The law gives extra protection for reputable trade marks against dilution by prohibiting third party use of similar marks not only in relation to the same or similar goods or services associated with the reputable mark, but also in relation to dissimilar goods or services provided certain conditions are satisfied.
The Trade Marks Act 1994 (which has similar provisions to the EU Trade Marks Directive) provides that a reputable mark owner can prevent others from registering or using identical or similar marks if the use of the later mark "without due cause" would "take unfair advantage" of or be "detrimental" to the distinctive character of the reputable mark.
The main problem that various reputable mark owners, including owners of INTEL and MERC, have faced when trying to enforce this in the Courts has been the evidential burden of showing "unfair advantage" or "detriment". In the latest ECJ decision on the Intel case, the Court held that the reputable mark owner has to show an effect on the economic behaviour of consumers in order to establish detriment. This could be very difficult to do in practice. The ECJ also gave little concrete guidance on establishing "unfair advantage".
However, there is hope on the horizon. In the L'Oreal "smellalike" case which is awaiting ECJ decision, the Advocate General ("AG") gave his opinion (which is often followed by the ECJ – but not always) ahead of the ECJ decision. The AG said that "advantage" can simply be a boost to the third party mark and sales, and it is not necessary for the reputable mark owner to suffer a fall in sales or other harm. In trying to interpret "unfair advantage", the Advocate General said that a trader will have to show "due cause" for using the reputable mark. If it cannot show "due cause" then the advantage is deemed unfair. Where the trader can demonstrate "due cause" then the advantage would not be assumed to be unfair and it would be necessary to determine whether it is "unfair" in light of all the relevant circumstances and the nature of the due cause established. If the ECJ follows the AG's logic, it would make it easier for mark owners to stop third parties from diluting their famous marks.
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