Judgment of the Court of Justice of January 11, 2024, Inditex (C-361/22)
Facts
The Spanish Supreme Court has submitted a request for a preliminary ruling concerning the interpretation of Article 6(1)(c) of Directive 89/104/EEC.
The petition is filed in connection with a dispute between Industria de Diseño Textil, S.A. (hereinafter “Inditex”) and Myalert, S.A. (hereinafter “Buongiorno”) regarding an alleged infringement of the rights conferred by a national trademark owned by Inditex due to Buongiorno’s use of a sign identical to that trademark without Inditex’s consent.
The dispute arose from an advertising campaign launched by Buongiorno, which encouraged potential customers to participate in a raffle, with one of the prizes being a ZARA gift card worth 1,000 euros. Buongiorno is a provider of information services via the Internet and mobile phones. In 2010—the year in which the events giving rise to this judgment occurred—it launched an advertising campaign to promote subscriptions to a paid service consisting of the delivery of multimedia content via SMS. To increase public awareness of the service, the campaign included a series of promotional activities, such as participation in the contest described above.
Inditex considered that Buongiorno’s use of the Spanish national trademark ZARA infringed upon its exclusive rights, and filed a lawsuit with Madrid Commercial Court No. 2, bringing an action for trademark infringement. Inditex based its claim on the existence of a likelihood of confusion, the free riding on the trademark’s reputation, and the damage caused to that reputation.
Buongiorno denied any infringement of those rights, arguing that the use of the ZARA trademark had been a one-time occurrence, not made in the capacity of a trademark, and was intended to indicate what one of the prizes offered to the winners of the drawing consisted of. Buongiorno considered that such use was referential and fell within the scope of lawful uses of third-party distinctive signs.
After the Court of First Instance dismissed Inditex’s complaint, Inditex filed an appeal with the Provincial Court of Madrid, which in turn dismissed the appeal, finding that Buongiorno’s use did not harm the reputation of the ZARA trademark and that there was no unfair exploitation of its reputation. Inditex filed a cassation appeal with the Supreme Court, which, as the referring court, posed the following question:
“Should Article 6(1)(c) of Directive [89/104] be interpreted to mean that the more general conduct now referred to in Article 14(1)(c) of Directive [2015/2436] is implicitly included within the scope of the trademark right: use ‘of the trademark for the purpose of designating goods or services as belonging to the proprietor of that trademark or of referring to them?’”
The referring court considered that Buongiorno’s use of the ZARA trademark fell within the scope defined by Article 37, paragraph 1(c) of the Trademark Law, in its original version, which was applicable ratione temporis to the dispute at issue in the appeal, and which was equivalent to Article 6(1)(c) of Directive 89/104. The Spanish Supreme Court considered that Buongiorno’s conduct might be better characterized by the wording of Article 14(1)(c) of Directive 2015/2436 than by Article 6(1)(c) of Directive 2008/95.
Statements
The Court of Justice concludes that the scope of Article 6(1)(c) of Directive 2008/95 is more limited than that of Article 14(1)(c) of Directive 2015/2436, in that Article 6(1)(c) refers only to the use of the trademark in the course of trade where such use is necessary to indicate the intended purpose of a product or service. That interpretation is supported by the legislative history of the directive.
The Court notes that the purpose of Article 6(1)(c)—which limits the scope of trademark rights—is simply to reconcile the fundamental interests of trademark protection with the free movement of goods and the freedom to provide services in the internal market.
In that regard, the Court considers that the scope of application of that provision is not limited to situations in which it is necessary to use a trademark to indicate the intended use of a product “as an accessory or spare part.” The situations falling within the scope of the aforementioned provision must be limited to those that correspond to the purpose of the limitation—to the extent that it was intended—so that suppliers of products or services complementary to a product may use that trademark to inform the public, in a comprehensible and complete manner, of the intended use of the product they market or the service they offer, understood as the functional link between their products or services and those of the trademark owner.
During the drafting of Directive 2015/2436, an effort was made to broaden the scope of the limitation previously set forth in Article 6(1)(c) of Directive 2008/95 to ensure that a trademark owner could not prevent the fair and honest use of the trademark to designate goods or services as its own, or to refer to them. Therefore, the scope of the limitation set forth in the earlier version of the Directive’s article concerning the limitation of the rights conferred by the trademark (that is, Article 6(1)(c) of Directive 2008/95) is narrower than that of the later version of the same article (that is, the wording of Article 14(1)(c) of Directive 2015/2436).
Accordingly, it rules that Article 6(1)(c) of the Directive must be interpreted as referring to the use of the trademark in the course of trade by a third party, in accordance with honest practices in industrial or commercial matters, for the purpose of identifying goods or services as belonging to the owner of that trademark or of referring to them only when such use of the trademark is necessary to indicate the intended purpose of a good marketed or a service offered by that third party.
Consequently, it considers that it is for the national court to determine whether Buongiorno made use of the ZARA trademark in a manner that could be considered covered by the exception set forth in Article 6(1)(c) of Directive 2008/95 and whether, in light of the answer to the preliminary ruling, that use was necessary to indicate the purpose of the service offered by Buongiorno, as well as whether such use was made in accordance with honest practices in industrial or commercial matters.
Comment
This ruling establishes relevant interpretive principles that are fully applicable to the current trademark law regime in the European Union, as it recognizes the balance that must exist between the exclusive right conferred upon a trademark owner by registration and the need to ensure that other economic operators may make legitimate reference to the trademark.
Another relevant issue is the importance the Court of Justice attaches to the origins of the articles whose scope is being analyzed, considering that, in order to correctly interpret a provision of Union law, it is essential to take into account not only its literal wording but also the context in which it is set, its objectives, and its purpose.
Sara Navarro, Senior Associate in theTrademarkPractice Group at Elzaburu.