The facts of the case
Iron&Smith filed an application in Hungary for the colour figurative sign ‘Be Impulsive’. Unilever opposed this application, relying on several earlier trademarks, including a Community trademark. Unilever did not succeed in proving that its trademarks were widely known in Hungary. But it did prove that its Community mark had acquired a reputation in the EU, given the fact the Unilever had advertised and sold large quantities of the goods protected by the trademark in both the UK and Italy. The Hungarian Trademark Office found that use of the later trademark, without due cause, was likely to take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier Community trade mark. Iron&Smith opposed this decision.
The ECJ considered that a trademark can have an established reputation in the EU if that reputation is established in a substantial part of the EU. This may, under circumstances, coincide with the territory of only one member state. The ECJ added that the proprietor of such a trademark is not required to produce evidence of that reputation in the member state where the application for registration of the later national mark, which is the subject of an opposition, was filed.
The referring court also wanted to know whether the established reputation can be successfully invoked in a member state where the trademark does not have a reputation. The ECJ considered that, even though the earlier Community trademark is unknown to the relevant public in the member state where registration of the later national trademark is applied for, it is conceivable that a commercially significant part of that public may be familiar with the earlier trademark and make a connection between that trademark and the later national trademark. If this can be shown and that there is either actual and present injury to its mark or a serious risk that such injury may occur in the future, the proprietor of the older trademark will be able to oppose the registration of the later trademark.
This ruling concerns establishment of a reputation within the EU and whether that reputation may be invoked in opposition proceedings in a member state where the trademark does not have a reputation. However, it may be assumed that the ruling also applies by analogy to prohibiting the use of a later trademark in a member state.
There is also the question of which party has to prove injury to the earlier trademark, or the lack thereof, as the Community trademark has a unitary character and should therefore enjoy the same protection throughout the EU. Does this mean that the burden of proof lies with the trademark holder who has already proven that the trademark enjoys a reputation within the EU, or should it be placed on the defendant, who will in essence reduce that unitary protection in claiming that the trademark does not have a reputation in the member state where the defendant wants to register or use that (similar) trademark?