At present, EU law and especially the case-law of the Court of Justice of the EU (CJEU) provides wide-ranging protection of brands, which are considered as trademarks in law, covering such functions of trademarks as their use for the purposes of advertising, investment and communication with consumers. However, this approach causes controversy because it broadens the scope of trademark protection beyond the primary function of indicating the origin of goods and services and guaranteeing their quality (origin function).
In recent years scholars have criticised the current line of CJEU case-law on this issue, specifically its understanding of trademarks’ functions . As a consequence, academics have suggested rethinking the current wide scope of trademark protection in the EU, which they consider to be exaggerated, and ” push[ing] the genie back in the bottle .” They argue that trademark protection should be available only for use of a sign that affects or is likely to affect the origin function.
It seems that the CJEU has taken this critique to heart, with a recent ruling showing that the Luxembourg court may be ready to soften its position on brand protection.
The case Red Bull v de Vries
The Red Bull company filed a complaint against Hendrikus de Vries before the Rechtbank Amsterdam (Amsterdam District Court) , considering that the use of a sign could be misleading. The Red Bull company is the owner of the ‘Red Bull Krating‑Daeng’trademark for non-alcoholic drinks in the Benelux countries since 11 July 1983. Hendrikus de Vries registered the ‘ The Bulldog’trademark on 14 July 1983 and the ‘The Bulldog Energy Drink’trademark on 11 July 2000 in the Benelux countries. Furthermore, the national court declared as certain that Mr de Vries was using his trademarks for goods and services involving the sale of drinks. However, the unquestionability of Red Bull as a global brand marketing energy drinks was also affirmed, so that not just its original function but also its reputation is protected by trademark law., The Hoge Raad der Nederlanden (Supreme Court) thus requested a preliminary ruling from the CJEU, asking how the EU Trademark Directive (89/104) should be interpreted. More precisely, the national court asked if a “due cause” (i.e. appropriate justification of some behaviour) could be found in the situation whereby the “Bulldog” sign was already being used in good faith by Mr de Vries before the “Red Bull” trademark was filed.
Argumentation of the CJEU
In its preliminary ruling, the CJEU stated that the concept of “due cause” must be interpreted in a way taking into account all functions of a trademark, including also those of communication, investment or advertising. However, it added that the purpose of trademark protection is to strike a balance between the interests of the trademark proprietor and the interests of other economic operators. In other words, the CJEU highlighted the protection of free competition in trademark law. In conclusion, it held that “due cause” must be interpreted subjectively and – in consequence – as one of the limitations of brand protection . This means that when Mr de Vries uses a bulldog sign for hotels and drinks and owns a trademark for this sign, he can also use it for energy drinks under three conditions. First of all, the sign and its reputation must have been accepted by the relevant public. Secondly, the degree of proximity between his and Red Bull goods must not be too high. Finally, the economic and commercial influence of such use from the point of view of Red Bull’s products must not be too significant. It is now for the national court to apply these criteria.