Eighty-two years since Frank I. Schecter published his seminal essay “The Rational Basis of Trademark Protection” (Harvard Law Review, vol. XL, 1926–1927, 813–833), which argued that the distinctiveness or uniqueness of certain trade marks merited specific protection, and 20 years since the EU Trade Mark Directive (TMD) (First Council Directive 89/104/EEC on the approximation of the laws of Member States relating to trade marks) allowed Member States to offer such protection, the European Court of Justice in Intel Corp Inc v. CPM United Kingdom Ltd. ((C-252/07) [2009] E.T.M.R. 13) has given the first substantive judgement to identify the particular circumstances in which that protection would arise.

Intel held UK and Community trade marks for the words INTEL and INTELINSIDE for, inter alia, computers and related products. CPM registered the mark INTELMARK for marketing and telemarketing. According to Article 4(a) TMD (s. 5(3), Trade Mark Act 1994), a trade mark shall not be registered, or if it is, shall be declared invalid if it is identical with or similar to a mark with a reputation where the goods or services are dissimilar and where the use of the later mark without due cause would take unfair advantage of or be detrimental to the distinctive character or the repute of the earlier mark. Intel sought a declaration of invalidity for the CPM mark on the basis of Article 4(a) arguing that CPM's mark would “dilute” the distinctiveness of its own. In particular, Intel argued, following an earlier ECJ decision, Adidas-Salomon AG v. Fitnessworld Trading Ltd. ((C-408/01) [2004] E.T.M.R. 10), that for Article 4(a) to take effect, although the relevant public must make a “link” between the two marks, that “link” could constitute any kind of mental association, even a mere bringing to mind.

In the Court of Appeal (Intel Corp Ltd. v. CPM United Kingdom Ltd. [2007] EWCA Civ 431), Jacob L.J. accepted that INTEL was an invented word in that it had no other meaning beyond its identification with the products of Intel Corp, that it was unique in that it had not been used by any other trader in relation to other goods or services and that it had a “huge reputation” in the UK for computers and related products. Jacob L.J. also accepted that the marks were similar and that the goods were dissimilar. Further, he assumed that the use of the INTELMARK by CPM did not suggest to the relevant public that there was a trade connection with Intel Corp. Jacob L.J. then asked a number of questions of the ECJ. In particular, were the circumstances of this case sufficient for the necessary link to come into play? If not, what factors would allow a national court to find such a link? And, finally, what is required to find detriment to the distinctive character of the mark with a reputation?

According to the ECJ, whether there is a “link”, within the terms of Adidas-Salomon, between the earlier mark with a reputation and the later mark, must be assessed globally taking into account all relevant factors. The fact that the average consumer calls the earlier mark to mind is tantamount to there being such a link. However, the fact that the earlier mark has a “huge” reputation, the goods and services at issue are dissimilar or substantially so and that the earlier mark is unique does not necessarily imply such a link. Second, the question of whether use of the later mark takes unfair advantage of or is detrimental to the distinctive character or repute of the earlier mark must also be assessed globally, taking into account all the relevant factors. These are the same factors already set out, as well as the fact that the average consumer calls the earlier mark to mind. But, as is the case with the relevant “link”, the presence of these factors is not sufficient to establish either unfair advantage or detriment. The ECJ also held that use of the later mark may be detrimental to the distinctive character of the earlier mark even if it is not unique. Further, even first use of the later mark may suffice to be detrimental to the distinctive character of the earlier mark. And, finally, proof that use of the later mark would be detrimental necessitates evidence of a change in the economic behaviour of the average consumer of the goods and services for which the earlier mark was registered or at the very least a serious likelihood that such a change will occur in the future.

In an age of the powerful “brand” whose value lies as much in its advertising function as in its role as a badge of origin, the question of the extent to which it will be protected against “dilution” is of course critical. Some have gone further to argue that such protection should be not just against a dilution of the distinctiveness of such a mark, but also against any appropriation of the mark's value by a third party, even if it does not damage the mark itself. From this point of view, the ECJ judgement in Intel will be disappointing. In the Court of Appeal, Jacob L.J. had expressed concern that a powerful mark should not be protected against all use by third parties, especially if such use did not affect its distinctiveness in relation to the goods against which it was used. Instead, he took the view that there should be harm or a real and tangible prospect of harm to the earlier mark. In the Intel judgement, the ECJ appeared to endorse this approach, setting its face against introducing a doctrine of pure misappropriation when dealing with the use by a third party of a mark with a reputation or the use of a similar mark. Whether the circumspection displayed by the ECJ in Intel will survive may depend upon how, in later cases, national courts choose to identify what constitutes damage to a mark with a reputation and how the value of such damage is to be calculated. If, in order to avoid what will undoubtedly be a complex issue, the courts are satisfied in such cases that there will be a likelihood of future damage, then the cautious approach taken by the ECJ to “dilution” in Intel may well be abandoned.