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10 March 2015
Dutch football club AFC Ajax is one of the most successful in the world. Although AFC Ajax is particularly famous for its achievements, it is also recognised for its jersey. More than 100 years ago, AFC Ajax designed a club strip consisting of white shorts and a white shirt with a broad vertical red stripe over the chest and back, which is still used today. In 1997 AFC Ajax registered two Benelux trademarks (Registrations 0600269 and 0600270) for its red and white colour combination. The first mark consists of a red rectangle flanked by two smaller white rectangles (below left), while the other mark is a white short-sleeved t-shirt with a red rectangle in the centre.
AFC Ajax became aware that a stand outside the Amsterdam ArenA football stadium was selling AFC Ajax merchandise, including shirts and long-sleeved vests bearing the distinctive red and white colour combination. However, the garments offered at the stand were not identical to AFC Ajax's trademark registrations and did not bear other protected AFC Ajax trademarks.
AFC Ajax invoked its Benelux trademarks in order to stop the trader from offering and selling the garments without its consent. AFC Ajax claimed that the merchant's acts constituted infringement under Articles 2.20(1)(b) and 2.20(1)(c) of the Benelux Convention for Intellectual Property, which are identical to Articles 5(1)(b) and 5(2) of the EU Trademarks Directive (2008/95/EC). In addition, AFC Ajax claimed that sale of the garments by the merchant qualified as an unlawful act.
In his defence, the merchant submitted that AFC Ajax's trademarks were invalid because they lacked distinctive character according to the high threshold for the protection of colour trademarks.
In 2011 the Amsterdam District Court held that sale of the garments did not constitute trademark infringement. The court agreed with the defendant that the trademarks invoked were invalid because they lacked distinctive character. However, the merchant was ordered to cease sale of the garments on the grounds that it constituted an unlawful act against AFC Ajax.
On October 15 2013 the Amsterdam Court of Appeal overturned the district court's judgment and ruled that the trademarks were valid. The appeal court held that the district court had erred in applying the stringent criteria for the protection of colour trademarks as stipulated in European Court of Justice (ECJ) case law. The court found that the trademarks at issue were not colour trademarks, but rather figurative trademarks comprising a graphic representation of the two colours red and white, specifically designated and with contours. The appeal court found no objections to the validity of the trademarks.
However, AFC Ajax was unsuccessful in regard to the infringement claim. The appeal court held that although the trademarks were valid, the scope of protection of the trademarks was limited since the graphic representation in the Trademarks Register constituted the basis for a comparison between the trademarks and the sign used by the allegedly infringing party. In concrete terms, this meant that the actual garment sold by the merchant had to be compared to:
Therefore, AFC Ajax could not oppose all garments bearing a combination of red and white, even if such combination had the same designation and contours.
The appeal court held that the garments sold by the merchant were insufficiently similar to AFC Ajax's trademark registrations to result in the degree of similarity necessary to oppose the sales of such garments. Thus, the claim for trademark infringement failed. The claim based on the merchant's unlawful act also failed on similar grounds. The appeal court held that the dissimilarity between the signs excluded the possibility that the public would be misled as to the origin of the products.
AFC Ajax appealed. In particular, the Supreme Court was asked to decide whether the appeal court was correct in finding that the dissimilarity between the trademarks and the sign was sufficient to rule out the risk of confusion.
The Supreme Court ruled that the appeal court had erred in its trademark assessment. The Supreme Court referred to the ECJ decision in Specsavers (July 18 2013, Case C-252/12), in which the ECJ confirmed the criteria for trademark infringement based on Articles 5(1)(b) and 5(2) of the directive. Under Article 5(1)(b) of the directive, a likelihood of confusion is required. The existence of such a likelihood of confusion shall be assessed taking into account all factors relevant to the circumstances of the case (SABEL, November 11 1997, Case C‑251/95). The assessment of the likelihood of confusion, in relation to the visual, aural or conceptual similarity of the marks in question, must be based on the overall impression given by the marks, particularly bearing in mind their distinctive and dominant components. The global assessment implies some interdependence between the relevant factors, meaning that a low degree of similarity between the marks may be offset by the strong distinctive character of the earlier mark (Canon, September 29 1998, Case C‑39/97).
A similar test applies for assessing the infringement of marks with a reputation under Article 5(2) of the directive. According to Article 5(2) of the directive, the relevant public must perceive a link between the marks. All of the factors relevant to the circumstances of the case should be taken into consideration, including:
The parties agreed that the appeal court had not conducted such an assessment of the similarity of the marks; rather, it had merely ruled that the marks were too dissimilar to conflict with each other.
The Supreme Court clarified that the test applied by the appeal court was incorrect. The assessment described above may be skipped only where there is no similarity between the earlier mark and the challenged mark. In that situation the reputation or recognition enjoyed by the earlier mark and the fact that the goods or services covered are identical or similar are insufficient for the court to find that there is a likelihood of confusion between the marks at issue or that the relevant public creates a link between them (Ferrero, March 24 2011, Case C-552/09). The appeal court's ruling that the sign used by the merchant was insufficiently similar to the trademarks invoked by AFC Ajax implied that the signs were, to a certain extent, similar. In that situation the appeal court should have assessed the similarity as well as the likelihood of confusion or the existence of a link between them, which it failed to do.
The case has been referred to the Hague Court of Appeal for an assessment based on the correct criteria. However, it is unclear whether the ruling will ultimately help AFC Ajax to succeed in its infringement claim or whether the Supreme Court's ruling is in fact a Pyrrhic victory. The Hague Court of Appeal may conclude that there is no likelihood of confusion between the two marks, leading to the same outcome as the judgment of the Amsterdam Court of Appeal.
For further information on this topic please contact Roderick Chalmers Hoynck van Papendrecht at AKD by telephone (+31 88 253 50 00) or email (firstname.lastname@example.org). The AKD website can be accessed at www.akd.nl.
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