The plaintiff owns an internationally reputed and well-known European mark registered in Class 18 for trunks and bags (the LOUIS VUITTON mark) (Figure 1).
Figure 1
The defendant, a Hungarian confectioner, produced cakes that resembled handbags and incorporated the LOUIS VUITTON mark. He advertised the cakes in RFH.(1)
The owner of the LOUIS VUITTON mark claimed against the confectioner for trademark infringement.
The Metropolitan Tribunal condemned the defendant for unlawfully transferring an image of the reputed mark to his confectionery from a different product. According to the tribunal, the defendant had used the reputation of the plaintiff's mark without due cause, thereby obtaining unfair advantage and causing harm to the mark's distinctive character. The defendant appealed the tribunal's decision to the Metropolitan Court of Appeal.
Although the appeal was rejected, the Metropolitan Court of Appeal challenged the tribunal's judgment on one point – namely, that the plaintiff had been unable to prove unfair use of its mark's distinctiveness. The court agreed with the tribunal regarding the defendant's use of the LOUIS VUITTON mark's reputation without due cause.
The defendant appealed this decision before the Supreme Court, contesting almost all of the Metropolitan Court of Appeal's claims. The defendant referred to European Court of Justice (ECJ) Decision C-62/08 as precedent; however, his appeal was rejected.
The Supreme Court reiterated that:
- the defendant had used the plaintiff's reputed mark without due cause and permission in order to obtain economic profit; and
- ECJ Decision C-62/08 was based on entirely different grounds to those of the case at hand and was therefore irrelevant.(2)
There have been relatively few 'free-riding' trademark cases in Hungary since the country's laws were harmonised with EU law in 1997. Besides this case, the Trademark Commentary (Budapest 2014) refers to only one other Supreme Court judgment. However, it cannot be excluded that free-riding cases have been judged at lower instances.
In the case at hand, the Metropolitan Tribunal condemned the defendant for the unfair use of the LOUIS VUITTON mark's distinctiveness and reputation, while the Metropolitan Court of Appeal condemned the defendant only for the unfair use of the mark's reputation.
Arguably, it is excessive to require proof of the unfair use of a mark's distinctiveness if the mark is reputed. Further, acquired reputation arguably has a retroactive effect on a mark's distinctiveness.
The ECJ case referred to by the defendant arguably concerned whether a third party's unauthorised use of a mark constituted infringement; therefore, the fact that the Supreme Court considered it irrelevant seems fair.
The Metropolitan Tribunal, Metropolitan Court of Appeal and Supreme Court decisions correspond to the ECJ's test for determining whether a party has taken unfair advantage of a mark's reputation.(3)
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Endnotes
(3) See L'Oreal, ECJ Decision C-487/07, paragraphs 41 to 44.
