OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 21 March 2013 ( 1 )

Case C‑65/12

Leidseplein Beheer BV

H.J.M. de Vries

(Request for a preliminary ruling from the Hoge Raad der Nederlanden)

‛Directive 2008/95/EC — Trade mark law — Right of the proprietor of a registered trade mark — Trade mark with a reputation — Use made by a third party, without due cause and unfairly, of a sign identical with, or similar to, the trade mark with a reputation — Notion of ‘due cause’’

I – Introduction

1. Any Member State may grant proprietors of trade marks with a reputation the right to prevent third parties from using a similar sign in cases 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 with a reputation.

2. Following the Court of Justice’s earlier discussion of certain aspects of potential due cause in the context of internet advertising using keywords, ( 2 ) it is now necessary to address the extent to which the bona fide use of a sign prior to the date of application for registration of a similar trade mark which later gains a reputation can justify the continued use of that sign. Mr de Vries and his undertaking, Leidseplein Beheer BV, were already using the image of a bulldog with the words ‘The Bulldog’ long before the date on which Red Bull’s trade marks were first registered. At issue now is whether Red Bull can prohibit the use of this sign for an energy drink.

II – Legal framework

A – European Union law

3. Article 5(1) of the Trade Marks Directive ( 3 ) governs the rights enjoyed by all proprietors of trade marks: ‘The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; (b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.’

4. Article 5(2) of the Trade Marks Directive governs the additional rights enjoyed by the proprietors of trade marks with a reputation: ‘Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is … similar to … the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State concerned and 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.’

B – Law of the Netherlands

5. Trade mark law in the Netherlands is laid down in the Benelux Convention on Intellectual Property, signed on 25 February 2005 in The Hague. Article 2.20(1)(c) of the Convention corresponds to Article 5(2) of the Trade Marks Directive.

III – Facts of the case and request for a preliminary ruling

6. Red Bull is the proprietor of the word/figurative mark ‘Red Bull Krating-Daeng’, which was registered on 11 July 1983 for Class 32 (non-alcoholic drinks). This undertaking’s best known product is the energy drink of the same name.

7. Mr de Vries is the proprietor of the word/figurative mark ‘The Bulldog’, which was registered on 14 July 1983, also for Class 32 (non-alcoholic drinks), as well as similar, more recent trade marks. (Long) before Red Bull filed its trade mark in 1983, Mr de Vries was using this sign for ‘hotel, restaurant and café services involving the sale of drinks’ and for various merchandising activities, namely, according to information provided by him, since 1975 inter alia for so-called ‘Coffeeshops’, but also for cafés, a hotel, a bicycle-hire business and, since 1997, for an energy drink. Leidseplein Beheer BV appears to be the company which Mr de Vries uses to carry out these activities.

8. Red Bull seeks particularly to prevent Mr de Vries from producing and distributing energy drinks in packaging bearing the sign ‘Bull Dog’, any other sign in which the word element ‘Bull’ appears, or other signs which are confusingly similar to Red Bull’s registered trade marks.

9. Mr de Vries was successful at first instance before the Rechtbank Amsterdam (Amsterdam District Court); by contrast, on appeal before the Gerechtshof te Amsterdam (Amsterdam Regional Court of Appeal), Red Bull was successful. Mr de Vries’ appeal in cassation is currently pending before the Hoge Raad (Netherlands Supreme Court).

10. According to the request for a preliminary ruling, the similarity between the two signs has not yet thus far been adequately assessed. A likelihood of confusion cannot therefore be taken as established for the purposes of the present proceedings. In addition, the request for a preliminary ruling leaves open the question whether Mr de Vries has sought to obtain a share in Red Bull’s multi-million turnover for energy drinks, as well as whether, riding on the coat-tails of Red Bull’s trade mark with a reputation, he has taken unfair advantage of that reputation. ( 4 )

11. Rather, the Hoge Raad has doubts as to the extent to which the prior use of the sign can constitute due cause. It has therefore referred the following question to the Court of Justice: Is Article 5(2) of [the Trade Marks Directive] to be interpreted as meaning that there can be due cause within the meaning of that provision also where the sign that is identical or similar to the trade mark with a reputation was already being used in good faith by the third party/parties concerned before that trade mark was filed?

12. The parties to the main proceedings, Leidseplein Beheer B.V., together with H.J.M. de Vries, and Red Bull GmbH, as well as the Italian Republic and the European Commission, have submitted written observations. With the exception of Italy, they also took part in the hearing held on 27 February 2013.

IV – Legal analysis

A – Background to the question referred

13. With regard, first, to the applicability of the rules set out in Article 5(2) of the Trade Marks Directive, it is settled case-law that, even though those provisions make express reference only to the situation in which use is made of a sign which is identical with, or similar to, a trade mark with a reputation in relation to goods or services which are not similar to those for which the trade mark is registered, the protection there provided for applies, a fortiori, also in relation to use of such a sign in relation to goods or services which are identical with, or similar to, those for which the mark is registered. ( 5 ) They are therefore also applicable to the case at issue, which concerns identical goods, namely energy drinks.

14. With regard to the extent of the protection conferred on trade marks with a reputation, it is thus clear from the wording of Article 5(2) of the Trade Marks Directive that the proprietor of such a mark is entitled to prevent the use by third parties, in the course of trade, without his consent and without due cause, of a sign identical with, or similar to, that trade mark where that use takes unfair advantage of the distinctive character or the repute of the trade mark or is detrimental to that distinctive character or repute. The exercise of that right by the proprietor of the trade mark with a reputation is not conditional upon the existence of a likelihood of confusion on the part of the relevant section of the public. ( 6 )

15. The types of injury against which Article 5(2) of the Trade Marks Directive provides protection are, firstly, detriment to the distinctive character of the trade mark (‘dilution’), secondly, detriment to the repute of the mark (‘tarnishment’) and, thirdly, the taking of unfair advantage of the distinctive character or the repute of the trade mark (‘free-riding’), just one of those types of injury sufficing for application of the rule set out in that provision. ( 7 )

16. In the national proceedings, the appeal court – the Gerechtshof – considered the ‘taking of unfair advantage of the distinctive character or the repute of the trade mark’, also referred to as ‘free-riding’, to be established. This infringement of the trade mark proprietor’s rights relates, not to the detriment caused to the mark, but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation. ( 8 )

17. The Hoge Raad postponed its decision on the relevant ground of Mr de Vries’ appeal in order first to ask the Court of Justice whether there can also be due cause, within the meaning of Article 5(2) of the Trade Marks Directive, in the case where the sign that is identical or similar to the trade mark with a reputation was already being used in good faith by the third party or parties before that trade mark was filed.

B – Red Bull’s contention

18. Red Bull’s position on this issue is that there will be due cause only in the case where the user of a sign has a need to use that specific sign, and, irrespective of the harm caused by that use to the trade mark proprietor, he could not reasonably be expected to refrain from such use. In other words: there must be a compelling ground under which he cannot refrain from the use at issue. In support of this position, Red Bull refers to a judgment of the General Court, ( 9 ) to a decision of one of the Boards of Appeal of OHIM, ( 10 ) and to the earlier case-law of the Benelux Court of Justice. ( 11 )

C – The wording

19. The Dutch-language version of Article 5(2) of the Trade Marks Directive is potentially somewhat closer to the restrictive position taken by Red Bull than are other language versions. The Dutch version does not use the concept of ‘due cause’ (‘rechtvaardige reden’), but rather the concept of a ‘proper ground’ or a ‘valid ground’ (‘geldige reden’). This version could almost be understood as requiring the existence of a specific right to use the sign, for example, a right to a name, or an earlier trade mark.

20. By contrast, the German concept of ‘rechtfertigender Grund’, but also the corresponding concepts in the French-language version – ‘juste motif’ – and the English – ‘due cause’ – can also be understood to mean that the ground for the use of the sign need not be compelling in nature. On this basis, the existence of a legitimate interest which prevails over the interests of the proprietor of the trade mark with a reputation might also suffice.

21. Prima facie, it is not evident why the prior use of a sign should not be capable of forming the basis of a potentially prevailing legitimate interest.

22. However, the different language versions of a provision of European Union law must be uniformly interpreted. Hence, in the case of divergence between those versions, in principle the provision must be interpreted by reference to the purpose and general scheme of the rules of which it forms part. ( 12 )

D – The scheme of the Trade Marks Directive

23. Red Bull does in fact rely, in support of its contention, on the scheme of the Trade Marks Directive and its implementation in the Benelux Convention. This is based on the rules on the protection of so-called de facto trade marks, that is to say, trade marks which are not registered but are instead protected only by reason of their use.

24. Article 4(4)(b) of the Trade Marks Directive permits Member States to refuse registration of a trade mark in the case where rights to a non-registered trade mark already exist and that non-registered trade mark confers on its proprietor the right to prohibit use of the subsequent trade mark. Furthermore, Article 6(2) permits Member States to recognise earlier rights which apply only in a particular locality. As recital 5 in the preamble makes explicit, Member States may therefore recognise and protect non-registered trade marks but are not obliged to do so.

25. The Benelux Convention does not make use of these options. Under its provisions, a trade mark can be acquired only by registration and not by mere use. Red Bull’s position is that, in a pure registration system, the sole corrective measure is the sanctioning of trade mark applications made in bad faith under Article 3(2)(d) of the Trade Marks Directive. Italy also submits that, in such a system, the prior use of a sign in good faith cannot constitute due cause under Article 5(2).

26. The thinking behind this line of argument is that recognition of the prior use of a sign in good faith as potentially constituting due cause within the meaning of Article 5(2) of the Trade Marks Directive would have the indirect effect of protecting non-registered trade marks.

27. That view is, however, unconvincing. Recognition as potential due cause means neither that the party which has used the sign without registering it is able to take advantage of the protective rights conferred by a trade mark, nor does it follow from such recognition that it would be accepted as due cause in every case.

28. Moreover, the use of a sign which is potentially justified under Article 5(2) of the Trade Marks Directive can still be prohibited pursuant to Article 5(1) in the case where there is a likelihood of confusion, since in this case there would be a risk that consumers might be misled.

29. To counter this last consideration, Red Bull argues that the protection offered by Article 5(2) of the Trade Marks Directive is broader than that offered by Article 5(1); this argument, however, is also unconvincing. In fact, these two rights have different functions. The exclusive purpose of Article 5(2) is to protect the proprietor of the trade mark, while Article 5(1) serves also to protect the consumer from deception. Thus, the protection of simple trade marks may apply in cases in which the protection of trade marks with a reputation does not apply, and vice versa.

30. For the sake of completeness, it should also be noted that another aspect of the scheme of the Trade Marks Directive could be relevant, namely the relative grounds for refusal to register a trade mark with a reputation pursuant to paragraphs (3) and (4)(a) of Article 4. Indeed, the same terminology is used in these provisions as is used in Article 5(2). However, since the sign at issue in the present case had already been registered before ‘Red Bull’ became a trade mark with a reputation, there is no need to reach a decision on the potential consequences for the registration of trade marks of the interpretation of Article 5(2) suggested here.

31. As such, the scheme of the directive also does not require that the restrictive view taken by Red Bull be accepted.

E – The balancing exercise required

32. It is therefore not surprising that, in its recent Interflora judgment, upon which the Hoge Raad also relies in order to justify the need for its request for a preliminary ruling, the Court of Justice did not understand the concept of ‘due cause’ as requiring that the ground be compelling. That case concerned an advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation. The advertisement proposed an alternative to the goods or services of the proprietor of the trade mark with a reputation – without, however, offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark concerned. As a rule, such use comes within the ambit of fair, healthy competition in the sector for the goods or services concerned and is thus not without ‘due cause’ for the purposes of Article 5(2) of the Trade Marks Directive. ( 13 )

33. For the purposes of healthy and fair competition with the proprietor of a trade mark with a reputation, it may indeed be helpful to use that trade mark as a keyword when advertising on the internet. Such advertising is, however, not a precondition which is strictly necessary for that competition.

34. Consequently, in the Interflora judgment the Court did not rely on the absence of any alternative to the use of trade marks with a reputation as keywords. Rather, its decision was based on the result of a balancing exercise which weighed up the detriment to the trade mark against other legal rights, in particular freedom of competition.

35. Moreover, a balancing exercise is also more consistent with the Court’s case-law to the effect that the purpose of the directive is generally to strike a balance between the interest of the proprietor of a trade mark in safeguarding its essential function, on the one hand, and the interests of other economic operators in having signs capable of denoting their products and services, on the other. ( 14 )

36. Article 5(2) of the Trade Marks Directive also calls for a balancing exercise. The proprietor of a mark with a reputation cannot prevent all uses of the mark or a similar sign, but only use which, without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. In this context, the detriment or taking of unfair advantage is closely linked to the absence of due cause. This is because, where the use of the sign is justified, there is generally no room for a negative assessment deeming the use to be unfair. ( 15 )

37. It is therefore opportune to link the examination of due cause to the examination of whether the use of a sign takes unfair advantage of the trade mark’s distinctive character or repute. This calls for a comprehensive assessment of all factors relevant to the circumstances of the specific case. ( 16 )

38. In this context, the Court has focussed in particular on the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue, as well as the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the earlier mark, the stronger that mark’s distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. The more immediately and strongly the trade mark is brought to mind by the sign, the greater will be the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or repute of the trade mark or is, or will be, detrimental to them. ( 17 )

39. In carrying out this examination, the national courts will have to take into account the fact that identical goods are involved and, as such, an association with the trade mark – which is very well known in relation to those goods – is particularly likely to arise. The signs are not, however, identical, but rather have only the word ‘Bull’ in common, which in Mr de Vries’ sign is merely a component of the word Bulldog and is associated with an entirely different image.

40. The essential characteristic of taking unfair advantage is, however, that a third party attempts, through the use of a sign similar to a trade mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of his own in that regard, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image. ( 18 )

41. In this assessment, great importance can be attached to the fact that the sign ‘The Bulldog’ has already been registered as a trade mark for non-alcoholic drinks since 1983. While the trade mark ‘Red Bull’ predates it by a few days, it is nevertheless doubtful that the former already had a reputation at that time. In principle, therefore, with regard to this trade mark Mr de Vries can rely on the principle of respect for acquired rights, which is recognised by European Union law, ( 19 ) to justify its use for a non-alcoholic energy drink. The exercise of an existing right cannot, in principle, be unfair and without due cause simply because another trade mark subsequently achieves a high degree of recognition, with the result that its scope of protection conflicts with the scope of protection of existing marks.

42. On the other hand, it must be recognised that not even Mr de Vries is claiming to have used the trade mark for energy drinks prior to 1997. Nor does it appear that the Hoge Raad addressed the effects of this trade mark in its request for a preliminary ruling. Rather, it focussed on the use of the trade mark for other economic activities in the catering sphere.

43. However, such use must also be taken into account in the balancing of interests, as this use is attributable to the third party’s own effort, who at any rate can no longer be accused of jumping on coat-tails without effort on his own part. Rather, the prior use may itself have led to a power of attraction, reputation and prestige accruing to the sign, which will now have to be taken into account as legitimate interests of the third party. This also applies to a lesser extent in the case where the sign was used subsequent to the filing of the trade mark, but before that mark gained a reputation. What weight ought to be accorded to the use of signs which took place after a trade mark had gained a reputation need not be determined in the present case.

44. Since a power of attraction, reputation and prestige can result from the prior use of a sign, its current use can, moreover, be capable of functioning as an indicator of origin and, in so doing, contribute to the provision of better information for consumers. In the present case, therefore, it is possible that consumers, at least in Amsterdam, will be better able to associate the sign ‘The Bulldog’ with a particular undertaking than the names ‘De Vries’ and ‘Leidseplein Beheer’ or a completely new identifier.

45. The possibility that Mr de Vries may have begun to market energy drinks only after Red Bull had enjoyed great success with this product also does not negate his legitimate interest in employing a previously used sign. The purpose of trade mark law is not to prevent particular undertakings from participating in competition on particular markets. Rather, such competition within the internal market is considered desirable, as the Interflora judgment shows. ( 20 ) Within the framework of this competition, undertakings should in principle also be entitled – subject to any likelihood of confusion – to use the sign under which they are known on the market.

46. Accordingly, the example provided by Red Bull, of an established bookshop with the name ‘Green Apple’ which starts to sell computers under this designation, cannot automatically be regarded as an infringement of the rights pertaining to the trade mark with a reputation ‘Apple’ either.

47. However, as the Commission correctly points out, it is still possible to pursue remedies against particular types of use of previously used signs in the case where, taking all relevant facts into consideration, they are in fact likely to cause detriment to or take unfair advantage, without due cause, of the distinctive character or the repute of a trade mark with a reputation. This could be the case, for example, where the presentation of the sign gives the consumer the impression that there is a particularly close link to the trade mark with a reputation.

48. All of these factors will have to be taken into account in detail by the competent national courts when they examine whether the use of a sign takes unfair advantage, without due cause, of the distinctive character or the repute of a trade mark with a reputation.

V – Conclusion

49. I accordingly propose that the Court answer the question on which a preliminary ruling is requested in the following terms: In weighing up whether a third party has, within the meaning of Article 5(2) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks, taken, without due cause, unfair advantage of the distinctive character or the repute of a trade mark with a reputation by using a sign similar to that trade mark with a reputation, if that third party was already using the sign in good faith for other goods or services before the trade mark with a reputation was filed or gained a reputation, such a fact will be taken into account in that third party’s favour.

( 1 ) Original language: German.

( 2 ) Case C-323/09 Interflora and Interflora British Unit [2011] ECR I-8625, paragraph 91.

( 3 ) The request for a preliminary ruling makes reference to First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1). The applicable legislation, however, is Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks (OJ 2008 L 299, p. 25), although the content of the relevant provisions does not differ from that of the earlier directive.

( 4 ) Point 3.10.2 of the request for a preliminary ruling.

( 5 ) Case C-292/00 Davidoff [2003] ECR I-389, paragraph 30; Joined Cases C-236/08 to C-238/08 Google France and Google [2010] ECR I-2417, paragraph 48; as well as Interflora and Interflora British Unit (cited in footnote 2), paragraph 68.

( 6 ) Case C-487/07 L’Oréal and Others [2009] ECR I-5185, paragraph 36, and Interflora and Interflora British Unit (cited in footnote 2), paragraph 70 et seq.

( 7 ) Case C-252/07 Intel Corporation [2008] ECR I-8823, paragraph 27 et seq.; L’Oréal and Others (cited in footnote 6), paragraphs 38 and 42; as well as Interflora and Interflora British Unit (cited in footnote 2), paragraph 70 et seq.

( 8 ) L’Oréal and Others (cited in footnote 6), paragraph 41, and Interflora and Interflora British Unit (cited in footnote 2), paragraph 74.

( 9 ) Judgment of 25 March 2009 in Case T‑21/07 L’Oréal v OHIM – Spa Monopole (SPALINE), paragraph 43.

( 10 ) Decision of the Second Board of Appeal of OHIM of 10 November 2010 (OStCaR/OSCAR) (R 1797/2008‑2), paragraph 63.

( 11 ) Judgment of 1 March 1975, Bols/Colgate Palmolive (Claryn/Klarein), GRUR International 1975, 399 (401).

( 12 ) Case 19/67 Van der Vecht [1967] ECR 345, at 354; Case 30/77 Bouchereau [1977] ECR 1999, paragraphs 13 and 14; Case C-56/06 Euro Tex [2007] ECR I-4859, paragraph 27; and Case C-426/05 Tele2 Telecommunication [2008] ECR I-685, paragraph 25.

( 13 ) Interflora and Interflora British Unit (cited in footnote 2), paragraph 91.

( 14 ) Case C-145/05 Levi Strauss [2006] ECR I-3703, paragraph 29, and Case C-482/09 Budějovický Budvar [2011] ECR I-8701, paragraph 34.

( 15 ) See Advocate General Mengozzi’s Opinion in Case C‑487/07 L’Oréal and Others (cited in footnote 6), point 105 et seq., Hacker, F., ‘§ 14 – Ausschließliches Recht – Sonderschutz der bekannten Marke’, in Ströbele/Hacker, Markengesetz‑Kommentar (published by Carl-Heymanns-Verlag), 9th ed., Cologne 2009, p. 925, n. 323, Fezer, K.-H., Markenrecht, 4th ed., Munich 2009, § 14, p. 1167, n. 814.

( 16 ) Intel Corporation (cited in footnote 7), paragraph 68, and L’Oréal and Others (cited in footnote 6), paragraph 44.

( 17 ) Intel Corporation (cited in footnote 7), paragraphs 67 to 69, and L’Oréal and Others (cited in footnote 6), paragraph 44.

( 18 ) L’Oréal and Others (cited in footnote 6), paragraph 49; Joined Cases C‑236/08 to C‑238/08 Google France and Google (cited in footnote 5), paragraph 102; and Interflora and Interflora British Unit (cited in footnote 2), paragraph 89.

( 19 ) Case C-168/09 Flos [2011] ECR I-181, paragraph 50.

( 20 ) Interflora and Interflora British Unit (cited in footnote 2), paragraph 91. See also Article 3(3) TEU on the establishment of an internal market and Protocol No 27 on the internal market and competition, as well as Case C-496/09 Commission v Italy [2011] ECR I-11483, paragraph 60.