The CJEU ruled that a trademark that peacefully coexists with a registered EUTM in one part of the EU can still infringe that same EUTM elsewhere. The circumstance that trademarks coexist in a part of the EU does not provide due cause for using the trademark in the rest of the EU. 

An EU trademark (EUTM) confers an exclusive right; its proprietor is entitled to prevent any third party not having his consent from using in the course of trade any sign:

1. which is identical with the EUTM in relation to goods or services which are identical with those for which the EUTM is registered;
2. where, because of its identity with, or similarity to, the EUTM and the identity or similarity of the goods or services covered by the EUTM and the sign, there exists a likelihood of confusion on the part of the public;
3. which is identical with, or similar to, the EUTM in relation to goods or services which are not similar to those for which the EUTM is registered, where the latter has a reputation in the EU 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 EUTM.

CJEU 20 July 2017, C-93/16 (Kerrygold/Kerrymaid)

 The proprietor of the dairy trademark KERRYGOLD (based in Ireland) brought an infringement action against the Spanish distributor of Kerry Group plc's (i.a. based in Ireland) KERRYMAID branded margarine, for use of that mark in Spain.

The Spanish court in first instance held that the only similarity between the sign KERRYMAID and the KERRYGOLD EUTM relates to the element 'kerry', which refers to an Irish county known for its cattle breeding. In addition it was undisputed that in Ireland and in the UK the KERRYGOLD EUTM and the KERRYMAID national trademark coexisted peacefully. For this reason the Spanish court in first instance held that there was no likelihood of confusion between KERRYGOLD and KERRYMAID in Spain. The court furthermore considered that, since Ireland and the UK together have a significant demographic weight in the European Union, the peaceful coexistence between that mark and that sign in those two Member States should, in view of the unitary character of the EU trademark, lead to the conclusion that there is no likelihood of confusion between that mark and that sign throughout the entire area of the European Union.

Following an appeal by the proprietor of the EUTM KERRYGOLD, the Spanish appellate court referred questions to the CJEU.

As to the matter of coexistence, the CJEU ruled that the fact of peaceful coexistence in one part of the EU does not allow the conclusion that in another part of the EU (where there is no peaceful coexistence) there will not be a likelihood of confusion. To this end the CJEU pointed out that infringement of a EUTM does not require the likelihood of confusion to take place throughout the entire territory of the EU. In an earlier decision, the CJEU had already ruled that where an EUTM court held that a trademark had been infringed in one Member State, it had to prevent the marketing of the infringing goods in all EU Member States, exception that part where no likelihood of confusion was found. The assessment of the likelihood of confusion in part of the EU must be based on a global assessment of all the relevant factors in the case concerned and that assessment must include a visual, phonetic or conceptual comparison of the mark and the sign used by the third party, which may lead, in particular for linguistic reasons, to different conclusions for one part of the European Union than for another.

As regards EUTMs with a reputation, the CJEU for similar reasons ruled that the situation regarding coexistence with an EUTM with a reputation is no different.  The fact that, in part of the EU, an EUTM with a reputation and a sign coexist peacefully, does not allow the conclusion that in another part of the EU, where that peaceful coexistence is absent, there is due cause for legitimising the use of that sign.

The CJEU further ruled that in the global assessment of the likelihood of confusion the EUTM court in one EU country (in this case Spain) can take circumstances in other Member States (in this case UK and Ireland) into account provided "that the market conditions and the socio-cultural circumstances are not significantly different". The exclusive right conferred by an EUTM is restricted where the use (by the third party) complies with honest practices in industrial matters, for instance when the sign is used as an indication of geographical origin. The CJEU pointed out the possibility that what is considered to be honest practice in industrial or commercial matters will be analysed differently in different parts of the EU.  In this specific case it was of importance that consumers from the UK and Ireland would understand "Kerry" to be a geographical indication, whereas the Spanish consumer would probably not have this understanding.

Comment

Although the EUTM is a unitary right this case once again illustrates the fact that it is important to bear in mind that relevant factors, for the question of infringement, can vary per Member State. Specifically as to for the situation of coexistence in one part of the EU, this judgment confirms that an EUTM trademark proprietor does not have to sit idle in other parts of the EU.