The CJEU recently ruled on the significant issue of limitations on trademark rights.

In its ruling of 11 January 2024 handed down in case number C-361/22, the CJEU interpreted Article 6(1)(c) of the now-defunct First Council Directive 89/104/EEC of 21 December 1988 to bring into line the laws of the Member States relating to trademarks.

The ruling is important as it may affect the application of legal provisions regarding limitations on the right to trademarks also under the new legislation regime. Notably, the Polish Industrial Property Law has not been amended accordingly. Hence, the currently effective provision corresponds to the provision evaluated by the CJEU in the judgment at hand.

Change in the provisions of law

Article 6(1)(c) of the now-defunct First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trademarks (hereinafter referred to as “Article 6 of Directive 89/104”) introduced one of the limitations on the effect of a trademark. According to its wording, a trademark owner is not entitled to prohibit a third party from using a trademark in the course of its trade operations if it is necessary to indicate the intended purpose of product or service, in particular with respect to accessories or spare parts (referential use of another’s trademark). The wording of this provision is the same as that of Article 6(1)(c) of Directive 2008/95 which replaced Directive 89/104.

The issue in question is currently regulated by Article 14(1)(c) of Directive 2015/2436 (hereinafter referred to as “Article 14 of Directive 2015/2436”). However, its contents differ from the earlier provisions. Pursuant to that article, the owner of a trademark is not entitled to prohibit a third party from using a trademark in the course of trade for the purpose of identifying or referring to goods or services as those of the proprietor of that trademark, in particular, where the use of the trademark is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts.

In the judgment at hand, namely, judgement dated 11 January 2024, in case C-361/22, the CJEU interpreted Article 6 of Directive 89/104 in response to the question as to whether the difference in contents between that article and Article 14 of Directive 2015/2436 means that Article 6 of Directive 89/104 must be interpreted to the effect that it covers any use of the trademark in the course of trade by a third party for the purpose of identifying or referring to, in accordance with honest practices in industrial or commercial matters, goods or services as those of the proprietor of that trademark (the same scope as that of Art. 14 of Directive 2015/2436), or only use of that trademark which is necessary to indicate the intended purpose of a product marketed by that third party or of a service offered by that party (a scope that is narrower than that of Article 14 of Directive 2015/2436).

Dispute before a Spanish court

Buongiorno Myalert SA (hereinafter referred to as  “Buongiorno”), a provider of information services via the Internet and mobile telephone networks, was the defendant in the main proceedings. In 2010, Buongiorno launched an advertising campaign for a certain paid subscription. As a part of the campaign, the subscription entitled subscribers to participate in a prize draw with a €1,000 „ZARA gift card” being one of the prizes . The campaign used the „ZARA” sign in a rectangle, reminiscent of the gift cards design.

The dispute was brought by Industria de Diseño Textil SA (hereinafter: Inditex), a Spanish clothing company holding that owns such brands as Zara, Pull&Bear, Bershka and Stradivarius. Among other things, it holds the rights to the domestic trademark „ZARA” in Spain. Inditex brought an action against Buongiorno claiming infringement of the exclusive rights conferred by a domestic trademark. According to Inditex, Buongiorno’s actions created a likelihood of confusion and were intended to take advantage of and cause detriment to the trademark’s reputation.

Buongiorno denied any infringement, arguing that the „ZARA” mark was used occasionally, not as a trademark, but to refer to one of the gifts offered to the winners of the prize draw (referential use of someone else’s mark). According to Buongiorno, such use comes under the lawful uses of third parties’ distinctive signs under Spanish law (in this case, the Spanish norms were the transposition of Directive 2008/95 in force at the time of the dispute, i.e. in 2010).

The courts of first and second instance dismissed Inditex’s claim. Therefore, it brought an extraordinary appeal on a point of law before the Tribunal Supremo which, in turn, decided to refer the case to the CJEU with a request for preliminary ruling.

The Tribunal Supremo had doubts about the scope of Article 6 of Directive 89/104. In its view, CJEU case law and the new text of the provision indicated that the scope of Article 6 of Directive 89/104 was limited to situations of use of another’s sign necessary to indicate the intended use of the goods, and therefore more general behaviour (as referred to in Article 14 of Directive 2015/2436), that is, the use of a trademark for the purpose of indicating or referring to goods or services as those of the owner of the trademark in question may not be covered by its application.

CJEU ruling

According to the wording of Article 6(1)(c) of Directive 2008/95, the trade mark must not entitle its proprietor to prohibit a third party from using the mark in trade where it is necessary to indicate the intended purpose of a product or service, especially as accessories or spare parts.

However, Article 14(1)(c) of Directive 2015/2436 states, first and foremost, that it covers the use of the trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark, and then it reproduces the normative contents of Article 6(1)(c) of Directive 2008/95, preceded by the expression ‘in particular’.

It follows that the scope of Article 6(1)(c) of Directive 2008/95 is more limited than that of Article 14(1)(c) of Directive 2015/2436, in that Article 6(1)(c) covers only the use of the trade mark in trade where it is necessary to indicate the intended purpose of a product or service.

These conclusions are confirmed by the wording of recital 25 of the proposal for a Directive (2015/2436) of the European Parliament and the Council which indicated that ‘the proprietor should not be entitled to prevent the general fair and honest use of the mark for identifying or referring to the goods or services as those of the proprietor. In paragraph 79 of his opinion on the proposal, the Advocate General noted that the Commission’s intention to expand the scope of the restriction previously contained in Directives 89/104 and 2008/95 can be interpreted from this recital.

In its case law, however, the CJEU stated that the application of Article 6(1)(c) of Directive 2008/95 is not limited to situations in which it is necessary to use a trademark to indicate the intended purpose of a product ‘as accessories or spare parts’. However, the situations coming within its scope must be limited to those which correspond to the objective of that provision.

This means that Article 6(1)(c) of Directive 89/104/EEC must be interpreted as meaning that it covers use of the trademark in the course of trade by a third party for the purpose of identifying or referring to, in accordance with honest practices in industrial or commercial matters, goods or services as those of the proprietor of that trademark only when such use of the trademark is necessary to indicate the intended purpose of a product marketed by that third party or of a service offered by that party.

In the present case, the national court must determine whether Buongiorno, by its advertising campaign launched for a subscription to one of its services, uses the ZARA trademark within the meaning of Article 5 of Directive 2008/95, and if that is the case, to assess in light of Article 6(1) of that Directive whether that use was necessary to indicate the intended purpose of a service which Buongiorno offered and, as appropriate, whether that use was made in accordance with honest practices in industrial or commercial matters.

Commentary

The ruling confirms that the amendment of the wording of Article 14 of Directive 2015/2436 was intended to broaden the scope of Article 6 of Directive 89/104 and to implement the premise that the proprietor should not be entitled to prevent the general fair and honest use of the mark for identifying or referring to the goods or services as those of the proprietor.

This is an extremely important ruling especially in the Polish legal context since Article 156(1)(c) of the Industrial Property Law introducing the referential use of a trademark as a limitation of the right to a trademark corresponds to Article 6 of Directive 89/104 and Directive 2008/95, and not to the currently applicable Article 14 of Directive 2015/2436. This means that Article 14(1)(c) of Directive 2015/2436 is not properly implemented in Polish law. The ruling at hand clearly shows that this is the case, and the wording of the Polish provision is not in compliance with the above-mentioned Directive.

Full text of the CJEU judgement is available here:

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62022CJ0361