The European Court of Justice’s landmark ruling in Intel Corp v CPM (UK) Ltd on the 27 November may alter the landscape of European trademarks. This case clarified the European position on trademark dilution and did not follow the US position. The case stemmed from a dispute between Intel Corp who owns the mark INTEL versus Compumark who has the mark, INTELMARK. Intel is famous for its computer chips whereas INTELMARK was being used on marketing and telemarketing services. Intel Corp sought a declaration of invalidity against the INTELMARK registration, claiming that its use would take unfair advantage of, or be detrimental to, the distinctive character or the repute, essentially diluting the earlier INTEL trade mark. The application was dismissed by the UK IPO, and the High Court agreed with the UK IPO. Intel then appealed to the Court of Appeal, claiming that their mark would be harmed by the use of INTELMARK despite the fact it was being used on very different products. They argued that this was a form of trademark dilution. The ruling from the ECJ indicates that in Europe INTEL is going to have a difficult time proving that the INTELMARK does the kind of economic harm to their mark that would result in dilution.

Trademark dilution has been a recognized form of trademark infringement in the United States for several years. The theory behind trademark dilution is that a famous mark can be harmed even if a similar mark is being used on goods which do not even necessarily compete with the famous brand’s goods. One way a mark is diluted is through blurring which has been described as “death by a thousand cuts. Under this theory the mark is being harmed over time because the link in a consumer’s mind between a company’s mark and a company’s product will be lessened. Dilution can also occur through tarnishment. This can happen when a mark is being used on a product which could damage the reputation of the famous brand. The most recent case from the US on dilution was decided last year: Louis Vuitton v. Haute Diggity Dog, 507 F.3d 252 (4th Cir. 2007). In this case the famous luxury goods maker sued a company that was making dog chew toys in the shape of Louis Vuitton handbags with the LV trademark on them. The court ruled that this was not a case of dilution since the LV mark was not impaired by the chew toys and it was not being tarnished by its use on chew toys.

In European law, trademark dilution is covered under the Trademark Directive Articles 4(4)(a) and (5)(2). Interestingly the word “dilution” is absent from the directive. In 2003, in the case of Adidas-Salomon v. Fitnessworld, (Case C-408/01), the Advocate General discussed the concept of dilution which had previously been avoided before the ECJ. He cited the US sources as inspiration for the decision. In the case of Adidas Salomon, the famous sportswear company Adidas, with their three stripe logo, sued Fitnessworld for making clothing with two stripes. They argued that consumers would be confused that the sportswear with two stripes was made by Adidas. A court in the Netherlands initially found that the use of the two stripe motif did infringe Adidas three stripe mark. This decision, however, was overturned after receiving guidance from the ECJ that the two stripes were not infringing and were merely a decoration.