• EUROPEAN PERSPECTIVES

    Last Rites for Spring?

    Under Article 6(1)(b) of the European Union’s Trade Marks Harmonisation Directive (89/104/EEC), a trade mark proprietor may not prevent a third party from using an indication of the geographical origin of his (the third party’s) goods or services, provided that use is in accordance with honest practices in industrial or commercial matters. A recent case (Gerolsteiner Brunnen v Putsch) before the European Court of Justice (ECJ) considered the extent of this defence.

    Gerolsteiner bottles and sells Gerri mineral water-based soft drinks in Germany. It owns a number of German registrations in class 32 for the trade mark Gerri. In the mid-1990s, Putsch began importing mineral water and related soft drinks, bearing labels including the phrase Kerry Spring, from Ireland. The Putsch imported products were manufactured and bottled in Ballyferriter in County Kerry, Ireland by an Irish company (Kerry Spring Water) using water from a spring called Kerry Spring.

    Gerolsteiner sued Putsch for trade mark infringement. The case eventually reached the German Bundesgerichtshof. This Court took the view that there was a likelihood of aural confusion between the trade mark Gerri and the phrase Kerry Spring and that the outcome of the case would therefore depend on the interpretation of Article 6(1)(b). They therefore put the following questions to the ECJ for a preliminary ruling:

    1) Is Article 6(1)(b) applicable if a third party uses an indication referred to therein as a trade mark?

    2) If so, must that use as a trade mark be taken into account when considering whether use has been in accordance with honest practices in industrial or commercial matters?

    The ECJ gave the following rulings which suggest a broad interpretation of the Article 6(1)(b) defence:

    • Article 6(1)(b) draws no distinction between the possible uses of the indications to which it refers.

    • The only test mentioned in that Article is whether the indication (for example, of geographical origin) is used in accordance with honest practices in industrial or commercial matters. The condition of honest practice constitutes in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner.

    • The mere fact that there exists a likelihood of aural confusion between a word mark in one Member State and an indication of geographical origin from another Member State is therefore insufficient to conclude that the use of that indication in the course of trade is not in accordance with honest practices. Given the linguistic diversity of the EU, a diversity that is set to increase with the entry of ten new Member States during 2004, the chance that there exists some phonetic similarity between a registered trade mark in one EU country and an indication of geographical origin in another EU country is already substantial and will soon increase further.

    • It is for the national Court to carry out an overall assessment of all the relevant circumstances which, in this case, would include the shape and labelling of the imported bottle, in order to assess whether the producer of the (imported) drink might be regarded as unfairly competing with the proprietor of the registered trade mark.

    • In the circumstances of the present case, Gerolsteiner may only prevent Putsch’s use of the indication of geographical origin if that use, taking into account the above overall assessment, is not in accordance with honest practices in industrial or commercial matters.

     

    Comment

    The question put by the German Court to the ECJ could not have been simpler. Does Article 6(1)(b) provide a defence to trade mark infringement if an indication referred to in that Article is used as a trade mark? Once again, the ECJ refused to answer the question, preferring to require a nebulous test involving an assessment of the honesty of the third party and the fairness (or otherwise) of his trading practices.

    In the writer’s opinion, the answer to the German Court’s question is as clear as Kerry Spring water. If Putsch uses Kerry Spring as a trade mark, then there should be no defence under Article 6(1)(b). If, on the other hand, they use the phrase in the following manner,

    “This mineral water originates from the Kerry Spring in County Kerry, Ireland”, then there should be a defence.

    Whether the use is as a trade mark or not is for the Court to decide in the circumstances of the case. The fact that the Irish bottler of the product has filed a CTM application for a Kerry Spring label and states, at their website, that “Kerry Spring is the second strongest brand in the overall bottled water market in Ireland…” could lead a Court to infer that the use was as a trade mark.

    The other aspect of this conflict that troubles the writer is the German Court’s view that the potential aural confusion between the trade mark Gerri and the sign Kerry Spring should be enough to lead to a finding of overall confusion. Once again, this seems to place far too much emphasis on the phonetic comparison of the mark and sign. It has always seemed to the writer that the visual and/or conceptual comparison of a mark and a sign are far more important than the phonetic comparison. In the Gerolsteiner case, it is submitted that any potential phonetic confusion between Gerri and Kerry Spring will almost always be resolved, once the Kerry Spring product is seen, given the considerable visual and conceptual differences between Gerri and Kerry Spring. In other words, this case should have been decided in favour of Putsch, without the need to apply a (now) extremely vague Article 6(1)(b) test.