Understanding the Laws on Trademark Dilution in UK

Trademark Dilution in the United Kingdom

In the United Kingdom (UK), the development of the law on dilution was very slow. They were not many judicial decisions acknowledging the doctrine of dilution before the passing of the Trademark Act of 1994 (TMA). Some of the cases were decided under the passing-off remedy. Passing off remedy can be explained as when anyone deliberately or unintentionally passes off their goods or services as those belonging to another party. This action of misinterpretation often damages the goodwill of a person or business, leading to financial or reputational damage. It applies to protect unregistered trademarks.

On the other hand, the member countries of the European Union agreed on some fundamental rules dealing with IP including the trademark regulation, in order to bring a unified code on intellectual property rights. Accordingly, The Trademark Harmonization Directive was issued which provides a system for the protection of the Trademarks. The Directives are generally binding as to the ‘result to be achieved’ but the form in which those results will be achieved can be made by the individual nations.

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 trademark in relation to goods or services which are not similar to those for which the trademark is registered, where the latter has a reputation in the Member State and where the use of that sign without due cause takes unfair advantage of or is detrimental to, the distinctive character or the repute of the trademark. Thus, upon reading Article 5(2), it can be inferred that this Article doesn’t have a binding force on the member countries. The United Kingdom came up with prompt response by enacting the Trade Mark Act of 1994 in order to implement the Trademark Harmonization Directive

The concept of dilution was dealt with by the Trade Mark Act (TMA), 1994, in line with the European Directive on Trademark as provided in Article 5(2), under section 5(2) and section 10(3) of the TMA 1994. In the year 2004, sections 5(2) and 10(3) were amended by the Trade-Mark Regulations 2004 to expand the scope of protection to identical, similar and non-similar goods and services. Thus, there was a gradual increase in the development of the law on dilution as relevant sections protecting the uniqueness of the mark were also introduced. Section 10(1) and 10(2) deal with the infringement of the trademark on the basis of the mark is likely to cause confusion. whereas, Section 10(3) of the Trade Mark Act, 1994, deals strongly with the protection of trademarks from being diluted. The act is silent as to whether a likelihood of confusion is necessary to infringe under section 10(3).

Section 10(3) of the Act, specifically protects the registered trademarks and prohibits use of the mark

• In relation to goods or services which are not similar to those for which the trademark is registered
• Where the trademark holds a reputation in the United Kingdom
• And the use of any sign which takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trademark, they can file a complaint by approaching an intellectual property lawyer.

 

Interpretation on the standard of Protection of trademark dilution under section 10(3)

There is no such express ruling by European Court of Justice (ECJ), as to whether the plaintiffs must show actual, as opposed to likely, harm or unfair advantage in the case of trademark dilution. However, this issue has been thoroughly analyzed by Advocate General Jacobs in the landmark case of General Motors Corp. v. Yplon, S.A., [1999] E.C.R. 1-5421. In the analysis, Advocate General Jacobs states that, ‘Article 5(2), in contrast to Article 5(1) (b), does not refer to a mere risk or likelihood of its conditions being met. The wording is more positive: ‘takes unfair advantage of, or is detrimental to (emphasis added), The National Court must be satisfied of evidence of actual detriment, or of unfair advantage.

It is ad-rem to bear in mind that the analysis made by Advocate General Jacobs, was neither accepted, nor rejected by the ECJ explicitly, as a matter of fact, by mentioning of detriment and unfair advantage without mentioning likelihood (as stated by the ECJ in the General Motors Case - If . . . the National Court decides that the condition as to the existence of a reputation is fulfilled, . . . it must then go on to examine the second condition laid down in Article 5(2) of the Directive, which is that the earlier trade mark must be detrimentally affected without due cause), it appears to be that ECJ tacitly accepted that actual unfair advantage or detriment is required for infringement under Article 5(2) of the Directive.

Even though the ECJ did not state anything expressly as to what must be established in order for the case of dilution to prevail, but it could be inferred that the ECJ implied its view in proving the actual detriment as the standard of protection in the General Motors Case. Having said that, however, there is no express authority by ECJ as to how to establish the case of actual detriment.  As the actual detriment or likelihood is not clearly stated in the section, hence, leaving the interpretation of the section keeping in mind the intent of the legislature, to the discretion of the court. It looks like the analysis of Advocate General Jacobs in the General Motors Case has influenced a lot to the UK courts.

Advocate General, Jacob has also shed some insight on defining the term ‘reputation which happens to be one of the criteria to qualify as a case of trademark dilution.  The facts of the case of General Motors Corp. v. Yplon were like this-

General Motors, the plaintiff, is the proprietor of the trademark ‘Chevy’, holding registration in the Benelux trademark office on the motor vehicles (the word “Benelux” is formed from the first two letters of each country’s name such as Belgium, Netherlands, and Luxembourg). Yplon, the defendant, happens to have a registered mark ‘Chevy’ in the Benelux Trademark office, on detergents, deodorants, and various cleaning products. The plaintiff, General Motors, sought an order, before the Belgian court, in line with Article 13 (A)(2) of the Uniform Benelux Trade Marks, forbidding any use of the trademark ‘Chevy’. As per the facts, Yplon had used its trademark since 1988, but it was not until 12 October 1995 that Yplon received a formal notice from General Motors’ legal adviser demanding the voluntary cancellation of its Benelux and international registrations and a formal undertaking to discard all use of the sign ‘Chevy’, on the reasons that use of this sign ‘Chevy’ could cause dilution of its trademark and thus damages its advertising function. Consequently, Yplon comes up with their argument stating that General Motors’ trademark ‘Chevy’ does not have a reputation within the Benelux countries and thereby, cannot be entitled to the protection as per the provisions of the Benelux Trade Marks law. And also, the defendant claims that as the products are not similar, use of the sign ‘Chevy’ cannot be detrimental to the distinctive character of General Motors

In this following case, the question of reputation was one of main contentions, accordingly the court has aptly defined the term ‘reputation’ and held that in order to satisfy the court of Law, to have a reputation a trade mark must be able to satisfy knowledge threshold. The degree of knowledge of that mark needs to be considered to determine the reputation of the mark. This means a significant part of the public must be well aware of the mark in use in the market or the public should be able to associate with the mark instantly. Further, the court has determined the basis on which the word public can be interpreted according to the facts of the case as depending upon the product or service marketed, either the public at large or more specialized public, for example, traders in a specific sector. Also, while deciding on what constitutes as a reputed trademark, the court has to consider the following relevant facts such as:

 

1. In relation to the market share of trademark
2. The intensity of the use of the mark
3. The geographical extent and duration of the use of the mark
4. The amount of investment made by the company in order to promote.

 

From the Judgement

“The answer to be given to the question referred must therefore be that Article 5(2) of the Directive is to be interpreted as meaning that, in order to enjoy protection extending to non-similar products or services, a registered trademark must be known by a significant part of the public concerned by the products or services which it covers. In the Benelux territory, it is sufficient for the registered trademark to be known by a significant part of the public concerned in a substantial part of that territory, which part may consist of a part of one of the countries composing that territory.” For a trademark to have a 'reputation’ within the meaning of Article 5(2) of Directive 89/104/EEC of 21 December 1988, it must be established that the mark is known to a significant part of the relevant sectors of the public; it is sufficient that such reputation extends to a substantial part of the Benelux territory, which may be part only of one of the Benelux countries.

In the case of DaimlerChrysler AG v. Alavi (MERC), [2001] R.P.C.: Justice Pumfrey while considering the issue of actual confusion as an infringement under section 10(3) in this case, stated that it is advisable to stick to the section and also bear in mind what Advocate General, Jacobs opinion in the General Motors case and expressed that its actual effects, not risks or likelihood that the case should be decided on.

However, there was one case decided by UK Court in 1997 where ‘likelihood of confusion’ was recognized as the standard of protection under section 10(3) of Trade Marks Act, 1994. The facts of the case are as follow:

Baywatch Prod. Co. Ltd. V. Home Video Channel: Baywatch, the plaintiff, marks the popular U.S. television series, in which it features male and female lifeguards usually wearing red bathing suits, filed a suit seeking a preliminary injunction under sections 10(2) and 10(3) of the Trade Marks Act as well as a passing off claim,  against the Adult Channel, which broadcast episodes of pornographic film series with the title “Babewatch.” Similar to Baywatch, Babewatch also featured lifeguards wearing red bathing suits but instead of saving the drowning victims, these lifeguards are engaged in sexual acts. While 10(2) requires a showing of a “likelihood of confusion,” section 10(3) does not have any such requirements. The Chancery Division, while determining the Baywatch’s claim under section 10(3), held that, it would be unreasonable to grant greater protection to famous marks with regards to non-similar goods or services. The Judge asserted that since the television show and the pornographic video are not similar, therefore, they will not create confusion of source. Thus, it was held that the plaintiff has no claim under section 10(3). Therefore, it could be inferred on from the case studies, that ‘likelihood of confusion’ is not a criterion under section 10(3) to constitute a case of trademark dilution.

 

Types of Dilution:

The act doesn’t expressly state on the types of dilution. However, on a detailed examination of the section, two kind of dilution could easily be inferred. If we look at the definition of blurring and tarnishment under the Trade Mark Revision Act, 2006 of US, we can make out that dilution by blurring and tarnishment has been incorporated in to the Trade Mark Act, 1994 of UK

On careful observation of the last part of section 10(3), it can be identified that act speaks about dilution on two ways

1. “Where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to the distinctive character or the repute of the trademark.” On analyzing this part of the section, dilution by blurring can be identified as the definition of blurring according to the TRDA also intends to protect the distinctiveness of a famous mark from being impaired. Hence, even though the UK Trade Marks Law doesn’t expressly state it, but from the term ‘detrimental to the distinctiveness of the famous mark is sufficient to establish the dilution by blurring.
2. The second part of section 10(3) states. “detrimental to the reputation of the mark”, which when seen in the reference of the definition of tarnishment as mentioned in the TRDA as harm caused to the reputation of famous mark by way of association which arises from the similarity between mark or trade name and famous mark, confirms that last part of section 10(3) speaking of dilution by tarnishment.