Trade mark repute and protection beyond the risk of confusion: new frontiers

Generally and traditionally ordinary protection of trade marks has taken account of the risk of confusion due to the use of a sign by an imitator.
However, a new trend is emerging, driven by the market and by current sectoral practice, where very often counterfeiting involves a sort of parasitic association with an existing trade mark through the use of signs that are identical or similar to it, even in the absence of any real risk of confusion. Here the conception of the trade mark on the part of the proprietor and the consumer has less to do with an indication of provenance than with, above all, a symbol standing for certain information and associations that determine market value.
In this sense, the real aim of the counterfeiters is no longer to cause confusion among consumers, but to ‘hitch a free ride’ for the products and services for which the sign is used, even in cases where consumers know they are not buying an original product.
An example of the tangible effects of this type of behaviour would be where signs identical to an existing third-party trade mark are used for products that bear no resemblance to those for which it is registered, and where it would also be unlikely that anyone could conclude that the trade marks were placed on the products in question by the proprietor or with their consent. In such cases, although there is no risk of confusion, consumers might well be aware of an association with the original trade mark – due to which part of the positive value connected with that trade mark is transferred onto the goods or services of the imitator – and which, in the case of low quality goods, might very well be detrimental to the earlier trade mark, infecting its message with negative connotations.
Another new legal frontier emerging in regard to distinctive signs involves imitation not of the trade mark itself, but of other distinctive elements relating to the product or its packaging. In such cases, we speak of look-alikes, not involving direct counterfeiting of the trade mark but clearly benefitting from parasitic exploitation of the message transmitted by the trade mark and evoked by these other distinctive ancillary elements. There is also increasing use of trade marks or ancillary elements that tend to evoke a prestigious geographical provenance, even where there is no risk of confusion.

Attempts to expand the notion of risk of confusion in interpretative approaches and importance of reputation
In Italy there is a diversity of opinion as to whether risk of confusion needs to be verified in an abstract or real manner. The concept of likelihood of confusion in the abstract, which was initially preferred by those interpreting national laws, was based on comparison between signs and products on the basis of market structure and the scope of exclusivity of the trade mark. According to an abstract assessment, the risk of confusion could exist even if consumers of the products and services were aware that they were not original.
All of this was contrary to established practice in the rest of the EU which had repeatedly stressed that the risk of confusion depended on several factors – on the reputation of the trade mark in the market, on the associations that it might evoke and the level of similarity between signs – confirming the view that assessment should involve the real risk based on the meaning of the trade mark for consumers.
This approach involved, however, the conventional belief that the better-known a trade mark is, the greater the risk of confusion, which did not reflect the reality of the situation. It is now generally accepted that the better-known a trade mark is, the less likely it is the public might confuse it with a similar sign, except where it might be seen as a variation on the original or authorised by the owner.
This has now been accepted at Community level, with definitive abandonment of the principle of necessarily greater risk of confusion in the case of better-known trade marks.
Another notion that is wrongly linked to an increased risk of confusion is risk of association (for example in cases of fashion and luxury goods bought in order to flaunt a trade mark); risk of association instead conceals a parasitic exploitation of a use connected to the communicative function of the trade mark, and certainly not to indication of provenance. In fact, when the consumer represents the counterfeited sign as original, this is basically for the powers of suggestion and reputation of the message that it essentially projects.
It is obvious that the need for additional protection, beyond the limits of risk of confusion, essentially applies to trade marks that transmit a consciously recognisable message that can be transferred in a positive manner onto goods and services. The protection of these trade marks therefore has to do with their reputation, or rather with the message they transmit and through which this reputation is expressed.
Community jurisprudence has in fact supported additional protection of trade marks that enjoy reputation and prestige even in cases where there is no confusion with products similar to those for which the trade mark was registered, but where such uses might involve unfair advantage to the user or be detrimental to the repute or distinctive character of the imitated trade mark. It is important to underline that the specific reason for the need for protection is thus the fact that the trade mark and sign are sufficiently similar that the relevant public would mentally link them.
It is therefore the case that all trade marks that are well-known on the market benefit from added protection beyond the risk of confusion (not just world-famous trade marks), while likelihood of confusion must be treated in terms of particular cases of use of parasitic exploitation of the reputation of the trade mark or detriment to such reputation.
It would seem obvious that this approach would also apply to cases where the imitator is making use of any sign even in a non-distinctive manner, since the element identical or similar to the trade mark to be protected is the aspect of the sign seen as transmitting a message and a connection to the imitated trade mark. In particular, it is immediately obvious that the trade mark should be analysed within the market and in its relationship with the market; this would mean that any use as part of a commercial activity of a well-known sign owned by a third party and regarded as involving risk of confusion, detriment to reputation or acquisition of an unfair advantage would amount to counterfeiting.
It should be underlined that detriment is considered to have been caused to a reputation where the goods for which the requested sign is used influence public opinion in such a way as to negatively affect its power of attraction.

Reputation and guarantee of quality for trade marks: protection of the message transmitted by trade marks
To sum up, we can view this as a type of common law basis for trade marks and signs, within the system of company communication that includes denominations of origin, distinctive signs and provisions regarding labelling and advertising and their coordination.
As a result, the scope of protection and the content of any restrictions on misleading uses should be based on the real and tangible meaning for consumers of each specific sign, on how well-known the trade mark really is (and traditionally has been) on the market and on the message it transmits, a fundamental element of the whole system described.
In a global market context where communication plays a fundamental role in establishing competitive advantage between companies and the relationship with consumers, distinctive signs constitute a form of universal language that often has the same meaning in all markets.
In order to extend the protection of a trade mark beyond risk of confusion, the natural choice in the present context would therefore seem to be to focus attention on the sign as transmitting the image, values and ideas of which it has become the symbol.
This approach informs the recent finding of the EU Court on the LA PERLA trade mark invalidating a later registration of trade marks similar to the well-known mark even for classes of goods (in this case jewellery; precious metals; precious stones) not similar to those for which the earlier trade mark was registered, allowing protection to extend across goods classes and indeed ‘beyond the goods’.
Specifically, the EU Court, unlike the Board of Appeals in its ruling, recognised the unfair advantage and detriment which are the reason for – and the evident consequence of – the similarity between the earlier and well-known trademark and the later mark, sufficient to allow the public to establish a link between the two signs. As for evidence, proof was not required given the simple risk that unfair advantage and detriment might well emerge in the future.

Author: Davide Taglia, Attorney-at-law
Source: Rapisardi Intellectual Property

    • July 2020
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