20 September 2011

Why You Cannot Trademark Symbols Of Despotism

Image: Soviet coat of arms on Wikimedia Commons

The image above represents nothing less than the coat of arms of the Union of Soviet Socialist Republics or the Soviet Union as this no longer existing state is known to large parts of the public.

The image above also shows what the British Virgin Islands based company called Couture Tech Ltd attempted to register as a

Community Trade Mark

with the Office for Harmonization in the Internal Market (OHIM).

Funnily, the registration sought to cover an amazingly broad spectrum of goods and services detailed by the classes 3, 14, 18, 23, 26 and 43 of the Nice Classification Agreement.

Not surprisingly to me OHIM

refused to grant registration

because it found that the mark applied for was contrary to public policy or to accepted principles of morality within the meaning of Article 7(1)(f) read with Article 7(2) of Regulation No 40/94. For the sake of clarity, it should be noted that Regulation 40/94 has been codified by Regulation No 207/2009, which is also referred to as the “CTMR”.

Couture Tech Ltd contested this finding before the Board of Appeal, but suffered another setback as in its dismissal the Board held that

symbols connected with the former USSR would be seen as contrary to public policy and to accepted principles of morality by a substantial section of the relevant public, namely the general public living in the part of the European Union which had been subject to the Soviet regime, at least as far as Hungary and Latvia were concerned.

Quoting the Hungarian Criminal Code, the Board of Appeal even stressed that the signs hammer and sickle (however together with other politically burdened insignia) represented

symbols of despotism

and hence signs which are likely to be perceived by the relevant public as being contrary to public policy or to accepted principles of morality.

What a statement, huh?

Couture Tech Ltd, obviously not willing to accept another defeat, asked the General Court to annul the decision of the Board of Appeal based on two pleas.

First, Couture Tech Ltd asserted that the Board did err in interpreting Articles 7(1)(f) and (2) of the CTMR.
Second – and since OHIM had already registered Couture’s mark No 3958154, which related to the same sign, i. e. the Soviet coat of arms – OHIM had lured Couture to rely upon the registration of the mark applied for. Consequently, OHIM did breach the principles of the protection of legitimate expectations and legal certainty.

Today the General Court issued its decision in which it dismisses all of Couture’s assertions.

Although the General Court  nearly neglects the second plea of Couture Tech Ltd, I am of the opinion that it sends a

very strong signal

not only to the brand owners and intellectual property practitioners, but also to the politicians throughout the European Union.

According to that signal, the communist symbols, especially those related to the Soviet regime represent symbols of despotism, the trivialisation of which could not be reconciled with the public policy and accepted principles of morality in Europe.

Consequently, such symbols must not be trademarked.

12 January 2011

From Russia with (trade mark) love: a reprise

Image: “Jing old bells” by Madalena Pestana on Flickr

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About a year ago I blogged on the “Christmas” trade mark that the Russian bank Vostochny Express managed to register. In that post I expressed some doubts as to the registrability of the trade mark in question. Well, I must admit that was really surprised when I found out that Vostochny Express succeeded to defend its trade mark at court in Moscow.

The bank has brought an action before the Moscow Court of Arbitration (a court competent in commercial matters) against another bank, Bank Rossisky Capital, that had used the word “Christmas” on its website. Claimant alleged the use on the website was one in commerce and thus infringing claimant’s rights in the trade mark.

Surprisingly to me, but the court found that defendant’s use was capable of creating confusion between both banks’ products and services. Consequently, the court ordered the defendant to cease using the word “Christmas” in connection with its products and services.

All this would be quite funny if it was not absurd. Like other enterprises, banks also advertise their products and services, especially loans, more extensively during Christmas time. Since the essential function of a trade mark is to identify the origin of product or service, “Christmas” clearly fails to serve as such identifier. It simply cannot distinguish one bank’s business from that of another.

Vostochniy Express’ trade mark registration is definitely amiss and even borders with abuse of law.


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6 November 2010

Stolichnaya’s trade mark right lost in transition

Image: Stolichnaya by Thor on Flickr
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This blog post does not aim to address only the consumers of good vodka. It rather aims to direct readers’s attention to the social and economical process of transition of the former communist countries that followed the fall of the iron curtain in the late 1980’s. The transition in question comprised of numerous transfers of previously state-owned assets to individuals or privately owned companies. Many of these transfers of assets have been considered to represent rather sinister business practices. I know, it is somewhat weird but it appears that the transfers, particularly those in Russia, have had also some intellectual property relevant aspects. In practical terms, I will spend some time and digital ink to analyse the case of the well-known brand “Stolichnaya”, being a transfer of asset case. In terms of dubiosity, it seems, the legal battle over Stolichnaya that is currently pending at the United States Court of Appeals for the 2nd District, delivers a good quality proof for above suspicion.

But let me first present the facts as the Second Circuit has made a great effort to summarize them in a very comprehensible fashion. Impatient readers are advised to proceed by skipping the next paragraph.

As many of you might well be aware,  “Stolichnaya” is Russian for “from the capital,” and is the name of a successfully marketed Soviet and, after the collapse of the Soviet Union, eventually Russian vodka. As part of this marketing, the All-Union Association Sojuzplodoimport (“V/O-SPI”), a Soviet-owned entity, registered the trade mark “STOLICHNAYA” with the United States Patent and Trade Mark Office (USPTO) in 1969. In 1990, V/O-SPI became the All-Union Foreign Economic Association Sojuzplodoimport (“VVO-SPI”). In 1991, VVO-SPI assigned the rights to the American trade marks, along with the authorization to import vodka under those marks into the United States, to the American corporation PepsiCo, in a contract which provided that the marks would revert to VVO-SPI in 2001.  Following the dissolution of the Soviet Union, the General-Director of the state-owned VVO-SPI at that time, Evgeniy Filoppovich Sorochkin, designed a scheme with others of the VVO-SPI staff to seize its assets for themselves. In 1992 Sorochkin registered a private Russian corporation, the Foreign Economic Joint Stock Company Sojuzplodoimport (“VAO-SPI”). Sorochkin then took various actions—including transferring assets from VVO-SPI to VAO-SPI in 1993—which were evidently sufficient to convince PepsiCo that VAO-SPI was the successor of VVO-SPI. In 1994 the two corporations entered into an agreement which adverted to the agreement between PepsiCo and VVO-SPI and which referred to VAO-SPI as the owner of the STOLICHNAYA trademarks. In 1997, VAO-SPI spawned a successor-in-interest, which subsequently sold the reversionary rights from the PepsiCo contract to a new company, Closed Auction Company Sojuzplodimport (one letter different from sojuzplodoimport) (“ZAO-SPI”), controlled by defendants Yuri Shefler and Alexey Oliynik. While still under the control of Shefler and Oliynik, ZAO-SPI sold its rights to the marks to defendant Spirits International, N.V. ( a Dutch corporation headquartered in Curacao) which is a subsidiary of defendant SPI Group SA (a Swiss company headquartered in Geneva). Both SPI corporations are hereinafter referred to as the “SPI defendants”. Claimant alleges that both of these corporations, together with defendant SPI Spirits Limited (a Cypriot corporation), are managed and owned by Shefler and Oliynik. Thus, claimant alleges, when ZAO-SPI transferred its purported trade mark rights to Spirits International, it was effectively transferring those rights to yet another corporate entity owned or controlled by Shefler and Oliynik, only this time to one located outside of Russia. In November 2000, SPI Spirits and Spirits International entered into an agreement with defendants Allied Domecq International Holdings, B.V. (a Dutch corporation) and Allied Domecq Spirits & Wines USA, Inc. (an American corporation), in which the SPI entities agreed to assign the marks to Allied Domecq beginning in 2001 until 2011, at which point the marks would revert to SPI. Allied Domecq then began marketing and selling STOLICHNAYA vodka in the United States. Meanwhile, the origianl proprietor of the STOLICHNAYA trade mark, VVO-SPI, continued to exist. In July 2001, the Russian government converted it to a different corporation, called Federal State Unitary Enterprise Economic Association Sojuzplodoimport (“FGUP VO SPI”). That same year, Russia’s government created claimant Federal Treasury Enterprise SOJUZPLODOIMPORT and Zakrytoe Aktsionernoe Obshestvo “LIVIZ” (“FTE”). In 2002, after Russia recovered rights to the Russian STOLICHNAYA marks from an SPI entity, Russia gave FTE the rights to manage (but not assign) the Russian STOLICHNAYA trademarks, and in 2005 it charged FTE with representing its interests relating to the recovery and registration of alcohol trademarks abroad. This litigation resulted.

Got it now? Once again, but in a nutshell: VVO-SPI registered the trade mark STOLICHNAYA and assigned it for a certain period to PepsiCo for operation in the US, VAO-SPI misrepresented to be the successor of VVO-SPI, VAO-SPI then sold the trade mark to ZAO-SPI, ZAO-SPI transferred its rights to the SPI defendants and they transferred to Allied Domecq. FTE, an entity created by the Russian government and purportedly granted rights by the government to manage the STOLICHNAYA trade marks, now sues two groups of defendants: (1) the SPI defendants and (2) Allied Domecq. FTE based its claims, inter alia, on fraud, misappropriation, unfair competition, copyright infringement, unjust enrichment, contributory trademark infringement, contributory trademark dilution, and contributory false designation of origin.

Curiously, but the district court dismissed the bulk of FTE’s trade mark and misappropriation claims on the ground that claimant sought to challenge ownership of a trademark that had become incontestable under the Lanham Act.

It is true that § 1065 of the Lanham Act establishes a process by which a registered trade mark may become “incontestable.” It is also true that  § 1115(b) of said act states that once the steps of the process occur, the “incontestable” trade mark provides evidence of the registrant’s ownership of that mark, subject to certain enumerated defenses, and accords the registrant the “exclusive right to use the mark”. Finally, the district court reasoned, according to § 1127 that the term “registrant” embraces the  assigns of a registered mark.  The district court consequently concluded that Allied Domecq could step into the shoes of PepsiCo and rely on the incontestable registration of the trade marks as conclusive evidence of ownership, and consequently ruled that FTE could not pursue claims purportedly challenging Allied Domecq’s ownership of the marks.

When I first read this section of the judgment, some doubts as to the correctness of the decision showed up and I thought “something must be wrong here”. I got reminded of the storyline as to how VAO-SPI became the “proprietor” of the STOLICHNAYA trade mark and Allied Domecq an “assign” respectively. It seems just too easy to be good, doesn’t it? Well, I am proud that the 2nd Circuit is of more or less the same opinion. This court, citing McCarthy, opined that only after a valid assignment of trade marks does the assignee succeed to the rights of the assignor. Obviously, an assignment obtained by fraud would not be valid. The court further held, citing In Re Ratny, that since the act of recording a document is not a determination of the document’s validity, the existence of a recorded assignment does not preclude a party from establishing its ownership of the mark in a proper forum, such as a federal court. As a result, the incontestability of a trade mark cannot serve to defeat allegations challenging the legality of the assignment. For those reasons, the 2nd Circuit vacated the district court’s decision and remanded it advising FTE to challenge the validity of the assignment of the incontestable STOLICHNAYA trade marks to Allied Domecq before the same district court.

I personally have no doubts as to FTE’s success in proving the invalidity of the assignment. The funny thing is that it takes an American court of jurisdiction to rectify a fault undertaken in the dying off Soviet Union.

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24 March 2010

Google’s AdWords do not infringe trade marks!

Google AdWords logophoto © 2010 Martin Lafrance | more info (via: Wylio)

One of my blog’s posts that has been attracting a huge user attention and hence traffic is the one relating to the case of Louis Vuitton et al vs Google. I wrote it some months ago with the purpose to cover the highly controversial opinion of Poiares Maduro, being the Advocate General assigned to this case. As many others interested in this matter, I was waiting for the final ruling to be delivered by the European Court of Justice. Well, yesterday was the day – the ruling, having the potential to prove not lesser controversial than the preceding opinion, is out and I will fulfil my promise and discuss it hereunder.

The Court had to deal with the separate proceedings that the three claimants, Louis Vuitton, Viaticum and Mr Thonet had raised against Google in France. All three claims had reached the highest French court – the Cour de Cassation. That court decided to stay the proceedings and to refer the following questions to the ECJ:

  • Must Article 5 (1) (a) and (b) of  the First Trade Mark Directive (the Directive) and Article 9 (1) (a) and (b) of the Community Trade Mark Regulation (CTMR) be interpreted as meaning that Google who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by its AdWords to create and favourably display, on the basis of those keywords, advertising links to sites offering infringing goods is using those trade marks in a manner which their proprietor is entitled to prevent?
  • In the event that the trade marks have a reputation, may the proprietor oppose such use under Article 5 (2) of the Directive and Article 9 (1) (c) of the CTMR?
  • In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under either the Directive or the CTMR, may Google be regarded as a “hosting” provider within the meaning of Article 14 of the E-Commerce Directive, so that that Google cannot incur liability until it has been notified by the trade mark proprietor of the unlawful use of the sign by the advertiser?

In answering the first question, the Court addressed whether Google (through its AdWords service) used the trade marks in the first place. The Court thereby opined that Google did not and I personally find the Court’s reasoning more than remarkable. Accordingly, not even the fact that Google operates its AdWords “in the course of trade” as it enables advertisers to select signs identical with trade marks as keywords and stores those signs and displays its clients’ ads on the basis thereof suffices to open Google’s dealing to a “use” within the terms of Article 5 of the Directive and Article 9 of the CTRM. This conclusion, the Court holds, is neither called into question by the fact that Google is paid by its clients for the use of those signs.

The Court, at least, grants a cold comfort to the trade marks proprietors by stating that Google’s clients used the signs identical with, or similar to, the proprietors’ trade marks and that, Google allowed its clients to use signs which are identical with, or similar to, trade marks, without itself having used those signs.

The logical questions that demands an answer would be respectively: is a proprietor entitled to prevent a client of Google to use signs which are identical with, or similar to, proprietor’s trade marks? The Court’s opinion thereto is rather restrictive and conveys once again bad news for trade marks proprietors: the exercise of that right must be reserved only to cases in which third party’s use of the sign affects or is liable to affect the functions of the trade mark. A proprietor, accordingly, cannot in general terms oppose the use of a sign identical with the mark if that use is not liable to cause detriment to any of the functions of that mark. With regard to the instant cases, the Court concluded that proprietors cannot prevent third parties from using keywords selected on Google’s AdWords and displayed in connection with goods or services identical with those for which that mark is registered, unless that ad enables an average internet user to ascertain that the goods or services referred to therein originate from a third party.

In answering the second question, the Court denied a “use” of Google within Article 5 (2) of the Directive  or within Article 9 (1) (c) of the CTMR. However, third parties free-riding over well known and reputable trade marks and by this gaining advantages may be considered infringing such trade marks and be very well restrained from doing so.

In answering the third question, the Court found that Google was an information society service provider and was thus entitled to benefit from the liability exemptions guaranteed by the E-Commerce Directive with respect to such providers. The Court further pointed out that the mere facts that Google’s services were subject to payment,  could not have the effect of depriving Google of the above exemptions from liability.

Overall, the Court acquitted Google, so to say, of all charges.

What does the ruling mean for the proprietors of trade marks? Well, I believe there are both, bad but also good news for those. The bad news are that the ruling weakens the proprietors’ exclusive rights in their trade marks. It literally scrapes a layer or even two from the exclusivity to use such trade marks.

The good news, however, consist in the legal certainty that this ruling provides for, as it also regards a row of questions that are of general importance for trade marks law. Put it another way – it is nothing but the eternal dilemma: is the glass half empty or just half full?

 

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29 January 2010

Whose iPad is it anyway?

iPad Casephoto © 2010 Yutaka Tsutano | more info (via: Wylio)

You have certainly heard, seen or otherwise perceived (by the way who hasn’t?) that couple of days ago Apple presented its iPad to the public. However surprisingly, the fancy product name “iPad” that seems to perfectly fit into the iFamily of “iBook”, “iPod” and “iPhone”, could now enter the hostile territory of trade mark infringement.

It is funny, but the sign “iPad” has in recent years been really coveted by enterprises around the globe . So much, as some of these have undertaken trade mark registrations under different jurisdictions. For instance, the The Trade Marks and Designs Registration Office of the European Union  (OHIM) has granted the word mark “iPAD” for motors, engines and drives to Siemens and the word mark “IPAD” to the French Company STMICROELECTRONICS SA for, in particular, integrated circuits and termination lines that, however, may be also applied in cellular phones, computers and computer peripherals.

OHIM has further received an application for registration on 18 January 2010 and this is  filed by a US company named IP Application LLC. The application covers products and services classes such as computers, printed matter, toys, telecommunications and web services that just hardly fail to fit into Apple’s marketing target. It has been said in news reports that in 2009 Apple have used a proxy to file for a registration on Trinidad and Tobago in order to secure a priority date. This same Trinidadian registration is mentioned in IP Applications LLC’s application before OHIM. Any doubts why may be behind that act?

The above application, however, may cause some problems to its applicant. The Community Trade Mark Regulation states a so called relative ground for refusal where a trade mark applied for is identical with an earlier trade mark and the goods or services for which registration is sought are identical with the goods or services for which the earlier trade mark is protected. Consequently, STMICROELECTRONICS SA might successfully oppose Apple’s European registration.

As if that were not enough, the war clouds for Apple are gathering over another – much more promising – battlespace.

2002 Fujitsu came up with a handheld computer named “iPad” for use by shop assistants and has since then attempted to file for a trade mark registration with the US Patent and Trade Mark Office (USPTO).

Fujitsu iPad. Courtesy to TheRegister

Fujitsu’s application to register iPad name was deterred by an earlier filing by Magtek, an information technology security company based in Seal Beach, California, for a handheld number-encrypting device.

Magtek IPAD. Courtesy to Magtek.

The consequence was that the USPTO listed Fujitsu’s application as abandoned in the beginning of 2009, but the Tokyo company managed to revive its application in June 2009. In the autumn of the same year, Apple is believed to have filed requests of opposition before the USPTO and has now time until 28 February 2010 to submit its final opposition statement.

See whether the Canadian lingerie manufacturing company Coconut Grove, to which the USPTO assigned the trade mark “IPAD” for padded bras, will join the technology giants’ war game.

 

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14 January 2010

From Russia with (trade mark) love

I have always known that Russia and Russians are different. So totally different that they can hardly be compared with other nations’ representatives. And this appears to be true also with respect to their dealings with intellectual property.

According to the Russian newspaper Komersant, Vostochniy Express, a Russian bank, has successfully registered with Rospatent words like

“New Year”, “Christmas”, “Holiday”

as well as derivates thereof as trade marks. Not surprisingly, many banks issue promotional offers specially at Christmas or at year’s end. As a consequence of its trade mark grant however, Vostochniy Express has served such banks with cease and desist notices. The proprietor bank has alternatively offered to license the use of its “trade marks” against payment of license fees.

Vostochniy Express demonstrate they are

A Way Ahead In Making Business With Their IP Assets

This bank’s business drive could, however, be barred since the registration of the “trade marks” in suit has been referred to a board of appeal within Rospatent. Pursuant to the Russian trade mark practitioner Vassily Moiseev, the board of appeal is very likely to vacate Rospatent’s grant as it has frequently done in the past.

In my view Rospatent had to reject the registration as these very words are not really capable of distinguishing the products or services of Vostochniy Express from those of other banks. See whether the board of appeal will deliver a judgment consistent with mine.

 

23 November 2009

Keyword advertising actionable under privacy law?

Debates on the use of keywords that equate registered trade marks have brought  new challenges for legal professionals. As well-known, the majority of lawsuits on keywords advertising were based on alleged trade marks infringement.

However, the courts’ ambivalent treatment of such trade marks proprietors’ claims (see Google AdWords Litigation update for the US and Advocate General  Poiares Maduro’s opinion on Google’s AdWords to the ECJ for Europe) might have brought a Wisconsin law firm to observe this set of problems through a different angle.

Representatives of Habush, Habush & Rottier have discovered that when their law firm’s name is sought over internet searching engines, the name of Cannon & Dunphy, a rival law firm, showed up. Accordingly, Habush have filed an action against the rival who does not even deny the purchase of a keyword containing claimant’s name. However, whether based on reasons stated above or not, Habush is not willing to rely on trade marks law, but on Wisconsin’s law on privacy.

In my view a really promising case. We will see as to whether it will bring some freshness into the keyword advertising complexity.

19 November 2009

CFI rejects "CANNABIS" trade mark’s registration for beverages

photo © 2006 olga.palma | more info (via: Wylio)

In its judgment delivered today the Court of First Instance dismissed Giampietro Torresan’s appeal against an earlier decision of OHIM‘s Cancellation Division. OHIM’s decision had declared the (previously obtained) registration of the Community trade mark

“CANNABIS” invalid

with respect to goods in Classes 32 (beers) and 33 (alcoholic beverages except beers) of the Nice Agreement. In its decision OHIM found that the trade mark “CANNABIS” was descriptive in terms of Article 7(1)(c) of Regulation No 40/94.Curiously, it was the same OHIM that registered the word sign “CANNABIS” as a Community trade mark for beers, wine and spirits some years ago, namely on 16 April 2003.

However, few weeks thereafter the German Klosterbrauerei Weissenohe GmbH & Co. KG, applied to OHIM to declare the trade mark’s invalidity with regard to Classes 32 and 33. OHIM found in favour of the Germans, Giampietro then appealed and – eventually – lost.

These are the facts. Much more interesting are the findings of the CFI.

The Court pointed out that

“Cannabis” or “Hemp” Had Three Possible Meanings

(1) a textile plant which is subject to very strict legislation as regards the content of it active ingredient (tetrahydrocannabinol: THC); (2) a narcotic which is prohibited by a great number of Member States; and (3) a substance the therapeutic use of which is under discussion.

The Court then pointed out that cannabis, given its very low concentration of THC, was used in the food sector. Equally important, the word “cannabis” was a Latin scientific term which was well known, was present in a number of European Community languages and has had a lot of media coverage. Based on that, the Court opined that the average consumer would perceive the trade mark

“CANNABIS” As A Description

of one of the characteristics of the goods bearing that mark.

The Regulation on Community trade marks prohibits the registration of descriptive signs. Such signs are deemed incapable of fulfilling the indication-of-origin function which forms an integral part of a trade mark. The Court finally went on applying ECJ’s well established authority on the assessment of a mark’s descriptive character that is to be undertaken in relation to the goods for which the mark was registered and in the light of the presumed perception of an average consumer of those goods, who is reasonably well informed and reasonably observant and circumspect (eg Nestle SA vs Mars UK Ltd).

Having read this ruling, I made a quick research using OHIM’s search engine. I sought for registrations containing the

Word Combination “Mary Jane”

and, found 5 matches. Two of them are registered in the Class 32 and one in Class 33.

By the way, what would be the “well informed” and “reasonably observant and circumspect” consumer’s perception of “Mary Jane” on beer or liquor bottles?

25 September 2009

Google’s AdWords do not infringe trade marks?

Foto0016photo © 2007 Stefan | more info (via: Wylio)

Google has been no stranger to legal controversy in recent years. One of the hotly contested issues courts are currently debating involves the legality of Google AdWords, Google’s lucrative advertising program that is the source of nearly half of its revenue. The AdWords program allows advertisers to purchase words or phrases related to their businesses that will bring up their websites under “sponsored links” when those keywords are typed into Google’s search engine.

The issue at the center of the controversy is whether Google can legally sell and advertise those words which are trademarked terms. For businesses looking to protect their trade marks, Google’s practice of selling and advertising trademarked terms has raised questions as to its liability for trade mark infringement.
The French Cour de Cassation has recently made a referral to the European Court of Justice (ECJ) with questions concerning the use of Google AdWords. These issues arose out of litigation brought against Google by trade mark owners, including Louis Vuitton, who object to the reservation by Google customers of search keywords matching their registered trade marks.

In his Opinion, Advocate General Poiares Maduro suggests that Google has not committed a trade mark infringement by allowing advertisers to select, in AdWords, keywords corresponding to trade marks.

The Advocate General further recalls that trade mark rights cannot be construed as classical property rights enabling the trade mark owner to exclude any other use. Accordingly, internet users’ access to information concerning the trade mark should not be limited to or by the trade mark owner even if it involves a trade mark which has a reputation.

Advocate General’s opinions are not binding on the ECJ, though the Court follws them in about 80% of all cases.

In my personal view this Advocate General’s opinion is very problematic for trade mark proprietors as, given a coresponding judgment of the Court, it will weaken proprietors’ position and ease springboard marketers and imitators to exploit the goodwill and reputation arising out of the trade marks in question.