Intellectual Property :

1. “The practice of the Court of Justice of the European Union (CJEU) to expand constantly the
already multiple functions of the trademark goes far beyond what the trade mark system was
originally designed for, and needs to be halted.” Critically discuss.

Question is

The CJEU is constantly expanding the existing multiple functions of the trademark, and it goes far
beyond what the trade mark system was originally designed for and it needs to be halted

- Start with the original functions of the trademark

- How it expanded to its multiple functions and how it did and how its continuously expanding
- Critically state how it is so different from its original function and compare the cases quickly
- Has the expansion affected anyone adversely ?
- Does the difference in functions mean that the expansion of the functions deserve to be halted,
if not why ?
- Conclude

Original Functions of the Trademark:

A trademark is defined as ‘any sign capable of being represented graphically which is capable of
distinguishing goods or services of one undertaking from those of other undertakings’. 1 A trademark is
basically an ‘information umbrella’ that resolves information asymmetry and market failure by
simplifying purchase decisions2. Therefore trademark are a vital component of brands which compels
brand owners to protect the trademark and use it as a weapon against competitors that harm their
distinctive identity3. In 1990 the trademark act (TMA 1994) was introduced, it is responsible in resolving
many issues in relation to trademarks and is still in effect today, the European Union trademark directive
which was created in 19894 was created and it required all Member states to comply their national laws to
the directive which led to a new trademark register which was set under the 1998 Community Trade Mark
Regulation.

How it expanded to its multiple functions and how it did and how it is continuously expanding:

1
TMA sec 1. For an earlier definition, see B. Paster, ‘Trademark-their early history’(1969) 59 TMR 551,551

2
G. Ramello, ‘What's in a Sign? Trademark Law and Economic Theory’ (2006) 20. J.Econ.Surv 547, 556- 557.

3
R. Sinclair (n.145) 502. Occasionally, brand owners can bring actions for passing off. For example, see Erven
Warnink v. Townend & Sons Ltd [1979] AC 731,742 (HL), United Biscuits(UK) Ltd. v. Asda Stores [1997] RPC 513.

4
Reform of Trademarks Law Commission 102 (September 1990).
Trademarks are playing an increasing role in the functioning of the market, it is no longer reasonable to
argue that it has one function which is the origin function, discussions have occurred to come to the
conclusion that trademarks do have multiple roles in the marketplace 5. In the case of Arsenal v Reed6, the
CJEU invoked 5(1)(a) of the TMD7 to rule that using a sign as a badge of support affects the right of
Arsenal as a proprietor even in the absence of any likelihood of confusion 8 Reed’s use of the mark
permitted it to take unfair advantage of the reputation of the protected trademark 9, AG Ruiz who found
that limiting trademark functions only to its origin function seems to be a ‘simplistic reductionism’ 10,
L’Oreal v Bellure11 gave a much broader insight into the functions of trademarks and the courts found in
applying Article 5(1)(a) and Article 5(2) of the trademark directive that Bellure was infringing the articles
of the TMD on the basis of unfair advantage12, the court then assented three additional functions of
trademarks: communication investement and advertising. In the Case of Google France v Louis Vuitton,
the CJEU found that Google had not violated the essential origin function but also reiterating the
existence of the advertising function13, In Interflora v Marks and Spencer14, the function in discussion was
the investement function15, the enquiry in question was whether the use of a trademark to acquire or
preserve the reputation of a mark was adversely affected. The CJEU has gradually come to realize that a
trademark can signify more than just the origin of the good or service 16.

- Advertising function: it has been recently recognized in the ruing of the CJEU 17, it has been
described as a tool facilitating consumer to make purchase decisios, or more unfairly for

5
A. Kur, ‘Trade Marks Function, and Don’t They? CJEU Jurisprudence and Unfair Competition Principles’ (2014) 45
IIC 434, A. Katz, ‘Beyond Search Costs: The Linguistic and Trust Functions of Trademarks’ (2010) 5(3) BYU L. Rev.
1555, M. A. Naser, ‘Re-Examining Functions in Trademark Law’ (2008) 8(1) Chi.Kent J.Intell.Prop. 102, J. Tarawneh,
‘Trade Marks in the Modern World: Drawing the Fine Line between Adequate and Excessive Protection in
European Law’ (PhD thesis, University of Manchester, 2009).

6
Arsenal Football (n.415) Opinion of AG Colomer, par.41.

10

11

12

13

14

15

16

17
 manipulating purchase decisions and deluding customers 18. It empowers companies to bring their
products to the attention of the buying public by emphasizing their features sometimes unfairly.
An example of this is when a product emphasizes that purchasing shampoo X will enable the
consumer to get ‘smooth and silky hair’. Fisher states that ‘advertising affects demand for goods
because it lowers the gap between the market price received by the seller and the full price born
by the buyer’.19 Adveritising promotes competition in the market as well as provides consumers
with an important source of information to process.20 Most advertising is done by relying on
emotions of consumers and by creating specific ads that trigger the consumers impulses 21.
Trademarks are now regarded as essential tools for companies to generate income in the market.

- Investment Function: in the case of Interflora22, when a third party uses a trademark of a
competitor in relation to its good and services and it affects the reputation of the company in
being capable of attracting consumers then the third party is regarded as adversely affecting the
company’s trademark investment function. If an infringement of the trademark interferes with the
owner’s ability to attract consumers for its business and retain the loyalty of their customers, then
the investment function will significantly be harmed and the trademark owner will be adversely
affected.23
Bv

18

19

20

21

22

23