CJEU rules on Trade Mark Referential Use Exception in ZARA and AUDI cases

CJEU rules on Trade Mark Referential Use Exception in ZARA case

In a recent decision (C-361/22) on 11 January, the European Court of Justice (ECJ) addressed the issue of referential use in cases of alleged trade mark infringement and clarified its interpretation under European Union law.

The case involves Buongiorno Myalert SA (Buongiorno), an Italian provider of mobile applications, and Inditex, owner of the ZARA trade mark. In 2010, Buongiorno launched an advertising campaign for its "Club Blinko" service, offering prizes including a €1,000 ZARA gift card: after clicking on a banner to access the draw, subscribers were shown the "ZARA'' sign in a rectangular shape resembling a gift card. Inditex sued for trade mark infringement.

Firstly, the Provincial Court of Madrid, Spain, dismissed Inditex's action on the grounds that Buongiorno's use did not damage the reputation of the ZARA trade mark and that Buongiorno’s use of the trade mark was admissible as a use necessary to identify the goods there were offering (i.e. a Zara gift card).. Dissatisfied with this decision, Inditex appealed to the Spanish Supreme Court, which referred the case to the European Court of Justice for a preliminary ruling. The key issue was the interpretation of Article 6(1)(c) of Directive 2008/95 (the “old” Trade Mark Directive harmonising the law of EU member states regarding trade marks, no longer in force but applicable to facts which happened in 2010), which allows third parties to use a trade mark if it is necessary to indicate the intended purpose of a product or service, such as accessories or spare parts, and its alignment with Article 14(1)(c) of Directive 2015/2436 (the “new” Trade Mark Directive which replaced the former), which extends this provision to allow the use of a trade mark to identify the products or services as those of the proprietor of that trade mark if it is necessary to indicate their intended purpose.

In summary, the Court had to clarify the scope of the limitation of the effects of a trade mark, in particular in cases where the use of the trade mark is necessary to indicate the intended purpose of a product or service. While the Spanish court had to apply the “older” directive (due to the moment in which the relevant acts took place), it wished to know if it should apply it and interpret it taking into account the wider scope of the “new” directive.

While the difference seems minimal, it actually holds implications in terms of applying these clauses and the question therefore could brought down to the following: should the “old” directive be interpreted as covering “any use of the trade mark for the purpose of identifying goods or service of the trade mark proprietor”, or covering only “use of the trade mark which are strictly necessary to indicate the purpose of a product”.

Upon accepting the question, the CJEU pointed out that, in line with settled case-law, when interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it appears and the objectives pursued by the act of which it forms part.

By comparing Article 6(1)(c) of Directive 2008/95 with Article 14(1)(c) of Trade Marks Directive 2015/2436, the Court highlighted that the latter provision has a wider scope than the earlier one. This was in line with the objective of Article 6(1)(c), which is to allow providers of complementary goods or services to use a trade mark to inform the public of the intended purpose of those goods or services.

In addition, the Court considered the legislative history supporting this interpretation. In particular, the 2013 Proposal for a Directive of the European Parliament and of the Council noted the relevance of an explicit limitation covering referential use in general, suggesting that Article 14(1)(c) was an extension of the original provision rather than a mere clarification of Article 6(1)(c).

Lastly, the CJEU concluded that both the legislative history and the objective of the provision supported a more restrictive interpretation of Article 6(1)(c) of Directive 2008/95. Nevertheless, the Court left it to the Spanish Supreme Court to determine whether Buongiorno's use of the ZARA trade mark was necessary, within the meaning of Article 6(1)(c), to indicate the intended purpose of the service offered and whether it was carried out in accordance with honest practices in industrial or commercial matters.

CJUE Upholds AUDI trade mark

On 25 January, the European Court of Justice (ECJ) issued a relevant judgment in the Audi case (C-334/22), confirming the possibility of infringement of the Audi trade mark in its dispute with an online seller of radiator grilles for older Audi models.

The defendant named “GQ” in the proceedings, an individual, manufactured and sold radiator grilles for classic Audi models from the 1980s and 1990s. Those grilles had a special feature: they contained a hole in the shape of the Audi logo so that the customer could place and fix the original Audi emblem on the grill. GQ claimed that this was a way of respecting the design of the old cars and making them easier to identify.

However, Audi AG, the well-known German company which owns the EU trade mark No. 000018762, which protects the shape of the distinctive Audi logo (four intertwined rings) for vehicles and parts including engines, claimed that the defendant was infringing its trade mark by reproducing the shape of the logo on radiator grilles and brought the case before the Regional Court in Warsaw, Poland.

The Polish court, faced with the interpretation of Article 14(1)(c) of the EU Trademark Regulation (EUTMR), asked the CJEU whether the use of the mark on radiator grilles was covered by the exception allowing its use to indicate the purpose of a product, such as accessories or spare parts.

The Court did not consider that the exception in Article 14(1)(c) could apply in this case. It interpreted the use of the shape of the Audi logo as not being necessary to indicate the intended purpose of the grilles, since it did not affect their functionality or their compatibility with older Audi cars, but was an aesthetic choice of the manufacturer. Therefore, the use of the shape of the Audi logo was not considered to be justified under this exception.

In addition, as regards possible infringement of the Audi trade mark in accordance with Article 9(2)(b) EUTMR, which provides that the owner of an EU trade mark may prohibit third parties from using signs which are identical or similar to its trade mark where there exists a likelihood of confusion on the part of the public, the CJEU found that the shape of the recess in the grille was identical to the outline of Audi's trade mark and was likely to lead consumers to believe that the grilles came from Audi or were authorised by Audi, thereby infringing the trade mark's function of indicating origin.