Dilution went under the microscope again in a recent case involving ROYAL SHAKESPEARE for beers and other drinks. Although far from its usual stage, the Royal Shakespeare Company (RSC) found an appreciative audience in the General Court, who upheld the invalidation of a third-party CTM for ROYAL SHAKESPEARE on grounds that its use would take unfair advantage of the RSC's earlier CTM for RSC - ROYAL SHAKESPEARE COMPANY (Jackson International Trading Co. Kurt D. Brühl GmbH & Co. KG v OHIM, Case T-60/10).
But a Poor Player
The story began in 2000 when Jackson International filed a CTM application for ROYAL SHAKESPEARE for beer, wine, spirits and other drinks and bar and restaurant services. The mark was registered in 2003.
Getting wind of this, in 2006 the well-known RSC, which stages Shakespearian performances, applied to invalidate the CTM on the basis of prior rights in marks including ROYAL SHAKESPEARE for inter alia theatrical services. The RSC relied in particular on an earlier CTM for RSC - ROYAL SHAKESPEARE COMPANY, in which the RSC claimed a reputation, and argued that the use of the later mark would take unfair advantage of the repute of the RSC's mark under Article 8 (5) CTMR.
The RSC lost at first instance but won on appeal. Jackson pushed the case up to the General Court, who gave the case a fresh eye, but not to Jackson's advantage.
All's Well That Ends Well
In the spotlight before the General Court, Jackson's arguments lacked lustre.
The General Court readily concluded that ROYAL SHAKESPEARE and RSC - ROYAL SHAKESPEARE COMPANY were similar marks, with the acronym "RSC" in the earlier mark likely to be seen as merely an acronym for the RSC's full name. The word COMPANY in the earlier mark was non-distinctive and denoted no more than corporate status; its absence in the earlier mark was therefore immaterial.
The RSC had proved an "exceptional" reputation among the UK public at large through its high-profile performances all around the country and through television and radio broadcasts. Its activities were widely reported, reviewed and commented on in newspapers and journals, and it enjoyed substantial corporate sponsorship from businesses across a wide range of commercial fields. Jackson had argued that the RSC's reputation extended only to a specialist group, namely theatre-goers, but it was clear from evidence that theatre-goers came from all walks of life, both affluent and modest, and that the RSC's reputation was not limited to an elite group.
In line with the ECJ's decision in PAGO ( ECR I-9429), a reputation in the UK was deemed sufficient to constitute a reputation in a substantial part of the Community in support of the claim based on the RSC's earlier CTM.
Having satisfied itself that the marks were similar and that the RSC enjoyed a reputation in its earlier mark in the UK, the Court went on to consider whether the use of ROYAL SHAKESPEARE for beer, alcoholic and non-alcoholic drinks and restaurant and bar services was likely to take unfair advantage of the distinctiveness or repute of the earlier mark.
Here the Court was influenced by the practices in the relevant trade. Although on the face of it drinks and catering services were quite far removed from theatrical performances, in fact there was considerable proximity between the goods and services because theatre-goers were accustomed to theatres providing food and drink in bars and restaurants both before and after, and in the interval of, performances.
The word combination ROYAL SHAKESPEARE was unique and was in fact the only distinctive part of the RSC's earlier CTM. Taking into account that inherent distinctiveness, as well as the similarities between the parties' marks overall and the proximity between the goods and services in actual trade, the Court considered it likely that the average consumer would make a link between the ROYAL SHAKESPEARE mark and the earlier CTM of RSC.
It was no surprise then when the Court upheld the Board of Appeal's finding that the use of the later mark would bring the RSC's earlier mark to mind and that Jackson would benefit from "the power of attraction, the reputation and the prestige" of the RSC's mark. The Court agreed that the link between the marks would give Jackson a commercial advantage over its rivals by triggering associations with the RSC, and that such advantage, for which Jackson had paid nothing, was inherently unfair.
All's well that ends well for the RSC, and the outcome of this case is really no surprise.
What is interesting about this decision, though, is the importance of trade channels and practices to the outcome. Even with a substantial reputation, it is far from certain that a claimant can succeed in proving unfair advantage, or even detriment to distinctiveness or repute, where the goods or services in question are, on the face of things, commercially quite discrete. Hence, the importance of evidence that dissimilar goods and services are nonetheless likely to be encountered together, or to be in some way linked in the public mind or experience, cannot be understated.
The concept of "image transfer", as articulated in Intel, also had another airing here as the Court acknowledged that the use of a later mark that is similar to an earlier mark with a reputation can benefit from the transfer of the image of the earlier mark, with the result that the later mark owner benefits from the image created by and nurtured through an earlier mark owner's effort and investment. To prove image transfer, one must first prove an image, though, and this is probably why the RSC took such pains to establish a reputation for high-quality theatrical performances, rather than simply for theatrical productions generally. Again, this is an area where evidence is critical.
Like PAGO, this is another case where a reputation in just one country of the EU was sufficient to show a reputation in a substantial part of the Community, so as to support a claim based on unfair advantage or detriment to the distinctiveness or repute of a CTM. The RSC's overwhelming reputation in the UK meant that this was never really in doubt, but the confirmation of this principle shows that, in relation to reputation, EU law has developed along common-sense lines. In other areas, like genuine use, it remains to be seen just how far the one-country-only rule will go.