Territorial overlaps in trademark law: the evolving European model.

AuthorDinwoodie, Graeme B.
PositionNegotiating IP's Boundaries in an Evolving World

INTRODUCTION I. TRADEMARK TERRITORIALITY II. MECHANISMS TO MODERATE THE FORCE OF TERRITORIALITY III. INCREASED OVERLAP IN MARKS: CLUTTER IV. COMMITMENTS TO THE UNITARY CHARACTER OF THE EUTM: THE COURT OF JUSTICE A. Genuine Use B. Scope of Relief V. APPLICATIONS OF LENO MERKEN AND DHL: RESISTANCE? A. Genuine Use B. Scope of Relief C. Relief in Dilution Cases VI. THE UNITARY PRINCIPLE AND OVERLAPPING RIGHTS: A DEFENSE OF RESISTANCE A. Two Paradoxes 1. Local Rights in a Regional or Global Polity 2. The Interdependence-and-Scope Paradox B. Institutional and Conceptual Design C. Concrete Reform Proposals 1. Judicial Resistance: Developing Interpretation of Leno Merken and DHL 2. Elevating Use-Based Devices 3. Embracing Coexistence of Registered Rights 4. Right to (Nonexclusive) Use Defenses 5. Temporary Nonenforceability D. Hardly a Radical Resistance 1. The "Emmenthal Cheese" Provisions 2. The Expansion Compromise CONCLUSION INTRODUCTION

Trademark law has to address "overlapping" rights in a number of contexts. Thus, both the United States Supreme Court and the Court of Justice of the European Union have in recent years tackled the prospect that trademark rights in product shapes might effectively extend the life of patented inventions, (1) or the concern that limits in copyright law might be evaded through assertion of trademark-like claims as regards copyrightable subject matter. (2) In Europe, where design law is a more prominent part of intellectual property disputes, the relationship between trademark law and design law is also heavily contested. (3)

And disputes about the overlap of rights under trademark and unfair competition law are also on the horizon on both sides of the Atlantic: the European debate implicates allocation of authority between EU and national law, (4) while in the United States, resolution of the constitutionality of the exclusion from registration of disparaging marks might force the courts to confront in a new context the character of residual use-based rights in a system where such rights have been overlaid by a federal registration scheme. (5) The overlap tackled in this Article--the territorial overlap of competing trademark rights--might be viewed in part through the registration/use prism. Certainly, one of the contexts where territorial disputes are most acute is where the reach of a registration is not closely coextensive with the area of trademark use. But this Article seeks to explore the territorial overlap problem more broadly.

Resolving a conflict between two similar rights that overlap (whether territorially or otherwise) is perhaps more central to trademark law than other intellectual property regimes. (6) The fact that an applicant for a trademark would notionally infringe an earlier right is a so-called relative ground for denial of the later registration, and such assessments are a crucial and significant part of trademark law. (7) Indeed, they are becoming even more frequent as the register and the marketplace become choked with a greater number of marks of increasing scope. (8) Thus, this Article's treatment of the territorial overlap of rights--one dimension along which there may be dwindling space for new marks--might also be considered as part of the ongoing debate about so-called trademark "clutter."

One cause of the increasing conflict between overlapping trademark rights is the trend in international trademark law to develop (mostly, but not entirely, administrative) mechanisms designed to extend rights more easily and more quickly beyond the borders of a single nation-state. These efforts reflect pressures caused by global trade and digital commerce. (9) If brands are known and sold globally, as the Internet has facilitated with many goods and services, then limiting the reach of trademarks to national borders is seen by many as anachronistic. (10) And even when producers are not yet operating globally, some of the trademark mechanisms are consciously tovited as part of a normative industrial policy of encouraging expansion of trading activities beyond national borders. Extending the territorial reach of rights often occurs in advance of actual expansion of trade.

But these mechanisms, purportedly prompted by and designed to further international trade, can cause problems that both hinder trade and arguably undermine competing social and economic norms (especially as the normative effects of unthinking internationalization are increasingly questioned). The difficulties caused are particularly acute when rights have been granted in systems that do not require use in order to secure a trademark registration, and where registrations are of ever greater reach. This is true of the European Union Trade Mark system, which is one such mechanism designed to extend the geographic scope of rights beyond the nation-state. Under that arrangement, a single application can secure a right valid throughout the entire territory of the European Union and that can be enforced in one proceeding via the grant of an EU-wide injunction even without the plaintiff having used its mark. (11) The application can be filed without even possessing an intent to use the mark in question and the territorial scope of the resulting European Union Trade Mark (or EUTM, formerly called a Community Trade Mark or CTM) is defined by the external political boundaries of the EU, which now encompasses twenty-eight member states. (12)

Despite this, courts in the European Union have in a number of recent cases resisted some of the innovations of the EU system and have affirmed the enduring pull of a different conception of territoriality. This Article defends many of these acts of resistance, and supports further modifications of the EU model, in part because of the increased problem of overlapping rights. That increased overlap requires a critical reading of these innovative mechanisms and attention to a broader range of values in implementing the model. These propositions are supported both by a more theoretically complex conception of trademark territoriality (13) and a richer normative account of the European project (itself, these days, a project in flux and one about which, from Britain, it is hard to write without profound melancholy). (14)


    Trademark protection is territorial. (15) Indeed, it is a cardinal principle that all intellectual property law is territorial. (16) It has been since at least the Paris Convention in 1883 or the Berne Convention in 1886, (17) both of which are foundational international agreements that perhaps paradoxically installed territoriality as the governing principle of international intellectual property relations. (18)

    International harmonization, which has become more intense since the signing of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) over twenty years ago, (19) has not interfered with the purity of territoriality as a legal proposition. But global trade, and even more so an online marketplace, has called into question the practical relevance of the principle that trademark law is territorial. There is a growing gap between the global reach of markets and the national scope of marks. (Much) trade is actually international; trademarks are legally national, and historically acquired and protected on a country-by-country basis. Such gaps between law and commerce create costs and uncertainues.

    Concern about gaps between local law and international commerce is not new. Indeed, the Paris Convention itself was a response to pressures on national systems created by international trade. (20) And every so often in the 130 years since, litigants or scholars, policymakers or judges, have remarked on the fact that we are living in a wholly different world, and that trademark law must dramatically adapt. 21 What (if anything) is trademark law to do about this apparent gap between commercial reality and legal principle? How, if at all, should we reconfigure legal principle to comport with commercial reality? (22)


    International and regional trademark law has developed a number of mechanisms designed to facilitate trademark protection across borders, beyond substantive harmonization. (23) Some, such as the protection of wellknown marks under the Paris Convention (first introduced in 1925), map protection to actual reputation in the transnational marketplace. (24) Others, such as the priority period and telle quelle mechanisms under the Paris Convention, (25) or the procedural reforms of the Trademark Law Treaty and the Singapore Trademark Law Treaty, are designed to offer transnational protection by facilitating registration of marks on multiple national registers. (26) This too explains the conceptual basis of the Madrid Protocol, (27) to which the United States and the European Union adhered in 2002 and 2004, respectively. (28)

    The next step conceptually in efforts to facilitate truly transnational protection is the advent of so-called unitary (registered) rights that transcend national borders. The EUTM is the leading exemplar of such rights. In some respects, and at least if applied to a broad geographic space, this may appear to be a quite radical approach to overcoming the territoriality of national trademark rights. But in other respects it is reaffirmation of a territorial approach to trademarks, with the simple adjustment of the relevant "territory."

    A conventional assessment of the conditions in which unitary rights have grown up suggests that such adjustments are far easier, and perhaps more likely to succeed, when certain political institutions exist (or are created) that map in some way to the new territory. (29) But one of the questions discussed briefly in Part VI of this Article is whether supranational political institutions are sufficient to ensure the success of a system of unitary rights. (30) At the very least, it is clear that...

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