Well-known or famous marks are being afforded increased protection under trademark and unfair competition law in a significant number of countries. However, it seems that difficulties in getting sufficient protection for non-competing goods or services remain in some jurisdictions.
In several countries, the concept of confusion lies at the heart of actions for trademark infringement and passing off. Confusion is also often the key in determining the registrability of trademarks. Admittedly, not all uses of similar marks by opportunists result in consumer confusion. So, what is the state of the law in protecting such marks? Is the traditional principle of likelihood-of-confusion a suitable mechanism to protect well-known marks?
Many countries have addressed this issue by implementing anti-dilution or similar laws. International treaties such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the World Intellectual Property Organization's Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks show a shift in a similar direction.
Two commonly recognized forms of trademark dilution are blurring and tarnishment. Dilution by blurring occurs when the public sees a well-known mark and thinks of a junior mark's products. Regardless of whether consumers are confused by the junior use, the well-known mark loses its ability to be uniquely and distinctively identified and distinguished as one source. Consequently, the change in consumer perception reduces the marketing value or selling power of products bearing the well-known mark.
Dilution by tarnishment occurs when the plaintiff's trademark is linked to products of poor quality or is portrayed in an unwholesome or unsavoury context that is likely to evoke unflattering thoughts about the trademark owner's product. One example is where a mark is depicted in a sexual context, such as in the case of Toys 'R' Us vs. Akkaoui over the sale of sexual products under the brand name Adults 'R' Us.
Such dilution also occurs where there is denigration. For example, the slogan 'where there's life there's Bugs' for a floor wax containing insecticide mirrored Budweiser beer's well-known slogan 'Where there's life there's Bud' (see the case of Chemical Corp of America vs. Anheuser-Busch).
There is potentially a third form of dilution, free riding, which rests on the principle that one should not reap what one has not sown. The theory can be particularly useful where traditional dilution would fail to provide the requisite protection. Indeed, the US courts have on a few occasions been explicit in identifying free riding as the gist of a dilution cause of action. Some examples include Nikon vs. Ikon ('Ikon' dilutes 'Nikon'), McDonald's Corp. vs. McBagel's ('McBagel's' dilutes 'McDonald's'), Cynthia Grey vs. Campbell Soup ('Polaraid' dilutes 'Polaroid'), and Hester Indus vs. Tyson Foods ('Wing-Flings' dilutes 'Wing-Dings').
United States
Trademark dilution is specifically addressed in the United States via the Trademark Dilution Revision Act of 2006 (TDRA). This revised legislation is hailed as Congress' attempt to provide a clearer statement of the law than its predecessor, the Federal Trademark Dilution Act of 1995 (FTDA), and to overturn the Supreme Court's March 4 2003 decision in the case of Moseley vs. V Secret Catalogue, which had rasied the bar for dilution cases.
The TDRA appears to have considerably broadened the federal trademark dilution law in the US, benefiting owners of famous marks by defining the parameters of trademark dilution more clearly than in the past, removing the requirement of demonstrating actual damage and providing more guidance to practitioners on how to prove a dilution claim.
It also answers many of the questions left open by the Moseley decision. However, the TDRA is far from perfect. Its redefinition of 'famous marks' excludes niche fame, the definitions of blurring and tarnishment are sweepingly broad and there is lack of specificity behind the 'use in commerce' requirement. These shortcomings will likely pose some interpretative challenges.
It remains to be seen how the US courts will interpret the statute and whether it will indeed bring the level of consistency in the development of dilution law in the US that appears to be intended by Congress. It also remains to be seen whether the wider scope of protection afforded under the TDRA will stall reliance on anti-free-rider principles or whether the narrower definition of famous marks might lead to a resurgence of the doctrine.
European Union
The anti-dilution principle also seems to be an integral part of the European Union's protection of well-known marks through the First Council Directive of December 21 1988. Although the word 'dilution' is conspicuously absent from the Directive, it represents a substantial departure from confusion principles and in some respects echoes the US' FTDA and TDRA.
The European Court of Justice (ECJ) has recently shown a willingness to extend the application of the Directive, according it the status of an overarching legal remedy applicable to situations where goods are similar or dissimilar, competitive or otherwise. (See the ECJ's decisions in the cases of Marca Mode vs Adidas, Adidas Benelux and Zino Davidoff vs. A and G Imports, et al.)
Many European countries have a cause of action explicitly described as 'unfair advantage', which is meant to cover all instances where there is an attempt to take advantage - without due cause - of the reputation of a well-known mark by exploiting and capitalizing on its attractive value and commercial magnetism.
It was on this ground that the Court of Milan enjoined a third-party use of the mark 'Nike Sports Fragrance' on December 23 1999, holding that adoption of a similar sign was based on the clear intent of the defendant to benefit from the celebrity and attractive value of the well-known Nike trademark (see the case of Nike Ital & Nike vs. Saledo Italia & Campomar & Nike Cosmetics).
These cases however, seem to be the exception. For the most part, the ECJ steers clear of the word 'dilution' and appears to be even more averse to refer to the theoretical, historical and logical foundations of the dilution concept. Also unexplored by the ECJ is the scope and meaning of the open-ended phrase "without due cause takes unfair advantage of". This seems to invoke vague and undefined notions of unfair competition and free riding.
Britain
Unlike the ECJ's liberal approach, the English courts seem to be unprepared to part with the traditional principles of trademark infringement laws and seem very reluctant to embrace the US style of dilution principles. In fact, the courts appear to be moving away from earlier liberal judgements.
In the case of Baywatch Production vs. Home Video Channel, the court refused to extend the application of section 10(3) of the Trade Marks Act 1994 to similar goods. It found that the broadcasting of 'Babewatch', which contained sexually explicit material, was not detrimental to the 'Baywatch' trade mark. The court held that "video tapes, and video discs, all featuring music, action-adventure, comedy, animation, sports and exercise" were dissimilar to television programmes or services related to television broadcasting. More recently, in the case of Daimler Chrysler vs Alavi, the court imposed an additional requirement under section 10(3) of the Act - that a connection between the parties' marks be shown.
At a time when the rest of the world seems to be moving towards stronger recognition of and protection of well-known marks, the UK seems to be trapped in the more traditional outlook of trademark laws. Some commentators have been applauding this stringent adherence, arguing vociferously that affording greater rights to well-known marks is akin to the commoditization of the marks themselves. However, given the wording of section 10(3) of the Act, there is scope in the UK to move closer towards the anti-dilution principles of the EU.
Asia
The protection of well-known marks seems particularly challenging in Asia. Jurisdictions such as South Korea, China, Japan, Thailand, Vietnam, the Philippines and Indonesia follow the first-to-file principle versus first-to-use trademark registration, with exceptions in cases of bad faith. This conflicts with Article 6bis of the Paris Convention for the Protection of Industrial Property, under which protection of internationally well-known marks is not dependant upon registration.
Notwithstanding the above, whether by specific legislation or judicial intervention, some countries in Asia, such as China, Japan, Thailand, Singapore and India, have begun to provide broader protection to well-known marks.
China
China significantly improved its legislation governing trademarks with the April 2003 Regulation for Certification and Protection of Well-known Trademarks. Firstly, the definition of well-known marks is more specific, albeit more onerous. Secondly, the protection of unregistered well-known marks, regardless of the classes of goods or services concerned, is strengthened and allows for certification as such. Thirdly, the certification process is fairer. Fourthly, there is stronger and improved administrative punishment for infringement through higher fines and provisions for the confiscation and destruction of infringing goods and any instruments specifically used to manufacture the infringing goods. Lastly, the requirement for prior registration of well-known marks has been eliminated.
In addition, China's courts have issued damages awards to foreign companies in recent cases. In January 2006, Starbucks won US$62,000 in damages (a relatively large Chinese award) for Xingbake's use of a Chinese name and logo similar to that of Starbucks, while the French firm Bonneterie Cevenole was awarded US$93,000 in April 2005 for infringement of its garment trademark 'Montagut'.
Recent rulings on the internet domain-name front in favour of DuPont (relating to Dupont.com.cn), Proctor & Gamble (relating to Olay.com.cn) and InterIKEA Systems (relating to Ikea.com.cn) signal a similar trend. The Ikea case is particularly interesting because the defendant was a government entity, signalling that even a company with strong government backing cannot escape liability. This was the first domain-name dispute in China which happened to have involved a foreign firm and the issue of a well-known mark.
China's trademark law also provides for criminal prosecution of infringers, with successful convictions inviting imprisonment and monetary fines. The current trend is to exercise anti-infringement efforts on intermediaries, with the courts imposing third-party liability on contributing infringers such as landlords and market retailers.
In April 2006, Beijing's Shio-Shui Market, which was renowned for selling low-priced counterfeit goods, was held liable to several foreign mark owners (including Prada and Louis Vuitton) for the infringing activities of its vendors. The litigation was resolved in just three months, with the court holding the market liable for its inaction in responding to the foreign companies' concerns.
Notwithstanding these progressive efforts, there appear to be several longstanding problems hindering the proper enforcement of China's trademark regulations, which will likely improve with time. Examples include:
(i) regional protectionism and turf wars between local governments and the national government affecting policy formulation and intellectual property enforcement actions;
(ii) the inherent ideological difference in thinking between China and the western world (capitalism vs. communism);
(iii) few experts trained in the IP discipline, questionable judicial competency in IP and widespread judicial corruption;
(iv) infringement through the use of transliteration of well-known marks. (For example, the court dismissed Pfizer's case against a Chinese entity that registered 'Viagra' as its domain name, holding that 'Viagra' was not a well-known mark in China as most Chinese knew the mark as 'Weige'. The court similarly ruled against Pfizer in December 2004, holding that 'Envacar' had, according to a Chinese dictionary, become the generic term for a type of anti-hypertensive drug and, therefore, was not eligible for registration, despite Pfizer's arguments that it was the creator and owner of the mark.)
Notwithstanding the foregoing, increased global pressure and China's own growing realization of the value of well-known marks through the marketing of home-grown brands such as Haier, Phoenix and Lenovo on an international platform has resulted in greater efforts to protect intellectual property. The new trademark provisions, innovative enforcement solutions and governmental efforts to expose corrupt members of the judiciary is beginning to show tremendous progress in the scope of protection afforded to well-known marks in China.
Japan
Japan has a two-pronged system to protect well-known marks. Law No. 127 of 1921 (Trademark Law) protects registered well-known marks, regardless of the presence or absence of confusion and dissimilarity of goods/services. Law No. 47 of 1993 (Unfair Competition Prevention Act) protects unregistered well-known marks, based on the confusion analysis.
In addition, Japan introduced a new regional collective trademark system on April 1 2006 to foster regional brands and provide protection to businesses whose quality and reputation of goods or services are associated with a particular geographic region, thereby relaxing the requirement of distinctiveness via fame throughout Japan.
Japan's judiciary appears also to be leaning towards according enhanced protection to owners of well-known marks. For instance, in the case of Zazahoraya vs. Semumarumatsu, the Supreme Court of Japan found in June 2001 that a purchase agreement for goods affixed with a mark confusingly similar to the well-known mark 'Polo by Ralph Lauren' was invalid. The court emphasized the serious harm caused to the market by the distribution of goods with illegal trademarks. In the same vein, in the case of JPO Commissioner vs. Heaven Corp, the Supreme Court found in July 2006 the applicant's mark 'Palm Springs Polo Club' was confusingly similar to the well-known trademark 'Polo'.
Likewise in the case of Compagnie Generale des Etablissements Michelin, Michelin et Compagnie (France) vs. Toshio Saegusa and KK Mishuran, the Tokyo District Court granted Michelin damages of ¥63 million in March 1998 and issued an injunction, holding that the 'Michelin' trademark was well-known in Japan since at least 1977. In addition, it found that that the defendant's use of the 'Mishuran' name to sell food products conflicted with the 'Michelin' trademark and was likely to cause consumer confusion. The decision was upheld on an appeal to the Tokyo High Court, although the amount of damages awarded was reduced.
Thailand
Except for the TRIPS Agreement, Thailand is not a party to any international convention on trademarks or any multilateral treaty concerning trademarks or unfair competition. Yet it offers fairly progressive protection to well-known marks via the doctrine of passing off. Thailand's Trade Marks Act 1991 (as amended by the Trademarks Act (No.2) of BE 2543 (2000)), includes a new regulation on the recording of well-known marks, which prevents the registration of marks which are identical or confusingly similar to well-known marks, even for unrelated goods or services.
The Thai courts have shown a willingness to recognize both registered and unregistered well-known marks, provided that the mark in question has global reputation and recognition and that the infringer has been using the infringing mark in bad faith with an intention to benefit from its goodwill.
In 2006, in the case of Compaq Information Technologies Group vs. Intel Inter Marketing over the well-known mark 'Intel', the Thai Supreme Court ordered the cancellation of third-party trademark registrations across different classes of goods to those for which the owner registered his mark, demonstrating the court's endorsement that the strength of the well-known mark can transcend the nature of goods/services.
Likewise, in an earlier case involving the use of 'BMW' in Thai characters as a company name for fire extinguishers, the IP & IT Court and Supreme Court affirmed the likelihood of public confusion and also affirmed the defendant's act of violating the rights of the plaintiff, since the trademark 'BMW' is internationally well-known.
India
The Indian Trademarks Act, 1999, which came into effect on September 15 2003 and brought India's IP regime in line with the TRIPS Agreement, extends protection to well-known trademarks even if they are neither registered nor used in India and regardless of whether there is a similarity of goods and services. The new Act goes so far as to recognize trans-border or spill-over reputations, provided the use of the mark would likely be detrimental to the distinctive character or reputation of the earlier mark.
Recent judicial examples include Sony Corporation vs Jasbir Singh Kohli, where the application for registration of the mark Sonico in Class 12 for rubber brushes to use in cars was disallowed on the grounds that it was deceptively similar to the well-known marks 'Sony' and 'SonyCo' and "would dilute and deface the goodwill and reputation of the registered trademark".
Similarly, in the case of JVC Industrial Corporation vs. Victor Company of Japan, the defendant successfully opposed the registration of its well-known trademark 'JVC' in India by the applicant. In the case of Adidas-Salomon vs. Jagdish Grover, which involved infringement of the well-known mark 'Adidas', the court granted a permanent injunction, damages of Rs.500,100 and declared that Grover pay costs.
Likewise in the case of Carlton and United Breweries vs. Harmohan Singh Chandok, the court granted a permanent injunction against the infringer to prevent him from using the internationally known mark 'Foster' with an 'F' device on its products. In addition, in the case of Intel Corporation vs. Retd Admiral BR Vasant, the court granted a permanent injunction against the infringer of the trademark 'Intel'.
In addition to legislative and judicial efforts to protect trademarks, India is also working towards enhancing efficiency in this area by establishing the Intellectual Property Appellate Board to hear and decide appeals to decisions made by the Trade Marks Registry. This will result in speedier disposals of cases that were previously overflowing in the dockets of the High Court, which was the sole hearer of appeals from the Trade Mark Registry.
Singapore
On July 1 2004, Singapore's Trade Marks Act was amended to strengthen protection for well-known trademarks, both registered and unregistered. The revised Act offers two levels of protection. Firstly, an injunction can be obtained where a well-known mark is being used in respect of similar goods/services in a manner likely to cause confusion. For non-similar goods/services, an injunction can be sought where the use would indicate a connection between those goods/services and the proprietor, and is likely to damage the interests of the proprietor.
The second of the two-pronged approach involves the introduction of the US concept of dilution under section 55 of the Act. Under this section, the owner of a well-known mark would be able to restrain a third party's use of an identical or similar mark (whether in relation to similar or dissimilar goods/services) where its use would "cause dilution or take unfair advantage of the distinctive character" of the trademark, regardless of any likelihood of confusion.
By availing of remedies without the requirement of establishing confusion or likelihood of confusion, Singapore has taken a significant step away from its English common law heritage. Arguably, Singapore is adopting gradual measures as it eases in the anti-dilution provision fully.
Singapore's courts have shown a readiness to accord due recognition to marks with international reputation against misappropriation. Examples include rulings in favour of Tiffany & Co against Fabriques de Tabac Reunies, in favour of McDonald's Corporation against Future Enterprises (finding the term 'MacCoffee' similar to 'McCafe' and likely to cause confusion), and allowing the opposition by Asia Pacific Breweries of the proposed trademark 'Bière Larue' on the grounds that it "would lead an average consumer to believe that the Applicant's goods are connected with the Opponents or originate from the Opponents because of their representation of a tiger's face in their mark". These decisions gives due recognition to the concept of perceived connection between the parties, irrespective of the presence or absence of confusion.
About the author
Jasmine Karimi is the senior counsel at Techtronic Industries Co in Hong Kong. A lawyer for over 10 years, Karimi is called to the Bar in the UK, Singapore and Canada and has practiced law in Singapore, Canada and Hong Kong. For the past seven years, Karimi was an in-house counsel at large media conglomerates in Toronto, Canada, where she spoke regularly at industry and professional forums. She has recently completed an LL.M. in intellectual property law.