NOTES OF CASES

DOIhttp://doi.org/10.1111/j.1468-2230.1975.tb01418.x
Published date01 May 1975
Date01 May 1975
NOTES
OF
CASES
TRADE
MARKS,
CUSTOMER
CONFUSION
AND
THE
COMMON
MARKET
FOR
better, for worse, competitive markets require some means by
which buyers may distinguish rival products: hence the exclusive
rights in trade-marks. which are recognised in all capitalist economies
as the basic means of indicating the trade source
of
goods. Within
the
E.E.C.
so
much
is
being done to keep the nose of capitalism
clean with the handkerchief of competition policy that there is a
certain irony about the European Court of Justice's decision in
Van
Zuylen
Freres
v.
Hag
A.G.'
For this, in a curiously selective way,
reduces the protection of trade-marks provided by national law.
Of course, in the light
of
modern trading conditions the degree
to which trade-marks are protected in law without limit
of
time may
be viewed with a certain cynicism. For rights do not at present bring
correlative duties: no duty, for instance, to inform the public how
far any one producer or group of companies puts out much the same
product under different brands, nor any duty to distinguish a product
marketed under
a
well-advertised brand from the same product put
out in the name
of
a
supermarket chain. Moreover the
law
is not
concerned that the ordinary customer may know or care nothing
of
the source
of
a product beyond the allure
of
its advertise-
ments or the satisfaction of having bought it previously.2 It
is
easy
to see
or
suspect that such heterodoxy has played some part in the
making
of
the
Hug
decisionS and
in
the justifications that sub-
sequently have been offered for it. Equally it is hard to feel that the
judgment offers any meaningful modifications of doctrine that might
reconcile those whose doubts about the faith stem from such con-
siderations. Instead it stands at the top of a logical slope down which
the whole practice of exclusive branding might slide away into
oblivion. And that, given the economic system within which the court
stands, can scarcely have been
its
intention.
What has happened is this. The German company, Hag
A.G..
began
producing decaffeinated coffee and marketing
it
under the trade-
mark
"
Hag
''
at
the
beginning
of
the century. This company always
held the registered trade-marks in Germany. Between the wars
it
set
up
a Belgian subsidiary for marketing, and later for producing,
the coffee. To this offspring the Belgian marks were assigned. After
1
[I9741
2
C.M.L.R.
127;
119741
E.C.R.
731.
a
The
shallowness
of
the consumer's knowledge about the trade
sources
domin-
ated
by
marks
is,
in
our
own
law, a positive reason
for
giving broad protection.
See,
for
a very recent instance,
Style
Patterns
V.
K-Tel International
C19741 F.S.R.
499.
8
In the European
Court's
earlier decision,
Slrena
V.
Edu
[IWl] C.M.L.R.
260,
264,
17
Rec.
69,
Roemer Adv.-Gen. introdwtd a somewhat disparaging assessment
of
the value
of
trade-marks
with
the remark, Originally the trademark was intended
to
guarantee for the consumer the quality
of
the product,
but
it now tends more and
more
ta
be
nothing more than
a
ptyp
for
advertising (and this can be seen in the
development
of
national legislation)
.
Cf.
the court's judgment, para.
7.
329
330
THE MODERN LAW REVIEW
[Vol.
38
the war, sequestration of enemy property severed the links between the
two and
so
it
came about that marks sharing
a
common origin
were held in hands unlinked legally, financially, technically or econo-
mically.“ The German company began selling its products, marked
“Hag,” to Luxembourg retailers, and the owners of the Benelux
marks began proceedings for trade-mark infringement in the Tribunal
of
Luxembourg. This court referred to the European Court questions
concerning the effect of Article
85
of the Rome Treaty and the
principle
of
the free movement of goods upon this attempt
to
use
national trade-mark rights to repel the imports. The court has held
that “to prohibit trading, in one member state, in a product which
lawfully bears a trade-mark in another member state, for the
sole
reason that an identical mark, sharing the same origin, exists in the
first state, is incompatible with the provisions laying down the free
circulation
of
goods within the Common Market.”
The decision has been attacked on various grounds. It apparently
requires that, in its particular circumstances, national law should not
impede the appearance on the same market of goods produced by
unconnected organisations under the same mark, to the bemusement
of
customers. Moreover, the only help offered by the judgment
towards explaining why the conflict between trade-mark exclusivity
and the free circulation of goods
is
being resolved in favour of the
latter, is the opinion (better regarded as naive than disingenuous)
that consumers can be informed by other means about the trade
origin of goods.
If
this is the reason, then, it has been asked, why
restrict the principle to marks of the same origin? Why not extend
to
all cases of honest concurrent use in another part of the market?
Or even to the case where a trader deliberately applies in one state
for registration of a trade-mark well known in another with the
intention of importing into the first state from the second?
It may be that the court will treat the decision as restricted to
the case of marks
of
common origin. In other decisions the court has
quite justifiably insisted that national trade-mark rights should not
be used to prevent the interstate movement of goods emanating from
single economic units or from enterprises acting together
to
divide
distribution rights in products coming from
a
single source.‘ Because
4
So
found by the Tribunal of Luxembourg. The phrase has subsequently been
taken up by the Commission in order
to
test whether a trademark assignment has
been
made
in
pursuance
of
an
agreement prohibited by Article
85:
Advocuut
Zwarte
Kip
’,
J.O.
L
2371 12, August 29, 1974.
5
Judgment, para. 15 (C.M.L.R. translation).
In
the familiar, but evasive, juris-
prudence
of
the
hurt,
the attempted application
of
Benelux rights went
to
their
exercise, rather than
to
their essence; accordingly, it could
not
be
justified as an
exception (Article 36)
to
the free movement principle as elaborated in Article 30.
The relevant texts of these articles appears in Mrs. Korah’s note
on
the
Centrufnrrti
cases,
tnfra,
p.
333.
In
this
note
the
decision
is
treated as
a
faif accomplf
and its extent
is
explored. The
justifiability
of
interpreting the Treaty
as
the court has done
is
debated by
F.
A.
Mann (1975) 24
I.C.L.Q.
31.
6
Centrafurm
BV
v.
Winrhrop
BV
119741
2
C.M.L.R. 480, noted
infra,
p. 334.
7
Consten
and
Grundlg
V.
E.E.C.
Commission
[I9661
C.M.L.R. 418, 12
Rec.
429.

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