• European Perspectives

    Levi’s Blues: Suing on Time, Winning Too Late

    When it comes to winning a trade mark infringement action, timing can be everything. Levi Strauss & Co. learned this the hard way when the ECJ handed down judgment on a reference from a Belgian court in a trade mark infringement action brought by the famous jeans manufacturer against a competitor, Casucci SpA (Case C-145/05).

    The questions referred related to the relevant time for the perception of an allegedly infringing mark by the average consumer, and, more critically, whether an injunction can be allowed where a trade mark has lost its distinctiveness through misuse or dilution before judgment.

     

    The Alleged Infringement

    Levi’s was the owner of a 1980 Benelux trade mark registration for a figurative mark consisting of a pentagonal back-pocket motif with a double-row of overstitching curving downwards in the middle, referred to as the “seagull” mark. The registration covered “clothes” in Class 25.

    In 1997, Casucci brought out a line of jeans also featuring a pentagonal back pocket, but with a double row of overstitching curving upwards. Levi’s sued for infringement of its Benelux “seagull” mark in March 1998. They failed at first instance and on the first appeal, on the grounds that the marks were not confusingly similar taking into account the dilution of the “seagull” mark as a result of the use of similar motifs by others.

    Before the referring court, Levi’s argued that the relevant time for considering whether there had been infringement was 1997, when Casucci’s allegedly infringing use began. According to Levi’s, the widespread third-party use that had led to the dilution of its rights did not begin until 1998. The Benelux court sought the ECJ’s guidance on the relevant time for assessing whether third-party use is infringing, as well as whether, if infringement were found, the court was entitled in all circumstances to order an injunction against that use.

     

    Suing on Time

    In its judgment, the ECJ held that the origin-indicating function of a trade mark could only be effectively protected if account was taken of the perception of an allegedly infringing mark at the time the infringement began.

    If this were not the case, an infringer might be able to rely on the diluting effect of its own use on the registered trade mark as a means of escaping an unfavourable judgment. Unless a trade mark could be shown to have been subject to revocation as of that date, it would enjoy protection on the date on which the allegedly infringing use began, and that date would be the material date from which to consider infringement.

     

    Winning Too Late

    Proving infringement when the defendant’s use commenced, however, was not the end of the case. Levi’s sought remedies, chief among them an order that the defendant desist from the infringing activities. In this, Levi’s may have been disappointed.

    The ECJ affirmed that national courts must order such measures as appear appropriate to safeguard a trade mark owner’s rights, including the grant of injunctions. However, an injunction would not be an appropriate remedy where the national court finds that the registered trade mark has lost its distinctiveness before judgment due to the acts or inactivity of the proprietor, and where the registered trade mark has consequently been revoked.

    This was a necessary outcome of the need to balance the interests of trade mark owners against those of their competitors, who have an interest in using words or images that are descriptive or common in the trade. A trade mark owner’s protection must be limited where he has failed to exercise the vigilance needed to prevent his mark from being used and misused by third parties, and from falling thereby into the public domain.

     

    Comment

    This case is an important reminder of how important it is for brand owners to keep an eye on the marketplace, and to act promptly and effectively against third-party use, and misuse, of their brands.

    The consequences of failing to do so can be severe. Levi’s competitors, for example, now have every incentive to revoke the “seagull” registration. They may indeed have grounds to do so: if the plethora of similar designs on the market in recent years is anything to go by, it will not be difficult to show that such designs have become common in the trade. It will then be necessary only to show that this outcome is the result of Levi’s own acts or, more likely, inactivity. In such circumstances Levi’s would be highly unlikely to secure an injunction against an infringing use, and even if it did, it would hardly be enough to turn back the tide of similar marks in use by others.

    Failing to stop unauthorized third-party use of a brand can be commercially undermining. Confusion may arise or a brand may lose its exclusiveness and associated allure. Such outcomes may seem distant and unlikely from the sunny perspective of a successful business, but many minor uses or misuses may feed off one another and increase to an unstoppable flow. If a brand owner waits for “the big one” before sending a cease and desist letter, he may find himself winning a Pyhrric victory: succeeding in an infringement action, only to lose the registration in a counterclaim for revocation and fail to stop any of the infringing use.

    This outcome is no surprise in England, where an injunction is an equitable remedy ordered at the discretion of the judge, and only where it is appropriate in all the circumstances. However, the fact that it is not unexpected does not diminish its importance as a reminder that brand owners should police the marketplace. Failing to do so can turn winning an action into a fruitless victory.