Fair use of the mark: reinforced approach? The ZARA case
Spanish readers will be aware of the ZARA vs Club Blinko case in Spain. For those unfamiliar with it, the dispute has garnered attention in the intellectual property arena due to the discussion of the scope of well-known marks and the defense of fair use. The Italian company TMT Buongiorno (operating in Spain as Buongiorno Myalert, SA) sponsored a competition in 2010 with an attractive prize: a €1,000 gift card issued by the famous ZARA brand. The Spanish company brought an action for trademark infringement on the grounds of the risk of confusion and parasitism (letters b) and c) art. 34 Spanish Trademark Law – STL; arts. 5.1 b and 5.2 EU Directive 2008/95). Buongiorno’s defense was accompanied by the fair use exception (art. 37 STL; art. 6 EU Directive).
The courts of first instance and appeal dismissed the appeal citing the well-known judgments of the CJEU in Google France (C-236/08; C-237/08); Loreal eBay (C-324/09) and Interflora (C-323/09). According to the first instance decision – confirmed by the provincial court – none of the functions of the mark were harmed by the use of ZARA by the defendant, therefore no infringement took place. The decision assessed the ability of the average Internet consumer to know whether there is a commercial link between the two companies (rather similar reasoning to Interflora, p. 81).
The decision was first unsuccessfully challenged in the Supreme Court. However, and in an unexpected turn of events, a nullity action was successful and the Court reversed its own decision. The appeal in cassation is now suspended as long as a request for a preliminary ruling has been sent to the Court of Justice: art. 6(1)(c) of Directive 89/104/EC should be interpreted as implicitly included within the limit of trademark rights, the more general conduct now included in Art. 14(1)(c) of EU Directive 2015/2436: use of the mark to identify or designate goods or services as being those of the owner of this mark”?
Referral for a preliminary ruling:
It has been more than twenty years since the CJEU ruled in the BMW / Deenik case (C-63/97) on the limits of trademark rights in relation to the repair and maintenance of goods.
The question now posed by the Spanish Supreme Court is equally interesting. According to the CJEU judgments subsequently delivered in the Gillette (C-288/03) and Portakabin (C-558-08) cases, the destination of the products “as accessories or spare parts” was only mentioned by the legislator only by way of example, that being the usual situation in which it is necessary to use a mark to indicate the destination of a product” (p. 63). On the other hand, the following paragraph of the decision specifies that this fair use must be “limited” “and only to allow suppliers of goods or services, complementary to the goods or services offered by the owner of a mark, to use this mark to inform the public of the concrete link between their goods or services and those of the owner of the mark”
Whereas 27 of EU Directive 2015/2436 introduces the issue with a set of examples of fair use (use in the context of the resale of goods; artistic expression). Does this mean – as the Supreme Court asks – that this “reinforced approach” is sought by the European legislator?
We will find out in the following weeks. The explanation offered by the ECJ will be much appreciated but as usual, the decision will surely not leave anyone indifferent. Should we expect changes in comparative advertising and/or unfair competition rulings in the future if this improved approach is approved?
There is no doubt that the average consumer is no longer straightforward. Flagship cases such as Interflora have understood this and welcomed it. Although the setting for this case is the long-forgotten SMS-marketing practice (the facts date back to before 2010), this decision could be a taste of what new realities such as the “metaverse” could bring to human rights. brand and within their exclusive reach.