fromCéline Sarlv Céline SA (C-17/06),20 a case of double identity,requiring a four-step test for infringement, namely: (1)use in the course of trade; (2) no consent from the trademark owner; (3) use in relation to goods and services;and (4) the use affects or is liable to affect the functionsof the trade mark.One of the questions referred by Arnold J. to the CFEU

in Interflora vMarks & Spencer (concerning whether andwhen the use of the registered trade mark as a keywordmay amount to infringement) is the extent to whichart.5(1)(a)/9(1)(a) and art.5(2)/9(1)(c) overlap, inparticular whether art.5(1)(a)/9(1)(a) should be restrictedto use which affects or is liable to affect the originfunctions of a mark, whereas use which only affects theother functions of a mark, namely guarantee of quality,investment, communication and advertising, should onlybe prohibited by art.5(2)/9(1)(c).In the L’Oréal v Bellure case the CJEU specifically

states that the requirement that the third party’s use affectsor is liable to affect the functions of the trade mark:

“Include not only the essential function of the trademark, which is to guarantee to consumers the originof the goods or services, but also its other functions,

in particular that of guaranteeing the quality of thegoods or services in question, and those ofcommunication, investment or advertising.”21

Such wording does not envisage mutually exclusivecategories, but rather accepts the parallel application ofart.5(1)(a) and 5(2).It seems clear that art.5(1)(b)/9(1)(b) should be

restricted to use which affects or is liable to affect theorigin function of a trade mark. At the very outset of thecurrent trade mark regime when interpreting “likelihoodof confusion, including likelihood of association” LaddieJ. rejected the Benelux concept of “non-originassociation” inWagamama Ltd v City Centre RestaurantsPlc.22 This was followed by the ECJ in Sabel BV v PumaAG (C-251/95)23 which held that likelihood of confusionand likelihood of association were not alternatives.“Likelihood of association” in this context meant that theconcept of “likelihood of confusion” is not limited toconfusion in the sense that a consumer mistakes oneproduct for another, but also other types of confusion,such as the mistaken assumption that there is anorganisational or economic link between two competingundertakings. It did not mean that a mere associationbetween two trade marks which did not lead to confusionsufficed for this particular category of infringement.And yet, as a result of L’Oréal v Bellure, non-origin

association for similar goods has, in the case of markswith a reputation, as it were, been brought in via by theback door. The CJEU has clearly said that it is notnecessary to establish that the guarantee of origin functionhas been jeopardised provided that there is an impact onthe trade mark’s other functions.The relationship between double identity cases and the

protection against dilution afforded by art.5(2) is alsonow unclear. Advocate General Jääskinen considers thisissue in Interflora Inc v Marks & Spencer Plc in hisOpinion of March 24, 2011. He notes that in the case ofdouble identity protection against blurring, tarnishmentand free-riding may now be accorded by art.5(1)(a),following the rationale of L’Oréal v Bellure that use ofan identical sign falls under art.5(1)(a) provided there isan adverse effect on any of the functions of the trademark, including those such as the quality, communication,advertising or investment functions which underlie theprotection against dilution accorded by art.5(2), not onlythe origin function. Carried to its logical conclusion, thiswould mean that in cases of double identity thedistinctiveness and repute of the trade mark might beprotected irrespective of whether the mark has areputation as required by art.5(2), in other words, whetherit is well known or not. The Advocate General points outthat Davidoff extended the application of art.5(2) to notjust similar but also identical goods. Although constrained

18Arsenal Football Club v Reed (C-206/01) [2002] E.C.R. I- 10273; [2003] E.T.M.R. 19.19Adam Opel AG v Autec (C-48/05) [2007] E.C.R. I-1017; [2007] E.T.M.R. 33.20Céline Sarl v Céline SA (C-17/06) [2007] E.C.R. I- 7041; [2007] E.T.M.R. 80.21 L’Oréal v Bellure NV [2009] E.C.R. I-5185 at [58].22Wagamama Ltd v City Centre Restaurants Plc [1995] F.S.R. 713 Ch D.23 Sabel BV v Puma AG (C-251/95) [1998] R.P.C. 199.



to accept that the CFEU has accepted parallel applicationof art.5(1)(a) and 5(2) the Advocate General was clearlytroubled by the ramifications of this development andinterestingly commented as follows:

“It seems to me that trade mark dilution as a legalphenomenon should in all cases be analysed on thebasis of Article 5(2). This would entail that thenotions relating to trademark dilution are interpreteduniformly despite the differences in the degrees ofsimilarity required to exist between allegedlyinfringing goods or services and those covered by atrade mark in the situations referred to in Article5(1)(a), (1)(b) and (2) of Directive 89/104respectively.”24

As a result the Advocate-General considered that:

“All trade mark functions—with the exception ofthe origin function—can have a role to play in theapplication of Article 5(2) … even if they havealready been applied in determining the applicabilityof Article 5(1)(a).”25

Thus it seems that the boundaries between the categoriesof infringement are becoming ever more blurred, as aresult of the doctrine of essential functions, if cases ofdouble identity involvingmarks which are not well knownmay in effect receive under art.5(1)(a) equivalentprotection to that accorded under art.5(2). A glimmer ofhope that this will not happen does however emerge fromthe Max Planck Study at para.2.184:

“As regards the additional trade mark functions, inparticular those of guaranteeing the quality of goods,communication, investment and advertising, andtheir interpretation in double identity cases, it shouldbe accepted as a principle for the future practice thatthese functions do not play an autonomous role indefining the scope of protection under Article 5(1)(a)TMD and Article 9(1)(a) CTMR. An adverse effecton these functions has no relevance for protectionunder the double identity rule.”

Clearly there is an urgent need for the CJEU and indeedthe Max Planck Institute, which has conducted a reviewof the Trade Marks Directive and CTM Regulation, totake the opportunity to restore order and clarity toEuropean trade mark law.

Clarification of trade mark law followingL’Oréal v BellureMr Justice Arnold in Interflora v Marks & Spencer hadhelpfully summarised the questions which are left to beclarified following L’Oréal v Bellure, as follows.

Precisely what are the functions of a trademark which may be affected by the use ofa sign?The Max Planck Study accepts there is legal uncertaintyin this area and has recommended as follows inpara.2.187:

“Issues relating to the purpose and scope of trademark protection should be addressed in thePreamble. The aim should be to give a full accountof the functions performed by trade marks, withoutthereby blurring the contours of legal provisionsdetermining the ambit of trade mark law.”

Questions which might be addressed are what exactly ismeant by the guarantee of quality and how in practice isthis different from the guarantee of origin given that mostbrand owners will wish to promote the quality of theirproducts/services. In addition, what is meant by thecommunication, investment and advertising functions ofa mark? These are unclear and undefined concepts whichoffer no certainty to businesses. Is there any differencebetween the communication and advertising functions ofa mark, and is it not the case that any unauthorised useof a trade mark must impact on such functions? For theinvestment function to be affected, is it necessary to showthat an investment has been made in the promotion of themark? If it is also necessary to show the mark has beenadvertised in order to claim the advertising function hasbeen impaired, how is this different from impairment ofthe investment in the mark?

Precisely what is required in order toestablish that such functions are liable tobe affected in order to found a claim underart.5(1)(a)?Likelihood of confusion is not required to be proved underthis heading but it appears the use must still affect theorigin function of the mark. The Max Planck Study atpara.2.181 states that under current law infringementsfalling under the double identity rule are considered as“absolute” in the sense that no likelihood of confusionneeds to be established. Protection is however notunlimited. If the sign is used on goods not originatingfrom the proprietor infringement will be excluded (only)if the function of guaranteeing origin is not affectedbecause the public does not consider the mark as a signindicating origin. This the authors of the study say is “alimitation inherent in Article 5(1)(a)”. It may be that thisis just another way of saying that if the use is not use asa trade mark there will be no infringement. If so, shouldwe not formulate an appropriate defence, rather than adda requirement which seems to fly in the face of the literalwording of the statute?

24 Interflora v Marks & Spencer Opinion March 24, 2011 at [64].25 Interflora v Marks & Spencer Opinion March 24, 2011 at [64].



TheMax Planck Study goes on to contrast cases wherea mark is used to identify the goods of the proprietor(which it calls referential or nominal use) wherelimitations follow from the exceptions of arts 6 and 7 ofthe TradeMark Directive. The Study recommends settingout in the Preamble that the “double identity” rule mayrelate to these two different kinds of cases.

What is the relationship between a claimunder art.5(1)(a) and art.5(2) in a doubleidentity case (identical marks and identicalgoods/services)?Perhaps this question may now be reformulated andexpanded as follows.

Should we reassess and restructure theoverall relationship between art.5(1)(a),art.5(1)(b) and art.5(2)?Is it logical that, in the case of marks with a reputationand similar goods/services, under art.5(2) non-originassociation is sufficient for trade mark infringement,although it would, in an otherwise identical set ofcircumstances but involving a mark without a reputation,not be sufficient under art.5(1)(b)? Even more bizarrely,as noted above, is it correct that in cases of double identity(identical mark/sign and identical goods/services) whichwould include marks with a reputation under art.5(1)(a)there must apparently be an affect on the origin functionof the mark whereas for identical (or similar) marks/signswith a reputation and similar goods/services non-originassociation may suffice under art.5(2) where there is animpact on the other functions of the mark. Furthermore,as discussed earlier, if the non-origin functions such asthe advertising function may apply to the assessment ofdouble identity infringement under art.5(1)(a) and maybe applied in parallel to assessment of infringement underart.5(2), does that in effect mean that the dilutionprotection of art.5(2) is available to marks without areputation?Arguably a rational trade mark system would require

that the origin function be relevant only to art.5(1)(a) and5(1)(b), and the other functions (but not origin) only toart.5(2), in other words art.5(1) and 5(2) would bemutually exclusive. This would, however, require arewriting of the existing law. It is interesting to note thatthe Advocate General in Interflora v Marks & Spencerseems to have reached such a conclusion:

“In my opinion these issues partly stem from theproblematic drafting of Article 5 of Directive 89/104.Therefore the actual situation might be betterremedied by appropriate legislative measures thana reorientation of case-law, as the example of thedevelopment of the United States federal legislation

on trade mark dilution shows. I observe that theCommission in December 2010 received a StudyRelating to the Overall Functioning of the TradeMark System in Europe [the Max Planck Study],and further steps in this area can hopefully beexpected.”26

A further important question which also requiresconsideration follows.

When is an advantage unfair?Is the requirement that there be an intention to takeadvantage of a mark with a reputation a sine qua non ofinfringement under this heading? In view of the scopefor uncertainty caused by the ruling and in L’Oréal vBellure and the application of its principles by nationalcourts especially in the United Kingdom it would be goodto have this point clarified.In addition, different approaches have been taken by

the CFEU to detriment to distinctive character and unfairadvantage as regards the evidential requirement to proveinjury or damage. The Intel decision (C-252/07) ofNovember 27, 2008 held that proof of detriment todistinctive character (blurring/dilution) requires “evidenceof a change in the economic behaviour of an averageconsumer of the goods and services”27 or a seriouslikelihood that such change will occur in the future. Bycontrast L’Oréal v Bellure held that unfair advantage canbe taken of the repute of a registered mark with areputation without the need to show any detriment to thedistinctive character or repute of such mark. As a resultit has been possible in a registration context, for examplein the OHIM Board of Appeal decisionWaterford—Waterford Stellenbosch,28 for an oppositionto succeed on the basis of a “non-hypothetical risk” ofunfair advantage being taken of an earlier mark with areputation, even where there was no serious risk ofdetriment to the distinctive character or detriment to therepute of such earlier mark. It is thus much easier toestablish “unfair advantage” than “detriment to distinctivecharacter” as a ground of opposition since there is noneed to provide evidence of economic damage to theearlier mark, or likelihood of such damage.The Max Planck Study accepts that claimants who

would fail because of Intel to enforce their dilution claims“can always rely on the ‘taking advantage branch’ of theclaim”, and recommends as follows at para.2.200:

“The current English text allows an interpretationthat ‘unfairness’ applies only to the takingadvantage, but not to the detriment caused. Therequirements should be set out in detail to avoid thatinterpretation. This would also add to theunderstanding of the ‘taking advantage’ part of theprovision insofar as ‘unfairness’ and lack of ‘due

26 Interflora v Marks & Spencer Opinion March 24, 2011 at [9].27 Intel Corp Inc v CPM United Kingdom Ltd (C-252/07) [2008] E.C.R. I-8823; [2009] E.T.M.R. 13 at [6].28Waterford—Waterford Stellenbosch, Case R240/2004-2, Second Board of Appeal, November 23, 2010.



cause’ need to be assessed separately, and are notimplied in the taking of commercial advantage assuch.”

And finally, a wider question to consider is as follows.

Is it time to harmonise the laws of unfaircompetition in the European Union?The controversy of L’Oréal v Bellure has, as Jacob L.J.noted, at its heart the relationship between trade markand competition law. It has for the first time brought rightsakin to those protected by the law of unfair competition,until now confined to continental Europe, across theChannel into the United Kingdom. It is likely, withoutharmonisation of unfair competition laws, that the L’Orealv Bellure ruling will be interpreted and applied, inparticular in relation to what is an “unfair advantage”,according to the laws of parasitical trading, slavishcopying and other unfair competition law concepts asthese are understood in the relevant European MemberStates. Indeed it is interesting to note that many of theterms discussed in the case law of the CFEU, such asparasitism, tarnishment, blurring and “riding on the coattails”, which are not English law concepts, are not set outin the literal wording of the legislation as currentlyenacted. On the other hand concepts such as “unfair

advantage” and “without due cause” which do appear inthe legislation are typically not discussed in detail or atall.It is also likely, as has apparently already happened

that the United Kingdom, a jurisdiction which has untilnow not had an unfair competition law, will interpret theruling in as restrictive a way as possible, for example byrequiring the element of intention to take an unfairadvantage. As well as reforming or clarifying trade marklaw in Europe, perhaps there is a need to considerharmonising national laws of unfair competition. In thisway it should also be possible to circumscribe what is“fair competition” and ensure that acts falling within thiscategory are not adjudged to take “unfair advantage” ofa mark with a reputation in the context of trade mark law.The Max Planck Study may have paved the way for

such an approach by recommending that unregisteredwell-known trade marks having a reputation should beaccorded the same protection as that accorded toregistered trade marks. However any legislative changeswhich are proposed by the Commission later in 2011 onthe basis of the Max Planck Study recommendations arerealistically not likely to include anything so far-reachingin scope. It is to be hoped that nevertheless the proposalsfor new legislation will grasp this important opportunityto provide us with a clearer, more internally consistentand comprehensive European trade mark law.



essential functions of tm loreal v bellure

Documents