Economic Loss Essential in Trade Mark Dispute, Rules CJEU

May 19, 2014

Economic Loss Essential in Trade Mark Dispute, Rules CJEU

The Court of Justice of the European Union (CJEU) has issued an important judgment relating to trade marks, overturning an earlier decision.

The dispute related to the use of a wolf's head as a trade mark. A community trade mark application was filed in 2006 for the use of the emblem in connection with the sale of 'machines for professional and industrial processing of wood and green waste; professional and industrial wood chippers and shredders'.

Another company, which had made use of a similar trade mark, opposed the application.

The argument hinged on whether or not proving that 'the use of the later mark is or would be detrimental to the distinctive character of the earlier mark' requires evidence of 'a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or evidence of a serious likelihood that such a change will occur in the future'.

On the one hand, the registration of the second mark could be said to cause 'dispersion of the identity and hold upon the public mind of the earlier mark', which is an effect on its own account and for which proof of economic loss is not necessary. The counter-argument is that this is merely 'the other side of the coin' of economic loss, which must be demonstrated to have occurred or be foreseeable to give weight to the argument.

The proof of the pudding, the latter argument goes, is a change in the economic behaviour of the average consumer.

The CJEU accepted the argument that in order to show damage to a trade mark in existing use, evidence must be presented that the economic behaviour of an average consumer might be altered.

It referred the case back to the General Court of the European Union to hear evidence on that point.