Netherlands Pays Bas Niederlande. Report Q195

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1 Netherlands Pays Bas Niederlande Report Q195 in the name of the Dutch Group by W. A. HOYNG, A. A. HIRSCHFELD, B. J. BERGHUIS VAN WOORTMAN, J. B. C. W. VAN DIJK, M. H. L. HEMMER, J. K. VAN HEZEWIJK, W. SAKULIN, I. M. WIJFFELS and S. DE WIT Limitations of the Trademark Protection Questions Note: the following topics are not to be covered in the Group answers: Exhaustion Limitations on trademark rights by competition law Limitations on trademark rights by the right to freedom of expression Comparative advertising Acquiescence. I) Analysis of current law and case law The Groups are invited to answer the following questions under their national laws: 1) Are there statutory limitations of trademark rights in your trademark law? If so, which ones? If not, have similar concepts been developed in case law? (Please only briefly list the limitations here; more detailed explanations will be required below). Indeed, the following statutory limitations apply: Article 2.23 BCIP 1. The exclusive right does not entail the right to prohibit a third party from using, in the course of trade: a) its own name or address; b) indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or of rendering of the service, or other characteristics of the goods or services; c) the trademark where this is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts; provided he uses them in accordance with honest practices in industrial or commercial matters. 2) The exclusive right to a trademark does not entail the right to prohibit the use in the course of trade of a similar sign that derives its protection of an earlier right which only applies in a particular locality if and to the extent to which that right is recognized by the statutory provisions of one of the Benelux countries. 1

2 Further, in addition to the excluded topics mentioned above, there are non statutory limitations derived from the general provisions of Dutch Civil law, as for instance the abuse of one s rights. It is under debate whether or not a general limitation on trademark protection based on the general interest should apply. 2) If descriptive use defences are recognised under your trademark law, what is descriptive use and what types of descriptive use defences are recognised? (Please only briefly list the types of descriptive use defences here; more detailed explanations will be required below) The Dutch Group disagrees with the view reflected under point 8) of the Working Guidelines. Since we feel that descriptive use necessarily implies that a characteristic of the good or service is, in fact, described by the sign, we would only refer to conduct mentioned under category b as descriptive use defenses. With this in mind, we state that the following descriptive use defenses are recognized under Dutch law: b) indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or of rendering of the service, or other characteristics of the goods or services. 3) Is use of one s own name permissible under your trademark law? If so, under which circumstances? Specifically, may anyone use his or her name as a trademark? The first question is unclear; we assume that the question is: is use of one s own name permissible under your trademark law in case that name or a similar name is registered as a trademark by another party?. The statutory provision that deals with this issue is Article 2.23(1)(a) BCIP. This provision is in line with Article 6(1)(a) of the First Directive 89/104/EEC to Approximate the Laws of the Member States Relating to Trade Marks (hereinafter: the Trademark Directive ) which deals with the limitation of the effects of a trademark. The (identical) provisions stipulate that a trademark shall not entitle the proprietor to prohibit a third party from using his own name or address in the course of trade, provided that such use is honest. It goes without saying that outside the course of trade a person can always use his name as such use does not amount to trademark use and thus not to trademark infringement. This is only different under Article 2.20(1)(d) BCIP 1 which covers use of the trademark or a similar sign other than for the distinction of goods and does not require use in the course of trade. However, in that case the normal use of one s name will constitute a valid reason (justification) for such use. This use of one s own name under Article 2.23(1)(a) BCIP is permitted provided that the use is in accordance with honest practices in the relevant area of trade or industry. A distinction must be made between the use of one s name as designation thereof (identification) and the use of one s name in order to distinguish goods and services. The latter use ( as a trademark ) may be prohibited by the trademark owner (if all other requirements for establishing infringement have been met). 1 Article 2.20(1)(d) BCIP implements Article 5 paragraph5 of the Trademark Directive ( 5.5 Paragraphs 1 to 4 shall not affect provisions in any Member State relating to the protection against the use of a sign other than for the purposes of distinguishing goods or services, 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. ) Note that the implementation of this provision is not required and that no other EU jurisdiction (other than the Benelux) has a similar provision protecting against such other use in its national law. 2

3 As to the second question, whether use of one s own name as a trademark is permitted, Article 2.1(3) BCIP specifically states that a family name may serve as a trademark, provided that the general provisions of law are respected. This means that registering and using someone else s family name as a trademark may (under circumstances) amount to an unlawful act. This limitation does not apply to the register and use of a first (given) name. Further, the other requirements for obtaining trademark protection obviously need to be met. The fact that first (given) names and family names may be registered and used as trademark, is in line with the Trademark Directive (Article 2 refers to personal names ). The leading case law is the Nichols case (C 404/02) of the European Court of Justice (hereinafter: ECJ )). In this case it is made clear how to deal with the assessment of the distinctiveness of a common surname. 4) Is a company entitled to make use of the own name defence? Specifically, is the own name defence only available to a company whose name includes a surname (e.g. William Smith Limited)? How are conflicts between the company s use of its own name and confusingly similar trademarks resolved? The joint declaration of the Council and the European Commission on the Directive clarified that only natural persons are meant to be understood by third party in the sense of Article 6(1)(a) of the Trademark Directive. However, the ECJ has held in the Anheuser Busch/Budvar case (C 245/02) that this declaration has no legal significance and that a third party may, in principle, rely on the exception provided for in Article 6(1)(a) in order to be entitled to use a sign which is identical or similar to a trademark for the purpose of indicating its trade name. We feel that use of a trade name does not authorize use thereof as a trademark. If so, the general doctrine on trademark infringement applies and it will have to be assessed whether the company s use of its own name constitutes trademark infringement. 5) Is the use of indications concerning the characteristics of the goods or services, including the kind, quality, value, geographical origin or time of production of goods permissible under your trademark law? If so, under which circumstances? Trademark registrations are refused if (according to the Benelux Office for Intellectual Property) the trademark consists exclusively of signs or indications which may serve, in the course of trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or the rendering of the service, or other characteristics of the goods or services (Article 2.11(1)(c) BCIP). This hurdle can be overcome if the trademark has acquired a distinctive character following the use which has been made of it. After registration the trademark still does not entitle the owner to prohibit a third party from using, in the course of trade, indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or rendering of the service, or other characteristics of goods or services, provided that this use is in accordance with honest practices in industrial or commercial matters. Leading case is the Gerolsteiner Brunnen/Puch case of the ECJ (C 100/02), in which the owner of the trademark registration for GERRI for mineral water and non alcoholic beverages and lemonades, encountered a company marketing soft drinks bearing the name KERRY Spring, containing water from a spring named Kerry Spring. The ECJ held that the proprietor of the trademark may prevent the use of the indication of geographical origin only if that use is not in accordance with honest practices in industrial or commercial matters. It is for the national court to carry out an overall assessment of all the circumstances of the particular case in that respect. The mere fact that a likelihood of aural 3

4 confusion exists between a word mark and an indication of geographical origin is insufficient to conclude that the use of that indication in the course of trade is not in accordance with honest practices. It is for the national court to carry out an overall assessment of the relevant circumstances. Since the case concerned bottled drinks, the ECJ held that circumstances to be taken into account by the national court should include in particular the shape and labeling of the bottle in order to assess, more particularly, whether the producer of the drink bearing the indication of geographical origin could be regarded as unfairly competing with the proprietor of the trademark. 6) Is the use of another s mark to indicate product compatibility permissible under your trademark law? If so, under what circumstances? Is only the use of another s word mark in ordinary script or neutral letters permissible or also the use of another s logo or special script format of the mark? According to Article 2.23(1)(c) BCIP a trademark shall not entitle the proprietor to prohibit a third party from using, in the course of trade, the trademark where it is necessary to indicate the intended purpose of a good or service, in particular as accessories or spare parts provided he uses them in accordance with honest practices in industrial or commercial matters. In its BMW/Deenik (C 63/97) and Gillette (C 228/03) decisions, the ECJ gave further guidance regarding the interpretation of honest practices in this respect (see below). The abovementioned exception applies if a trademark is being used by a third party in order to provide the public with comprehensible and complete information as to the intended purpose of the marketed product, namely its compatibility with the (trademark proprietor s) product which bears those trademarks. Use of the trademark is necessary, according to the ECJ in its Gillette decision, in cases where that information cannot in practice be communicated by a third party to the public in any other way, i.e. without use being made of the trademark of which the latter is not the owner. Thus, the use must in practice be the only means of providing the information. If a trademark proprietor s logo or special script format is used, we feel that this could be conceived as giving the impression that there is a commercial connection between the third party and the trademark owner. Further, such use might affect the value of the trademark by taking unfair advantage of its distinctive character or repute. However, it depends to a large extent on practices in the relevant area of industry or commerce, whether or not such use of the trademark is deemed to be in accordance with honest practices in the sense of the Directive/BCIP. Benelux case law is divided on this issue; however, we feel that if use of a logo in the relevant area of trade is customary, the average customer will not easily assume a commercial relationship between the third party and the trademark proprietor merely on the basis of the use of these logo s/special scripts by the third party. 7) Is decorative use of another s mark permissible under your trademark law? If so, under what circumstances? The BCIP does not contain a provision that allows or forbids decorative use by a third party of a registered trademark. However, based on case law of the ECJ (Adidas/Fitnessworld, C 408/01), we conclude that a trademark proprietor cannot invoke the protection of Article 5 paragraph 2 of the Trademark Directive if the public does not make a connection (sees a link ) between the sign (as used by the third party) and the trademark. If the relevant section of the public views the sign purely as an embellishment, it necessarily does not establish a link with a registered trademark. Such a link is therefore necessary. 4

5 If a link is established, decorative use will only be prohibited in the event of a trademark with a reputation when use of the decoration leads to an unfair advantage or damages the reputation or the distinctiveness of that trademark. Recently, the ECJ refined Arsenal/Reed (C 206/01) in Adam Opel/Autec (C 48/05). In the latter case a toy manufacturer affixed a mark, identical to the Opel trademark registered for toys and for motor vehicles, to scale car models. The ECJ held that although in such a case the trademark is not used to designate origin, the trademark proprietor is nevertheless entitled to prevent such use under Article 5(1)(a) of the Trademark Directive (identical to Article 2.20(1)(a) BCIP) if that use affects or is likely to affect other functions of the trademark. The ECJ added to this that a well knownn trademark (e.g. Opel for cars) can, if the jurisdiction in question offers the protection of Article 5 Paragraph 2 of the Trademark Directive (identical to Article 2.20(1)(c) BCIP), act against such use if it takes unfair advantage of or is detrimental to the distinctive character or the repute of the well knownn trademark. This seems to suggest that use of a mark for decorative reasons (in this case because the toy manufacturer wanted to sell a miniature car that resembled an Opel car) does not constitute use as an indicator of origin. However, it is still possible to invoke the trademark Opel for toys (Article 5 Paragraph (1)(a) of the Trademark Directive) if such use affects other functions of the trademark. This seems to suggest that Article 5 Paragraph (1)(a) also provides the protection given by Article 5 Paragraph 2 but without the requirement that the trademark has a reputation. Article 5 Paragraph 2 would then only have importance for cases not covered by Article 5 Paragraph (1)(a), for example the car manufacturer Opel relying on its Opel trademark for cars. 8) Is use of descriptive terms permissible regardless of whether it is in accordance with honest or fair practices or whether it constitutes unfair competition? If descriptive use of another s mark is only permissible if it is in accordance with honest or fair practices, what are typical examples of use which are not in accordance with honest or fair practices? Similar to Article 6(1)(c) of the Trademark Directive which it implements, Article 2.23(1) BCIP (cited above) only allows descriptive use to the extent this constitutes honest use in industrial and commercial matters. The ECJ has given guidance on the interpretation of honest use in its BMW/Deenik (C 63/97) and Gillette (C 228/03) decisions. It has stated that this requirement constitutes in substance the expression of a duty to act fairly in relation to the legitimate interests of the trademark owner. The ECJ further interpreted this as follows: Use of the trademark will not be in accordance with honest practices in industrial and commercial matters if, for example: it is done in such a manner as to give the impression that there is a commercial connection between the third party and the trademark owner; it affects the value of the trademark by taking unfair advantage of its distinctive character or repute; it entails the discrediting or denigration of that mark; or where the third party presents its product as an imitation or replica of the product bearing the trademark of which it is not the owner. A specific instance of the commercial connection mentioned at the first indent, can be found in the BMW case: the use may not be such as to suggest that the [third party s] business is affiliated to the trademark proprietor s distribution network. 5

6 Prior Dutch case law was more restrictive 2 than the ECJ in the Gillette case and therefore does not seem relevant anymore. After the BMW and Gillette decisions, Dutch courts have given a further interpretation of what may constitute (dis)honest use, but no new categories have been added compared to the Gillette category mentioned above. 9) Do the above mentioned types of descriptive use constitute limitations of trademark rights because they would not be regarded as use as a mark or are they specifically exempted regardless of whether trademark use is involved? In respect to this question, the distinction between use as a trademark and types of use which are not regarded as such, is somewhat confusing in view of the case law of the ECJ which does not clearly make this distinction in order to establish infringement. Rather, in order to establish whether or not a trademark holder may act against infringement, the ECJ establishes whether or not one of the (essential) functions of a trademark is at stake. The identification of source/origin is said to be the essential functions, but goodwill, advertisement, etc are also relevant functions of a trademark. Therefore, even if there is no confusion as to the origin of the goods, and even if the alleged infringer does not use the sign in order to indicate origin of the goods, a trademark owner may still act against a third party if one of the other trademark functions is at stake (see above re Opel/Autec). What is necessary, is a link between the use of the sign and the relevant goods or services. As said, such link may well exist without there being use as a trademark by the alleged infringer. Moreover, even if there is no such link between the sign and the goods or services, a trademark owner may act against (alleged) infringement. The Benelux is the only territory within the European Union in which Article 5(5) of the Trademark Directive has been implemented (see footnote 1).In view of the fact that this article only adds something to the protection provided by the ECJ if there is no link between the goods or service and the trademark, it currently seems to add little to the scope of protection provided by the ECJ under the Trademark Directive. Having said that, the limitations discussed above are (in general) limitations to the exercising of the rights by the trademark holder. Thus these exemptions apply to cases where (without the exemptions in place) there would be trademark infringement, thus regardless of whether the signs are used by third parties as trademark. However, if the third party uses a sign which would normally fall within the exception as a trademark, i.e. in order to distinguish goods or services, the trademark owner may still prohibit that use. This is the case if for instance apersonal name is used otherwise than to identify the relevant person. In such a case the use of the name as a trademark is deemed to be contrary to the honest use criterion. 10) If your trademark law recognises other types of descriptive use defences which have not been discussed above, please explain. As stated above, it is defended that the general interest also provides for limitations of trademark use. In that respect, the Dutch Supreme Court has asked the following questions to the ECJ (re Adidas/Marca II, 17 February 2007): 2 E.g. the Dutch Supreme Court s decision in Gillette/Hermans (6 October 2000, NJ 2001/582) restricting the intended purpose exception to spare parts which have a lesser value than the main product and requiring that the intended purpose be the only purpose for which the product can be used. 6

7 1) Should, in order to establish the scope of protection of a trademark consisting of a sign that has no distinctive character ab initio or an indication that meets the definition in Article 3(1)(c) of the Trademark Directive, but where that sign/indication has acquired distinctiveness through use and has been registered, consideration be given to the general interest that the availability of certain signs be not unjustifiably restricted for other market parties who offer the particular goods or services (Freihältebedürfnis)? 2) If the answer to Question 1 is yes, does it make a difference if the relevant public observes those signs as signs to distinguish goods, or purely as embellishment of the goods? 3) If the answer to Question 1 is yes, does it make a difference if the sign that the trademark owner attacks is devoid of distinctive character as meant in Article 3(1)(b) of the Directive, or is an indication as meant by Article 3(1)(c) of the Directive? As to the use of a similar sign that derives its protection from an earlier right which only applies in a particular locality, this amounts to the (continued) use of locally used trade names. 11) Does your trademark law provide for a prior user right/defence? If so, under what circumstances? First, it should be noted that the BCIP does not provide for a prior user right. The BCIP is based on the first to register principle and not on a first to use principle (Article 2.2 BCIP). In fact, if a sign is used, the proprietor of a later registered trademark may prevent the prior use of that earlier used sign for the future. However, prior users do have some rights/defences: Article 2.4(f) BCIP states no trademark right is gained from a registration that has been made in bad faith. According to Article 2.28 BCIP, good faith prior users of such a mark or a similar sign may institute proceedings to invalidate such a mark. The bad faith defence may also be invoked by way of exception in infringement actions (Benelux Court of Justice 23 December 1985, NJ 1986/258). The BCIP gives certain examples of bad faith registrations. According to the principle of territoriality, the BCIP distinguishes between prior use inside the Benelux territory and outside the Benelux territory. First, a registration is considered to be made in bad faith if the person who filed for registration knew or was supposed to know that someone else has used an identical mark for similar goods and services within the Benelux territory within the last three years. The prior user must have used the sign as a mark, normally, and in good faith. Good faith of the prior user is excluded, if he knew that the person, who subsequently registered the mark, has used the mark prior to his own use. Much of the case law revolves around this so called prior prior use (e.g. Benelux Court of Justice 25 June 2004, IER 2004, p. 79 (Winner Taco)). Second, a registration is considered to be made in bad faith if the person who filed for registration knew, due to a direct relationship, that someone else has used an identical mark for similar goods and services outside Benelux territory within the last 3 years. Third, prior user actions have been established in jurisprudence in a few other cases. A good faith prior user of trade names may apply for invalidation for subsequent bad faith registrations of identical marks for similar goods or services (e.g. Dutch Supreme Court 11 February 1977, BIE 1978/102). In addition, a prior user may bring a claim of unfair competition under Article 6:162 of the Dutch Civil Code, in particular when the subsequent user solely registered the mark to harm the prior user. In a few cases, rent seeking strategies i.e. registering a potential high value trademark without the 7

8 intent to use it, but with the intent to make a profit from a subsequent party s wish to register it, have been considered to be in bad faith (Regional High Court Amsterdam 18 April 1996, NJ 1998/633 (Route 66); District Court Breda 11 May 1999, BIE 1999, p. 262 (Euro)). However, this topic is disputed in Dutch literature. Over the years it has become more difficult to establish that a registration was made in bad faith. Well known marks Article 2.4(e) BCIP contains an implementation of Article 6bis of the Paris Convention. It protects prior users of well known non registered marks in the Benelux territory against registrations of marks that may cause confusion. According to Article 16(2) TRIPS, the prior mark must be well known by the relevant sector of the public. Before registration, the proprietor of the well known trademark may institute opposition proceedings within 2 months of the publication of the application (Article BCIP). After registration, but within five years of the registration date, the proprietor of the well known trademark may institute invalidity proceedings with respect to the subsequent registration (Article 2.28(3)(b) BCIP). In case of bad faith, there is no time limit within which the invalidity proceedings must be initiated (Article 2.28(3)(b) BCIP). 12) If your trademark law provides for other limitations of trademark rights which have not been discussed above, please explain. II) Not applicable. Proposals for adoption of uniform rules The Groups are invited to put forward proposals for adoption of uniform rules regarding limitations of trademark rights. More specifically, the Groups are invited to answer the following questions: 1) Should descriptive use of another s trademark be permissible? If so, under what circumstances? Should descriptive use of another s trademark be permissible regardless of whether it is in accordance with honest or fair practices or whether it constitutes unfair competition? We are satisfied with the existing (case)law which amounts to the following:indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of goods or services may be used provided that the use is in accordance with honest practices in the relevant area of trade or industry. The ECJ has given guidance on the interpretation of honest use (in short: the expression of a duty to act fairly in relation to the legitimate interests of the trademark owner) and has given examples of dishonest use in its BMW/Deenik and Gillette decisions, which is now followed by the Benelux judges. Reference is made to article 2.23 BCIP and article 6 of the Trademark Directive. 2) Should use of one s own name be permissible? If so, under which circumstances? What should the position regarding the use of corporate names be? We are satisfied with the existing (case)law which amounts to the following: use of one s own name in the course of trade (e.g. for identification purposes) does not constitute trademark infringement provided that the use is in accordance with honest practices in the relevant area of trade or industry. (Use of one s own name outside the course of trade is of course always permitted, except if it constitutes other use in the sense of Article 5 paragraph 5 of the Trademark Directive and Benelux law is applicable and there is no justification for that use.) Pursuant to the Trademark Directive, personal names can be registered as trademarks and further the BCIP explicitly states that family (sur)names may serve as trademarks. Using 8

9 someone else s surname may amount to an unlawful act; in case of common surnames reference is made to the Nichols decision of the ECJ. As for trade names, we feel that use thereof does not authorize use thereof as a trademark; the general doctrine of trademark infringement applies. 3) Should the use of indications concerning the characteristics of the goods or services, including the kind, quality, value, geographical origin or time of production of goods be permissible? If so, under which circumstances? We are satisfied with the existing (case)law which amounts to the following: the registration of a mark which consists exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering of the service, or other characteristics of the goods, will be refused by the Benelux Office for IP/OHIM unless the mark has acquired distinctive character. As for the use of such descriptive indications by third parties, again the criterion for permitted use is whether the use is in accordance with honest practices in industrial or commercial matters, which must be assessed by the national court. Reference is made to the GERRI/KERRY Spring decision in which the ECJ gives some guidance with respect to the use of indications of geographical origin. 4) Should the use of another s mark to indicate product compatibility be permissible? If so, under what circumstances? Should only the use of another s word mark in ordinary script or neutral letters be permissible or also the use of another s logo or special script format of the mark? We are satisfied with the existing (case)law that a trademark shall not entitle the proprietor to prohibit a third party from using, in the course of trade, the trademark where it is necessary to indicate the intended purpose of a good or service, in particular as accessories or spare parts provided that the third party uses the trademark in accordance with honest practices in industrial or commercial matters. However, we feel that the use of another s logo or special script trademark, assuming that is not misleading, should sometimes be permitted if the use of such logo s/scripts is customary in the relevant area of trade. 5) Should decorative use of another s mark be permissible? If so, under what circumstances? There is no statutory law, but we are satisfied with the existing case law on this matter. In the Adidas/Fitnessworld decision the ECJ introduced the criterion that a trademark proprietor can only invoke the protection of Article 5 paragraph 2 of the Trademark Directive if assuming that all other criteria of this provisionare met the relevant public does not view the sign used by the third party merely as an embellishment but perceives a link between the sign and the proprietor s trademark. The more recent Adam Opel/Autec ECJ decision seems to suggest that use of a mark for decorative reasons does not constitute use as an indicator of origin, but that if such use affects other functions of the trademark, it may still amount to infringement of that trademark under Article 5 paragraph 1(a)(!) of the Trademark Directive. This broadens the scope of protection of trademarks without a reputation (which for that reason do not fall within Article 5 paragraph 2). 6) Should trademark law provide for a prior user right? If so, under what circumstances? The BCIP does not provide for a prior user right, but prior users do have some rights and possible defences, established in Benelux case law and following from the bad faith provisions of the BCIP (which have, however, become more and more difficult to successfully invoke). We are satisfied with this existing (case)law. Further, well known trademarks have a broader protection, and the Paris Convention provides for their protection even if they have not been registered. 9

10 7) Should trademark law provide for other limitations of trademark rights which have not been discussed above? If so, under what circumstances? Under exceptional circumstances situations could arise in which a limitation based on the general interest might rise. National Groups are invited to comment on any additional issue concerning limitations of trademark rights which they find relevant. 10