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3PLR – MARCA MODE CV V. ADIDAS AG AND ANOTHER

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MARCA MODE CV

V.

ADIDAS AG AND ANOTHER


COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES (SIXTH CHAMBER)

 [2000]All ER (EC)

(Case C-425/98)

24 NOVEMBER 1999, 27 JANUARY, 22 JUNE 2000

3PLR/2000/166  (CJ-EC)

 

MAIN ISSUES

INTERNATIONAL LAW

ANTITRUST AND TRADE REGULATION

INTELLECTUAL PROPERTY

EUROPEAN COMMUNITY; Competition Policy: INTELLECTUAL PROPERTY; Trade Marks; Other

 

JUDGES

MOITINHO DE ALMEIDA (PRESIDENT OF THE CHAMBER), GULMANN (RAPPORTEUR), PUISSOCHET, HIRSCH AND MACKEN ADVOCATE GENERAL JACOBS

 

European Community – Trade mark –‘Likelihood of confusion’–‘Likelihood of association’– Trade mark having distinctive character – Third party using similar sign for similar goods – Whether a finding of likelihood of association sufficient to allow trade mark proprietor to prevent third party’s use – Council Directive (EEC) 89/104, art 5(1)(b).

 

A, a company established in Germany, was the proprietor in the Benelux countries of a figurative trade mark, in respect of sports articles and clothing, consisting of a logo composed of three parallel stripes. AB, a company established in the Netherlands, was its exclusive licensee in those countries. MM, also established in the Netherlands, offered a sportswear collection for sale in its shop in Breda, the Netherlands, a number of items of which bore two or three parallel stripes. In proceedings for infringement in the Netherlands courts, A and AB had obtained interim relief restraining MM from using, in the Benelux countries, the sign consisting of the double or triple stripe motif or any other sign corresponding to A’s logo. On appeal to the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), MM contended that the regional court had misapplied trade mark law by basing its decision solely on a finding that there existed, under art 5(1)(b)a of First Council Directive (EEC) 89/104 (to approximate the law of the member states relating to trade marks), a risk of association, as opposed to a likelihood of confusion, on the part of the public concerned between the signs it used and the registered mark. Article 5(1)(b) entitled the proprietor of a mark, subject to certain conditions, to prevent third parties from using a sign for which there existed ‘a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark’. Accordingly, the Hoge Raad stayed the proceedings and referred to the Court of Justice of the European Communities for a preliminary ruling under art 177 of the EC Treaty (now art 234 EC) the question whether, on its true construction, art 5(1)(b) was to be interpreted as meaning that, in such circumstances, the proprietor was entitled to prevent the use of such a sign by a third party if the distinctive character of the mark was such that the possibility of such association giving rise to confusion could not be ruled out.

 

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a    Article 5(1)(b) is set out at p 697 e f, post

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Held – On the proper construction of art 5(1)(b) of First Council Directive (EEC) 89/104, the concept of likelihood of association was not an alternative to that of likelihood of confusion, but served to define its scope. The very terms of the provision excluded its application where there was no likelihood of confusion on the part of the public. Protection of a registered mark thus depended, in accordance with art 5(1)(b), on there having been a likelihood of confusion, which was to be appreciated globally, taking into account all factors relevant to the circumstances of the case. The reputation of a mark, where it was demonstrated, was an element which, amongst others, might have some importance and marks with a highly distinctive character, in particular because of their reputation, enjoyed broader protection than marks with a less distinctive character. However, the reputation of a mark did not give grounds for presuming the existence of a likelihood of confusion simply because of the existence of a likelihood of association in the strict sense. Accordingly, art 5(1)(b) of the directive could not be interpreted as meaning that where a trade mark had a particularly distinctive character, either per se or because of the reputation it enjoyed with the public, and a third party, without the consent of the proprietor of the mark, used, in the course of trade in goods or services which were identical with, or similar to, those for which the trade mark was registered, a sign which so closely corresponded to the mark as to have given rise to the possibility of its being associated with that mark, the exclusive right enjoyed by the proprietor entitled him to prevent the use of the sign by that third party if the distinctive character of the mark was such that the possibility of such association giving rise to confusion, although not established, could not be ruled out (see p 712 d to p 713 b, d to f and h j, post).

 

SABEL BV v Puma AG, Rudolf Dassler Sport Case C-251/95 [1997] ECR I-6191 and Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc (formerly Pathé Communications Corp) Case C-39/97 [1998] All ER (EC) 934 applied.

 

Cases cited

 

Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc (formerly Pathé Communications Corp) Case C-39/97 [1998] All ER (EC) 934,[1998] ECR I-5507, ECJ.

 

Henri Jullien BV v Versuchere Norbert Case A 82/5 (1983) 4 Jurisprudence of the Benelux Court of Justice 36 (20 May 1983).

 

Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV Case C-342/97 [1999] All ER (EC) 587,[1999] IP & T 11, ECJ.

 

Loendersloot v George Ballantine & Son Ltd Case C-349/95 [1997] ECR I-6227.

Pigs Marketing Board v Raymond Redmond Case 83/78 [1978] ECR 2347.

SA CNL-SUCAL NV v HAG GF AG (HAG II) Case C-10/89 [1990] ECR I-3711.

SABEL BV v Puma AG, Rudolf Dassler Sport Case C-251/95 [1997] ECR I-6191.

 

Reference

 

By a judgment of 6 November 1998, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) referred to the Court of Justice of the European Communities for a preliminary ruling under art 177 of the EC Treaty (now art 234 EC) a question (set out at p 710 g h, post) on the interpretation of art 5(1)(b) of First Council Directive (EEC) 89/104. The question was raised in proceedings between Marca Mode CV, established in Amsterdam, the Netherlands, on the one hand, and Adidas AG, established in Herzogenaurach, Germany, and Adidas Benelux BV, established in Etten-Leur, the Netherlands, on the other. Written observations were submitted on behalf of: Marca Mode, by O W Brouwer, D W F Verkade and D J G Visser, of the Amsterdam Bar, and P Wytinck, of the Brussels Bar; Adidas and Adidas Benelux, by C Gielen, of the Amsterdam Bar; the Netherlands government, by M A Fierstra, Head of the European Law Department in the Ministry of Foreign Affairs, acting as agent; the United Kingdom government, by M Ewing, of the Treasury Solicitor’s Dept, acting as agent; and the Commission of the European Communities, by K Banks and P van Nuffel, of its legal service, acting as agents. Oral observations were made on behalf of: Marca Mode, represented by D J G Visser and C R A Swaak, of the Amsterdam Bar; 695Adidas and Adidas Benelux, represented by S A Klos, of the Amsterdam Bar; and the Commission, represented by H M H Speyart, of its legal service, acting as agent. The language of the case was Dutch. The facts are set out in the opinion of the Advocate General.

 

27 January 2000. The Advocate General (FG Jacobs) delivered the following opinion.

 

  1. Article 4(1)(b) of the First Council Directive (EEC) 89/104 (to approximate the laws of the member states relating to trade marks)(OJ 1989 L40 p 1)(the directive) protects owners of trade marks against the registration of an identical or similar mark for identical or similar goods or services which would result in ‘a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark’. In SABEL BV v Puma AG, Rudolf Dassler Sport Case C-251/95 [1997] ECR I-6191 (paras 18–19) the Court of Justice of the European Communities was asked whether there was a likelihood of confusion for that purpose where the public might make a mere association between two marks although the two were not confused. The Court of Justice stated that it followed from the wording of art 4(1)(b) that the concept of likelihood of association was not an alternative to that of likelihood of confusion but served to define its scope; that the terms of the provision itself excluded its application where there was no likelihood of confusion on the part of the public; and that that interpretation was confirmed by the tenth recital in the preamble to the directive, according to which ‘the likelihood of confusion … constitutes the specific condition for such protection’.
  2. The present case concerns art 5(1)(b) of the directive which, using essentially identical terms, protects trade mark owners against the use by others of an identical or similar sign for identical or similar goods or services which would result in ‘a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark’. The Hoge Raad (Supreme Court), the Netherlands, has referred the following question to the Court of Justice for a preliminary ruling:

‘Where:(a) a trade mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public, and (b) a third party, without the consent of the proprietor of the mark, uses, in the course of trade in goods or services which are identical with, or similar to, those for which the trade mark is registered, a sign which so closely corresponds to the mark as to give rise to the possibility of its being associated with that mark, must Article 5(1)(b) of Directive 89/104/EEC be interpreted as meaning that the exclusive right enjoyed by the proprietor entitles him to prevent the use of the sign by that third party if the distinctive character of the mark is such that the possibility of such association giving rise to confusion cannot be ruled out?’

THE TRADE MARKS DIRECTIVE

  1. The trade marks directive was adopted under art 100a of the EC Treaty (now art 95 EC). Its aim was not ‘to undertake full-scale approximation of the trade mark laws of the Member States’ but simply to approximate ‘those national provisions of law which most directly affect the functioning of the internal market’.
  2. The ninth and tenth recitals of the preamble to the directive are in the following terms, in so far as is relevant:

‘Whereas it is fundamental, in order to facilitate the free circulation of goods and services, to ensure that henceforth registered trade marks enjoy the same  protection under the legal systems of all the Member States; whereas this should however not prevent the Member States from granting at their option extensive protection to those trade marks which have a reputation … whereas it is indispensable to give an interpretation of the concept of similarity in relation to the likelihood of confusion; whereas the likelihood of confusion, the appreciation of which depends on numerous elements and, in particular, on the recognition of the trade mark on the market, onb the association which can be made with the used or registered sign, onc the degree of similarity between the trade mark and the sign and between the goods or services identified, constitutes the specific condition for such protection; whereas the ways in which likelihood of confusion may be established, and in particular the onus of proof, are a matter for national Procedural rules which are not prejudiced by the Directive …’

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b    The word ‘of’, rather than ‘on’, appears in the English text by mistake.

c    See footnote 2, above.

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  1. Article 4(1)(b) of the directive provides that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid—

‘if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.’

  1. Article 5(1)(b) of the directive provides that the proprietor of a trade mark shall be entitled to prevent third parties from using in the course of trade—

‘any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.’

  1. It is clear, and appears to be accepted by the parties submitting observations, that arts 4(1)(b) and 5(1)(b) of the directive should be interpreted in the same way.
  2. I would mention at this point a discrepancy between the different language versions of the directive. Most versions other than the English use the notion of ‘risk’ or ‘danger’ of confusion and association rather than ‘likelihood’; the Dutch however use the concept of possibility of confusion and of association in art 4(1)(b) and of possibility of confusion and risk of association in art 5(1)(b), although the tenth recital in the preamble refers to the ‘risk’ or ‘danger’ of confusion. For reasons which I will explain later, I do not consider that anything turns on those differences of terminology.
  3. Article 5(2) of the directive provides that any member state—

‘may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.’

THE NATIONAL LAW

  1. Under the Uniform Benelux Law on Trade Marks (annexed to the Benelux Trade Mark Convention (19 March 1962))(the Benelux Law) prior to implementation of the directive, the owner of a trade mark could prevent any use of a mark identical or similar to his own registered mark in respect of the same or similar goods (art 13A of the Benelux Law). Similarity of the marks was thus sufficient; in contrast to the position in other member states, the Benelux Law did not require a risk of confusion. Nor did it expressly refer to a likelihood of association. That concept was introduced by the Benelux Court in Henri Jullien BV v Versuchere Norbert Case A 82/5 (1983) 4 Jurisprudence of the Benelux Court of Justice 36 (20 May 1983) and subsequently reflected in the Benelux Law after its amendment with a view to implementing the directive: art 13A(1)(b) of the Benelux Law, as amended (by a protocol of 2 December 1992, which entered into force on 1 January 1996), provides that the exclusive right to a trade mark entitles the proprietor to oppose any commercial use of the mark or a similar sign in respect of the products for which the mark is registered or similar products when there exists, in the mind of the public, a ‘risk of association’ between the sign and the mark.

THE FACTS AND THE MAIN PROCEEDINGS

  1. Adidas AG is the proprietor in the Benelux countries of a trade mark consisting of a logo composed of three stripes. The mark is generally recognised as belonging to Adidas; the three stripes are not regarded as a purely decorative feature. Adidas Benelux BV is the exclusive licensee of Adidas AG in respect of the Benelux countries. The two companies are hereinafter collectively referred to as ‘Adidas’.
  2. Marca Mode CV (Marca Mode) markets a sports clothes collection, a number of the items in which bear on the side two parallel stripes running longitudinally. Marca Mode also markets a white and orange T-shirt bearing three black, vertical stripes running in parallel down the entire length of the front of the garment, broken up by a medallion showing a picture of a cat and bearing the word TIM.
  3. In July 1996 Adidas, considering that Marca Mode had infringed their triple stripe trade mark, obtained an interlocutory order from the President of the Rechtbank te Breda (Breda District Court) restraining Marca Mode from using on some seven articles of clothing and the TIM shirt in the Benelux countries the sign consisting of the triple or double stripe motif or any other sign corresponding to Adidas’ logo. Adidas founded their application on art 13A(1) of the Benelux Law.
  4. In April 1997 the Gerechtshof te’s-Hertogenbosch (’s-Hertogenbosch Regional Court of Appeal) upheld that judgment. According to the referring court, the Gerechtshof found:(i) that the overall impression given by the articles of clothing in question was such that there was a real possibility that an association would be triggered on the part of the relevant section of the general public between Marca Mode’s double stripe motif and Adidas’ triple stripe motif;(ii) that there existed, with regard to the TIM shirt, a possibility that the three stripes featuring on that shirt—which was intended for children of up to eight years of age and was generally bought by their parents—might be associated by the parents with Adidas’ triple stripe motif; and (iii) that Adidas’ mark was generally known.
  5. In May 1997 Marca Mode appealed to the Hoge Raad. Before that court it argued, on the basis of the SABEL case, that it was not sufficient, for the purposes of establishing a trade mark infringement, to prove the existence of a real likelihood that the relevant section of the general public might associate the sign with the trade mark; instead, it was necessary to show a likelihood of confusion on the part of the public within the meaning of art 5(1)(b) of the directive.
  6. The Advocate General at the Hoge Raad, Advocate General Bakels, delivered his opinion in September 1998. In his opinion, Advocate General Bakels reviews the history of the Benelux provision, the broad protection of marks which had been derived from it, the negotiating history of the relevant provisions of the directive and the conviction of the Benelux governments and certain Benelux authors and judges that the Benelux provision was compatible with the directive. The Advocate General is however clearly of the view that the law has changed as a result of the directive and that a mere risk of association without a risk of confusion is insufficient; moreover he stresses that that view is unquestionably correct since the judgment of the court in the SABEL case (which as he notes post-dated the decision of the Gerechtshof—the judgment in the SABEL case was delivered in November 1997). Advocate General Bakels concludes that the Hoge Raad should show that it applies the court’s case law even if it would have preferred that case law to have gone the other way.
  7. The Hoge Raad was apparently not persuaded by the arguments of its Advocate General. In its judgment it expresses the view that the judgment in the SABEL case does not automatically mean that the Gerechtshof was wrong in confirming the decision in favour of Adidas. It notes that in the SABEL case the court ruled that art 4(1)(b) was not applicable ‘where there is no likelihood of confusion on the part of the public’(paras 18 and 22) and infers that a mere risk (see my comments in para 8, above, concerning the linguistic discrepancies between the Dutch and the English versions of the directive) of association is not enough to justify an injunction under art 5(1)(b) where there can be no question of confusion on the part of the public. The Hoge Raad considers however that there are justifiable reasons for concluding that where (on account of other factors) the risk of confusion cannot be excluded, a risk of association may indeed be sufficient to justify an injunction. In its view, the SABEL case appears to confirm that conclusion where the earlier mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public: para 24 of that judgment appears to indicate that, in such circumstances, the existence of a risk of association is sufficient, since the possibility that the association arising from some semantic or other similarity may create confusion cannot be ruled out.
  8. The Hoge Raad adds that the interpretation of art 5(1)(b) of the directive in relation to well-known marks suggested by such a reading of the judgment in the SABEL case vindicates the compromise inherent in the inclusion of the words ‘includes the likelihood of association between the sign and the trade mark’ and reconciles art 5(1)(b) with the optional protection provided for such marks by art 5(2) against use of a sign in relation to goods or services which are not similar to those covered by the mark: on such a reading art 5(1)(b) protects well-known marks against the use of signs in relation to identical or similar goods or services which takes unfair advantage of, or detracts from, the distinctive character of such marks.
  9. The Hoge Raad concludes that if its interpretation of the SABEL case is correct, there is no cause to quash the Gerechtshof’s judgment. That is because, in addition to ruling that there was a real possibility that Marca Mode’s sign might be associated with Adidas’ trade mark, the Gerechtshof found that that mark was generally known. By virtue of that finding, it cannot be excluded that the very real possibility of association established by the Gerechtshof may give rise to confusion; consequently, on the basis of its suggested interpretation of art 5(1)(b), the findings of fact made may justify the grant of the injunctive relief sought by Adidas.
  10. The Hoge Raad accordingly referred to the Court of Justice for a preliminary ruling the question set out in para 2, above.
  11. Written observations have been submitted by Marca Mode, Adidas, the Netherlands and United Kingdom governments and the Commission of the European Communities. Marca Mode, Adidas and the Commission were represented at the hearing.

ANALYSIS

  1. In my view, the construction of art 5(1)(b) proposed by the Hoge Raad is irreconcilable with the scheme and wording of the directive as interpreted by the court. Before considering the specific question referred, namely whether there are grounds for extending the scope of art 5(1)(b) where the first mark has a particularly distinctive character, either per se or because of its reputation, I propose to examine the general question whether there are grounds for regarding art 5(1)(b) as applicable where there is a likelihood of association and the possibility of confusion, although not established, cannot be ruled out. Finally, I shall briefly address a point raised by Adidas about the scope of art 5(2). Since, however, I consider that the national court’s question in the present case is substantially answered by the decisions of the court in the SABEL case and in a subsequent case, Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc (formerly Pathé Communications Corp) Case C-39/97 [1998] All ER (EC) 934,[1998] ECR I-5507, in which the court was asked to clarify the relationship between the distinctiveness of the mark seeking protection and the likelihood of confusion, I propose first to set out in full the relevant paragraphs of the judgments in those two cases.

The case law of the court

  1. In the SABEL case, the court was asked essentially whether there was a likelihood of confusion for the purpose of art 4(1)(b) of the directive where the public simply made an association between a sign and a mark conveying a similar idea—in that case, pictorial representations of, first, a bounding puma and, second, a bounding cheetah—although the two were not confused. Under the pre-directive German law, such association would not have been sufficient to preclude registration of the sign: confusion in the strict sense was required. The question was essentially whether the directive had broadened protection in line with the pre-directive law in the Benelux, where mere association sufficed. The court stated (paras 14–18, 22–26):

‘(14) The Belgian, Luxembourg and Netherlands Governments claimed that the term “likelihood of association” was included in those provisions of the Directive at their request, in order that they should be construed in the same manner as Article 13a of the Uniform Benelux Law on Trade Marks which adopts the concept of resemblance between marks, rather than that of likelihood of confusion, in defining the scope of the exclusive right conferred by a trade mark.

(15)   Those governments refer to a judgment of the Benelux Court holding that there is resemblance between a mark and a sign when, taking account of the particular circumstances of the case, in particular the distinctiveness of the mark, the mark and the sign, considered separately and together, present, aurally, visually or conceptually, a similarity such as to establish an association between the sign and the mark (judgment of 20 May 1983 in Case A 82/5 Jullien v Verschuere, Jur 1983, vol 4, p 36). That decision is based on the idea that, where a sign is likely to give rise to association with a mark, the public makes a connection between the sign and the mark. Such a connection may  be prejudicial to the earlier mark not only if it gives the impression that the products have the same or a related origin, but also where there is no likelihood of confusion between the sign and the mark. Since perception of the sign calls to mind, often subconsciously, the memory of the mark, associations made between a sign and a mark can result in the “goodwill” attached to the earlier mark being transferred to the sign and dilute the image linked to that mark.

(16)   According to those governments, the likelihood of association may arise in three sets of circumstances:(1) where the public confuses the sign and the mark in question (likelihood of direct confusion);(2) where the public makes a connection between the proprietors of the sign and those of the mark and confuses them (likelihood of indirect confusion or association);(3) where the public considers the sign to be similar to the mark and perception of the sign calls to mind the memory of the mark, although the two are not confused (likelihood of association in the strict sense).

(17)   It must therefore be determined whether, as those governments claim, Article 4(1)(b) can apply where there is no likelihood of direct or indirect confusion, but only a likelihood of association in the strict sense. Such an interpretation of the Directive is contested by both the United Kingdom Government and by the Commission.

(18)   In that connection, it is to be remembered that Article 4(1)(b) of the Directive is designed to apply only if, by reason of the identity or similarity both of the marks and of the goods or services which they designate, “there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark”. It follows from that wording that the concept of likelihood of association is not an alternative to that of likelihood of confusion, but serves to define its scope. The terms of the provision itself exclude its application where there is no likelihood of confusion on the part of the public …

(22)   As pointed out in paragraph 18 of this judgment, Article 4(1)(b) of the Directive does not apply where there is no likelihood of confusion on the part of the public. In that respect, it is clear from the tenth recital in the preamble to the Directive that the appreciation of the likelihood of confusion “depends on numerous elements and, in particular, on the recognition of the trade mark on the market, of the association which can be made with the used or registered sign, of the degree of similarity between the trade mark and the sign and between the goods or services identified”. The likelihood of confusion must therefore be appreciated globally, taking into account all factors relevant to the circumstances of the case.

(23)   That global appreciation of the visual, aural or conceptual similarity of the marks in question, must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components. The wording of Article 4(1)(b) of the Directive—”… there exists a likelihood of confusion on the part of the public …”—shows that the perception of marks in the mind of the average consumer of the type of goods or services in question plays a decisive role in the global appreciation of the likelihood of confusion. The average consumer normally perceives a mark as a whole and does not proceed to analyse its various details.

(24)   In that perspective, the more distinctive the earlier mark, the greater will be the likelihood of confusion. It is therefore not impossible that the conceptual similarity resulting from the fact that two marks use images with analogous semantic content may give rise to a likelihood of confusion where 701 the earlier mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public.

(25)   However, in circumstances such as those in point in the main proceedings, where the earlier mark is not especially well known to the public and consists of an image with little imaginative content, the mere fact that the two marks are conceptually similar is not sufficient to give rise to a likelihood of confusion.

(26)   The answer to the national court’s question must therefore be that the criterion of “likelihood of confusion which includes the likelihood of association with the earlier mark” contained in Article 4(1)(b) of the Directive is to be interpreted as meaning that the mere association which the public might make between two trade marks as a result of their analogous semantic content is not in itself a sufficient ground for concluding that there is a likelihood of confusion within the meaning of that provision.’

  1. In the Canon case the company MGM had applied to register the mark CANNON in respect of certain goods including video film cassettes. Canon opposed the application on the ground that it infringed its own mark CANON, already registered in respect of certain goods including television filming and recording devices and accepted as having a reputation (unlike Puma’s mark, which was found by the national court not to be particularly distinctive either per se or because of its reputation). The court was asked whether, on a proper construction of art 4(1)(b) of the directive, the distinctive character of the earlier trade mark, and in particular its reputation, was to be taken into account when determining whether the similarity between the goods or services covered by the two trade marks was sufficient to give rise to the likelihood of confusion.
  2. The court first set out the tenth recital in the preamble to the directive (set out in para 4, above) and continued (the Canon case (paras 16–18)):

‘(16) Second, the court has held that the likelihood of confusion on the part of the public, in the absence of which art 4(1)(b) of the directive does not apply, must be appreciated globally, taking into account all factors relevant to the circumstances of the case (see the judgment in SABEL BV v Puma AG, Rudolf Dassler Sport Case C-251/95 [1997] ECR I-6191 (para 22)).

(17)   A global assessment of the likelihood of confusion implies some interdependence between the relevant factors, and in particular [between the] similarity [of] the trade marks and [that of the] goods or servicesd. Accordingly, a lesser degree of similarity between these goods or services may be offset by a greater degree of similarity between the marks, and vice versa. The interdependence of these factors is expressly mentioned in the tenth recital of the preamble to the directive, which states that it is indispensable to give an interpretation of the concept of similarity in relation to the likelihood of confusion, the appreciation of which depends, in particular, on the recognition of the trade mark on the market and the degree of similarity between the mark and the sign and between the goods or services identified.

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d    I have slightly reformulated this paragraph, since the English translation appears incorrect.

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(18)   Furthermore, according to the case law of the court, the more distinctive the earlier mark, the greater the risk of confusion (see the SABEL case (para 24)). Since protection of a trade mark depends, in accordance with art 4(1)(b) of the directive, on there being a likelihood of confusion, marks with a highly distinctive character, either per se or because of the reputation  they possess on the market, enjoy broader protection than marks with a less distinctive character.’

‘Likelihood of confusion’

  1. I turn now to the question whether art 5(1)(b) of the directive may be applicable where there is a likelihood of association and the possibility of confusion cannot be ruled out. Such a construction of that provision is to my mind untenable for the following reasons.
  2. First, the language of the provision, and of the court when interpreting it, precludes such a construction. Article 5(1)(b) itself is expressed to apply ‘where there exists a likelihood of confusion’; the tenth recital in the preamble to the directive provides that the likelihood of confusion constitutes the specific condition for the protection of a mark in the circumstances subsequently set out in art 5(1)(b); as noted by the court in the SABEL case, mere association is not in itself a sufficient ground for concluding that there is a likelihood of confusion; the court in the Canon case stated explicitly that ‘protection of a trade mark depends, in accordance with art 4(1)(b) of the directive, on there being a likelihood of confusion’(para 18). It would be wrong to lose sight of the express terms of the provision being interpreted and it would be a curious use of language to regard a likelihood of confusion as existing simply on the ground that the possibility of confusion could not be ruled out.
  3. It may be added that the tenth recital concludes with the words ‘the ways in which likelihood of confusion may be established, and in particular the onus of proof, are a matter for national procedural rules which are not prejudiced by the Directive’, thus confirming the need to establish a likelihood of confusion (see also Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV Case C-342/97 [1999] All ER (EC) 587 (para 11)).
  4. Admittedly, those arguments are strongest in connection with the English version of the directive, since the other language versions of art 5(1)(b) speak of danger, risk or possibility rather than likelihood. However, for reasons which I will explore below I do not consider that the difference between the language versions of art 5(1)(b) affects the interpretation of the condition in question.
  5. More fundamentally, however, the test suggested by the Hoge Raad cannot in my view be reconciled with the standard of the average consumer which the court has developed and which is to be applied when making the global assessment of the likelihood of confusion which is required in order to determine whether art 5(1)(b) of the directive is applicable. It is clear from the court’s case law that, for that purpose, the average consumer must be taken to be reasonably well informed, observant and circumspect (see the Lloyd Schuhfabrik case (para 26) and the earlier case law there referred to). As noted by Marca Mode, it can no longer be relevant that a minority of particularly inattentive consumers might possibly be confused. Community law has thankfully disempowered the consumer who confuses the mark LUCKY WHIP with the mark ‘Schöller-Nucki’(see SA CNL-SUCAL NV v HAG GF AG (HAG II) Case C-10/89 [1990] ECR I-3711 (para 36 of the opinion)).
  6. In addition, as the Netherlands government points out, the Hoge Raad is in effect asking the court to reverse the terms of the directive: ‘confusion … which includes the likelihood of association’ in art 5(1)(b) means, in its view,‘association … which includes the likelihood of confusion’. The court has already considered and expressly rejected that view in the SABEL case.
  7. The above are all specific reasons drawn from the case law and the directive which in my view clearly run counter to the interpretation urged by the Hoge Raad. More generally, however, there are a number of reasons of principle which make it undesirable to give a broad interpretation to the concept of confusion.
  8. First, as stressed by Marca Mode, a broad interpretation of the concept of confusion would hinder the internal market. A directive such as the trade marks directive which was adopted under art 100a of the EC Treaty is designed to achieve the objectives set out in art 7a (now art 14 EC), in particular to guarantee the free movement of goods and services within the internal market. Those objectives militate against an extensive interpretation of the likelihood of confusion which would lead to unjustified restrictions on the free flow of goods and services (see the SABEL case (paras 50 and 51 of the opinion) and the Lloyd Schuhfabrik case (para 20 of the opinion)).
  9. The requirement of confusion as a condition of protection of trademarks was not of course a novel concept introduced by the directive: it reflected established case law of the court on the scope of trade mark proprietors’ rights in the light of arts 30 and 36 of the EC Treaty (now arts 28 and 30 EC). In a long line of cases in which the contours of Community trade mark law were mapped out, the court developed the cornerstone principle that the specific subject matter of a trade mark was in particular to guarantee to the owner that he had the exclusive right to use that mark for the purpose of putting a product on the market for the first time and thus to protect him against competitors wishing to take unfair advantage of the status and reputation of the trade mark by selling products illegally bearing it; in order to determine the exact scope of that right, account had to be taken of the essential function of the trade mark, namely to guarantee to the consumer or end user the identity of the trademarked product’s origin by enabling him to distinguish it without any risk of confusion from products of different origin (see in particular the SA CNL-SUCAL case (para 14) and Loendersloot v George Ballantine & Son Ltd Case C-349/95 [1997] ECR I-6227 (paras 22–24)). Broadening the protection conferred by art 5(1)(b) of the directive by extending it as proposed by the Hoge Raad would accordingly have the effect that the directive would confer more extensive protection on trade mark owners than the court had considered it appropriate to allow pursuant to the derogation from the principle of the free movement of goods contained in art 36 of the EC Treaty.
  10. Moreover, a broad interpretation of the notion of confusion would seriously hinder the effective application of Council Regulation (EC) 40/94 on the Community trade mark (OJ 1994 L11 p 1)(the Community trade mark Regulation)(the CTMR). That regulation, which provides for the establishment of a Community trade mark, contains provisions relating to confusion between marks which are virtually identical to those in the directive. It is clearly appropriate that the provisions of the directive should be interpreted in the same way as the corresponding provisions of the CTMR. A Community mark can be granted only in respect of the whole of the territory of the Community and thus a conflict with just one mark in one country suffices to prevent registration of a mark as a Community mark. An application to register a mark may be opposed on the basis of an existing Community mark, a mark registered in any member state, or, in certain circumstances, an unregistered right recognised in a member state (see art 8(1) and (2) of the CTMR). Too broad a protection for trade marks on the basis of a risk of ‘association’ with other marks would accordingly make it very difficult for many marks to be registered at Community level. If the Community trade mark system is to function effectively, and if applications are not to be swamped by opposition proceedings, it seems essential that marks should be registrable in the absence of a genuine and properly substantiated risk of confusion.
  11. Furthermore, the international conventions to which the Community and/or member states are parties provide no support for the view that trade mark protection may be based on mere association. Although the final recital of the directive stresses that its provisions must be ‘entirely consistent with those of the Paris Convention’(the Paris Convention on the Protection of Industrial Property 1883 (Paris, 20 March 1883), as last revised at Stockholm,(14 July 1967), that convention makes express reference only to confusion (arts 10(3)1 and 6; see further the SABEL case (para 53 of the opinion)). The Agreement on Trade-Related Aspects of Intellectual Property Rights (OJ 1994 L336 p 214)(TRIPs) similarly links the protection of marks with use which would result in a likelihood of confusion (art 16(1)).
  12. Finally I would note a difference of emphasis between the various language versions of the directive. While the English version refers to ‘likelihood’ of confusion and association, all other language versions except for the Dutch use the notion of ‘risk’ or ‘danger’. The Dutch version, structured differently from the others, speaks of circumstances in which ‘confusion can arise, including the possibility of association’(art 4(1)(b) of the directive) or in which ‘confusion can arise, including the risk of association’(art 5(1)(b) of the directive)(although it may be noted that the tenth recital in the preamble twice refers to ‘the risk of confusion’). For that reason, paras 18 and 22 of the judgment in the SABEL case are, in the Dutch translation, couched in terms of ‘possibility’ rather than ‘likelihood’,‘risk’ or ‘danger’; understandably, the order for reference and the question referred follow this usage. In the context of the scheme and objectives of the directive, however, as discussed above, I do not consider that any significance is to be attached to the different terminology used in the Dutch version of the directive or of the judgment in the SABEL case.

Particularly distinctive marks

  1. I accordingly conclude that in general art 5(1)(b) of the directive cannot be regarded as applicable where there is a likelihood of association and the possibility of confusion, although not established, cannot be ruled out. The Hoge Raad, however, considers that the wording of para 24 of the judgment in the SABEL case suggests that where the earlier mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public, the likelihood of confusion may be assumed from the likelihood of association.
  2. Marca Mode, the United Kingdom and Netherlands governments and the Commission all concur in the view that that question should be answered in the negative. Marca Mode argues on the basis of the case law of the court, the legislative history and scheme of the directive and the specific subject matter of the mark. The Netherlands government considers that the issue is resolved by reference to the decision in the SABEL case, the wording of the directive and the function of trade marks. The Commission and the United Kingdom government refer to the decisions in the SABEL case and in the Canon case.
  3. The court stated in para 24 of its judgment in the SABEL case that ‘the more distinctive the earlier mark, the greater will be the likelihood of confusion’. It is manifest from its context that that proposition follows from the requirement to appreciate the likelihood of confusion globally, taking into account all factors relevant to the circumstances of the case (para 22) and from the fact that that global appreciation must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components (para 23).
  4. Even if doubts were to arise as to what the court meant in the SABEL case, they have now been unequivocally dispelled by its judgments in the Canon case and in the Lloyd Schuhfabrik case. In those cases the court was asked about the weight to be given, in assessing the likelihood of confusion, to the fact that the earlier mark is highly distinctive. It is clear from the answers it gave that the distinctive character of the earlier mark, and in particular its reputation, must be taken into account when determining whether the similarity between the goods or services covered by the two marks is sufficient to give rise to a likelihood of confusion (the Canon case, operative part) and that hence the more similar the goods or services covered and the more distinctive the earlier mark, the greater will be the likelihood of confusion (the Lloyd Schuhfabrik case, operative part). Both those propositions flow clearly, as the court explained (and indeed had already explained in the SABEL case), from the wording of the tenth recital, which states that the appreciation of the likelihood of confusion—

‘depends on numerous elements and, in particular, on the recognition of the trade mark on the market,[on] the association which can be made with the used or registered sign,[on] the degree of similarity between the trade mark and the sign and between the goods or services identified.’ (See the SABEL case (para 22), the Canon case (para 17) and the Lloyd Schuhfabrik case (para 19).)

  1. Thus, as essentially submitted by Marca Mode, the United Kingdom and the Netherlands governments and the Commission, whether there is a likelihood of confusion is a question of fact in each case, and in that context the fact that the earlier mark is distinctive will often be relevant for determining whether there is in fact a likelihood of confusion. A likelihood of confusion must, however, exist in order for art 5(1)(b) of the directive to apply. It may be noted that, as Marca Mode and the Commission point out, the assumption that the likelihood of confusion must be shown in the case of a distinctive mark clearly underlies the judgment in the Canon case (see paras 15–19 and 22), which concerned a mark accepted as distinctive by virtue of having a reputation. It may also be noted that the judgment in the Canon case was delivered before the order for reference in this case was made.
  2. The court followed its assertion in para 24 of its judgment in the SABEL case that the more distinctive the earlier mark, the greater the likelihood of confusion, by the statement that it was therefore not impossible that the conceptual similarity resulting from the fact that two marks used images with analogous semantic content could give rise to a likelihood of confusion where the earlier mark had a particularly distinctive character, either per se or because of the reputation it enjoyed with the public (the Canon case (para 24)). Since however it is clear from the above that the assessment in each case is to be made on the basis of the relevant facts, no principle of general application could reasonably be deduced from that statement. The court presumably had in mind a concrete situation such as would arise, for example, from the use in relation to records, cassettes, compact discs or similar goods of a sign consisting of a small dog listening to the trumpet of a phonogram. In such cases where the marks involved are marks with analogous semantic content, it will (as noted by the Netherlands government) evidently be easier to show a likelihood of confusion where the earlier mark has a particularly distinctive character than in a case such as the SABEL case, where the earlier mark did not have a particularly distinctive character.
  3. The approach advocated by the Hoge Raad and endorsed by Adidas, namely assuming the likelihood of confusion where the earlier mark is particularly distinctive and a likelihood of association has been established, would not only run counter to the wording of art 5(1)(b) and the objectives of the directive, as discussed above, but also have the effect of further extending the protection available to particularly distinctive marks. Such marks already, in effect, enjoy greater protection under art 5(1)(b) than less well-known marks since the court’s explanation in the Canon and the Lloyd Schuhfabrik cases of the relevance of the distinctive character of the earlier mark for the purpose of assessing confusion. Granting yet further protection to marks with a reputation in the absence of confusion would amount to granting protection against dilution, namely the blurring of the distinctiveness of a mark such that it is no longer capable of arousing immediate association with the goods for which it is registered and used (see, further, the SABEL case (paras 38–39 of the opinion)). To do so by a creative interpretation of art 5(1)(b) would run counter to the scheme of the directive, which clearly envisages that such additional protection should be conferred, if at all, by virtue of arts 4(4)(a)e and 5(2) at the member states’ option: see the ninth recital in the preamble (set out in para 4, above).

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e    Article 4(4)(a) of the directive gives member states an option to provide that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid in analogous circumstances to those set out in art 5(2).

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  1. Article 5(2) of the directive (set out in para 9, above), it will be recalled, permits member states to confer additional protection on the proprietor of a trade mark with a reputation: such a proprietor may be entitled to prevent the use of an identical or similar sign in relation to goods or services which are not similar to those for which the mark is registered where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark. Adidas propose that, if the Hoge Raad’s suggested construction of art 5(1)(b) is not accepted, art 5(2) of the directive should be construed so as to apply not, as it provides on its face, solely where the goods or services in question are dissimilar but also, indeed a fortiori, where they are similar, since in its view it would be anomalous for marks with a reputation to be protected against dilution where the goods or services are not similar but not where they are similar. Both in its written and in its oral observations, Adidas have urged the court to rule on the application of art 5(2) even though the Hoge Raad makes no request for such a ruling.
  2. In my view for that reason alone it would be inappropriate for the court to seek to resolve, in the context of these proceedings, the apparent inconsistency in the scope of protection offered by art 5(1)(b) and art 5(2) of the directive. The question whether art 5(2) is intended, as its wording states, to apply solely where the goods in question are dissimilar or whether it should be interpreted more extensively is an issue which has aroused—and continues to arouse—much academic interest. It is certainly an issue which will in due course call for resolution by the court. However, in the present case the issue has not been fully canvassed in the observations submitted to the court since the national court did not put a question about art 5(2). Only Adidas give the question its full attention: Marca Mode simply comments towards the end of its written observations that it sees no inconsistency between the differing scopes of art 5(1)(b) and art 5(2); the United Kingdom notes that the test in art 5(2) is different from that in art 5(1)(b), and that the terms of the latter cannot be rewritten for a particular group of trade marks; the Netherlands government does not address the issue at all; and the Commission considers that it is not appropriate to deal with the apparent inconsistency between art 5(1)(b) and art 5(2) in this case. If the court were to rule on art 5(2), it would be doing so without the benefit of full observations, not only from the Commission and from those member states which submitted observations in this case but very probably also from other member states which, had they been on notice that the scope of art 5(2) was in issue, might have availed themselves of their right to submit observations. In my view such a course of action by the court would be neither appropriate nor equitable and the undoubtedly interesting question of the scope of art 5(2) should await a case in which the national court expressly asks for guidance on that issue.

CONCLUSION

  1. Accordingly the question referred by the Hoge Raad should in my opinion be answered as follows:

(1)     Article 5(1)(b) of First Council Directive (EEC) 89/104 (to approximate the laws of the member states relating to trade marks)(OJ 1989 L40 p 1)(the directive) is not applicable unless there is a genuine and properly substantiated likelihood of confusion about the origin of the goods or services in question.

(2)     Where a trade mark has a particularly distinctive character and a third party, without the consent of the proprietor of the mark, uses, in the course of trade in goods or services which are identical with, or similar to, those for which the trade mark is registered, a sign which so closely corresponds to the mark as to give rise to the possibility, risk or likelihood of its being associated with that mark, it is not sufficient, in order for art 5(1)(b) of the directive to apply, that the distinctive character of the mark is such that the possibility, risk or likelihood of such association giving rise to confusion cannot be ruled out.

22 June 2000. The COURT OF JUSTICE (Sixth Chamber) delivered the following judgment.

  1. By a judgment of 6 November 1998, received at the Court of Justice of the European Communities on 26 November 1998, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) referred to the Court of Justice for a preliminary ruling under art 177 of the EC Treaty (now art 234 EC), a question on the interpretation of art 5(1)(b) of First Council Directive (EEC) 89/104 (to approximate the laws of the member states relating to trade marks)(OJ 1989 L40 p 1).
  2. That question was raised in proceedings between Marca Mode CV, established in Amsterdam, the Netherlands, on the one hand, and Adidas AG, established in Herzogenaurach, Germany, and Adidas Benelux BV, established in Etten-Leur, the Netherlands, on the other, concerning a figurative trade mark which is registered by Adidas AG at the Benelux Trade Mark Office and is also the subject of an exclusive licence granted by Adidas AG to Adidas Benelux BV for the Benelux.

LEGAL BACKGROUND

  1. Paragraph 1(b) of art 5 of the directive, relating to the rights conferred by a trade mark, provides:

‘The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade …(b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.’

  1. Most of the language versions of the directive use, in that provision, the notion of risk or danger of confusion or association. The Dutch and Swedish versions use the concepts of possibility of confusion and risk of association, whereas the English version uses the notion of likelihood of confusion or association.
  2. Article 5(2) of the directive states:

‘Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.’

  1. Article 13A(1)(b) of the Uniform Benelux Law on Trade Marks, which is designed to transpose art 5(1)(b) of the directive into Benelux law, states:

‘Without prejudice to any application of the ordinary law governing civil liability, the exclusive rights in a trade mark shall entitle the proprietor to oppose …(b) any use, in the course of trade, of the mark or a similar sign in respect of the goods for which the mark is registered or similar goods where there exists a risk of association on the part of the public between the sign and the mark.’

THE DISPUTE IN THE MAIN PROCEEDINGS

  1. The figurative mark registered by Adidas AG at the Benelux Trade Mark Office is composed of three parallel stripes. It covers, in particular, sports clothes and articles connected with sport.
  2. Marca Mode put up for sale in its establishment in Breda, Netherlands, a sports clothes collection, a number of the items in which bore on the sides two parallel stripes running longitudinally. Those clothes were white with black stripes or black with white stripes.
  3. Marca Mode also marketed a white and orange T-shirt bearing three black, vertical stripes which run in parallel down the entire length of the front of the garment, are edged on the outside with a narrow white border and are broken up by a medallion showing a picture of a cat and bearing the word TIM.
  4. On 26 June 1996, Adidas AG and Adidas Benelux BV (collectively ‘Adidas’) made an application for interim relief against Marca Mode before the President of the Rechtbank te Breda (Breda District Court). Adidas claimed that Marca Mode had infringed their figurative trade mark composed of three stripes and sought an order restraining that company from using the signs composed of triple or double stripes in the future in the Benelux.
  5. The judge hearing the application for interim relief allowed the claim in respect of seven items of clothing and the T-shirt bearing the word TIM.
  6. The Gerechtshof te ’s-Hertogenbosch (Regional Court of Appeal) upheld the order made.
  7. Marca Mode then appealed on a point of law against the judgment of the Gerechtshof to the Hoge Raad.
  8. Before the Hoge Raad, Marca Mode argues, in particular, that the Gerechtshof misapplied art 13A(1)(b) of the Uniform Benelux Law on Trade Marks by basing its decision solely on the finding that there existed a risk of association on the part of the public concerned of the signs in question and the registered mark. Relying on SABEL BV v Puma AG, Rudolf Dassler Sport Case 709 C-251/95 [1997] ECR I-6191, Marca Mode submits that, under art 5(1)(b) of the directive, the Gerechtshof should have based its decision on a finding that there existed a likelihood of confusion.
  9. The Hoge Raad takes the view that, in the light of the SABEL case, and in particular paras 18, 22 and 24 thereof, there may be justifiable reasons for concluding that where, on account of specific circumstances, such as the particularly distinctive character of the mark, either per se or because of the reputation it enjoys with the public, the risk of confusion cannot be excluded, a finding of a risk of association may indeed be sufficient to justify a prohibition on the use of the signs in question.
  10. In the view of the Hoge Raad, such an interpretation in relation to well-known marks reconciles art 5(1)(b) with art 5(2) of the directive, the second provision authorising member states to confer on well-known marks protection in relation to goods and services which are not similar ‘where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark’. The proposed interpretation of art 5(1)(b) of the directive also protects well-known marks against the use of signs in relation to identical or similar goods or services which takes advantage of, or is detrimental to, the distinctive character of such marks.
  11. The national court concludes that, if its interpretation of the SABEL case is correct, the ground of appeal advanced by Marca Mode cannot serve to have the Gerechtshof’s judgment set aside. It points out that, in addition to ruling that there was a possibility of association between Marca Mode’s sign and Adidas’ trade mark, the Gerechtshof found that that mark had a reputation. By virtue of that finding, it cannot be ruled out that the possibility of association may give rise to confusion. In those circumstances, the findings of fact made may justify the grant of the prohibition sought by Adidas.
  12. In the light of those observations, the Hoge Raad decided to stay proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Where:(a) a trade mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public, and (b) a third party, without the consent of the proprietor of the mark, uses, in the course of trade in goods or services which are identical with, or similar to, those for which the trade mark is registered, a sign which so closely corresponds to the mark as to give rise to the possibility of its being associated with that mark, must Article 5(1)(b) of Directive 89/104/EEC be interpreted as meaning that the exclusive right enjoyed by the proprietor entitles him to prevent the use of the sign by that third party if the distinctive character of the mark is such that the possibility of such association giving rise to confusion cannot be ruled out?’

  1. By the same judgment, the Hoge Raad also referred several questions to the Benelux Court of Justice for a preliminary ruling. According to information supplied by Marca Mode, that court, by order of 18 January 1999, suspended its examination of the questions referred pending the ruling of this court.

THE QUESTION REFERRED FOR A PRELIMINARY RULING

  1. Adidas requests the court to rule on the interpretation of art 5(2) of the directive.
  2. According to settled case law, as regards the division of jurisdiction between national courts and the Court of Justice under art 177 of the EC Treaty (now art 234 EC), the national court, which alone has direct knowledge of the facts of the case and of the arguments put forward by the parties, and which will have to give judgment in the case, is in the best position to determine, with full knowledge of the matter before it, the relevance of the questions of law raised by the dispute before it and the necessity for a preliminary ruling so as to enable it to give judgment. However, where the questions are inappropriately framed, the court is free to extract from all the factors provided by the national court and in particular from the statement of grounds contained in the reference, the elements of Community law requiring an interpretation having regard to the subject matter of the dispute (see, in particular, Pigs Marketing Board v Raymond Redmond Case 83/78 [1978] ECR 2347 (paras 25 and 26)).
  3. In the present case, it is clear from the order for reference that the Hoge Raad is seeking solely an interpretation of art 5(1)(b) of the directive and that the resolution of the dispute in the main proceedings depends on whether the Gerechtshof was right in holding that the requirement of the existence of ‘a likelihood of confusion … which includes the likelihood of association between the sign and the trade mark’ was met.
  4. Furthermore, it is not clear from the order for reference that Adidas argued in the main proceedings that the use of the signs in question without due cause took unfair advantage of, or was detrimental to, the distinctive character or the repute of the trade mark registered by Adidas, a condition to which any application of the provision implementing art 5(2) of the directive is subject. The Hoge Raad refers to that last article, not on the ground that the dispute actually concerns the particular prejudice to the mark which it envisages, but in order to submit that the interpretation of art 5(1)(b) of the directive proposed in the order for reference ensures a certain consistency between the situations governed by those two provisions.
  5. Accordingly, it is not necessary, in order to give a useful answer to the national court, to examine the question of the interpretation of art 5(2) of the directive.
  6. As regards the question referred by the Hoge Raad, it should be noted that art 5(1)(b) of the directive entitles the proprietor of a mark, subject to certain conditions, to prevent third parties from using a sign for which there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.
  7. Substantially identical terms are used in art 4(1)(b) of the directive, which states the grounds on which a trade mark may be refused registration or, if registered, declared invalid.
  8. Article 4(1)(b) of the directive has been the subject of interpretation by the court, notably in the SABEL case.
  9. Accordingly, that interpretation must also apply to art 5(1)(b) of the directive.
  10. In the view of the Hoge Raad, the case law of the court does not rule out the possibility that a likelihood of confusion between the mark and the sign may be presumed where the mark has a particularly distinctive character, in particular because of its reputation, and where the sign used by the third party in respect of identical or similar goods so closely corresponds to the mark as to give rise to the possibility of its being associated with that mark.
  11. By its question, the Hoge Raad thus seeks to ascertain whether art 5(1)(b) of the directive must be interpreted as meaning that, in such circumstances, the proprietor of the mark may prevent a third party from using the sign if the distinctive character of the mark is such that the possibility of the association made by the public between the sign and the mark giving rise to confusion cannot be ruled out.
  12. Referring to the SABEL case, Marca Mode, the Netherlands and United Kingdom governments and the Commission of the European Communities submit that the protection conferred under art 5(1)(b) of the directive is, like that provided for in art 4(1)(b) of the same directive, always conditional on positive proof of a likelihood of confusion. They take the view that, even in respect of well-known marks, it is not sufficient, where there is merely a likelihood of association, for a likelihood of confusion not to be ruled out.
  13. Relying, in particular, on para 24 of the SABEL case, Adidas contend that, in respect of well-known marks, the likelihood of association is sufficient to justify a prohibition where a likelihood of confusion cannot be ruled out. In other words, as far as such marks are concerned, the likelihood of association means that a likelihood of confusion is assumed.
  14. In this connection, it should be noted at the outset that, even in particular circumstances such as those outlined by the Hoge Raad in its order for reference, a likelihood of confusion cannot be presumed.
  15. Article 5(1)(b) of the directive is designed to apply only if, because of the identity or similarity both of the marks and of the goods or services which they designate,‘there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark’. It follows from that wording that the concept of likelihood of association is not an alternative to that of likelihood of confusion, but serves to define its scope. The very terms of the provision exclude its application where there is no likelihood of confusion on the part of the public (see, as regards art 4(1)(b) of the directive, the SABEL case (para 18)). Protection of a registered mark thus depends, in accordance with art 5(1)(b) of the directive, on there being a likelihood of confusion (see, as regards art 4(1)(b) of the directive, Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc (formerly Pathé Communications Corp) Case C-39/97 [1998] All ER (EC) 934,[1998] ECR I-5507 (para 18)).
  16. The tenth recital in the preamble to the directive, according to which ‘the likelihood of confusion … constitutes the specific condition for such protection’, also confirms that interpretation (the SABEL case (para 19)).
  17. The interpretation is not inconsistent with art 5(2) of the directive which establishes, for the benefit of well-known trademarks, a form of protection whose implementation does not require the existence of a likelihood of confusion. That provision applies to situations in which the specific condition of the protection consists of a use of the sign in question without due cause which takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.
  18. Adidas cannot effectively rely on para 24 of the SABEL case.
  19. In that paragraph, the court noted that the more distinctive the earlier mark, the greater will be the likelihood of confusion, adding that it is therefore not impossible that the conceptual similarity resulting from the fact that two marks use images with analogous semantic content may give rise to a likelihood of confusion where the earlier mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public.
  20. The court thus stated that the particularly distinctive character of the earlier mark may increase the likelihood of confusion and that, where there is a conceptual similarity between the mark and the sign, that character may contribute to the creation of such a likelihood. The negative formulation ‘it is therefore not impossible’ which is used in para 24 of the SABEL case simply underlines the possibility that a likelihood may arise from the conjunction of the two factors analysed. It in no way implies a presumption of likelihood of confusion resulting from the existence of a likelihood of association in the strict sense. By such wording, the court referred by implication to the assessment of evidence which the national court must undertake in each case pending before it. It did not excuse the national court from the necessary positive finding of the existence of a likelihood of confusion which constitutes the matter to be proved.
  21. In this connection, it must be noted that the likelihood of confusion must be appreciated globally, taking into account all factors relevant to the circumstances of the case (the SABEL case (para 22)). A global assessment implies some interdependence between the relevant factors (the Canon case (para 17)). For example, a likelihood of confusion may be found, despite a lesser degree of similarity between the goods or services covered, where the marks are very similar and the earlier mark, in particular its reputation, is highly distinctive (the Canon case (para 19)).
  22. The reputation of a mark, where it is demonstrated, is thus an element which, amongst others, may have a certain importance. To this end, it may be observed that marks with a highly distinctive character, in particular because of their reputation, enjoy broader protection than marks with a less distinctive character (the Canon case (para 18)). Nevertheless, the reputation of a mark does not give grounds for presuming the existence of a likelihood of confusion simply because of the existence of a likelihood of association in the strict sense.
  23. Accordingly, the answer to the question must be that art 5(1)(b) of the directive cannot be interpreted as meaning that where a trade mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public, and a third party, without the consent of the proprietor of the mark, uses, in the course of trade in goods or services which are identical with, or similar to, those for which the trade mark is registered, a sign which so closely corresponds to the mark as to give rise to the possibility of its being associated with that mark, the exclusive right enjoyed by the proprietor entitles him to prevent the use of the sign by that third party if the distinctive character of the mark is such that the possibility of such association giving rise to confusion cannot be ruled out.

COSTS

  1. The costs incurred by the Netherlands and United Kingdom governments and by the Commission of the European Communities, which have submitted observations to the court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, the Court of Justice (Sixth Chamber), in answer to the question referred to it by the Hoge Raad der Nederlanden, by judgment of 6 November 1998, hereby rules: Article 5(1)(b) of First Council Directive (EEC) 89/104 (to approximate the laws of the member states relating to trade marks) cannot be interpreted as meaning that where a trade mark has a particularly distinctive character, either per se or because of the reputation it enjoys with the public, and a third party, without the consent of the proprietor of the mark, uses, in the course of trade in goods or services which are identical with, or similar to, those for which the trade mark is registered, a sign which so closely corresponds to the mark as to give rise to the possibility of its being associated with that mark, the exclusive right enjoyed by the proprietor entitles him to prevent the use of the sign by that third party if the distinctive character of the mark is such that the possibility of such association giving rise to confusion cannot be ruled out.

 

Law Nigeria Admin
Law Nigeria Admin

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