Due cause

Abstract

... Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. [Emphasis added] Due cause has had something of a renaissance over the past few years. Until very recently it was assumed that due cause under the Trade Marks Directive should be interpreted in the same way as it had been in the pre-harmonization Benelux law, where it was limited to situations where the junior user was compelled to use the mark in question or had an earlier right to do so. This approach deprived the dilution/unfair advantage provision of the Directive of an important counterbalance at a time when unfair advantage was interpreted expansively. However, in the recent Interflora2 and Leidseplein3 cases, the Court of Justice of the European Union (CJEU) has made it clear that due cause is an autonomous concept, and not restricted to the scope of the old Benelux provision. Instead, the CJEU has spoken of due cause as allowing junior use that might otherwise infringe, but amounts to fair competition and has held that it provides an entry point for a consideration of the subjective intentions of the junior user. The CJEU has also explained that rather than being an ‘add on’, due cause plays a central role in counterbalancing the width of the dilution/unfair advantage action. At the same time, though, it has suggested that due cause may not apply when certain of the very harms mentioned in Art. 5(2) occur. This brings into question the utility of the provision in many dilution cases, particularly when taken in conjunction with the way in which the ‘honest practices’ proviso to the general defences has been interpreted.