A recent CJEU decision, concerning the trade marks KERRYGOLD and KERRYMAID, looks at the relationship between co-existence agreements and trade mark infringement. Following a reference from the Spanish court, the court ruled on the interpretation of Article 9(1)(b) and (c) of the EU Trade Mark (EUTM) Regulation (207/2009/EC) that trade mark co-existence in one part of the EU does not prevent confusion in another part of the EU.
Background
In Ornua Co-operative Ltd v Tindale & Stanton Ltd (Case C/9316), the owner of the registered EU word mark KERRYGOLD and two figurative marks,
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sought a declaration that the import and distribution of margarines in Spain under the defendant's word mark KERRYMAID (registered in Ireland and the UK, but not in Spain) was infringing its marks.
The defendant argued that its mark was not similar to the KERRYGOLD marks and that there was no likelihood of confusion since the element 'Kerry', an Irish county known for its cattle breeding, was an indication of geographical origin.
It was accepted by both parties that the KERRYGOLD EU marks had peacefully co-existed with the KERRYMAID national mark in the UK and Ireland, but products under both brands had not been sold throughout the rest of the EU. It was this use of the KERRYMAID mark elsewhere in the EU that was in dispute.
The Spanish court dismissed the action finding that the only similarity between the KERRYMAID and KERRYGOLD EU marks was the element 'kerry', which referred to a geographical region. Since Ireland and the UK together had a significant demographic weight in the EU, the peaceful co-existence of the marks in those states should in, view of the unitary character of the EU trade mark, lead to the conclusion that there was no likelihood of confusion between them throughout the entire area of the EU.
Questions referred to the CJEU
Following an appeal, the Spanish court referred the following questions to the CJEU:
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Does peaceful co-existence in specific member states rule out the likelihood of confusion in the rest of the EU under Article 9(1)(b) of the EUTM Regulation?
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In this type of situation can the court base its assessment of likelihood of confusion in the country of the proceeding on circumstances prevailing in other member states?
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Does the fact that the marks have co-existed within the EU constitute 'due cause' legitimising the use of the sign where an infringement action is based on Article 9(1)(c) of the EUTM Regulation?
CJEU's decision
The answer to question 1 was "no". The CJEU stated that infringement of an EUTM did not require likelihood of confusion in all member states. Where an EU trade mark court held that a mark had been infringed in one country, it had to prevent the marketing of the infringing goods in all EU member states other than those where it had found that there was no likelihood of confusion (as was the case in Ireland and the UK). In respect of those states where there was no confusion or acquiescence, the court had to make a global assessment in the usual way.
In respect of question 2, the CJEU held that "yes" such circumstances could be taken into account but only to the extent that those circumstances were not significantly different between the two countries. While the court could take into account matters as they appeared in the UK and Ireland it did have to ensure that there was no significant difference between the market conditions and sociocultural climate there and in Spain.
In answer to question 3, the CJEU stated that case law had established that if a mark had a reputation in a substantial part of the EU then that reputation was deemed to extend to the entire EU. However, there was no need to prove infringement in all states, if it could be proved in one state. The CJEU concluded that in the present case the defendant had due cause to use its sign in the UK and Ireland, however the Spanish court did not have to accept acquiescence in those countries as constituting due cause for using the sign in Spain.
Comment
This case highlights:
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The importance of ensuring that brand owners have the correct rights in all necessary territories before entering them, despite what arrangement are in place in other territories; and
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That although the EU mark is a unitary right, it is possible for brand owners to give consent to the use of a similar third party mark in a particular member state, without being deemed to have acquiesced to that use in other member states.