Trademarks and Social Media - IP Dragon

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Trademarks and Social Media

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Trademarks and SocialMediaTowards Algorithmic Justice

Danny FriedmannFaculty of Law, The Chinese University of Hong Kong

Cheltenham, UK +Northampton, MA, USA



© Danny Friedmann 2015

All rights reserved. No part of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means, electronic, mechanicalor photocopying, recording, or otherwise without the prior permission of thepublisher.

Published byEdward Elgar Publishing LimitedThe Lypiatts15 Lansdown RoadCheltenhamGlos GL50 2JAUK

Edward Elgar Publishing, Inc.William Pratt House9 Dewey CourtNorthamptonMassachusetts 01060USA

A catalogue record for this bookis available from the British Library

Library of Congress Control Number: 2015938631

This book is available electronically in theLaw subject collectionDOI 10.4337/9781783479542

ISBN 978 1 78347 953 5 (cased)ISBN 978 1 78347 954 2 (eBook)

Typeset by Columns Design XML Ltd, ReadingPrinted and bound in Great Britain by T.J. International Ltd, Padstow



Contents

Preface xSignificance of the book xScope of the book xi

List of abbreviations xvTable of cases xvii

1 Introduction 11.1 Basics 1

Paradigm shift 2Literature review 3Outline of the book 18

PART I STAGE, PROTAGONISTSAND LEGAL CONFLICT

2 Stage of the legal conflict 232.1 Introduction 232.2 Relevant international treaties 242.3 Definition of the trademark 282.4 Two roots of the trademark 292.5 Inherent and acquired distinctiveness 302.6 Conventional and unconventional trademarks 312.7 Misrepresentation and misappropriation 32

Sponsorship and affiliation confusion 33Initial-interest confusion 34Post-sale confusion 34Reverse confusion 35Misappropriation 35Dilution by blurring 37Dilution by tarnishment 38

2.8 Dichotomous functions of the trademark 38Consumer interest-related functions of trademarkinfringement 39Consumer interest-related function of trademark dilution 42Proprietary functions 43

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2.9 Brief history of trademark infringement and dilution 49Trademark infringement legislation 52Trademark infringement tests 53TDRA test for trademark dilution by blurring 57Virgin Enterprises Ltd v Bodtrade likelihood ofconfusion principles 59Legislation against trademark dilution 61

3 Protagonists of the legal conflict 653.1 Introduction 653.2 Trademark holders 653.3 Social media providers 68

Power asymmetry between social media providers andinternet users 70

3.4 Internet users 713.5 Trademark logo 83

4 Analysis of the legal conflict 924.1 Introduction 924.2 Perception of internet users, social media providers and

search engines 934.3 Ample access to the unauthorized trademark logo 934.4 Proliferation, scale and speed of contentious content 954.5 Permanence of uploaded logos 984.6 Uncertain boundaries 1014.7 Trademark holders and OSP’s are overwhelmed, internet

users are ignorant of infringement 1024.8 Loss of control 1044.9 Technologies such as cloud computing 1054.10 Conclusion 107

PART II INADEQUACY OF THE LAW

5 Trademark infringement and its defences 1115.1 Introduction 1115.2 Commercial use 1125.3 Descriptive use defences 119

Classic fair use defence 121Nominative fair use defence 125

5.4 Legitimate and illegitimate use of the unauthorizedtrademark 131

5.5 Conclusion 134

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6 Trademark dilution and its defences 1376.1 Introduction 1376.2 Rationale of the trademark dilution doctrine 138

Article 6bis Paris Convention 141Article 10bis Paris Convention 142

6.3 Legislation and case law 143Legislation and case law in the EU 153Preconditions for protection against trademark dilution 165Degrees of distinctiveness 165Degree of fame, reputation or well-knownness 170Famous trademark in the US 170Trademarks with a reputation in the EU 172Famous trademarks, trademarks with a reputation andwell-known trademarks 176Problems with identical trademarks for dissimilar goodsor services 178

6.4 Defences 182Bases of defence, and defence against defence 184Freedom of expression v property 187Defence of fair use in the case of trademark dilutionin the US 189Defence of limitations/exceptions of unfair advantageor detriment to the distinctive character or repute ofthe mark in the EU 191Parody 198Parody and dilution by blurring/detriment to distinctive-ness 210Parody and dilution by tarnishment/detriment to repute 211Free-riding/unfair advantage of distinctive character orrepute 221Criticizing and commenting 221Current trademark law’s insufficient protection of thetrademark logo on social media 222

7 Intermediary liability 2257.1 Introduction 2257.2 Safe harbour provisions 228

DMCA and CDA 228Lanham Act 233E-Commerce Directive 235

7.3 Knowledge 237Contributory liability 240

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Vicarious liability 2447.4 Weakening incentives of social media to filter 246

Market forces: attractiveness over accountability 247Excessive yielding to complainants 249Bargaining power of trademark holders 251Self-regulation 252Legislation 253Seminal cases 254

7.5 Obligation to monitor 260Technology 264

7.6 Lack of legal certainty 268

PART III PARADIGM CHANGE

8 Moral right of integrity 2738.1 Introduction 2738.2 Origin of moral rights 274

Theories on moral rights 274Moral rights avant la lettre 275French and mainstream moral rights 276

8.3 International treaties 279Economic rights and moral rights dichotomy 280Right of attribution and/or right of integrity 281

8.4 Common law’s functional equivalents of moral rights 282Moral rights in the US 283Moral rights legislation in the UK 288Moral rights legislation in the US 288

8.5 Trademark logo and moral rights 290Trademark as a vehicle of communication 291

8.6 Trademark as personification of the trademark holder 292Personality rights 292Personality of the trademark 296

8.7 Trademark dilution seen as moral right 297Why trademark dilution does not pre-empt the need fora moral right for the trademark logo 298

8.8 Rationale for moral right of integrity for the trademarklogo 299

9 Implementation of a paradigm shift 3039.1 Introduction 3039.2 Juridical solution 304

Right to disclose and withdraw 305

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Right of attribution 305Right of integrity 306

9.3 Contractual solution 307Walled garden phenomenon 307Diversity 310Market forces will shape law in the private sphere 311Technological developments 313

9.4 Making authorized trademark use transparent 314Licence conditions 315

9.5 Making unauthorized trademark use disappear 3189.6 Pre-upload filtering to substitute safe harbour provisions 3199.7 Optimizing policy goals 322

Trademark law 322Copyright law 323

9.8 Algorithmic justice 324

PART IV CONCLUSIONS

10 Conclusions 329

Bibliography 331

Index 365

Contents ix



Preface

Legal conflicts between trademark holders, social media providers andinternet users have become manifest in light of wide scale, unauthorizeduse of the trademark logo on social media in recent decades. Arguing forthe protection of the trademark logo against unauthorized use in acommercial environment, this book explores why protection enforcementshould be made automatic. A number of issues are discussed, includingthe scalability of litigation on a case-by-case basis and whether safeharbour provisions for online service providers should be substituted forstrict liability.

SIGNIFICANCE OF THE BOOK

This book is a revised adaptation of Danny Friedmann’s dissertation ‘AParadigm Shift of the Trademark Logo: Toward Algorithmic Justice’(PhD in Laws, The Chinese University of Hong Kong, December 2013).

It is written for scholars and students in the field of trademark law,social media, internet intermediary liability and contract law, but also forpractitioners such as trademark lawyers, in-house counsel, trademarkholders, marketeers and policy makers interested in the legal aspects ofuser generated content on social media in regard to the trademark logo.

Brands, which represent a combination of the trademark and thereputation built up in the trademark, can be extremely valuable totrademark holders, consumers and society at large. Some trademarks areassigned or licensed for millions of US dollars or euros. In 2011, thethree most valuable brands were Apple, valued at more than 153 billionUS dollars; Google, valued at more than 111 billion US dollars; andIBM, valued at more than 100 billion US dollars.1 As pointed out above,the unauthorized use of the trademark logo on social media can be veryharmful to the trademark holder.

1 WPP/Millward Brown, ‘BrandZ Top 100 Most Valuable Global Brands2011’, (2011), accessed 13 June 2015 at: http://c3232792.r92.cf0.rackcdn.com/WPP_BrandZ_2011.pdf.

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As detailed below existing literature does not cover the conflict oftrademark holders, social media providers and internet users over theunauthorized use of the trademark logo on social media and how toprotect and enforce the trademark logo on social media. This book aimsto fill that gap.

This book builds upon the work of multiple intellectual propertyscholars and others. The book is novel in that it explores whether thetrademark logo inherently contains certain characteristics which deserveto be protected beyond other forms of the trademark, and that it excludesa solution that includes predominantly litigation, since courts of law arenon-scalable. The protection and enforcement of the trademark logo isnot only seen as a problem, but also as a solution. The reason is that thetrademark logo is not susceptible to any nominative use defence and canavoid confusion when a trademark is used in keyword triggered adver-tisements. After analysing the challenges facing the trademark logo onsocial media, this book proposes a paradigm shift. The solution to theproblems associated with protection and enforcement needs to corres-pond to the principle that it needs to bring clarity, legal certainty andbusiness predictability to all stakeholders involved, and be more eco-nomical than the current legal conflicts between trademark holders andsocial media, and trademark holders and internet users. This book notonly proposes a change of the law, but until that is realized, it advancescontractual solutions via walled gardens of social media, which can beused as testing grounds to automatically enforce the proposed solution.

SCOPE OF THE BOOK

The current trademark law in the US and EU can be characterized asbeing narrowly interpreted. The protection and consequently the enforce-ment of the trademark, including the trademark logo on social media, arelimited to the use of the trademark in the course of trade. However, thisbook is dealing with the trademark logo used both in and outsidethe course of trade, as long as it was used without the permission of thetrademark holder. In addition, this book will assess the merits of the‘non-commercial use’ doctrine, and that of nominative fair use defencesagainst trademark infringement based on confusion, and fair use defencesagainst trademark dilution, in light of social media.

Logos can be divided into unregistered and registered trademark logos.This book will exclusively explore the latter for goods or services whichare placed on social media. However, the jurisprudence of unauthorizedplacement of trademarks on other forms of media that are applicable to

Preface xi



those involving trademark logos on social media will be referred to.Therefore some of the cases are about auction sites and keywordtriggered advertisements. In other words, this book elaborates on thetrademark law in general only to see whether it can be applied in the caseof the protection and automatic enforcement of the trademark logo onsocial media in particular.

Copyright law has the potential to protect and enforce those logos withsome measure of originality. However, protecting and enforcing copy-righted pictures that were reproduced, displayed and distributed asthumbnails can be more problematic.2 Recent jurisprudence demonstratesthis difficulty. For example, in Perfect 10 v Google3 the District Courtand on appeal4 the 9th Circuit both favoured the server test5 instead ofthe incorporation test,6 holding that Google Images was not liable fordirect copyright infringement since the frames and in-line links itdisplayed were not stored on and served by Google.

Likewise, in Kelly v Arriba Soft Corp. the District Court7 and 9thCircuit8 held that irrespective of whether the source was authorized ornot, Arriba Soft Corp.’s reproduction, display and distribution of thumb-nails of copyright pictures was transformative and therefore fair use.9

Thus, it seems that with this recent jurisprudence copyright law is notsuitable as a remedy in case of unauthorized use of a trademark logo onsocial media. That being said, this book frequently returns to copyright

2 Miquel Peguera, Copyright Issues Regarding Google Images and GoogleCache, in GOOGLE AND THE LAW: IT AND THE LAW (Aurelio Lopez-Tarruella, ed., The Hague: T.M.C. Asser, 2012).

3 Perfect 10, Inc. v Google, Inc., 416 F. Supp. 2d 828 (D. Cal. 2006).4 Perfect 10, Inc. v Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).5 The server test is to see whether a party is sending ones and zeroes over

the internet to the user’s browser. In case of the copyrighted pictures Google wasnot sending the pictures, but only displaying them via in-line linking. Peguera,supra note 2, at 177.

6 In the incorporation test it is sufficient when content is incorporated into aweb page and then pulled by the browser. When this test would have beenapplied Google would be held liable for direct copyright right infringement.Peguera, supra note 2, at 177–8.

7 Kelly v Arriba Soft Corp., 77 F. Supp. 2d 1116 (C.D. Cal. 1999).8 Kelly v Ariba Soft Corp., 280 F.3d 934 (9th Circuit 2002) withdrawn,

re-filed at 336 F.3d 811 (9th Circuit 2003).9 The Ninth Circuit held that Arriba’s use of the images, namely access to

information, serves a different function than Kelly’s use, which was consideredartistic. Kelly v Arriba Soft Corp., supra note 8, at 819.

xii Trademarks and social media



law as it has been a fertile breeding ground for many doctrines that laterwere codified into or analogously applied to trademark law.10

Although technical protection measures and digital rights managementsystems are a way to protect against the unauthorized copying of picturesthat represent trademark logos, and the removal, disablement or circum-vention of these technical protection measures is prohibited by law,11 thetopic will only implicitly be addressed when Google Images is discussed.

To infer from the lack of technical protection measures that a trade-mark holder gives permission to copy and paste a trademark logo onsocial media, by implied licence, will not be dealt with, since they are notcompatible with an automatic enforcement which employs a system ofexplicit licences.

Just as with technical protection measures and digital rights manage-ment systems, opt-out requirements by social media will not be takeninto account, since they have not been used as a defence by social media,thus far, and from an ethical point of view could be better completelyavoided.12

The largest part of the most valuable trademark logos in the world arein the hands of trademark holders who are located in the US or EU.Moreover, the most important social media sites are based in the US,with affiliate sites in the languages used by and/or top level domainnames of the respective EU member states. Thus, the laws and jurispru-dence of the US and EU feature prominently throughout this book, witha focus on the federal law system in the US and directives andregulations in the EU.

Although in reality there are many more relevant stakeholders, includ-ing the federal and state legislators in the US and the respective EU

10 Berne Convention for the Protection of Literary and Artistic Works (infra,Chapter 2, note 3), with its three-step test of fair-use, fair-use in general, and thesafe harbour provisions, originated from copyright law. Implied licence doctrinecomes from patent law and then jumped to copyright law and trademark law,respectively. Moral rights doctrine also originated from copyright law.

11 Articles 11 and 12 WIPO Copyright Treaty, implemented in the US via§ 103 (17 U.S.C § 1201 Digital Millennium Copyright Act); and in the EU viaArticle 6 Directive 2001/29/EC of the European Parliament and of the Council of22 May 2001 on the harmonisation of certain aspects of copyright and relatedrights in the information society.

12 Opt-out requirements would better be avoided completely, since theydeviate from the ‘principle of qui tacet consentire videtur’ (he who is silent istaken to agree) whereby a respondent is explicitly asked. To assume that ifsomeone does not opt-out that that person in some way has consented is arguablyproblematic.

Preface xiii



member states’ legislators, national and international industry groups fortrademark holders, internet intermediary service providers, and con-sumers, this book exclusively deals with: trademark holders, social mediaproviders and internet users.

This book aspires not just to provide an analysis of the law as it is, butwill also propose the law as it ought to be, by proposing a paradigm shiftand a comprehensive solution.

xiv Trademarks and social media



Abbreviations

ADR Alternative Dispute ResolutionBasic Law Basic Law for the Federal Republic of Germany

(Grundgesetz)BBC British Broadcasting CompanyBerne Convention Berne Convention for the Protection of Literary and

Artistic WorksCDA Communications Decency ActCDPA Copyright, Designs and Patents ActCJEU Court of Justice of the European UnionCMI copyright management informationCommunity Council Regulation (EC) No. 40/94 of 20 DecemberTrademark 1993 on the Community trade markRegulationDMCA Digital Millennium Copyright ActECHR European Convention for the Protection of Human

Rights and Fundamental FreedomsECJ European Court of JusticeEU Charter Charter of Fundamental Rights of the European

UnionFBX Facebook Ad ExchangeFIFA Fédération Internationale de Football AssociationFTC Federal Trade CommissionFTDA Federal Trademark Dilution ActICC International Chamber of CommerceIOC International Olympic CommitteeIP intellectual propertyMarkenG MarkengesetzNice Agreement Nice Agreement Concerning the International

Classification of Goods and Services for thePurposes of the Registration of Marks

NOCI notice of claimed infringement

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OHIM Office for the Harmonization of the Internal MarketOSP Online Service ProviderParis Convention Paris Convention for the Protection of Industrial

PropertyProtocol to ECHR Protocol to the European Convention for the

Protection of Human Rights and FundamentalFreedoms, Paris, 20 March 1952

ROI return on investmentSEO search engine optimizationTDRA Trademark Dilution Revision ActTrademark First Council Directive 89/104/EEC of 21 DecemberDirective 1988 to approximate the laws of the Member States

relating to trade marksTRIPS Agreement on Trade-related Aspects of Intellectual

Property RightsUSPTO United States Patent and Trademark OfficeVARA Visual Artists Rights ActVeRO Verified Rights OwnersWIPO World Intellectual Property OrganizationWIPO WIPO Joint Recommendation Concerning ProvisionsRecommendation on the Protection of Well-Known MarksWTO World Trade OrganizationWTO panel report WTO document WT/DS160/R, 15 June 2000, panelcopyright report United States – Section 110(5) of the United

States Copyright ActWTO panel report WTO document WT/DS114/R, 17 March 2000,patent panel report Canada – Patent Protection of

Pharmaceutical Products CaseWTO panel report WTO document WT/DS174/R, 15 March 2005,trademark panel report European Communities – Protection of

Trademarks and Geographical Indications forAgricultural Products and Foodstuffs

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1. Introduction

Building blocks of the research; why, what,how, and what was done before, plus fivequestions

1.1 BASICS

If another poaches upon the commercial magnetism of the symbol he hascreated, the owner can obtain legal redress.1

In 1942, Justice Frankfurter stated the abovementioned quote. At its core,this book questions whether such optimism remains valid in times ofsocial media. More specifically, this book investigates whether thetrademark logo that is uploaded on social media without permission ofthe trademark holder is sufficiently protected and enforced. Answeringthis question in the negative, the book proposes a paradigm shift.

The unauthorized use of the trademark logo on social media can spreadexponentially, because of the dynamics and topology of and interactivitybetween social networks.2 In a relatively short period of time this candamage beyond repair a reputation3 which had been diligently built upover a relatively long period of time. The damage to the reputation candevalue the trademark, alienate customers and erode shareholder value.In addition, capital can be destroyed in the ensuing legal conflictsbetween stakeholders. These legal battles potentially repress commerce

1 Frankfurter J. in Mishawaka Rubber & Wollen Mfg. v S.S. Kresge Co.(Mishawaka Rubber), 316 U.S. 203, 205 (1942).

2 Maziar Nekovee, Y. Moreno, G. Bianconi and M. Marsili, Theory ofRumour Spreading in Complex Social Networks, 374 PHYS. A 457 (2007).

3 ‘Who steals my purse steals trash; ‘tis something, nothing; / ‘Twas mine,‘tis his, and has been slave to thousands; / But he that filches from me my goodname / Robs me of that which not enriches him, / And makes me poor indeed’.William Shakespeare, THE TRAGEDY OF OTHELLO, THE MOOR OFVENICE 1605 (Gretchen Schultz, ed., Newburyport: Focus Publishing 2010),Act 3, Sc. 3.

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of the trademark holder, distract social media providers from theirprimary activities and stifle creativity of internet users. The parlous stateof the present situation is bound to lead to an unacceptable level of legaluncertainty for all stakeholders involved.

Paradigm Shift

The possible scope, scale and impact of damage resulting from unauthor-ized use of a trademark logo on social media are incomparable with thatof a trademark logo offline. The social media phenomenon has radicallychanged the balance of interest between trademark holders and thirdparty users of their trademark, without any adaptation to the laws oftrademark infringement and trademark dilution.

After determining that the current system is not sufficient to control thenew situation, this book proposes a paradigm change to lay the foun-dation for the protection and enforcement of the trademark logo on socialmedia. In so doing, the book will demonstrate that on the one hand thetrademark logo is worth protecting on social media, and on the otherhand, that the enforcement without judicial review is both needed andcompatible with the fundaments of a democratic society.

Throughout the book, two assumptions are made: first, that thetrademark holder should be protected against unauthorized use of histrademark logo on social media; second, that technology should be usedto restore an equitable equilibrium.

The unauthorized use of the trademark logo is a serious problem. Inorder to resolve it the authorized use of the trademark logo on socialmedia should be made transparent,4 otherwise any transgression remainsundeterminable for even the most well-intentioned internet users. Thesheer volume of the number of cases of unauthorized use of thetrademark logo makes a case-by-case solution unfeasible. Therefore, thisbook advances automatic enforcement as a prerequisite for a solution.The limitations to internet intermediary liability regimes, relevant tosocial media providers, do not provide any real safety against legalconflicts for any of the stakeholders; instead, they aggravate the problem.This book therefore asserts that an abolition of these so-called safeharbour provisions is another prerequisite for a solution.5

4 Not unlike Creative Commons’ licence system, which enables copyrightholders to make transparent what kind of use of their works is authorized.Creative Commons, accessed 9 February 2015 at: http://creativecommons.org.

5 In the US the safe harbour provisions can be found in the DigitalMillennium Copyright Act (DMCA), 1998, which can be found in the United

2 Trademarks and social media



The paradigm shift does not require any derogation of the acquis in theUS and EU to guarantee the right to freedom of speech, parody andcritical comments. One should realize, however, that rights to freedom ofspeech, parody and critical comments are in no jurisdiction absolute. Thisparadigm shift leaves enough room for an equitable balancing ofthe interests of the stakeholders. Based on the paradigm change and thespecial properties of the trademark logo, the solution proposed is theprotection and automatic enforcement of the moral rights of integrity ofthe trademark logo, the abolishment of the safe harbour provisions, whileallowing freedom of speech, parody and critical comments taking intoaccount a few fair formalities. This solution can be either enacted intolaw or, pending any such codification, tested as a contractual solution inthe ‘walled gardens’ of social media.6

Literature Review

Since the problem of the unauthorized use of the trademark logo onsocial media is underdeveloped in the literature, the review below willgive a broad overview of the epistemology on the theories of thetrademark in general. This review can serve as theoretical building blocksand context in regard to the specific challenges the stakeholders face overthe conflict of the unauthorized use of the trademark logo on socialmedia. Also, the interrelationships between the themes will be demon-strated.

Trademarks can be seen as monologic or dialogic. The philosopherBakthin7 came up with this distinction, related to literature. Monologicliterature only gives its opinion, while dialogic literature carries on acontinual dialogue with other works of literature and other authors. If oneperceives the trademark as monologic, then its meaning, defined by thetrademark holder will remain unchanged if the trademark holder sowishes. However, if one perceives the trademark as dialogic, thenconsumers are able to change the meaning given by the trademark

States Code, Title 17 Chapter 5, Article 512. In the EU, in Directive 2000/31/ECof the European Parliament and of the Council of 8 June 2000 on certain legalaspects of information society services, in particular electronic commerce, in theInternal Market (Directive on electronic commerce). Chapter 7 is dedicated tothis subject.

6 The term ‘walled gardens’ will be explained in Chapter 9.3 ‘WalledGarden Phenomenon’.

7 Mikhail Mikhailovich Bakhtin, THE DIALOGIC IMAGINATION: FOURESSAYS (Austin: University of Texas Press 1981).

Introduction 3



holder.8 The implications of a dialogic perspective are serious, sinceinternet users can easily find, copy and paste unauthorized trademarklogos that can be uploaded and shared on and among social media sites.

Coombe9 asserted that creating meaning to an image is not a top-downprocess, but instead involves dialogue between the corporate author andthe consumer. According to Coombe,10 intellectual property laws stifledialogic practices and prevent other people from expressing their identity.

A trademark holder codifies his trademark with meaning, the consumerdecodes that meaning, and third parties might be able to recodifymeaning to the trademark.

According to Professor Aoki, trademark holders should know that‘recodifications of symbols are always capable of being deployed againstthe grain’.11

A person that appropriates pre-existing materials and then re-createsimprovised structures is called a bricoleur, a term coined by the anthro-pologist Claude Lévi-Strauss, as the visual semiotician Chandlerexplained.12 On social media one can assert that internet users thatrecodify the trademark logo are such virtual bricoleurs. In his bookRemix, Professor Lessig made a case for the freedom of internet users toremix existing copyright works, to improve, integrate or change these

8 The trademark Lonsdale was hijacked by white supremacists in theNetherlands, Belgium, France and Germany who reinterpreted the Lonsdalename by revealing just the third, fourth, fifth and sixth letters, ‘NSDA’, short forNSDAP, the former Nazi party, under their bomber jackets. Lonsdale tried tochange these associations with the brand by supporting anti-racist initiatives.Joerie van den Bergh, and Mattias Behrer, Chapter Seven Happiness: Gen Y’sAdoration for Branded Emotions, in BRANDING TO GENERATION Y: HOWCOOL BRANDS STAY HOT 181 (London: Kogan Page, 2009).

9 Rosemary J. Coombe, Objects of Property and Subjects of Politics:Intellectual Property Laws and Democratic Dialogue, 69 TEX. L. REV. 1853(1991).

10 Id, at 1854.11 Keith Aoki, How the World Dreams Itself to be American: Reflections on

the Relationship Between the Expanding Scope of Trademark Protection andFree Speech Norms,17 LOY. L.A. ENT. L. REV. 523, 542 (1997).

12 Daniel Chandler, SEMIOTICS: THE BASICS (London: Routledge 2002).Beebe has applied this theory on trademark doctrine. See Barton Beebe, TheSemiotic Account of Trademark Doctrine and Trademark Culture, Chapter 2, inTRADEMARK LAW AND THEORY: A HANDBOOK OF CONTEMPORARYRESEARCH (Graeme B. Dinwoodie and Mark D. Janis, eds, Cheltenham UKand Northampton, MA, USA: Edward Elgar 2008).




works into new works.13 Although Remix is about copyright law, it is alsorelevant to the study of the trademark logo.

Professor Wilf explained that authorship in trademark could be re-defined to include a public act of interpretive association, because it lacksthe idea of individual authorial production.14 Coombe characterizedtrademarks as free-floating symbols, which she considered to be in thepublic consciousness, and which are vulnerable to people who assumethe right to reinterpret and change them.15

According to Professor Fisher all persons in an attractive society wouldbe able to participate in the process of meaning-making.16 ProfessorLitman asserted that trademark symbols earn value when the publicinvests in the meaning of these brands.17 Professor Dreyfuss also heldthat the public can contribute to a brand’s value.18 According to Lessig,there is a connection between the possibilities of internet users toparticipate in a remix procedure and the flourishing of culture.

Once the trademark logo is unauthorizedly used in an environmentsuch as social media, recodification can take place. This recodification isobviously aggravated where the internet users upload an altered versionof the trademark logo.

According to Professor Katyal, trademarks are paradoxically im-mutable, but instable entities open to constant reinterpretation andre-signification.19

Instable trademarks caused, according to sociologist and philosopherBaudrillard, a hyper-reality, which can be characterized as the fragmen-tation of the public sphere and a lack of commonly shared meaning ofsigns.20 Professor Hughes articulated that the interests of non-owners in

13 Lawrence Lessig, REMIX: MAKING ART AND COMMERCE THRIVEIN THE HYBRID ECONOMY, (New York: Bloomsbury Academic Press 2008).

14 Steven Wilf, Who Authors Trademarks?, 17 CARDOZO ARTS & ENT.L.J. 4, 10 (1999).

15 Coombe, supra note 9, at 1880.16 William Fisher, Property and Contract on the Internet, 73 CHI.-KENT. L.

REV. 1203, 1217 (1998).17 Jessica Litman, Breakfast with Batman: The Public Interest in the

Advertising Age, 108 YALE L.J. 1717, 1730 (1999).18 Rochelle Cooper Dreyfuss, Expressive Genericity: Trademarks as Lan-

guage in the Pepsi Generation, 65 NOTRE DAME L. REV. 397, 402 (1990).19 Sonia K. Katyal, Stealth Marketing and Antibranding: The Love that

Dare Not Speak Its Name, 58 BUFF. L. REV. 795 (2010).20 Jean Baudrillard, SYMBOLIC EXCHANGE AND DEATH, (London:

Sage Publications 1993); Jean Baudrillard, SIMULACRA AND SIMULATION,(Ann Arbor: University of Michigan Press 1994).

Introduction 5



stable trademarks might outweigh groups that want to be able to changethe meaning of trademarks.21 Hughes clarified that even for the lattergroup the knowledge of the original meaning of the mark is essential asa reference to the recodification, otherwise no one will notice a differ-ence of meaning. Professor Assaf explained that the interest in protectingcultural heritage coincides with a need to fix the meaning of thatheritage.22

Holders of trademark logos that are unauthorizedly used on socialmedia might be most harmed by the instability of meaning.

Already in 1899 the economist and sociologist Veblen explained theevolution of social classes through the consumption of goods.23 ProfessorPollack gave a description of the trademarks used as signifiers of socialstatus throughout history.24 A modern example of using a trademark tosignify social status can be observed on social media where for thispurpose often trademark logos of luxury goods are unauthorizedlyuploaded and shared.

That consumers use the trademark to help them assume an identity isoutlined by Drescher.25 Hughes wrote that the trademark is used on theone hand to express a need for individuality, but on the other hand toidentify with a collective.26

From an economic or moral point of view it is challenging to usetrademark law to protect the status-signalling qualities of the mark,according to Professor Harrison.27

Frankfurter wrote that ‘the creation of a market through an establishedsymbol implies that people float on a psychological current engendered

21 Justin Hughes, ‘Recoding’ Intellectual Property and Overlooked AudienceInterests, 77 TEX. L. REV. 923, 941 (1999).

22 Katya Assaf, The Dilution of Culture and the Law of Trademarks, 49IDEA: THE J. OF L. AND TECH. 1 (2008).

23 Thorstein Veblen, THE THEORY OF THE LEISURE CLASS: ANECONOMIC STUDY IN THE EVOLUTION OF INSTITUTIONS (New York,London: Macmillan Company 1899).

24 Malla Pollack, Your Image Is My Image: When Advertising DedicatesTrademarks to the Public Domain – with an Example from the TrademarkCounterfeiting Act of 1984, 14 CARDOZO L. REV. 1391 (1993).

25 Thomas D. Drescher, The Transformation and Evolution of Trademarks:From Signals to Symbols to Myth, 82 T.M.R. 301, 309 (1992).

26 Hughes, supra note 21, at 956–7. See also Shahar J. Dilbary, FamousTrademarks and the Rational Basis for Protecting ‘Irrational Beliefs’, 14 GEO.MASON L. REV. 605, 634–6 (2007).

27 Jeffrey L. Harrison, Trademark Law and Status Signaling: Tattoos for thePrivileged, 59 FLA. L. REV. 195, 196 (2007).




by the various advertising devices which give a trademark its potency’.28

Professor Ralph Brown stated that the goodwill and advertising functionmight not be beneficial to society at large.29 Heath and Scott argued thatproducts with a trademark logo might be purchased, even though thismight be based on irrational projections, for reasons of self-realizationthrough the internalization of the portrayed values.30 The consumer,however, purchases the advertised mental image together with thephysical commodity of a product, as Professor Economides explained.31

Brown found out that, although it might be irrational to buy illusions, thereality is that consumers are irrational.32 Lemley stated hesitantly, in afree market, everybody should perhaps be able to make their ownchoices, whether these choices are irrational or not.33

Author and activist Klein in her international bestseller No Logocriticized the philosophy of brands in the global economy that value theimage bestowed on their trademarks more than the products they aremanufacturing.34 One implication of such a philosophy is that thesebrands outsource their production to Third World countries where theproduction takes place under suboptimal circumstances, to put it euphem-istically, cutting loose the link between trademark and source of origin.However, trademark logos can also help make the trademark holderaccountable.

Rogers argued in 1909 that the trademark is not that important since ‘itis just the shadow of the goodwill’.35 This perception has definitelychanged. After the gap between mark and source, and between mark andproduct, became so wide, the mark only referred to itself, as professor of

28 Mishawaka Rubber, supra note 1.29 Ralph S. Brown, Jr., Advertising and the Public Interest: Legal Protection

of Trade Symbols, 57 YALE L.J. 1165, 1181 (1948).30 A.P. Heath and D. Scott, The Self-Concept and Image Congruence

Hypothesis, 32 EUR. J. MARKETING 1110 (1997).31 Nicholas S. Economides, The Economics of Trademarks, 78 T.M.R. 523,

533 (1988).32 Ralph S. Brown, Jr., supra note 29, at 1181.33 Mark Lemley, The Modern Lanham Act and the Death of Common Sense,

108 YALE L.J. 1687, 1692 (1999).34 Naomi Klein, NO LOGO: TAKING AIM AT THE BRAND BULLIES

(Toronto: Knopf Canada, 2000).35 Edward S. Rogers, Comments on the Modern Law of Unfair Trade, 3 ILL.

L. REV. 551, 555 (1909).

Introduction 7



history, film and media studies Poster observed.36 Later, Coombe alsodescribed the mark as quintessentially self-referential.37 ProfessorWelkowitz stated that the trademark is the product.38 Judge Kozinskiwrote about the use of the logo used as a separate commodity, totallydistinct from its original and traditional function.39 Lemley contendedtrademarks as assets with their own intrinsic value.40 Anthropologist andgeographer Harvey asserted that ‘given the ability to produce images ascommodities more or less at will, it becomes feasible for accumulation toproceed at least in part on the basis of pure image production andmarketing’.41

The author and lawyer Johnson made clear that a trademark holderdoes want to give his trademark enough meaning, but not too much sothat it will be threatened by genericide42 when its meaning includes aproduct category.43

Professor Dreyfuss, who observed that trademarks have becomeindependent commodities, proposed the protection of the expressive

36 Mark Poster, THE MODE OF INFORMATION, POST-STRUCTURALISM AND SOCIAL CONTEXTS 13 (Chicago: University ofChicago Press 1990).

37 Rosemary Coombe, THE CULTURAL LIFE OF INTELLECTUALPROPERTIES: AUTHORSHIP, APPROPRIATION, AND THE LAW 55 (Dur-ham, NC: Duke University Press 1998).

38 David S. Welkowitz, TRADEMARK DILUTION: FEDERAL, STATE,AND INTERNATIONAL LAW 117 (Arlington, VA: Bloomberg BNA 2002).

39 Alex Kozinski, Trademarks Unplugged, 68 N.Y.U. L. REV. 960, 961(1993).

40 Lemley, supra note 33, at 1693.41 David Harvey, THE CONDITION OF POSTMODERNITY 89 (Cam-

bridge MA, Oxford: Blackwell Publishers, 1989).42 An example is Walkman; in the Netherlands Sony made a mistake in

advertisements by referring to mobile tape-players of its competitors as ‘walk-men of other brands’, committing genericide to their own trademark name‘Walkman’. Lecture by Professor Bernt P. Hugenholtz, attended at IViR, Univer-sity of Amsterdam, 2006.

43 Peter Johnson, Book Review: Can You Quote Donald Duck? IntellectualProperty in Cyberculture – Rosemary J. Coombe, The Cultural Life of Intellec-tual Properties: Authorship, Appropriation, and the Law, 13 YALE J.L. &HUMAN. 451, 459 (2001).




dimension of trademarks.44 Trademarks have become valuable commod-ities, according to Litman.45 She also described the value of the trade-mark as being more dependent on the perception of consumers than theproduct itself.46

Even before social media, Judge Kozinski noticed a growing tendencyof consumers that use trademarks not just to identify products, ‘but alsoto enhance or adorn them, even to create new commodities altogether’.47

Half a century before, Frankfurter in the Mishawaka Rubber caseformulated it like this: trademarks are used to ‘impregnate the atmos-phere of the market with the drawing power of a congenial symbol’.48

Frankfurter also wrote: ‘If it is true that we live by symbols, it is no lesstrue that we purchase goods by them’.49

The internet can be described as a platform for free social, cultural andpolitical discourse and production,50 with information being communi-cated that is crucial to a democratic society. The division betweenproducers and consumers is no longer useful since each can generatecontent, according to Professor Tushnet.51

Johnson wrote that the rapid development of the internet has meant anexplosion in unauthorized use of commoditized trademark signs in newand innovative ways by internet users, which led to a flood of trademark-related litigation and legislation.52

Beside trademark law, cyberlaw and information law are possibletheoretical frameworks to study these challenges. Lipton asserted thatcyberlaw does not suggest a focal point other than internet-relatedtechnologies53 and deals with a plethora of different topics, including fairuse or other exceptions to propertization, formation and interpretation ofcontracts made electronically and freedom of speech in relation tointernet communications. Lipton argued that information law with itsfocal point on information has a better chance to develop into a coherentframework of law, which comprises a set of principles that can exist

44 Dreyfuss, supra note 18.45 Litman, supra note 17, at 1728.46 Id.47 Kozinski, supra note 39, at 961.48 Mishawaka Rubber, supra note 1.49 Id.50 Lawrence Lessig, FREE CULTURE, (New York: Penguin Press 2004).51 Rebecca Tushnet, Copy This Essay: How Fair Use Harms Free Speech

and How Copying Serves It, 114 YALE L.J. 535, 566 (2005).52 Johnson, supra note 43.53 Jacqueline Lipton, A Framework for Information Law and Policy, 82 OR.

L. REV. 695, 714 (2003).

Introduction 9



alongside other laws such as tort, contract and intellectual property laws.The normative framework of information law, suggested by Lipton, isbalancing the control rights of property and privacy with the access rightin information. This might be partly relevant for the trademark, whichhas arguably informational components, for example the source of origin.

Property implies ownership, which implies possession, which impliesexclusory control, even though the control is never absolute.54 Intellectualproperty rights such as trademarks are intangible, but they have owners.To look at intellectual property as property is useful since property is ahighly efficient way to support commercial transactions of an asset.55

Professor Llewelyn highlighted the potential of the commercialization ofintellectual property rights.56 Litman wrote that the reason for theexistence of property is its alienability, to sell or license it.57 ProfessorCalabresis and Melamed introduced a classification of property, liabilityand alienability rules that can partly be applied to the trademark logo: thetrademark holder can assign or license them according to these views.58

However, there has also been criticism about seeing trademarks asproperty. Lipton expressed her concern about the potential of over-propertization of information rights.59 Professor Lemley opposed thepropertization of trademark law, in particular merchandising rights, andrecommended courts to use other rationales for its protection.60 ProfessorDenicola made an analysis of the merchandising of famous symbols.61

Professors Dogan and Lemley suggested weighing the costs andbenefits of the property rationale.62 One implication of seeing trademark

54 Even though information cannot be physically possessed, it can becontrolled, although not in an absolute sense. Id., at 730.

55 Jessica Litman, Information Privacy/Information Property, 52 STAN. L.REV. 1283, 1295 (2000).

56 David Llewelyn, INVISIBLE GOLD IN ASIA: CREATING WEALTHTHROUGH INTELLECTUAL PROPERTY (Singapore: Marshall CavendishBusiness, 2010).

57 Litman, supra note 55, at 1295.58 Guido Calabresi and A. Douglas Melamed, Property Rules, Liability

Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089(1972).

59 Jacqueline Lipton, Information Wants to Be Property: Legal Commodifi-cation of E-Commerce Assets, 16 INT’L REV. L. COMP. & TECH. 53 (2002).

60 Lemley, supra note 33, at 1714.61 Robert C. Denicola, Institutional Publicity Rights: An Analysis of the

Merchandising of Famous Symbols, 62 N.C. L. REV. 603, 606 (1984).62 Mark Lemley and Stacey Dogan, Merchandising Right: Fragile Theory or

Fait Accompli, 54 EMORY L.J. 461, 478 (2005).




as a property right, as Professors Desai and Rierson suggested, is that theinvestment in the brand is seen as an indicator of potential harm.63

Jou wrestled with the question when the moral rights of the newcomeroutweigh those of the existing trademark holder.64

Many authors are defeatist in the challenge to control their trademarkson social media. Examples are Sammons, who suggested that trademarkholders should accept that they lost control and focus on what they cancontrol,65 and Standfield, who advised for the same reason to focus onone’s own websites.66

Hughes argued that ‘society’s increasing dependency on trademarkscreates a pressure to remove them from private control’.67 According toSchaffer-Goldman, ‘words and images do not worm their way into ourdiscourse by accident; they’re generally thrust there by well-orchestratedcampaigns intended to burn them into our collective consciousness.Having embarked on that endeavour, the originator of the symbolnecessarily – and justly – must give up some measure of control’.68 Inother words: trademark holders expose the public to countless advertise-ments and therefore the public is entitled to take some control over thetrademarks and their meaning.

Professor Coombe observed law as a central locus for the control anddissemination of those signifying forms with which identities and differ-ences are made and remade.69

63 Deven R. Desai and Sandra L. Rierson, Confronting the GenericismConundrum, 28 CARDOZO L. REV. 1789, 1797–9 (2007).

64 Chi-Ru Jou, The Perils of a Mental Association Standard of Liability: TheCase Against the Subliminal Confusion Cause of Action, 11 VA. J.L. & TECH. 2,66 (2006).

65 Stephanie Sammons, ‘With Blogging and Social Media, Focus on WhatYou Can Control’, 18 September 2010, Build Online Influence, accessed 13 June2015 at: http://www.stephaniesammons.com/with-blogging-and-social-media-focus-on-what-you-can-control/.

66 Alyson Standfield, ‘Social Media Is only a Tool’, Artbizblog, 23 February2011, accessed 14 June 2015 at: http://www.artbizblog.com/2011/02/social-media-is-a-tool.html.

67 Justin Hughes, The Philosophy of Intellectual Property, 77 GEO. L.J.287, 322 (1988).

68 Regina Schaffer-Goldman, Cease-and-Desist: Tarnishment’s Blunt Swordin Its Battle Against the Unseemly, the Unwholesome, and the Unsavory, 20FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 1241, (2010).

69 Rosemary J. Coombe, Tenth Anniversary Symposium: New Direction –Critical Cultural Legal Studies, 10 YALE J.L. & HUMAN. 463 (1998).

Introduction 11



The expansion of trademark law, with trademark dilution, based oninvestment and advertising functions, has been both criticized andadvocated at the same time. Professor Coombe asserted that an expansionof intellectual property could strip us of our humanity,70 nothing less,while Professor Beebe discussed the trademark holders’ need for abroadened scope of trademark protection.71 Professor Lemley reluctantlymade the point that the goal of continued expansion of trademark rightsis to obtain property rights in trademarks.72

Matos counted the blessings of the use of brands as source identifi-cation in order to prevent opaqueness of the source which leads todeception and confusion of consumers.73 The only function of trade-marks, from symbols to myths, was as a signifier of the source of origin,according to Ralph Brown.74

Beebe analysed trademark law semiotically: one can distinguishbetween the signifier (trademark), signified (goodwill) and represent(source and/or product).75 The essential function of the trademark isconsidered to indicate the source of origin, so that consumer confusion ormisrepresentation is avoided. Diamond, commissioner of patents andtrademarks, made clear that the function of trademarks as an indicator ofsource could already be found in Ancient Rome.76 The essential functionof the trademark can be divided into source identification, productdistinction and quality functions, argued Professor Simon Fhima,77 whichall protect against confusion. According to Professor Dreyfuss, somelevel of confusion might be unavoidable in times of keyword triggeredadvertisements.78

70 Coombe, supra note 9.71 Barton Beebe, Search and Persuasion in Trademark Law, 103 MICH. L.

REV. 2020, 2029 (2005).72 Lemley, supra note 33, 1687–714.73 Cassi G. Matos, The Unbranding of Brands: Advocating for Source

Disclosure in Corporate America, 20 FORDHAM INTELL. PROP. MEDIA &ENT. L.J. 1307 (2010).

74 Brown, Jr., supra note 29, at 1167.75 Barton Beebe, The Semiotic Analysis of Trademark Law, 51 UCLA L.

REV. 621, 658 (2004).76 Sidney A. Diamond, The Historical Development of Trademarks, 65

T.M.R. 265 (1975).77 Ilanah Simon Fhima, How Does ‘Essential Function’ Doctrine Drive

European Trade Mark Law? 36 INT’L REV. INTELL. PROP. & COM-PETITION L. 401 (2005).

78 Rochelle Cooper Dreyfuss, Reconciling Trademark Rights and ExpressiveValues: How to Stop Worrying and Learn to Love Ambiguity, in TRADEMARK




Justice Frankfurter,79 the economist Stigler,80 and the economistLandes and judge Posner proposed that trademarks are crucial toshorthand the economic search costs for consumers, to repeat enjoyablepurchases and avoid those one did not enjoy.81 In contrast, Larson gaveexamples of sites that use the trademark logo in a confusing anddeceptive way.82 For Schechter, who introduced the dilution doctrine tothe US, the preservation of the uniqueness of a trademark shouldconstitute the only rational basis for its protection.83

According to the economist Aldred, it is assumed that trademarkholders invest in the reputation of their trademark by keeping the qualityof the products or services constant.84 Professors Altman and Pollackasserted that a trademark is sometimes a more convincing selling pointthan the quality of the product to which it refers and that often thecompetition is between trademarks rather than between the quality of theproducts.85 Levin stated that consumers associate some product featureswith the product, rather than with the brand.86 Therefore the goodwill canbe misappropriated when an unauthorized manufacturer uses a feature to

LAW AND THEORY: A HANDBOOK OF CONTEMPORARY RESEARCH,(Graeme B. Dinwoodie and Mark D. Janis, eds.,Cheltenham: Edward ElgarPublishing, 2007), 261–93, at 286.

79 Frankfurter J: ‘A trademark is a merchandising shortcut which induces apurchaser to select what he wants, or what he has been led to believe he wants’.Mishawaka Rubber, supra note 1.

80 George J. Stigler, The Economics of Information, 69 J. POLIT. ECON.213 (1961).

81 Landes, William M. Landes and Richard A. Posner, THE ECONOMICSTRUCTURE OF INTELLECTUAL PROPERTY LAW 166–209 (Cambridge,MA: Harvard University Press, 2003).

82 Joseph A. Larson, Taming the Wild West: An Examination of PrivateStudent Loan Consolidation Companies’ Violations of § 43(A) of the Lanhan Actby Using Trade Names and Logos that Closely Resemble Those Used by theUnited States Department of Education, 41 CREIGHTON L. REV. 515 (2008).

83 Frank I. Schechter, The Rational Basis of Trademark Protection, 40HARV. L. REV. 813 (1927).

84 Jonathan Aldred, The Economic Rationale of Trademarks: An Econo-mist’s Critique, in TRADE MARKS AND BRANDS: AN INTERDISCIPLI-NARY CRITIQUE (L. Bently, J. Davis and J.C. Ginsburg, eds., Cambridge:Cambridge University Press, 2008), at 270.

85 Louis Altman and Malla Pollack, CALLMANN ON UNFAIR COM-PETITION, TRADEMARKS AND MONOPOLIES, (Eagan: Thomson Reuters/West 2008) at § 17:4.

86 Gabrielle Levin, Misappropriation of Goodwill, 5 WAKE FORESTINTELL. PROP. L.J. 89 (2005).

Introduction 13



benefit from the status or social image that the brand owner hasdeveloped, without confusing consumers as to the source of the goods.

After trademarks could be assigned and licensors failed to exerciseadequate control over the licensee’s level of quality in the case of aso-called naked licence, the connection between trademark and its sourceof origin was lost, explained Beebe.87

Subsequently, it was thought that the trademark could indicate theproduct which had a certain quality, independent from the source. Thisled to the anonymous source theory, where the source is deemed constantbut not known, according to scholar Sakulin.88

In 197589 and 198990 there were the ‘patch’ cases with which UScourts wrestled. It was about companies that unauthorizedly reproducedthe trademark as a patch unattached to any product. Therefore it was hardto determine trademark infringement, since the mark did not refer to thesource. The actual product that the defendant sold, the court wrote, is notthe ‘trademark symbol’, but ‘fabric and thread emblems’.91 The use oftrademark rights to enforce a monopoly in the production of merchandiseof, for example, a sports team in the absence of confusion, has been metwith criticism, including that of the philosophers Scott, Oliver andLey-Pineda.92

Shull posed the question whether universities should allow theirstudents to use their trademark logos.93 It is an interesting question thatcould be applied to the use of trademark logos on social media byinternet users: should trademark holders authorize internet users to usetheir trademark logos under certain conditions?

87 Beebe, supra note 71, at 2029.88 Wolfgang Sakulin, ‘Trademark Protection and Freedom of Expression, An

Inquiry into the Conflict between Trademark Rights and Freedom of Expressionunder European, German, and Dutch Law’, PhD Dissertation IViR, University ofAmsterdam, 27 April 2010, at 37.

89 Boston Prof’l Hockey Ass’n v Dallas Cap & Emblem Mfg., 510 F.2d 1004(5th Cir. 1975).

90 Boston Athletic Ass’n v Sullivan, 867 F.2d 22 (1st Cir. 1989).91 Id.92 Dominic Scott, Alex Oliver and Miguel Ley-Pineda, Trade Marks as

Property: A Philosophical Perspective, in TRADE MARKS AND BRANDS: ANINTERDISCIPLINARY CRITIQUE (Lionel Bently, Jennifer Davis and Jane C.Ginsburg, eds., Cambridge: Cambridge University Press, 2008), 285–305, at 297.

93 Michael C. Shull, Biting the Hand that Feeds: How Trademark ProtectionMight Threaten School Spirit, 21 MARQ. SPORTS L. REV. 641 (2011).




Manas used the example of gripe sites such as NoHarvard to seewhether they are confusing or not to the public.94 Consumer opinionwebsites do not tend to lead the viewer to believe the trademark owner isthe sponsor of the site, according to Rochat.95 By asking visitors to clickon another entity’s trademark logo to gain access to their own site wouldraise trademark infringement concerns if those seeing the link were led tobelieve that the one who linked was affiliated with the owner of thetrademark mark logo, explained Professor Effross.96 Scott Brownexplained how third party programmes can use trademark logos withoutauthorization, implying false endorsements or by naming the applicationin a way that supports a generic understanding of the trademark.97 Brownalso showed how third party applications that integrate two or moreoriginal programmes can lead to confusion.98

Aoki stated that ‘symbols have the ability to convey meaning acrossthe globe because they are not restricted by language barriers, and theyoften have a uniformity of meaning that is understood across cultures’.99

Because of these special characteristics, a trademark logo can also beused as a solution to potential trademark infringement challenges.Professor Strowel and Ide100 dealt with the Shetland Times case, wherebyit was settled that Shetland News could use the Shetland Times’ headlines,as long as the Shetland Times logo was put next to the links, to show thesource.

However, in the Total News case the opposite was settled: the links ofTotal News could be used, but without the Total News logo.101 ProfessorO’Rourke realized that the trademark logo is special and stated that using

94 Alayne E. Manas, Harvard as a Model in Trademark and Domain NameProtection, 29 RUTGERS COMPUTER & TECH. L.J. 475 (2003).

95 Leslie C. Rochat, ‘I See What You’re Saying’: Trademarked Terms andSymbols as Protected Consumer Commentary in Consumer Opinion Websites, 24SEATTLE U. L. REV. 599 (2000).

96 Walter A. Effross, Withdrawal of the Reference: Rights, Rules, andRemedies for Unwelcomed Web-Linking, Summer, 49 S.C. L. REV. 651 (1998).

97 Scott Brown, ‘I Tweeted on Facebook Today: Re-Evaluating TrademarkGenericide of Internet-Based Trademarks’, 7 I/S: J.L. & POL’Y FOR INFO.SOC’Y 457 (2012).

98 Id.99 Aoki, supra note 11, at 541.

100 Alain Strowel and Nicolas Ide, Liability with Regard to Hyperlinks, 24COLUM.-VLA J.L. & ARTS 403 (2001).

101 Total News, No. 97 Civ. 1190 (PKL) (S.D.N.Y. filed 28 February 1997).

Introduction 15



an address as a hyperlink intrudes less on the linked site’s trademarkrights than would use of a fanciful logo.102

The trademarked logo is also being used as a deterrent to copyists infashion, asserted Molho, who wrote a biography about Giorgio Armani,an Italian fashion designer.103 Likewise, Blakley asserted that trademarksare the only effective way of protection for the fashion industry.104

Professor Baker argued that commercial expression does not inducepeople to think critically, therefore does not qualify for protection underthe right to freedom of expression.105 In contrast, according to Kozinski,the link between commercial and non-commercial use has not merelyblurred but disappeared.106

Schaffer-Goldman wrote: ‘If the anti-dilution statute were construed aspermitting a trademark owner to enjoin the use of his mark in anon-commercial context found to be negative or offensive, then acorporation could shield itself from criticism by forbidding the use of itsname in commentaries critical of its conduct’.107 Gatewood also pointedto the challenges to freedom of expression when non-commercial use oftrademarks is banned.108

Professor Blanke gave an overview of the history of parody.109 Parodycoincides with being famous asserted Cantwell. According to himtrademark holders, ‘like public figures, who seek the public spotlightmust accept the concomitant risk of public ridicule in the form of

102 Maureen A. O’Rourke, Fencing Cyberspace: Drawing Borders in aVirtual World, 82 MINN. L. REV. 609, 619 (1998).

103 Renata Molho, BEING ARMANI: A BIOGRAPHY 91–2 (AntonyShugaar trans., Milan: Baldini Castoldi Dalai, 2007).

104 Johanna Blakley, ‘Lessons from Fashion’s Free Culture’, presentationTEDxUSC, filmed April 2010, accessed 9 February 2015 at: http://www.ted.com/talks/lang/en/johanna_blakley_lessons_from_fashion_s_free_culture.html.

105 C. Edwin Baker, Commercial Speech: A Problem in the Theory ofFreedom, 62 IOWA L. REV. 1 (1976); C. Edwin Baker, Paternalism, Politics,and Citizen Freedom: The Commercial Speech Quandry in Nike, 54 CASE W.RES L. REV. 1161 (2004).

106 White v Samsung Elec., 989 F.2d 1512, 1520–21 (9th Cir.) (Kozinski, J.,dissenting), cert. denied, 508 U.S. 951 (1993).

107 Regina Schaffer-Goldman, supra note 68.108 Christopher E. Gatewood, Web Links, Trademarks and the First Amend-

ment, 5 RICH. J.L. & TECH. 12 (1999).109 Jordan M. Blanke, Victor’s Little Secret: Supreme Court Decision Means

More Protection for Trademark Parody, 13 FORDHAM INTELL. PROP.MEDIA & ENT. L.J. 1053 (2003).




parody’.110 Cantwell asserted that if humans had to bear this fate, thancertainly the trademark logo does not deserve greater protection than isafforded to a human.111 Denicola stated that famous trademarks are thefunctional equivalent of famous names, and found it not surprising thatthe US Constitution – which does not explicitly mention the protection ofthe trademark – demands restraint in the recognition of trademark rightwhen the right to freedom of speech is at stake.112

Professor Dreier applied some reservation to the freedom of speech,based on the relatively new US constitutional law and human rights lawin comparison to the much older private law.113 Sakulin asserted thatintellectual property lawyers might have the same concerns.114

The protection of the right of speakers is very important, but asProfessor Heymann demonstrated, it is also important to protect the rightof listeners: they deserve to receive non-fraudulent information.115 Hey-mann was afraid that the presence of a trademark logo can convey toconsumers the false message of affiliation, even though the entity mighthave used the trademark logo unauthorizedly, so that the trademarkholder of the used trademark logo had no involvement with the produc-tion of the goods.116

It is argued that the mere brandishing of intellectual property laws canbe sufficient to not only stop offensive uses but also innocent uses. Thisis called the ‘chilling effect’.117 As Coombe observed: ‘Hegemonic poweris operative when threats of legal action are made as well as when they

110 Michael K. Cantwell, Confusion, Dilution, and Speech: First AmendmentLimitations on the Trademark Estate, 87 T.M.R. 547, 583 (1997).

111 Id.112 Robert C. Denicola, Trademarks as Speech: Constitutional Implications

of the Emerging Rationales for the Protection of the Trade Symbols, WIS. L.REV. 158, 198 (1982).

113 Thomas Dreier, Balancing Proprietary and Public Domain Interests:Inside or Outside of Proprietary Rights?, in EXPANDING THE BOUNDARIESOF INTELLECTUAL PROPERTY, INNOVATION POLICY FOR THE KNOW-LEDGE SOCIETY (R. Dreyfuss, D. Leenheer Zimmerman and H. First, eds.,Oxford, Oxford University Press, 2001) 295–316 at 310.

114 Sakulin, supra note 88, at 110.115 Laura A. Heymann, The Public’s Domain in Trademark Law: A First

Amendment Theory of the Consumer, 43 GA. L. REV. 651 (2009).116 Id.117 Chilling effect: the mere brandishing of intellectual property laws is

usually sufficient to stop offensive uses. Examples can be found on the site‘Chilling Effects’, accessed 13 June 2015 at: http://www.chillingeffects.org/.

Introduction 17



are actually acted upon’.118 Beside the chilling effects of trademarkinfringement, there are the chilling effects of trademark dilution oncorporate parody, which is dealt with by Schlosser.119

Outline of the Book

Part I (Chapters 2–4) introduces the conflict, under the ambit oftrademark law (stage of the legal conflict), between trademark holders,social media providers and internet users (protagonists of the legalconflict) over the unauthorized use of the trademark logo on socialmedia. After that the conflict is deconstructed into its constituentelements (analysis of the legal conflict). In Part I the question will beanswered whether an automated enforcement solution for the unauthor-ized trademark logo on social media is the only feasible solution.

Part II (Chapters 5–7) elaborates on the problems of protection andenforcement of the trademark logo on social media. It explores themisrepresentation of the trademark logo, and covers confusion or alikelihood of confusion that lead to trademark infringements, and thedefences of trademark infringement: trademark use outside the course oftrade and nominative fair use. It then deals with the misappropriation ofthe trademark logo, trademark dilution or a likelihood of dilution. Thiswill be followed by the defences against dilution: fair use and exceptions,including parody, satire and comments. Finally, Part II covers the internetintermediary liability, notice-and-takedown obligations and the limitationon internet intermediary liability (also known as the safe harbourprovisions). Part II answers two questions: whether the current trademarklaw is insufficient to protect against the unauthorized use of a trademarklogo, and whether the safe harbour provisions of the law of intermediaryliability of trademark infringement are ineffective.

Part III (Chapters 8–9) offers a paradigm shift: toward the moral rightof integrity of the trademark logo. The question to be answered is whythis has not been the case yet? and how this can be changed? A rationalewill be proposed for a moral right of integrity of the trademarked logo,which is a feasible solution for the problems outlined in Part II. Finally adescription will be given of the walled gardens of social media as testinggrounds for the proposed solution. Part III answers two questions:whether the unauthorized use (including non-commercial use) of the

118 Coombe, supra note 69, at 9.119 Sarah Mayhew Schlosser, The High Price of (Criticizing) Coffee: The

Chilling Effect of the Federal Trademark Dilution Act on Corporate Parody, 43ARIZ. L. REV. 931 (2001).




trademark logo on social media should be protected by the moral right ofintegrity? and whether a contractual solution (walled gardens of socialmedia) can pave the way for an automated solution for the trademarklogo on social media?

Part IV (Chapter 10) provides the conclusion.

Introduction 19



PART I

Stage, protagonists and legal conflict

Columns Design XML Ltd / Job: Friedmann-Trademarks_and_social_media / Division:2StageofthelegalconflictDF24May2015DF14June2 /Pg. Position: 1 / Date: 25/6


2. Stage of the legal conflict

Mapping the lawscape before routing a wayout of the legal conflict

2.1 INTRODUCTION

Reputation, reputation, reputation! O, I have lost my reputation! I havelost the immortal part of myself, and what remains is bestial.

My reputation, Iago, my reputation!1

Understanding the context in which the legal conflict takes place, thetrademark law in the US and EU, is crucial to find a solution. As oneappreciates the intricacies of these legal systems under which thetrademark logo on social media should be protected and enforced, onecan see that these laws are ill-equipped to address the problem. This isexacerbated by international treaties such as the Berne and Paris Conven-tions, partly incorporated by Trade-related Aspects of Intellectual Prop-erty Rights (TRIPS) and interpreted by the World Trade Organization(WTO) panel reports, that give the US and EU the bandwidth withinwhich these jurisdictions can operate.

Therefore, in order to provide the necessary context the chapterprovides a brief introduction to the relevant international treaties (Chapter2.2) and a comprehensive review of the basis of US and EU trademarklaw. Chapter 2.3 provides a definition of the trademark; Chapter 2.4explicates the two roots of trademark law and demonstrates that the UShas federal and state trademarks, and the EU has community and nationaltrademarks; Chapter 2.5 makes a distinction between inherent andacquired distinctiveness; Chapter 2.6 gives an overview of conventionaland unconventional trademarks; Chapter 2.7 reviews the doctrines toavoid misrepresentation and misappropriation and Chapter 2.8 sets outthe dichotomous functions of the trademark based on these doctrines.

1 Cassio in OTHELLO, Shakespeare, supra, Chapter 1, note 3, Act 2, Sc. 3,262–5.

23



Finally, Chapter 2.9 provides a brief history of trademark infringementand trademark dilution in both the US and EU.

2.2 RELEVANT INTERNATIONAL TREATIES

The international treaties relevant to the trademark logo on social mediawill be introduced below. Why they are germane will be explained indepth in the designated Chapters.

One can argue that intellectual property law has been harmonized to agreater extent than any other field of law. This is due to the ParisConvention for the Protection of Industrial Property2 (Paris Convention)of 1883, the Berne Convention for the Protection of Literary and ArtisticWorks3 (Berne Convention) of 1886, the Nice Agreement Concerning theInternational Classification of Goods and Services for the Purposes of theRegistration of Marks4 (Nice Agreement) of 1957 and TRIPS of 1994.They will be dealt with below, as well as the WTO panel reports,5

relevant for interpretations of some legal terms, and the European

2 Paris Convention for the Protection of Industrial Property (Paris Conven-tion), signed in Paris 1883, revised at Brussels in 1900 (Brussels Act), Washing-ton in 1911 (Washington Act), The Hague in 1925 (The Hague Act), London in1934 (London Act), Lisbon in 1958 (Lisbon Act), Stockholm in 1967 (StockholmAct) and amended in 1979. The Paris Convention is administered by WorldIntellectual Property Organization (WIPO).

3 Berne Convention for the Protection of Literary and Artistic Works(Berne Convention), signed in Berne in 1886, completed at Paris in 1896, revisedat Berlin in 1908, completed at Berne in 1914, revised at Rome in 1928, revisedat Brussels in 1948, revised at Stockholm in 1967, and revised at Paris in 1971,and amended in 1979. The Berne Convention is administered by WIPO.

4 The Nice Agreement Concerning the International Classification of Goodsand Services for the Purposes of the Registration of Marks (Nice Agreement) of15 June 1957, as revised at Stockholm on 14 July 1967, and at Geneva on 13May 1977, and amended on 28 September 1979. The Nice Agreement isadministered by WIPO.

5 World Trade Organization (WTO) document WT/DS114/R, 17 March2000, panel report Canada – Patent Protection of Pharmaceutical Products Case(WTO panel report patent; WTO document WT/DS160/R, 15 June 2000, panelreport United States – Section 110(5) of the United States Copyright Act (WTOpanel report copyright); WTO document WT/DS174/R, 15 March 2005, panelreport European Communities – Protection of Trademarks and GeographicalIndications for Agricultural Products and Foodstuffs (WTO panel report trade-mark.




Convention for the Protection of Human Rights and Fundamental Free-doms6 (ECHR) and Protocol to the ECHR,7 which must guaranteefreedom of speech, but also the protection of property.

Unfortunately there is much legal uncertainty over what constitutesprotectable freedom of speech, parody or critical comment, and how tobalance it with proprietary rights. Chapter 6 ‘Trademark Dilution and ItsDefences’ deals extensively with this problem.

The Paris Convention8 is highly relevant for trademark law. The US9

and all members of the EU10 are members of the first importantintellectual property treaty in history: the Paris Convention, which wassigned in 1883 by 11 countries. The EU11 and US jurisdictions are boundby the Paris Convention, and their legislations must comply with it.

The Paris Convention, which covers marks and trade names as well aspatents, utility models and industrial designs, contains two fundamentalprinciples: national treatment12 and priority right.13 These two principles

6 European Convention for the Protection of Human Rights and Funda-mental Rights (ECHR), Rome, 6 November 1950.

7 Protocol to the European Convention for the Protection of Human Rightsand Fundamental Freedoms (Protocol to ECHR), Paris, 20 March 1952, at 31.

8 Paris Convention, supra note 2.9 The United States acceded to the Paris Convention on 18 March 1887 and

the treaty came into force as of 30 May 1887.10 The Paris Convention came into effect in all 27 members of the European

Union: Belgium 1884, France 1884, Italy 1884, Netherlands 1884, Portugal1884, Spain 1884, United Kingdom 1884, Sweden 1885, Denmark 1894,Germany 1903, Hungary 1909, Austria 1909, Poland 1919, Romania 1920,Bulgaria 1921, Finland 1921, Luxembourg 1922, Greece 1924, Ireland 1925,Cyprus 1966, Malta 1967, Slovenia 1991, Czech Republic 1993, Latvia 1993,Slovakia 1993, Estonia 1994, and Lithuania 1994. Supra note 2.

11 Last paragraph of the Preamble of the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member Statesrelating to trade marks (Trademark Directive): ‘Whereas all Member States ofthe Community are bound by the Paris Convention for the Protection ofIndustrial Property; whereas it is necessary that the provisions of this Directiveare entirely consistent with those of the Paris Convention; whereas the obliga-tions of the Member States resulting from this Convention are not affected bythis Directive …’.

12 National Treatment means that each member of the treaty must treatnationals of other members in respect of industrial property in the same way astheir own nationals. See Article 2 Paris Convention, supra note 2.

13 The priority right in regard to trademark rights provides an applicant fromone treaty member with the possibility to use the filing date in one of the treatymembers as the effective filing date in another contracting state, provided that the

Stage of the legal conflict 25



have internationally harmonized the procedural law of trademarks tosome degree.

For this book Articles 6-10ter Paris Convention are especially relevant:they include well-known marks,14 prohibitions concerning state emblemsand so on,15 assignment of marks,16 nature of the goods to which themark is applied,17 collective marks,18 trade names,19 goods unlawfullybearing a mark or trade name,20 false indications as to their source or theidentity of the producer21 and unfair competition.22

Although the Berne Convention23 covers the protection of authors’rights and neighbouring rights, it is also relevant for this book. Inparticular Articles 9(2), 10 and 10bis Berne Convention, which deal withthe three-step test and certain free use of works, in other words with fairuse, which are sometimes analogously applied to trademark use. Besides,Article 9(2) Berne Convention applies to works and other subject matter,and therefore might be applicable to trademarks.

Another international treaty relevant for this book is the Nice Agree-ment24 of 1957, under which goods are classified into classes 1–34, andservices into classes 35–45. Under Article 19 Paris Convention, the statesto which it applies reserve the right to make separately between them-selves special agreements for the protection of industrial property. TheNice Agreement is signed by the US and all members of the EU, exceptfor Cyprus and Malta.25

applicant files another application within 6 months from the first filing. Article 4Paris Convention, id.

14 Article 6bis id.15 Article 6ter id.16 Article 6quarter id.17 Article 7 id.18 Article 7bis id.19 Article 8 id.20 Article 9 id.21 Article 10 id.22 Article 10bis id.23 Supra note 3.24 Supra note 4.25 Nevertheless, these two countries also use the Nice Classification system.

Cyprus and Malta are not party to the Nice Classification, but nevertheless usethe classification. Trademark Classification in Cyprus, accessed 9 February 2015at: http://www.ldlaw.com.cy/services/intellectual.htm. Trademark Classificationin Malta, accessed 9 February 2015 at: http://www.euromalta.net/trademark/attorneys.htm.




In Chapter 6.3 ‘Problems with identical trademarks for dissimilargoods and services’ it will be argued that the fundament of the NiceClassification, to divide the trademarks according to class, is artificialand not fair to trademark holders that should be able to extend the use oftheir trademark to other goods and services.

The relevance of the Paris and Berne Conventions has only increasedsince all members of the WTO have to comply with TRIPS,26 which hasincorporated Articles 1 through 12 and Article 19 of the Paris Conven-tion27 and the Berne Convention.28 TRIPS provides minimum standardsto enforce intellectual property rights. The three-step test of Article 9(2)Berne Convention was curtailed into a two-step test of Article 17 TRIPS,which deprives trademark holders from the ‘normal exploitation’criterion. This will be extensively covered in Chapter 6 ‘TrademarkDilution and Its Defences’.

To interpret the terms used in the two-step test of Article 17 TRIPS tosee whether the limitations and exceptions should be applied or not bylegislators or courts there are three relevant WTO panel reports:

– Canada – patent protection of pharmaceutical products29 (WTOpatent panel);

– United States – § 110(5) of the US Copyright Act30 (WTO copy-right panel), and;

– EU – Protection of Trademarks and Geographical Indications forAgricultural Products and Foodstuffs31 (WTO trademark panel).

Chapter 6 ‘Trademark Dilution and Its Defences’ elaborates on theseinterpretations.

26 Trade-related Aspects of Intellectual Property Rights (TRIPS) is Annex1C of the Marrakesh Agreement on the Establishment of the WTO, 15 April1994.

27 Article 2(1) TRIPS: ‘In respect of Parts II, III and IV of this Agreement,Members shall comply with Articles 1 through 12, and Article 19, of the ParisConvention (1967)’, id.

28 Article 2(2) TRIPS: ‘Nothing in Parts I to IV of this Agreement shallderogate from existing obligations that Members may have to each other underthe Paris Convention, the Berne Convention, the Rome Convention and theTreaty on Intellectual Property in Respect of Integrated Circuits’, id.

29 WTO panel report patent, supra note 5.30 WTO panel report copyright, id.31 WTO panel report trademark, id.




An international treaty relevant for the limitations of the exclusiverights of trademarks in the EU and the US is the ECHR,32 especiallyArticle 10 of this convention which covers freedom of expression, andArticle 1 Protocol to the ECHR,33 which covers the protection ofproperty. The Charter of Fundamental Rights of the EU (Charter),34

based on the ECHR, is relevant for the countries of the EU. Just like theECHR, Article 11 Charter protects the right to freedom of expression andinformation, and Article 17 Charter protects the right to property. How tobalance these two rights is dealt with in Chapter 6 ‘Trademark Dilutionand its Defences’.

2.3 DEFINITION OF THE TRADEMARK

The Paris Convention and TRIPS, to which both the member countries ofthe EU and US are contracting parties, do not give any definition of atrademark. It is up to the sovereignty of the contracting parties to comeup with their own version. As a definition, both the EU and US havepromulgated a non-exhaustive list of examples of what could constitute atrademark.

In the EU the Trademark Directive35 and the Community TrademarkRegulation36 both give the same broad definition of a trademark:

A trademark [or Community Trademark] may consist of any sign capable ofbeing represented graphically, particularly words, including personal names,designs, letters, numerals, the shape of goods or of their packaging, providedthat such signs are capable of distinguishing the goods or services of oneundertaking from those of other undertakings.37

In the US there are federal trademarks under the Lanham Act. Just aswith the EU definition of a trademark, the Lanham Act provides a broaddefinition of a trademark: ‘The term “trademark” includes any word,name, symbol, or device, or any combination thereof …’, that identifies

32 ECHR, supra note 6.33 Protocol to ECHR, supra note 7.34 Charter of Fundamental Rights of the EU (EU Charter), proclaimed in

2000 and binding in December 2009.35 Article 2 Trademark Directive, supra note 11.36 Article 4 Council Regulation (EC) No 40/94 of 20 December 1993 on the

Community trade mark (Community Trademark Regulation).37 Article 2 Trademark Directive, supra note 11 and Article 4 Community

Trademark Regulation, supra note 36.




and distinguishes the goods or services of one undertaking from those ofanother, and that indicates the source of the goods or services.38

2.4 TWO ROOTS OF THE TRADEMARK

According to the famous trademark scholar Schechter, the trademark hastwo roots: the voluntary merchant’s personal or proprietary mark on theone hand to establish ownership, and the compulsory production markson the other hand, to identify the collective origin of the goods.39

‘Strictly speaking, marks designating ownership are not trade-marks at allbut merely proprietary marks, which may or may not incidentally serveto designate the origin or source of the goods to which they areaffixed’.40 Meanwhile, the raison d’être for the regulatory productionmark was to be able to ‘trace back defective goods to the craftsman, andthus protection against deceit and safeguarding the collective good willand monopoly of the gild’.41

The expansion of the trademark function shows that the proprietarypart of the function that protects trademark holders has become just asimportant as the source of origin-related function that protects con-sumers. Just as with some trees these two roots of trademarks have fused.Its result is inseparable and the two different functions of the trademarkamplify each other.

According to the Paris Convention42 the conditions for the filing andregistration of trademarks will be determined in each country of the ParisUnion by its domestic legislation.43

In the EU there are two kinds of trademark. The national trademark ofeach member state and the Community Trademark. The national trade-mark is governed by the national laws relating to trademarks in combin-ation with the Trademark Directive to approximate the laws of each ofthe member states.44 The Community Trademark is ruled by the Com-munity Trademark Directive, which is binding in its entirety and directly

38 15 U.S.C. § 1127.39 Neil J. Wilkof and Daniel Burkitt, TRADE MARK LICENSING (2nd ed.,

London: Sweet & Maxwell, 2005), at 22.40 Schechter, supra, Chapter 1, note 83, at 819.41 Id., at 825.42 Paris Convention, supra note 2.43 Article 6(1) Paris Convention, id.44 Third sentence of Article 189 Treaty Establishing the European Economic

Community (Treaty of Rome), 25 March 1957: ‘A directive shall be binding, as




applicable in all member states.45 Each of the member countries of theEU uses a first-to-file system for their national trademarks, and the Officefor the Harmonization of the Internal Market (OHIM) also uses afirst-to-file system to register the Community Trademarks.

In the US there are also two kinds of trademark. Each American statecan register state trademarks. Beside state trademarks, one can registerfederal trademarks at the US Patent and Trademark Office (USPTO). TheUS follows the first-to-use rule for trademark registration, which meansthat the rights to a trademark can be acquired either through being thefirst to use the mark in commerce, or being the first to register the markwith the trademark office.46

2.5 INHERENT AND ACQUIRED DISTINCTIVENESS

In both the US and EU if a word is not inherently distinctive it isincapable of becoming a valid trademark, for example if it is onlydescriptive. However, even descriptive marks can acquire secondarymeaning47 by using the mark intensively, for example via advertising, sothat it can be protected by unfair competition law in the US48 andtrademark law in the EU. Standard Oil is an example in the US49 andWindsurfing Chiemsee in the EU50 of descriptive marks that have

to the result to be achieved, upon each Member State to which it is addressed,but shall leave to the national authorities the choice of form and methods’.

45 Second sentence of Article 189 Treaty of Rome: ‘A regulation shall havegeneral application. It shall be binding in its entirety and directly applicable in allMember States’. Id.

46 15 U.S.C. § 1127(a).47 A trade name has acquired ‘secondary meaning’ when ‘a substantial

number of present or prospective purchasers understand the designation, whenused in connection with goods, services, or a business, not in its primarylexicographical sense, but as referring to a particular place or association’Restatement of Torts § 716 (b) and comment b (1938).

48 ‘In the absence of secondary meaning, the law of unfair competition doesnot protect a name which is based on or is truly descriptive of the constructioncommon to, or characteristics of an article’. Harry D. Nims, THE LAW OFUNFAIR COMPETITION AND TRADE-MARKS § 50 (3rd ed., New York:Baker, Voorhis & Co., 1929).

49 Standard Oil Co. of Maine v Standard Oil Co. of N.Y., 45 F.2d 309, 310(1st Cir. 1930.

50 Windsurfing Chiemsee Produktions- und Vertriebs GmbH (WSC) v Boots-und Segelzubehör Walter Huber and Franz Attenberger (Windsurfing Chiemsee)(Joint cases C108/97 and 109/97), Judgment of the ECJ, 4 May 1999




acquired distinctiveness. The inverse route is also possible; so that adistinctive trademark becomes a generic one, see Chapter 6.3 ‘Degrees ofdistinctiveness’.

2.6 CONVENTIONAL AND UNCONVENTIONALTRADEMARKS

In both the EU and US conventional trademarks are signs that are visible,such as brand names, slogans and logos. Although this book coversexclusively conventional trademarks, one should realize that there are agrowing number of unconventional trademarks.51 These include in theEU gustatory, scent,52 touch,53 sound,54 colour55 and 3-D56 trademarksthat in an increasing number of jurisdictions can be registered astrademarks, as long as the source identification,57 graphical representa-tion, non-functionality58 and distinctiveness criteria are met.

In the 1988 amendment of the US Lanham Act, Congress retained thewords ‘symbol’ and ‘device’ ‘so as not to preclude the registration ofcolours, shapes, smells, sounds or configurations where they function astrademarks’.59 More concisely, the US Supreme Court made it clear inQualitex Co. v Jacobson Products Co. that a trademark can be ‘almost

51 John T. Gabrielides and Thomas M. Williams, ‘The Sound of Unconven-tional Marks in the United States’, WORLD TM REV., July/August 2007, 94–5.

52 Dr. Ralf Sieckmann v Deutsches Patent- und Markenambt (C-273/00)Judgment of the ECJ, 12 December 2002

53 The distinctive texture of Louis Vuitton bags might be entitled toprotection in some jurisdictions as a touch trademark. INTA, Global TrademarkResearch, ‘Fact Sheets, Types of Protection: Nontraditional Trademarks’,accessed 9 February 2015 at: http://www.inta.org/TrademarkBasics/FactSheets/Pages/NontraditionalTrademarksFactSheet.aspx.

54 Shield Mark BV v Kist (C-283/1), Judgment of the ECJ, 27 November2003

55 Libertel Groep BV Benelux-Merkenbureau (C-104/01), Judgment of theECJ, 6 May 2003

56 Koninklijke Philips Electronics NV v Remington Consumer Products Ltd(C-299/99) Judgment of the ECJ, 18 June 2002. See Danny Friedmann, TheBottle is the Message: Only the Distinctive Survive as 3D Community TradeMarks, 10(1) JOURNAL OF INTELLECTUAL PROPERTY LAW AND PRAC-TICE 35–42 (2015).

57 Oliveira v Frito-Lay Inc., 251 F3d 56 (2d Cir 2001).58 In re NV Organon, 79 USPQ2d 1639 (TTAB 2006).59 S Rep 515, 100th Cong 2d Sess 44 (1988).




anything at all that is capable of carrying meaning’.60 A recent exampleof the special features mark is the red dripping wax seal of Maker’sMark, a brand of bourbon.61

2.7 MISREPRESENTATION AND MISAPPROPRIATION

There are two doctrines on which the protection and enforcement of thetrademark is based in the US and in the EU: the doctrine to avoidmisrepresentation, and the doctrine to avoid misappropriation.

Misrepresentation leads to a likelihood of confusion, which constitutesliability for trademark infringement. When an identical or similar sign isused as the trademark without authorization of the trademark holder inthe identical or similar product or service class, the trademark holder canprevent the sign being registered or, if it is registered, to cancel it.

The result of a misrepresentation of the trademark, where a linkbetween the trademark and an entity is suggested that does not exist,consumers might get confused. Therefore consumers need to be protectedagainst this likelihood of confusion.

McKenna criticizes the likelihood of confusion being sufficient tosustain a claim, even where it has no effect on consumers’ purchasingdecisions:62

[a] trademark law focused on consumer decision making and committed torespecting consumer autonomy should treat consumer preferences as fixedand exogenous; it should intervene only when use of a trademark threatens toprevent consumers from acting on pre-existing preferences. It should specific-ally decline to regulate non-deceptive attempts to shape those preferences.63

60 Qualitex Co. v Jacobson Products Co., 514 U.S. 159 (1995).61 The 6th Circuit decided in Maker’s Mark (bourbon) v Jose Cuervo

(tequila) that the red dripping wax seal on the bottle is a protected trade dress.Josh Block interviews Chris Spigman at Bloomberg Law, 23 May 2012, accessed9 February 2015 at: http://www.youtube.com/watch?v=9Pgl4V9AURU.

62 McKenna defined trademark search narrowly: ‘targeting search costs orconfusion in and of themselves, trademark law should instead focus on deceptivepractices that interfere with consumers’ purchasing decisions’. Mark P. McK-enna, A Consumer Decision-Making Theory of Trademark Law, 98 VA. L. REV.67, 70 (2012). See also: Mark A. Lemley and Mark McKenna, IrrelevantConfusion, 62 STAN. L. REV. 413, 415–16, 450 (2010).

63 McKenna, A Consumer Decision-Making Theory of Trademark Law, id.,at 122.




Besides enjoining the use or cancellation of an existing trademark,likelihood of confusion is also a reason not to allow the registration of atrademark.64

On the one hand it has become more difficult to claim that a likelihoodof confusion has taken place, because of the relaxation of the source oforigin function into a constant source doctrine and the gradual abandon-ment of the quality control requirement (see below). On the other hand, ithas become easier, because of four controversial doctrines: sponsorshipand affiliation confusion; initial-interest confusion; post-sale confusion;and reverse confusion. Lemley and McKenna argued that these fourforms of confusion should only be actionable when the plaintiff canprove the confusion is likely to materially impact consumer purchasingdecisions.65

Sponsorship andAffiliation Confusion

Derived from the source of origin function, if a trademark is used for aproduct or service and the consumer knows that it is not part of the coreactivities of the trademark holder, he or she assumes66 that the trademarkholder has ‘sponsored, endorsed, or otherwise approved of defendant’suse of the mark’.67 Here too, a likelihood of confusion can happen whena link between trademark and sponsor is suggested, but does not reallyexist. Dogan and Lemley compared sponsorship and affiliation confusionto the right of publicity.68

64 Besides, trademark infringement, Article 4(1)(b) Trademark Directive,supra note 11, states that ‘if because of its identity with, or similarity to, theearlier trade mark and the identity or similarity of the goods or services coveredby the trade marks, there exists a likelihood of confusion on the part of thepublic, which includes the likelihood of association with the earlier trade mark’.

65 Lemley and McKenna, supra note 62, at 414–15.66 ‘[A]n appreciable number of ordinarily prudent purchasers are likely to be

misled, or indeed simply confused, as to the source of the goods in question …’Savin Corp. v Savin Group, 391 F.3d (2d Cir. 2004 at 456 (citing MushroomMakers, Inc. v R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir. 1978.

67 Tommy Hilfiger Licensing, Inc. v Nature Labs LLC (Tommy Hilfiger), 221F. Supp. 2d 410, 414 (S.D.N.Y. 2002 (citing Dallas Cowboys Cheerleaders, Inc.v Pussycat Cinema, Ltd., 604 F.2d 200, 204–5 (2d Cir. 1979).

68 Stacey L. Dogan and Mark A. Lemley, What the Right of Publicity CanLearn from Trademark Law, 58 STAN. L. REV. 1161, 1193 (2006).




Initial-Interest Confusion

Initial-interest confusion takes place when the purchaser is initiallyconfused and during the purchase he knows he is purchasing a productfrom another source than he initially intended. The Brookfield caseshowed that Blockbuster Video put up a billboard on the highway withthe words: ‘West Coast Video next exit’. Consumers expecting WestCoast Video will only find a Blockbuster Video store there.69 Gasparekcriticized Brookfield as an outcome determinative decision.70

Metatags can also lead to initial-interest confusion. McCuaig arguedthat the initial-interest confusion theory in the metatag context is debat-able since consumers are aware that search engines do not alwaysproduce relevant results.71 O’Rourke argued that the use of a trademarkon the face of a web page may manipulate search engines more thanthose in metatags, since many search engines do not consider metatagsanymore in producing search results.72

Post-Sale Confusion

Post-sale confusion is when a potential customer is confused and believessomeone else has bought a product of brand A, even though the actualcustomer knew it bought a product of brand B. If the quality of brand Bis inferior to brand A, potential customers of brand A can be deterredfrom purchasing products from brand A. McKenna asserted that post-saleconfusion does not matter as long as we have some reason to think thatthose observers would otherwise be potential customers. However, inprinciple every consumer is a potential customer.73 Therefore one can

69 Brookfield Communications, Inc. v W. Coast Entm’t Corp., 174 F.3d 1036,1044 (9th Cir. 1999).

70 ‘The circuit court, having found intent or bad faith on the part of thealleged infringer, set out to find a theory that would allow them to hold againstthat party’. Katherine E. Gasparek, Applying the Fair Use Defense in TraditionalTrademark Infringement and Dilution Cases to Internet Meta Tagging or LinkingCases, 7 GEO. MASON L. REV. 787, 795 (1999).

71 Dan McCuaig, Halve the Baby: An Obvious Solution to the Troubling Useof Trademarks as Metatags, 18 J. MARSHALL J. COMPUTER & INFO. L. 643,654, 658–64 (2000).

72 Maureen A. O’Rourke, Defining the Limits of Free-Riding in Cyberspace:Trademark Liability for Metatagging, 33 GONZ. L. REV. 277, 285 (1997–98).

73 Chances that potential customers become actual customers are of coursehigher in societies with high socio-economic mobility.




argue that McKenna demonstrated, in contrast to his intention, that thepost-sale confusion is relevant.74

Reverse Confusion

Ford, a brand better known than Westward, used Mustang for itsexperimental cars in 1962, even though it knew that Westward had afederal registration of the mark and used it for its trailers and campers.Ford spent 16 million US dollars advertising the Mustang.75 Thereforeconsumers might be confused into thinking that the senior brand, in thiscase Westward, is the infringer. In 1974, the 10th Circuit for the first timerecognized reverse confusion in the case of the senior use of thetrademark Big Foot by the lesser known brand Big O Tire against thejunior user of the mark, but better known brand, Goodyear.76

It is obvious that the lesser known brand which is the senior user has aproperty interest in protecting the mark. However, Feldman asserted that‘the public may benefit more from the junior user’s [the better knownbrand] adoption of the mark because they only identify the mark with thejunior user and are not confused by the dual uses of the mark’.77 Thejunior user might not directly take away business from the senior user.However, one can argue that reverse confusion leads to the senior user’sloss of control of the significance and distinctiveness of its trademark,comparable to trademark dilution, see below.

Misappropriation

Misappropriation leads to what is called liability for ‘trademark dilution’in the US and ‘unfair advantage of or causing detriment to the distinctivecharacter or repute of the trademark’ in the EU. In the EU marks with areputation, and in the US famous marks, are given extra protection bypermitting the registrant of a mark with a reputation, or a famous mark toprevent the use or registration of a diluting trademark, or institute

74 McKenna, supra note 62, at 103.75 The 7th Circuit refused to recognize reverse confusion, instead the 7th

Circuit determined that the trademark of the senior Westward brand was notstrong, therefore there was no trademark infringement. Westward Coach Mfg. Co.v Ford Motor Co., 388 F.2d 627 (7th Cir. 1968

76 Big O Tire Dealers, Inc. v Goodyear Tire & Rubber Co., 561 F.2d 1365(10th Cir. 1977).

77 Joel R. Feldman, Reverse Confusion in Trademarks: Balancing theInterest of the Public, the Trademark Owner, and the Infringer, 8 J. TECH. L. &POL’Y 163, 164 (2003).




cancellation proceedings based on the validity of its earlier registration,78

even for goods or services in non-competing categories.Schechter introduced the dilution doctrine in 1927 to the US as ‘the

gradual whittling away or dispersion of the identity and hold upon thepublic mind of the mark or name by its use upon non-competinggoods’.79 Callmann, an advocate of incorporating the protection of theadvertising function of the trademark in trademark law, coined the worddilution for this doctrine.80 However, when the doctrine was made intolaw in the US, Schechter’s suggestion to apply it to fancy and arbitrarymarks was not followed, and he did not mention dilution by tarnishment.Instead it was applied only to famous marks and marks with a reputationand dilution by tarnishment was included. Rierson argued that ‘[i]f marksare nonrivalrous and therefore function more like words than disposablegoods, the economic justification for the dilution cause of action ceasesto exist’.81 But a strong argument for the protection against trademarkdilution is that the freedom of holders of a famous mark to extend the useof their trademark to different product categories would otherwise berestricted.82 This reasoning was self-evident to Justice Pitney in the 1916Hanover Star Milling case:

Common Law trademarks, and the right to their exclusive use, are of course,to be classed among property rights, but only in the sense that a man’s right tothe continued enjoyment of his trade reputation and the good will that flows

78 Marshall A. Leaffer, The New World of Intellectual Trademark Law, 2MARQ. INTELL. PROP. L. REV. 1, 9 (1998).

79 Schechter, supra, Chapter 1, note 83, at 825. Schechter referred to theOdol case, where the Landgericht Elberfeld substantiated the right to preventothers from using the trademark Odol in a non-confusing way on generalprinciples of civil code and the law against unfair competition. LandgerichtElberfeld, 11 September 1924, Juristische Wochenschrift 1925, 502, AnselmKamperman Sanders, Ch. 4. Odol: The Introduction of a Watery Concept withSteeled Resilience, in LANDMARK INTELLECTUAL PROPERTY CASESAND THEIR LEGACY 51 (Christopher Heath and Anselm Kamperman Sanders,eds., Alphen aan den Rijn: Kluwer Law International, 2011).

80 Id., at 54.81 Sandra L. Rierson, The Myth and Reality of Dilution, 11 DUKE L. &

TECH. REV. 212, 213 (2012).82 Learned Hand: ‘However, it has of recent years been recognized that a

merchant may have a sufficient economic interest in the use of his mark outsidethe field of his own exploitation to justify interposition by a court’. Yale Elec.Corp. v Robertson, 26 F.2d 972, 974 (2 Cir. 1928).




from it, free from unwarranted interference by others, is a property right, forthe protection of which a trademark is an instrumentality.83

Nelson criticized this line of reasoning by asserting that the supply bymore competitors of a good or service can be beneficial to consumers.84

This might be the case, but one can equally argue that competitors cansupply a good or service using a trademark name, and especially in thecase of a trademark logo, that is distinctive enough from any senior mark.Not using the names that are already taken leaves enough room, asSchechter put it eloquently: ‘All the rest of infinity is open to defend-ant’.85

One can argue it would be fair if trademark holders were able todetermine whether they would like to use their mark to provide anunrelated product or service, or whether they would like to license theuse of their mark to other providers. Drescher identified this phenomenonas ‘brand extension’ and noted that one can stretch a brand ‘only so far asits reservoir of good will, its “brand equity” will allow’.86

Below the two forms of trademark dilution will be analysed.87

Dilution by Blurring

One can argue that dilution by blurring impairs the distinctiveness of thetrademark. Schechter wrote:

If ‘Kodak’ may be used for bath tubs and cakes, ‘Mazda’ for cameras and shoes,or ‘Ritz-Carlton’ for coffee, these marks must inevitably be lost in the common-place words of the language, despite the originality and ingenuity of theircontrivance, and the vast expenditures in advertising them which the courtsconcede should be protected to the same extent as plant and machinery.88

This loss of distinctiveness could lead to a ‘death by a thousand cuts’.89

83 Hanover Star Milling Co. v Metcalf, 240 U.S. 403, at 412–13 (1916).84 Sara Stadler Nelson, The Wages of Ubiquity in Trademark Law, 88 IOWA

L. REV. 731, 776–83 (2003).85 Schechter, supra, Chapter 1, note 83, at 833.86 Drescher, supra, Chapter 1, note 25, at 338.87 Beebe makes a threefold division which distinguishes next to dilution by

blurring and dilution by tarnishment, the dilution of uniqueness, becauseSchechter meant to refer to the impairment of uniqueness. Barton Beebe, ADefense of the New Federal Trademark Antidilution Law, 16 FORDHAMINTELL. PROP. MEDIA & ENT. L.J. 1143, 1145 (2006).

88 Schechter, supra, Chapter 1, note 83, at 830.89 Beebe, supra note 87, at 1163 footnote 102.




One could define it also as genericism not for the products or services,but for the trademark name itself.90

Dilution by Tarnishment

Dilution by tarnishment happens when an association arising from thesimilarity between a mark or trade name and a famous mark harms thereputation of the latter. For example the junior mark is used on inferiorproducts, or sexually suggestive products. As stated by the SecondCircuit: ‘[t]he sine qua non of tarnishment is a finding that plaintiff’smark will suffer negative associations through defendant’s use’.91

Taran argued that it is not up to the judge to be a gatekeeper of cultureand asserted that no matter whether it is vulgar or refined humour, lowand high brow art, all expressions of the freedom of speech deserve thesame level of protection.92

Schaffer-Goldman argued that even though tarnishment actions areoften rejected by courts, cease-and-desist letters can still stifle expres-sions that are unseemly, unwholesome and unsavoury in the sensitiveeyes of the trademark holder.93

2.8 DICHOTOMOUS FUNCTIONS OF THE TRADEMARK

One can argue that the functions of the trademark are the justifications,or at least the efforts to justify for its very existence, for the protectionand enforcement of a trademark. Besides the indication of a source oforigin and quality being the dominant functions of a trademark, there isno consensus about which other functions a trademark covers or shouldcover. It is established law by the Court of Justice of the EU (CJEU)94

that, if an action has an adverse effect on the functions of the trademark,the trademark holder should be able to stop it.95

90 Bayer Co. v United Drug Co., 272 F. 505, 510 (S.D.N.Y. 1921).91 Hormel Foods Corp. v Jim Henson Productions, Inc. (Hormel Foods), 73

F.3d 497, 507 (2d Cir. 1996).92 Jessica Taran, Dilution by Tarnishment: A Case for Vulgar Humor, 7

INTELL. PROP. L. BULL. 1 (2002).93 Schaffer-Goldman, supra, Chapter 1, note 68, at 1305.94 CJEU, before 1 December 2009, when the Treaty of Lisbon went into

force, known as the European Court of Justice.95 Google France and Google (Google France SARL and Google Inc. v

Louis Vuitton Malletier SA (C-236/08), Google France SARL v Viaticum SA andLuteciel SARL (C-237/08) and Google France SARL v Centre national de




It is clear that the universe of trademark functions in the EU and UShas expanded from exclusively consumer interest-related functions toinclude proprietary functions.

Consumer Interest-Related Functions of Trademark Infringement

Below, one can find a taxonomy of trademark functions that can rejoicein varying degrees of popularity. Landes and Posner argued that eachtrademark function confers its own benefit to the owner and to societyunder an economic analysis which justifies conferring a ‘property’ rightunder a costs/benefits model.96

Professor McKenna argued that trademark law traditionally sought toprotect a trademark owner’s interests by preventing competitors fromdishonestly diverting the trademark holder’s trade.97 According toMcKenna, trademark doctrine is better explained through that historicalproprietary lens than through the ‘search costs’ consumer interest lens.98

The essential function of the trademark is considered to indicate theorigin or trade source of a product or service.99 This makes the searchprocess more efficient for consumers;100 they can again find products

recherche en relations humaines (CNRRH) SARL and Others (C-238/08)),Judgment of the ECJ, 23 March 2010, para. 79; Die BergSpechte Outdoor Reisenund Alpinschule Edi Koblmüller GmbH v Günther Guni and trekking.at ReisenGmbH. (C-278/08), Judgment of the CJEU, 25 March 2010, para. 21; PortakabinLtd and Portakabin BV v Primakabin BV (Portakabin) (C-558/08), Judgment ofthe CJEU, 8 July 2010, para. 29; L’Oréal SA, Lancôme parfums et beauté & CieSNC and Laboratoire Garnier & Cie v Bellure NV, Malaika Investments Ltd andStarion International Ltd. (L’Oréal and Others) (C-487/07), Judgment of theECJ, 18 June 2009, para. 60.

96 William M. Landes and Richard A. Posner, The Economics of TrademarkLaw, 78 TMR 267, 270 (1988).

97 Mark P. McKenna, The Normative Foundations of Trademark Law, 82NOTRE DAME L. REV. 1839, 1866–71 (2007).

98 McKenna, id.99 ‘A significant function of a trade mark is to link goods or services to a

source of supply, whether the original producer or a commercial intermediary’.Intel Corporation Inc. v CPM United Kingdom Ltd., Case C-252/07, OpinionAdvocate General Sharpston, 26 June 2008

100 McKenna points out that consumers are a diverse group, some have ahigh need for cognition in the purchase decision making, others like to makeintuitive purchase decisions. McKenna, supra note 62, at 90.




they like101 and avoid products they do not like.102 The shortcut in thesearch process is a more efficient alternative for assessing the qualityeach time one needs a product or service. The advantages for thetrademark holders to reach ‘their hands over the retail tradesman’sshoulder, so to speak, and offering their goods in their own name to thecustomer’103 are that their products can be distinguished from otherproducts, so that the customer can appreciate their reputation.

Then again, search cost reduction might also reduce competition,which might not be in the consumers’ interest.104 McKenna asserted thatincreasing search costs can actually benefit brands, by more activelyengaging consumers.105

The function of the trademark to indicate a source of origin has beeneclipsed by the constant source function, even though that source mightbe unknown.106 The latter case can be relevant if trademarks aretransferred independently of the undertaking.107

Trademarks are an incentive to trademark holders to produce high-quality goods and services, because competitors are not allowed to mimic

101 ‘The true functions of the trademark are, then, to identify a product assatisfactory and thereby to stimulate purchases by the consuming public’.Schechter, supra, Chapter 1, note 83, at 817.

102 ‘[O]nce consumer learns that he does not want particular goods, the mark,name or get-up becomes a significant warning signal’. William Cornish andDavid Llewelyn, INTELLECTUAL PROPERTY: PATENTS, COPYRIGHTS,TRADEMARKS & ALLIED RIGHTS (6th ed., London: Sweet & Maxwell2007), at 587.

103 H.G. Wells, THE WORLD OF WILLIAM CLISSOLD, Vol. 1 (London:Faber and Faber, 1926), at 237.

104 McKenna, supra note 62, at 87.105 An example could be Google that every now and then changes the logo of

its search engine into a Google Doodle, which is a themed masquerade of theGoogle logo. Accessed 9 February 2015 at: http://www.google.com/doodles/finder/2012/All%20doodles. McKenna, supra note 62, at 91.

106 Schechter: ‘[T]hat the goods in connection with which it is used emanatefrom the same – possibly anonymous – source or have reached the consumerthrough the same channels as certain other goods that have already given theconsumer satisfaction, and that bore the same trademark’. Schechter, supra,Chapter 1, note 83, at 816. A trademark ‘to identify and distinguish his or hergoods, including a unique product, from those manufactured or sold by othersand to indicate the source of the goods, even if that source is unknown’. 15U.S.C. § 1127. The same principle applies in the EU, see Sakulin, supra, Chapter1, note 88, at 37.

107 Article 19 Trademark Directive, supra note 11.




their mark and free-ride off their work.108 Quality is linked to the sourceof origin, since stability of source designation is considered a proxy forconsistent quality.109 Making sure that the quality associated by con-sumers is at least as high as consumers expect is crucial for takingadvantage of the link between trademark and trademark holder. Withoutconsistency in quality, it would adversely affect the source of originfunction of the trademark.

It can be argued that a trademark can be protected in the absence of aconnection between the trademark and the producer in the mind of theconsumer, if the consumer uses the connection between trademark andtrade source as a sign of quality.110

The naked or bare licence is a US and UK doctrine. In the US theLanham Act § 45, 15 U.S.C. § 1127111 prescribes that the licensor of aregistered trademark controls the quality of his mark by licensees, so thatconsumers will not be misled. Failure to exercise quality control, deemedto be ‘naked licensing’, may result in the unintentional abandonment ofthe trademark,112 because as Wilkof put it: ‘the user of the mark is notthe owner of the mark, and the owner of the mark is not the user of themark’.113

108 William Fisher, Theories of Intellectual Property, in NEW ESSAYS INTHE LEGAL AND POLITICAL THEORY OF PROPERTY (Stephen R.Munzer, ed., Cambridge: Cambridge University Press, 2001) 169–70.

109 ‘From the standpoint of realities, the consumer does not regard thetrade-mark as an indication of origin but rather as a guaranty that the goodspurchased under the trade-mark will have the same meritorious qualities as thosepreviously noted by him in his purchase of other goods bearing the same mark.The mark “sells the goods”’. Frank I. Schechter, THE HISTORICAL FOUN-DATION OF THE LAW RELATING TO TRADEMARKS (1925) (Reprint, NewJersey, The Lawbook Exchange 2002), at 149–50.

110 Westbury as Lord Chancellor insisted that a mark or name could beprotected even though the public did not know the producer as such but used theconnection with a trade source simply as a sign of quality. Cornish and Llewelyn,supra note 102, at 574 footnote 21; Hall v Barrows (1863) 4 De G.J. & S. 150,at 157.

111 ‘The term “related company” means any person whose use of a mark iscontrolled by the owner of the mark with respect to the nature and quality of thegoods or services on or in connection with which the mark is used’. Lanham Act§ 45, 15 U.S.C. § 1127.

112 Lanning Bryer and Matthew Asbell, Combining Trademarks in a JointlyOwned IP Holding Company, 98 TMR 834, 838.

113 Neil Wilkof, ‘When Rodney Dangerfield Meets the Naked Trade MarkLicence’, The IPKat, 3 January 2011, accessed 9 February 2015 at: http://ipkitten.blogspot.com/2011/01/when-rodney-dangerfield-meets-naked.html.




However, Professor Calboli made clear that unfortunately the ‘statuteneither provided a definition of “quality” and “control” nor indicated howmuch control must be used for licensing to be valid’.114 However, theinterpretation of control has been loosened from ‘adequate’ to ‘sufficient’to ‘minimal’.115

In the UK, since the Scandecor case,116 the bare trademark licencedoctrine seems to be no longer applied. According to Lord Nicholls, theTrade Marks Act of 1994117 has swept away the remaining restrictions onlicensing.118 Wilkof and Burkitt wrote:

[q]uality control is no longer relevant in assuring that, as a legal matter, thelicensor remains the source of the good. What is crucial for determiningsource is that during the term of the licence, the exclusive licensee has beenauthorised to use the mark and that the consumer identifies the exclusivelicensee as the source of the goods.119

Trademarks are signifiers used to distinguish a good or service producedby one undertaking from the goods or services of other undertakings.120

This function is a precondition for all the other trademark functions. Forexample, if one cannot distinguish one product from the other, there is nopoint in knowing what the source of origin is of that product.

Consumer Interest-Related Function of Trademark Dilution

A special consumer interest-related function is the one that should averttrademark dilution. Scholars have tried to align trademark dilution withthe confusion doctrine to state that dilution negatively influences thesource of origin function that shortcuts the search process. In the wordsof Dogan and Lemley: ‘Dilution of a unique mark increases consumersearch costs by making consumers who once associated any mention of

114 Irene Calboli, The Sunset of ‘Quality Control’ in Modern TrademarkLicensing, 57 AM. U. L. REV. 341, 345 (2007).

115 Id., at 346.116 Scandecor Developments AB v Scandecor Marketing AB and Others,

2001, UKHL 21, 2001, E.T.M.R. 74, 2002, F.S.R. 122. The opinion of the HighCourt is reported in 1998, F.S.R. 500; the opinion of the Court of Appeal isreported in 1999, F.S.R. 26.

117 Trade Marks Act 1994 (UK).118 Scandecor Developments AB v Scandecor Marketing AB and Others,

supra note 116, para. 33.119 Wilkof and Burkitt, supra note 39, at 133.120 Article 2 Trademark Directive, supra note 11; Article 4 Trademark

Regulation, supra note 36.




the trademark with its owner look further for context’.121 Or, as Austinput it succinctly: dilution leads to ‘burdened imagination’.122

Rose argued that there are few scholars that identify ‘dilution rights asprotecting this earned property against subliminal association/confusion,which would ultimately dilute the value of the quality image/persona offamous and highly distinctive marks’.123

Proprietary Functions

In the EU and US legislatures124 and case law125 one can find ampleevidence for the existence of other relevant functions of the trademark.But it can be argued126 the trademark includes the following functions ofthe trademark, which overlap each other somewhat, each separately andin combination can be seen as instruments of commercial strategy used,inter alia, for advertising purposes or to acquire a reputation in order todevelop consumer loyalty. This is not only concerned with rationalevaluation of information, but also with the feelings and subconscious

121 Stacey L. Dogan and Mark A. Lemley, Trademarks and Consumer SearchCosts on the Internet, 41 HOUS. L. REV. 777 (2004).

122 Graeme W. Austin, Trademarks and the Burdened Imagination, 69BROOK. L. REV. 827, 890–95 (2004).

123 Simone A. Rose, Will Atlas Shrug? Dilution Protection for ‘Famous’Trademarks: Anti-Competitive ‘Monopoly’ or Earned ‘Property’ Right?, 47 FLA.L. REV. 653, 702–3 (1995).

124 The wording of the EU legislature when describing the functions of thetrademark includes ‘in particular’ in the tenth recital to the Trademark Directive,supra note 11, and seventh recital to the Community Trademark Regulation,supra note 36. In the US, Congress removed reference to confusion in theLanham Act ‘as to the source of origin’, to also allow the protection of otherfunctions of the trademark. S. Rep. No. 2107, 87th Cong., 2d Sess. 4, reprintedin 1962 U.S.C.C.A.N. 2844, 2847. Read also Kozinski, supra, Chapter 1, note39, at 973.

125 In Arsenal Football Club the plural word ‘functions’ of the mark was firstused in nine different paras. Since that time L’Oréal and Others and GoogleFrance and Google have also dealt with functions of the trademark. ArsenalFootball Club plc v Matthew Reed (Arsenal Football Club), (Case C-206/01),Judgment of the ECJ, 12 November 2002; L’Oréal and Others, supra note 95,paras 63 and 65; Google France and Google, supra note 95, paras 77 and 79.

126 The use of marks to actually tell consumers specifically where goods orservices come from, and also a looser usage, to distinguish one line of goods orservices from another on the market, in cases where consumers have no interestin source as such only as a key to qualities, was labelled by Advocate-GeneralColomer of the ECJ as ‘simplistic reductionism’ in Arsenal Football Club (CaseC-206/01), Opinion of the Advocate-General, 13 June 2002, at para. 46.




appreciation of consumers.127 One can assume that both trademarkholders with and without a reputation are capable of having functionsother than that of indicating the source of origin.128

Callmann observed that courts are reluctant to define trademarks asproperty, because of the erroneous view that a trademark has noindependent ‘advertising’ value or ‘persona’, but is instead limited to itssource identification and ‘good will’ function.129

McKenna stated that trademark law’s expansive confusion doctrineswere developed, often explicitly, for the purpose of protecting trademarkholders’ interests. However, McKenna asserted that courts preferred tocast their decisions in consumer interest function terms ‘since theiremphasis on confusion is so compatible with the dominant theoreticalaccount of trademark law – namely, the search costs theory’.130

In order to communicate the values of a brand, the integrity of thetrademark is crucial. The constituent parts of a trademark logo and nameshould be complete. The context in which a trademark is communicatedis also crucial. If the consumers are aware of the brand’s sustainabilityprinciple it would be damaging to the brand if their trademark was usedon non-degradable plastic bags, or used on a Hummer, not known for itsefficient use of fossil fuels.

In Google France and Google the CJEU clarified when there is anadverse effect on the advertising function of the trademark:

[T]he proprietor of a trade mark is entitled to prohibit a third party fromusing, without the proprietor’s consent, a sign identical with its trade mark inrelation to goods or services which are identical with those for which thattrade mark is registered, in the case where that use adversely affects theproprietor’s use of its mark as a factor in sales promotion or as an instrumentof commercial strategy.131

The advertising function is used by the trademark holder to acquire orpreserve a reputation capable of attracting consumers and retaining their

127 Cornish and Llewelyn, supra note 102, at 590.128 Interflora Inc. and Interflora British Unit v Marks & Spencer plc et

Flowers Direct Online Ltd (Interflora), (C-323/09), Judgment of the CJEU, 22July 2011, para. 40.

129 Rudolf Callmann, Unfair Competition Without Competition? The Import-ance of the Property Concept in the Law of Trade-Marks, 95 U. PA. L. REV.443, 458–60 (1947).

130 McKenna, supra note 62, at 71.131 Google France and Google, supra note 95, para. 92.




loyalty.132 For example in 2002–03 Samsung spent 200 million USdollars in advertising to try to link its image to the lifestyle its customerswere looking for.133 According to Cornish and Llewelyn, investments inthe promotion of the trademark deserve to be protected on theirown merits, apart from the protection against abuse arising from mis-representation or inferior quality.134

According to Gilson, the term advertising function of the trademark isnot used in the US.135 Of course, in the US it is dealt with implicitly tosupport a trademark infringement or dilution claim, when the defendantis harming the plaintiff’s ability to advertise effectively by confusion orwhen the trademark’s attributes cannot be promoted due to dilution.

Dilution could be grounded in deceit and trespass, according toRose.136 She argued that the protection of the advertising value or, asPattishall, following the example of Frankfurter,137 called it, ‘commercialmagnetism’138 of a mark is an acknowledged function of anti-dilutionmeasures.

The investment function is just as the advertising function used toacquire or preserve a reputation, however, not only advertising isemployed, but also various other commercial techniques.139 When acompetitor is using a sign that is identical with the trademark which‘substantially interferes with the proprietor’s use of its trade mark toacquire or preserve a reputation capable of attracting consumers andretaining their loyalty, the third party’s use must be regarded as adverselyaffecting the trade mark’s investment function’.140 In such cases the

132 Interflora, supra note 128, para. 60.133 Gerry Khermouch, ‘The Best Global Brands’, BusinessWeek, 4 August

2002.134 ‘Marks are ciphers around which investment in the promotion of a

product is built and that investment is a value, which deserves protection is such,even when there is no abuse arising from misrepresentation either about origin orquality’. Cornish and Llewelyn, supra note 102, at 586–7.

135 Jerome Gilson, Trademarks: The Future of the Advertising Function (anAmerican Perspective), University College London Institute of Brand andInnovation Law, London, 23 March 2011, accessed 9 February 2015 at:http://www.ucl.ac.uk/laws/ibil/docs/11_brands_gilson.pdf.

136 Rose, supra note 123.137 Mishawaka Rubber, supra, Chapter 1, note 1, at 205.138 Beverly W. Pattishall, The Dilution Rationale for Trademark-Trade Iden-

tity Protection, Its Progress and Prospects, 67 TMR 607, 621–2 (1977).139 Interflora, supra note 128, para. 61.140 Id., para. 62.




trademark holder should be able, by virtue of the exclusive rightconferred upon it by the mark, to prevent such use.141

Simon Fhima wrote that ‘the law does not automatically protectintangibles just because they are valuable, and intellectual property rights(IPRs) are generally only created where the public interest in incentivis-ing that form of investment outweighs the public detriment in restrictinguse of the intangible’.142 However, Simon Fhima has reservations aboutprotecting the investments in the reputation in the image of a trademark:‘However, we must be careful not to let the image take on too much of alife of its own, ultimately, the role of a trademark is to identify goods orservices’.143 In contrast, Poster144 and Coombe145 declared the trademarkquintessentially self-referential, as already mentioned in the literaturereview.

Trademarks can be seen as visible manifestations of goodwill,146 or asRogers put it ‘good will is the substance, the trademark merely theshadow’.147 But this does not accurately state the function of trademarks.Schechter acknowledged that trademarks are not just symbols of good-will, but that they are an agency for the actual creation and perpetuationof goodwill:148 ‘[T]he trademark is not merely the symbol of good willbut often the most effective agent for the creation of good will,imprinting upon the public mind an anonymous and impersonal guarantyof satisfaction, creating a desire for further satisfactions’.149

Consumers have the need to know the reputation, which is thecollective judgement of others, of a product or service. Schechterdecoupled creation and retention from the source of origin doctrine.150

141 L’Oréal and Others, supra note 95; Interflora, supra note 128, para. 63.142 Ilanah Simon Fhima, TRADE MARK DILUTION IN EUROPE AND

THE UNITED STATES (Oxford: OUP 2011), at 163.143 Id., at 164.144 Poster, supra, Chapter 1, note 36.145 Coombe, supra, Chapter 1, note 37.146 ‘Goodwill is an intangible asset that comprises a good name and/or

reputation as well as regular customer satisfaction or technical efficiency’.Sakulin, supra, Chapter 1, note 88, at 40.

147 Edward Sidney Rogers, Comments on the Modern Law of Unfair Trade, 3ILL. L. REV. 551, 555 (1909).

148 Schechter, supra, Chapter 1, note 83, at 818.149 Id., at 819.150 Ainsworth v Walmsley: ‘If he does not carry on a trade in iron, but carries

on a trade in linen and stamps a lion on his linen, another person my stamp a lionon iron’. (L. R. 1 Eq. 518, 524–5 (1866)). The equitable principle that you maynot palm off goods of another and that the sole injury resulting from the use of




There seems to be a virtuous circle of trademark products or serviceswith a reputation. The reputable goods/services attract consumers, so thatmanufacturers are willing to invest in the quality and innovation of theproducts/services, which on their turn increase the reputation of thegoods/services, and so on.151 Heymann posed the question whetherreputation should be better protected by advertising law than by trade-mark law, or in the same way as with defamation, trade libel or productdisparagement claims.152 But she also warned that the desire to movereputational claims outside of trademark law leads to discount of theexistence of the reputational interests of the brand.153

Nock proposed a definition of reputation: ‘a shared, or collective,perception about a person’, based on judgements on a mosaic ofinformation available.154 The same could be applied to the trademark’sreputation, including the trademark logo’s reputation.

According to Post, reputation is a form of property. Post’s Lockeanvision is that people earn the esteem of others by ‘the fruit of personalexertion’.155

The other side of the coin of reputation is self-image. Humans partlyform their self-image on how they are perceived by other people,156 or in

the same ‘lion’ mark on linen and iron might be a confusion as to the source ofthese two dissimilar products. This ignores the fact that creation and retention ofcustom (instead of designation of source) is the primary function of a trademark.‘[T]he preservation of uniqueness and individuality of the trademark is ofparamount importance to its owner’. Schechter, supra, Chapter 1, note 83, at 822.

151 ‘The assumption is that a company is a going concern, and has noincentive to exploit its reputation, but wants to maintain it, if not improve it’.Norman Siebrasse, ‘Comparative Advertising, Dilution: And the Meaning ofSection 22 of the Trade-Marks Act’, 18 (1) CAN. I.P. REV. 277 (2001).

152 Laura A. Heymann, The Scope of Trademark Law in the Age of the BrandPersona, 98 VA. L. REV. In Brief 68 (2012).

153 Id.154 Steven L. Nock, THE COSTS OF PRIVACY: SURVEILLANCE AND

REPUTATION IN AMERICA (New York: Aldine de Gruyter, 1993), at 2. SeeDaniel Solove, THE FUTURE OF REPUTATION, GOSSIP, RUMOR, ANDPRIVACY ON THE INTERNET (New Haven, CT: Yale University Press 2007),at 30.

155 Robert C. Post, The Social Foundations of Defamation Law: Reputationand the Constitution, 74 CAL. L. REV. 691, 694 (1986) (quoting Joel Hawes,LECTURES ADDRESSED TO THE YOUNG MEN OF HARTFORD ANDNEW HAVEN, AND PUBLISHED AT THEIR UNITED REQUEST, 95 (Hart-ford: O. D. Cooke, 1828)).

156 The looking glass self. Charles H. Cooley, HUMAN NATURE AND THESOCIAL ORDER (New York: Charles Scribner’s Sons, 1906).




the case of trademark holders how internet users perceive the trademarklogo of the trademark holders on social media.

More companies are starting to realize that their brands equal theiridentity or persona.157

We consider the Polo brands to be the essence of our company. They are ouridentity, our face, our worth – in other words, our property. For Polo RalphLauren, and many other American companies, the most valuable piece ofproperty that they own is their good name, or, as we say in the industry, theirbrand …158

Gerhardt argued that consumers do not use trademarks just as a short-hand for the physical qualities of a product, ‘but as a way of signallingtheir own emotional participation and identity, which then feeds back intothe meaning of the brand in a continuous loop’.159 Consumers havebonds with their favourite brands that mimic the dynamics of a personalrelationship. And just like relationships between friends can go awry, socan the relationships between brands and consumers.160

The link between trademark and trademark holders can also be seen asa way to make trademark holders accountable for their actions, not justthe quality of their products and services but also in regard to the waytheir products are manufactured, the way they deal with corporate social

157 ‘“Persona” has been defined as the “quality of distinctiveness anduniqueness”, quite apart from its [the trademark’s] function of identifying thesource of goods and services’. Ellen P. Winner, Right of Identity: Right ofPublicity and Protection for a Trademark’s ‘Persona’, 71 TRM 193 (1981).

158 Oral Statement of Sherry L. Jetter, Vice President, Intellectual Property,Polo Ralph Lauren Corporation, before the Hearing of the Subcommittee onCourts, the Internet, and Intellectual Property of the Committee on the Judiciary,107th Cong., 2d Sess., Serial No. 53 (14 February 2003).

159 Deborah R. Gerhardt, Consumer Investment in Trademarks, 88 N.C. L.REV. 427, 455 (2010). Read more about the signalling properties of thetrademark in Drescher, supra, Chapter 1, note 25, at 309.

160 When Frederic Rouzaud, managing director of Louis Roederer, was askedin The Economist what he thought of the embracement by the hip-hop com-munity of their Cristal champagne, he distanced himself from the hip-hopcommunity. This triggered hip-hop artist and producer Jay-Z to call for a boycott.‘Bubbles and Bling’, The Economist, 8 May 2006, accessed 9 February 2015 at:http://www.economist.com/node/6905921. ‘Jay-Z Launches Bubbly Boycott ofCristal’, Associated Press, 15 June 2006, via USA Today, accessed 9 February2015 at: http://www.usatoday.com/life/people/2006-06-15-jayz-cristal_x.htm.Douglas Century, ‘Jay-Z Puts a Cap on Cristal’, New York Times, 2 July 2006, atH1, accessed 9 February 2015 at: http://select.nytimes.com/gst/abstract.html?res=F40815FE3E540C718CDDAE0894DE404482.




responsibility and environmental issues.161 One of the biggest reasons thequestionable working conditions and, as a consequence, suicides thattook place at Foxconn in Shenzhen China were picked up by themainstream media was because they are the biggest manufacturer forApple, Inc. Therefore, one can argue that the title of Klein’s bestseller NoLogo pointed to a problem instead of a solution, because without atrademark logo, the ultimate principles cannot be traced.162

2.9 BRIEF HISTORY OF TRADEMARKINFRINGEMENT AND DILUTION

Trademark infringement, based on the misrepresentation doctrine, andtrademark dilution, based on the doctrine of misappropriation, havedeveloped in both the US and EU, under the constraints of internationaltreaties to which both are members. The result is that trademarkinfringement and trademark dilution in both jurisdictions are similar, butstill deserve their own analysis.

Trademark law in the US pursues two related goals: to protect againstdeception, fraud and misrepresentation, which is actionable via trademarkinfringement and to protect against misappropriation and the protectionof property,163 actionable via trademark dilution. Below a brief overviewis given of the evolution of the trademark in US legislation.

Although it can be argued that trademark law plays an equallyimportant role in American society as patent and copyright law, it wasnever drafted into the US. Constitution164 as something Congress should

161 Since brands and their corporate parents are becoming ever moreentwined – both in the public perception and commercial reality – it follows thatconsumers can increasingly influence the behaviour of companies. ‘It is absurdto say that brands can be too powerful’, concludes Interbrand’s Ms Clifton.‘Brands are the ultimate accountable institution. If people fall out of love withyour brand, you go out of business’. ‘Who’s Wearing the Trousers?’, TheEconomist, 6 September 2001 accessed 9 February 2015 at: http://www.economist.com/node/770992?story_id=770992.

162 Klein, supra, Chapter 1, note 34.163 Ameritech Inc. v American Info. Tech. Corp., 811 F.2d 960, 964 (6th Cir.

1987).164 According to the US Const. art. I, § 8, US Congress is given the power

‘[t]o promote the Progress of Science and Useful Arts, by securing for limitedTimes to Authors and Inventors the Exclusive Right to their respective Writingsand Discoveries’. Federal Convention of 1787.




promote.165 Instead, trademark law developed from tort-based causes ofaction, misappropriation and misrepresentation.

The tort of misappropriation of the goodwill of the trademark owner isbased on the Lockean concept that people should not be able to reapwhere they have not sown,166 in other words free-riding on the reputationof another, if doing so interferes with the incentive to engage in creativeactivity so that society would suffer.167 The tort of deception of theconsumer became the fundament under the likelihood of confusiondoctrine.

Initially one must prove that the defendant was deliberately attemptingto pass off his goods as those of the plaintiff to establish fraud. ‘No manhas a right to use names, symbols, signs or marks which are intended, orcalculated, to represent that his business is that of another’.168 In 1925,generic descriptive words could be enjoined if there was actual fraud orintent to deceive.169

‘The universal test [of unfair competition] is whether the public islikely to be deceived’.170 A non-arbitrary trademark that has acquiredsecondary meaning can be restrained in the case of actual or likelihood ofconfusion.171 ‘The determining factor is not that people have actuallybeen deceived but that there is a likelihood of that happening’.172 Chafeeobserved that ‘[f]raud has been squeezed out of’ cases involving tradenames and trademarks.173

165 The author,ity of Congress (re: Patent and Copyright Acts) is exercised inthe hope that ‘[t]he productive effort thereby fostered will have a positive effecton society through the introduction of new products and processes of manufac-ture into the economy, and the emanations by way of increased employment andbetter lives for our citizens’. Diamond v Chakrabarty, 447 U.S. 303, 307 (1980)(quoting Kewanee Oil Co. v Bicron Corp., 416 U.S. 470, 480 (1974)). One canargue that trademarks are justified by a similar rationale.

166 John Locke, THE SECOND TREATISE OF CIVIL GOVERNMENT(1690) (Peter Laslett, ed., Cambridge: Cambridge University Press, 1988),Chapter 5 ‘Property’.

167 The creative activity of a trademark is that it endows symbols withinformation carrying capacity. David W. Barnes, Misappropriation of Trademark,9 N.C. J.L. & TECH. 171 (2008).

168 Hilson Co. v Foster, 80 F. 896, 897 (C.C.N.Y. 1897).169 Drive It Yourself Co. v North, 130 A. 57, 59 (Md. App. 1925).170 Boice v Stevenson, 187 P.2d 648, 653 (Ariz. 1947).171 Sartor v Schaden, 101 N.W. 511, 513 (Iowa 1904).172 New York World’s Fair v World’s Fair News, 256 A.D. 373, 374 (N.Y.

App. 1939).173 Zechariah Chafee, Unfair Competition, 53 HARV. L. REV. 1289, 1296–7

(1940).




In Hanover Star Milling, the US Supreme Court made it clear that theessential element, the sale of the goods of one manufacturer for those ofanother, is the same in trademark cases as in cases of unfair competitionunaccompanied by trademark infringement.174 Therefore, the doctrinewas embraced to treat trademarks and trade names under unfair com-petition law in the same way.

Trademark law is often seen as a subset of the law of unfaircompetition.175 However, in contrast to this belief Derenberg asserted thatthe law of unfair competition developed at the beginning of the 20thcentury and was considered an outgrowth of trademark law.176

According to Chafee, the only important difference between tradenames and trademarks was the eligibility for federal registration of thelatter.177 Handler and Pickett wrote that since trademarks and trade namesfunctioned much the same in practice, there is no justification todiscriminate the level of protection of one of the two.178

Rogers observed:

The notion that there is ‘property’ in trademarks as a separate thing was oncequite generally entertained and for a while it served well enough, but it wasvery soon perceived that a trader’s customers might be diverted by theimitation of things which were not trademarks and in which property rightscould not be maintained, such as the misuse of personal names, descriptivewords and the like.179

174 Hanover Star Milling Co., 240 U.S. (1916) at 412–13.175 ‘Trademark law is really just a part of the broader law of unfair

competition’. Gasparek, supra note 70, at 795.176 Walter J. Derenberg, TRADE-MARK PROTECTION AND UNFAIR

TRADING 48 (Albany: Matthew Bender & Company 1936), at 39–40.177 Zechariah Chafee, Unfair Competition, 53 HARV. L. REV. 1289, at 1298

(1940).178 ‘Whether or not there is property in trademarks or trade names seems to

us a fruitless and unhelpful inquiry. Both types of mark frequently are the mostvaluable assets of a business’. Milton Handler and Charles Pickettt, Trade-Marksand Trade Names: An Analysis and Synthesis: II, 30 COLUM. L. REV. 168, 759,776 (1930).

179 Edward Sidney Rogers, New Concepts of Unfair Competition under theLanham Act, 38 TMR 259, 260 (1948).




Trademark Infringement Legislation

The first federal trademark law was enacted on 5 July 1946: the LanhamAct.180 The Lanham Act was introduced as a bill ‘to place all mattersrelating to trademarks in one statute and to eliminate judicial obscurity… and [to make] relief against infringement prompt and effective’. Itpromotes three policies: it prevents consumer confusion,181 protects thegoodwill of businesses, and encourages competition within the market.182

There are two trademark registers in the US: the Principal Register183

if trademarks meet the qualifications, including that of distinctiveness. Ifnot, they still can be listed on the Supplemental Register.184 Theprotection for federal trademarks on the Principle Register is strongerthan on the Supplemental Register or for unregistered marks. If registeredon the Principle Register, one can enforce one’s trademark againsttrademark infringement. Paragraph 43(a) Lanham Act also protectsagainst violations of false advertising or unfair competition,185 withoutthe need to have a federally registered trademark.

Rogers asserted that:

[u]nder the modern law … unfair competition includes any act, not neces-sarily fraudulent, which artificially interferes with the normal course of tradeto the disadvantage of another. There need be no competition if the artificialinterference is present. It is true, of course, that most of the cases have arisenbetween competitors in business, but the fact of competition or its absenceought not to be controlling. It is the nature or the result of the act, not theoccupation of the actor which should determine its character.186

180 The Lanham Act was passed on 5 July 1946 and was named aftercongressman Frederick (Fritz) Garland Lanham, representative for Texas and aDemocrat.

181 The trademark infringement claim can be found in § 32(1) Lanham Act,15 U.S.C. § 1114(1).

182 Fara S. Sunderji, Protecting Online Auction Sites from the ContributoryTrademark Liability Storm: A Legislative Solution to the Tiffany Inc. v eBay Inc.Problem, 74 FORDHAM L. REV. 909, 917–18 (2005).

183 15 U.S.C. § 1051–72.184 15 U.S.C. § 1091–6. To meet the requirement of some countries that

require that the mark has been first registered in the home country.185 ‘Section 43(a) Lanham Act proscribes false statements or representations

that are made in commercial advertising or promotion, are likely to deceiveconsumers, and are likely to cause injury to the plaintiff’. Court L. Reichman andM. Melissa Cannady, False Advertising under the Lanham Act, 21 FRAN. L.J.187, 187 (2002).

186 Rogers, supra note 179, at 262.




The 1905 Trademark Act prevented registration of a mark that was likelyto cause confusion with an already registered mark, but only if the markswere placed on goods of the ‘same descriptive properties’ as those of thesenior user. The Lanham Act of 1946 eliminated this requirement. Underthe revised version of the Act, a junior user could not register or use amark ‘in connection with the sale, offering for sale, or advertising of anygoods or services on or in connection with which such use is likely tocause confusion or mistake or to deceive purchasers as to the source oforigin of such goods or services’.187 Handler and Pickett had alreadyadvocated in 1930 that all types of marks will be entitled to protectionunder the likelihood of confusion standard.188

Trademark Infringement Tests

Although there are more tests, as will be pointed out below, the Polaroidtest is still the most authoritative. In 1961 the Second Circuit formulatedthe Polaroid factors189 to determine whether a likelihood of confusionexists:190

(1) strength of plaintiff’s mark;(2) similarity of competing marks;(3) competitive proximity of the products;(4) likelihood that plaintiff will ‘bridge the gap’ and offer a product like

defendants’ product;(5) actual confusion;(6) defendants’ good faith;(7) quality of defendants’ product;(8) sophistication of the buyers.

In 1962 Congress broadened the scope of the likelihood of confusionstandard by removing the reference to ‘purchasers’ in the statute.191 It

187 Trademark Act of 1946, ch. 540, § 43(a)(1)(A), 60 Stat. 444, 15 U.S.C.§ 1125(a)(1)(A) (1946).

188 Handler and Pickett, supra note 178.189 Polaroid Corp. v Polarad Elecs. Corp., 287 F.2d 492, 495 (2d. Cir. 1961),

cert. denied, 368 U.S. 820 (1961).190 These factors must not be applied in a mechanical way, and the focus

needs to be on whether consumers are likely to be confused. Nabisco, Inc. vWarner-Lambert Co., 220 F.3d 43, 46 (2d Cir. 2000).

191 S. Rep. No. 2107, 87th Cong., 2d Sess. 4, reprinted in 1962 U.S.C.C.A.N.2844, 2847.




now prohibits all uses of a trademark that are ‘likely to cause confusionor to cause mistake or to deceive’.192

Congress also removed reference to confusion ‘as to the source oforigin’, so now also confusion as to sponsorship or endorsement of agood or service are within the scope of protection and thus prohibited.193

In 1979 the 9th Circuit came up with an eight-factor balancing test forthe likelihood of confusion:194

(1) strength of the mark;(2) proximity of the goods;(3) similarity of the marks;(4) evidence of actual confusion;(5) marketing channels used;(6) type of goods and the degree of care likely to be exercised by the

purchaser;(7) defendant’s intent in selecting the mark;(8) likelihood of expansion of the product lines.

In 2000 the 7th Circuit used a slightly different seven-factor balancingtest:195

(1) the similarity between the marks in appearance and suggestion;(2) the similarity of the products;(3) the area and manner of concurrent use of the products;(4) the degree of care likely to be exercised by consumers;(5) the strength of the complainant’s mark;(6) any evidence of actual confusion;(7) the defendant’s intent (or lack thereof) to palm off its product as

that of another.

In contrast to what Schechter proposed, namely the protection of thedistinctiveness of arbitrary or fancy trademarks, the US legislator choseto only protect famous trademarks.196 Rierson pointed out that Schechterdid not intend that it would apply to words or terms that were not

192 Since 1962 Lanham Act: 15 U.S.C. § 1125(a)(1)(A) (2006).193 S. Rep. No. 2107, 87th Cong., 2d Sess. 4, reprinted in 1962 U.S.C.C.A.N.

2844, 2847.194 AMF, Inc. v Sleekcraft Boats, 599 F.2d 341, 348–9 (9th Cir. 1979).195 Eli Lilly & Co. v Natural Answers, Inc., 233 F.3d 456, 461–2 (7th Cir.

2000).196 Beebe, supra note 87, at 1162–3.




inherently distinctive: ‘His argument in favor of separating the twoclasses of marks was in fact directly contrary to the definite trend in favorof conflating them’.197

McClure characterized Schechter’s trademark dilution theory as aproposal to re-propertize certain categories of trademarks.198 Locke’slabour theory of property,199 which argues that the fruits ofone’s labour are one’s own because one has worked for it, cannot beemployed, according to Port, because the trademark holder has notexerted any work on the mark in non-competing markets.200 However,Locke developed the homestead principle: one gains just ownership of anunowned resource by performing an act of original appropriation. It canbe argued that to register and use a trademark in one product categorycan be seen as such an act of original appropriation for all categories.Property can be used in any way the property owner sees fit,201 as long asit has no detrimental effects to society.

Callmann, after Schechter one of the most prolific advocates ofcodifying the trademark dilution doctrine, asserted that ‘trade-markinfringement includes both “passing-off”, which is found when competi-tors infringe upon a mark, and “trespass of trademark property”, which isfound most commonly when the infringing mark is used on non-competing goods’.202

Since 1947 trademark dilution has been enacted in some of the USstates.203 But only in 1995 did Congress enact the Federal Trademark

197 Rierson, supra note 81, at 9.198 Daniel M. McClure, Trademarks and Unfair Competition: A Critical

History of Legal Thought, 69 TMR 320, 323–4 (1979).199 Locke, supra note 166.200 Kenneth L. Port, The ‘Unnatural’ Expansion of Trademark Rights: Is a

Federal Dilution Statute Necessary?, 18 SETON HALL LEGIS. J. 433, 473–4,487 (1994).

201 This can be compared to someone who claims land and uses it in oneway, and does not have to allow anyone to exploit the same land in other waysthat do not interfere with the exploitation of the activity of the landowner.

202 Callmann, supra note 129, at 465–6.203 Massachusetts enacted the first dilution statute: Act of 2 May 1947, Ch. 307,

§ 7a, 1947 Mass. Acts 300 (codified as amended at MASS. GEN. LAWS ANN. Ch.110H § 13 (West Supp. 2007)). Massachusetts was followed by New York, Illinoisand Georgia. Dilution materialized in state statutes as early as 1947, and manystates still recognize a dilution cause of action. See: N.Y. GEN. BUS. LAW § 368-d(1961 N.Y. Laws 1806, 1813) (recodified at N.Y. GEN. BUS. LAW § 360-l inMCKINNEY’S CONSOLIDATED LAWS OF NEW YORK (St Paul, MN: WestPublishing 1996 & Supp. 2008)); 140 ILL. COMP. STAT. ANN. 22 (St Paul, MN:




Dilution Act (FTDA).204 The FTDA was replaced by the TrademarkDilution Revision Act (TDRA)205 after the Supreme Court had inter-preted the FTDA in the Victoria’s Secret case206 as having an actualdilution standard: after the District Court207 decided to favour the dilutionclaim and the Sixth Circuit208 confirmed, the Supreme Court reversed.There needed to be more than mere association between them todemonstrate that the defendant had ‘impaired the distinctiveness’ of andthereby diluted the plaintiff’s famous trademark.

The actual dilution standard articulated in Victoria’s Secret was criti-cized by the holders of famous trademarks. Then, Congress amended theAct because of the Supreme Court’s decision209 and passed the TDRA.Paragraph 43(c) US Trademark Act of 1946, as amended by the TDRA of2006,210 is codified in U.S.C. Title 15 § 1125211 and includes dilution by

West Publishing, 1986) (superseded by 765 ILL. COMP. STAT. ANN. §§ 1036/5,1036/65 (St Paul, MN: West Publishing 2001)); GA. CODE ANN. § 10-1-451(LexisNexis, 2000). Robert G. Bone, Schechter’s Ideas in Historical Context andDilution’s Rocky Road, 24 SANTA CLARA COMP. & HIGH TECH. L.J. 469,497–504 (2008).

204 Federal Trademark Dilution Act of 1995, Pub. L. No. 104-98, § 4, 109Stat. 985, 986 (codified at 15 U.S.C. § 1127 (2000).

205 Trademark Dilution Revision Act of 2006, Pub. L. No. 109-312, § 2, 120Stat. 1730 (codified at 15 U.S.C. § 1125(c) (2006).

206 Moseley v V Secret Catalogue, Inc., (01-1015) 537 U.S. 418 (2003) 259F.3d 464, reversed and remanded.

207 V Secret Catalogue, Inc. v. Moseley, No. 3:98CV-395-S, 2000 WL370525, at 1 (W.D. Ky. Feb. 9, 2000).

208 V Secret Catalogue, Inc. v Moseley, 259 F.3d 464, 476–7 (6th Cir. 2001).209 As was pointed out in Starbucks Corp. v Wolfe’s Borough Coffee, Inc.,

588 F.3d 97, 104 (2d Cir. 2009).210 The Trademark Dilution Revision Act (TDRA) of 2006 was implemented

as a correction to the Supreme Court’s interpretation of the Federal TrademarkDilution Act of 1995 in Moseley v V Secret Catalogue, Inc., supra note 206.TDRA made clear that no actual trademark dilution was needed, but that alikelihood of trademark dilution was enough for protection. Famous mark wasredefined as recognized by a member of the general public, instead of a memberof a niche market. The fair use defence was also changed. See Chapter 6‘Trademark Dilution and Its Defences’.

211 Trademark dilution legislation, in the U.S. Title 15, Ch. 22, subCh. III,§ 1125, ‘False designations of origin, false descriptions, and dilution forbidden’(c) Dilution by blurring, dilution by tarnishment.




blurring212 and tarnishment.213 It modified the statutory language in amanner that effectively decreased the importance of mark similarity andincreased the relevance of mark association in trademark dilution cases.

In the next Victoria Secret’s case, the District Court214 applied thelikelihood of dilution standard, which was confirmed by the SixthCircuit.215

TDRA Test for Trademark Dilution by Blurring

The six TDRA factors about what could constitute trademark dilution byblurring216 are non-exclusionary:

(1) the degree of similarity between the mark or trade name and thefamous mark;

(2) the degree of inherent or acquired distinctiveness of the famousmark;

(3) the extent to which the owner of the famous mark is engaging insubstantially exclusive use of the mark;

(4) the degree of recognition of the famous mark;(5) whether the user of the mark or trade name intended to create an

association with the famous mark;(6) any actual association between the mark or trade name and the

famous mark.

If one approaches the dilution doctrine from a relational perspective itmakes sense that a mere association instead of likelihood of dilution canbe damaging. If one associates oneself with the wrong kind of people, itreduces one’s reputation in the job market and might also decrease theopportunities one is getting in one’s career.

212 U.S. Code, Title 15, Ch. 22, subCh. III, § 1125(c)(2)(B), see note 9.213 Code, Title 15, Ch. 22, sub Ch. III, § 1125(c)(2)(C), see note 9.214 V Secret Catalogue, Inc. v Moseley, 558 F. Supp. 2d 734, 750 (W.D. Ky.

2008).215 V Secret Catalogue, Inc. v Moseley, 605 F.3d 382, 390 (6th Cir. 2010),

cert. denied, 79

U.S.L.W. 3301 (U.S. 18 January 2011) (No. 10-604).216 15 U.S.C. § 1125(c)(2)(B).




In regard to dilution by tarnishment Horn’s criticism was that when adefendant’s trademark has lewd or sexual associations a ‘likelihood ofdilution’ is presumed and must be rebutted by the defendant.217

Under the TDRA, injunctive relief is the primary form of remedy.218

Damages and attorney fees can be compensated by the defendant, incases of ‘willful’ dilution.219

In the 1990s the EC harmonized the trademark, this led to the FirstCouncil Directive 89/104/EEC (Trademark Directive).220 Harmonizationhas made the differences between the rules in the separate EU memberjurisdictions smaller.221 However, it did not lead to a uniform set ofagreed rules. Rather, it merely ‘directs a change of rules, standards orprocesses in order to avoid conflicts and bring about equivalence’.222

Which on its turn set the stage for unifying community trademark lawinto the Community Trademark Regulation.223 Unification did eliminatethe differences between the rules in the jurisdictions of the separatemember countries of the EU for the community trademark.

One can observe an evolution in what can prevent a likelihood ofconfusion. It started with the precondition of a single undertaking that isthe source of origin and who is in control of the quality of the products:

For the trade mark to be able to fulfil its essential role in the system ofundistorted competition which the Treaty seeks to establish, it must offer aguarantee that all the goods or services bearing it have originated under thecontrol of a single undertaking which is responsible for their quality.224

217 Greg Horn and Matthew Malm, Sex Changes Everything, but the Trade-mark Dilution Revision Act Shouldn’t: V Secret Catalogue, Inc. v. Moseley andthe Burden of Proof in Trademark Dilution Actions, 79 U. CIN. L. REV. 1583,1584 (2011).

218 15 U.S.C. § 1125(c)(1).219 15 U.S.C. § 1125(c)(5)(B)(i) and (ii).220 Supra note 11.221 Harmonization of laws has been called the ‘dominant impulse’ for

international lawmaking initiatives. Timothy W. Blakely, Comment: Beyond theInternational Harmonization of Trademark Law: The Community Trade Mark asa Model of Unitary Transnational Trademark Protection, 149 U. PA. L. REV.309, 309 (2000).

222 George A. Zaphiriou, Unification and Harmonization of Law Relating toGlobal and Regional Trading, 14 N. ILL. U. L. REV. 407, 407 (1994).

223 Supra note 36.224 HAG GF (HAG II), (Case C-10/89), Judgment of the ECJ, 17 October

1990, paras 13 and 14.




The requirement for a single undertaking was first that it had to be known,later the requirement sufficed that it be constant. The one responsible for thequality was broadened to economically linked undertakings in CanonKabushiki Kaisha v Metro-Goldwyn-Meyer Inc.225 As pointed out in Chap-ter 2.8 on the quality function, the interpretation of control over the qualityhas shifted from adequate to sufficient to minimal.

Distinctiveness is part of the likelihood of confusion test. ‘[T]hedistinctive character of the earlier trade mark, and in particular itsreputation, must be taken into account when determining whether thesimilarity between the goods or services covered by the two trade marksis sufficient to give rise to the likelihood of confusion’.226

It was established that there is a relation between the degree ofsimilarity between goods or services of the sign and the trademark andthe degree of similarity between the sign and the trademark.227 In otherwords: if two entities use very similar signs but their products are verydissimilar it might be not confusing.

Virgin Enterprises Ltd v Bodtrade Likelihood of Confusion Principles

In La Chemise Lacoste SA v Baker Street Clothing Ltd228 GeoffreyHobbs QC sitting as the Appointed Person quoted the following summaryearlier used by Mr Allan James in Virgin Enterprises Ltd v Bodtrade229 togive an overview of the principles established in regard to whether asimilar trademark for identical or similar products can co-exist:

(a) the likelihood of confusion must be appreciated globally, taking accountof all relevant factors;230

(b) the matter must be judged through the eyes of the average consumer ofthe goods or services in question,231 who is deemed to be reasonably well

225 Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc (Canon KabushikiKaisha), (Case C-39/97), Judgment of the ECJ, 29 September 1998, para. 30.

226 Id., para. 24.227 ‘[A] lesser degree of similarity between those goods or services may be

offset by a greater degree of similarity between the marks, and vice versa’. Id.,para. 17.

228 La Chemise Lacoste SA v Baker Street Clothing Ltd, The AppointedPerson (Geoffrey Hobbs, Q.C.): 128 R.P.C. 165 (2011).

229 Virgin Enterprises Ltd v Bodtrade 54 (Pty) Ltd (BL O-216/09; 23 July2009).

230 SABEL BV v Puma AG (SABEL BV) (Case C-251/95), Judgment of theECJ, 11 November 1997, para. 22.

231 Id., para. 23.




informed and reasonably circumspect and observant,232 but who rarelyhas the chance to make direct comparisons between marks and mustinstead rely upon the imperfect picture of them he has kept in his mind,and whose attention varies according to the category of goods or servicesin question;233

(c) the average consumer normally perceives a mark as a whole and does notproceed to analyse its various details;234

(d) the visual, aural and conceptual similarities of the marks must normallybe assessed by reference to the overall impressions created by the marksbearing in mind their distinctive and dominant components, but it is onlywhen all other components of a complex mark are negligible that it ispermissible to make the comparison solely on the basis of the dominantelements;235

(e) nevertheless, the overall impression conveyed to the public by a compos-ite trade mark may, in certain circumstances, be dominated by one ormore of its components;236

(f) and beyond the usual case, where the overall impression created by amark depends heavily on the dominant features of the mark, it is quitepossible that in a particular case an element corresponding to an earliertrade mark may retain an independent distinctive role in a compositemark, without necessarily constituting a dominant element of thatmark;237

(g) a lesser degree of similarity between the goods or services may beoffset by a great degree of similarity between the marks, and viceversa;238

(h) there is a greater likelihood of confusion where the earlier mark has ahighly distinctive character, either per se or because of the use that hasbeen made of it;239

(i) mere association, in the strict sense that the later mark brings the earliermark to mind, is not sufficient;240

232 Gut Springenheide GmbH and Rudolf Tusky v Oberkreisdirektor desKreises Steinfurt – Amt für Lebensmittelüberwachung, (Case C-210/96), Judg-ment of the ECJ, 16 July 1998, para. 31.

233 Lloyd Schuhfabrik Meyer & Co. GmbH v Klijsen Handel BV, (CaseC-342/97), Judgment of the ECJ, 22 June 1999, para. 26.

234 SABEL BV, supra note 230, para. 6.235 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV, supra note

233, para. 25.236 Matratzen Concord v OHIM Hukla Germany (MATRATZEN), (Case

T-6/01), Judgment of the Court of First Instance, 23 October 2002, para. XXXV.237 Medion AG v Thomson Sales Germany & Austria GmbH (Case C-120/

04), Judgment of the ECJ, 6 October 2005, paras 35–7.238 SABEL BV v Puma AG, supra note 230, para. 22.239 Canon Kabushiki Kaisha, supra note 225, para. 24.240 SABEL BV, supra note 230, para. 26.




(j) the reputation of a mark does not give grounds for presuming alikelihood of confusion simply because of a likelihood of association inthe strict sense;241

(k) if the association between the marks causes the public to wrongly believethat the respective goods [or services] come from the same oreconomically-linked undertakings, there is a likelihood of confusion.

The European Court of Justice (ECJ) made clear in O2 v Hutchison (the‘bubbles’ case)242 that the plaintiff can take action for trademark infringe-ment in the case of a likelihood of confusion, even in respect of acomparative advertisement. Besides, a plaintiff can bring a complaintunder the current Misleading and Comparative Advertising Directive.243

Legislation against Trademark Dilution

Although the word dilution cannot be found anywhere in the directive orregulation, the doctrine to protect marks with a reputation against use ondissimilar goods or services as taking unfair advantage of or causingdetriment to the distinctive character or repute of the trademark can befound in both: Article 5(2) Trademark Directive244 and its equivalent:Article 9(1)(c) Community Trademark Regulation.245

In a case between the competitors Puma v Sabel,246 the ECJ rejectedthe interpretation that a likelihood of association meant that the accusedmark merely calls to mind the senior mark and that the concept oflikelihood of association is not an alternative to that of likelihood ofconfusion, but serves to define its scope.247 In Davidoff v Gofkid the ECJdecided that member states can also allow action against a competitor forcausing detriment to, or taking unfair advantage of the distinctive

241 Marca Mode CV v Adidas AG, (Case C-425/98), Judgment of the ECJ, 22June 2000, para. 41.

242 O2 Holdings Ltd and O2 (UK) Limited v Hutchison 3G Limited, (C-533/06) Judgment of the ECJ, 12 June 2008.

243 Misleading and Comparative Advertising Directive 2006/114/EC.244 Supra note 11.245 Council Regulation 40/94, supra note 36, and updated by Council

Regulation (EC) No 207/2009 of 26 February 2009 on the Community trademark.

246 SABEL BV, supra note 230, para. 26.247 SABEL BV, id., at para. 18. Also Canon Kabushiki Kaisha, supra note

225.




character or repute of a trademark, rather than someone who uses thesign on dissimilar goods or services.248

Article 5(2) Trademark Directive249 ‘cannot be given an interpretationwhich would lead to marks with a reputation having less protectionwhere a sign is used for identical or similar goods’.250

In Intel v CPM the ECJ could not find any likelihood of confusion.251

However, it decided that causing detriment to the distinctive character ofthe mark is actionable when:

Such detriment is caused when that mark’s ability to identify the goods orservices for which it is registered and used as coming from the proprietor ofthat mark is weakened, since use of the later mark leads to dispersion of theidentity and hold upon the public mind of the earlier mark. That is notably thecase when the earlier mark, which used to arouse immediate association withthe goods and services for which it is registered, is no longer capable of doingso.252

The ECJ in Intel v CPM also held that in order to prove detriment to thedistinctive character of the mark with a reputation, the proprietor mustpresent evidence of a change in economic behaviour of the averageconsumer of the earlier goods or services as a consequence of the use ofthe later mark, or a likelihood that such a change will occur in thefuture.253

L’Oréal v Bellure was about comparison lists of smell-alike per-fumes.254 The ECJ decided:

Since, under Directive 84/450, comparative advertising which represents theadvertiser’s products as an imitation of a product bearing a trade mark isinconsistent with fair competition and thus unlawful, any advantage gained bythe advertiser through such advertising will have been achieved as the result

248 Davidoff & Cie SA and Zino Davidoff SA v Gofkid Ltd (Davidoff) (CaseC-292/00), Judgment of the ECJ, 9 January 2003.

249 Trademark Directive, supra note 11.250 Davidoff, supra note 248, para. 25. Adidas-Salomon AG and Adidas

Benelux BV v Fitnessworld Trading Ltd. (Adidas v Fitnessworld), (C-408/01),Judgment of the ECJ, 23 October 2003, confirmed Davidoff in paras. 14, 16and 19.

251 Intel Corporation Inc. v CPM United Kingdom Ltd. (Intel v CPM) (CaseC-252/07), Judgment of the ECJ, 27 November 2008.

252 Id.253 Jukka Palm, ‘The ECJ’s Puzzling Concept of a “Change in Economic

Behaviour”’, Brands in the Boardroom 2009, IAM-MAGAZINE 20 (2009).254 L’Oréal v Others, supra note 95.




of unfair competition and must, accordingly, be regarded as taking unfairadvantage of the reputation of that mark.255

In Interflora the mere fact that a competitor by using an identical signwith the trademark in relation to services identical for which that mark isregistered forces a trademark holder to intensify its advertising in order tomaintain or enhance its profile with consumers is not a sufficient basis, inevery case, for concluding that the trade mark’s advertising function isadversely affected.256 According to the CJEU: the trademark holder is notprotected against practices inherent in competition and keyword advertis-ing as a general rule is deemed as ‘merely to offer internet usersalternatives to the goods or services of the proprietors of those trademarks’.257

In Interflora, Marks & Spencer (M&S) selected keywords, includingInterflora.com.258 It can be argued that a website address, which literallyindicates the origin and should link to that source, leaves no doubt as towhere the internet user wants to go. But instead of linking the internetuser to Interflora.com, the M&S advertisement or M&S website wastriggered, something the CJEU did not qualify as an adverse effect on thesource of origin function of the trademark, nor a likelihood of confusion.However, empirical research by Bechtold and Tucker showed that,instead of shortening the search process, the use of trademarks inkeyword-triggered advertising caused people to need more time to findthe brand, which suggests that it adversely affects the source of originfunction of the trademark.259

255 Id., para. 79.256 Interflora, supra note 128, at para. 57.257 Google France, supra note 95, para. 69, Interflora, supra note 128,

para. 58.258 Using Google’s AdWords referencing service, M&S selected as keywords

the word ‘Interflora’, as well as variants made up of that word with minor errorsand expressions containing the word ‘Interflora’, including: ‘Interflora.com’.‘Consequently, when internet users entered the word “Interflora” or one of thosevariants or expressions as a search term in the Google search engine, an M&Sadvertisement appeared under the heading “sponsored links”’. Interflora, supranote 128, para. 18.

259 Stefan Bechtold and Catherine Tucker, Trademarks, Triggers and OnlineSearch, Working Paper, December 2012. Presentation at Overlapping IP Rights:The Rise of Functional and Empirical Perspectives, Conference ‘Searching forthe Boundaries of Intellectual Property Law’, University of Hong Kong, 15December 2012.




According to the CJEU in Interflora the trademark holder shouldaccept the situation in which his trademark is used ‘in conditions of faircompetition that respect the trademark’s function as an indication oforigin’260 and where the only consequence is that the trademark holder isobliged ‘to adapt its efforts to acquire or preserve a reputation of thattrademark capable of attracting consumers and retaining their loyalty’.261

That some consumers are prompted to switch from the trademark holderto competitors is all in the game and part of fair competition.262

260 Interflora, supra note 128, para. 64.261 Id.262 Id.




3. Protagonists of the legal conflict

Why all parties affected by the conflict wouldgain equally by its dissolution

3.1 INTRODUCTION

The trademark logo in the centre of a love/hate triangle.

As Chapter 2 set out the stage of the legal conflict, this chapterintroduces the perspective, interests and idiosyncrasies of each of theprotagonists: trademark holders (Chapter 3.2), social media providers(Chapter 3.3) and internet users (Chapter 3.4) who interact in a kind of‘love/hate triangle’. Each of this trinity of stakeholders is connected toeach other via the trademark logo (Chapter 3.5).

3.2 TRADEMARK HOLDERS

The trademark holder, trademark and brand, although often used inter-changeably in common parlance, each have their own specific meaning,measures and scope.

The brand is the perception people experience when they come intocontact with the trademark of the trademark holder.1 Marketing authorGodin succinctly stated the definition of a brand as a ‘set of expectations,memories, stories and relationships that, taken together, account for aconsumer’s decision to choose one product or service over another’.2

A definition of a trademark holder could simply be an entity that haseither registered or acquired a registered trademark. Licensees, includinginternet users, that use the trademark in an authorized way, are not

1 Tim Calkins, The Challenge of Branding, in KELLOG ON BRANDING(Tim Calkins and Alice Tybout, eds.,Hoboken, NJ: John Wiley & Sons, 2005)at 1.1.

2 Seth Godin, ‘Define: Brand’, 13 December 2009, accessed 13 June 2015at: http://sethgodin.typepad.com/seths_blog/2009/12/define-brand.html.

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considered trademark holders, since they do not have the right to alienatethe trademark. Trademark holders identify themselves and are publiclyidentified by their trademark.

As set out in Chapter 2, the trademark is a sign that is distinctive orhas become distinctive and has been registered at the designated trade-mark office.

The interests of the trademark holder are complex: the trademarkholder does not want to allow the functions of the trademark to beinfringed and diluted. On the one hand trademark holders can becomeenthusiastic if internet users refer to their mark on social media in apositive way. On the other hand, trademark holders do not approve ifinternet users refer to their trademark in a negative way. Also, even ifinternet users have good intentions, they might use the trademark in newways. This can precipitate a resignification of the trademark, so thattrademark holders de facto lose control over their trademarks. Trademarkholders try to prevent this from happening outside of the boundaries theyhave set. This could be the case when competitors use their trademark ina descriptive way to promote their competing or non-competing productor service, or in comparative advertising, or when internet users use theirtrademark for parody, satire or to make critical comments (see Chapter 6‘Trademark Dilution and Its Defences’). So on the one side it is in thetrademark holders’ interest to mitigate the space in which their trademarkis used without their permission. On the other side, each potentialtrademark holder needs to have the freedom to find a suitable name forhis trademark and promote their products using descriptive words inadvertisements that might already be claimed by other trademark holders,so it is in their interest to maximize the space where fair competition canflourish. Therefore a balance needs to be struck between these contradict-ory forces.

A trademark holder was once considered to be the exclusive source towhich his trademark refers. Then licensees were authorized to use thetrademark, so that they too could be the source to which the trademarkrefers, which necessitated the abandonment of this idea of exclusivereference.3 For the trademark holder the value is predominantly in thetrademark, not in the product itself.4 Although often not exclusiveanymore, the link between trademark holder and trademark still exists.

3 See in Chapter 2.8 ‘Consumer Interest-Related Functions of TrademarkInfringement’: source of origin.

4 Carlton Curtis, VP Corporate Communications, Coca Cola. LaurentMuzellec, What is in a Name Change? Re-Joycing Corporate Names to CreateCorporate Brands, 8 CORP. REPUTATION REV. 305 (2006).




The trademark enables the policy in regard to, for example corporatesocial responsibility or sustainability, to be traced back to the trademarkholder. Thus, the trademark facilitates accountability of the trademarkholder.5 In this sense, the trademark not only gives trademark holders aface, but also makes it possible for them to lose their face.

The activities of trademark holders vary widely, from for-profit com-panies to non-profit organizations, and from holders of well-knownmarks,6 service marks,7 collective marks8 to certification marks.9 Thelatter category might even be defined so as to include geographicalindications.10 Although trademark holders have such different back-grounds, and can be each other’s competitors, they have demonstrated theability to form powerful lobbyist and interest groups.11 If trademarkholders, who are of course the main advertisers on social media, wouldunite in the fight against infringement of their trademark logos onsocial media sites, they would be a formidable force to advocate aparadigm change to protect and enforce their trademark logos on socialmedia.12

5 See in Chapter 2.8 ‘Proprietary Functions’: accountability.6 Article 6bis Paris Convention, supra, Chapter 2, note 2.7 Article 6sexies Paris Convention, id.8 ‘A collective membership mark is a mark adopted for the purpose of

indicating membership in an organized collective group, such as a union, anassociation, or other organization. Neither the collective nor its members use thecollective membership mark to identify and distinguish goods or services; rather,the sole function of such a mark is to indicate that the person displaying the markis a member of the organized collective group’. Geographical Indication Protec-tion in the United States, United States Patent and Trademark Office, p. 5. Article7bis Paris Convention, supra, Chapter 2, note 2.

9 ‘The owner of a certification mark does not use it. A certification markdoes not indicate commercial source nor distinguish the goods or services of oneperson from those of another person. Certification marks are only source-identifying in the sense that they identify the nature and quality of the goods andaffirm that these goods have met certain defined standards’. GeographicalIndication Protection in the United States, United States Patent and TrademarkOffice, p. 3.

10 Articles 22 and 23 TRIPS, supra, Chapter 2, note 26.11 Examples are: International Trademark Association (INTA), American

Intellectual Property Law Association (AIPLA), European Communities TradeMark Association (ECTA).

12 How trademark holders use social media themselves will be dealt with inChapter 3.3.

Protagonists of the legal conflict 67



Trademark holders play a crucial role in society, and not only becausethey offer a product or service of a certain quality13 and reputation thatpeople recognize and sometimes even want to identify with.14 They alsoprovide a source of employment, which can stretch over multiplegenerations. In contrast to all other intellectual property rights, trademarkrights can be extended indefinitely. In fact, some trademark holderscontinue to thrive on trademarks registered in the late 19th century.15

3.3 SOCIAL MEDIA PROVIDERS

The social media provider is, next to the internet user and trademarkholder, the newest of the trinity of protagonists of the legal conflict, associal media is a relatively new phenomenon this section describes atlength several aspects of social media. First it classifies and describes thefunctions of the dominant social media services, before providing a briefhistory of the social media phenomenon and the commonalities of socialmedia providers. Next the section analyses the terms of service andcommunity guidelines of five important examples of social media sites:Facebook, Twitter, YouTube, Flickr and Pinterest. The section will look atissues of ownership and responsibility of these social media providers,the differences between measures taken to protect third parties againstintellectual property rights infringements and the policies they set up toprotect their own intellectual property rights. Finally, the section dis-closes what procedures are put in place in case of trademark infringe-ments, and to compare these findings to cases of copyright infringements.

‘Social Media is a group of Internet-based applications that build onthe ideological and technological foundations of Web 2.0, and that allowthe creation and exchange of User Generated Content’.16 Prashant

13 See in Chapter 2.8 ‘Proprietary Functions’ about the communicationfunction.

14 Drescher, supra, Chapter 1, note 25, at 309.15 The Bass Red Triangle was the first trademark logo to be registered under

the UK’s Trade Mark Registration Act of 1875, as trade mark number 1. Filingdate, 1 January 1886. Next renewal date, 1 January 2022, accessed 9 February2015 at: http://www.ipo.gov.uk/tm/t-find/t-find-number?detailsrequested=C&trademark=1.

16 Andreas M. Kaplan and Michael Haenlein, Users of the World, Unite! TheChallenges and Opportunities of Social Media, 53 BUSINESS HORIZONS 59,61 (2010). A definition of User Generated Content (UGC) could be: content thatis published on publicly accessible websites or social networking sites accessibleto selected groups, demonstrating some creative effort and created outside of




described Web 2.0 as a concept that takes the network as a platform forinformation sharing, interoperability, user-centred design and collabor-ation on the World Wide Web.17

Social media are provided on a growing arsenal of digital platforms,such as PCs, tablets and smart phones, and are accessed with an internetconnection.

Kaplan and Haenlein classified social media sites according to theoriesin the field of media research:18 social presence, media richness, socialprocesses, self-presentation and self-disclosure. These theories mighthelp explain why some intrinsic features of some social media sites aremore prone to stimulate the use of unauthorized trademark logos. Ifsomeone with high social influence has uploaded an unauthorizedtrademark logo on his social media page, chances are higher that hisconnections will share this trademark logo on their social media pages.Most social media sites now include the feature to post pictures,including unauthorized trademark logos. The more a social media siteallows self-disclosure, the higher the chances are that unauthorizedtrademark logos are uploaded for their status-signalling properties (seestatus-signalling properties in the literature review of Chapter 1).

The sharing of content can even take place between different socialmedia services. For example there are deals between different socialmedia service providers and there are independent service integrators thatconnect social media services. This interoperability increases the distri-bution, extent and rate of content, including contentious content (seeChapter 4.4 ‘Proliferation, scale and speed of contentious content’).

Another shared characteristic is that they are ‘walled gardens’, whichmeans that they can set their own rules within the space that can beaccessed by internet users that have agreed to their shrink-wrappedagreements. These aspects of social media sites will be elaborated inChapter 9 ‘Implementation of a Paradigm Shift’.

As the respective social media sites evolve, a convergence between thedifferent functions can be observed. Internet users can now share picturesand videos on microblogging site Twitter without leaving the site;

professional routines and practices. OECD, ‘Participative Web: User-CreatedContent’, document DSTI/ICCP/IE(2006)7/Final, dated 12 April 2007.

17 Prashant Sharma, ‘Core Characteristics of Web 2.0 Services’, TechPluto,28 November 2008, accessed 14 June 2015 at: http://www.techpluto.com/web-20-services/. Read Tim O’Reilly, ‘What Is Web 2.0’, 30 September 2005,accessed 13 June 2015 at: http://oreilly.com/pub/a/web2/archive/what-is-web-20.html.

18 Kaplan and Haenlein, supra note 16, at 61.




Facebook has chat functionality just like chat applications such as Skype;and one can share pictures on Skype.

One can add a contact/connection/friend on a social media site if thatparty agrees. Generally one can register uni-directionally at a blog as afan or at Twitter as a follower,19 and reciprocity is not needed.

The business model of social media providers is based on threesources: a stream of revenues of advertisements; data on the behaviourand content of the users; and gaming applications.

PowerAsymmetry between Social Media Providers and Internet Users

In the terms of service of most social media providers one can see thatthe internet user gives permission to the social media provider to grant anon-exclusive, tranferable, sub-licensable, royalty-free, worldwide licenseto use any intellectual property content.20

Each social media provider prohibits intellectual property (IP) infringe-ment by the internet users. All make clear that they are not responsiblefor any IP infringement by the users.

Social media providers are strict when protecting and enforcing theirown intellectual property rights. The contrast of their stance in regard tothe intellectual property infringement of trademark holders is salient.

Social media providers invite internet users to share content, and oncethey do, they appropriate the intellectual property rights, irrevocably andperpetually. Social media providers, especially Facebook, appear deeplyconcerned with protecting their own trademarks, but are much lessinterested in protecting other companies’ trademarks, even though theyare Facebook’s customers of advertisements and data on the behaviourand content of internet users.

Likewise, Pinterest uses a double standard: on the one hand it allowsinternet users to pin any picture, including trademark logos, on their

19 Unless the permission to follow is selected by the Twitter user. In thatcase the follower can also send direct messages.

20 See Statement of Rights and Responsibilities, Facebook’s Terms ofService, 8 June 2012, accessed 9 February 2015 at: http://www.facebook.com/legal/terms; 5. Your Rights, Terms of Service Twitter, 25 June 2012, accessed 9February 2015 at: http://twitter.com/tos/; 5.A. Terms of Service YouTube, 9 June2010, accessed 9 February 2015 at: http://www.youtube.com/static?gl=US&template=terms; 9. Content submitted or made available for inclusion on theYahoo! Services, Terms of Service Yahoo!, accessed 9 February 2015 at:http://info.yahoo.com/legal/us/yahoo/utos/utos-173.html; Pinterest Terms of Ser-vice, effective 6 April 2012, accessed 9 February 2015 at: http://pinterest.com/about/terms/.




electronic pinboard without any verification of authorization; on the otherhand, if the trademark logo happened to be of Pinterest the internet userneeds to ask written permission first.

Social media providers such as Flickr require people that use theirtrademarks to use symbols such as ®, while others such as Facebook donot. Chapter 9.4 ‘Making authorized trademark use transparent’ looks atwhether such symbols can play a significant role in the protection oftrademark logos.

Moreover, Twitter is the only social media provider that allows internetusers to use their moral right to revoke or withdraw a work completely.

Of course, each social media provider goes to great lengths to try toindemnify themselves for content submitted by internet users that violateor infringe law, including intellectual property rights of third parties.

An argument Chapter 7 ‘Intermediary Liability’ further investigates iswhether social media sites merely host content which reflects society andtherefore reject any form of intermediary liability in regard to intellectualproperty infringements.21

3.4 INTERNET USERS

The internet user is the last of the trinity of protagonists in the legalconflict to be explored. Internet users aggregated in communities areinfluential groups acknowledged by both trademark holders and socialmedia providers.

One can simply define internet users as those who make use of theinternet. This book focuses on internet users that make use of socialmedia services.

‘User’ was historically used for computer operators/creators of code ordigital rules, which made further content generation possible.22 In thisbook ‘a user’ generates content for social media, based on co7de createdby social media providers.

21 Twitter made explicit the argument that they have so much content, thatthey cannot really monitor or control it. The other social media providers wouldbe likely to concur. Many companies and governments made some huge mistakesin the beginning with Twitter. Kristin Burnham, ‘Sweden Teaches Us How Not toDo Social Media’, Social Media Matters, 13 June 2012, accessed 9 February2015 at: http://blogs.cio.com/twitter/17162/sweden-teaches-us-how-not-do-social-media.

22 Director Steven Lisberger, Tron, 1982, accessed 9 February 2015 at:http://www.imdb.com/title/tt0084827/.




An aggregation of internet users can be more than the sum of itsindividuals. This is caused by interactive influence of the internet usersand group dynamics. Substrata of the internet can form communities,with their own values and norms.

One can find a wide variety of communities online. Social media canbe seen as the most vibrant communities online. Some online serviceproviders allow anonymity23 or pseudonymity,24 while others requireinternet users to use their real name. Different pseudonyms can bedistinguished, which have a different degree of linkability25 and observ-ability.26 Pseudonymity allows internet users to be perceived onlinedifferently from their real-life identity. Advocates of pseudonymity areagainst real name policies, because of some inherent disadvantages forsome groups and in some situations.27 However, anonymity can makeaccountability for trademark infringements impossible and pseudonymitycan make it very difficult. Therefore, Online Service Providers (OSPs)that do not want to assume liability for the acts of their internet users,and also content rights holders, might also want to push for real namepolicies.28

23 ‘Anonymity is the state of not being identifiable within a set of subjects,the anonymity set’. Andreas Pfitzmann and Marit Hansen, ‘Anonymity, Unlink-ability, Unobservability, Pseudonymity, and Identity Management: A Consoli-dated Proposal for Terminology, Version v0.25’ (2005), at 6, accessed 9 February2015: http://freehaven.net/anonbib/cache/terminology.pdf.

24 ‘Being pseudonymous is the state of using a pseudonym as ID’. Id., at 13.25 Pfitzmann and Hansen describe the degrees of linkability due to the use

of a pseudonym in different contexts. Id., at 17.26 ‘Unobservability is the state of items of interest (IOIs) being indistin-

guishable from any IOI (of the same type) at all’. Id., at 10.27 The Geek Feminism Wiki catagorizes the harm to the following groups

and situations: the marginalized and endangered groups, people with directidentity concerns, subject-related considerations, employment-related, peoplewhose ‘real name’ is more complicated than you think, people with long-standing pseudonyms, people whose real names are extremely common or rare,but also people who are comfortable using their uncomplicated real name incertain situations. Geek Feminism Wiki, ‘Who is Harmed by a “Real Names”Policy?’, undated, accessed 9 February 2015 at: http://geekfeminism.wikia.com/wiki/Who_is_harmed_by_a_“Real_Names”_policy%3F.

28 Winer points out an additional reason: the ability to cross-relate youraccount in a ‘commerce-ready way’ and ‘to give them information about whatyou do on the Internet, without obfuscation of pseudonyms’. Dave Winer, ‘WhyGoogle Cares if You Use Your Real Name’, Scripting News, 25 July 2011,accessed 9 February 2015 at: http://scripting.com/stories/2011/07/25/whyGoogleCaresIfYouUseYour.html. Madrigal understands why Facebook and Google




Social networking site Friendster required real name registration in2003,29 and Facebook required real name registration in 2007.30 Google+,what Google calls a social is described by Google as ‘the name yourfriends, family or co-workers usually call you’.31 This triggered theso-called nymwars.32 Only real persons were allowed to have a profile,therefore it banned company names.33 Singel argued that:

Google is likely trying to defer the difficult problems around trademark issuesand fake business profiles, because any social network with scale ends uphaving to deal with the same thorny naming problems that plague the net(essentially inheriting all the problems of ICANN [Internet Corporation forAssigned Names and Numbers], though without the formalities).34

Google deactivated company names, from Google+, but the Mashableblog was allowed to change its profile name to that of its founder.35

favour real name policies: ‘It’s bad for their marketing teams. It generates socialproblems when people don’t act responsibly under the cloak of their assumedidentity. It messes up the clarity and coherence of their data. And maybe thosecosts do outweigh the benefits pseudonymity brings to social networks’. AlexisMadrigal, ‘Why Facebook and Google’s Concept of “Real Names” Is Revolu-tionary’, The Atlantic, 5 August 2011, accessed 9 February 2015 at: http://www.theatlantic.com/technology/archive/2011/08/why-facebook-and-googles-concept-of-real-names-is-revolutionary/243171/.

29 Mike Masnick, ‘Friendster Fakesters: Goodster or Badster’, TechDirt, 13August 2003, accessed 9 February 2015 at: http://www.techdirt.com/articles/20030813/2010251.shtml.

30 Mike Masnick, ‘Does No One Remember the Friendster Fakester Fiasco?Facebook now Dealing with Fakebookers’, TechDirt, 2 November 2007, accessed9 February 2015 at: http://www.techdirt.com/articles/20071101/194615.shtml.

31 Google+ Page and Profile Names, accessed 9 February 2015 at: http://support.google.com/plus/bin/answer.py?hl=en&answer=1228271.

32 Nymwars is a neologism, and consists partly of the word ‘pseudonym’and the word ‘wars’. Nymwars, Wikipedia, accessed 9 February 2015 at:http://en.wikipedia.org/wiki/Nymwars.

33 Ryan Singel, ‘Kicking Square Pegs out of Round Circles: Why Google’sBanishment of Companies from Google+ is a Bad Sign’, Wired, 22 July 2011,accessed 9 February 2015 at: http://www.wired.com/business/2011/07/companies-google-plus/.

34 Id.35 Ben Popper, ‘Anti-Social Networking, Google+ Clarifies Brand Pages and

Mashable Drops Profile’, Betabeat, 21 July 2011, accessed 9 February 2015 at:http://betabeat.com/2011/07/has-the-google-brand-purge-begun-ford-motors-next-web-down-yet-mashable-remains/.




However, in November 2011,36 Google made it possible for companies touse Google+ Pages,37 if these companies first get an owner to obtain aprofile on Google+ first.38 Three out of four of the top 100 brands cannow be found on Google+ Pages.39

Facebook has had a real name policy40 since 2005. However, Facebookrevealed that 4.8 percent of its accounts are duplicate, 2.4 percentmisclassified and 1.5 percent undesirable, which accounted for 83.09million ‘fake’ Facebook accounts.41 Apparently in an effort to fight thissubstantial number, Facebook is using pop-up surveys that ask users topoint out if a certain friend named in that survey is using his or her realname.42

The use of a pseudonym, or a real name, has implications to identity,and touches upon cultural sensitivity, public and private identity, privacy,and the role of social media in modern discourse. Anonymity, pseudo-nymity and privacy already seem to get weaker in society43 while theycan, under some circumstances,44 be beneficial to society. Therefore this

36 Azam Khan, ‘Google Launches Business Pages’, Social Times, 7 Novem-ber 2011, accessed 9 February 2015 at: http://socialtimes.com/google-launches-business-pages_b83409.

37 About Google+ Pages, accessed 9 February 2015 at: http://support.google.com/plus/bin/answer.py?hl=en&answer=1710600. Three out of four com-panies of the top 100 brands are now on Google+ Pages.

38 Each Google+ Page can have one owner and up to 50 managers. Ownersand managers on Google+ Pages, accessed 9 February 2015 at: http://support.google.com/plus/bin/answer.py?hl=en&answer=2380625.

39 Miranda Miller, ‘Google+ Adoption Among Big Brands Growing: PagesFeatured More in SERPs’, 1 August 2012, accessed 9 February 2015 at: http://searchenginewatch.com/article/2196139/Google-Adoption-Among-Big-Brands-Growing-Pages-Featured-More-in-SERPs.

40 Facebook’s Name Policy, accessed 9 February 2015 at: http://www.facebook.com/help/292517374180078/.

41 Emil Protalinski, ‘Facebook: 8.7 Percent Are Fake Users’, CNET, 1August 2012, accessed 9 February 2015 at: http://news.cnet.com/8301-1023_3-57484991-93/facebook-8.7-percent-are-fake-users/.

42 Carl Franzen, ‘Facebook Surveying Users about Their Friends’ FakeUsernames’, TPMIdeaLab, 20 September 2012, accessed 13 June 2015 at: http://alkingpointsmemo.com/idealab/facebook-surveying-users-about-their-friends-fake-usernames.

43 Eva Galperin, ‘Randi Zuckerberg Runs in the Wrong Direction onPseudonymity Online’, EFF, 2 August 2011, accessed 9 February 2015 at:https://www.eff.org/deeplinks/2011/08/randi-zuckerberg-runs-wrong-direction-pseudonymity.

44 Geek Feminism Wiki, supra note 27.




book does not advocate any real name policy for its proposed solution, afortiori, since real name policies are costly and burdensome to implementand enforce, even in China.45

Social media have made it possible for internet users and communitiesto engage in expressive activities that were first the prerogative ofmainstream media and professionals. Each internet user can publish46 hisactivities as a journalist,47 photographer, radio or television maker.48

Using social media gives each internet user a platform on which he can,theoretically, reach the whole online population.49 Communities canengage in putting some political or social goals on the agenda, usingsocial media. One can argue that social media were the catalysts forcommunities that wanted social change during the Arab Spring.50

45 The real name registration was tried before and is expected to be toocostly for social media sites to be implemented in the short term. Bill Bishop,‘Rumors of a Real Name Registration Requirement Coming for Weibo and OtherChinese Social Media?’, DigiCha, 29 August 2011, accessed 9 February 2015 at:http://digicha.com/index.php/2011/08/real-name-registration-requirement-coming-for-weibo-and-other-chinese-social-media/.

46 Four revolutions in the production of knowledge: language, writing,printing press and the internet. M. Warschauer and T. Matuchniak, New Tech-nology and Digital Worlds: Analyzing Evidence of Equity in Access, Use, andOutcomes, 34 REV. RES. EDU. 179, 179 (2010), referring to S. Harnad,Post-Gutenberg Galaxy: The Fourth Revolution in the Means of Production andKnowledge, 2 PUB.-ACCESS COMP. SYS. REV. 39, 39 (1991).

47 The following blogs rank numbers 1 to 5 respectively in the TechnoratiTop 100 (8 August 2012): Huffington Post, BuzzFeed, Mashable!, BusinessInsider and The Verge. ‘Technorati’s Top100 blogs’, 8 August 2012, accessed 9February 2015 at: http://technorati.com/blogs/top100/. One can argue that theseblogs have become mainstream media themselves. For example, the HuffingtonPost was bought by AOL for 315 million US dollars. Richard Adams, ‘Huffing-ton Post Sold to AOL for $315m’, The Guardian, accessed 9 February 2015at: http://www.guardian.co.uk/world/richard-adams-blog/2011/feb/07/huffington-post-sale-aol-ariana.

48 ‘Individuals can now post content to an audience that previously wouldhave been available only through the mass media, leading to a convergence inaudience and producer’. Jacob Rowbottom, To Rant, Vent and Converse: Protect-ing Low Level Digital Speech, 71 C.L.J. 365 (2012).

49 Gillmor asserts that civil journalism and independent journalists challengethe traditional media. Dan Gillmor, WE THE MEDIA: GRASSROOTS JOUR-NALISM BY THE PEOPLE, FOR THE PEOPLE (Sebastopol, CA: O’ReillyMedia 2004–08).

50 Eric Voeten, ‘Similarities and Differences between Eastern Europe in1989 and the Middle East in 2011: Summarized Remarks from a PanelDiscussion Sponsored by Middle East Studies’, AM. U., 30 May 2011, accessed




MacKinnon argued that internet users not only have the right to expressthemselves individually, but also have an obligation to assert their rightsand responsibilities as citizens of nation-states.51

The question that remains is whether the law and regulations thatgovern intellectual property should reflect the norms of the internetusers/community or should the law be used instrumentally to impose apolicy choice. Chapter 4 ‘Analysis of The Legal Conflict’ will demon-strate that the norms of the internet users/community have caused a greatdeal of problems. This chapter will demonstrate it is preferable to use theinstrumentality of the law to impose a policy choice that benefits allstakeholders.

Disintermediation had led to a massive expression by internet users.The drawback is that after the middle person is cut out of the equation,this is not necessarily conducive to the quality of the content. A sideeffect of the lack of monitoring, quality control and/or editing has led toonline intellectual property infringement on a massive scale.

A growing percentage of all internet users have grown up with digitalmedia and are able to express themselves digitally. Social media provid-ers have made it possible for everyone with access to the uncensoredinternet52 to gather, share and add information, accessible from a growingrange of electronic devices. The internet in combination with inexpensivecameras and microphones has led to a democratization of film, photo-graphy and written journalism and disintermediation of publishing. Thishas resulted in an enormous content generation by internet users. Forexample: 72 hours of video are uploaded on YouTube every minute. Inone month, more content was generated on YouTube than the major UStelevision networks created in 60 years. Seventy percent of YouTube’straffic comes from outside the US.53 The world population is more than 7billion people,54 and Flickr hosts over 6 billion photos.55

9 February 2015 at: http://themonkeycage.org/blog/2011/05/30/similarities-and-differences-between-eastern-europe-in-1989-and-the-middle-east-in-2011/.

51 Rebecca MacKinnon, The Netizen, 55 DEVELOPMENT 201 (2012).52 Danny Friedmann, Paradoxes, Google and China: How Censorship Can

Harm and Intellectual Property Can Harness Innovation, in GOOGLE ANDTHE LAW, supra note 2.

53 Statistics, YouTube, accessed 9 February 2015 at: http://www.youtube.com/t/press_statistics.

54 Population Reference Bureau, world population clock, 15 July 2015,accessed 9 February 2015 at: http://www.prb.org/.

55 Kay Kremerskothen, ‘6,000,000,000’, Flickr, 4 August 2011, accessed 9February 2015 at: http://blog.flickr.net/en/2011/08/04/6000000000/.




One can argue that the right to freedom of expression is indispensablefor a well-functioning democracy. Since social media has empowered somany internet users, it can be seen as one of the foremost platforms forpolitical, artistic and commercial expression. Therefore, a discussionwhether the right to internet access is a human right was articulated inlight of a potential implementation of a ‘graduated response’56 in case ofrepeat infringers of copyright law, and possibly trademark law. InEstonia,57 Finland,58 France59 and Greece60 internet access is considereda human right.61 And according to the Special Rapporteur on thepromotion and protection of the right to freedom of opinion andexpression, internet access is a human right.62 Cerf, one of the fathers ofthe internet and now vice-president of Google, did not agree: ‘technologyis not a right, but an enabler of rights’ and the protection of human rights

56 Peter K. Yu, The Graduated Response, 62 FLA. L. REV. 1373 (2010).57 Public Information Act of Estonia, 15 November 2000, as amended 2003,

accessed 9 February 2015 at: http://www.legaltext.ee/text/en/X40095K4.htm.Oana Lungescu, ‘Tiny Estonia Leads Internet Revolution’, BBC News, 7 April2004, accessed 9 February 2015 at: http://news.bbc.co.uk/2/hi/europe/3603943.stm.

58 Decree no. 732/2009 of the Finnish Ministry of Transport and Communi-cations on the Minimum Rate of a Functional Internet Access as a UniversalService, 14 October 2009, accessed 9 February 2015 at: http://www.finlex.fi/en/laki/kaannokset/2009/en20090732.pdf. Bobbie Johnson, ‘Finland Makes Broad-band Access a Legal Right’, The Guardian, 14 October 2009, accessed9 February 2015 at: http://www.guardian.co.uk/technology/2009/oct/14/finland-broadband.

59 French Act furthering the diffusion and protection of creation on theInternet, Decision 2009-580, 10 June 2009, accessed 9 February 2015 at:http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/download/2009580DC2009_580dc.pdf.

60 2001 Syntagma Constitution art. 5A of Greece. The Constitution ofGreece: as revised by the parliamentary resolution of April 6th 2001, of the VIIthRevisionary Parliament (2004), accessed 9 February 2015 at: http://www.hellenicparliament.gr/UserFiles/f3c70a23-7696-49db-9148-f24dce6a27c8/001-156%20aggliko.pdf.

61 Charter of Human Rights and Principles for the Internet, Version 1.1.Draft, Internet Rights & Principles Coalition, 2011; Commentary on the Charterof Human Rights and Principles for the Internet, Internet Rights & PrinciplesCoalition, Centre for Law and Democracy, October 2011.

62 Frank La Rue, ‘Document U.N. Report: Internet Access Is a HumanRight’, 16 May 2011, accessed 9 February 2015 at: http://documents.latimes.com/un-report-internet-rights/.




should be reserved to the most basic rights.63 In any case, it can beargued that the output of internet user generated content has a profoundamplifying effect on culture, society and economics. Freedom of expres-sion, commentary, criticism and parody are all conducive to a democraticsociety.

The question remains of when using content in an unauthorized waybecomes abusing content.64 In the book Remix, Lessig argued thatrecombining and building on existing copyrighted content and mash-upsalways happened and that it could have transformative effects.65 How-ever, Lessig did not elaborate on the unauthorized use of trademarks. InChapter 6 ‘Trademark Dilution and Its Defences’, a proposal will bemade about where to draw the line in commentary, criticism and parodyin the case of unauthorized use of a trademark logo on social media.

Trademark holders are not just challenged by social media, but theycan also benefit from setting up their own pages, advertising and buyingdata for behavioural targeting. The CEO of luxury goods company Gucciconsidered social media even as a marketeer’s dream.66

Setting up fan pages to engage in a two-way conversation with thetarget group can build and strengthen the bond between brand andcustomer or potential customer. Trademark holders can monitor andstudy what is said by the internet users on social media about theirbrands. Blackshaw wrote that satisfied customers tell 3 friends, but angrycustomers tell 3,000 people about a bad experience with a product orservice.67 Social media make it possible for companies to respond tospecific issues and adjust their public relations and marketing actions,68

63 Vinton G. Cerf, ‘Internet Access Is Not a Human Right’, New YorkTimes, 4 January 2012, accessed 9 February 2015 at: http://www.nytimes.com/2012/01/05/opinion/internet-access-is-not-a-human-right.html?_r=0.

64 Since the abuse of content is shared online, it can be followed by‘abusement’, which is described by Urban Dictionary as ‘deriving amusementfrom the abuse of others’, accessed 9 February 2015 at: http://www.urbandictionary.com/define.php?term=Abusement.

65 Lessig, supra, Chapter 1, note 13.66 As Robert Polet, President, CEO and Chairman of the Managing Board of

Gucci Group, pointed out during Google Zeitgeist Europe 2010, 17 May 2010,accessed 9 February 2015 at: http://www.youtube.com/user/eurozeitgeist#p/u/13/B8v2tMJmeg0.

67 Pete Blackshaw, SATISFIED CUSTOMERS TELL THREE FRIENDS,ANGRY CUSTOMERS TELL 3,000: RUNNING A BUSINESS IN TODAY’SCONSUMER-DRIVEN WORLD (New York: Crown Publishing Group, 2008).

68 For instance Gap Inc., an American apparel and accessories retailerreintroduced its original logo after a week long of massive protests from fans on




and in the case of intellectual property infringements decide to takeenforcement measures.

Facebook users can subscribe to so-called ‘fan pages’ about a brand,either set up by the trademark holder or by a third party, fan or foe. Theidea is that after each status update by the brand, it will be shown in thenews feeds69 of the users, to which comments can be added. Thesecomments will be shared with the user’s Facebook contacts, who on theirturn can subscribe again to these fan pages by ‘liking’ them.

However, there has been some controversy about the so-called NewsFeed algorithm,70 which regulates the distribution of status updates of thefan pages to the news feed of the subscribed users. It was alleged that theNews Feed algorithm deliberately prevented between 50 and 85 percentof these status updates to be distributed to users.71 This was allegedlydone in order to stimulate the brands to compensate for their loss ofvisibility in these news feeds by advertising in the sponsored posts thatare also distributed in the news feeds.72 This was denied by Phil Zigoris,software engineer at Facebook’s sponsored posts products.73

Just as many companies use search engine optimization (SEO) to rankas high as possible in Google’s organic search results, increasingly theyalso want to apply EdgeRank/News Feed optimization, by optimizing the

social media. Fredrix, Emily, ‘Gap’s Logo Back to Blue after Fans Gripe aboutNew’, 11 October 2010 accessed 13 June 2015 at: http://news.yahoo.com/gaps-logo-back-blue-fans-gripe.html.

69 News feeds are constantly updating lists of actions of Facebook connec-tions.

70 The News Feed algorithm is often called EdgeRank, however, this isdenied by Zigoris. Howard Greenstein, ‘5 Things You Don’t Know aboutFacebook Exposure, Inc.com’, 25 July 2012, accessed 9 February 2015at: http://www.inc.com/howard-greenstein/facebook-promoted-posts-for-small-business.html.

71 Geoffrey Colon, ‘Thinking Social/Value, Facebook Algorithmic Changeto Decrease Reach on Brand Page Posts’, Social@Ogilvy, 25 September 2012,accessed 9 February 2015 at: https://social.ogilvy.com/facebook-algorithmic-change-to-decrease-reach-on-brand-page-posts/. Jim Edwards, ‘FacebookAccused of Changing a Key Algorithm to Hurt Advertisers’, Business Insider, 3October 2012, accessed 9 February 2015 at: http://www.businessinsider.com/facebook-changed-edgerank-algorithm-to-hurt-advertisers-2012-10. Ryan Holi-day, ‘Broken on Purpose: Why Getting It Wrong Pays More Than Getting ItRight’, New York Observer, 11 November 2012, accessed 9 February 2015 at:http://observer.com/2012/09/broken-on-purpose/.

72 Peter Olsthoorn, ‘IT’S COMPLICATED’: THE POWER OF FACEBOOK– EXTENDED EDITION Amsterdam: Peter Olsthoorn Publishing, 2012.

73 Greenstein, supra note 71.




timing of a post, type of post (video, text or photo), frequency of postsand content of a post.74

Social media have special characteristics that make them particularlysuitable as advertisement platforms of trademark holders. Facebook, forexample, makes it possible for trademark holders to advertise based onuser generated content, behavioural targeting and social marketing.75

Trademark holders know that social media are more effective vehiclesfor advertisements than traditional media such as newspapers or broad-casting.76 According to Favier, former research director of ForresterResearch, the return on investment (ROI) of the best social media is fourtimes that of traditional media.77 Nielsen market research measured thatpeople notice brands in Facebook’s news feeds thirty percent better thanbrands using advertisements that have not been endorsed by the connec-tions of a Facebook user.78

Facebook, with its more than a billion active internet users in the US,EU but also emerging economies, excluding China,79 is a convenientone-stop shop for companies. They can reach with their advertisements

74 Tomio Geron, ‘PostRocket’s “News Feed Optimization” for FacebookRaises Seed Funding’, Forbes, 31 May 2012, accessed 9 February 2015at: http://www.forbes.com/sites/tomiogeron/2012/05/31/postrockets-news-feed-optimization-for-facebook-raises-seed-funding/.

75 McGeveran has mapped the problems that can appear when using socialmarketing: William McGeveran, Disclosure, Endorsement, and Identity in SocialMarketing, 4 U. ILL. L. REV. 1105 (2009).

76 Ethan Smith, ‘How Old Media Can Survive in a New World’, Wall StreetJournal, 23 May 2005, accessed 9 February 2015 at: http://online.wsj.com/public/article/SB111643067458336994-dZdpfVsBBc8Y17yRcFtFhF_8YWk_20060522.html?mod=blogs.

77 ‘The best social media programs also convert the consumer’s social timeinto a brand premium, reaching a return on investment (ROI) up to four times ashigh as the ROI of a TV commercial’. Jaap Favier, ‘Calculate the ROI of SocialMedia’, Brian Solis, 8 October 2012, accessed 9 February 2015 at: http://www.briansolis.com/2012/10/calculate-the-roi-of-social-media/. ‘In the US, around$150 billion per year is spent on advertising. Per American, that is roughly 500dollars. Of that figure, television brings in around 25 percent and the internet 20percent. Internet advertising has grown the most rapidly in recent years, inparticular at the expense of newspapers and magazines’. Olsthoorn, supranote 73.

78 Jack Neff, ‘Nielsen: Facebook’s Ads Work Pretty Well’, AdvertisementAge, 19 April 2010, accessed 9 February 2015 at: http://adage.com/digital/article?article_id=143381.

79 According to SocialBakers 2012–13.




specific target groups, based on individual profiles80 and behaviouralpatterns. Facebook is increasingly used mobile: 23 percent of the totaltime spent on Android and iOS applications in the US goes to Face-book.81

The commercial return on Facebook per user was about 5 dollarsduring 2012, with only a 1.30 dollar margin (with a 5 billion dollar totalrevenue and 1.3 billion net result). Around 85 percent of company profitscame from advertising.82 Facebook Advertisements tries to increase thegrowth of its audience, to convert more advertisements into clicks, makeinternet users more aware and engage them. Internet users with Facebookuse this social media 25 percent of the time.83

Facebook tracks all the actions of its users on Facebook, and othersites with Facebook plugins or where one can login with Facebook, evenafter they log out of Facebook. Therefore, Facebook is being sued in a 15billion dollar class action.84 After tracking the users’ actions, preferences,interactions and cross-references with affiliated sites Facebook can baseits predictions and offer advertisements that are tailor-made to indi-viduals, these include re-targeting advertisements.85 Companies can bidon advertisement space based on the behavioural patterns of a targetgroup and are able to capitalize on, for example, events, called FacebookAd Exchange (FBX).

Besides providing a platform for advertising, Facebook will probablyalso become more active in commerce: ‘F-commerce’, including a ‘Buybutton’ for advertisers. Facebook already provides the possibility to buygifts via its site.

80 ‘Thanks to the internet passport, Facebook is the ultimate medium formarketing, because it identifies you as an individual customer under your ownname’. Olsthoorn, supra note 73.

81 Dara Kerr, ‘Facebook’s Mobile-Only Use Jumps 23 Percent since March’,CNET, 31 July 2012, accessed 9 February 2015 at: http://news.cnet.com/8301-1023_3-57484036-93/facebooks-mobile-only-use-jumps-23-percent-since-march/.

82 Olsthoorn, supra note 73.83 Olsthoorn, supra note 73.84 Emil Protalinski, ‘Facebook Hit with $15 Billion Class Action User

Tracking Lawsuit’, ZDNET, 18 May 2012, accessed 9 February 2015 at: http://www.zdnet.com/blog/facebook/facebook-hit-with-15-billion-class-action-user-tracking-lawsuit/13358.

85 Re-targeting advertisements: after Facebook finds out that a Facebookuser had clicked a certain advertisement outside Facebook by recognizing thecookies, Facebook offers the same relevant advertisement.




For some time, trademark holders have been laggards in the usage ofsocial media. This has led to considerable cybersquatting of the names ofsocial media profiles, also known as brandjacking.86

Now many trademark holders have become avid users of social mediaand made it an integral part of their brand strategy. ‘As these communi-cation tools become more important the allocation of the unique identi-fiers (user names), also becomes more important’.87 Allemann isconcerned that trademark lawyers will expand the definition of domainnames to include user names.88 This process of registering user names ofsocial media without the authorization of the trademark holder is easyand without extra costs.89 Some trademark holders have pre-emptivelyregistered user names using their trademarks on all important social

86 A third party can impersonate an employee or representative of the brandor company, or suggest a link with the brand. For example, ExxonMobil wasbrandjacked by a certain Janet who registered the ExxonMobil Twitter account,posing as an employee of the oil company. Jeremiah Owyang, ‘How “Janet”Fooled the Twittersphere (and Me): She’s the Voice of ExxonMobil’, 1 August2008, accessed 9 February 2015 at: http://www.web-strategist.com/blog/2008/08/01/how-janet-fooled-the-twittersphere-shes-the-voice-of-exxonmobil/. See alsoLisa P. Ramsey, Brandjacking on Social Networks: Trademark Infringement byImpersonation of Markholders, 58 BUFF. L. REV. 851 (2010).

87 Adam Strong, ‘Social Media User Names Becoming More Like DomainNames’, Domain Name News, 22 December 2008, accessed 9 February 2015at: http://www.domainnamenews.com/miscellaneous/social-media-user-names-becoming-more-like-domainnames/3556.

88 Andrew Allemann, ‘Facebook Usernames Set Dangerous Precedent’, 23June 2009, Domain Name Wire, accessed 9 February 2015 at: http://domainnamewire.com/2009/06/23/facebook-usernames-set-dangerous-precedent/.

89 The Coca-Cola user name was cybersquatted on both Facebook andTwitter by Dusty Sorg and Michael Jedrzejewski.www.facebook.com/coca-cola,August 2008. And only in November 2009, Facebook started to enforce a policythat anyone who creates a branded Facebook page must be authorized by orassociated with the brand. Still, independent Facebook users can create homagesto brands, but they must live as a ‘group’ or fan club. Abbey Klaassen, ‘How TwoCoke Fans Brought the Brand to Facebook Fame’, 16 March 2009, accessed 9February 2015 at: http://adage.com/digital/article?article_id=135238. Coca-ColaCompany came up with an elegant solution, whereby Coca-Cola works togetherwith the founders of the page. Justin Smith, ‘How Do You Treat a Fan WhoOwns Your Facebook Page?’, Inside Facebook, 18 March 2009, accessed 9February 2015 at: http://www.insidefacebook.com/2009/03/18/how-do-you-treat-a-fan-who-owns-your-facebook-page/.




media sites.90 But after registering, brand owners need not use the socialmedia sites, despite the hoax that if they do not use Facebook for twoweeks, they risk their account being removed.91 However, even theprocess of pre-emptive registering can be a time-consuming and costlyexercise for trademark holders.

Even after pre-emptively registering social media user names, trade-mark holders can avoid a lot of problems by developing a clear socialmedia policy92 that is known company-wide and by which everyemployee or even ex-employee is contractually bound.

3.5 TRADEMARK LOGO

The trademark logo can be seen as the locus on the stage where theprotagonists of the legal conflict, trademark holder, social media provid-ers and internet users, find each other. Below the following questions willbe answered: where does the logo come from, how is its functionevolving and what will be its future? Then a definition of the trademarklogo will be provided and a rationale for the trademark logo, someunique characteristics and a taxonomy of the different types of trademarklogo.

Etymologically, the English word logo means a sign or characterrepresenting a word, and was used for the first time in 1937.93 Its origin

90 Dell Inc. is a good example, according to Seidenburg: ‘The Texas-basedcomputer giant has created three photo streams on Flickr, 26 pages and 23groups on Facebook and 34 Twitter feeds’.

91 Brett M. Christensen, ‘Hoax-Slayer, Facebook Deleting Inactive UsersHoax’, 19 September 2007, accessed 9 February 2015 at: http://www.hoax-slayer.com/facebook-overpopulated-hoax.shtml. ‘34 percent of all Twitteraccounts have no tweets, in comparison to 37.1 percent in June 2009’, PaulJudge, ‘Barracuda Labs: Annual Report 2009’, at 7, accessed 9 February 2015 at:http://barracudalabs.com/downloads/BarracudaLabs2009AnnualReport-FINAL.pdf.

92 Fleet has compiled a list of 57 links to social media policies of companiessuch as American Express, BBC, Cisco, Coca-Cola, Dell, General Motors,Harvard Law School, IBM, Intel, and so on, published online. Dave Fleet, ‘57Social Media Policy Examples and Resources’, Social Media Today, 26 July2010, accessed 13 June 2015 at: http://www.socialmediatoday.com/content/57-social-media-policy-examples-and-resources.

93 First known use of logo in 1937, according to the online Merriam-Webster dictionary, accessed 9 February 2015 at: http://www.merriam-webster.com/dictionary/logo.




is probably an abbreviation of logogram,94 which means a letter, symbolor sign used to represent an entire word, and was coined in 1840.

The modern logo has many predecessors, which include cylinderseals (c.2300 BCE), coins (c.600 BCE), coats of arms, watermarks, silverhallmarks,95 banners96 and stickers.97

Just like cloth banners before, the logo can make the communication ofthe brand coherent. Logos have made the transition to online media. Withthe advent of social media they started to populate these platforms bothintentionally and unintentionally. This in combination with the character-istics of the digital media, which makes the logo easily copy-and-pastableand highly diffusible, resulted in many corporations’ perception that theyhave lost control over their own trademark logo.

The logo has evolved together with the trademark: from an indicator ofthe source of origin and of quality to a ‘visual distillation of a cultural

94 Online Etymology Dictionary, accessed 9 February 2015 at: http://www.etymonline.com/index.php?term=logo.

95 Logo, Wikipedia, accessed 9 February 2015 at: http://en.wikipedia.org/wiki/Logo.

96 Banners were used for identification purposes. There are among others,heraldic, religious, trade union and, most relevant for this book, advertisingbanners, which can include a logo. , accessed 9 February 2015 at: http://en.wikipedia.org/wiki/Banner.

97 Before the time of user generated content and social media, the brand-scape was divided dichotomously into content producers and consumers. In the1970s and 1980s, brand holders that wanted to promote their brands sometimesdistributed stickers with their logo at shops or exhibitions. By giving awaystickers, the brand holders gave away some of their control: they had noinfluence over where the people would stick them. The hope was that fans andyoungsters would stick the adhesives, for example, on their door of their room,so that they and their family will see it daily or in the street so that people willbe exposed to it frequently. In the worst case the stickers were put on trafficsigns, cars, windows or garage doors of strangers. The trademark holders had toweigh the costs of manufacturing and distributing the stickers and the negativebrand exposure that connected to sticker abuse with the positive brand exposure.One way to minimize sticker abuse was to try to give them only to fans. Butnobody had to sign an agreement about how they could use the sticker with thebrand logo before they received it. As long as the acquirer of the trademark logo,whether or not depicted on a sticker, does not use it as a way to counterfeit goodsor deceive people into believing that the trademark holder sponsored therelationship between the acquirer’s goods and the acquirer, the use of thetrademark is considered not in the course of trade. Whether this is justified or notwill be looked into below.




ideal’.98 Many trademark logos are no longer exclusively influenced bythe trademark holder. Customers, potential customers and even non-customers invest meaning in the logo to give expression to part of theirpersonality, thereby partly appropriating control of the logo.

Many individual logos evolve over the years. Although with trade-marks, there is no need for evergreening,99 since trademarks are inprinciple perpetual if one keeps using them and paying the fees for themto the trademark office. But still some brands decide to redesign theirlogo in such a way to keep some connection to the old logo, so that themnemonic value is maintained. At the same time the update often impliesprogressiveness.100 adidas’ 3-Stripes,101 then its Trefoil and three barslogos were developed.102 Nike’s swoosh is an example103 of a logo that

98 Dan Redding, ‘The Evolution of the Logo’, Smashing Magazine, 6 July2010, accessed 9 February 2015 at: http://www.smashingmagazine.com/2010/07/06/the-evolution-of-the-logo/.

99 Evergreening is the strategy of extending the patent, by the patenting ofnonessential features of products, including aspects of their formulation, theirmetabolites, or methods of administration. Aaron S. Kesselheim, IntellectualProperty Policy in the Pharmaceutical Sciences: The Effect of InappropriatePatents and Market Exclusivity Extensions on the Health Care System, 9 AAPS J.E306 (2007). Evergreening also exists in copyright law: the creation of slightlynew works, so that the work will be protected again by copyright. DuncanBucknell, ‘Copyright “Evergreening”’, 2 March 2008, accessed 9 February 2015at: http://www.thinkipstrategy.com/ipthinktank/273/copyright-evergreening/.

100 Paul Rand, graphic designer of corporate logos, including the ABC, UPSand IBM logos: ‘My take on redesigning logos is that if possible, try to havesome connection to the old logo so that there is a frame of reference, there isnostalgia, there is the value of the mnemonic device, that you can recognize. Andif you can do it and update it, you have this double advantage. Updating impliesprogressiveness and so on’. Transcript of video: Miggs Burroughs, ‘Interviewwith Paul Rand’, filmed for the television show ‘Miggs B. on TV’ in Connecti-cut, 1991, accessed 9 February 2015 at: http://www.paul-rand.com/foundation/video_miggsInterview_1991/#.UDA3sKkgcR8.

101 If three stripes were purely an embellishment it would not infringe,adidas’ trademark. adidas AG and adidas Benelux BV v Marca Mode CV andOthers (adidas v Marca II), Case C-102/07, Judgment of the ECJ, 10 April 2008.See also Adidas v Fitnessworld, supra, Chapter 2, note 250. Timothy Pinto, TooStripy for Adidas, 3 J.I.P.L.P. 624 (2008).

102 Adidas, ‘The Story of a Logo’, accessed 13 June 2015 at: http://tamuagcj.com/docs/74843_logohistory-adidas.pdf. The trademark adidas wasregistered in lower case on 18 August 1949.

103 Sports apparel company Nike has a logo called the Swoosh, designed byCarolyn Davidson, which is recognized widely to represent Nike. Heritage, ‘TheOrigin of the Swoosh’, Nikebiz.com, available via the Internet Archive, accessed




has evolved over the years. Sometimes the customers of a brand demandthe return of the old version of the trademark logo.104

Redding anticipated the future of the logo in a deconstructionistway.105 Louis Vuitton has already registered as trademarks the constituentelements of its trademarked Monogram Canvas.106 After the Court ofAppeal in Singapore107 rejected its claim of trademark infringement andpassing off of its Flower Quatrefoil and Flower Quatrefoil Diamond108 ona Solvil watch, it started to use the constituent elements of its MonogramCanvas independently.109

13 June 2015 at: http://web.archive.org/web/20070408190641/http://www.nike.com/nikebiz/nikebiz.jhtml?page=5&item=origin.

104 Supra note 69.105 ‘How else can a logo break the rules to adapt? Is there a way to explode

the logo, to decentralize it? What about a logo that consisted of separate elementsthat could be displayed on their own or joined together to create a unified whole?If branded products exist on a molecular level that’s invisible to the naked eye,could they project external holographic brand identity?’ Dan Redding, ‘TheEvolution of The Logo’, Smashing Magazine, 6 July 2010, accessed 9 February2015 at: http://www.smashingmagazine.com/2010/07/06/the-evolution-of-the-logo/.

106 The Toile Monogram consists of the LV monogram (a motif made byoverlapping or combining two or more letters or other graphemes to form onesymbol), a circle with a four-leaved flower inset (flower quatrefoil), a curvedbeige diamond with a four-point star inset (flower quatrefoil diamond), and itsnegative, as explained by Michael Pantalony, Director of Civil Enforcement,North America, Louis Vuitton Malletier, who sent cease-and-desist letter to deanof University of Pennsylvania Law School, 29 February 2012, accessed 9February 2015 at: https://www.law.upenn.edu/fac/pwagner/DropBox/lv_letter.pdf.

107 City Chain Stores (S) Pte Ltd v Louis Vuitton Malletier ([2009] SGCA 53,6 November 2009).

108 With regard to passing off, the court held that Louis Vuitton was requiredto show the existence of goodwill in the ‘flower quatrefoil’ mark itself. However,on the facts, the court found that the mark had never been used alone, but wasused either as part of Louis Vuitton’s monogram or with the trademark LOUISVUITTON. Therefore, the court held that Louis Vuitton had failed to prove thatit possessed goodwill in the ‘flower quatrefoil’ mark’. Regina Quek, ‘LouisVuitton Defeated on Appeal in “Quatrefoil” Case’, 15 January 2010, accessed 9February 2015 at: http://www.onelegal.sg/pdf/Louis%20Vuitton%20defeated%20on%20appeal%20in%20quatrefoil%20case.pdf.

109 David Tan, ‘The Business of Luxury Brands and Trademark Protection’,Powerpoint presentation at NUS, (2011), at 21, accessed 9 February 2015at: http://www.lawtech.hk/wp-content/uploads/2011/01/Presentation-powerpoint1.pdf.




The Paris Convention110 makes no mention of logos and Article 6(1)Paris Convention leaves the pre-conditions for the filing and registrationof trademarks with the respective member states (countries of the ParisUnion ).111 Article 6ter Paris Convention does prohibit state emblems,official hallmarks, and emblems of intergovernmental organizations.112

Both Article 15 TRIPS113 and Article 2 Trademark Directive114 providea non-exhaustive overview of the signs a trademark may constitute. Atleast TRIPS, the Trademark Directive and the Community TrademarkRegulation state the capability of signs to be represented graphically andto distinguish one undertaking from another as pre-conditions to functionas a trademark. Article 2 TRIPS115 incorporates Article 6ter ParisConvention about the prohibition of state emblems, official hallmarks,and emblems of intergovernmental organizations.

In the US, 15 U.S.C. § 1127 gives the definition of trademark: ‘Theterm “trademark” includes any word, name, symbol, or device, or anycombination thereof’.116

Therefore one can conclude that no precise definition of the word‘sign’ is given, and not any definition of the word symbol nor the word

110 Supra, Chapter 2, note 2.111 Article 6(1) Paris Convention: ‘The conditions for the filing and registra-

tion of trademarks shall be determined in each country of the Union by itsdomestic legislation’. Id.

112 Article 6ter id.113 ‘Any sign, or any combination of signs, capable of distinguishing the

goods or services of one undertaking from those of other undertakings, shall becapable of constituting a trademark. Such signs, in particular words includingpersonal names, letters, numerals, figurative elements and combinations ofcolours as well as any combination of such signs, shall be eligible for registrationas trademarks. Where signs are not inherently capable of distinguishing therelevant goods or services, Members may make registrability depend on distinc-tiveness acquired through use. Members may require, as a condition of registra-tion, that signs be visually perceptible’. Article 15 TRIPS, supra, Chapter 2,note 26.

114 ‘A trade mark may consist of any sign capable of being representedgraphically, particularly words, including personal names, designs, letters,numerals, the shape of goods or of their packaging, provided that such signs arecapable of distinguishing the goods or services of one undertaking from those ofother undertakings’. Trademark Directive, supra, Chapter 2, note 11.

115 Article 2(1) TRIPS: ‘In respect of Parts II, III and IV of this Agreement,Members shall comply with Articles 1 through 12, and Article 19, of the ParisConvention (1967)’. So including Article 6ter Paris Convention. Supra, Chapter2, note 26.

116 15 U.S.C. § 1127.




logo. It is uncontested that a logo is both a symbol and a sign, and that asymbol or a sign is not necessarily a logo. Therefore, this book prefers touse the word logo.

Wikipedia’s non-legal definition of the logo is: ‘a graphic mark oremblem commonly used by commercial enterprises, organizations andeven individuals to aid and promote instant public recognition’.117 Thisbook proposes a shorter definition for the logo as a corporate ororganizational avatar under which the company or individual118 engagesnot just in the marketplace, but everywhere in the virtual and non-virtualworld.

In the case of the tobacco industry, the logo and its dimensions arewell defined in a legal sense. The plain package controversy betweenPhilip Morris and Australia119 illustrated that the banishment of the logofrom the package is perceived as a defacement of the company, allegedlycommercially crippling them.

According to Rand, who designed the logos for ABC, UPS and IBM,the logo is not, what is often assumed, an illustration of what the

117 Logo, Wikipedia, supra note 96.118 After a conflict with Warner Bros. in 1992, musician Prince started to

refer to himself by an unpronounceable symbol, which is now called ‘Lovesymbol no. 2’, which looks like a combination of the symbols for man (Marssymbol) and woman (Venus symbol), and Ankh, which is the Egyptian symbolfor eternal life. Wikipedia, accessed 9 February 2015 at: http://en.wikipedia.org/wiki/Ankh. In 1993 Pickett made a guitar in the form of Love symbol no. 2 (seeWikipedia, accessed 9 February 2015 at: http://en.wikipedia.org/wiki/Prince_(musician). After Picket showed Prince the guitar, he let someone else make aguitar in the same Love symbol no. 2 form. Picket sued Prince in 1994. ‘Pickettclaims the right to copyright a work derivative from another person’s copyrightwithout that person’s permission and then to sue that person for infringement bythe person’s own derivative work’. Ferdinand Pickett v Prince, 207 F.3d 402 (7thCir. 2000), 14 March 2000, para. 4. In 1997 Prince registered the logo as acopyright of visual art, not as a trademark, although Judge Posner wrote that thesymbol is Prince’s trademark, he probably spoke in a figurative way. FerdinandPickett v Prince, 207 F.3d 402 (7th Cir. 2000), 14 March 2000, para. 1. JudgePosner decided that Pickett could not make a derivative work based on the Princesymbol without Prince’s authorization even if Pickett’s guitar would haveshowed the incremental originality needed. Ferdinand Pickett v Prince, 207 F.3d402 (7th Cir. 2000), 14 March 2000, paras 5 and 7.

119 Bryan Christopher Mercurio, Awakening the Sleeping Giant: IntellectualProperty Rights in International Investment Agreements, 15 J. INT’L ECON. L.871 (2012).




company does or what it represents.120 Instead Rand asserted that afterthe logo is used, it can become a suitable vehicle for associating thebrand, product or corporation with its goodwill, reputation and identity/personality.

The raison d’être of the logo is the need for an association with anotherwise faceless brand, product or organization. Most natural personsare gifted with a face which distinguishes them from other people andmakes them recognizable as a unique individual.121 Legal persons mightnot have a face of flesh and bones and sometimes they even have thesame name if they are active in another product or service category. Sothe trademark logo can be crucial to distinguish products or companies122

from each other, a distinct appearance with which they can link them-selves to the outside world.

One can argue that some brands, such as those of Nike and Apple, arepresenting themselves as lifestyle brands. This has led to a situationwhereby consumers use the logos to express some part of their personal-ity.123 The one-way communication from the trademark holder to thepublic via television, radio and print advertisements has been substitutedwith two-way communication between the trademark holder and internetusers on social media.124

120 ‘People don’t understand how or why a logo is designed. They don’tunderstand. Most clients or people on the street think that the important thingabout a logo is that it illustrate what the business does or what it represents,which is nonsense. I think it’s proven by this logo (IBM logo, DF). I mean a logobecomes meaningful only after it’s used. In other words the illustration thatrepresents the logo is the product and not the logo. So that comes after the logo,and that requires that the thing is seen and associated. And the association iswhat makes the logo’. Supra note 101.

121 Twins, look-alikes and doubles undermine this uniqueness, and Prosopag-nosia, whose sufferers cannot recognize faces, makes this uniqueness ineffective.Prosopagnosia, Wikipedia, accessed 9 February 2015 at: http://en.wikipedia.org/wiki/Prosopagnosia.

122 A company’s logo is often synonymous with its trademark. AlineWheeler, DESIGNING BRAND IDENTITY, (Hoboken NJ: John Wiley & Sons,Inc. 2006), at 4.

123 Drescher, supra, Chapter 1, note 25, at 309.124 ‘Advertising thus seeks to control the behaviour of recipients or con-

sumers. Amongst others, trademark rights help in protecting this kind ofcommunication and, thus, ensure that right holders have undistorted access toconsumers and the latter’s undivided attention. By contrast, freedom of expres-sion seeks to ensure dialogic communication, which results in dialogue ordiscussion, with the intention of bringing forth truth and the advancement ofsociety’. Sakulin, supra, Chapter 1, note 88, at 7–8.




Research has demonstrated that the human brain can absorb andremember125 visual information much faster than verbal information.126 Apicture is worth a thousand words.127 There are, however, also wordmarks and letter marks, but the use of the font or the design of the lettersmake those logos more recognizable and distinguishable than a plainpackage with a generic font as a badge of recognition.

As will be dealt with in Chapter 5 ‘Trademark Infringement and ItsDefences’, it can be argued that trademark logos, unlike trademarknames, are immune to legal issues in regard to nominative fair-use issuesand legal issues could be solved in an automatic way. This givestrademark logos a unique way of guaranteeing the functions of thetrademark.

There is a non-exhaustive number of ways to classify the differenttypes of logos: for example, in three,128 five,129 six130 or seven131

different logo types.

125 Ancient Roman rhetorical treatises, for example Cicero’s De Oratore,explain the principles of memory palace: items can be remembered by visualiz-ing them in specific physical locations. Method of Loci, Wikipedia, accessed 9February 2015 at: http://en.wikipedia.org/wiki/Method_of_loci.

126 Susumu Kobayashi, Theoretical Issues Concerning Superiority of Picturesover Words and Sentences in Memory, 63 PERCEPTUAL & MOTOR SKILLS783 (1986).

127 McCarthy is using this logic to suggest the inverse: ‘As the Chinese say,1001 words is worth more than a picture’. John McCarthy, ‘The Sayings of JohnMcCarthy’, 1 March 2007, accessed 9 February 2015 at: http://www-formal.stanford.edu/jmc/sayings.html.

128 Three basic types of logos: 1. iconic/symbolic, 2. logotype/wordmark,3. combinationmark. Logodesignsource.com, ‘Types of Logodesign’, 2005,accessed 9 February 2015 at: http://www.logodesignsource.com/types.html.

129 Five different types of logos: 1. wordmark, 2. lettermark, 3. brandmark 4.combination mark, 5. emblem. Vladimir Gendelman, ‘The 5 Different LogoDesign Styles: Which Type Fits Your Brand?’, Company Folders September 10,2013, accessed 13 June 2013 at: http://www.companyfolders.com/blog/5-different-logo-design-styles-which-type-fits-your-brand.

130 Six different types of logos: 1. type-based logos, 2. symbol-based logos,3. abstract-based logos, 4. initial-based logos, 5. badge-style logos, 6. mascotlogos.

Nora Reed, ‘6 Different Types of Logo Designs: Choose the Right One!’,Logo blog, 2 April 2012, accessed 13 June 2015 at: http://www.logoinlogo.com/Gallery/Company-Logo-Design-Ideas-6-Different-Types-of-Logo-Designs-Choose-The-Right-One–437.htm.

131 Seven different types of logos: 1. abstract, 2. descriptive, 3. emblematic,4. illustrative, 5. letterform, 6. typographic, 7. wordmark. Tatiana Hindes, ‘7Different Types of Logos for Small to Medium Businesses: Which One Is the




The categorization of logos into five groups has the advantage that thegroups are not too big, as in the categorization of logos into three groups,and do not seem to overlap, as might be the case in the categorizationinto six and seven different logo types, respectively.

The five different categories of logo are:132

1. wordmark; for example the Sony logo;2. lettermark; for example the IBM logo, with the horizontal stripes;3. brandmark; for example the apple logo of Apple;4. combination mark, of a brandmark and a wordmark for example the

Unilever logo;5. emblem, a wordmark or lettermark in an emblem; for example the

Harley-Davidson logo.

Another distinction is between static and dynamic logos. Most logos arestatic, because it is easier to memorize and recall a logo that is alwayspresented in the same consistent way with the same dimensions. How-ever, some brands, such as Google, Michelin, MTV, Morton Salt andSaks Fifth Avenue, made the decision to use dynamic logos. MTV, forexample, wanted a logo that fits with a rock music image.133 Therefore,the logo was animated all the time in new ways. However, in the end thecontours could be seen from the letters M and TV. Also Google invites allkinds of designers to come up with their renditions of the logo, which itcalls Doodles.134 However, the ‘doodles’ are alternated with the Googlelogo that is static.

Right for Yours?’, 10 June 2011, accessed 13 June 2015 at: http://www.soulspace.com.au/graphic-design-news-and-blog/the-7-different-types-of-logos-for-small-to-medium-businesses-which-one-is-the-right-for-yours/.

132 Supra note 130.133 ‘Knowing that many animators, designers, ad agencies, etc. were going to

be working with the logo made them think how, just like rock music alwayschanges, the logo should also. This was a concept that had never been used on alogo before. The “M” and the “TV” could be made of any colors and/ormaterials’. Frank Olinsky, ‘MTV Logo Story’, undated, accessed 9 February2015 at: http://www.frankolinsky.com/mtvstory1.html.

134 Google Doodles, accessed 9 February 2015 at: http://www.google.com/doodles/finder/2012/All%20doodles.




4. Analysis of the legal conflict

The non-scalability of litigation andarbitration necessitates the prerequisite ofautomation for any solution

4.1 INTRODUCTION

Quantity has a quality all its own1

This chapter provides a description of aspects of social media which leadto legal conflicts between internet users, trademark holders and socialmedia providers. The unauthorized use of the trademark logo on socialmedia has been so widespread, massive and fast paced that it places theprotagonists – trademark holders, social media providers and internetusers – in an uncertain legal position. The sections below (Chapter 4.2–9)will distinguish eight elements of the legal conflict between trademarkholders, social media providers and internet users:

– a perception by internet users, social media providers and imagesearch engines that the trademark logo is without protection;

– the ample access to the unauthorizsed use of the trademark logo;– the proliferation, scale and speed of the unauthorized use of the

trademark logo;– the permanence of the uploaded unauthorized trademark logos on

the internet;– the uncertain boundaries of the trademark logo;– stakeholders that are either overwhelmed or ignorant to the

infringement;– a loss of control for trademark holders; and– the emergence of new technology such as cloud computing.

1 Quote attributed to Mao, Lenin and Trotsky. Peter Roberts, ‘Quality ofQuantity Still Has Resonance’, Financial Times, 2 March 2014.

92

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The current case-by-case solution2 using existing IP laws or alternativedispute resolution (ADR) is not sustainable, nor is it advisable. Chapter4.10 concludes that a paradigm shift is necessary.

4.2 PERCEPTION OF INTERNET USERS, SOCIALMEDIA PROVIDERS AND SEARCH ENGINES

Internet users make unauthorized use of trademark logos as if there areno restrictions. Despite some prohibitory words in the Terms of Serviceof social media sites against intellectual property infringements by thirdparties, the unauthorized use of the trademark logo is not mentioned.Instead, image search engines and social media providers have tech-nically enabled internet users to use trademark logos, regardless ofwhether the trademark holder has authorized such use, which simplyreinforces the perception of internet users that using trademark logoswithout authorization is legitimate.

Internet users share trademark logos for a variety of reasons. Someinternet users want to share with their social media relations their love orhate for a brand of which the logo is the symbol. Meanwhile, others seethe logo as an expression of part of their personality.3 And some internetusers perceive the trademark logo as raw material which they may freelyuse to express some commercial, artistic or political message (seeChapter 6 ‘Trademark Dilution and Its Defences’, about the use oftrademark for parody, satire and critical comment).

4.3 AMPLE ACCESS TO THE UNAUTHORIZEDTRADEMARK LOGO

Search engines, such as Google, Bing and Baidu, each have a specialsearch engine for images, called Google Images,4 Bing Images5 andBaidu Images,6 respectively.

2 Where the parties are willing to bind themselves to the award, arbitrationmight be a more efficient way to resolve a dispute than litigation. However, themassiveness of the legal conflicts also outnumbers the arbitrators’ capacity.

3 Drescher, supra, Chapter 1, note 25, at 338.4 Google Images, accessed 9 February 2015 at: http://images.google.com/.5 Bing Images, accessed 9 February 2015 at: http://bing.com/images.6 Baidu Images, accessed 9 February 2015 at: http://image.baidu.com/.

Analysis of the legal conflict 93



One can argue that these image indexing sites are the biggest enablersor inducers of unauthorized use of trademark logos. The search enginesindex all the pictures their webspiders come across on the internet. Someof those pictures are trademark logos, that have been uploaded some-where on the internet without permission of the trademark holder.

Once these trademark logos are indexed on the search engine, they canbe selected with two right clicks on the mouse, copy-and-pasted, anduploaded somewhere else on the internet, for example on a social mediasite. For instance in a simple search for Louis Vuitton’s LV logo, one gets493,000,000 results, spread out over many pages, with 24 pictures perpage related in some way to the LV trademark logo.7

One can directly copy-and-paste a picture from these search resultpages, without ever seeing any warning against possible infringement ofintellectual property rights. If one clicks on any picture on the GoogleImages site one will be taken to a page where one will see in a columnwhich takes in a fourth of the complete page some information about thewebsite where Google found the image, the dimensions of the image, thetype of the image (the format, for example jpeg), and the sentence:‘Images may be subject to copyright.’ The possibility that images may besubject to trademark law is not even suggested. The rest of the columnremains empty.

Internet users might see the technical possibility to copy-and-paste anytrademark logo as an implied consent by the search engine that givesthem those options.

This book asserts that a trademark holder should be able to freelydetermine whether Google can index a picture of its trademark. Googlegave some advice to those with a website, so that their images will beindexed successfully.8 Moreover, there are two possibilities for trademarkholders to opt out of Google Images so that the trademark logos theyhave placed online will not be indexed.9 However, these efforts do not

7 It becomes immediately clear that many images related to the LV logowere not uploaded by Louis Vuitton, and worse, violate the integrity of the logo,and dilute by blurring or tarnishment.

8 Illyes explained that when it is not clear from the URL that there arepictures, then Googlebot will crawl the URL first, and if an image was foundGooglebot-Image will revisit. Gary Illyes, ‘1000 Words about Images’, GoogleWebmaster Central Blog, 25 April 2012, accessed 13 June 2015 at: http://googlewebmastercentral.blogspot.in/2012/04/1000-words-about-images.html?utm_source=twitterfeed&utm_medium=facebook.

9 Google attempted to educate users on the possibility of opting out ofGoogle Images by providing a meta-tag in the HTML code of the page, or to put




solve the problem that Google Images still indexes trademark logos thathave been uploaded from sites that were not under the control of thetrademark holder.

4.4 PROLIFERATION, SCALE AND SPEED OFCONTENTIOUS CONTENT

Before the popularity of social media, false information could alreadyspread very rapidly. In 1996 a false rumour about the clothing designerTommy Hilfiger erupted on the internet. According to the rumour,Hilfiger had said: ‘If I had known that African-Americans, Hispanics, andAsians would buy my clothes, I would not have made them so nice.’10

One of the components of the rumour was that Hilfiger had made thestatement on The Oprah Winfrey Show. However, Hilfiger never appearedon The Oprah Winfrey Show. The false rumour was very damaging to thebrand value of Tommy Hilfiger.11

Social media sites created the unprecedented possibility for everyinternet user to communicate and share information efficiently andeffectively, thanks to the interoperability between different platforms.With minimum effort internet users can use social media to amplify thediffusion of information. In fact, this scalability is one of the greatadvantages of social media.12 With the same amount of programmingone’s social media site can provide the same service, no matter whether

a robots.txt file in the server root. Robots Pages, accessed 9 February 2015 at:http://www.robstxt.org.

10 Barbara Mikkelson and David P. Mikkelson, ‘Tommy Rot, Urban LegendsReference Pages’, 6 May 2006, accessed 9 February 2015 at: http://www.snopes.com/racial/business/Hilfiger.asp; About.com, ‘Tommy Hilfiger “Racist”Rumor Is Fashionable Again’, accessed 9 February 2015 at: http://urbanlegends.about.com/library/weekly/aa121698.htm.

11 Id.12 Insights about value of a network and its scalability have developed via

laws developed by Sarnoff, Metcalfe and Reed. Sarnoff’s law, which states thatthe value of a broadcast network is proportional to the number of viewers, can beapplied to networks: the value of a network corresponds proportionately with thenumber of users of a network. David Sarnoff, Wikipedia. Metcalfe’s law (RobertMetcalfe): the value of a telecommunications network is proportional to thesquare of the number of connected users of the system n(n-1)/2. Metcalfe’s law,Wikipedia. Reed’s law: the utility of large networks, particularly social networks,can scale exponentially with the size of the network, which goes faster thanSarnoff’s or Metcalfe’s law. See David Reed, Reed’s Law, Wikipedia.




there are just a few or millions of internet users.13 The other side of thecoin is that the same can be said for the challenges of unauthorized useof trademark logos. Suppose one internet user uploads an unauthorizedtrademark logo, or worse, a mutilated version of the trademark logo.After a short time, the unauthorized and mutilated trademark logo mayhave spread epidemically among social media sites, and have come to theattention of thousands or even hundreds of thousands of internet users.14

Such actions might have devastating effects on the reputation andgoodwill of the trademark logo.

One complicating factor is that some internet users have not changedtheir privacy settings and thus share their information with everybody. Ifan internet user has set up his social media profile in such a way that heis only sharing the content he uploads with his social media connections,he can assume that his content will only reach this limited audience.However, despite the internet user’s privacy settings, the distribution ofthe content can reach a much bigger audience than intended,15 includingthe government.16 Moreover, search engines index even the content thatis ‘locked’ within social media. Social media connections can republish17

content so that the content will be exposed to their respective socialnetworks too, or they can republish it outside this social media site.18

13 The only difference is that one has to buy more server space.14 Stephanie Clifford, ‘Video Prank at Domino’s Taints Brand’, New York

Times, 15 April 2009, accessed 13 June 2015 at: http://www.nytimes.com/2009/04/16/business/media/16dominos.html.

15 ‘Digitised communications also allow the expression to come to theattention of people beyond the speaker’s intended audience’. Rowbottom, supra,Chapter 3, note 49, at 366.

16 Facebook users have no control with whom their friends shares theirprofile. Jeff John Roberts, ‘“Friends” Can Share Your Facebook Profile with theGovernment, Court Rules’, PaidContent, 15 August 2012, accessed 13 June 2015at: http://gigaom.com/2012/08/15/friends-can-share-your-facebook-profile-with-the-government-court-rules/?utm_source=General+Users&utm_campaign=cd049c36d7-c%3Amed+d%3A08-16&utm_medium=email.

17 Republication includes linking, re-tweeting, embedding, re-posting andre-blogging. See, Jason J. Lunardi, Guerrilla Video: Potential Copyright Liabilityfor Websites that Index Links to Unauthorized Streaming Content, 19 FORD-HAM INTELL. PROPO. MEDIA & ENT. L.J. 1077, 1081 (2009); Seth A.Metsch, Embedded Media: Apps, Widgets, RSS and Embedded Content, 978PLI/PAT 235 (2009).

18 One can pose the question whether an author of a post will also be liablefor republication on other websites. M. Collins, THE LAW OF DEFAMATION AND

THE INTERNET (3rd ed., Oxford: Oxford University Press, 2010), at 5.38–5.41.




Since platforms have converged in respect to the media they provide,content can jump seamlessly from one platform to the other. And manyinternet users make use of interoperability sites that make it possible toautomatically republish across many platforms.

Therefore, both good and bad news can spread like wildfire. Aninteresting case is the dissemination of the prank video by two Domino’sPizza employees in 2009.19 The video, which showed unhygienic actswith pizzas, to put it euphemistically, was uploaded to YouTube.20 Withintwo days half a million people saw the video on YouTube, many more viaother social media sites such as Twitter. References to the video could befound in 5 of the 12 results on the first page of a Google search for‘Domino’s’. Domino’s Pizza’s reputation was damaged and the percep-tion of its quality among consumers went from positive to negative in justdays.21 Then again, social media also helped to identify the perpet-rators.22 Domino’s Pizza reacted with a counter-offensive public relationscampaign, of course using social media to express its views.23

19 Jaram Park, Meeyoung Cha, Hoh Kim, and Jaeseung Jeong , ‘SentimentAnalysis on Bad News Spreading’, CSCW Workshop on Design, Influence, andSocial Technologies (DIST) Seattle, 11-12 February 2012, accessed 9 February2015 at: http://distworkshop.files.wordpress.com/2012/02/dist2012-workshop_2-2.pdf.

20 Fragments of the prank video that was removed from YouTube can be seenhere, in a reportage of WCBC, ‘Charlotte New Caroline’, accessed 9 February2015 at: http://www.youtube.com/watch?v=OhBmWxQpedI; ‘Dominos Pizza onthe Today Show: Workers Fired for Dominos Prank Video’, 17 April 2009,accessed 9 February 2015 at: http://www.youtube.com/watch?v=xaNuE3DsJHM.

21 ‘In just a few days, Domino’s reputation was damaged. The perception ofits quality among consumers went from positive to negative since Monday,according to the research firm YouGov, which holds online surveys of about1,000 consumers every day regarding hundreds of brands’. Clifford, supranote 14.

22 The perpetrators were fired by Domino’s Pizza and held in custody at theConover police department on felony charges of tampering and distributing food.Russell Goldman and Jason Stine, ‘Star of Domino’s Pizza Gross-Out Video IsSorry’, ABC Good Morning America, May 2009, accessed 9 February 2015 at:http://abcnews.go.com/GMA/Business/story?id=7500551#.UYjfKqIhpDM. Whetherthe perpetrators were convicted or not, could not be found.

23 Domino’s created a Twitter account: @dpzinfo and uploaded a YouTubevideo by its chief-executive, which was later removed. More generally, theystarted a website called Pizza Turnaround.Patrick Doyle, president of Domino’sPizza stated: ‘You can even use negative comments to put you down or you usethem to excite you and energize your process to make a better pizza. We did thelatter’. 21 December 2009, accessed 9 February 2015 at: http://www.youtube.




The libel case Cairns v Modi in the UK illustrated the connectionbetween scope and spread of the injurious information on the one handand the damages awarded on the other hand. In this case, £90,000 in libeldamages was awarded after defamatory allegations of cricket matchfixing were made on Twitter24 and an online journal, where it was seenby 65 and 1,000 people, respectively. It was recognized that the spreadvia social media was an aggravating factor; thus, the ordinarily £75,000award was supplemented with an additional £15,000.

The scope of dissemination on social media sites cannot really becontained, because republishing between social media connections andbetween different social media platforms is so easy. Therefore equitableremedies are often not possible. Instead an action on the basis of the legalremedy of compensatory damages is available for the injured party.25

However, as will be shown in Chapters 5 and 6, the available courses ofaction are not sufficient.

4.5 PERMANENCE OF UPLOADED LOGOS

As Judge Benjamin Cardozo wrote in 1931: ‘What gives the sting towriting is its permanence in form. The spoken word dissolves, but thewritten one abides and perpetuates the scandal.’26 Cardozo’s words arerelevant in the era of social media, perhaps to even a greater extent;user-generated content has led to a democratization and disintermediationof content, but the lack of gatekeepers is not only a strength, it is also aweakness. This can lead not only to a fountain of creativity, but alsopotentially flood the system with adulterated content that can havenegative effects on rights holders and the public at large.

There are two opposing technological developments in social media.On the one hand it has become increasingly easy to upload, post, publish

com/watch?v=AH5R56jILag. Jaram Park, Meeyoung Cha, Hoh Kim andJaeseung Jeong, ‘Managing Bad News in Social Media: A Case Study onDomino’s Pizza Crisis’, Workshop Lightning 1 (Diffusion and Propagation;topics, sentiments and emotion). International AAAI Conference on Weblogs andSocial Media (ICWSM) Dublin 5 June 2012 ), accessed 9 February 2015 at:http://mia.kaist.ac.kr/publication/icwsm2012_park.pdf.

24 Cairns v Modi, [2012] EWHC 756 (QB).25 ‘[I]n some cases content can be republished so quickly and in so many

places that an adjudication by a court or agency may be futile and the onlyremedy is an award of damages, assuming the author’s identity is known’.Rowbottom, supra, Chapter 3, note 49, at 381.

26 Ostrowe v Lee, 175 N.E. 505, 506 (N.Y. Ct. App. 1931).




or link to content. Indeed, the gap between thought and expression to theoutside world has become smaller.27 On the other hand, once somethingis uploaded, posted or linked somewhere on the internet, it is difficult ifnot impossible to remove. This level of persistence varies with socialmedia sites.28 Twitter keeps messages accessible to the public for alimited period of time, but is making its entire archive accessible to theUS Library of Congress,29 based on its users’ consent for disclosure byvirtue of its Private Policy. Because messages can be republished andbecause there is considerable interoperability between the different socialmedia, messages can always jump to other persistent platforms beforethey could be retracted.

Since the threshold is so low and implications for internet users seemto be inconsequential, internet users might be tempted to spontaneousactions of generating content. But because content can stay forever onlinea rights holder can ultimately find the content and take legal steps againstthe internet user and/or internet service provider.30

The lack of a possibility to reformulate, perfect and retract (seeChapter 8 on the moral right of withdrawal) can potentially lead toserious legal problems which seem disproportionate.31 It is interesting torealize that a virtual medium can also be so lapidary. Solove stated:

27 ‘When a person says whatever is on his mind, the gap between the thoughtand its expression to the outside world is minimal. It is not mediated by furtherreflection, research or verification’. Rowbottom, supra, Chapter 3, note 49, at374.

28 Danah Boyd, Social Network Sites as Networked Publics: Affordances,Dynamics, and Implications, in NETWORKED SELF: IDENTITY, COM-MUNITY, AND CULTURE ON SOCIAL NETWORK SITES (Z. Papacharissi,ed., New York: Routledge, 2010).

29 Matt Raymond, ‘How Tweet It Is! Library Acquires Entire TwitterArchive’, Library of Congress, 14 April 2010, accessed 9 February 2015 at:http://blogs.loc.gov/loc/2010/04/how-tweet-it-is-library-acquires-entire-twitter-archive/. See also: Audrey Watters, ‘How the Library of Congress is Building theTwitter Archive’, O’reilly Radar, 2 June 2011, accessed 9 February 2015 at:http://radar.oreilly.com/2011/06/library-of-congress-twitter-archive.html.

30 Rowbottom compared the situation in which internet users take intoaccount the possibility that they are being surveyed with a digital version ofJeremy Bentam’s panopticon. Rowbottom, supra, Chapter 3, note 49, at 367. Seealso Panopticon, Wikipedia, accessed 9 February 2015 at: http://en.wikipedia.org/wiki/Panopticon.

31 The Strasbourg Court has considered the factor of dissemination, lookingat whether there was any ‘possibility of reformulating, perfecting or retracting’ astatement before putting it into the public domain. Fuentes Bobo v Spain (2001)31 E.H.R.R. 50 at [46].




‘There is a grave danger that people will enslave themselves and eachother by making past mistakes permanently and readily available for therest of their lives.’32 As Solove continued: ‘Information that was oncescattered, forgettable, and localized is becoming permanent and search-able. Ironically, the free flow of information threatens to undermine ourfreedom in the future.’33

However, one can also argue that because of this characteristic themassive amount of infringing content stays online forever. An interestingquestion that might ultimately be answered by the US Supreme Court iswhether a message that has been deleted and made inaccessible tointernet users is no longer accessible for the government, unprotected bystate or federal privacy protection.34 Judge Sciarinno, Jr. comparedmessages on social media with messages on the street: ‘Well today, thestreet is an online, information superhighway, and the witnesses can bethe third party providers like Twitter, Facebook, Instagram, Pinterest, orthe next hot social media application.’35 He continued: ‘If you post a

32 Daniel Solove, Speech, Privacy and Reputation on the Internet, in THEOFFENSIVE INTERNET (Martha Nussbaum and Saul Levmore, eds., Cam-bridge MA: Harvard University Press, 2011), at 16.

33 Solove, supra, Chapter 2, note 154, at 4.34 A subpoena issued by the New York County District Attorney’s Office to

Twitter ordered that it provide all possible information, including tweets, and‘non-public location and movement information’. (Amicus Curiae Brief ofAmerican Civil Liberties Union, New York Civil Liberties Union, ElectronicFrontier Foundation, and Public Citizen, Inc., in Support of Twitter, Inc.’sAppeal, 27 August 2012, at 1), that can be derived from the internet protocoladdress of an Occupy Wall Street protester, without the need to get a searchwarrant. Criminal Court of the City of New York judge Matthew Sciarrino, Jr.upheld the district attorney’s order (Criminal Court of the City of New York,County of New York, JURY 2, The People of the State of New New York vMalcolm Harris – 30 June Decision and Order, Docket No: 2011NY080152)(The People of the State of NY v Harris. Judge Sciarinno, Jr. compares messageson social media with messages on the street, at 4: ‘Well today, the street is anonline, information superhighway, and the witnesses can be the third partyproviders like Twitter, Facebook, Instagram, Pinterest, or the next hot socialmedia application’; and at 6: ‘If you post a tweet, just like if you scream it outthe window, there is no reasonable expectation of privacy’, which is now beingappealed by Twitter. Aden Fine, ‘Twitter Appeals Ruling in Battle over OccupyWall Street Protester’s Information’, 27 August 2012, ACLU, accessed 9February 2015 at: http://www.aclu.org/blog/technology-and-liberty-national-security-free-speech/twitter-appeals-ruling-battle-over-occupy.

35 People of the State of NY v Harris, id., at 4.




tweet, just like if you scream it out the window, there is no reasonableexpectation of privacy.’36

4.6 UNCERTAIN BOUNDARIES

Bessen and Meuren asserted that ‘if you can’t tell the boundaries, it ain’tproperty’.37 It is sometimes argued that jurisdictions have not providedany bright-line rules for what internet users can and can not do with atrademark logo for which they have no authorization and thus confusionexists. This is combined with the fact that there seems to be anuninformed laissez-faire, if not hostile, attitude towards IP rights amonginternet users.

In contrast with the technological possibilities, it can, admittedly, besometimes difficult for internet users to find out what is authorized use ofa trademark logo (see Chapter 9 ‘Implementation of a Paradigm Shift’,which proposes a uniform solution that makes transparent which use ofthe trademark logo on social media is authorized) or even to verifywhether a trademark is registered or not.38 This can make it difficult foreven the most benign of internet users that want to use a trademark logoin an authorized way on social media.39

Thus, the relevant provisions of trademark law are either not known orignored by most internet users. Of course, even the knowledge of theselegal provisions is sometimes not enough. For example one cannot use atrademark logo without authorization in a commercial way. An internetuser might not use the trademark logo he or she uploaded on socialmedia in a commercial way, but what if a social media site takes

36 People of the State of NY v Harris, id., at 6.37 Read Chapter 3 ‘If You Can’t Tell the Boundaries, Then It Ain’t Property’

of James Bessen and Michael James Meurer, PATENT FAILURE: HOWJUDGES, BUREAUCRATS, AND LAWYERS PUT INNOVATORS AT RISK,47– 72 (Princeton, NJ: Princeton University Press, 2008).

38 Problems related to logo: difficult to find whether the trademarks havebeen registered, RODYK, ‘Watch Out! You Might Be Infringing Someone’sTrade Mark’, accessed 9 February 2015 at: http://www.rodyk.com/front/poppage/261.

39 Many trademark holders do not explain what is authorized use of theirtrademark logo. And those that do explain it, do this in a non-uniform way.Therefore, each time an internet user has learned how to find what is authorizeduse of one trademark logo, he has to unlearn this when he wants to know what isauthorized use of another trademark logo. For more about this intransparencychallenge, see Chapter 9 ‘Implementation of a Paradigm Shift’.




commercial advantage of the trademark logo uploaded by the internetuser? In other words: where does commercial use start and where does itend? Chapter 5 ‘Trademark Infringement and Its Defences’ will elaborateon this question. The same question can be asked in regard to parody,satire and critical comments (see Chapter 6 ‘Trademark Dilution and ItsDefences’).

4.7 TRADEMARK HOLDERS AND OSP’S AREOVERWHELMED, INTERNET USERS AREIGNORANT OF INFRINGEMENT

The scale of unauthorized use of intellectual property rights on theinternet is massive. Even where OSPs attempt to enforce intellectualproperty rights, they cannot keep up with the pace of infringements. Forinstance, Google is transparent about copyright removals,40 and in August2012 it claimed ‘to remove more than 4.3 million URLs in the last 30days alone’, and, moreover, Google take valid copyright removal noticesinto account in its ranking search algorithm to rank them into obscurity.41

One month later Google received more than 8.5 million copyrightremoval receipts.42 Again Google did not publish information on thenumber of requests to remove trademarks, including trademark logos.One can assume that these numbers follow the trend of the number ofcopyright removal requests. Given the sheer numbers, to enforce un-authorized trademark logos on a case-by-case basis seems infeasible. Inother words: litigation and arbitration are not scalable.

40 An overview of the scale can be found at Google Transparency Report,accessed 9 February 2015 at: http://www.google.com/transparencyreport/removals/copyright/.

41 ‘Since we re-booted our copyright removals over two years ago, we’vebeen given much more data by copyright owners about infringing content online.In fact, we’re now receiving and processing more copyright removal noticesevery day than we did in all of 2009 – more than 4.3 million URLs in the last 30days alone. We will now be using this data as a signal in our search rankings’.Amit Singhal, ‘An Update to Our Search Algorithms’, Inside Search, The officialGoogle Search blog, 10 August 2012, accessed 9 February 2015 at: http://insidesearch.blogspot.ca/2012/08/an-update-to-our-search-algorithms.html?m=1.

42 Google received 16,107,468 copyright removal requests in the last month(July 2013), supra note 40.




The problem is bigger than the number of actions taken by trademarkholders, because of so-called tolerated use.43 Some of the trademarkholders think they cannot do anything about it or they do not want to doanything about it. The scope of the problem is further blurred by secondlevel agreements between content holders and social media providers,44

in which social media providers share the revenues they make from theinfringing content with the content holders.

Aretz wrote that operators of photo-sharing platforms never enteredany second level agreement so that rights holders in images still bear thecosts of tracking their content over the internet.45 Aretz further speculatedthat because of privity of contract46 the second level agreements do nothave any impact on internet users’ legal status, unless they are interpretedas implied licence and estoppel to exculpate the user.47

It is hard for trademark holders to vindicate their rights. The currentlegal environment, with prescribed notice-and-takedown requirementsallows OSPs, including social media providers, to invoke the safe harbourprovisions provided that OSPs take down any content after a notice sentby trademark holders and at the same time do not proactively filter beforecontent is uploaded (see Chapter 7 ‘Intermediary Liability’). Becausesocial media sites, such as Facebook, Twitter and YouTube get millionsof notifications, they have tried to automate the takedown process. Butsince this process is far from perfect, trademark holders try to enforcetheir rights against the primary and secondary infringers. Because realname policy is not implemented and probably will not be in the future,trademark holders try to enforce their trademark rights against OSPs ifthey cannot track down the internet users (see Chapter 7 ‘IntermediaryLiability’).

43 Wu describes tolerated use for copyright: ‘Tolerated use occurs when acopyright owner knows about infringing activity but does not act to halt it orseek to be compensated for it. This informal practice may be grounded in acopyright owner’s laziness, expansive enforcement costs, a desire to creategoodwill, or a strategic decision to enjoy the benefit of the unauthorized use’.Tim Wu, Tolerated Use, 31 COLUM. J.L. & ARTS 617, 619 (2008).

44 ‘Second Level Agreements are preemptive licences granted by copyrightowners to platforms operators, with the purpose of ratifying the mass usage ofcopyrighted content by their users’. Yafit Lev Aretz, Second Level Agreements,45 AKRON L. REV. 137 (2012).

45 Id.46 Privity of contract is when rights cannot be conferred to or obligations

imposed on anyone else than the parties of the contract.47 Aretz, supra note 44.




The internet users do not know what kind of use is authorized or notauthorized and what is legal or illegal. And after being exposed to somuch unauthorized content on social media, on image search engines,and having a technology available that can copy-and-paste unauthorizedcontent stripped from any metatags, many an internet user assumes thatuploading unauthorized content is legal. This had led to, as Lee put it, a‘warming up’ instead of a chilling effect on user-generated content(which will be further discussed in Chapter 8.8 ‘Rationale for moral rightof integrity for the trademark logo’). Thus, there is much room forimprovement here.

4.8 LOSS OF CONTROL

The ascent of social media sites precipitated the perception of a loss ofcontrol48 for trademark holders in regard to the unauthorized use of theirtrademark logo on social media; and for social media providers in regardto secondary liability and for internet users in regard of direct liability, incase of content infringement. However, there is no reason for defeatismfor the protagonists involved.

After sometimes decades of investing labour, effort and investment intheir trademark logo, trademark holders have found out that social mediasites and Google Images have de facto outlawed the use of theirtrademark logo by making it possible for every internet user to copy-and-paste and upload pictures stripped of metadata. Some trademark holdersperceive that they have lost control over the use of their own trademarklogo on social media.49 Social media policy,50 marketing51 and public

48 ‘It is no wonder that content industries feel threatened, not just becausepeople recirculate what they regard as their property, but also because they are nolonger able to exercise the kind of control over the marketplace that they imaginethey used to have’. Christina Spiesel, Responding to Rebecca Tushnet: Worth aThousand Words – The Images of Copyright, 125 HARV. L. REV. 683 (2012).

49 McGeveran, supra, Chapter 3, note 76.50 Boudreaux has set up a database of social media policy papers of many

famous brands and organizations. Chris Boudreaux, ‘Policy Database, SocialMedia Governance, 2009–2013’, accessed 13 June 2015 at: http://socialmediagovernance.com/policies.php.

51 Gaines-Ross proposes six reactionary strategies to defend a company’sreputation on social media: proportionate reaction; respond quickly, tell yourorganization’s side of the story, use social media for your message, find thirdparties that can amplify your message, stockpile credentials. See Leslie Gaines-Ross, Reputational Warfare, HARV. BUS. REV. 70, 73 (December 2010). O’Dell




relations52 experts tend to focus on reactionary strategies for socialmedia. This book goes beyond this and proposes a paradigm shift whichwill give back some measure of control to trademark holders, but also tosocial media providers and internet users. On the one hand by makingOSPs fully liable for secondary liability of trademark infringement, andon the other hand, by providing some degree of control to the internetusers by making transparent which use is authorized.

Social media providers perceive a loss of control since, even thoughthey operate under the aegis of the safe harbour provisions, they are stillheld liable for secondary liability of content infringement (as will bediscussed further in Chapter 7 ‘Intermediary Liability’).

Also internet users can perceive a loss of control. If internet users haveuploaded some infringing content online, it might have spread already todifferent platforms and they might not be able to remove the infringingcontent completely, damaging the reputation and goodwill of the trade-mark holder. Then, when the internet user is sued by the trademarkholder, the latter has the advantage in the evolving asymmetric legalconflict.

4.9 TECHNOLOGIES SUCH AS CLOUD COMPUTING

Technologies that have emerged can make enforcement of intellectualproperty rights, including the trademark logo, on social media moredifficult. For example if a social media provider makes use of cloudcomputing,53 it is not or not exclusively making use of its own servers. Ifa trademark holder wants to enforce its trademark logo on a social media

interviewed six experts: Jolie O’Dell, ‘6 Challenges to Managing a Brand on theSocial Web’, 30 June 2010, accessed 9 February 2015 at: http://mashable.com/2010/06/30/brands-social-web.

52 Andres Wittermann, ‘The Global Social Media Challenge: A SocialMarketer’s Guide to Managing Brands across Borders, IPRA, 10 April 2013,accessed 9 February 2015 at: http://ipra.org/itl/04/2013/the-global-social-media-challenge-a-social-marketer-s-guide-to-managing-brands-across-borders.

53 Dotcom: ‘There are many other sites that provide the same service as ours.Mediafire is based in the US offers exactly the same service as us. Rapidshare,Filesurf, Filesonic. Microsoft has their own service called Skydrive, Google islaunching a new service called Drive. Everyone is in this cloud arena, in thesame business, and has the same problems as we have, battling piracy. But weare not responsible for the problem’. Kim Dotcom (Schmitz), founder ofMegaupload, was interviewed by John Campbell of 3NewsNz, 1 March 2012,accessed 9 August at: http://www.youtube.com/watch?v=ZvrRaeHD5TE.




site whose content is uploaded in the cloud, this makes the social mediaprovider not the only possible addressee of such an enforcement action:other candidate addressees are the cloud infrastructure provider and thecloud service provider. Complicating factors from a forensic point ofview include: that data held in the cloud are likely to be replicated forreasons of performance, availability, back-up and redundancy;54 that thedata are stored in a distributed way via techniques that include sharding55

and other forms of partitioning, which means ‘that the data will likely bestored as fragments across a range of machines, logically linked andreassembled on demand, rather than as a single contiguous data set’;56

that the data are encrypted; and it is difficult, if not impossible, toestablish a link between the internet user who uploaded the content andthe content in the cloud, especially where user applications are allegedlyconfigured not to record such interactions.57 Once the infringing contentis located in the cloud it might be that the data are distributed overservers in different jurisdictions, with possibly different and conflictingintellectual property rights, privacy, data protection and evidential rules.Even if the cloud user, cloud service provider or cloud infrastructureprovider would comply with these requests, the identified internet usersmight be located in a place where, although the jurisdiction could beasserted, because harm was experienced locally,58 it is not economical todo so.

54 Ian Walden, Accessing Data in the Cloud: The Long Arm of the LawEnforcement Agent, QUEEN MARY SCHOOL OF LAW LEGAL STUDIESRESEARCH PAPER No. 74/2011, at 3.

55 ‘Sharding is a type of database partitioning that separates very largedatabases into smaller, faster, more easily managed parts called data shards’.Margaret Rouse, ‘Definition: What Is Sharding?’, Search Cloud Computing,December 2011, accessed 9 February 2015 at: http://searchcloudcomputing.techtarget.com/definition/sharding.

56 Walden, supra note 54.57 ‘One of the world’s most popular browsers, Internet Explorer from

Microsoft allows for “InPrivate” browsing that, at least allegedly, does not leaveany trace of the computer user having gone to any particular web site’. Joseph J.Schwerha IV, in ‘Law Enforcement Challenges in Transborder Acquisition ofElectronic Evidence from “Cloud Computing Providers”’, Draft DiscussionPaper, Council of Europe, 15 January 2010, at 1.

58 Michael Geist, Is There a There There: Toward Greater Certainty forInternet Jurisdiction, 16 BERKELEY TECH. L.J. 1345 (2002).




4.10 CONCLUSION

This chapter demonstrates that the following aspects either complicatethe effective enforcement of the trademark logo on social media or makeit sheerly impossible. Because of ample availability of copy-and-pastablepictures of unauthorized trademark logos on image search engines andsocial media sites, many internet users assume that they can uploadtrademark logos to social media without the authorization of the trade-mark holder. These uploaded pictures of unauthorized trademark logos onsocial media can spread rapidly over different social media platforms, sothat they can become impossible to remove completely. Thus, afteruploading, the internet user and possibly also the social media site can beheld liable at some point in the future. The uncertain boundaries of thetrademark logo in the law make enforcement nearly impossible, aggra-vated by new technologies, such as cloud computing, that are makingenforcement even more complex. Thus, this problem makes trademarkholders, social media providers and internet users, each in their own way,vulnerable after they have lost some of their control. The vast extent ofthe unauthorized use of the trademark logo in combination with thenon-scalability of litigation and arbitration leads to the prerequisite forany feasible solution that it is automated.




PART II

Inadequacy of the law

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5. Trademark infringement and itsdefences

Why use of trademarks on social media iscommercial and trademark logos areincompatible with the descriptive use defence

5.1 INTRODUCTION

Just as there is no continuum in being pregnant, there is no continuumin commercial use of a trademark. Either one uses a trademark

commercially or not.

This chapter demonstrates why the trademark logo on social media is notadequately protected against trademark infringement. When the markused by a defendant is too similar or identical with the trademark of aplaintiff on similar or identical goods or services, one would assume thatthe resulting likelihood of confusion can be remedied with a measureagainst trademark infringement. However, the protection of the trademarkright is not absolute: if the mark that causes a likelihood of confusion isused in a descriptive way, the descriptive use defences can be invoked.

The prerequisite of the trademark right is that the trademark must beused in a commercial way. Therefore the defence of non-commercial useof a trademark is often invoked when trademark infringement is alleged.

If the trademark is used in a commercial way without permission ofthe trademark holder so that it would cause actual confusion or alikelihood of confusion, it becomes clear that the freedom of expressionexemptions do not apply. Kozinski illustrated this in the context of USlaw: ‘Whatever first amendment rights you may have in calling the brewyou make in your bathtub “Pepsi” are easily outweighed by the buyer’sinterest in not being fooled into buying it’.1

1 Kozinski, supra, Chapter 1, note 39, at 973.

111



Chapter 5.2 will first describe and evaluate US and EU legislation inrelation to commercial use, together with the relevant jurisprudence.Following this introduction, the book will argue that in the case ofunauthorized trademark use of the trademark logo on social media itwould be difficult to maintain that there is no commercial use of thetrademark. Chapter 5.3 will look into the descriptive use defences in theUS and in the EU, as applicable in the case of trademark infringement,including on social media sites. Chapter 5.4 follows by looking at thebright line between legitimate and illegitimate unauthorized use of atrademark. Finally Chapter 5.5 concludes that the use of a trademark onsocial media is nearly always commercial and that the trademark logo isimmune from descriptive use defences.

5.2 COMMERCIAL USE

This section reviews commercial use of the trademark in the trademarklaw of the US and the EU, respectively. Since this book is about thetrademark logo on social media, it is appropriate to focus on these twojurisdictions, since the most valuable trademarks originate from the USand the EU, and most social media were developed in the US.

In the US, the Lanham Act makes clear that if someone, withoutconsent of the trademark holder, uses the trademark in a commercial wayand this leads to a likelihood of confusion or actual confusion he will beheld liable for trademark infringement.2 In other words: the use of atrademark in a commercial way is a precondition to imposing liability fortrademark infringement. This makes the non-commercial use of thetrademark a defence for trademark infringement.

The Lanham Act gives two examples of the term ‘use in commerce’,3

in connection with goods and in connection with services:A mark is used in commerce in connection with goods when;

it is placed in any manner on the goods or their containers or the displaysassociated therewith or on the tags or labels affixed thereto, or if the nature ofthe goods makes such placement impracticable, then on documents associatedwith the goods or their sale, and … the goods are sold or transported incommerce.4

2 15 U.S.C. § 1114.3 15 U.S.C. § 1127.4 15 U.S.C. § 1127(1).




One could argue that the use of a trademark logo on social media pagescould be seen as digital versions of documents that are associated withgoods or their sale.

A mark is used in commerce in connection with services when ‘it isused or displayed in the sale or advertising of services and the servicesare rendered in commerce’.5

So, use in commerce is the use of the trademark in bona fide businessactivities. The non-commercial use exclusion is designed to be used as anaffirmative defence. This means that the defendant can affirm that thetrademark has been used, but not in a commercial way – therefore thedefendant should be exonerated.

There is no case law regarding ‘commercial use’ in the context ofsocial media, yet. However, this book argues that the unauthorized use ofthe trademark logo on social media sites that all include advertisementscan be qualified as commercial use of the social media provider: to defacto allow the placement of the trademark logo on social media pageshelps make these pages more popular and one can argue that as aconsequence the social media provider could be held liable for secondaryliability.

In the absence of case law regarding ‘commercial use’ in the context ofsocial media, there is, however, relevant case law. In 1-800 Contacts, Inc.v WhenU.com, Inc.6 the Second Circuit decided in 2005 that thepurchasing of adware and pop-ups does not qualify as a use in com-merce: ‘[c]ommercial use is not the equivalent of “use in commerce”’.7

The Second Circuit decided that:

Not only are ‘use’, ‘in commerce’, and ‘likelihood of confusion’ three distinctelements of a trademark infringement claim, but ‘use’ must be decided as athreshold matter because, while any number of activities may be ‘in com-merce’ or create a likelihood of confusion, no such activity is actionable underthe Lanham Act absent the ‘use’ of a trademark. Because 1-800 had failed toestablish such ‘use’, its trademark infringement claims fail.8

However, in this case the court did not explicitly rule out that theprovider of adware and pop-ups could not be held liable for secondaryliability for trademark infringement.

5 15 U.S.C. § 1127(2).6 1-800 Contacts, Inc. v WhenU.com, Inc., Docket Nos. 04-0026-cv and

04-0446-cv (2d Cir. 27 June 2005).7 Merck & Co. v MediPlan Health Consulting, Inc., 431 F. Supp. 2d 425,

427 (S.D.N.Y. 2006).8 1-800 Contacts, Inc. v WhenU.com, Inc., supra note 6.

Trademark infringement and its defences 113



In Merck & Co. v Mediplan Health Consulting, Inc.9 in 2006, theDistrict Court for the Southern District of New York extended the 1-800Contacts doctrine to the realm of keyword triggered advertisements.10

Here too, the position of the provider of the keyword triggered advertise-ments was not questioned. In this case some of the defendants, Canadianonline pharmacies, purchased Merck’s trademark name Zocor as akeyword for the search engines of Google and Yahoo! to trigger their ownadvertisements or link to their own sites in special designated places nextto or above the search results. Judge Chin determined that using Zocor asa keyword to trigger the advertisement or website of the defendants in asearch engine cannot be considered as use of the mark in the sense of atrademark, as promulgated by 15 U.S.C. § 1127(1), since it is not:

placed in any manner on the goods or their containers or the displaysassociated therewith or on the tags or labels affixed thereto, or if the nature ofthe goods makes such placement impracticable, then on documents associatedwith the goods or their sale, and … the goods are sold or transported incommerce.11

Judge Chin considered it ‘internal use of the keyword “Zocor” [which] isnot use of the mark in the trademark sense’.12

9 ‘Here, in the search engine context, defendants do not “place” theZOCOR marks on any goods or containers or displays or associated documents,nor do they use them in any way to indicate source or sponsorship. Rather, theZOCOR mark is “used” only in the sense that a computer user’s search of thekeyword “Zocor” will trigger the display of sponsored links to defendants’websites. This internal use of the mark “Zocor” as a key word to trigger thedisplay of sponsored links is not use of the mark in a trademark sense’. Merck &Co. v Mediplan Health Consulting, Inc., supra note 7, at 22.

10 Read also Jonathan Moskin, Virtual Trademark Use: The Parallel Worldof Keyword Ads, 98 TMR 873.

11 Merck & Co. v Mediplan Health Consulting, Inc., supra note 7, at 415.12 With ‘internal use’ Judge Chin refers to 1-800 Contacts, Inc. v WhenU.

com, Inc. ‘A company’s internal utilization of a trademark in a way that does notcommunicate it to the public is analogous to an individual’s private thoughtsabout a trademark. Such conduct simply does not violate the Lanham Act, whichis concerned with the use of trademarks in connection with the sale of goods orservices in a manner likely to lead to consumer confusion as to the source of thegoods or services’. 1-800 Contacts, Inc. v WhenU.com, Inc., supra note 6, at 409.




In so deciding it appears Judge Chin is following Second Circuit lawthat treats ‘use in commerce’ the same for goods and services.13

However, one could also assert that the advertisements that will bedisplayed after the purchased keywords are typed in search engines is aservice and constitutes use in commerce.14 And besides the primaryliability of the buyers of a keyword triggered advertisement, it is difficultto qualify the unauthorized use of the trademark by providers of keywordtriggered advertisements other than as secondary liability for trademarkinfringement.

Use of the trademark ‘in the course of trade’ is the EU equivalent of‘commercial use’ of a trademark in the US. Here too, use of thetrademark ‘in the course of trade’ is a precondition for the determinationof a liability for trademark infringement. According to Article 5(1)a-bTrademark Directive 89/104/EEC,15 the trademark holder is only entitledto prevent all third parties that use their trademark unauthorizedly in thecourse of trade. The equivalent of this provision can be found in Article9(1)a-b Community Trademark Regulation 40/94/EC.16 So, just as in theUS, non-commercial use of the trademark can be used as a defence incase of trademark infringement.

The use in the course of trade was interpreted by the ECJ in ArsenalFootball Club v Matthew Reed in 2002 as use that ‘takes place in thecontext of commercial activity with a view to economic advantage andnot as a private matter’.17

Two related cases in 2006 and 2011 revolving around use by theEuropean Commission of the trademark Galileo for a satellite navigationsystem18 further clarified the law. In the Galileo cases first the ECJ and

13 See Rebecca Tushnet, ‘Keywords Revisited: Goods versus Services’,Rebecca Tushnet’s 43(B)log, 26 May 2006, accessed 9 February 2015 at:http://tushnet.blogspot.hk/2006/05/keywords-revisited-goods-versus_26.html.

14 Tushnet, id.15 Trademark Directive, supra, Chapter 2, note 11. In 2008, Directive

89/104/EEC was substituted by Directive 2008/95/EEC of the European Parlia-ment and of the Council of 22 October 2008 to approximate the laws of theMember States relating to trademarks.

16 Community Trademark Regulation, supra, Chapter 2, note 36. In 2009,Regulation 40/94 was substituted by Council Regulation (EC) No 207/2009 of 26February 2009 on the Community trademark.

17 Arsenal Football Club, supra, Chapter 2, note 125, para. 40.18 CFI, Galileo International Technology and others v Commission (Galileo

v Commission) (Case T-279/03), Judgment of the Court of First Instance, 10 May2006, para. 114 and Galileo International Technology v OHMI – Galileo




later the CJEU held that the Commission was not offering goods orservices on the market.

By using the word ‘Galileo’ in the context of the research, development anddeployment phases of the project, which precede the economic operationalphase proper, the Commission is not seeking to obtain an economic advantageover other operators, given that there are no operators in competition with itin that field.19

It is questionable whether research in the pre-market phase is non-commercial. Research forms the building blocks for all market activities.Whether research is for profit or not-for-profit, its results represent addedvalue, which arguably could all be qualified as commercial and commer-cially quantified.

The qualification ‘seeking to obtain an economic advantage over otheroperators’ is definitely applicable in the case of use of the trademark forkeyword triggered advertisements. The same can be said for the adver-tisements on social media sites which de facto allow the placement ofunauthorized trademark logos.

An affirmative defence of trademark infringement is that, although thetrademark is operated in a commercial way, it is not commercially usedby the defendant.

In Google France and Google, the CJEU joined three cases in whichGoogle operated as a reference service provider, permitting advertisers toselect keywords that are trademarks of Louis Vuitton, Viaticum andCNRRH.20 The keyword triggered advertisements are displayed under theheading ‘sponsored links’ or links to the sites of these competitors orcounterfeiters. The CJEU stated:

Although it is clear from those factors that the referencing service provideroperates ‘in the course of trade’ when it permits advertisers to select, askeywords, signs identical to trade marks, stores those signs and displays itsclients’ ‘ads’ on the basis thereof, it does not follow, however, from thosefactors that that service provider itself ‘uses’ those signs within the terms ofArticle 5 Directive 89/104 and Article 9 Regulation No 40/94.21

Sistemas y Servicios (GSS Galileo Sistemas y Servicios) (Galileo v OHMI) (CaseT-488/08), Judgment of the CJEU, 6 October 2011.

19 Galileo v Commission, id. and Galileo v OHMI, id.20 Google France and Google, supra, Chapter 2, note 95.21 Id., para. 55.




Thus, according to the CJEU, even though Google did operate in thecourse of trade, it did not itself use the trademark: ‘The fact of creatingthe technical conditions necessary for the use of a sign and being paid forthat service does not mean that the party offering the service itself usesthe sign’.22

In L’Oréal and Others, the CJEU held that if due to ‘their volume,their frequency or other characteristics, the sales made on a marketplacesuch as eBay went beyond the realms of a private activity’,23 sellers oneBay were acting in the course of trade. However, eBay, the operator ofthe online marketplace, did not use the trademark if it ‘provides a serviceconsisting in enabling its customers to display on its website, in thecourse of their commercial activities such as their offers for sale, signscorresponding to trade marks, it does not itself use those signs within themeaning of that EU legislation’.24

Therefore, EU case law demonstrates, just as in the US, that one canoperate a trademark in the commercial way with impunity as long as oneis not using the trademark directly for oneself. The interpretation of usein the course of trade (‘seeking to obtain an economic advantage overother operators’) in the EU differs from the definition of commercial use(attached to a product or document associated with the product or sale, oradvertised as a service) in the US. However, it seems that the courts inboth jurisdictions use these interpretations in their discretion, to rational-ize what they consider is fair and reasonable.

One can argue that trademarks used on social media pages are alwaysused in a commercial way. Social media providers exploit advertisementson their social media sites. If internet users upload unauthorized trade-mark logos on the social media sites, these can be perceived as moreattractive to internet users. Below are two examples that show how theuse of the unauthorized trademark on a site with one or more advertise-ments can be judged as commercial use of that trademark by the operatorof that site:

In People for the Ethical Treatment of Animals v Doughney,25 Dough-ney registered and operated the gripe-site peta.org. The Fourth Circuitheld that Doughney was liable for trademark infringement, because of hisuse of the PETA trademark with which he intended to divert consumersfrom the PETA website to his own website, either for commercial gain or

22 Id., para. 57.23 L’Oréal and Others, supra, Chapter 2, note 95.24 Id.25 People for the Ethical Treatment of Animals v Doughney, 263 F.3d 359

(4th Cir. 2001).




with the intent to tarnish the mark by creating a likelihood of confusionas to the source, sponsorship, affiliation, or endorsement of the site.26

Doughney’s website provided links to over 30 commercial operationsoffering goods and services: ‘By providing links to these commercialoperations, Doughney’s use of PETA’s mark is “in connection with” thesale of goods or services’.27

Another useful illustration of how the combination of unauthorized useof a trademark and advertisements on the same site can lead to adetermination of commerciality is the I Hate Ryan Air case.28 Althoughthere was no confusion for consumers about the source of the criticism,because of the name and address of the website (www.ihateryanair.org),the respondent was forced to hand over the website address to thetrademark holder. The reason was that the respondent received revenue of£322 from the commercial links on the site, and therefore took unfairadvantage of the complainant’s trademark, according to the expert of thedispute resolution provider.

One can only conclude that no continuum of commerce exists. Just asone is either pregnant or not, one receives money using a third party’sunauthorized trademark or not. In the case of social media it wouldtherefore be reasonable that the social media provider would be heldliable for secondary liability, since he has both the control to prevent theuploading of unauthorized trademark logos onto social media pages andbenefits financially from the increased popularity of the uploaded un-authorized trademark logos (see Chapter 7.3 ‘Vicarious Liability’).

One can argue there cannot be a secondary infringer without a directinfringer. However, one can argue that internet users benefit in acommercially expressible way from the increased attractiveness that isassociated with unauthorized use of the trademark logos. For exampleFacebook users upload a trademark logo unauthorizedly. These trademarklogos make Facebook more attractive (because they embellish their siteor the Facebook users can signal their personality to other Facebookusers in a better way, potentially attracting more internet users to orattract them more frequently to Facebook). By uploading trademark logos

26 Id., at 12.27 Id., at 8.28 Ryanair Limited v Robert Tyler, Dispute Resolution Service, D00008527,

Decision of Independent Expert, available at: Nominet Dispute-Resolution Ser-vice Policy, 28 July 2008, accessed 9 February 2015 at: http://www.nic.uk/disputes/drs/decisions/decisionssearch/?searchText=Ryanair&x=28&y=14. TheURL ihateryanair.co.uk is offline, but Robert Tyler has already registered theURL ihateryanair.org, which is online.




unauthorizedly the value of the service the Facebook users receive fromFacebook increases, because of the network effects (the more Facebookusers the merrier Facebook will become and the more valuable theservice is to Facebook users). To quantify the increase in value of theservice of Facebook users is difficult, but it is clear that neither Facebookusers nor Facebook pays anything for the increase in attractiveness of theservice in return, save the costs for notice-and-takedown procedures andlitigation. The value the Facebook user extracts from the trademarkholder he adds to the service he receives from Facebook. Therefore onecan argue that the trademark logo is used in a commercial way by theFacebook users, bartering the attractiveness of the trademark logo for animproved Facebook service (more users and more frequent users).

5.3 DESCRIPTIVE USE DEFENCES

The descriptive use defence for the descriptive use of a trademark can befound in the legislation of both the US and EU, see below. However, onecan argue that the descriptive use defence for the descriptive use of thetrademark logo, given its unique characteristics, is never possible (seeChapter 5.4 ‘Legitimate and Illegitimate Use of the Unauthorized Trade-mark’), so also not on social media sites. In fact, as both US and EU caselaw underlines, one can argue that the descriptive use defence for thetrademark name is no longer applicable when the trademark logo is alsoused. First some comments are made about the risks of allowingdescriptive use of the trademark name.

Frey argued that the public has an interest in not allowing individualsto create monopolies or other ‘barriers to competition by improperlyusing trademark law to remove words’, symbols, or product features fromgeneral use.29 In the same vein Mencken wrote: ‘Life’s apologies, butthe Goodrich Company must be aware that its trademark has passed intothe English language’.30 However, this process leads ultimately to

29 Michael G. Frey, Comment, Is it Fair to Confuse? An Examination ofTrademark Protection, the Fair Use Defense, and the First Amendment, 65 U.CIN. L. REV. 1255, 1260–61 (1997).

30 BF Goodrich Company claimed to have exclusive right in the use of theirtrademark ‘zipper’. Mencken refers toLIFE magazine’s reply to BF GoodrichCompany. Henry L. Mencken, THE AMERICAN LANGUAGE (2nd ed., NewYork: A.A. Knopf, 1921).




genericide,31 as can be illustrated by the Aspirin case, which metamor-phosed from Bayer’s trademark into a product category name in 1921,32

since it is easier to remember Aspirin than acetyl salicylic acid. Thus,Google’s opposition to33 the inclusion of the verb ‘to google’ in Merriam-Webster’s Collegiate Dictionary34 is in light of imminent genericideunderstandable. Although the definition is ‘to use the Google searchengine to obtain information about (as a person) on the World WideWeb’,35 Google’s problem with it is that the verb is lower-cased. And asthe American Press had already warned in 1952: ‘A trademark orbusiness can be lower-cased or misspelled to death’.36

When a plaintiff alleges that a third party is using his trademarkunauthorizedly in a commercial way and is holding the defendant liablefor trademark infringement, there are two varieties of the fair use defencethe defendant can invoke in the US. The defendant can make either aclassic fair use or a nominative fair use claim. Although the fair usedefences are mutually exclusive, some defendants use both and let thejudge determine which variety applies.37

When analysing which of the two fair use defences can be applied, ifat all, one should first make a basic distinction: is the trademark used ina primary, descriptive sense or in a secondary, trademark sense.38 In thelatter case, no claim on the fair use defences can be made. The differencecan be explained with the following example: in the case of thetrademark Beach Boys, if one uses the mark to describe boys who

31 Genericide is when a protectable trademark becomes generic. Gary H.Fechter and Elina Slavin, Practical Tips on Avoiding Genericide, 66 INTABULL. 20 (2011).

32 Bayer Co. v United Drug Co., supra, Chapter 2, note 90.33 Elinor Mills, ‘Google Says No “Googling” in Trademark Warning’,

CNET, 14 August 2006, accessed 9 February 2015 at: http://news.cnet.com/8301-10784_3-6105481-7.html.

34 Candace Lombardi, ‘Google Joins Xerox as a Verb’, CNET, 6 July 2006,accessed 9 February 2015 at: http://news.cnet.com/Google-joins-Xerox-as-a-verb/2100-1025_3-6091289.html.

35 Definition of ‘google’ in Merriam-Webster online dictionary, supra,Chapter 3, note 94.

36 DEATH OF A TRADEMARK, The American Press, February 1952,p. 20. Mentioned in Walter J. Derenberg, The Problem of Trademark Dilutionand the Antidilution Statutes, 44 CAL. L. REV. 439, 464 (1956) at footnote 115.

37 Brother Records, Inc. v Jardine, 318 F.3d 900 (9th Cir. 2003).38 ‘The fair use defense [allows] a junior user to use a descriptive term in

good faith in its primary, descriptive sense other than as a trademark”. J. ThomasMcCarthy, MCCARTHY ON TRADEMARK AND UNFAIR COMPETITION,11:45 (4th ed., New York: Thomson Reuters, 2001).




frequent a stretch of sand beside the sea, it would be use of a trademarkin a primary, descriptive sense. However, if one uses the trademark BeachBoys to indicate the music band it would be trademark use in asecondary, trademark sense.39

Brookfield Communications, Inc. v West Coast Entertainment Corp40

demonstrated that the line between primary and secondary meaning canbe thin. For instance, West Coast was deemed not to be infringingBrookfield Communications’ trademark ‘MovieBuff’ when it used‘Movie Buff’ as a metatag. The Ninth Circuit held that ‘Movie Buff’ wasthe primary, descriptive use of the trademark, referring to someone whois enthusiastic for watching movies, and ‘MovieBuff’ as the secondary,trademark use of the trademark.41 The space between the two wordsmade the difference.

Classic Fair Use Defence

A brief definition of the classic fair use defence can be found in NihonKeizai Shimbun v Comline Business Data: ‘[F]air use permits others touse a protected mark to describe aspects of their own goods’.42 Theclassic fair use defence is codified in the Lanham Act, 15 U.S.C.§ 1115(b)(4)43 and applies when the trademark is used in its primary,descriptive sense:44 when a defendant uses the plaintiff’s trademarkname, term or device of geographic indication to describe its ownproducts. This way the public’s right to use descriptive words in theirordinary descriptive sense prevails over the exclusivity claims of the

39 Brother Records, Inc. v Jardine, supra note 37.40 Brookfield Communications, Inc. v West Coast Entertainment Corp., 174

F.3d. 1036 (9th Cir. 1999).41 Id.42 Nihon Keizai Shimbun, Inc. v Comline Bus. Data, Inc., 166 F.3d 65, 73

(2d Cir.1999).43 Lanham Act, 15 U.S.C. § 1115(b)(4): ‘That the use of the name, term, or

device charged to be an infringement is a use, otherwise than as a mark, of theparty’s individual name in his own business, or of the individual name of anyonein privity with such party, or of a term or device which is descriptive of and usedfairly and in good faith only to describe the goods or services of such party, ortheir geographic origin’.

44 Use of a mark not in a trademark sense, but in a descriptive sense, and ingood faith. EMI Catalogue P’ship v Hill, Holliday, Connors, Cosmopulus, Inc.,228 F.3d 56, 64 (2d Cir. 2000).




trademark holder.45 In other words: because of this defence, descriptivewords are not monopolized by trademark holders who registered them,but can still be used to describe things needed for commercial andnon-commercial expressions.46 The provision includes the preconditionsthat the trademark is ‘used fairly’ and ‘in good faith’ which seemsuperfluous since the trademark will already be used in a descriptiveway.47

The 2004 Supreme Court case of KP Permanent Make-Up, Inc. vLasting Impression I, Inc.48 was about the generic words, and if notgeneric then descriptive words: ‘micro colors’ that were part of LastingImpression’s trademark logo.

The Supreme Court agreed with the District Court49 and overturned theNinth Circuit Appellate Court, when it determined that these words didnot acquire secondary meaning for the parties. At the District Court, KPPermanent claimed prior use of the words ‘micro colors’ before LastingImpression’s registration and also claimed the fair use defence.50 WhenLasting Impression conceded that KP Permanent did not use the words asa trademark, they gave KP Permanent the possibility of relying on theclassic fair use defence that the words were used merely to describe theirproduct.51

KP Permanent clarified that a likelihood of confusion does notpreclude a classic fair use defence.52 Just as the 1924 case Warner & Co.v Eli Lilly & Co. had already demonstrated: the use of a similar name by

45 CarFreshner Corp. v S.C. Johnson & Son, Inc., 70 F.3d 267, 269 (2d Cir.1995).

46 KP Permanent Make-Up, Inc. v Lasting Impression I, Inc., 543 U.S. 111,122, 125 S.Ct. 542, 160 L.Ed.2d 440 (2004).

47 Lanham Act, 15 U.S.C. § 1115(b)(4), supra note 43.48 KP Permanent Make-Up, Inc., v Lasting Impression I, Inc., supra note 46.49 KP Permanent was allowed declaratory relief against Lasting Impression

in the US District Court for the Central District of California. Judgment, CaseNo. SA-CV-00-276-GLT, (EEx) (C.D. Cal., 17 May 2001).

50 Abel and Sieber argued that the focus of the District Court in KPPermanent Make-Up should have been on prior use defence instead of on the fairuse defence. Then again, they remarked, the case would never have gone to theSupreme Court. Sally Abel and Albert Sieber, ‘The Supreme Court’s KPPermanent Decision Opens a Can of Worms’, Fenwick & West LLP, 2006,accessed 13 June 2015 at: http://www.fenwick.com/FenwickDocuments/fair_use_palooza.pdf.

51 KP Permanent Make-Up, Inc., v Lasting Impression I, Inc., supra note 46.52 Id.




another to describe one’s own product can be legal even if it confused thepublic about the origin of the goods.53

The Supreme Court concurred with the District Court and applied thethree-pronged test54 of 15 U.S.C. § 1115(b)4 for the classic fair usedefence:

1. the term only describes goods or services;2. the term is not used as a mark;3. the term is used fairly and in good faith.

It would be conceivable to include the absence of the use of a trademarklogo as a fourth prerequisite, as the Volkswagen Aktiengesellschaft55 casebelow will illuminate. However, one can also argue that the use of atrademark logo is not compatible with the third prerequisite that the termshould be used fairly and in good faith.

The Supreme Court interpreted the classic fair use defence of 15U.S.C. § 1115(b)4 strictly, so that the defendant claiming a classic fairuse defence has no burden to negate any likelihood that the practicecomplained of will confuse consumers about the origin of the goods orservices affected.56 In other words, mirroring the legal principle that theburden is on the challenger, instead of on the party being challenged.Machat concluded that any resulting confusion in these cases is not dueto the strength of a plaintiff’s mark, but rather due to its weakness.57 TheSupreme Court did not rule out that some degree of confusion could

53 ‘The use of a similar name by another to truthfully describe his ownproduct does not constitute a legal or moral wrong, even if its effect be to causethe public to mistake the origin or ownership of the product’. William R. Warner& Co. v Eli Lilly & Co., 265 U.S. 526, 528 (1924).

54 ‘After finding that Lasting had conceded that KP used the term only todescribe its goods and not as a mark, the District Court held that KP was actingfairly and in good faith because undisputed facts showed that KP had employedthe term “microcolor” continuously from a time before Lasting adopted thetwo-word, plural variant as a mark’. Supreme Court, KP Permanent Make-Up,Inc., v Lasting Impression I, Inc., supra note 46, at 3.

55 Volkswagen Aktiengesellschaft v Church (Volkswagen Aktiengesellschaft),411 F.2d 350 (9th Cir. 1969).

56 In contrast to the view of the Court of Appeals for the Ninth Circuit thatthere cannot be a fair use defence that leads to a likelihood of confusion. KPPermanent Make-Up, Inc., v Lasting Impression I, Inc., 328 F.3d 1061, 1073 (9thCir. 2003).

57 Michael Machat, The Practical Significance of the Supreme Court Deci-sion in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 95 TMR 825,831 (2005).




influence the fairness of the application of the fair use defence.58 But thequestion remains how much consumer confusion precludes a successfulclaim on the classic fair use defence.59

The classic fair use doctrine is also applicable in the social mediarealm: when an undertaking that uses a trademark without authorizationof the trademark holder uses the words merely in their ordinary,descriptive meaning to sell its products or services, it can invoke theclassic fair use defence.60

Instead of internet users on social media, social media providers canalso themselves try to invoke the descriptive fair use defence. On 29September 2011, Facebook was sued by Timelines, Inc. before the USDistrict Court for the Northern District of Illinois61 for using the nameTimeline for one of its main features,62 as introduced at the F8 Develop-ers Conference on 22 September 2011.63 Facebook argued before thecourt that Timelines and Timeline are generic terms64 and tried tosubstantiate this by a survey in which 68 percent agreed with thisstatement.65 Then Facebook asserted that Timelines’ mark is merely

58 ‘While we thus recognize that mere risk of confusion will not rule out fairuse, we think it would be improvident to go further in this case, for decidinganything more would take us beyond the Ninth Circuit’s consideration of thesubject. It suffices to realize that our holding that fair use can occur along withsome degree of confusion does not foreclose the relevance of the extent of anylikely consumer confusion in assessing whether a defendant’s use is objectivelyfair’. Supreme Court, KP Permanent Make-Up, Inc., v Lasting Impression I, Inc.,supra note 46, at 10.

59 Michael Fuller, ‘“Fair Use” Trumps Likelihood of Confusion in Trade-mark Law: The Supreme Court Rules in KP Permanent Make-Up, Inc. v LastingImpression I, Inc.’, B.C. INTELL. PROP. & TECH. F. 011001 (2006).

60 ‘In the social media space, a company that markets its product in a waythat merely uses words for their ordinary, descriptive meaning does not constitutetrademark use sufficient to offend the Lanham Act – even if those words happento be someone’s trademark’. Michael G. Atkins, ‘Social Media Law: TrademarkIssues’, Seattle Trademark Lawyer, undated, at 2, accessed 9 February 2015 at:http://seattletrademarklawyer.com/storage/Social%20Media%20Law.pdf.

61 Timelines, Inc. v Facebook, Inc., No. 11-cv-6867 (N.D. Ill. 1 April 2013),at 1.

62 Facebook Timeline can include a summary of a user’s life since birth,using updates made to a user’s profile on the website. Facebook, ‘IntroducingTimeline: A new kind of Profile’, 22 September 2011, accessed 13 June 2015 at:https://www.facebook.com/facebook/videos/2203694005397/.

63 Timelines, Inc. v Facebook, Inc., supra note 61, at 12.64 Id., at 14.65 Id., at 13.




descriptive and had not acquired the secondary meaning.66 However, thecourt deemed the evidence for this inadequate to support a motion for asummary judgment.67 Facebook then tried to invoke the fair usedefence68 and alleged that it did not use Timeline as a trademark and itsuse was merely descriptive of its offering, and it used the mark fairly andin good faith.69 However, Facebook founder and CEO Mark Zuckerbergundermined this assertion, because he had referred to ‘Timeline’ asFacebook’s ‘most important brand’,70 intended to replace its trademarked‘Wall’.71 According to the document Facebook filed at the Securities andExchange Commission on 2 May 2013, the case with Timelines, Inc. wassettled.72

Nominative Fair Use Defence

Just as with the classic fair use defence, the nominative fair use defencecan be applied in the social media realm. In the absence of any socialmedia-related jurisprudence, physical world examples can illustrate thedoctrine.

A brief definition of nominative fair use can be found in Saxlehner vWagner: ‘defendants are not trying to get the good will of the name, butthe good will of the good’.73 It also makes clear that ‘[t]he Lanham Actdoes not prohibit commercial rival’s truthfully denominating his goods acopy of a design in the public domain, though he uses the name of thedesigner to do so’,74 even if this leads to a substitution for another’sproduct, which is ‘a common method of advertisement that encouragescompetition’.75 Just as with the classic fair use defence, the nominativefair use defence can be based on 15 U.S.C. § 1115(b)(4).76

66 Id., at 14.67 Id. at 19.68 Which could be qualified as a classic fair use defence.69 Timelines, Inc. v Facebook, Inc., supra note 61, at 14.70 Id., at 10.71 Id., at 11.72 Facebook, Inc., Securities and Exchange Commission, Form 10-Q, (Quar-

terly Report), 2 May 2013, at 33.73 Saxlehner v Wagner, 216 U.S. 375, 380–81, 30 S.Ct. 298, 54 L.Ed. 525

(1910).74 Société Comptoir de L’Industrie v Alexander’s Dep’t Stores, Inc., 299

F.2d 33, 36 (2d Cir. 1962).75 Neutrik AG v Switchcraft, Inc., No. 99 Civ. 11931 (JSM), 2001 WL

286722, at 3 (S.D.N.Y. 23 March 2001).76 Lanham Act, 15 U.S.C. § 1115(b)(4), supra note 43.




Since the New Kids on the Block case77 the nominative fair use defenceacknowledges that there are cases where, for the purposes of comparison,critique or point of reference, there are no alternatives for the defendantbut to describe the plaintiff’s trademark. ‘Where a mark incorporates aterm that is the only reasonably available means of describing a charac-teristic of another’s goods, the other’s use of that term in a descriptivesense is usually protected by the fair use doctrine’.78

Two publishers could not refrain from mentioning the trademark NewKids on the Block in a survey, otherwise the respondents would not haveknown about which band they should give their opinion. In New Kids onthe Block,79 the judge provided a three-pronged test:

1. The product or service in question must be one not readilyidentifiable without use of the trademark. One could call this thesubsidiarity principle.

2. Only so much of the mark or marks may be used as is reasonablynecessary to identify the product or service. The defendant has tominimize its referral to the trademark. One could call this theproportionality principle. The principle was applied in this way:‘[b]oth The Star and USA Today reference the New Kids only tothe extent necessary to identify them as the subject of the polls;they do not use the New Kids’ distinctive logo or anything else thatisn’t needed to make the announcements intelligible to readers’.80

3. The user must do nothing that would, in conjunction with the mark,suggest sponsorship or endorsement by the trademark holder. Thisindicates that using a trademark logo is not compatible with theavoidance of affiliation confusion. One could call this the passivityprinciple.

There has been criticism of the New Kids on the Block81 doctrineconcerning the burden of proof. As mentioned above, it is a well-established principle of law that the plaintiff has the burden of proof,which was also applied in the classic fair use defence case KP PermanentMake-Up.82 However, in New Kids on the Block83 the plaintiff did not

77 New Kids on the Block v News America Publishing, Inc., case (971 F.2d302 (9th Cir.1992).

78 Id.79 Id.80 Id., at 23.81 Id.82 KP Permanent Make-Up, Inc. v Lasting Impression I, Inc., supra note 46.




have to prove that the consumers perceived a likelihood of confusion by,for example, applying the Sleekcraft test.84 But New Kids on the Blockinverted this by shifting the burden of proof to the defendant to negatethat he did nothing to suggest an affiliation between him and theplaintiff’s trademark,85 which is, in the words of Professor McCarthy,‘merely the other side of the confusion coin’.86 Doellinger noticed thatthe nominative fair use defence, created in the New Kids on the Blockcase, is more difficult to prove than the Sleekcraft test requires.87 Thiscould lead to a situation whereby on the one hand defendants could notprove that they were not involved in any affiliation confusion so that thecourt would not allow the nominative fair use defence,88 and on the otherhand, the court would allow the plaintiff summary judgment, even incases where the plaintiff would not be able to prove a likelihood ofconfusion.

The other Circuit courts have not followed the New Kids on the Blockdoctrine.89 In Brother Records, Inc. v Jardine90 in 2003, the same NinthCircuit that decided New Kids on the Block91 considered applying astronger likelihood of confusion doctrine in the nominative fair useanalysis. However, the Ninth Circuit argued that the application of theSleekcraft test,92 which focuses on the similarity of the trademark usedby the plaintiff and the defendant, would lead to the wrong conclusionthat all nominative fair uses are confusing. Then the Ninth Circuitcombined the nominative fair use analysis with the likelihood of confu-sion theory by arguing that the third step of the New Kids on the Blocktest, the passivity principle which aims to prevent any suggestion that theplaintiff’s trademark has sponsored or endorsed the mark of the defend-ant, is a derivative of the likelihood of confusion doctrine.

83 New Kids on the Block v News America Publishing, Inc., supra note 77.84 AMF, Inc. v Sleekcraft Boats, supra, Chapter 2, note 194.85 Chad J. Doellinger, Nominative Fair Use: Jardine and the Demise of a

Doctrine, 1 NW. J. TECH. & INTELL. PROP. 66 (2003).86 Brother Records, Inc. v Jardine, supra note 37.87 Doellinger, supra note 85.88 Number 3 of the New Kids on the Block test. Although one could argue

that indirectly a similarity between plaintiff and defendant’s mark could lead toconfusion about some kind of affiliation between the two. Supra note 77.

89 ‘The Second Circuit has come closest to adopting the test, simply byaccepting its use by its district courts below’. Abel and Sieber, supra note 50.

90 Brother Records, Inc. v Jardine, supra note 37, at 900.91 New Kids on the Block, supra note 77.92 AMF, Inc. v Sleekcraft Boats, supra, Chapter 2, note 194.




Should there be a likelihood of confusion test for nominative fair usedefence? Abel and Sieber93 criticize and discuss whether the test shouldbe changed, and in doing so referred to the controversial Century 21case,94 decided by the Court of Appeals for the Third Circuit in 2005,which even added a preliminary likelihood of confusion test to thethree-pronged New Kids on the Block test.95

Despite using a trademark without authorization in a commercial wayand in a confusing way one could still invoke the classic or nominativefair use defence. One could conclude that the common denominator ofboth the classic and nominative fair use defence is their incompatibilitywith the use of trademark logos. Besides, one can argue that thenominative fair use defence principles of subsidiarity, proportionality andpassivity should be applied to the classic fair use defence as well.

Comparable to the US, defendants in the EU can invoke defencesbased on a primary, descriptive use of the trademark. These defences arealso applicable in the realm of social media. And just as with the caselaw in the US, one can learn from the EU case law that the use ofunauthorized trademark logos is an indication that an invocation of thedescriptive use defence will be unsuccessful.

The EU limits the effects of trademarks in the course of trade inArticle 6 Directive 2008/95/EC96 and in its parallel provision of Article12 Regulation 207/2009/EC,97 if a third party uses his own name oraddress, or if indications are used that concern kind, quality, quantity,intended purpose, value, geographical origin, the time of production ofgoods or of rendering of the service, or other characteristics of goods orservices (comparable to the classic fair use defence in the US, see above).Additionally, a trademark holder cannot prohibit a third party from usinga trademark in the course of trade, where it is necessary to indicate theintended purpose of a product or service (comparable to the nominativefair use defence in the US, see above), in particular as accessories orspare parts. The condition is, however, that the person uses the trademark‘in accordance with honest practices in industrial or commercialmatters’.98

93 Abel and Sieber, supra note 50.94 Century 21 Real Estate Corp. v Lendingtree, Inc., 425 F.3d 211, 221,

229–31 (3d Cir. 2005).95 New Kids on the Block v News America Publishing, Inc., supra note 77.96 Supra note 15.97 Supra note 16.98 Article 6 Directive 2008/95/EC, supra note 15. Article 12 Council

Regulation No 207/2009/EC, supra note 16.




In Portakabin Ltd v Primakabin B.V., Primakabin made use of thetrademark Portakabin as a keyword, to sell second-hand Portakabin andPrimakabin mobile homes.99 So it made sense that Primakabin’s adver-tisements that were triggered included the Portakabin trademark name toindicate that the retailer sells second-hand Portakabins. However,Primakabin ‘did not enable normally informed and reasonably attentiveinternet users, or enables them only with difficulty, to ascertain whetherthe goods or services referred to by the advertisement originate from thetrade mark proprietor or from an undertaking economically linked to it ororiginate from a third party’,100 which would correspond to a breach ofthe passivity principle in the US.101 But Primakabin lost its chance tosuccessfully invoke a defence based on Article 6 Trademark Directive2008/95/EEC,102 since it had removed some of Portakabin’s trademarklogos from the mobile homes, so called debranding. Therefore, the CJEUheld that Primakabin could not claim to have acted in accordance withhonest practices in industrial or commercial matters, but it was up to thenational court to carry out the overall assessment of all relevant circum-stances to determine whether there is any evidence to justify thecontrary.103

In Hölterhoff v Freiesleben, Hölterhoff offered for sale particular cutsof precious stones.104 In order to describe these special characteristics ofthe precious stones, Hölterhoff refers to trademarks Spirit Sun andContext Sun, owned by Freiesleben, that cover these particular cuts.According to the ECJ, the reference cannot be interpreted by potentialcustomers as indicating the source of origin of the products.

No trademark logo was used, which would be confusing to potentialcustomers as indicating the source of origin of the product or suggestingan affiliation to the trademark holder. But one can argue that the additionof the words ‘style’ or ‘like’ to the trademark names Spirit Sun andContext Sun would completely eliminate every likelihood of confusion.

99 Portakabin, supra, Chapter 2, note 95.100 Portakabin, id., paras 54, 68.101 Third Factor of the New Kids on the Block test: ‘The user must do

nothing that would, in conjunction with the mark, suggest sponsorship orendorsement by the trademark holder. Again this indicates that using a trademarklogo is not compatible to avoid sponsorship or affiliation confusion. One couldcall this the passivity principle’. Supra note 77.

102 Supra note 15.103 Portakabin, supra, Chapter 2, note 95.104 Michael Hölterhoff v Ulrich Freiesleben (C-2/00), Judgment of the ECJ,

14 May 2002.




In O2 Holdings v Hutchison,105 Hutchison, which owns the mobilephone company 3, used bubbles imagery that was similar to the O2trademark logo which includes bubbles in a comparative advertisementcampaign.106 O2 was not entitled to prevent the use of a sign that issimilar to its trademark logo in a comparative advertisement:

where such use does not give rise to a likelihood of confusion and that is soirrespective of whether or not the comparative advertisement satisfies all theconditions laid down in Article 3a of Directive 84/450107 concerning mislead-ing advertising and comparative advertising, as amended by Directive97/55,108 under which comparative advertising is permitted.109

The question whether Article 3a(1) Directive 84/450/EEC110 must beinterpreted as meaning that a comparative advertisement in which theadvertiser uses the trademark of a competitor or a sign similar to thatmark is permitted only if that use is indispensable in order to make acomparison between the advertiser’s goods or services and those of thecompetitor. One can argue that a sign that is identical or similar to atrademark logo of a competitor is never indispensable, since one canrefer to the trademark name. This way the distinctiveness of the trade-mark will not be harmed.

In Adam Opel v Autec, the latter manufactured toy cars that are replicasof Opel and include the Opel trademark logo.111 The Federal SupremeCourt of Germany asked the ECJ for a preliminary ruling on whetherOpel should be able to prevent this unauthorized use of its trademarklogo. The ECJ ruled that there could only be trademark infringement

105 O2 Holdings Ltd and O2 (UK) Ltd v Hutchison 3G UK Ltd, supra,Chapter 2, note 242.

106 ‘3 Bubble Advert: Subject of O2 Bubble Case’, campaign video, accessed13 June 2015 at: http://www.youtube.com/watch?v=U_XFVYrQbzg&feature=plcp.

107 Council Directive 84/450/EEC of 10 September 1984 relating to theapproximation of the laws, regulations and administrative provisions of theMember States concerning misleading advertising.

108 Directive 97/55/EC of European Parliament and of the Council of 6October 1997, amending Directive 84/450/EEC concerning misleading advertis-ing so as to include comparative advertising.

109 O2 Holdings Ltd and O2 (UK) Ltd v Hutchison 3G UK Ltd, supra,Chapter 2, note 242.

110 Council Directive 84/450/EEC, supra note 107.111 Adam Opel v Autec (Case C-48/05), Judgment of the ECJ, 25 January

2007, para. 23.




where the use adversely affects the functions of the trademark, inparticular, its essential function.

Opel registered its trademark logo for cars but also for toys. One canargue that the ECJ’s determination, based on an explanation by thereferring German court, that the average consumer will understand ‘thatthe Opel logo appearing on Autec’s products indicates that this is areduced-scale reproduction of an Opel car’,112 does not preclude anylikelihood of confusion as to the origin or affiliation of the product withthe trademark. When the trademark logo is on a toy that seems to be aminiature version of the product of the same product, one would expectthat the trademark holder would authorize the dimensions and design.However, the German Federal Supreme Court confirmed that despite theregistration of the Opel trademark for toys that the essential function ofthe trademark was not harmed.113

Since this is a double identity case,114 one should expect that not onlythe origin and quality functions of the trademark are protected, but alsothe advertisement, communication and investment functions of the trade-mark (see Chapter 6 ‘Trademark Dilution and Its Defences’), just as inthe L’Oréal case.115 But a likelihood of a loss of distinctiveness of thetrademark logo was not even mentioned.

5.4 LEGITIMATE AND ILLEGITIMATE USE OF THEUNAUTHORIZED TRADEMARK

Since a trademark used on social media can almost exclusively bequalified as commercial use of the trademark, so that the non-commercialdefence can be excluded, the question remains when does commercialuse of a third party’s trademark on social media without explicitpermission constitute trademark infringement? If an undertaking uses atrademark name to inform the public that it is providing a product orservice related to the trademark product, it is in the interest of faircompetition and society at large that the undertaking is able to do so,

112 Id.113 Bundesgerichtshof, Opel Blitz II (Adam Opel v Autec), I ZR 88/08,

Judgment of 14 January 2010.114 ‘[I]f it is identical with the earlier trade mark and the goods or services

for which registration is applied for are identical with the goods or services forwhich the earlier trade mark is protected’. OHIM The Manual ConcerningOpposition Part 2, Ch. 1: Identity, at 4.

115 L’Oréal and Others, supra, Chapter 2, note 95, paras 2, 58 and 63.




basing its conduct on a descriptive use defence. However, these defencesare accepted by jurisprudence in the US and EU only under certainconditions. What is the bright line between legitimate and illegitimateunauthorized commercial use of a third party’s trademark? The bound-aries of unauthorized commercial use of the trademark can be illuminatedby two comparable automobile repair cases, one in the US, the other inthe EU.

Volkswagen Aktiengesellschaft v Church is a case in the US decided in1969 by the Ninth Circuit.116 The defendant, Douglas Church, opened anautomobile repair business, specializing in the repair of Volkswagen andPorsche vehicles. He did this first under the name ‘Modern VolkswagenPorsche Service’. In response to objections by Volkswagen, Churchchanged the name into ‘Modern Specialist’.

Also in response to objections by Volkswagen, Church started to addthe word ‘Independent’ in his advertising, to distinguish his businessfrom those of Volkswagen’s authorized or franchised dealers. Churchused a large sign on the front of his premises which read ‘ModernVolkswagen Porsche Service’ and changed it when the action was filedby Volkswagen into ‘Independent Volkswagen Porsche Service’.

The court held that Church’s early use of the word ‘Volkswagen’ aspart of his former business name ‘Modern Volkswagen Porsche Service’was unlawful. However, none of his subsequent practices infringedVolkswagen’s rights, because of Church’s ‘extensive use of the word“Independent” sufficiently distinguished his business from those affiliatedwith appellant’.117 According to the court ‘the terms “VolkswagenService” and “VW Service” did not belong exclusively to Volkswagen,but have come to mean in the mind of the public only that the advertiserservices Volkswagen vehicles’.118

It was not expected from Church that he avoid the use of the trademarknames Volkswagen or VW, which are the normal terms to signify the typeof cars Church repairs. However, Church should not advertise in amanner ‘which is likely to suggest to his prospective customers that he ispart of Volkswagen’s organization of franchised dealers and repair-men’.119

The Ninth Circuit upheld the District Court’s decision that Church’sadvertising did not constitute trademark infringement nor unfair com-petition. ‘The size, style and appearance of the advertising articles and

116 Volkswagen Aktiengesellschaft, supra note 55.117 Id., at 9.118 Id., at 9.119 Id., at 10.




displays were among these factors. Another was the fact that Church didnot use Volkswagen’s distinctive lettering style or color scheme, nor didhe display the encircled “VW” emblem’.120

BMW v Deenik is a case of 1999 decided by the ECJ,121 and iscomparable to the Volkswagen Aktiengesellschaft v Church case.122 Itdealt with the alleged unauthorized use in advertisements of the trade-mark of another famous car brand, BMW, for a garage business, whichincluded the sale of second-hand cars, repairs and maintenance of BMWvehicles. The ECJ was asked by the Supreme Court of the Netherlands togive a preliminary ruling that, based on the Trademark Directive 89/104/EEC,123 the trademark proprietor can only prevent the person of using themark if he creates the impression that his undertaking is affiliated to thetrademark proprietor’s network.124 BMW argued that:

the high probability that the manner in which the trade mark is used for thoseannouncements may create an impression among the public that the trademark is in that regard being used to an appreciable extent for the purpose ofadvertising his own business as such by creating a specific suggestion ofquality125

was not taken seriously by the court. The use of the trademark was seenas unavoidable.

Both the Volkswagen and BMW cases show that there is a broadconsensus in the US and EU that proprietors cannot prevent undertakingsthat can only sell their product or service by referring to a third party’strademark. They must be able to do so, because it furthers fair com-petition. So they use the trademark of a third party in a commercial waywhich constitutes trademark infringement, but they can claim a descrip-tive use defence, under the condition that they do not suggest anysponsorship, endorsement or affiliation by the brand whose trademarkthey use. Therefore, as the Volkswagen case makes explicit and the BMWimplicit, the unauthorized use of the trademark logo and the use of

120 Id., at 12.121 Bayerische Motorenwerke AG (BMW) and BMW Nederland BV v Ronald

Karel Deenik (Case C-63/97), Judgment of the ECJ, 23 February 1999. See alsothe Opinion of the Advocate General in Google France and Google (GoogleFrance SARL and Google Inc. v Louis Vuitton Malletier SA) (C-236/08), 22September 2009.

122 Volkswagen Aktiengesellschaft, supra note 55.123 Supra Chapter 2, note 11.124 Bayerische Motorenwerke AG (BMW), supra note 121, para. 44.125 Id.




distinctive lettering and style should be avoided and could be grounds forwhich any recourse to a descriptive use defence become ineffective.

Proprietors of trademarks sometimes need to tolerate the limitation oftheir exclusive rights, so that the competition in a fair market will not bestifled.126 However, one can argue that these restrictions need to belimited, by applying the principles of subsidiarity, proportionality andnon-affiliation.

The trademark logo has such special characteristics which exclude anydescriptive use defences in case of a trademark infringement claim,127

since the trademark logo, representing a brand, can be accuratelydescribed by the trademark name of the brand, without the need to usethe trademark logo.

5.5 CONCLUSION

To apply fair use defences ‘fairly and in good faith’128 in the US or thedescriptive use defence ‘in accordance with honest practices in industrialor commercial matters’129 in the EU, it seems reasonable to apply theNew Kids on the Block doctrine, so that the use of the trademark will betested against principles of subsidiarity, proportionality and passivity(non-affiliation). One can argue that these three principles can besatisfied when:

1. The use of a trademark logo is precluded, because the defendantcan substitute the trademark logo for a trademark name, whichalready clarifies to which the product the defendant is referring to(subsidiarity principle);

126 A rare exception is honest concurrent use. An example is BudejovickyBudvar v Anheuser-Busch where both use the identical trademark name Bud-weiser registered for an identical product, although they have different trademarklogos. Budweiser case Budejovicky Budvar Narodni Podnik v Anheuser-Busch,Inc. [2012] EWCA Civ 880.

127 ‘… using a trademark owner’s logo often crosses the line, because itsword mark alone almost always would suffice to convey the desired message’.Atkins, supra note 60, at 4.

128 Lanham Act, 15 U.S.C. § 1115(b)(4).129 Article 6 Directive 2008/95/EC, supra note 15. The parallel provision can

be found in article 12 Regulation 207/2009/EC, supra note 16.




2. Trademark logos do not lend themselves well to be used in aminimal way130 (proportionality principle);

3. One can argue that any use of a trademark logo by the defendantdirectly suggests some kind of affiliation with the plaintiff’s trade-mark (passivity principle). The passivity principle might be over-come if there comes into being a convention of using trademarklogos in a distinctive way that makes clear that there is noendorsement, sponsorship or affiliation between the trademarkholder and trademark user.131

One can also deduce from the EU case law some principles applicable todescriptive use defences. In the Galileo cases, OHIM132 and the GeneralCourt133 came to the conclusion that the conceptual comparison betweentwo identical trademark names should take into consideration the contextof the entire mark: including the figurative elements, size and overalldominant impression and in relation with the goods and services forwhich it is registered. The Galileo134 and Portakabin135 cases confirmedthat the trademark logo can make the difference. The source-identifyingfunction of the trademark is favourably affected if a keyword wasenriched with a trademark logo, so that it would enable normallyinformed and reasonably attentive internet users, or enables them onlywith little difficulty, to ascertain whether the goods or services referred toby the advertisement originate from the proprietor of the trademark or anundertaking economically connected to it or, on the contrary, originatefrom a third party.136

These cases show that courts in the US and in the EU confirm theimportance of the trademark logo in determining whether a user of the

130 If one insists on using trademark logos, could think about thumbnails orlow resolution versions of the trademark logo.

131 For example, one can think of a red ring around the logo.132 Galileo v Commission, supra note 18.133 Galileo v OHMI, id.134 Galileo v Commission, id., Galileo v OHMI, id.135 Portakabin, supra, Chapter 2, note 95.136 In contrast to the wording: ‘The function of indicating the origin of the

mark is adversely affected if the ad does not enable normally informed andreasonably attentive internet users, or enables them only with difficulty, toascertain whether the goods or services referred to by the ad originate from theproprietor of the trade mark or an undertaking economically connected to it or,on the contrary, originate from a third party’. Portakabin, supra, Chapter 2, note95, and Google France, supra, Chapter 2, note 95, paras 83, 84.




trademark is suggesting sponsorship, endorsement or affiliation. There-fore it seems peculiar that legislation in neither jurisdiction is providingadequate protection against unauthorized use of trademark logos onsocial media. Especially since it can be determined that social media sitesexploit advertisements, so that unauthorized trademark logos on socialmedia will be used in a commercial way.




6. Trademark dilution and its defences

How to reconcile freedom of expression withthe protection of the trademark logo

6.1 INTRODUCTION

Reputation comes on foot and leaves on horseback.1

The last chapter demonstrated trademark law’s lack of adequate protec-tion of the trademark logo on social media against trademark infringe-ment. One of the main problems was that, despite counter-indications,commerciality was not always assumed. This chapter will examinewhether trademark law is protecting the trademark logo on social mediaagainst trademark dilution in the US or its equivalent in the EU, called‘unfair advantage or detriment to the distinctive character or repute of thetrademark’.

Where measures against trademark infringement should protect againstmisrepresentation via confusion-related functions of the trademark (asdiscussed in Chapter 2.8), measures against trademark dilution aresupposed to protect against misappropriation of the famous trademark orthe trademark with a reputation via the proprietary functions of thetrademark that protect the communication, advertising and investmentfunctions of the trademark and that must guarantee its reputation,goodwill, signalling identity and accountability.

Justice Arnold remarked that courts have found it difficult to developcoherent and workable principles within the field of dilution.2 This points

1 Translation of ‘Reputatie komt te voet en gaat te paard’, which is a Dutchsaying.

2 ‘Although the thinking behind it goes back as far as Schechter’s seminal1927 article in the Harvard Law Review [supra, Chapter 1, note 83] thelegislative provisions are still relatively new to our law and indeed mostEuropean laws. As of yet the courts have found it difficult to develop coherentand workable principles within this field. It is possible that extended protectionsimply is incapable to being developed into a clear body of law. But I suggest it

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to some of the challenges ahead. Unintimidated, this chapter attempts todevelop coherent and workable principles so that the right of thetrademark holder to protect the trademark logo on social media againsttrademark dilution can be reconciled with the right to freedom ofexpression by third parties, including internet users.

The chapter consists of two sections: trademark dilution (Chapter6.2–3) and the defences against trademark dilution (Chapter 6.4). Thischapter answers the question why the current trademark dilution law andthe defences provide insufficient protection for the trademark logo onsocial media.

Firstly, Chapter 6.2 discusses the rationale of the trademark dilutiondoctrine. Chapter 6.3 then examines the legislation and case law abouttrademark dilution in the US and about the unfair advantage of ordetriment to the distinctive character or repute of the trademark in theEU.. Finally, Chapter 6.4 looks into the trademark dilution defences inthe case of parody, comment or criticism.

6.2 RATIONALE OF THE TRADEMARK DILUTIONDOCTRINE

The rationale for the trademark dilution law against non-confusing,3

non-competing use of a famous trademark or a trademark with areputation is to protect it against any negative impact it might have on itsdistinctiveness, individuality, originality, uniqueness, identity, reputation,goodwill, significance, drawing power, selling power,4 advertisingpower,5 commercial magnetism6 and prestige. Handler succinctly stated:‘Dilution protects the mark while confusion protects the business’.7

is a bit premature to reach that conclusion just yet’. Justice Arnold, ‘BrandProtection and Competition’, IBIL, UCL, 27 January 2010, accessed 13 June2015 at: http://www.ucl.ac.uk/laws/ibil/index.shtml?events_past.

3 Article 8(5) does not require proof of likelihood of confusion, even wherethere is no similarity between the goods in question. SABEL BV, supra, Chapter2, note 230.

4 Schechter, supra, Chapter 1, note 83, at 831.5 Beverly W. Pattishall, Dawning Acceptance of the Dilution Rationale for

Trade-Mark Identity Protection, 74 TMR 289, 297 (1984).6 Mishawaka Rubber, supra, Chapter 1, note 1, at 205.7 With protecting the mark, Handler meant protection against the impair-

ment of distinctiveness or the harm of reputation. With protecting businessHandler meant that the doctrine protects against trademark use for competing




The discussion of trademark dilution as ‘the gradual whittling away ordispersion of the identity and hold upon the public’s mind of the mark orname by its use upon non-competing goods’8 was initiated by Schechter’sarticle in the Harvard Law Review in 1927.9 Schechter was an advocatefor the right of trademark holders to extend the use of their trademark foractivities that involved other products or services, and this was notnecessarily limited to famous trademarks or trademarks with a reputation(as will be discussed in Chapter 6.3). In contrast to Schechter’s substan-tial legacy, modern defences against trademark dilution do not take intoaccount whether the future ‘normal exploitation’ of the mark will beconflicted (conform the second step of the three-step test for copyrightlimitations and exceptions in the EU, but not according to the two-steptest for trademark limitations and exceptions in the EU, as will bediscussed in Chapter 6.4) or whether the effect of the use upon thepotential market is negatively influenced (conform step four of the fairuse test for copyright in the US, but not according to the fair use test fortrademark in the US, see below). Another problem of contemporarytrademark law is its flawed classification system for trademark registra-tion (see Chapter 6.3). The argument for the use of an identical trademarkname used by multiple proprietors active in different fields is that itwould not be a problem if they operated in separate markets as it is notlikely that the public will be confused. However, in times of internet andglobalization, exclusive protection for famous trademarks or trademarkswith a reputation across the different designated goods or services classesis unfeasible and outdated (see Chapter 6.3 ‘Problems with identicaltrademarks for dissimilar goods and services’).

Schechter posed the question whether ‘the preservation of the unique-ness of a trademark should constitute the only rational basis for itsprotection’.10 The unique character of the trademark, especially thetrademark logo, could be interpreted as ‘one of its kind’ and implies thatit needs to remain unique for all activities. This chapter will answer thequestion why trademark logos, besides those that are famous or have areputation, have such a Schechterian quality of singularity that a higherlevel of protection in comparison to the current level of protectionbecomes imperative.

products or services. Milton W. Handler, Are the State Anti-Dilution LawsCompatible with the National Protection of Trademarks?, 88 TMR 419 (1998).

8 Schechter, supra, Chapter 1, note 83.9 Schechter, id.

10 Schechter, id., at 831.

Trademark dilution and its defences 139



A distinction between the trademark dilution by blurring doctrine andthe trademark dilution by tarnishment doctrine is made below. After thatthe relevance will be discussed for the trademark dilution doctrine ofArticle 6bis Paris Convention and Article 10bis Paris Convention, respec-tively.

The gradual whittling away, lessening, watering down, debilitating,undermining, eroding and insidious gnawing away of the distinctivenessof the trademark has been described as trademark dilution by blurring, orhyperbolically as ‘death by a thousand cuts’,11 ‘stung by a hundredbees’,12 or euphemistically as ‘picking the proverbial cherry from the topof their cake’.13 An important but unjustly ignored rationale for thetrademark dilution doctrine is that trademark holders of famous marks ormarks with a reputation deserve to keep the possibility to extend the useof their trademark and enter into new related14 or non-related fieldsthemselves or allow others via licensing (see Chapter 6.3).

Where the source-identifying function of the trademark is adverselyaffected, and the search costs for consumers are not cut short butextended, liability for trademark infringement can be determined, asalready discussed in Chapter 5. However, Judge Posner asserted15 thattrademark dilution can also lead to increased mental search costs forconsumers.16 If every product one comes across is called Coca-Cola, onewould have to think twice in case an advertisement of Coca-Cola by thesenior user of the mark selling carbonated soft drink was shown.Trademark infringement deals with the question whether two products orservices are from the same source. In contrast, trademark dilution dealswith the question of whether the famous trademark or trademark with areputation for a product or service can be retrieved from memory.17

11 Beebe, supra, Chapter 2, note 87, at 1143, 1163.12 McCarthy, supra, Chapter 5, note 38, § 24:94.13 Anca Musat, ‘Trademark Infringement: Any Room for the Parody

Defense in Romania?’, Business Review /Bucharest Lawyer, June 2007, at 10,accessed 9 February 2015 at: http://www.musat.ro/pdf/Bucharest%20Lawyer%20-%20Anca%20Musat%20-%20June.pdf.

14 Hormel Foods, supra, Chapter 2, note 91, at 504.15 Ty, Inc. v Perryman, 306 F.3d 509 (7th Cir. 2002).16 ‘The mark holder surely benefits from the FTDA’s preservation of her

mark’s uniqueness, but consumers also benefit, as they experience a moreefficient market’. Brian A. Jacobs, Note, Trademark Dilution on the Constitu-tional Edge, 104 COLUM. L. REV. 161, 188 (2004).

17 Rebecca Tushnet, Truth and Advertising: The Lanham Act and Commer-cial Speech Doctrine, 58 S.C. L. REV. 737 (2007).




The trademark dilution doctrine is also relevant for trademark logos ofcollective trademarks and certification trademarks. A distinction must bemade between members and non-members, in the case of collectivetrademarks, and between companies that did and those that did not pass acertain standard, in the case of certification trademarks. So here tootrademark dilution by blurring or trademark dilution by tarnishment canoccur if a non-member uses the collective trademark or if a company thatdid not pass a certain standard uses the certification mark.

Trademark dilution by tarnishment could be defined as the harm to thereputation or goodwill that was caused by the unauthorized use of atrademark in an unsavoury way. However, there must be the assumptionthat the consumer, after seeing the junior mark used in an unsavoury way,will blame the famous senior mark/mark with a reputation. Pattishall18

and Moskin19 have questioned the efficacy of this contagion theory.20

However, it seems safe to assume that, for example, it will not beconducive for the commercial magnetism of a trademark such as LouisVuitton, if a Louis Vuitton aficionado is exposed to a streetscapedominated by fake Louis Vuitton products.

A more radical view on trademark dilution is espoused byMagliocca.21 He asserted that all second uses of trademarks are perdefinition infringing,22 which makes enforcement potentially simple andeffective.

Article 6bis Paris Convention

Article 6bis was added to the Paris Convention in 1925,23 especially toprotect those first users in a member country of the Union of the ParisConvention that have not registered or used it in another member country ofthe Union, against those that register or have registered a mark that isalready well known in the country of origin and in the country whereprotection is sought, for identical or similar goods or services, and which

18 Pattishall, supra note 5, at 307.19 Jonathan Moskin, Dilution or Delusion: The Rational Limits of Trade-

mark Protection, 83 TMR 122, 146 (1993).20 Simon Fhima, supra, Chapter 2, note 142, at 161, footnote 7.21 Gerard N. Magliocca, One and Inseparable: Dilution and Infringement in

Trademark Law, 85 MINN. L. REV. 949, 983 (2001).22 Magliocca, id., at 983.23 Article 6bis Paris Convention, supra, Chapter 2, note 2.




use could be confusing.24 Callmann25 appealed to no avail to includeprotection against non-confusing marks for non-competing goods or ser-vices. Also the International Chamber of Commerce (ICC) proposed in vainan amendment to Article 6bis Paris Convention, to make the protectionapplicable to marks registered or used for dissimilar products.26

Only in 1994 did Callmann and the ICC’s dream become a reality:Article 16(3) TRIPS27 extended the scope of Article 6bis Paris Conven-tion’s protection to dissimilar goods and services, under the conditionsthat the use of the trademark would indicate a connection between thegoods/services and the trademark holder, and that it would likely causedamage to the trademark.28 Therefore, the Article 16(3) TRIPS29 incarna-tion of Article 6bis Paris Convention is relevant to this book.

Article 10bis Paris Convention

Article 10bis Paris Convention30 prescribes that countries of the Unionmust assure their nationals effective protection against unfaircompetition. Article 10bis(2) Paris Convention states that ‘[a]ny act of

24 Article 6bis(1) Paris Convention, since the revision of Stockholm in 1967.The countries of the Union undertake, ex officio if their legislation so permits, orat the request of an interested party, to refuse or to cancel the registration, and toprohibit the use, of a trademark which constitutes a reproduction, an imitation, ora translation, liable to create confusion, of a mark considered by the competentauthority of the country of registration or use to be well known in that country asbeing already the mark of a person entitled to the benefits of this Convention andused for identical or similar goods. These provisions shall also apply when theessential part of the mark constitutes a reproduction of any such well-knownmark or an imitation liable to create confusion therewith. See id.

25 Rudolf Callmann, Thoughts on the Protection of World Marks, 44 TMR1134 (1954).

26 Stephen P. Ladas and Charles Magnin, ‘Well-Known Trade Marks’,presentation at 13th International Chamber of Commerce Congress, Lisbon, June1951. Derenberg, supra, Chapter 5, note 36, at 484, footnote 194.

27 Article 16(3) TRIPS, supra, Chapter 2, note 26.28 Article 16(3) TRIPS, id.: ‘Article 6bis of the Paris Convention (1967)

shall apply, mutatis mutandis, to goods or services which are not similar to thosein respect of which a trademark is registered, provided that use of that trademarkin relation to those goods or services would indicate a connection between thosegoods or services and the owner of the registered trademark and provided thatthe interests of the owner of the registered trademark are likely to be damaged bysuch use’.

29 Article 16(3) TRIPS, id.30 Article 10bis Paris Convention, supra, Chapter 2, note 2.




competition contrary to honest practices in industrial or commercialmatters constitutes an act of unfair competition’.31 Trademark dilutionarguably falls within this collection of acts of unfair competition.Especially since the wording of Article 10bis(3) Paris Convention32 is‘The following in particular shall be prohibited’, which makes clear thisis a non-exhaustive list which could include trademark dilution.

At the Quebec Congress of the ICC33 it was proposed to amend Article10bis Paris Convention34 to include: ‘The use or registration by a personof a mark which by reason of its originality and uniqueness or of its longand exclusive use by another has come to symbolize and identify hisentire business or commercial activity shall be deemed an act of unfaircompetition ‘.35 The wording of ‘originality and uniqueness’ is interest-ing, since it is in the spirit of Schechter’s proposal to protect coined,invented, fanciful or arbitrary marks, which fit within the description of‘original’, instead of the famous or well-known marks. The word‘uniqueness’, which can be defined as ‘one of its kind’, could beinterpreted as to point to the right of the trademark holder to extend theactivities of its trademark (see below).

6.3 LEGISLATION AND CASE LAW

This section examines the legislation and case law, starting with somecases of trademark dilution avant la letter and followed by an examin-ation of the legislation and case law in the US, where a distinction ismade between dilution by blurring, dilution by tarnishment and free-riding. Then a discussion on the legislation and case law in the EU makesa distinction between detriment of distinctiveness, detriment of reputeand use without due cause. It also analyses the double-identity case ofDavidoff,36 and the keyword triggered advertising case of Interflora,37

which sheds a light on both the source function and the advertising/investment function of the trademark.

31 Article 10bis Paris Convention, id.32 Article 10bis Paris Convention, id.33 Quebec Congress of the International Chamber of Commerce, 12th

Congress, Summer 1949. Derenberg, supra, Chapter 5, note 36, at 487, footnote212.

34 Article 10bis Paris Convention, supra, Chapter 2, note 2, revision of TheHague, 6 November 1925.

35 Derenberg, supra, Chapter 5, note 36, at 488.36 Davidoff, supra, Chapter 2, note 248.37 Interflora, supra, Chapter 2, note 128.




In the UK, in Eastman Photographic Materials Co. Ltd. v JohnGriffiths Cycle Corp. Ltd., the trademark name Kodak, manufacturer ofphotographic material, was used by a defendant to sell bicycles in 1898,38

benefiting from the plaintiff’s investments in the mark, the British courtunder Justice Romer wrestled to come up with a solution that servedjustice using the doctrines that were available at the time. For thispurpose Justice Romer determined that there was an ‘intimate connectionbetween the bicycle trade and camera trade’,39 which, according to him,caused a likelihood of confusion. One can argue that the judge was tryingto put a square peg into a round hole, and applying a trademark dilutionby blurring doctrine avant la lettre in the process.

Another example which could be qualified as dilution by blurringavant la lettre is the Duro Pump & Mfg. Co. v Cal. Cedar Products Co.case of 1926,40 in which Justice Robb wrote: ‘If the Californian CedarProducts Company were permitted to use this mark, which has come torepresent the Duro Company and its product to the public, othercompanies likewise might use it, with resultant loss of identity of theDuro Company’.41 The judge determined that the mark Duro registeredfor pneumatic pressure systems by one proprietor could not also beregistered for manufacturing wall board materials by another proprietor.

In the US, the German émigré Schechter was familiar with the GermanOdol case,42 in which the loss of drawing power of a mark fornon-competing products was protectable.43 Schechter’s insights on

38 Eastman Photographic Materials Ltd. v John Griffiths Cycle Corp. Ltd.(1898) 15 R.P.C. 105.

39 Romer J., at 110 wrote: ‘At one recent large cycle show the Plaintiffcompany had a stall, and the evidence shows that between the two trades, thebicycle trade and the camera trade, there is an intimate connection’. Id.

40 Duro Pump & Mfg. Co. v. Cal. Cedar Products Co., 11 F. (2nd) 205 (Ct.of Appeal D.C. 1926). Read also Anonymous, Trade-Marks, Manufacturer ofWall Board Materials Not Entitled to Registration of Mark Used for PneumaticPressure Systems, 8 BUS. L.J. 51 (1926).

41 Id.42 ‘Odol ’ Landgericht Elberfeld, 11 September 1924, Juristische Wochen-

schrift 1925, 502. Kamperman Sanders, supra, Chapter 2, note 79, at 51.43 Regarding the junior mark being registered for non-competing goods or

services, the German Court wrote: ‘That, however, is beside the point. Thecomplainant has created a demand for its goods, while employing thereon a wordhaving drawing power, for only through the year-long activity of complainantwas its selling power acquired … Complainant’s ability to compete with othermanufacturers of mouth wash will be impaired if the significance of its mark islessened’. Id.




‘dilution’44 can be found in his influential Harvard Law Review article of1927 entitled ‘The Rational Basis of Trademark Protection’, in which headvocated the protection against ‘[t]he gradual whittling away or disper-sion of the identity and hold upon the public mind of the mark or nameby its use upon non-competing goods’.45

Schechter testified before a Congressional Commission in 193246

about a revision of the trademark law, called the Perkins Bill,47 which hedrafted and in which he did not propose the protection of famous marksor marks with a reputation but did propose the protection of registeredmarks that are ‘coined or invented or fanciful or arbitrary’ againstconfusing marks but also against users that ‘injure the good will,reputation, business credit or securities of the owner of the previous usedtrade-mark’.48

In 1934, after Irving’s Yeast-Vite Ltd. v Horsenail,49 in which theHouse of Lords held that a reference to the Horsenail’s yeast tablet asbeing ‘a substitute for Yeast-Vite’ was not use of the plaintiff’s ‘Yeast-Vite’ mark in the trademark sense, the Goschen Committee in the USrecommended changing the trademark law in regard to collateral refer-ences, which used disclaimers such as ‘a substitute for’, ‘an equivalentof’, ‘as good as’ or ‘X-type’.50 Despite the recommendation, the trade-mark law remained unchanged in this respect.

In 1963, in Polaroid Corp. v Polaraid, Inc.51 the Seventh Circuit madeit clear that the plaintiff should not have to share with anyone the ‘effortand expenditure of large amounts of money’, in other words: theinvestments made by the plaintiff which gained him his reputation. In1977, in Allied Maintenance Corp. v Allied Mechanical Trades, Inc.,52

the defendant’s use of the plaintiff’s trademark for dissimilar products

44 However, Schechter did not actually use the term dilution. Supra, Chapter1, note 83.

45 Schechter, id.46 Frank I. Schechter’s testimony: Hearings before the House Committee on

Patents, 72d Cong., 1st Sess. 15 (1932).47 Perkins Bill, H.R. 11592, 72d Cong., 1 Sess. (1932).48 Id., § 2(d)(3).49 Irving’s Yeast-Vite Ltd. v Horsenail, 51 R.P.C. 110 (1934).50 Goschen Committee, Board of Trade, Report of the Departmental Com-

mittee on the Law and Practice Relating to Trade Marks 80, § 185 (1934), at 50.51 Polaroid Corporation v Polaraid, Inc., 319 F.2d 830, 837 (7th Cir, 1963).52 Allied Maintenance Corporation v Allied Mechanical Trades, Inc., 42 NY

2d 538, 369 NE 2d 1162, 399 NYS 2d 628, 198 USPQ 418, 422 (1977).




had been compared with ‘cancerlike growth’ which ‘feeds upon thebusiness reputation of an established distinctive trademark or name’.53

During the long formation of the Lanham Act, the dilution doctrinewas never implemented. Callmann, another German émigré trademarkscholar in the US,54 became a prolific advocate of Schechter’s ideas afterhe passed away in 1937. Several states implemented anti-dilution laws intheir common law legislation, which showed some variety.55

Only much later, in 1995, were Schechter’s ideas on dilution imple-mented in a federal statute, although in an adulterated form: the FederalTrademark Dilution Act (FTDA).56 Trademarks eligible for the protectionof the FTDA have to be famous, which is a radical departure from thepremise that trademarks with coined, arbitrary and fancy terms would beeligible for protection, as Schechter had imagined.

In 2003, in Moseley v V Secret Catalogue, Inc.,57 the US SupremeCourt held that the FTDA applied only when the plaintiff could proveactual dilution instead of a likelihood of dilution. However, an actualdilution standard necessarily means that the harm first must havemanifested itself. Therefore, Congress preferred a likelihood of dilutionstandard,58 so that the harm could be prevented and at the same timeclarify that famous trademarks are federally protected against dilution, nomatter whether they are inherently distinctive or have acquired distinc-tiveness.59 Dilution by tarnishment was also to become an explicitmeasure for action. This led to a revised dilution act: the TrademarkDilution Revision Act (TDRA)60 of 2006.

53 Id.54 Rudolf Callmann, Trademark Infringement and Unfair Competition, 14

LAW & CONTEMP. PROB. 185 (1949); Callmann, supra, Chapter 2, note 129.55 ‘A man’s rights in his trade-marks in one State may differ widely from

the rights which he enjoys in another’. Although Derenberg explains that theNew York and Massachusetts State statutes and those of Georgia and Illinois areidentical. Derenberg, supra, Chapter 5, note 36, at 439.

56 Federal Trademark Dilution Act (FTDA) 15 U.S.C. § 1125(c).57 Supra, Chapter 2, note 206.58 Stacey Dogan and Mark Lemley, The Trademark Use Requirement in

Dilution Cases, 24 SANTA CLARA COMPUTER & HIGH TECH. L.J. 541,547 (2008).

59 Overturning a precedent of the Second Circuit. TCPIP Holding Co. vHaar Commc’ns, Inc., 244 F.3d 88, 96 (2d Cir. 2001).

60 Trademark Dilution Revision Act (TDRA), § 43(c) of the United StatesTrademark Act of 1946 amended by U.S. Title 15, Chapter 22, subchapter III,§ 1125, ‘False designations of origin, false descriptions, and dilution forbidden’(c) Dilution by blurring, dilution by tarnishment.




Besides the two forms of dilution recognized in the TDRA, dilution byblurring61 and dilution by tarnishment,62 Judge Posner distinguishedfree-riding as a third form of non-confusing use by third parties that thetrademark holders should be able to prevent.63 This corresponds with the‘unfair advantage of the distinctive character or repute of a trademark’ inthe EU. However, in the US it is not codified as such.

Dilution by blurringDilution by blurring arises from the use of a similar junior mark innon-competing goods or services that impairs the distinctiveness of thesenior famous mark.64 Schechter illustrated this danger: ‘[I]f you allowRolls Royce restaurants and Rolls Royce cafeterias, and Rolls Roycepants, and Rolls Royce candy, in 10 years you will not have the RollsRoyce mark any more’.65 In other words dilution by blurring couldultimately lead to a situation where the distinctive character of thetrademark is lost, and genericide takes place.

Barber proposed three factors for the TDRA to see whether dilution byblurring is applicable: the degree of fame of the plaintiff’s mark, theuniqueness of the plaintiff’s mark and the similarity of the defendant’smark to the plaintiff’s mark.66 The TDRA provision, however, is moreextensive and sums up six non-exhaustive factors the court can considerwhen making a decision whether dilution by blurring is applicable:

1. the degree of similarity between the mark and the famous mark;2. the degree of inherent or acquired distinctiveness of the famous

mark;3. the extent to which the owner of the famous mark is engaging in

substantially exclusive use of the mark;4. the degree of recognition of the famous mark;5. whether the user of the mark or trade name intended to create an

association with the famous mark;6. any actual association between the mark or trade name and the

famous mark.

61 U.S. Code, Title 15, Chapter 22, subchapter III, § 1125(c)(2)(B).62 U.S. Code, Title 15, Chapter 22, subchapter III, § 1125(c)(2)(C).63 Ty, Inc. v Perryman, supra note 15.64 U.S. Code, Title 15, Chapter 22, subchapter III, § 1125(c)(2)(B).65 Schechter’s testimony, supra note 46.66 William G. Barber, A ‘Rational’ Approach for Analyzing Dilution Claims:

The Three Hallmarks of True Trademark Dilution, 33 AIPLA Q.J. 25, 40 (2005).




These six factors will be assessed in light of their compatibility to beapplied in case of an automatic enforcement of the trademark logo onsocial media, as Chapter 4 determined this prerequisite crucial to anysolution. Two factors, 1 and 5, are about the role of the alleged dilutor.Factor 1, the degree of similarity between a junior trademark logo andthe famous senior trademark logo, can be determined in an objective andautomatic way.67 Currently, software already exists that is able to detectcopyrighted video on YouTube. Therefore from a technological point ofview it is even easier to find static trademark logos. However, it is moredifficult to find out whether the user of the mark or trade name intendedto create an association68 with the famous mark,69 since intention issubjective. Therefore factor 5 is not suitable for an automatic test.

In factors 2 and 3, the trademark holder is the protagonist. Factor 2, todetermine the degree of inherent or acquired distinctiveness of thefamous mark,70 seems superfluous, since the trademark has alreadypassed the required minimum standard of distinctiveness, otherwise itwould not have been registered in the first place. In any case, one canargue that it qualifies for protection. Factor 3, the extent to which theowner of the famous mark is engaging in substantially exclusive use ofthe mark, is irrelevant.71 It is completely to the discretion of thetrademark holder whether he wants to engage in exclusive use of itstrademark, or whether he wants to license its trademark.

Factors 4 and 6 use external information from the relevant public: thedegree of recognition of the famous mark,72 and the actual associationbetween the mark or trade name and the famous mark.73 Factor 4, to findthe relevant public and test whether they recognize the mark can becostly and difficult to automate. So is factor 6, to measure any actualassociation between the sign and the famous trademark. These factors aretherefore less suitable for automation.

The extent of proximity between the products or services of the seniorfamous mark and those of the junior mark has been suggested as anotherfactor. One could imagine a continuum where, for example, steam

67 U.S. Code, Title 15, Chapter 22, subchapter III, § 1125(c)(2)(B)(i).68 Read more about the associative pathways to the mind of the consumer

by Alexander Simonson, How and When Do Trademarks Dilute: A BehavioralFramework to Judge Likelihood of Dilution, 83 TMR 149, 159–62 (1993).

69 U.S. Code, Title 15, Chapter 22, subchapter III, § 112 (c)(2)(B)(v).70 Id., § 112 (c)(2)(B)(ii).71 Id., § 112 (c)(2)(B)(iii).72 Id., § 112 (c)(2)(B)(iv).73 Id., §112 (c)(2)(B)(vi).




shovels and lipstick are situated at each other’s extremes.74 One couldcome up with an algorithm which could be fed information abouttrademark class, customer class, ingredients used, and so on, so that therelative distance between goods or between services could be estimated(read about more problems related to classification of goods and servicesin Chapter 6.3). Until the advent of a workable algorithm the proximitybetween goods or services cannot be automatically measured.

In short: only factor 1 is suitable for an automated way to determinewhether there is a case of trademark dilution by blurring.

Trademark dilution by tarnishmentIn 1963 Anheuser-Busch brewery had spent 40 million dollars to promotetheir slogan ‘Where there’s life, there’s Bud’. Then Chemical Corp. ofAmerica, manufacturer of a floor wax with insecticide, modified thisslogan by changing ‘Bud’ for ‘bugs’, thereby disparaging Budweiser,according to Anheuser-Busch, who tried to enjoin Chemical Corp.’s useof the modified slogan. The latter’s rebuttal was that their inspiration wasJohn Gay’s famous line: ‘While there’s life, there’s hope, he cried’. In atemporary injunction the court ruled that Chemical Corp. should applythe word ‘bug killer’ to its slogan75 to avoid a ‘peculiarly unwholesomeassociation of ideas’. One can question whether this is a big improve-ment, but the reasoning in Chemical Corp. of America, Inc. v Anheuser-Busch, Inc.76 was to make the two slogans more distinct from each other.

In 1964 an interesting anonymous note was published in the HarvardLaw Review that examined whether the scope of protection shouldinclude not only trademark dilution by blurring, but also trademarkdilution by tarnishment.77 The anonymous writer determined that non-confusing use may also tarnish the affirmative mental associations whichform part of the advertising value of the mark.78

74 Judge Learned Hand: ‘[I]t would be hard … for the seller of a steamshovel to find ground for complaint in the use of his trade-mark on a lipstick’.L.E. Waterman Co. v Gordon, 72 F.2nd 272, 273 (2d Cir. 1934).

75 Chemical Corp. of America v Anheuser-Busch, Inc., 306 F.2d 433, 437(5th Cir. 1962), cert. denied, 372 U.S. 965 (1963).

76 Id.77 ‘Tarnishment may even be an independent ground of relief’. Anonymous,

Dilution: Trademark Infringement or Will-o-the-Wisp, 77 HARV. L. REV. 520,525 (1963–64).

78 Id., at 522.




In 1994, the Second Circuit decided Deere & Co. v MTD Products,Inc.,79 a double-identity dilution case: famous senior mark and juniormark were identical and used for competing products or services. MTD,a competing manufacturer of lawn tractors, developed and showed ananimated commercial in which their MTD tractor altered Deere & Co.’strademarked deer ‘from a proud, majestic deer, to one that was cowardlyand afraid’.80 The court judged that the distorted version of the seniortrademark in the commercial, although not confusing, could lead con-sumers to attribute unfavourable characteristics to the trademark andultimately to the goods.

In 1995 the FTDA81 became effective, which did not explicitly includedilution by tarnishment as a cause of action,82 but was neverthelessrecognized in the Mattel cases in 200283 and 2003.84 But only since theTDRA of 2006 was dilution by tarnishment mentioned explicitly as acourse of action.85 In 2009, in Starbucks Corp. v Wolfe’s Borough Coffee,Inc., Starbucks could not convince the court that Charbucks causedconsumers to attribute unfavourable characteristics to their mark andultimately associate their mark with inferior goods and services.86

79 Deere & Co. v MTD Products, Inc., 41 F.3d 39, 43 (2nd Cir 1994).80 Id.81 FTDA, supra note 56.82 15 U.S.C. § 1125(c)(1).83 Mattel, Inc. v MCA Records (Mattel), 296 F.3d 894 (9th Cir. 2002), paras

22 and 23. However, Judge Kozinski recognizes the possibility of tarnishment,‘inappropriate for young girls’ and ‘tarnishing with negative associations’, hedescribed the use as non-commercial, which constituted a statutory ‘exemption’from the FTDA.

84 Mattel, Inc. v Walking Mountain Prods., 353 F.3d 792, 812 (9th Cir.2003). The court held that Thomas Forsythe’s 78 ‘Food Chain Barbie’ photosportraying Barbie ‘in various absurd and often sexualized positions’ were artisticand parodic works and therefore non-commercial speech not subject to atrademark dilution claim. Rebecca Tushnet, Make Me Walk, Make Me Talk, DoWhatever You Please: Barbie and Exceptions, in INTELLECTUAL PROPERTYAT THE EDGE (Rochelle Dreyfuss and Jane Ginsburg, eds., Cambridge:Cambridge University Press, 2014), at 10.

85 Trademark Dilution Revision Act (TDRA), § 43(c) of the United StatesTrademark Act of 1946 amended by U.S. Title 15, Chapter 22, subchapter III,§ 1125, ‘False designations of origin, false descriptions, and dilution forbidden’(c) Dilution by blurring, dilution by tarnishment.

86 Supra, Chapter 2, note 209.




Interestingly enough, the law does not give any factors that can betaken into account in relation to what constitutes trademark dilution bytarnishment.87

In the TDRA of 2006, dilution by tarnishment became an explicitground for action.88 Dilution by tarnishment is an association arisingfrom the similarity between a mark or trade name and a famous markthat harms the reputation of the famous mark,89 or in the words of thecourt in Deer & Co. v MTD Products, Inc.: ‘to evoke unflatteringthoughts about the owner’s product’90 or service. Or to put it in anotherway: when the mark may lose its ability to serve as a ‘wholesomeidentifier’ of plaintiff’s product. As already pointed out above, there is notest for tarnishment in the US.

Generally trademark dilution by tarnishment is assumed to be easier torecognize than trademark dilution by blurring. Deere & Co. v MTDProducts, Inc.91 illuminated that dilution by tarnishment ‘is usually foundwhere a distinctive mark is depicted in a context of sexual activity,92

obscenity,93 or illegal activity’.94

87 Simon Fhima, supra, Chapter 2, note 142, at 178.88 Trademark Dilution Revision Act (TDRA), § 43(c)(2)(C): association

arising from the similarity between a mark or trade name and a famous mark thatharms the reputation of the famous mark.

89 U.S. Code, Title 15, Chapter 22, subchapter III, § 1125 (c)(2)(C).90 Deere & Co. v MTD Prods., Inc., note 79, para 17.91 Id., para. 20.92 Joe-College.com sells without any authorization a number of T-shirts with

trademarks of Kansas University which refer to sex and alcohol. University ofKansas v Sinks, 565 F.Supp.2d 1216 (D. Kan. 2008). In an earlier case, theuniforms of the Dallas Cowboys Cheerleaders were used in a sex movie, so thatthe business reputation of the Dallas Cowboys was injured. Dallas CowboyCheerleaders, Inc. v Pussycat Cinema, Ltd., 604 F.2d 200 (2d Cir. 1979). Arecent example is Rodax Distributors Inc., which does business as CaballeroVideo, which received a temporary restraining order, barring it from selling itsBen & Cherry’s series of 10 DVDs with titles including ‘Peanut Butter D-Cups’and ‘Boston Cream Thigh’ while a trademark suit is under way. Ben & Jerry’sHomemade Inc. v Rodax Distributors Inc., 12-cv-6734 (S.D.N.Y. 2012).

93 It is easy to see, after a video prank was posted on YouTube by twoDomino employees doing distasteful things with food, that caused the revenuestream of the pizza chain to decrease significantly, supra, Chapter 4, note 19.

94 Coca-Cola sued Gemini Rising for selling a poster in the colours ofCoca-Cola and text written in the characteristic curved lettering ‘enjoy Cocaine’,which was held not only to be distasteful but tarnishing to the Coca-Colatrademark. Coca-Cola Co. v Gemini Rising, Inc., 346 F. Supp. 1183 (DCNY1972), at 1189.




Denicola proposed to limit the scope of trademark dilution by tarnish-ment to only those cases where a junior user of the mark uses it for hisown goods.95 However, this means that competitors can easily avoidclaims of trademark dilution by tarnishment if they hire parodists todegrade the senior mark.

Just like there is already filter software against pornography, it ispossible to filter pornography or illegal activity in combination with atrademark.

In other words one can ‘teach’ software to find by itself96 thesecategories of unsavoury content to which famous marks cannot beexposed on social media. Until that time there are broad categories oftarnishing use of a trademark that cannot be automatically recognized. InChapter 9 it will be explained how trademark holders in case of‘outbreaks’ of tarnishing use on social media can ‘vaccinate’ thesesystems, so that tarnishing use of trademarks on social media provision-ally can be tackled in a semi-automatic way.

Hormel Foods97 made clear that a trademark may be tarnished when itis linked to products of shoddy quality,98 poor customer service,99

internet usage100 or is portrayed in an unwholesome or unsavourycontext, with the result that the public will associate the lack of quality orlack of prestige in the defendant’s goods with the plaintiff’s unrelatedgoods.101 To automatically assess the subjective qualifications associatedwith a junior mark is not possible.

In short: even before tarnishment was codified in the TDRA it was partof established case law. In contrast to trademark dilution by blurring,trademark dilution by tarnishment does not have any test which courts

95 Denicola, supra, Chapter 1, note 112, 202–3.96 Nancy Owano, ‘Google Team: Self-Teaching Computers Recognize

Cats’, Phys.org, 26 June 2012, accessed 9 February 2015 at: http://phys.org/news/2012-06-google-team-self-teaching-cats.html.

97 Hormel Foods, supra, Chapter 2, note 91.98 Use of the trademark on poor quality goods. Chewy Vuiton: Louis Vuitton

Malletier SA v Haute Diggity Dog (Haute Diggity Dog), LLC 507 F. 3d 252,268–9 (CA4 2007). In Dallas Cowboys v America’s Team, the defendants hadused the trademark on products that misspelled the word basketball. DallasCowboys Football Club, Ltd. v America’s Team Properties, 616 F. Supp. 2d 622,643 (ND Tex. 2009).

99 The New York City Triathlon, LLC v NYC Triath-Lon Club, Inc., 704 F.Supp. 2d 305, 323 (SDNY 2010), para. 36.

100 Nissan Motor Co. v Nissan Computer Corp., 2007 U.S. Dist LEXIS90487 (CD Cal. 2007).

101 Hormel Foods, supra, Chapter 2, note 91.




can apply. However, one can draw from the jurisprudence that for famoustrademarks used in an unsavoury way, especially when associated withsexuality, obscenity or illegality, courts recognize that they can qualifythis as tarnishing, but can decide to exempt the tarnishing trademarkdilutor under certain circumstances (as will be discussed in Chapter 6.4).

Free-ridingAlthough free-riding, misappropriation, or unfair competition, has notbeen included explicitly in the federal statutory protection against trade-mark dilution, it was recognized in Tiffany & Company v TiffanyProductions, Inc.102 Here, the defendant, a film producer, had chosen thejeweller’s mark with no plausible reason ‘except the desire to obtain thebenefit of the reputation built up by the plaintiff at a great expense overa long period of years, even though there was no competition betweenthe two undertakings’.103 Some more recent judgments where free-ridinghas been dealt with include Johnny W. Carson v Here’s Johnny PortableToilets, Inc.104 in 1983 and Ty, Inc. v Perryman105 in 2002.

To automate the enforcement of trademark use that is free-riding,separate from an automatic inference of trademark dilution by blurring, isdifficult. If there is also dilution by blurring, they overlap and there is noneed for any separate inference of free-riding.

Legislation and Case Law in the EU

Below a review of the most important legislation and case law in the EUwill be provided, followed by an analysis of Article 5(2) TrademarkDirective (parallel to Article 9(1)(c) Community Trademark Regulation),which provides a clear definition of trademark dilution. After thisanalysis one can assess the controversial judgment of the CJEU inInterflora, which derogates Article 5(2) Trademark Directive’s protectionagainst unfair competition in favour of ‘principles inherent to com-petition’, in the absence of any trademark dilution, trademark infringe-ment or trademark use adversely affecting the trademark functions.

102 Tiffany & Company v Tiffany Productions, Inc., 147 Misc 679, 264 NYS459 (1932, NY Sup Ct), affd 237 App Div 801, 262 NYS, at 682.

103 Id.104 Johnny W. Carson v Here’s Johnny Portable Toilets, Inc., 698 F.2d 831, 6

February 1983, (6th Cir. 1983).105 Ty, Inc. v Perryman, supra note 15. Read Ilanah Simon Fhima, Dilution

by Blurring: A Conceptual Roadmap, IPQ 44, 56 (2010).




An ‘act of unfair competition’ means any act of competition contraryto honest business practices in industrial or commercial matters asdefined in Article 10bis Paris Convention.106 Taking ‘unfair advantage ofthe distinctive character or the repute of the trade mark’ is the EUequivalent of free-riding, a term sometimes used in the US. It relates notto the detriment caused to the mark but to the advantage taken by thethird party as a result of the use of the identical or similar sign. In otherwords, ‘an exploitation on the coat-tails of the mark with a reputation’.107

Trademark holders can protect their mark against trademark dilution inthe EU according to Article 5(2) Trademark Directive,108 and its equiva-lent Article 9(1)(c) Community Trademark Regulation.109 Both deal withpreventing third parties that, without permission, use in the course oftrade a sign that is identical with or similar to a trademark with areputation in relation to goods or services which are not similar to thosefor which the trademark is registered, and where use of that sign takesunfair advantage of, or is detrimental to, the distinctive character or therepute of the trademark.

Trademark dilution can happen when the average consumer is able toattach the sign to inferior goods or to those whose connotations areincompatible with those of the trademark with a reputation. There needsto be a sufficient degree of knowledge of that senior trademark so that thepublic, when confronted by the junior mark, may possibly make anassociation between the two marks.110 ‘The Court of Justice has inter-preted that wording as requiring a degree of similarity between the twomarks which need not be such as to give rise to a likelihood of confusionbut may merely have the effect that the relevant section of the public“establishes a link” between them’.111 Despite the formulation in Article5(2) Trademark Directive and Article 9(1)(c) Community TrademarkRegulation, trademarks can be protected against trademark dilution notonly in relation to dissimilar goods and services, but also in relation to

106 Paris Convention, supra, Chapter 2, note 2.107 Interflora refers to L’Oréal and Others, supra, Chapter 2, note 95, para.

41. Interflora, supra, Chapter 2, note 128, para. 74.108 Supra, Chapter 2, note 11, and updated by Directive 2008/95/EC, supra,

Chapter 5, note 15.109 Supra, Chapter 2, note 36, and updated by Council Regulation (EC) No.

207/2009, supra, Chapter 5, note 16.110 General Motors Corp. v Yplon SA (General Motors) (Case C-375/97),

Judgment of the ECJ, 14 September 1999. Adidas v Marca Mode I (CaseC-425/98), Judgment of the ECJ, 22 June 2000.

111 Intel v CPM, supra, Chapter 2, note 251.




identical or similar goods or services as the ECJ explained in Davidoff112

and confirmed in Interflora.113 These so-called double-identity cases fallwithin the ambit of Article 5(1) and (2) Trademark Directive,114 whichprovides harmonized trademark dilution criteria (see the section below:‘In relation to dissimilar goods’).

Article 5(5) Trademark Directive115 states:

Paragraphs 1 to 4 shall not affect provisions in any Member State relating tothe protection against the use of a sign other than for the purposes ofdistinguishing goods or services, where use of that sign without due causetakes unfair advantage of, or is detrimental to, the distinctive character or therepute of the trade mark.

Therefore, EU members might come up with legislation that protects theuse of a sign other than for the purposes of distinguishing goods orservices where use of that sign without due cause takes unfair advantageof, or is detrimental to, the distinctive character or the repute of thetrademark. Interestingly enough Article 5(5) Trademark Directive116 lacksany criterion of ‘use in the course of trade’ which is explicitly mentionedin Article 5(1) and (2) Trademark Directive.117

Since Robelco NV v Robeco NV,118 it became clear that theimplementation of Article 5(5) Trademark Directive119 is not part ofharmonized EU law.120 As a consequence it cannot be dealt with by theCJEU. Any decision to implement such provision in the national law fallswithin the sovereign competence of each EU member state. Article 5(5)Trademark Directive121 was implemented into Article 2.20(1)(d) Benelux

112 Davidoff, supra, Chapter 2, note 248.113 Interflora refers to other double-identity cases: Davidoff, supra, Chapter

2, note 248, para. 30; Adidas v Fitnessworld, supra, Chapter 2, note 250, paras18–22, and Google France, supra, Chapter 2, note 95, para. 48. Interflora, supra,Chapter 2, note 128, para. 68.

114 Supra, Chapter 2, note 11.115 Id.116 Id.117 Id.118 Robelco NV v Robeco NV (Case C-23/01), Judgment of ECJ, 21 Novem-

ber 2002.119 Supra, Chapter 2, note 11.120 Robelco NV v Robeco NV, supra note 118, paras 25, 30 and 31.121 Id.




Convention on Intellectual Property,122 a Belgium, Dutch and Luxem-bourg organization that grants so-called Benelux trademarks. Since 2002the Benelux-Trademark Office has referred to the ECJ for preliminaryrulings.123

Article 2.20 Benelux Convention on Intellectual Property states:124

(1) A registered trademark shall provide its owner with an exclusive right.Without prejudice to the possible application of ordinary law in matters ofcivil liability, the exclusive right to a trademark shall permit the owner toprevent any third party, without its consent, from: (d) using a sign forpurposes other than those of distinguishing the goods or services, where useof the sign without due cause would take unfair advantage of or bedetrimental to the distinctive character or the repute of the trademark.

To summarize the abovementioned legislation and case law: since 1991the EU members have to implement the Trademark Directive whichincludes a provision to protect against dilution of their national trade-marks. Since 1993 the provision in the Community Trademark Regu-lation to protect against dilution of the Community trademarks is bindingon the EU members and directly applicable. The ECJ made clear that thepublic must be able to make an association between the junior and seniormark before there can be trademark dilution, and that a proprietor shouldbe able to protect its trademark against trademark dilution in relation tonot just dissimilar goods or services, but also in the case of identicalgoods or services. The protection of a trademark outside the course oftrade, as Article 5(5) Trademark Directive makes possible, falls outsideharmonized EU law, and is left to the member states. The Beneluxmember states have implemented Article 5(5) Trademark Directive viaArticle 2.20(1)(d) Benelux Convention on Intellectual Property.

The EU provision of a protection against trademark dilution is formu-lated rather descriptively. Article 5(2) Trademark Directive states that aproprietor can prevent third parties from using a sign without permissionthat is identical or similar to its trademark with a reputation in relation todissimilar goods or services if it ‘without due cause takes unfairadvantage of, or is detrimental to, the distinctive character or the reputeof the trade mark’.

122 Benelux Convention on Intellectual Property (Trademarks and Designs)of 25 February 2005.

123 Campina Melkunie BV v Benelux-Merkenbureau (Case C-265/00), Judg-ment of ECJ, 12 February 2004.

124 Benelux Convention on Intellectual Property (Trademarks and Designs),supra note 122.




The constituent parts of this definition will be analysed below:

– In relation to dissimilar goods or services;– Detriment to distinctiveness;– Detriment to repute;– Unfair advantage of the distinctive character;– Unfair advantage of repute; use without due cause

The distinctive feature of trademark dilution is that it protects trademarkswith a reputation against unauthorized use of an identical or similar signfor dissimilar goods or services. However, the ECJ in Davidoff125 madeclear that the scope of protection against trademark dilution includesidentical or similar signs in relation to identical or similar goods:so-called double-identity cases.

These double-identity cases which take unfair advantage of or aredetrimental to the distinctive character or the repute of the earliertrademark are controversial, since one can argue that the application ofthe trademark confusion doctrine is preferable in such a situation. Article5(2) Trademark Directive’s wording126 seemed to exclude similar goods,according to Advocate General Jacobs’ opinion.127 The ECJ in David-off128 disagreed, and held that one should not interpret the TrademarkDirective129 solely on the basis of its wording: one should take intoaccount the overall scheme and objectives of the system of which it is apart.130 But the ECJ in Davidoff131 contended that non-confusing double-identity cases should also be protectable. Article 5(1)(b) TrademarkDirective132 is not suitable because it relates to cases with a likelihood ofconfusion. Therefore the ECJ made clear that non-confusing double-identity cases are eligible for protection under Article 5(2) Trademark

125 Davidoff, supra, Chapter 2, note 248.126 Supra, Chapter 2, note 11.127 Davidoff & Cie SA and Zino Davidoff SA v Gofkid Ltd (Case C-292/00),

Opinion of Advocate General, 21 March 2002.128 The ECJ interpreted Articles 4(4)(a) and 5(2) Trademark Directive ‘as

entitling the Member States to provide specific protection for trade marks with areputation in cases where the later mark is intended to be used or is used forgoods or services identical with or similar to those covered by the earlier mark’.Davidoff, supra, Chapter 2, note 248.

129 Supra, Chapter 2, note 11.130 Compare Article 31(2) Vienna Convention on the Law of Treaties, United

Nations, 23 May 1969.131 Davidoff, supra, Chapter 2, note 248.132 Supra, Chapter 2, note 11.




Directive. The ECJ reasoned that if Article 5(2) Trademark Directive133

was applicable to dissimilar goods then it would be a fortiori applicableto identical and similar goods and services, which could arguably be abigger danger to a senior trademark.134

Detriment to distinctivenessDetriment to the distinctive character of a trademark with a reputation isthe EU’s version of dilution by blurring.135 This occurs when the abilityof the trademark to identify goods or services for which it is registered isweakened.136 The proprietor of a trademark with a reputation does nothave to wait until dilution has destroyed its distinctive character, alikelihood of detriment of distinctiveness is sufficient.137

One can argue that it is detrimental to the distinctive character of atrademark logo if other proprietors use the identical trademark logo,gradually persuading internet users that the trademark logo is not atrademark designating the goods or services provided by one particulartrademark holder, but a generic symbol for different goods or servicesthat the trademarked logo is registered for (or in double-identity cases ageneric symbol for the identical or similar goods or services).

Just as with dilution by blurring in the US, the detriment to thedistinctive character of the trademark could be automatically and objec-tively determined by comparing the degree of similarity between a juniortrademark and a senior trademark with a reputation.

133 Id.134 Davidoff, supra, Chapter 2, note 248.135 ‘In my opinion blurring in the sense of watering down is analogous to a

family name losing its ability to distinguish between different families as groupswith a common origin’. Advocate General Jääskinen in Interflora Inc., InterfloraBritish Unit v Marks & Spencer plc et Flowers Direct Online Limited (CaseC-323/09), Opinion of Advocate General, 24 March 2011, footnote 65.

136 Interflora refers to L’Oréal and Others, supra, Chapter 2, note 95, paras39 and 40. Interflora, supra, Chapter 2, note 128, para. 73. Interflora also refersto Advocate General Jääskinen in Interflora, id., para. 80: ‘detriment is caused tothe distinctive character of a trade mark with a reputation when the use of a signidentical with or similar to that mark reduces the ability of the mark todistinguish the goods or services of its proprietor from those which have adifferent origin. At the end of the process of dilution, the trade mark is no longercapable of creating an immediate association, in the minds of consumers, with aspecific commercial origin’.

137 ‘[W]ithout it being required to wait for the end of the process of dilution,that is to say, the total loss of the trade mark’s distinctive character’. Interflorarefers to L’Oréal and Others, supra, Chapter 2, note 95, paras 39 and 40.Interflora, supra, Chapter 2, note 128, para. 77.




Detriment to reputeDetriment to the repute of a trademark with a reputation is the EU’sequivalent of dilution by tarnishment. It is caused when the goods orservices for which the identical or similar sign is used by the third partymay be perceived by the public in such a way that the trademark’s powerof attraction is reduced.138

The reputation tainted or debased, devalued without due reason in such a waythat the capacity of the mark to stimulate the desire to buy the kinds of goodfor which it is registered might be impaired. This can occur when the markhas been put in a context that is obscene or degrading or inappropriate orinherently unpleasant, or incompatible with the special image the earliertrademark has acquired in the eyes of the public, due to the promotionalefforts of its owner.139

A clear illustration is the Claeryn/Klarein decision140 of the BeneluxCourt of Justice which asserted that the use of the Klarein detergentwould negatively affect the persuasive advertising power of the mark forthe Claeryn gin, which is pronounced the same way in Dutch.

Simon Fhima pointed out that attention in the EU was focused onso-called dissonant goods.141 Then again, she explained that, so far, theCJEU has not expressed itself on the scope of tarnishment, in contrast tosome Advocates General.142 Just like the US, there is no test fortarnishment in the EU.143

138 Interflora refers to L’Oréal and Others, supra, Chapter 2, note 95, paras39 and 40. Interflora, supra, Chapter 2, note 128, para. 73.

139 OHIM, The Manual Concerning Opposition – Part 5, Article 8(5) CTMR,at 38.

140 Colgate-Palmolive v Bols (Claeryn v Klarein), Benelux Court of Justice,1 March 1975, N 1975, 472. Kamperman Sanders, supra, Chapter 2, note 79,at 57.

141 Simon Fhima, supra, Chapter 2, note 142, at 175.142 Id., at 175. An example is Advocate General Sharpton, who proposed

criteria for what constitutes liability for damage of the reputation of thetrademark, in relation to repackaging and parallel import. One can avoidbecoming liable by ensuring that the packaging is not defective, of poor qualityor untidy; and that the importer gives notice to the trademark owner before therepackaged product is put on sale, and, on demand, supplies him with a specimenof the repackaged product. Boehringer Ingelheim KG and Others v SwingwardLtd and Dowelhurst Ltd (Case C-348/04), Opinion Advocate General, 26 April2007, para. 17(4) and (5).

143 Id., at 178.




Just as with dilution by tarnishment in the US, the protection againstthe detriment to the repute of the trademark could be semi-automatedagainst ‘outbreaks’ that are detrimental to the reputation of the trademark,as will be explained in Chapter 9 ‘Implementation of a Paradigm Shift’.

Unfair advantage of the distinctive characterIf an unauthorized use of the trademark did not cause detriment to thedistinctiveness of the trademark it can still take unfair advantage of thedistinctive character of the trademark. ‘Unfair advantage of distinctive-ness covers cases where the applicant benefits from the attractiveness ofthe earlier right by affixing on his goods a sign which is widely known inthe market, misappropriating thus its attractive powers and advertisingvalue’.144 Misappropriation of the distinctiveness of the trademark with areputation, also known as free-riding or commercial parasitism, canhappen when there is an association between the senior and juniortrademark which renders possible the transfer of attractiveness to thejunior trademark.145 Three opposition cases illustrate in what kind ofscenarios a transfer of the attractiveness of the senior trademark to ajunior mark can take place.

In Comité International Olympique v Belmont Olympic S.A., theInternational Olympic Committee opposed the registration of the Com-munity trademark ‘Family Club Belmont Olympic’, which included theword ‘Olympic’, which would ‘immediately add value thereto, because itwill make it both easier to remember as a whole, as it is built around areputed sign, and more attractive, as all the highly regarded conceptsrelating to the Olympic Games will be also reflected in the later mark’.146

In the Lipostatin/Lipostat case, the Community Trademark applicationof Lipostatin for the product classes which included hair lotion and foodwas opposed by Lipostat, which was registered in the product class forpharmaceuticals. It was held that there was the risk that some of thequalities of Lipostat’s goods would be attributed to those of Lipostatin,especially because of the proximity of the markets in the respective

144 OHIM Opposition Guidelines, Part 5, Article 8(5) Community TrademarkRegulation – Status: March 2004, at 40.

145 Id.146 Decision No. 81/2000 of the Opposition Division of 25 January 2000,

Comité International Olympique v Belmont Olympic S.A., at 12.




product classes, so that the extension of Lipostat into Lipostatin’s productclasses was conceivable.147

In Formula One Licensing B.V. v Produits Petroliers Organisation S.A.,Formula One Licensing appealed, to no avail, the rejection of itsopposition against the registration of Community trademark Kennol f1.Based on earlier rights, all variations of Formule 1 trademarks, which areknown for goods and services associated with the motor sport and/ormotor industry in general and the Championship in particular wouldtherefore take unfair advantage of the distinctiveness of Formula One,148

and would also preclude this trademark holder the possibility of furtherlicensing and merchandizing even outside its natural market sector.149

In other words, the chance that taking unfair advantage of distinctive-ness occurs is especially high where the trademark’s distinctiveness isvery strong, or if the junior mark is used for products that are within thereach of the trademark’s natural extension of products, or outside of thisextension when the distinctiveness of the trademark is very suitable forlicensing or merchandizing.150 The intention of the party that takes unfairadvantage of distinctiveness is not relevant.151

Just as with free-riding in the US, it is difficult to automaticallydetermine that there is unfair advantage of the distinctive character of thetrademark.

Unfair advantage of reputeInstead of detriment of repute, there can be an unfair advantage of repute.Unfair advantage of repute cases concern those where the defendantprofits from the renown of the opponent’s trademark by unduly exploit-ing its prestige. In L’Oréal and Others,152 unfair advantage of reputewas described as ‘exploitation on the coat-tails of the mark with areputation’.153

Unfair advantage of repute is focused on the quality image of themark. So, the mark has acquired not only a high degree of recognition

147 Lipostatin/Lipostat, (Case R 1007/2000-1), OHIM decision 30 November2001. See also European Perspectives, ‘Make Your Marks’, accessed 9 February2015 at: http://www.jenkins.eu/mym-autumn-2002/alicante-abstracts-.asp.

148 Formula One Licensing B.V. v Produits Petroliers Organisation S.A. (CaseR 957/2001-1), OHIM decision, 17 December 2002, at 5, para. 6.

149 OHIM Opposition Guidelines, supra note 144, at 41.150 Id.151 Id.152 L’Oréal and Others, supra, Chapter 2, note 95.153 Id., para. 41.




amongst consumers, but a good or special reputation as well. Theplaintiff needs to prove this added value. This is especially difficult if notimpossible to automate.

Use without due causeEven though ‘use without due cause’154 is a necessary element ofprotection against trademark dilution, it is not reasonable to expect thatthe opponent proves a negative fact, such as the absence of due cause.Simon Fhima explained that in the absence of any indications on the faceof the evidence providing an apparent justification for the applicant’sacts, the lack of due cause must be generally presumed.155 However, theapplicant may avail himself of the possibility of rebutting such apresumption by showing that he has one of the legitimate justificationsthat entitles him to act in this particular manner. Chapter 6.4 ‘Defences’elaborates on how the phrase ‘use without due cause’ provides a linkbetween trademark dilution and the defences and discretion of the courtto exempt trademark use.

InterfloraIn 2011, in Interflora,156 trademarks were unauthorizedly used as key-words triggering advertisements. The CJEU confirmed that Article 5(2)Trademark Directive157 and Article 9(1)(c) Community Trademark Regu-lation158 must be interpreted so that a proprietor can prevent a competitorfrom advertising on the basis of a keyword corresponding to thattrademark, whereby the competitor takes unfair advantage of the distinc-tive character or repute of the trademark (free-riding), or where theadvertising is detrimental to that distinctive character (trademark dilutionby blurring) or to that repute (trademark dilution by tarnishment).159 Butthen the CJEU held that a proprietor is not entitled to prevent keywordtriggered advertisements by competitors which put forward an alternative

154 Article 5(2) Trademark Directive states that reputation in the memberstate of the trademark is an express precondition for proprietors to prevent thirdparties not having their consent using their trademark in the course of trade fordissimilar products or services where the latter has a reputation in the memberstate and where use of that sign without due cause takes unfair advantage of, oris detrimental to, the distinctive character or the repute of the trademark. Supra,Chapter 2, note 11.

155 Simon Fhima, supra, Chapter 2, note 142, at 228.156 Interflora, supra Chapter 2, note 128.157 Supra, Chapter 2, note 11.158 Supra, Chapter 2, note 36.159 Interflora, supra, Chapter 2, note 128, para. 96(2).




to the goods or services of the proprietor of that mark, if the competitoris not offering a mere imitation of the goods or services of the proprietorof that trademark, without causing dilution or tarnishment and withoutadversely affecting the functions of the trademark with a reputation.

In short the CJEU held that if a competitor uses a trademark unauthor-izedly for keyword triggered advertising of a competitor, it is able to doso, if it withholds from dilution by blurring, dilution by tarnishment andis not adversely affecting the functions of the trademark. Article 5(2)Trademark Directive160 provides a separate protection against ‘unfairadvantage to the distinctive character or repute of the trademark’, alsoknown as free-riding or unfair competition. Advocate General Jääskinenin his opinion on Interflora seems to take free-riding more seriously:proprietors should be able to prevent use of their trademark if an‘advertiser attempts thereby to benefit from its power of attraction, itsreputation or its prestige, and to exploit the marketing effort expended bythe proprietor of that mark in order to create and maintain the image ofthat mark’.161

However, the CJEU held that in this keyword triggered advertisingcase the protection ground against unfair competition lost out against‘practices inherent in competition’. Apparently the CJEU finds thepossibility of keyword triggered advertisements more important thanprotecting proprietors against trademark dilution.

The CJEU, however, agrees with the Advocate General162 that keywordtriggered advertising is detrimental to the distinctive character of atrademark with a reputation if it contributes to turning that trademark intoa generic term.163 In other words, proprietors should be able to protecttheir trademark against trademark dilution by blurring.

One can question whether the competitor making use of the propri-etor’s trademark reputation via keyword triggered advertising reallywithheld from dilution by tarnishment and from adversely affecting theadvertising and investment functions of the trademark by divertingpotential consumers.

Besides, trademarks used as keyword triggered advertisements couldlead to dilution by tarnishment. The proximity of the keyword triggeredadvertisement to the organic results of the famous trademark caninfluence internet users’ perceptions in such a way that the famous markwill be tarnished. There have not been many dilution by tarnishment

160 Supra, Chapter 2, note 11161 Supra note 135, para. 107(2)(B).162 Id.163 Interflora, supra, Chapter 2, note 128, para. 96(2).




cases thus far for keyword triggered advertisements, but an examplecould be: a non-exclusive outlet known for shoddy products using thetrademark Louis Vuitton for selling genuine Louis Vuitton products.

Competitors that unauthorizedly use a trademark of a third party as akeyword triggering advertisement piggyback on the reputation of thistrademark, thereby saving money the third party has invested in market-ing and advertising, this adversely affects the advertising function of theproprietor’s trademark.

One can also argue that the investment function of the trademark willbe adversely affected, because if a famous mark wants to buy advertise-ments that are triggered by its own name it has to pay a premium becauseof the bids by junior marks.

The CJEU failed to appreciate that trademarks with a reputation thatare unauthorizedly used as keyword triggering advertisements of acompetitor adversely affect the essential function of the trademark: as anindicator of the source of origin. Instead of shortcutting the searchprocess of internet users, their search process is diverted away from thetrademark they were looking for, although Google makes a minordistinction using a slight colour difference and placement betweenkeyword triggered advertisements and organic results.164

Philips posed the useful question how the advertiser is attempting tobenefit from the power of attraction,165 reputation, prestige of a trade-mark and exploit the marketing effort of the trademark holder, if theinternet user already typed in the trademark as keyword.166 To give ananswer to this question, one could compare the situation of keywordtriggered advertisements with that of asking where one can find a certainbrand of product in a supermarket. A supermarket employee takes onealong the aisles to the right shelf. Here one sees the branded productflanked by house branded products. The difference between the search inthe supermarket and on the internet is that the latter concerns a digitalmedium that has the potential to be much more effective and efficient in

164 ‘People are only noticing retrospectively that the visual distinctionbetween Google search results and advertising has diminished over the years.You hardly see the difference between paid links on top of the page and searchresults beneath. So it is easier to click on advertisements (including accidentally)and generate Google revenue’. Olsthoorn, supra, Chapter 3, note 73.

165 Intel v CPM, supra, Chapter 2, note 251, at 18, quoting Adidas vFitnessworld, supra, Chapter 2, note 250.

166 Jeremy Philips, Google AdWords: Trade Mark Law and Liability ofInternet Service Providers, in GOOGLE AND THE LAW, supra, Preface, note 2,at 66.




shortcutting one’s search process. Bechtold and Tucker researched theinfluence of keyword triggered advertisements on the search process oftwo groups of internet users.167 One group was looking for a certainbrand and the other group for a certain product. The group looking for acertain brand needed a bit more time to find what they were looking for,and the group looking for a certain product found it a bit faster.Therefore, one can conclude that when trademarks are used as keywordtriggering advertisements the internet users looking for a certain brandneed more time, hence adversely affecting the source function of thetrademark of which shortcutting the search process is its raison d’être.

Preconditions for ProtectionAgainst Trademark Dilution

After the legislation and case law of trademark dilution in the US andunfair advantage of or detriment to the distinctive character or repute ofthe trademark in the EU, this chapter follows with prerequisites of theanti-trademark dilution measures. First the degrees of distinctiveness willbe covered, including a classification of trademarks into four categories(generic, descriptive, suggestive and arbitrary marks), dependent on theirdistinctiveness. Then the degree of fame, reputation or well-knownness,the precondition to trademark dilution in the US and in the EU will beexamined.

Finally the chapter discusses the problems with identical trademarksfor dissimilar goods or services, which are caused by globalization andthe internet and unclear boundaries of goods and services classifications.

Degrees of Distinctiveness

Distinctiveness plays a dual role in trademark law. The first role: toregister a sign as a trademark it needs to qualify as inherently distinctiveor otherwise have acquired distinctiveness.168 The second role is that thedegree of distinctiveness determines the scope of protection granted to a

167 Bechtold, Stefan, and Catherine Tucker, Trademarks, Triggers and OnlineSearch, March 2013 11(4) J. OF EMP. LEG. STUDIES 718 (2014).

168 A non-distinctive trademark can be registered once it has acquireddistinctiveness/secondary meaning recognized in a relevant universe of con-sumers after that mark was extensively used, for example via advertising. Thisconcept of having acquired secondary meaning is known in German as Frei-haltebedürfnis.




trademark.169 If the distinctiveness of a trademark is to be evaluated tosee whether a trademark deserves extended protection against trademarkdilution, then its distinctiveness is being evaluated for a second time. Thefirst time was to see whether the sign reached the threshold of sufficientdistinctiveness so that it could be registered as a trademark. To do adistinctiveness evaluation twice is redundant.

In ‘The Rational Basis of Trademark Protection’,170 Schechter clarifiedthe relation between the need for protection and the degree of distinctive-ness: ‘The more distinctive or unique the mark, the deeper is its impressupon the public consciousness, and the greater its need for protectionagainst vitiation or dissociation from the particular product in connectionwith which it has been used’.171 Schechter asserted that the moredistinctive the mark, the more effective is its selling power.172 Thereforeit was his opinion that ‘coined, invented, fanciful or arbitrary marks’deserve to have extensive protection, that is, beyond protection againstconfusion.173

Simon Fhima’s critique of Schechter was that his only criterion forprotection is coined, arbitrary or fanciful marks, regardless whether thesegoods are perceived as satisfactory or unsatisfactory: ‘This conveyance ofpoor quality could serve a useful consumer information function, but thenit seems strange to vest such rights in the mark owner who has producedsuch unsatisfactory products’.174 However, this author begs to differ:whether a good is perceived as satisfactory or unsatisfactory is subjectiveand can differ from one customer to the next. Therefore, it can be arguedthat the protection of goods that are unique, since their marks are coined,arbitrary or fanciful, and therefore can be recognized no matter whetherthey are valued in a positive or negative way, is rational. The need forprotection of this uniqueness is arguably a fortiori of importance in casea good is perceived as unsatisfactory, so that it can be avoided in thefuture.

169 ‘As the distinctiveness of the mark is the quality that the statute endeavorsto protect, the more distinctiveness the mark possesses, the greater the interest tobe protected’. Nabisco, Inc. v PF Brands, Inc, 191 F.3d 208; (31 August 1999)U.S. App. LEXIS 20786; 51 U.S.P.Q.2D (BNA) 1882.

170 Schechter, supra, Chapter 1, note 83.171 Schechter, id., at 825.172 Schechter, id., at 819.173 Schechter, id., at 829.174 Simon Fhima, supra note 105, at 6.




In Zatarains, Inc. v Oak Grove Smokehouse, Inc.,175 a classification oftrademarks is given. Four categories of trademarks can be distinguished:generic, descriptive, suggestive and arbitrary marks.

The generic trademark, also known as proprietary eponym, is thecommon name for the kind of product instead of indicating the source ofthe product. Generic marks are not protected under the Lanham Act andare subject to cancellation of registration.176

Advocate General Jääskinen in Interflora177 makes a distinctionbetween a trademark becoming banal and thereby losing its distinctive-ness, caused by dilution of the trademark for dissimilar goods, and therisk of degeneration, the trademark becoming a generic term or commonnoun, so that genericide of the trademark takes place for the same kind ofproducts. The latter also ‘indicates a loss of distinctiveness but of adifferent nature than dilution in the sense of the trade mark becomingwatered down’.178 In Alvin M. Marks v Polaroid Corp,179 the court gavea definition of genericide: ‘That a well known trademark does notbecome generic unless it has lost all trademark meaning, not only withinpart of the general public but within the entire industry and trade’.180

Examples of genericide happened to Aspirin,181 Cellophane182 and Shred-ded Wheat.183 Trademark holders need to create a body of proof for thepurpose of avoiding a charge of constructive abandonment in thefuture.184 That is why, for example, a company such as Google explicitly

175 Zatarains, Inc. v Oak Grove Smokehouse, Inc., 698 F.2d 786, 791 (5thCir. 1983).

176 15 U.S.C. § 1064(3), Lanham Act.177 Opinion of Advocate General Jääskinen, Interflora, supra note 135,

para. 82.178 Id.179 Alvin M. Marks v Polaroid Corp., 129 F. Supp. 243, 105 U.S.P.Q. 10 (D.

Mass. 1955).180 Id.181 Aspirin: Bayer & Co., Inc. v United Drug Co., supra, Chapter 2, note 90.182 Cellophane: DuPont de Nemours & Co. v Waxed Products Co., 85 F.2d 75

(2d Cir. 1936), modifying 6 F. Supp. 958 (E.D.N.Y. 1934) cert. denied, 299 U.S.601 (1936).

183 Shredded Wheat: Kellogg Co. v National Biscuit Co., 305 U.S. 111(1938).

184 Constructive abandonment of a trademark can be by commission, actsthat use the trademark in a generic way, or by omission, lacking to write lettersprotesting the use of the trademark in a generic way.




objects internationally that its trademark Google is used as a verb,conjugated or not.185

A descriptive trademark describes the qualities or laudatory character-istics of a product. If a term requires imagination, thought and perceptionto reach a conclusion as to the nature of goods it is not descriptive.Another test is whether competitors would be likely to need the termsused in the trademark in describing their products. If so, the trademark isdescriptive. Another indication is the extent to which a term actually hasbeen used by others marketing a similar service or product.

Descriptive marks are only protected if and to the extent that they haveacquired secondary meaning in the minds of the consuming public.Machat wrote that if one incorporates a descriptive or generic word in atrademarked name or logo, it can advertise to or inform the public aboutthe function or attributes of a product.186 The other side of the coin is,however, that the chances increase that the public will get confusedbecause other businesses use those same descriptive or generic words todescribe their product. For this reason the trademark registrar can obligethe registrant to disclaim the use of the descriptive or generic words inthe logo or name as a precondition to registration.

A suggestive mark ‘suggests, rather than describes, some particularcharacteristic of the goods or services to which it applies and requires theconsumer to exercise the imagination in order to draw a conclusion as tothe nature of the goods and services’.187 In Coca-Cola Co. v Koke Co.,188

the infringer of Coca-Cola tried to use as a defence that the trademarkCoca-Cola in combination with an illustration of coca leaves and nutsuggested that cocaine was still used, and because of this allegedfraudulent representations to the public, the plaintiff had lost its claim toany help from the court. Justice Holmes did not concur: ‘Coca-Colaprobably means to most persons the plaintiff’s familiar product to be hadeverywhere, rather than a compound of particular substances’.189

Arbitrary or fanciful marks, which come into being out of theimagination, are invented marks. They do not bear any relationship to theproducts or services to which they are applied.

185 Mike Wheatley, ‘Google Wins “Ungoogleable” Usage Fight in Sweden,but at What Cost to Its Brand?’, Silicon Angle, 26 March 2013, accessed9 February 2015 at: http://siliconangle.com/blog/2013/03/26/google-wins-ungoogleable-usage-fight-in-sweden-but-at-what-cost-to-its-image/.

186 Machat, supra, Chapter 5, note 57, at 832–3.187 Zatarains, Inc. v Oak Grove Smokehouse, Inc., supra note 175, para. 20.188 Coca-Cola Co. v Koke Co., 254 U.S. 143 (1920), at 146.189 Id.




Suggestive, arbitrary and fanciful marks are considered per definitiondistinctive and are protected without proof of secondary meaning.However, as pointed out in Abercrombie & Fitch,190 the lines of de-marcation between distinctive and invented marks are not always bright:

Moreover, the difficulties are compounded because a term that is in onecategory for a particular product may be in quite a different one for another,because a term may shift from one category to another in light of differencesin usage through time, because a term may have one meaning to one group ofusers and a different one to others, and because the same term may be put todifferent uses with respect to a single product.191

Heymann asserted that the hierarchy used in Abercrombie & Fitch,192

which rewards the creativity inherent in a trademark and supported aLockean notion of trademarks, should be substituted by a linguisticanalysis.193 In such an analysis only trademarks that are not meta-phorically used, do not appear in lower case and are exclusively used asan adjective and never as a noun or verb, are to be preferred over thosethat do.194

Since the distinctiveness of trademarks can be acquired, a more usefuldistinction might be between those trademarks that symbolize a brandwith a personality and those that symbolize a brand without personality.Professor Tan called the first kind alpha brands.195 The implication forthese alpha brands is that they should accept that they will be referencedmore by other brands. In a similar vein, Beebe advocated that onlyextraordinary marks would be eligible for the extended protection againsttrademark dilution.196

190 Abercrombie & Fitch Co. v Hunting World, Inc. (Abercrombie & Fitch),537 F.2d 4 (2d Cir. 1976).

191 Id.192 Id.193 Laura A. Heymann, The Grammar of Trademarks, 14 LEWIS & CLARK

L. REV. 1313, 1332–3 (2010).194 Heymann, id., 1330–43.195 David Tan, Affective Transfer and the Appropriation of Commercial

Value: A Cultural Analysis of the Right of Publicity, 9 VA. SPORTS & ENT. L.J.272 (2010).

196 Beebe, supra, Chapter 2, note 87, 1158 (2006).




Degree of Fame, Reputation or Well-Knownness

Despite Schechter’s proposal to give arbitrary, coined or fanciful trade-marks extended protection against dilution, the prerequisite for extendedprotection against dilution was and is still given to those marks that arefamous in the US or have a reputation in the EU.

Schechter did not propose his criteria because unusual names sell perse. Instead, he proposed these as prerequisites for extended protection,because the uniqueness or arbitrariness, which one could see as amanifestation of a strong mark197 is important, simply to be able todistinguish one trademark from the other.

The idea behind the precondition for trademark dilution is that if thetrademark is not famous or does not have a reputation there is nothing todilute. However, this assumes that famous trademarks or trademarks witha reputation deserve to be more protected than non-famous trademarks ortrademarks without a reputation, an untenable position as this chapterwill demonstrate.

The prior mark must have obtained its famous status, or reputation,prior to the first use of the allegedly diluting mark to qualify for dilutionprotection. To prove that one’s trademark was famous or had a reputation,sometimes years ago, might be a more practical challenge.

Famous Trademark in the US

When the TDRA came into effect, 15 U.S.C. § 1125(c)(2)(A)198 codifiedsome factors that courts could take into account when determiningwhether a trademark possesses ‘the requisite degree of recognition’:

(i) The duration, extent, and geographic reach of advertising andpublicity of the mark, whether advertised or publicized by theowner or third parties.

(ii) The amount, volume, and geographic extent of sales of goods orservices offered under the mark.

(iii) The extent of actual recognition of the mark.(iv) Whether the mark was registered under the Act of March 3, 1881,

or the Act of February 20, 1905, or on the principal register’.

197 Norman Siebrasse, supra, Chapter 2, note 151, at 33, footnote 106.198 15 U.S.C. § 1125(c)(2)(A).




This non-exhaustive list of factors substitutes the Nabisco, Inc. v PFBrands, Inc.199 factors that were applied under the FTDA.

The TDRA200 changed the fact that a trademark could be famous withsome niche of the population, as was decided in the pre-TDRA Moseleyv V Secret Catalogue, Inc.201 case by the Supreme Court. As of 2006, afamous mark must be ‘widely recognized by the general consumingpublic of the United States’.202

According to Professor Fisher, US courts use in practice the followingeight-factor test to see whether a mark is famous,203 which is predomin-antly the same as 15 U.S.C. § 1125(c)(2)(A),204 except for factor 7:

1. the degree of inherent or acquired distinctiveness of the mark;205

2. the duration and extent of use of the mark in the identified field;3. advertising and publicity;4. the geographic area in which the mark is used;5. the channels of trade;6. the trade’s recognition of the mark;7. whether third parties also use the mark; and8. whether the mark is federally registered.

199 The Second Circuit in Nabisco, Inc. v PF Brands, Inc. provided afive-factor test to see whether a claim of dilution under the FTDA is justified:

(1) the senior mark must be famous;(2) it must be distinctive;(3) the junior use must be a commercial use in commerce;(4) it must begin after the senior mark has become famous; and(5) it must cause dilution of the distinctive quality of the senior mark.

Nabisco, Inc. v PF Brands, Inc., supra note 169.200 Trademark Dilution Revision Act (TDRA), § 43(c) of the United States

Trademark Act of 1946 amended by U.S. Title 15, Chapter 22, subchapter III,§ 1125, ‘False designations of origin, false descriptions, and dilution forbidden’(c) Dilution by blurring, dilution by tarnishment.

201 Supra, Chapter 2, note 206.202 15 U.S.C. § 1125(c)(2)(A).203 William Fisher, ‘Overview of Trademark Law’, Harvard Law School,

accessed 9 February 2015 at: http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm#8.

204 15 U.S.C. § 1125(c)(2)(A).205 In contrast to FTDA, TDRA explicitly includes the protection against

dilution by including the degree of ‘inherent or acquired distinctiveness’ as oneof the relevant factors.




Trademarks with a Reputation in the EU

Advocate General Sharpston articulated in her opinion on Intel Corp. vCPM UK Ltd.206 in 2008 the paradox that trademarks with a reputationare especially vulnerable to the existence of similar marks in dissimilarproduct areas where actual confusion is unlikely. To counter thesechallenges member states have the option to grant extended protection totrademarks with a reputation.207 All member states effectively have doneso. First the relevant articles of the Trademark Directive208 and Com-munity Trademark Regulation209 will be provided. Then the word ‘repu-tation’ is clarified.

ReputationArticle 5(2) Trademark Directive210 states that reputation in the memberstate of the trademark is an express precondition for proprietors toprevent third parties not having their consent using their trademark in thecourse of trade for dissimilar goods or services where the latter has areputation in the member state and where use of that sign without duecause takes unfair advantage of, or is detrimental to, the distinctivecharacter or the repute of the trademark.

The ECJ in PAGO International GmbH211 explained that a Communitytrademark must be known by a significant part of the public concernedby the goods or services covered by that trademark in a substantial partof the territory of the European Community and that the territory of onemember state of the EU may be considered such a substantial part.212

206 ‘In an apparent paradox, the best known trade marks are particularlyvulnerable to the existence of similar marks even in highly dissimilar productareas, where actual confusion is unlikely’. Advocate General Sharpston in IntelCorporation Inc. v CPM United Kingdom Ltd (Case C-252/07), Opinion ofAdvocate General, 26 June 2008, para 8.

207 Preamble 10 Trademark Directive. Notice that the geographical scope ofthe reputation is not mentioned here. Supra, Chapter 2, note 11.

208 Id.209 Supra, Chapter 2, note 36.210 Id.211 PAGO International GmbH v Tirolmilch registrierte Genossenschaft mbH

(PAGO International GmbH) (Case C-301/07), Judgment of the ECJ, 6 October2009.

212 Id., para. 30.




Article 9(1)(c) Community Trademark Regulation213 is the parallelprovision to Article 5(2) Trademark Directive.214 Besides an article toavert use of the trademark for dissimilar use, both the TrademarkDirective215 and Community Trademark Regulation216 also have anarticle to refuse or invalidate the registration of the already registeredtrademark for dissimilar use, as described below.

Article 4(3) Trademark Directive217 provides grounds for refusal orinvalidity of a trademark that is registered for dissimilar goods orservices of an earlier Community trademark which has a reputation in theCommunity and where the use of the later trademark without due causewould take unfair advantage of, or be detrimental to, the distinctivecharacter or the repute of the earlier Community trademark.

Article 4(4)(a) Trademark Directive218 is the optional version of Article4(3) Trademark Directive219 and is focused on protecting the earliernational trademark. An express condition for Article 4(4)(a) TrademarkDirective220 is that the earlier trademark has a reputation in the memberstate concerned.

Article 8(5) Community Trademark Regulation221 is the parallel provi-sion to Article 4(3) Trademark Directive.222 The only difference is thatthe regulation distinguishes between an earlier Community trademarkwhich needs to have a reputation in the Community, and an earliernational trademark which needs to have a reputation in the member stateconcerned.

There is no definition of ‘reputation’ in the Trademark Directive,223 norin the Community Trademark Regulation.224 In General Motors,225 theECJ explained that the translations of the word ‘reputation’ into thedifferent languages of the EU can be divided into two groups. The firstgroup consisting of translations of the word ‘reputation’ into German,Dutch and Swedish are words that signify that the trademark must be

213 Supra, Chapter 2, note 36.214 Supra, Chapter 2, note 11.215 Id.216 Supra, Chapter 2, note 36.217 Supra, Chapter 2, note 11.218 Id.219 Id.220 Id.221 Supra, Chapter 2, note 36.222 Supra, Chapter 2, note 11.223 Id.224 Supra, Chapter 2, note 36.225 General Motors, supra note 110, para. 21.




known without indicating the extent of knowledge required. The secondgroup of words consisting of translations of the word ‘reputation’ arewords that imply a quantitative level of a certain degree of knowledgerequired amongst the public.226 The ECJ confirmed that the degree ofknowledge required must be considered to be reached when the earliermark is known by a significant part of the public concerned by the goodsor services covered by that trademark,227 conforming to Article 5(2)Trademark Directive.228 This knowledge threshold229 is deemed to havebeen reached when a trademark is known by a significant part of thepublic concerned by the products or services covered by the mark.230 Toassess whether a significant part of the public knows the trademark, it isnot sufficient to apply a percentage, as General Motors explained.231

Instead, the ECJ made it clear that all relevant facts of the case must betaken into account, ‘in particular the market share held by the trade mark,the intensity, geographical extent and duration of its use, and the size ofthe investment made by the undertaking in promoting it’.232

Because of these interpretations of reputation, the EU trademarksystem has a broader eligibility for dilution protection than that of the UStrademark system. Then again, the US trademark system compensates forits narrower eligibility for dilution protection with a broader protection

226 Id.227 Id., para. 26.228 ‘In so far as Article 5(2) of the Directive, unlike Article 5(1), protects

trade marks registered for non-similar products or services, its first conditionimplies a certain degree of knowledge of the earlier trade mark among the public.It is only where there is a sufficient degree of knowledge of that mark that thepublic, when confronted by the later trade mark, may possibly make anassociation between the two trade marks, even when used for non-similarproducts or services, and that the earlier trade mark may consequently bedamaged’. General Motors, supra note 110, para. 23.

229 ‘The degree of knowledge required must be considered to be reachedwhen the earlier mark is known by a significant part of the public concerned bythe products or services covered by that trade mark’. General Motors, supra note110, para. 26.

230 ‘The public amongst which the earlier trade mark must have acquired areputation is that concerned by that trade mark, that is to say, depending on theproduct or service marketed, either the public at large or a more specialisedpublic, for example traders in a specific sector’. General Motors, supra note 110,para. 24.

231 ‘It cannot be inferred from either the letter or the spirit of Article 5(2) ofthe Directive that the trade mark must be known by a given percentage of thepublic so defined’. General Motors, supra note 110, para. 25.

232 General Motors, supra note 110, para. 27.




under the trademark infringement, using the likelihood of confusiondoctrine, so that the two legal systems de facto lead to similar out-comes.233

‘Reputation’ in the Community Trademark Regulation234 has the samemeaning as in the Trademark Directive.235 The OHIM Manual Concern-ing Opposition confirmed that ‘the limited size of the relevant marketshould not be regarded in itself as a factor capable of preventing a markfrom acquiring a reputation within the meaning of Article 8(5) [Com-munity Trademark Regulation], as reputation is more a question ofproportions and less of absolute numbers’.236 It continued that: ‘[a]s theeconomic value of reputation is also the protected subject-matter of thisprovision, any qualitative aspects thereof are of relevance when assessingthe possibility of detriment or unfair advantage ‘.237

A difference between the Trademark Directive238 and the CommunityTrademark Regulation239 is that the Community trademark should have areputation in a substantial part of the territory of the Community. Asalready pointed out above in PAGO International GmbH,240 the CJEUinterpreted substantial part of the territory of the Community to be atleast one member state.

Simon Fhima wrote that in the case of proving detriment of repute, theEU version of dilution by tarnishment, trademark holders need not onlyto show that their senior trademark has a reputation, but also what kindof reputation: for example, that those consumers have a positive image.241

Simon Fhima rightly argued that one might expect an automatic assump-tion that trademarks have positive reputation: the plaintiff should not beunnecessarily burdened to prove a positive image of his trademark,instead, the defendant should have the burden to prove otherwise.242

233 Marcus Luepke, Taking Unfair Advantage or Diluting a Famous Mark: A20/20 Perspective on the Blurred Differences Between U.S. and E.U. DilutionLaw, 98 TMR 789 (2008).

234 Supra, Chapter 2, note 36.235 Supra, Chapter 2, note 11.236 Supra, note 144, at 11.237 Id., at 10.238 Supra, Chapter 2, note 11.239 Supra, Chapter 2, note 36.240 PAGO International GmbH, supra note 211.241 Simon Fhima, supra, Chapter 2, note 142, at 175.242 Id., at 177.




Famous Trademarks, Trademarks with a Reputation and Well-KnownTrademarks

The WIPO Recommendation concerning provisions on the protection ofwell-known marks confirmed that the term wellknown can be explainedin a quantitative sense. Article 2(2)(b) WIPO Recommendation243:‘Where a mark is determined to be well known in at least one relevantsector of the public in a Member State, the mark shall be considered bythe Member State to be a well-known mark’.

Article 2(2)(c) WIPO Recommendations: ‘Where a mark is determinedto be known in at least one relevant sector of the public in a MemberState, the mark may be considered by the Member State to be awell-known mark’.

Advocate General Jacobs explained the difference between the term‘well-known’ in Article 6bis Paris Convention, which has a quantitativeconnotation, whereas the term ‘reputation’ in Articles 4(3), 4(4)(a) and5(2) Trademark Directive244 can be associated with qualitative criteria.Just as with the ECJ, the Advocate General also noticed differences in theterms used in the other official languages in which the TrademarkDirective has been written.245

However, Article 16(2) TRIPS246 which explains how to determinewhether a trademark is well known according to Article 6bis ParisConvention247 and the guidelines of the Joint RecommendationConcerning Provision of Well-Known Marks leave enough room for

243 WIPO Joint Recommendation Concerning Provisions on the Protection ofWell-Known Marks, adopted by the Assembly of the Paris Union for theProtection of Industrial Property and the General Assembly of the WorldIntellectual Property Organization at the Thirty-Fourth Series of Meetings of theAssemblies of the Member States of WIPO September 20 to 29, 1999.

244 Supra, Chapter 2, note 11.245 Advocate General Jacobs in General Motors v Yplon SA (Case C-375/97),

Opinion of the Advocate General, 26 November 1998, paras 34–6.246 Article 16(2) TRIPS, supra, Chapter 2, note 26: ‘Article 6bis of the Paris

Convention (1967) shall apply, mutatis mutandis, to services. In determiningwhether a trademark is well-known, Members shall take account of the know-ledge of the trademark in the relevant sector of the public, including knowledgein the Member concerned which has been obtained as a result of the promotionof the trademark’.

247 Article 6bis Paris Convention, supra, Chapter 2, note 2.




member states to determine the degree of knowledge or recognition onqualitative factors.248

Arguably the most important difference between a trademark with areputation and a well-known trademark is that the first needs to beregistered, whereas this is not necessary for the latter. Trademarks with areputation can be protected against unauthorized use for similar goods orservices or non-competing goods or services, whereas a well-knownmark only protects in case of similar products and services, according toArticle 6bis Paris Convention,249 although in the Article 16(3) TRIPSincarnation250 of Article 6bis Paris Convention the protection is extendedto non-similar goods and services.251

The US has been a member of the Paris Convention since 1887,including the revision of the Hague Act in 1925252 and TRIPS in 1995.253

Nevertheless the applicability of the protection of well-known marks fordissimilar goods and services guaranteed in Articles 6bis and 10bis ParisConvention254 in combination with Article 16(3) TRIPS,255 within the USremains controversial. In 1936, in Maison Prunier v Prunie’s Rest. &Café,256 the well-known marks doctrine, which in the jurisprudence iscalled the well-known/famous marks doctrine, was recognized for thefirst time by a New York trial court in a common law action for unfair

248 Article 2(1)(b)1–6, WIPO Joint Recommendation Concerning Provisionson the Protection of Well-Known Marks, adopted by the Assembly of the ParisUnion for the Protection of Industrial Property and the General Assembly of theWorld Intellectual Property Organization at the Thirty-Fourth Series of Meetingsof the Assemblies of the Member States of WIPO September 20 to 29, 1999.

249 Article 6bis Paris Convention, revision of The Hague, 6 November 1925,supra, Chapter 2, note 2.

250 Article 16(3) TRIPS, supra, Chapter 2, note 26.251 First sentence of Article 16(2) TRIPS: ‘Article 6bis of the Paris Conven-

tion (1967) shall apply, mutatis mutandis, to services’. Id.252 The US has been a member of the Paris Convention since 30 May 1887

and the Hague Act which revised the Paris Convention on 6 November 1925introducing Article 6bis Paris Convention entered into force in the US after 6March 1931. See WIPO Treaties and Contracting Parties.

253 The US has been a member of the Marrakesh Agreement Establishing theWorld Trade Organization (WTO) since 1 January 1995, of which the Agreementon Trade-Related Aspects of Intellectual Property Rights is an integral part, seeAnnex 1C of the Agreement Establishing the WTO.

254 Article 6bis Paris Convention, revision of The Hague, 6 November 1925,supra, Chapter 2, note 2.

255 Article 16(3) TRIPS, supra, Chapter 2, note 26.256 Maison Prunier v Prunier’s Rest. & Café, 159 Misc. 551, 557–8, 288

N.Y.S. 529, 535–6 (N.Y.Sup.Ct.1936).




competition. In 2007, in ITC Ltd. v Punchgini, Inc., the Second Circuitrelied on Trademark Board rulings which did not recognize that thewell-known/famous marks doctrine derives from any provision of theLanham Act or other federal law.257 According to the Second Circuitthe case needed to be resolved under state common law and thereforesent certified questions to the New York Court of Appeals.258 The lattercourt made clear in an advisory opinion that it ‘recognises common lawunfair competition law, but not the “famous” or “well-known” marksdoctrine’.259

Problems with Identical Trademarks for Dissimilar Goods or Services

Orthodox trademark law protects only famous trademarks or trademarkswith a reputation against identical trademarks for dissimilar goods orservices against trademark dilution. In other words: it has been assumedthat the connection of a senior trademark for goods or services that didnot reach the threshold of fame or reputation and an identical juniortrademark with different products or services can peacefully coexist. Thepremise was: if there is no competition, then there can be no unfaircompetition. However, if a trademark is not famous yet or if it only hasreached a reputation in some niche market, one can argue that thetrademark holders’ investments in advertisements in the trademark mighthave charged it with personality, and that the investments in advertise-ments deserve it to be protected. Just as important, in order to distinguishnon-famous identical trademarks for dissimilar goods or services fromeach other it can be argued that the use of different trademark logos canbe crucial.

Even if one really would believe that only famous trademarks ortrademarks with a reputation deserve to be protected against trademarkdilution, the automatic determination of whether a trademark is famousenough or has enough reputation is impossible if there is no special listfor that kind of trademark.

If trademarks that are well known according to the Paris Conventionare not registered, they are still protected. However, in most cases thetrademark holders of well-known trademarks have enough resources to

257 ITC Ltd. v Punchgini, Inc., 482 F.3d 135 (2d Circuit), 28 March 2007,para. 83.

258 ITC Ltd. and ITC Hotels Ltd., Appellants, v Punchgini, Inc., New YorkCourt of Appeals, 2007 NY Int. 164, number 165, 13 December 2007.

259 Id.




register them in a special list for well-known trademarks, which would beconducive to automatic enforcement.

Orthodox trademark law assumes that if an identical trademark fordissimilar goods or services is used or registered for geographicallyseparate markets this is not a problem, irrespective of whether thetrademark is famous or has a reputation. This is a misconception, as the1961 Lincoln Restaurant Corp. v Wolfies Restaurant, Inc.260 case of twoseemingly separate markets already has demonstrated. A famous restau-rant from Miami Beach, Florida, sued a company for using the identicalname in Brooklyn, New York. The judge found that there was unfaircompetition, because many people from Brooklyn frequented Miami andpatronized the restaurants there.261

The trend that could already be perceived in 1961262 was extrapolatedand amplified by globalization and the internet.

Non-famous trademarks or trademarks without enough reputation areonly protected in the designated classes of goods or services for whichthey are registered according to the Nice Classification,263 conforming tothe specificity principle. IP Legislator264 demonstrated the unclearboundaries of the Nice Classification. First the OHIM President inCommunication No. 4/03265 explained that OHIM did ‘not object to theuse of the general indications and class headings as being too vague orindefinite, contrary to the practice which is applied by some nationaloffices in the EU and in third countries in respect of some of the classheadings and general indications’.266 However, the CJEU held thatapplicants who use all the general indications of a particular classheading of the Classification must specify whether their application forregistration is intended to cover all the goods or services included in the

260 Lincoln Restaurant Corp. v Wolfies Restaurant, Inc., 291 F.2d 302, 303(2d Cir. 1961).

261 Id.262 Id.263 The Nice Agreement Concerning the International Classification of Goods

and Services for the Purposes of the Registration of Marks, of 15 June 1957, asrevised at Stockholm on 14 July 1967, and at Geneva on 13 May 1977, andamended on 28 September 1979. Supra, Chapter 2, note 4.

264 Chartered Institute of Patent Attorneys v Registrar of Trade Marks (IPLegislator) (Case C-307/10), Judgment of the ECJ, 19 June 2012.

265 Communication No. 4/03 of OHIM President, 16 June 2003, concerningthe use of class headings in lists of goods and services for Community trademark applications and registrations.

266 Second para. Point III Communication No. 4/03, id.




alphabetical list of that class or only some of those goods or services.267

After IP Legislator, OHIM President’s Communication No. 2/12268

rescinded Communication No. 4/03.269

Besides the scope of the class headings, another practical problem ofclassifying trademarks is the difficulty of determining the scope of somegoods and services. This has resulted in literal and rigid application ofclasses. Schechter already noted this problem by giving an illustration:

Thus bread and flour, pancake flour and syrup are in the same class, while, onthe other hand, ‘straight’ wheat flour and ‘prepared flours’ – such as ‘pancakeflour’ – are declared not to be of the same ‘class of commodities ‘. Chewinggum, held to be a ‘food’, and chewing tobacco, held to be a ‘narcotic’, icecream and milk, cheese and butter are likewise found not [sic] of differentclasses.270

Since the convergence of different technologies, such as phone, camera,audio-player, gaming console, reading device and computer into onesmart phone, this trend might have been aggravated.

In Intel v CPM,271 the ECJ explained the boundaries problem in aspatial way and showed the relation between the similarity of mark andthe similarity of product/service:

267 IP Legislator, supra note 264, para 64, third point. Ashmead rightlypointed out that the Court’s linkage of the validity of class heading registrationsto a mixture of intent and deemed coverage of Nice class alphabetical lists isinconsistent with the Court’s requirement of clarity and precision. According toAshmead this is ‘likely to involve goods scope broadening’, which, he argued,cannot be lawful within the international legal framework. Richard Ashmead, ‘IPTranslator: A Sun-Drenched Perspective’, IPKat, 9 July 2012, accessed 9February 2015 at: http://ipkitten.blogspot.hk/2012/07/ip-translator-sun-drenched-perspective.html.

268 Communication No. 2/12 of OHIM President, 20 June 2012, concerningthe use of class headings in lists of goods and services for Community trademark applications and registrations.

269 See supra note 265.270 Schechter, supra, Chapter 1, note 83, at 823. See also Fox: ‘[T]obacco

pipes were not wares similar to cigarettes and tobacco, that canned chickenproducts including chicken sandwich spread on the one hand and jams, jellies,pickles, sauces and vinegar on the other hand were not similar wares and thatleather footware and rubber footware were not similar’. Harold G. Fox, THECANDADIAN LAW OF TRADE MARKS AND UNFAIR COMPETITION(2nd ed., Toronto: Carswell, 1956).

271 Intel v CPM, supra, Chapter 2, note 251.




[a]round each trade mark there is an ‘exclusion zone’ which other marks maynot enter. The extent of that zone will vary according to circumstances. Anidentical or extremely similar mark must be kept at a greater distance in termsof the goods or services covered. Conversely, a mark used for identical orextremely similar products must be kept at a greater distance in terms ofsimilarity with the protected mark.272

Recital 10 Community Trademark Regulation273 postulates trademark asproperty, because it exists separately from the trademark holders, and canbe assigned, licensed, or charged as security.274 Nevertheless, the doctrinethat the same trademarks may be used in different classes by differentowners is premised on the idea that there is no property in a trademarkapart from the business or trade in connection with which it isemployed.275

Schechter contended that ‘[o]nce a mark has come to indicate to thepublic a constant and uniform source of satisfaction, its owner should beallowed the broadest scope possible for “the natural expansion of trade”to other lines of fields of enterprise’.276 In other words, Schechteradvocated a right for the trademark holder to extend the use of thetrademark to other activities, which includes the possibility to license histrademark. However, the Trademark Law Review Committee was con-cerned about extended protection for trademarks for dissimilar goods orservices:277 ‘There was also some concern that allowing trade markprotection for an indefinite range of goods would lead to the exhaustionof possible trade mark names, hence the Committee’s remark regardingthe “designing ingenuity of man.”’278 To withhold from trademarkholders the right to extend the use of their trademark for new entre-preneurial activities, because otherwise the creatively challenged cannotcopy already used trademark names for their activities, seems to beeconomically suboptimal.

272 Id.273 Supra, Chapter 2, note 36.274 Recital 10 Community Trademark Regulation: ‘Whereas a Community

trade mark is to be regarded as an object of property which exists separatelyfrom the undertakings whose goods or services are designated by it; whereasaccordingly, it must be capable of being transferred, subject to the overridingneed to prevent the public being misled as a result of the transfer. It must also becapable of being charged as security in favour of a third party and of being thesubject matter of licences;’, id.

275 American Steel Foundries v Robertson, 269 U.S. 372 (1926).276 Schechter, supra, Chapter 1, note 83, at 823.277 Siebrasse, supra, Chapter 2, note 151, at 19.278 Id.




Nelson proposed that dilution protection should be limited to trade-marks that are identified with one product.279 According to Nelson, if atrademark holder is using the trademark for more than one product, theproprietor would be responsible for his own dilution by blurring.280

However, one can argue that each trademark holder should have the rightof self-determination to use his trademark at his own discretion and risk.

If a company uses a similar or identical trademark of a third party thatis not famous or has not enough reputation, in a commercial way, but ina different good or service class than the third party had registered for,both the US and EU jurisdictions do not impose any restrictions. Thisleads to a coexistence of similar or identical trademarks. To give anexample: although one can argue that Ajax, the Amsterdam football clublisted at the Euronext exchange,281 might be a trademark with a reputa-tion, it does coexist with trademark namesakes in different productclasses, including a detergent282 and a manufacturer of fire extinguish-ers.283 As pointed out before, this can lead to potential problems oftrademark confusion and dilution. These problems play to an even greaterextent when the trademark concerns a trademark logo. Imagine the threeAjax companies with their different activities using one identical or verysimilar trademark logo. As will be argued in Chapter 8, there is no reasonwhy any company, including those who lack a famous trademark ortrademark without reputation, should allow other companies to use asimilar or identical trademark logo in a commercial way for a good orservice in another class, without their express authorization.

6.4 DEFENCES

After the legislation and case law of trademark dilution in the US andunfair advantage of or detriment to the distinctive character or repute ofthe trademark in the EU, and their respective prerequisites for theanti-dilution measures are examined, this section will examine how theprotection against trademark dilution and the freedom of expression canbe reconciled.

279 Nelson, supra, Chapter 2, note 84, 731–5.280 Id.281 Amsterdam Football Club Ajax.282 Colgate Ajax, accessed 9 February 2015 at: http://www.colgate.com/app/

Colgate/US/HC/Products/Dishwashing/Ajax.cvsp.283 Ajax Chubb Varel, accessed 9 February 2015 at: http://www.ajaxfire.nl.




Trademark dilution claims and defences based on the freedom ofexpression are well matched, better than trademark infringement anddefences based on the freedom of expression. Trademark infringement ispremised on the need to prevent a likelihood of consumer confusion,while trademark dilution is premised on the need to prevent againstharming the trademark. Averting fraud via a claim of trademark infringe-ment is considered to forfeit any defence based on the First Amend-ment284 or human rights treaties.285 While averting harm to the trademarkis more complex, since it should take into account both the right tofreedom of expression, which includes parody and critical comments, andthe right to protect property286 or intellectual property.287 Or as JudgeKozinski argued in Mattel, Inc. v MCA Records, Inc. in 2000: trademarkdilution injunctions lack a First Amendment compass.288

In order to determine whether the protection against trademark dilutionis adequate one needs to take the defences against trademark dilution intoaccount. In the US the fair use defences against trademark dilution and inthe EU the limitations and exclusions against unfair advantage ordetriment to the distinctive character or repute of the trademark areexamined. The right to freedom of expression, from which the parodydefence and critical comments defence derive, needs to be weighedagainst the right of the trademark holder to protect his trademark againsttrademark dilution.

The chapter first examines the bases of the defences: for the defend-ants, the right to freedom of expression, and for the plaintiffs, the defenceagainst this defence: the right to protect their property. Then the chapterposes the question which kind of expression deserves to fall under theright to freedom of expression to limit the protection against trademarkdilution, and makes the distinction between commercial and non-commercial expression, and includes factors of general interest, damage,dispersion and prejudice.

After that an examination will be provided of the fair use defences andlimitations/exclusions to the exclusive rights, derived from the right tofreedom of expression. This includes the defence of fair use in the caseof trademark dilution in the US and in the EU the unfair advantage ordetriment to the distinctive character or repute of the trademark. The

284 U.S. Const. amend. I (1791).285 EU Charter, supra, Chapter 2, note 34.286 Article 11(1), id.287 Article 17(2), id.288 Mattel, supra note 83, para. 33.




three-step test for copyright law will be compared with the two-step testfor trademark law.

Parody aims to amuse instead of to confuse. The chapter questionswhether trademark law should have a sense of humour at the expense oftrademark holders, and is followed by the parody/satire, non-competing/competing, non-commercial/commercial, high culture/low culture andtransformative use/non-transformative use dichotomies to see whetherthey can function as criteria to decide whether or not the parodic use of atrademark should be allowed. The chapter also examines free-riding/unfair advantage of distinctive character or repute. Next to the parodicuse of the trademark, the chapter explains that the trademark can also beused in a criticizing or commenting way.

The chapter demonstrates why the current trademark law insufficientlyprotects the trademark logo on social media against trademark dilution,and alludes to a solution.

Bases of Defence, and DefenceAgainst Defence

In both the US and EU the right to freedom of expression is consideredof crucial importance to the effective functioning of a democratic societyand as ‘a fundamental requirement for culture to continue’.289 However,the human right of freedom of expression is not absolute and must beweighed against another human right: the protection of property.290

The First Amendment to the Constitution291 guarantees the right tofreedom of expression in the US. New York Times v Sullivan292 confirmedthe importance of the right where the Supreme Court held that the FirstAmendment can be considered even if it is not claimed by the parties.293

As already pointed out, the right to freedom of expression is not absoluteand needs to be weighed against the right to protect property. The

289 ‘Fair use, a fundamental requirement for culture to continue, meets theFirst Amendment all over the Internet’. Spiesel, supra, Chapter 4, note 48.

290 That the protection of property is a human right becomes clear after therealization that people own their own bodies.

291 ‘Congress shall make no law respecting an establishment of religion, orprohibiting the free exercise thereof; or abridging the freedom of speech, or ofthe press; or the right of the people peaceably to assemble, and to petition thegovernment for a redress of grievances’. U.S. Const. amend. I (1791).

292 New York Times v Sullivan, 376 U.S. 254, 84 S. Ct. 710 U.S. Ala. 1964, at724–30.

293 Id.




Constitution294 treated the latter right impliedly, and also expressly in theFifth295 and Fourteenth Amendments,296 via ‘due process’ provisions.These include the rule, based on international law, that prescribescompensation in case of expropriation, where a redistribution of privateproperty took place or where the use of private property was restrained inthe public interest. However, lex specialis derogat legi generali.297 Fairuse in case of parody is such a lex specialis (see Chapter 6.4), andalthough the right of parody is arguably in the general interest, it can alsobe seen as an act that restrains the use of the trademark holder’s property,constituting an expropriation, which, however, does not need to becompensated under this lex specialis.

In the Council of Europe, which includes the EU member states andtwenty other countries,298 Article 10 ECHR299 guarantees the right tofreedom of expression. If one assumes that trademark rights are aproperty then Article 10 ECHR must be balanced with Article 1 of

294 ‘[T]he Framers [of the Constitution] simply assumed the existence ofsuch [property] rights, defined and protected mainly by state law, because thecommon law, grounded in property, was the background for all they did’. RogerPilon, THE CONSTITUTIONAL PROTECTION OF PROPERTY RIGHTS:AMERICA AND EUROPE, Economic Education Bulletin, AIER, 2008, at 8.

295 ‘No person shall … be deprived of life, liberty, or property, without dueprocess of law; nor shall private property be taken for public use, without justcompensation’. U.S. Const. amend. V (1791).

296 ‘No state shall make or enforce any law which shall abridge the privilegesor immunities of citizens of the United States; nor shall any state deprive anyperson of life, liberty, or property, without due process of law;’ U.S. Const.amend. XIV (1868).

297 Latin maxim which means: ‘special law derogates from the general law’.298 The US has observer status.299 Article 10 ECHR: (1) Everyone has the right to freedom of expression.

This right shall include freedom to hold opinions and to receive and impartinformation and ideas without interference by public authority and regardless offrontiers. This article shall not prevent States from requiring the licensing ofbroadcasting, television or cinema enterprises. (2) The exercise of these free-doms, since it carries with it duties and responsibilities, may be subject to suchformalities, conditions, restrictions or penalties as are prescribed by law and arenecessary in a democratic society, in the interests of national security, territorialintegrity or public safety, for the prevention of disorder or crime, for theprotection of health or morals, for the protection of the reputation or the rights ofothers, for preventing the disclosure of information received in confidence, or formaintaining the authority and impartiality of the judiciary. Supra, Chapter 2,note 6.




Protocol No. 1 to ECHR,300 which provides the right to protection ofproperty. Article 11 EU Charter,301 which binds EU members, except forthe UK and Poland that signed an opt-out protocol and the CzechRepublic that will be included in this opt-out protocol,302 prescribes theright to freedom of expression, which should be balanced with Article17(2) EU Charter, which prescribes that ‘Intellectual Property shall beprotected’.303 The relation between the ECHR and the EU Charter isexplained in Article 52(3) EU Charter: that the level of protection of theEU Charter should at least be as high as that of the ECHR.

In 1987, Judge Bownes in L.L. Bean, Inc. v Drake Publishers, Inc.wrote that ‘trademark rights do not entitle the owner to quash anunauthorized use of the mark by another who is communicating ideas orexpressing points of view’.304 However, whether or not a trademarkholder can protect its trademark, despite a third party’s right to freedomof expression, needs to be balanced against one another, and is arguablyfact specific.

300 Article 1 Protocol No. 1 to ECHR: ‘Every natural or legal person isentitled to the peaceful enjoyment of his possessions. No one shall be deprived ofhis possessions except in the public interest and subject to the conditionsprovided for by law and by the general principles of international law’. Supra,Chapter 2, note 7.

The preceding provisions shall not, however, in any way impair the right of aState to enforce such laws as it deems necessary to control the use of property inaccordance with the general interest or to secure the payment of taxes or othercontributions or penalties.

301 Article 11(1) EU Charter: ‘Everyone has the right to freedom of expres-sion. This right shall include freedom to hold opinions and to receive and impartinformation and ideas without interference by public authority and regardless offrontiers’. EU Charter, supra, Chapter 2, note 34.

302 UK and Poland fall under an opt-out protocol (Protocol No. 30 on theapplication of the Charter of Fundamental Rights of the European Union toPoland and to the United Kingdom, annexed to the Treaty on the EU and to theTreaty on the Functioning of the European Union), which effectiveness in JoinedCases C-411/10 and C-493/11 NS v Secretary of State for the Home Departmentand Others, was denied by the ECJ. The Czech Republic’s condition of signingthe Lisbon Treaty in 2007 was that it would be added to Protocol 30. EU-RightsClinic, ‘Background Note: ECAS’s Requests for Access to Commission Docu-ments Concerning the Opt-Out from the EU Charter of Fundamental Rights’,accessed 9 February 2015 at: http://blogs.kent.ac.uk/eu-rights-clinic/files/2013/03/Background-Note-Access-to-Documents-on-Charter-Opt-Out-04.03.13.pdf.

303 Article 17(2) EU Charter, supra, Chapter 2, note 34.304 L.L. Bean, Inc. v Drake Publishers, Inc., 811 F.2d 26, 29 (1st Cir.1987).




Freedom of Expression v Property

Sakulin described the tension between trademark protection and thefreedom of expression:

In practical terms, the freedom of commercial and non-commercial expressionmay include the freedom to use trademarks of third parties, in particular inartistic and political expression, but also in commercial expression, likecomparative advertising, use as a reference, or use as a descriptive indication.Freedom of expression may thus conflict with the rights of the trademarkholder to prohibit the use of his trademarks.305

Farber argued that courts have applied a higher standard for commercialexpressions to be communicated: ‘If a political candidate can lie withoutfear of legal intervention, why can’t a used car dealer? Why should acigarette manufacturer be required to publicize disagreeable facts abouthis product when a newspaper commentator cannot be penalized forincomplete disclosure?’306 Once communicated, the courts dealt with thiscommercial speech in comparison to non-commercial speech arguably ina discriminatory manner.307 To summarize the case law: first the courtsdecided that freedom of expression covers all speech, of both a commer-cial and non-commercial nature.308 Later, the courts decided that thereexists an intermediate level of protection: if commercial communicationswere intertwined with non-commercial communications, they wereregarded as the latter and protected by the First Amendment.309 However,

305 Sakulin, supra, Chapter 1, note 88.306 Daniel A. Farber, Commercial Speech and First Amendment Theory, 74

NW. U. L. REV. 372, 373 (1979).307 See the rise and demise of the commercial speech doctrine in the

following case law: Valentine v Chrestensen, Supreme Court of the U.S., 316U.S. 52 (1942), United States v O’Brien, 391 U.S. 367 (1968), Bigalow vVirginia, 421 U.S. 809 (1975), Virginia State Board of Pharmacy v VirginiaCitizens Consumer Council, Inc., 425 U.S. 748 (1976), Ohralik v Ohio State BarAss’n, 436 U.S. 447 (1978), Vill. of Schaumberg v Citizens for a Better Env’t,444 U.S. 620, 632 (1980), Bolger v Youngs Drug Products Corp., 463 U.S. 60(1983), National Federation of Blind v Riley, 487 U.S. 796 (1988), Dr. SeussEnterprises v Penguin Books USA Inc. (Dr. Seuss) 924 F. Supp. 1559, 1574 (S.D.Cal. 1996), and Hoffman v Capital Cities/ABC, Inc., 255 F.3d 1180, 1184 (9thCir. 2001).

308 Virginia State Board of Pharmacy v Virginia Citizens Consumer Council,Inc., supra note 307, at 1825–31.

309 Riley v National Federation of Blind, Inc., 487 U.S. 781 (1988), at795–801.




courts have varied their motivations by referring to one of the abovementioned jurisprudence.310

One can argue that for a long period of time trademarks were seen asexclusively commercial. As pointed out in ‘status-signalling quality’ inthe ‘Literature Review’ of Chapter 1, their function as social, politicaland cultural signifier has become more prominent, which made thecharacter of the communication arguably more non-commercial, there-fore more deserving of protection.

Next to the ratio between the commercial nature of the expression andthe public or general interest nature of the matter, Sakulin provided anon-exhaustive list of criteria to assess whether there is a fair balancebetween the right to freedom of expression and the right to protectproperty:311 the extent and intensity of the damage as a result of theexpression; the fame of the protected object;312 extent of dispersion;whether the use unnecessarily prejudices the reputation of the object ofprotection.313 Van den Berg and Haak asserted that another factor shouldbe taken into account: the extent to which it has been attempted toprevent the risk of confusion.314

Based on the freedom of expression rationale are the defences fortrademark dilution: fair use in the US and limitations and exclusions inthe EU. To be able to assess whether trademark law provides sufficientprotection against trademark dilution, one has to take into account thesedefences.

For a better comprehension of the potential of the fair use test fortrademark law in the US, one first needs to take a look at the fair use testfor copyright law. In the same vein, if one wants to understand the

310 Lee Ann W. Lockridge, When Is a Use in Commerce a NoncommercialUse? 37 FLA. ST. U. L. REV. 337 (2010).

311 Wolfgang Sakulin, Note under Vzr. Rb. The Hague May 4, 2011, Plesnerv Louis Vuitton, LJN BQ3525; IEPT20110504, IER 39 (2011); NJF 264 (2011).

312 ‘It is true that large public companies inevitably and knowingly laythemselves open to close scrutiny of their acts … and the limits of acceptablecriticism are wider in the case of such companies’. Fayed v the United Kingdom,21 September 1994, ECHR Series A no. 294-B. Steel and Morris v the UnitedKingdom, no. 68416/01, ECHR 2005-II, para. 94.

313 Guibault also contended that for examining the level of protection morefactors need to be taken into account and weighed: the extent and intensity of thedamage and the extent of dissemination, in order to see whether the use undulyaffects the reputation. Lucie Guibault, The Netherlands: Darfurnica, Miffy andthe Right to Parody!, 3 JIPITEC 237 (2011), para. 3.

314 Josine van den Berg and Maarten Haak, IE-Rechten en uitingsvrijheid,naar een fair balance, 39 BMM BULLETIN 2 (2013).




development and possibilities of an open term for limitations andexceptions in the EU that can provide flexibility for trademark law, oneneeds to first examine the three-step test that was drafted for copyrightlaw under the Berne Convention.315

This section will show that the fair use defences to trademark dilutionor the limitations and exceptions to the ‘unfair advantage of or detrimentto the distinctive character or repute of the trademark’ and a sufficientprotection of the trademark logo can be combined, under the conditionthat only a simple formality is taken into account, as will be explicated inChapter 9.

Defence of Fair Use in the Case of Trademark Dilution in the US

Defendants of a trademark dilution action can invoke a fair use defencebased on the Lanham Act § 43(c), now codified in 15 U.S.C.§ 1125(c)(3)(A–C),316 which gives some exclusions from what is action-able under the dilution by blurring and dilution by tarnishment pro-visions:

(A) Any fair use, including a nominative or descriptive fair use, orfacilitation of such fair use, of a famous mark by another personother than as a designation of source for the person’s own goods orservices, including use in connection with –(i) advertising or promotion that permits consumers to compare

goods or services; or(ii) identifying and parodying, criticizing, or commenting upon

the famous mark owner or the goods or services of the famousmark owner.

(B) All forms of news reporting and news commentary.(C) Any noncommercial use of a mark’.

U.S.C. § 1125(c)(3)(A)

Dilution is not actionable317 in case of fair use, including nominative ordescriptive fair use, or facilitation of such fair use (as discussed inChapter 5).

315 Berne Convention, supra, Chapter 2, note 3.316 15 U.S.C. § 1125.317 U.S. Code, Title 15, Chapter 22, subchapter III, § 1125(c)(2)(B).




U.S.C. § 1125(c)(3)(A)(i)Comparative advertising318 is legitimate in the US and in the EU319

jurisdictions. In such advertising often the trademark logo is presented ofboth companies that are compared by one of the companies that asserts ithas the best product attributes or price/quality relationship. An actualcomparison, not being a comparative advertisement is hard to distinguishthese days from those that are. One has to do a lot of research to find outwhether the website that is comparing has no interest in the company thathappens to be selected as the best. There are even bloggers that are paidby companies to promote particular brands. If only authorized trademarkholder users were allowed to use the trademark logo, the uncertaintyabout the source of a message will be solved. If one is not authorized touse a trademark logo, one can still describe, critique, inform, present inproximity, learn, comment, report or satirize brands without actuallyusing the trademark logo.

U.S.C. § 1125(c)(3)(A)(ii)Thus there is a fair use defence in case of trademark dilution when thetrademark is used for:

– identifying and parodying;– criticizing or commenting;– upon the famous mark owner; or– the goods or services of the famous mark owner.320

Mentioning ‘identifying’ after it was already clear that ‘fair use, includ-ing a nominative or descriptive fair use’ is included, seems to besuperfluous.

318 According to Siebrasse comparative advertising does not injure thegoodwill in the mark. ‘On the contrary, because it attempts to lure customersfrom one supplier to another, though it emphasizes the similarity between thegoods, at the same time it emphasizes the distinction between the two manufac-turers, and so does not weaken the association between the first supplier and itsmark’. Siebrasse, supra, Chapter 2, note 151.

319 Misleading and Comparative Advertising Directive 2006/114/EC of theEuropean Parliament and of the Council, 12 December 2006.

320 15 U.S.C. § 1125(c)(3)(A)(ii).




Defence of Limitations/Exceptions of UnfairAdvantage or Detrimentto the Distinctive Character or Repute of the Mark in the EU

In order to analyse the two-step test for the limitations and exceptions oftrademark law it is useful to first look at its predecessor: the three-step testfor copyright law, which might even apply to trademark rights directly.

Article 5(3)(k) Information Society Directive321 allows member statesof the EU to legislate exemptions of copyright use for the purpose ofcaricature, parody or pastiche without defining these purposes anyfurther. However, EU copyright law does provide an open three-step test,in Article 5(5) Information Society Directive,322 based on Article 9(2)Berne Convention,323 which tests whether exceptions and limitations,such as parody, must be applied or not. The three-step test originated atthe Stockholm Conference revision of the Berne Convention in 1967.324

Article 9(2) Berne Convention325 applies to works or other subjectmatter, and therefore might include trademarks.

Three-step testThe limitations of the Berne Convention can only be applied:

Step 1. in certain special cases;Step 2. which do not conflict with the normal exploitation of the work

or other subject matter; and

321 Article 5 Directive 2001/29/EC of the European Parliament and of theCouncil of 22 May 2001 on the harmonisation of certain aspects of copyright andrelated rights in the information society (Information Society Directive): ‘(3)Member States may provide for exceptions or limitations to the rights providedfor in Articles 2 and 3 in the following cases: … (k) use for the purpose ofcaricature, parody or pastiche’.

322 Article 5(5) Directive 2001/29/EC of the European Parliament and of theCouncil of 22 May 2001 on the harmonisation of certain aspects of copyright andrelated rights in the information society (Information Society Directive): ‘Theexceptions and limitations provided for in paragraphs 1, 2, 3 and 4 shall only beapplied in certain special cases which do not conflict with a normal exploitationof the work or other subject-matter and do not unreasonably prejudice thelegitimate interests of the rightholder’.

323 Article 9(2) Berne Convention: ‘It shall be a matter for legislation in thecountries of the Union to permit the reproduction of such works in certain specialcases, provided that such reproduction does not conflict with a normal exploit-ation of the work and does not unreasonably prejudice the legitimate interests ofthe author’. Supra, Chapter 2, note 3.

324 Berne Convention, id.325 Berne Convention, id.




Step 3. do not unreasonably prejudice the legitimate interests of theright holder.

Limitations can only be applied in ‘certain special cases’, when theyserve some public policy objective326 (step one).

‘[T]ake account of the legitimate interests of the owner of thetrademark and of third parties’ (step 3) can be interpreted as ‘do notunreasonably prejudice the legitimate interests of the right holder’.Remuneration might be able to make the prejudice ‘reasonable’.327

One could see step two as part of step three: where the exceptions andlimitations conflict with the normal exploitation of the work or othersubject matter, then one can argue that the legitimate interests of the rightholder have been unreasonably prejudiced.

There is no consensus on how to interpret the three-step test. Shouldthe test be applied to the limitations in legislation or in concrete cases byjudges? Also there is uncertainty as how to apply the test.

Ficsor argued, based on two WTO cases,328 that ‘the test must beapplied step by step in a way that, if the exception or limitation fails thecriterion of a step, it fails the test in general and there is no need toproceed to the next step’.329 Geiger made the point that the impreciseformulation of conflict with the normal exploitation of the work of steptwo could pre-empt the more meaningful assessment of unreasonableprejudice of legitimate interests of step three. The WTO Panel’s interpret-ation of ‘normal exploitation’ strengthens this point: it makes clear that itnot only covers current forms of exploitation that create sufficientincome, but also those that have the potential to do so in the future.330 Insuch scenarios Geiger proposed to start with step three ‘and to use thesecond step afterwards as a corrective measure to eliminate the mostabusive conflicts with the exploitation of the work’.331

Thirty prominent intellectual property scholars have drafted a declar-ation that states that ‘[t]he three steps are to be considered together and

326 Kamiel Koelman, Fixing the Three-Step Test, EIPR 3 (2006).327 Id.328 WTO panel report patent, supra, Chapter 2, note 5.329 Mihály Ficsor, ‘“Munich Declaration” on the Three-Step Test: Respect-

able Objective – Wrong Way to Try to Achieve It’, 11 May 2012, accessed 9February 2015 at: http://www.copyrightseesaw.net/data/documents/documents/0/6/6/0665a0ebfa425ceb829cc8fb4f3bf03f.doc.

330 WTO panel report copyright, supra, Chapter 2, note 5.331 Christophe Geiger, The Role of the Three-Step Test in the Adaptation of

Copyright Law to the Information Society, UNESCO, e-Copyright Bulletin,January–March, 2002, at 18.




as a whole in a comprehensive overall assessment’.332 Koelman assertedthat the three-step test should be redesigned, inspired by the fair use test,from three hurdles to three factors that must be weighed together and tolet legislators and courts consider all interests involved.

Griffiths pointed to a more radical interpretation of the three-step test:not as a secondary constraint to see whether the statutory exceptions areacceptable, but as a safety net to see whether the scope of the exclusiverights of the copyright holder are legitimate.333

Open terms such as ‘special’, ‘normal’, ‘unreasonably’ and ‘legitimate’give sovereignty to legislators and flexibility to judges, but also causelegal uncertainty, which could have chilling effects. For example, it canbe costly to prove via studies that a limitation conflicts with the normalexploitation, and the judge might not be have the means to assess thisconflict with an alternative study.334

Whether the limitations to the exclusive rights are checked by opennorms or the scope of the exclusive rights are checked via open norms, inboth cases the advantage of open norms is flexibility which could lead tofair decisions in unforeseen new concrete cases. This is especiallywelcome to keep up with the ever increasing rate of technologicalchange. Besides the lack of predictability and legal uncertainty, opennorms could result in courts that make de facto laws. This cannot bejustified because the courts’ lawmaking process lacks any democraticlegitimacy.335

Two-step testThe Trademark Directive336 and the Community Trademark Regulation337

both lack an explicit provision which allows member states to exempttrademark use for the purpose of parody or pastiche, in contrast to Article

332 Christophe Geiger, Reto Hilty, Jonathan Griffiths and Uma Suthersanen,Declaration: A Balanced Interpretation of the ‘Three-Step Test’ in CopyrightLaw, 1 JIPITEC 119 (2010).

333 Jonathan Griffiths, The ‘Three-Step Test’ in European Copyright Law:Problems and Solutions, QUEEN MARY SCHOOL OF LAW LEGAL STUD-IES RESEARCH PAPER No. 31/2009, at 14.

334 Geiger, supra note 331, at 16.335 P. Bernt Hugenholtz and Martin Senftleben, Fair Use in Europe: In

Search of Flexibilities (study commissioned by Google) 14 November 2011, at 8.336 Article 5(2) and 5(5) Trademark Directive, supra, Chapter 2, note 11.337 Article 9(1)(c) Community Trademark Regulation, supra, Chapter 2,

note 36.




5(3)(k) Information Society Directive,338 which does provide theselimitations for copyright law. However, the trademark regulations givetrademark holders the rights to prevent others from using their trademark‘without due cause’. This gives courts the possibility to interpret theinvocation of the fundamental guarantee of freedom of expression andinformation of Article 11 EU Charter339 and Article 10 ECHR340 as ‘duecause’ after weighing them against the right to protection of intellectualproperty341 or more broadly property.342

In TRIPS343 one can find different incarnations of Article 9(2) BerneConvention: Article 13 TRIPS344 gives a three-step test to assess whetherlimitations to copyright might be applied by legislatures or courts. Article26(2) TRIPS345 also gives a three-step test for limitations to the right ofindustrial designs, and Article 30 TRIPS346 does the same for patentrights. This section mainly deals with Article 17 TRIPS which gives atwo-step test for limitations to trademark rights.

Three WTO disputes347 dealt with the tests for limitations and haveshed some light on how to interpret the terms used in the limitations totrademark rights. It is interesting to see how the incorporation of theprovisions of the Berne and Paris Conventions in TRIPS348 have led to asituation where the panels of the WTO dispute settlement system have

338 Article 5 Information Society Directive: ‘(3) Member States may providefor exceptions or limitations to the rights provided for in Articles 2 and 3 in thefollowing cases: … (k) use for the purpose of caricature, parody or pastiche;’.Supra note 322.

339 EU Charter, supra, Chapter 2, note 34.340 ECHR, supra, Chapter 2, note 6.341 Article 17(2) ECHR, id.342 Article 1 Protocol No. 1 to ECHR, supra, Chapter 2, note 7.343 TRIPS, supra, Chapter 2, note 26.344 Id.345 Article 26(2) TRIPS: ‘Members may provide limited exceptions to the

protection of industrial designs, provided that such exceptions do not unreason-ably conflict with the normal exploitation of protected industrial designs and donot unreasonably prejudice the legitimate interests of the owner of the protecteddesign, taking account of the legitimate interests of third parties’. Id.

346 Article 30 TRIPS: ‘Members may provide limited exceptions to theexclusive rights conferred by a patent, provided that such exceptions do notunreasonably conflict with a normal exploitation of the patent and do notunreasonably prejudice the legitimate interests of the patent owner, takingaccount of the legitimate interests of third parties’. Supra, Chapter 2, note 26.

347 WTO panel report patent; WTO panel report trademark, supra, Chapter 2,note 5.

348 TRIPS, supra, Chapter 2, note 26.




become de facto the ultimate interpreters of these intellectual propertytreaties under the auspices of WIPO.349

Article 17 TRIPS350 allows members of the WTO, which include theUS and EU, to provide ‘limited exceptions to the rights conferred by atrademark, such as fair use of descriptive terms, provided that suchexceptions take account of the legitimate interests of the owner of thetrademark and of third parties’.

So in contrast to the three-step test for limitations to the rights ofcopyright, industrial design and patent, TRIPS provides a two-step testfor limitations to trademark rights:

Two-step test351

Step 1: limited exceptions (and fair use of descriptive terms is given asan example of such limited exceptions);

Step 2: taking account of the legitimate interests of the trademarkholder and of third parties.

How to interpret these terms? Interpretation of step 1: ‘limited excep-tions’ is similar to ‘certain special cases’ for copyright. The trademarkpanel agreed with the patent panel352 that the term ‘exceptions’ connotesa ‘limited derogation, one that does not undercut the body of rules fromwhich it is made’.353 ‘Limited’ was used to emphasize that the exceptionmust be narrow and permit only a small diminution of rights.354

Interpretation of step 2: the trademark panel agrees with the patentpanel’s interpretation of ‘legitimate interests’:

To make sense of the term ‘legitimate interests’ in this context, that term mustbe defined in the way that it is often used in legal discourse – as a normativeclaim calling for protection of interests that are ‘justifiable’ in the sense thatthey are supported by relevant public policies or other social norms.355

349 The two international organizations signed a cooperation agreement,which excluded an arrangement on the interpretation of each other’s treaties.WTO–WIPO Cooperation Agreement, 22 December 1995.

350 TRIPS, supra, Chapter 2, note 26.351 Article 17 TRIPS, id.352 WTO panel report patent, supra, Chapter 2, note 5.353 WTO panel report trademark, id., para. 7.650.354 Id.355 WTO panel report trademark, supra, Chapter 2, note 5, para. 7.663.




Due to the ‘limited exceptions’ the ‘legitimate interests’ of the trademarkholders are not equal to the full enjoyment of the trademark right. To putit in two formulas:

For trademark holders:Full enjoyment of rights conferred by trademark – limited exceptions =legitimate interests

For third parties:No enjoyment of rights conferred by trademark + limited exceptions =legitimate interests

The trademark panel states that the ‘legitimate interests’ of the trademarkholders are different from ‘third parties’, who have no rights conferred bythe trademark, and that this difference is confirmed by the use of the verb‘take account of’, which is less than ‘protect’.356 However, in this viewthe wording of the second step should be: ‘provided that such exceptionsprotect the legitimate interests of the owner of the trademark and takeaccount of third parties account’.

In contrast to the other limitations tests, Article 17 TRIPS357 misses the‘normal exploitation’ criterion. Senftleben wrote that the negotiatinghistory of TRIPS does not necessarily explain the reasons of adoptingdifferent tests for the limitations of respectively copyright and trademarkrights.358 To include the ‘normal exploitation’ criterion in Article 17TRIPS would deviate from international trademark law, according toSenftleben.359 This author does not concur: normal exploitation is one ofthe rationales for the dilution doctrine that is prevalent in both the EUand US: that trademark holders should be able to extend the use of theirtrademark with a reputation or famous trademark to new products andservices that are outside the classes of goods or services for which theydesignated their trademark registrations. Article 16 (2) and (3) TRIPS360

prescribe that Article 6bis Paris Convention, which protects well-knownmarks for identical and similar goods, also protects goods and services

356 Id., para. 7.662.357 TRIPS, supra, Chapter 2, note 26.358 Martin Senftleben, Towards a Horizontal Standard for Limiting Intellec-

tual Property Rights? WTO Panel Reports Shed Light on the Three-Step Test inCopyright Law and Related Tests in Patent and Trademark Law (1 March 2006).37 IRIPC 407, 412 (2006).

359 Id., at 422.360 Article 16 (2) and (3) TRIPS, supra, Chapter 2, note 26.




for dissimilar goods and services.361 Moreover, the WTO trademark panelacknowledges the advertising and investment functions of the trade-mark,362 which need protection against harm by non-competing goodsthat use an identical or similar mark.

One can argue that the principle to protect against confusion anddilution is enshrined in international trademark law. The trademark paneldoes recognize the trademark holders’ legitimate interest in preservingthe distinctiveness or capacity to distinguish, which refers to a trade-mark’s essential function as an indicator of origin preventing confusion,but also acknowledges the trademark’s advertising and investment func-tions, to prevent dilution by blurring and tarnishment: ‘Taking account ofthat legitimate interest will also take account of the trademark owner’sinterest in the economic value of its mark arising from the reputation thatit enjoys and the quality that it denotes’.363

The trademark limitations test could benefit from the normal exploit-ation criterion, as constituted by the patent panel: normal is defined onthe one hand by ‘an empirical conclusion about what is common within arelevant community’.364 On the other hand it means ‘a normativestandard of entitlement’.365 The copyright panel interpreted normalexploitation as the current activities that led to extraction of economicvalue, but also the activities that could lead to important financial gainsin the future.366

Why should trademark holders be deprived of the normal exploitationcriterion that is granted to copyright and patent right holders? Thedeprivation might be caused by the constitutional status of copyrights andpatents in the US: ‘To promote the progress of science and useful arts, by

361 This WIPO explanation of well-known marks associates Article 16(2)TRIPS with dilution. WIPO, ‘Well-Known Marks’, accessed 9 February 2015 at:http://www.wipo.int/sme/en/ip_business/marks/well_known_marks.htm.

362 WTO panel report trademark, supra, Chapter 2, note 5, para. 7.664.363 Id., para 7.664.364 WTO panel report patent, supra, Chapter 2, note 5, para. 7.53.365 Id.366 ‘We believe that an exception or limitation to an exclusive right in

domestic legislation rises to the level of a conflict with a normal exploitation ofa work (ie, the copyright or rather the whole bundle of exclusive rights conferredby the ownership of the copyright), if users, that in principle are covered by thatright but exempted under the exception or limitation, enter into economiccompetition with the ways that right holders normally extract economic valuefrom that right to the work (ie the copyright) and thereby deprive them ofsignificant or tangible commercial gains’. WTO panel report copyright, supra,Chapter 2, note 5, para 6.183.




securing for limited times to authors and inventors the exclusive right totheir respective writings and discoveries’.367 However, trademarks playsuch a crucial role in society as the facilitator of the normal exploitationof copyrighted works, protected industrial designs and patented inven-tions. Furthermore, trademarks play an, often intergenerational,368 role inthe creation of wealth for society and the extent to which a trademarkholder is prevented from the normal exploitation of his trademark shouldat least be taken into account, just as in the case where copyright holdersand patent holders are prevented from the normal exploitation of theirworks and patents, respectively.

Parody

The parody defence, based on the right to freedom of expressiondoctrine, was expressly postulated in the US as a fair use defence inU.S.C. § 1125(c)(3)(A)(ii).369 In the EU, parody can be implied as alimitation or exception to unfair advantage of or detriment to thedistinctive character or repute of the mark, because it can fall within the‘due cause’ clause of Articles 5(2) Trademark Directive370 and 9(1)(c)Community Trademark Regulation371 in combination with the two-steptest of Article 17 TRIPS372 mentioned above.

The fact that parody is expressly or impliedly a defence against a claimof trademark dilution means that it still needs to be justified. In otherwords: that the advantage of a parodic work outweighs the disadvantageof a likelihood of trademark dilution.

In Gucci Shops, Inc. v R.H. Macy & Co., Inc., where consumers seethe trademark name Gucchi Goo, the court held that it is not unreason-able for them to assume that the defendant’s use of the Gucci mark andthe stripe on ‘diaper bags’ would mislead members of the public into

367 U.S. Const. Art. I, § 8, Cl. 8.368 This author disagrees with the anonymous writer of the Harvard Law

Review note in 1963. He or she wrote: ‘Unlike the confusion case, there is nopublic interest here to tip the balance in favor of the owner’. But this does nottake intergenerational employment into account. Anonymous, supra note 77,at 529.

369 15 U.S.C. § 1125(c)(3)(A)(ii).370 Supra, Chapter 2, note 11.371 Article 9(1)(c) Community Trademark Regulation, supra, Chapter 2,

note 36.372 TRIPS, supra, Chapter 2, note 26.




believing that the plaintiff is somehow connected with the diaper bag.373

However, in Haute Diggity Dog ‘dog bags’ were offered with parodicnames such as Chewy Vuiton, ‘which by their attempted humorous,satirical association’ distinguished them from Louis Vuitton bags.374

As these above mentioned cases signify, comparable parody defencecases often have opposite outcomes. This lack of consistency has led tolegal uncertainty and unpredictability. Chapter 6.4 will demonstrate howa change in doctrine coupled with a simple formality can lead to legalcertainty and automatic enforcement.

In 1908 it was already known that a parody manifests at the same timeits difference as well as its resemblance with the famous trademark.375

Ninety-nine years later, in 2007, the court in Haute Diggity Dog376

confirmed this:

A parody must convey two simultaneous – and contradictory – messages: that itis the original, but also that it is not the original and is instead a parody. Thissecond message must not only differentiate the alleged parody from the originalbut must also communicate some articulate element of satire, ridicule, joking, oramusement. Thus parody relies upon a difference from the original mark,presumably a humorous difference, in order to produce its desired effect.377

If one chooses to mimic an existing trademark name, despite thepossibility of choosing one’s own trademark, courts presume that thejunior trademark intentionally tries to confuse the public with the morerecognizable senior mark. However, the junior mark can use this fact fora fair use defence:378 this recognisability of the trademark makes it easier

373 Gucci Shops, Inc. v R.H. Macy & Co., Inc., 446 F. Supp. 838, 840(S.D.N.Y. 1977).

374 Haute Diggity Dog, supra note 98.375 ‘Parody is permissible, but then, parody shows at the very time that it is

[imitating] that it is an imitation, it shows the difference as well as theresemblance’. Tate v Fulbrook, 98 L.T.R. 706 (C.A. 1908).

376 Haute Diggity Dog, supra note 98.377 Id.378 15 U.S.C. § 1125(c)(3)(A)(ii) was added to the Trademark Dilution

Revision Act in 2006:

(A) Any fair use, including a nominative or descriptive fair use, or facilita-tion of such fair use, of a famous mark by another person other than asa designation of source for the person’s own goods or services,including use in connection with(i) advertising or promotion that permits consumers to compare goods

or services; or




for the audience to realize that the use is a parody and a joke on thequalities embodied in a trademark word or image.379

Where a third party chooses to parodically use a trademark, the intentis not necessarily to confuse the public but rather to amuse.380 JudgeKozinski illustrated this reasoning in Mattel, Inc. v MCA Records, Inc.:‘If we see a painting titled “Campbell’s Chicken Noodle Soup,” we’reunlikely to believe that Campbell’s has branched into the art business.Nor, upon hearing Janis Joplin croon, ‘Oh Lord, won’t you buy me aMercedes-Benz?’ would we suspect that she and the carmaker hadentered into a joint venture’.381

Humorist Will Rogers wrote in 1974: ‘Now everything is funny as longas it is happening to somebody Else, but when it happens to you, why itseems to lose some of its Humor, and if it keeps on happening, why theentire laughter kinder Fades out of it’.382 In 1977, the court in GucciShops, Inc. v R.H. Macy & Co., Inc.383 held that a validly establishedtrademark may be protected from ridicule which rises to the level ofinfringement of the mark. This seems reasonable if one considers theasymmetry between trademark holders and parodists. Parodists candestroy a brand’s reputation in little time and without much cost, whiletrademark holders need a lot of time, money and effort to build up thereputation of their trademarks.

Who really should own a trademark? The court in Jordache held thatthe owner of the mark ‘does not own in gross the penumbral customerawareness of its name, nor the fallout from its advertising’.384 Does thepublic co-own trademarks they are involuntarily exposed to via advertise-ments online and in the streets? One can see parody in trademark as a

(ii) identifying and parodying, criticizing, or commenting upon thefamous mark owner or the goods or services of the famous markowner.

(B) All forms of news reporting and news commentary.(C) Any noncommercial use of a mark.

379 Tommy Hilfiger, supra, Chapter 2, note 67, quoting McCarthy, supra,Chapter 5, note 38, 31:153.

380 Jordache Enterprises, Inc. v Hogg Wyld Ltd. (Jordache), 828 F. 2d 1482(10 Cir. 1987) para. 26.

381 Mattel, supra note 83, para. 14.382 Will Rogers, Warning to Jokers: Lay Off the Prince, in THE ILLITER-

ATE DIGEST, I-3 THE WRITINGS OF WILL ROGERS (1975) (Whitefish, MT:Kessinger Publishing, 2003).

383 Supra note 373.384 Supra note 380.




way to appropriate or expropriate the fruits of intellectual labour in alegal way, or as a counter-balance to the power trademark holders haveover consumers and the public in general.385 See also the topic ‘loss ofcontrol’ in the ‘Literature Review’ of Chapter 1.

One could assume the proverb ‘High trees catch much wind’386 wouldapply to famous trademarks or trademarks with a reputation. In otherwords: that famous trademarks or trademarks with a reputation should bemore willing to accept the fact that they will be parodied and criticized incomparison with lesser known trademarks. Just like the burden of proofin defamation actions is higher where the plaintiff is a public figure thanwhere the plaintiff is a private figure,387 one would expect that the sameprinciple would apply for parodic use of a famous trademark or atrademark with a reputation in comparison to a lesser known trademark.However, holders of famous trademarks and trademarks with a reputationcan invoke an action based on trademark dilution in the case of alikelihood of trademark dilution, while the holders of lesser knowntrademarks are deprived of this right.

The spectrum of opinions on parody and protection against trademarkdilution have two extremes: one can assert that one can parody anytrademark, unless the parodic use of the trademark competes directlywith the original trademark in the same market, or as Judge Carterasserted, there is enough material in the public domain available forparody388 and therefore there is no need to use any trademarks forparody.

In order to come up with a more nuanced view courts have developeddichotomous criteria to decide whether the parodic use of a trademark is

385 ‘Parody serves the public interest by ridiculing the power of thesesymbols, by achieving a provocative effect and by producing laughter’. JamesRichard Banko, ‘Schlurppes Tonic Bubble Bath’: In Defense of Parody, 11 U.PA. J. INT’L BUS. L. 627, 634 (1990).

386 Dutch proverb: ‘Hoge bomen vangen veel wind ’.387 A plaintiff who is a public figure must be able to prove malice, typically

by the higher clear and convincing evidence standard, and actual damages. Aplaintiff who is a private figure must be able to prove negligence by a‘preponderance of the evidence’, actual damages or in case of ‘per se’-casesabout one’s criminal background, business character, chastity, and so on, actualdamages are presumed. Defamation Act 1996 (UK).

388 Judge Carter’s remark in a dicta, Loew’s Incorporated v. ColumbiaBroadcasting System, 131 F. Supp. 165 (S.D. Cal. 1955), affd sub nom. Benny vLoew’s Inc., 239 F.2d 532 (9th Cir. 1956), affd per curiam by an equally dividedCourt, 356 U.S. 43 (1957) (Douglas, J. abstaining), reh’g denied, 356 U.S. 934(1958).




allowed, including the parody/satire, non-competing/competing, non-commercial/commercial, high culture/low culture and transformative use/non-transformative use dichotomies.

Parody/satire dichotomyThe difference between parody and satire was tersely explained in 2002in Mattel:389 ‘The song does not rely on the Barbie mark to poke fun atanother subject but targets Barbie herself’390 and is therefore consideredparody. In 1994, Campbell v Acuff-Rose Music, Inc.391 explicated it moreelaborately: ‘Parody needs to mimic an original to make its point, and sohas some claim to use the creation of its victim’s (or collective victims’)imagination, whereas satire can stand on its own two feet and so requiresjustification for the very act of borrowing’.392

Because parodists of trademarks necessarily need to use the trademark,they are given considerably more leeway than in the case of claimedparodic use that makes no comment on the trademark.393

An example of satiric use of the trademark is the 1999 case ofHarley-Davidson, Inc. v Grottanelli.394 The defendant made no commentwith his mark on the Harley-Davidson mark, but ‘simply use[d] itsomewhat humorously to promote his own products and services’,therefore he was held to be infringing Harley-Davidson’s trademark. Thesame criterion was applied in Dr. Seuss,395 in 1996, in which case thedefendant had published a book called The Cat NOT in the Hat!, thereby

389 Mattel sued MCA Records because the band Aqua had made the song‘Barbie Girl’. Mattel, supra note 83, para. 14.

390 Id.391 Acuff-Rose Music had sued 2 Live Crew for covering Roy Orbison’s song

‘Oh Pretty Woman’ in a rap version. Campbell petitioned at the Supreme Court:Campbell v Acuff-Rose Music, Inc., 510 U.S. 569 (1994) at 581. It also addssome definitions it found in dictionaries in footnote 14: ‘Satire has been definedas a work “in which prevalent follies or vices are assailed with ridicule,” 14Oxford English Dictionary, or are “attacked through irony, derision, or wit,”American Heritage Dictionary.

392 For an overview of the parody/satire cases from the pre-TrademarkDilution Revision Act era: Juli Marshall and Nicholas Siciliano, ‘The Satire/Parody Distinction in Copyright and Trademark Law: Can Satire Ever Be a FairUse?’, ABA Section of Litigation Intellectual Property Litigation CommitteeRoundtable Discussion Online, accessed 9 February 2015 at: http://apps.americanbar.org/litigation/committees/intellectual/roundtables/0506_outline.pdf.

393 Harley-Davidson, Inc. v Grottanelli, 164 F.3d 806, 812–13 (2d Cir.1999).394 Id.395 Dr. Seuss, supra note 307.




using Dr. Seuss’s trademarked title The Cat in the Hat! to get attention,instead of mocking the original.

An example of parody can be found in Tommy Hilfiger in 1987,396 inwhich the juxtaposition of ‘the irreverent representation of the trademarkwith the idealized image created by the mark’s owner’ resulted inparody.397 Twenty years later in Haute Diggity Dog398 the same criterionwas used: ‘a simple form of entertainment conveyed by juxtaposing theirreverent representation of the trademark with the idealized imagecreated by the mark’s owner’.399

Non-competition/competition dichotomyAs discussed in the introduction of this chapter, where the right tofreedom of expression, or one of its derivations such as the right to use atrademark parodically, is weighed against trademark infringement, gener-ally the latter will prevail. In 2011, in Ate My Heart v Mind Candy,400

such a case was submitted to the High Court of England and Wales. MindCandy tried to invoke the right to use a trademark parodically as adefence against the claim by Ate My Heart of trademark infringement.Ate My Heart, Stefani Germanotta (Lady Gaga)’s company, was grantedan interim injunction to restrain an infringement of trademark, so that‘The Moshi Dance’, a song sung by the animated character Lady GooGoo from the Moshi Monsters Game, which has similarities with LadyGaga’s song ‘Bad Romance’, will have to be removed from YouTube.401

To see whether or not the trademark use was ‘without due cause’,according to Justice Vos, the similarities between the song of Lady Gagaand Lady Goo Goo were clear even to the untutored ear.402 Justice Vosheld that although Lady Goo Goo started out as a parody within a game,when this animated character was going into direct competition withLady Gaga this was no longer the case.403

396 Tommy Hilfiger, supra, Chapter 2, note 67.397 Id., citing L.L. Bean, Inc. v Drake Publishers, Inc., 811 F.2d 26, 34 (1st

Cir. 1987).398 Haute Diggity Dog, supra note 98.399 Id.400 Ate My Heart Inc. v Mind Candy Ltd & Anr (Ate My Heart Inc.) (Vos J;

[2011] EWHC 2741 (Ch); 10 October 2011).401 David Tan, Goo Goo Gaga: The Chilling Effect of the Trade Mark

Monster, 17 MALR 84 (2012).402 Id. at 85.403 ‘Lady Goo Goo, when she and the other take-off pop stars were born in

the Underground Disco in the Game, were indeed parodies of the real stars thatinspired them. But, as it seems to me, it is at least arguable that at some point




Professor Tan did not agree with the logical chain of linkages drawn bythe judge: between evocation, association and confusion.404 In contrast tothe Ate My Heart v Mind Candy case, Haute Diggity Dog showed thatevocation in itself is not enough reason to find confusion.405 ‘DespiteHaute Diggity Dog’s obvious intent to profit from its use of parodies, thisaction does not amount to a bad faith intent to create consumerconfusion. To the contrary, the intent is to do just the opposite – to evokea humorous, satirical association that distinguishes the products’.406

Professor Tan asserted that in the case of ‘transformative play’ and basedon the right to freedom of expression it should be possible to parody atrademark.407

Non-commercial/commercial dichotomyJust as trademark infringement is not possible in the case of non-trademark use (see Chapter 5), McCarthy asserted that trademark dilutionin the case of non-commercial use of a trademark408 would be pre-cluded.409 The same can be said for trademark use outside the course oftrade in the EU.410 In Mattel,411 the toy manufacturing company claimedthat consumers that hear Barbie’s name think of the song ‘Barbie Girl’, inaddition to the doll, or potentially exclusively of the song. The NinthCircuit decided that there was no dilution by blurring, because the use ofthe Barbie mark in the song was non-commercial and thereforeexempted.412

Lady Goo Goo morphed into something rather different, namely a character whois being used to enhance the commercial success of the Moshi Monsters brand,and now to sell records’. Supra note 400, para. 46.

404 Supra note 401, at 86.405 Haute Diggity Dog, supra note 98, at 260.406 Id., at 263.407 Tan, supra note 401.408 15 U.S.C. § 1125(c)(3)(C).409 ‘Non-trademark use does not dilute: in content of expressive works, e.g.

novels; in content of TV and movies; prestige claims: “Moose River wine theRolls-Royce of Idaho wines”; art, for example Andy Warhol’. J. ThomasMcCarthy, The American Experience with Trademark Anti-Dilution Law, IBIL,February 2009, presentation slides, at 9, accessed 9 February 2015 at: http://www.ucl.ac.uk/laws/ibil/docs/ibil_11feb09_mccarthy_ppt.pdf.

410 See Article 5(2) Trademark Directive, supra, Chapter 2, note 11, andArticle 9(1)(c) Community Trademark Regulation, supra, Chapter 2, note 36.

411 Mattel, supra note 83.412 15 U.S.C. § 1125(c)(3)(C).




One could describe non-commercial parodic use of a trademark as useof a trademark that consists entirely of non-commercial, or fully consti-tutionally protected, speech.413 However, non-commercial parodic use ofthe mark does not really exist. Just as the ‘Barbie Girl’ song, sung byAqua, was and still is commercial.414 The one who is using the trademarkfor parodic purposes is getting attention, which has a market value. Toqualify commercial income as marginal as the court did in the Bild DirKeine Meinung415 case or to assert that the trademark is not only usedcommercially, therefore the freedom of art was given priority, as thecourt did in Lila Postkarte416 ignores the binary character of commercialuse: either any income is received or not.

Even if the trademark is made for art, one can argue that the use of thetrademark is commercial: Nadia Plesner made a painting, which shecalled Darfurnica,417 allegedly as a protest against the lack of publicattention for the human tragedy taking place in Darfur while at the sametime full page advertisements were placed for luxury products, such asthose of Louis Vuitton. The painting includes an emaciated boy holding aLouis Vuitton bag. Plesner argued that she did not take advantage ofLouis Vuitton in a commercial418 sense. However, she not only capital-ized on the attention she was getting as an artist because of thecontroversy that ensued, but she also was and, at the time of writing, still

413 Jerome Gilson et al., Trademark Protection and Practice § 5.12[1][c][vi],at 5-240.

414 At the time of writing, ‘Barbie Girl’ from the album Aquarium, sung byAqua, could be downloaded for 1.29 dollars at Amazon.com, accessed 9February 2015 at: http://www.amazon.com/Barbie-Girl/dp/B000V66VGA oriTunes, accessed 9 February 2015 at: https://itunes.apple.com/us/artist/aqua/id62978.

415 Bild Dir Keine Meinung, OLG Hamburg, 4 June 1998, NJW-RR 1990,1060.

416 Lila-Postkarte, Federal Court of Justice (BGH), Decision of 3 February2005 – Az. I ZR 159/02; OLG Hamm.

417 The name Darfurnica is a reference to Guernica, painted by PabloPicasso in response to the bombing of a Basque country village during theSpanish Civil War.

418 District Court of The Hague, 4 May 2011, IER 2011/39 with commentaryfrom Wolfgang Sakulin (Nadia Plesner Joensen/Louis Vuitton Malletier SA)overturning the ex parte Court decision in preliminary proceedings of The Hagueof 27 January 2011, LJN: BP9616 KG RK 10-214 (Louis Vuitton Malletier SA/Nadia Plesner Joensen). The unofficial translation of the decision of the Court ofAppeal was made by Kennedy Van der Laan, attorneys in Amsterdam, represent-ing defendant Nadia Plesner, accessed 9 February 2015 at: http://www.nadiaplesner.com/Website/Verdict_English.pdf.




is selling merchandise with the depiction in question via her onlineshop,419 besides selling controversial original works. It does not matterhow the money is spent and whether it is a non-profit organization thatreceives the revenues.420

Another example of ‘art’ that uses a trademark in a commercial waywere pigs that were tattooed with the Louis Vuitton trademark logowithout the authorization of Louis Vuitton.421 Besides the obvious animalrights abuse, the trademark logo has been abused422 in a commercial way,because after the pigs were tattooed, they were killed and stuffed, andsold for 106,000 pounds sterling per pig.

The trademark holder suffers from the parodic use of his trademark bythird parties: humour at his expense, which can have severe economicconsequences. An example from the pre-social media era which illumi-nates the devastating effects of so-called non-commercial parodic use ofa trademark is the Buckler case.423

In the summer of 1988, Dutch beer brewer Heineken introduced a beerwith a low alcohol percentage under the trademark Buckler. InitiallyBuckler thrived, taking over Clausthaler, market leader in the low alcoholbeer segment. Then, on the evening of 31 December 1989, a Dutchcabaret performer Youp van ‘t Hek mocked the brand and its users on a

419 Previously, Plesner sold T-shirts depicting only the boy with the bag thathas the Louis Vuitton pattern protected by a Community Design. Plesner is stillmonetizing on the Louis Vuitton pattern, by selling replicas of the Darfurnicapainting, 25 euros per poster. Nadia Plesner Foundation Shop, accessed 9February 2015 at: http://www.nadiaplesnerfoundation.org/shop.

420 In Hong Kong so-called vanity licence plates, which included names suchas Louis Vuitton and Gucci, were auctioned off by the Hong Kong government.The respective trademark holders argued that this constitutes trademark infringe-ment. However, the Hong Kong court decided that it was not, since the revenuesof the auction were given to charity and therefore the trademark was not used ina commercial way. Author’s interview with Mayank Vaid, IP Director of LVMHFashion, 21 February 2012. Read more about the phenomenon of vanity plates:Laura Santini, ‘Market for Vanity Plates Grows Despite Hard Economic Times’,Wall Street Journal, 27 January 2010, accessed 9 February 2015 at: http://online.wsj.com/article/SB10001424052748703410004575028380283025678.html.

421 Urmee Khan, ‘Tattooed Pigs Banned from Modern Art Exhibition’, TheTelegraph, 4 November 2008, accessed 9 February 2015 at: http://www.telegraph.co.uk/news/newstopics/howaboutthat/3382201/Tattooed-pigs-banned-from-modern-art-exhibition.html.

422 This abuse can be categorized as trademark dilution by tarnishment. SeeChapter 4.

423 Marnix Langeveld, BUCKLER? PROOST! (Amsterdam: Otto Cram-winckel 2004).




widely watched Dutch television programme. Van ‘t Hek’s point wasmainly that people who drink Buckler are losers. After the evening, salesof Buckler plummeted. In 1993 Heineken had to withdraw Buckler fromthe Dutch market. Cause (the ‘humorous’ expressions) and effect (actualdamages) were easy to prove. Therefore, according to Langeveld, underthe former Dutch trademark law, Heineken would have won a lawsuit,but chose not to sue the cabaret performer,424 because the beer brewerwas afraid of even more negative attention. The Buckler example beliesthe expression that any publicity is good publicity.

Although it is often dubious whether the use of a trademark is reallynon-commercial, it is clear that even non-commercial use of an unauthor-ized trademark logo can lead to a likelihood of damages. If, for example,a trademark logo is known to be the symbol of high quality of theproducts that bear the trademark logo, then, this trademark’s reputationcan be harmed if people associate its trademark logo with a substandardproduct.

Louis Vuitton is perceived to attract designers with a refined taste, soits trademark logo can be tarnished when a Rolls-Royce is modified by aprivate individual, by covering the outer skin in Louis Vuitton trademarklogos, which can give an overall impression of vulgarity425 and concomi-tant attention in the media.426

Dogan and Lemley discussed the use of the trademark ‘in a non-branding way’ when it is not used to indicate the source or sponsor-ship.427 However, branding is not a legal term, and one can argue that‘comparing, describing, critiquing, informing, presenting in proximity,learning, commenting, reporting, or simply poking fun’ at or with thetrademark are all included in the activity of branding. Siebrasse arguedthat given the dominant doctrine of source, if there is no likelihood ofconfusion, that all references of a mark with an unauthorized trademark

424 Id.425 This also raises questions to what extent Rolls-Royce can enjoin the

modification of one of its designs, based on moral rights: le droit morald’intégrité de l’auteur.

426 Stern, Jared Paul, ‘The Brothel Prince & His Louis Vuitton Rolls-Royce’,Luxist, 11 May 2009, accessed 14 June 2015 at: http://royalwedding.aol.com/www.luxist.com/2009/05/11/the-brothel-prince-and-his-louis-vuitton-rolls-royce/.

427 ‘The requirement thus distinguishes between those who brand theirproducts using the plaintiff’s mark or some version thereof and others who usethe plaintiff’s trademark in some non-branding way – for example, by compar-ing, describing, critiquing, informing, presenting in proximity, learning, com-menting, reporting, or simply poking fun’. Dogan and Lemley, supra note 58, at542.




are permitted.428 On the other hand, if one takes the damaging effects ofnon-commercial parody into account, one could argue that such caseswould ask for a broader interpretation of dilution: that trademark dilutionby tarnishment or blurring is possible even in non-commercial settings.

In the EU, member countries could already implement Article 5(5)Trademark Directive429 in order to provide protection against non-commercial use (see Chapter 6.3 ‘Legislation and Case Law in the EU’under ‘Unfair advantage of repute’).

High culture/low culture dichotomyThe distinction between commercial and non-commercial is hard to makeand therefore not the best of criteria to decide whether parody shouldtrump trademark dilution. Another controversial criterion to decidewhether an expression deserves to be protected against trademark dilutionis to give a value judgement. In Bleistein v Donaldson Lithographing Co.in 1903,430 Justice Holmes was concerned to let ‘professionals’ judgeover the worth of pictorial illustrations: ‘It would be a dangerousundertaking for persons trained only to the law to constitute themselvesfinal judges of the worth of pictorial illustrations, outside of the narrow-est and most obvious limits’.431 A value judgement on which expressionsare worth protection is per definition subjective. As Justice Harlan put itin 1971 in Cohen v California: ‘[I]t is … often true that one man’svulgarity is another’s lyric. Indeed, we think it is largely becausegovernmental officials cannot make principled distinctions in this areathat the Constitution leaves matters of taste and style so largely to theindividual’.432 This opinion was confirmed in 1993 by the Supreme Courtin Edenfield v Fane.433 Rowbottom disagreed and preferred that thecourts distinguish between high and low levels of expression, for the

428 ‘It is a corollary of source theory that unauthorized use of the mark otherthan as a mark, and in particular use of the mark to refer to the goods with whichthe mark is normally associated, is permitted’. Siebrasse, supra, Chapter 2, note151.

429 Supra, Chapter 2, note 11.430 Bleistein v Donaldson Lithographing Co., 188 U.S. 239, 251 (1903).431 Attorney Steve Baird’s remark on radio KYW Newsradio, quoted by Pat

Loeb.432 Cohen v California, 403 U.S. 15, 25 (1971).433 ‘The commercial marketplace, like other spheres of our social and

cultural life, provides a forum where ideas and information flourish. Some of theideas and information are vital, some of slight worth. But the general rule is thatthe speaker and the audience, not the government, assess the value of theinformation presented’. Edenfield v Fane, 507 U.S. 761, 767 (1993).




latter of which he wanted to provide some kind of proportional protec-tion.434 However, one can argue that the difference between high and lowexpressions are arbitrary and elitist.

The question of what kind of expressions overrule the right to protectagainst trademark dilution can also be inversed: when is the restriction ofthe freedom of expression legitimate in order to protect against trademarkdilution? As an attorney pointed out on the radio: ‘One person’s bully isanother’s legitimate trademark enforcement’.435 One can argue that theindignation, oftentimes vented in the media436 against companies defend-ing their trademarks, is one-sided.

Transformative/non-transformative dichotomyA more promising criterion to distinguish between expressions worthprotecting and those that should give way to protection against trademarkdilution is sufficient transformative use. Transformative use, a doctrineestablished in copyright law could also be applied to trademark law.

If a parodist uses a substantial part of a work but also adds somethingto that work, the work will be original to the extent of that something,and it will be infringing for the remainder.437 The question is when theexact point arrives that the changes are sufficient to determine that thework has been transformed. In other words: when ‘use of a trademark’has been transferred into ‘inspired by a trademark’.

434 Rowbottom, supra, Chapter 3, note 49, at 370.435 Pat Loeb, ‘Penn Law Goes Head-to-Head Against Copyright Lawyer over

Student Poster’, 20 March 2012, accessed 9 February 2015 at: http://philadelphia.cbslocal.com/2012/03/20/penn-law-goes-head-to-head-against-copyright-lawyer-over-student-poster/.

436 Matthew Yglesias, ‘Louis Vuitton’s Campaign Against Free Speech’,Slate, 9 March 2012, accessed 9 February 2015 at: http://www.slate.com/blogs/moneybox/2012/03/09/louis_vuitton_s_campaign_against_free_speech.html.

437 ‘At one time it was thought “that no infringement was committed if theamount of effort and skill which the parodist expended upon his work was sogreat that the parody could be regarded as an original work in its own right. Thisview, which was only obiter, was founded upon the misapprehension that a workwas either an original work or an infringing one. Since a work can be bothoriginal and infringing” it is not surprising that, in Schweppes Ltd. v Wellington,Falconer, J. held that parody could not of itself affect the question of infringe-ment: either a substantial part of a work was copied or it was not’. JeremyPhillips, INTRODUCTION TO INTELLECTUAL PROPERTY LAW, 106 (Lon-don: Butterworths, 1986), quoting Millar v Taylor [1769] 4 Burr. 2303, at2334–5. See R. Deazley, ‘Commentary on Millar v. Taylor (1769)’, in PrimarySources on Copyright (1450-1900), (eds L. Bently & M. Kretschmer, www.copyrighthistory.org, 2008).




Just as described within the fair use test for copyright there is arelationship between the extent the parody is substituting the original andthe extent it is transformative. One can compensate for the other.438 Sofar that point was determined in a qualitative way by the court, forexample via the formulation ‘not more than necessary’,439 which makesany effort to predict this proportional level elusive. Besides the legaluncertainty it creates, it renders automatic determination impossible. Onthe other hand, if one could come up with a certain quantitative standard,for example: ‘if more than 50 percent of the content has been changedthere is transformative use’, it would lead to legal certainty and enforce-ment could be automated. Such a quantitative standard could be imple-mented for copyright and for trademark use by parodists on social media.

The inconsistent way of how courts deal with parody defences will beillustrated below by examples from both sides of the Atlantic.

Parody and Dilution by Blurring/Detriment to Distinctiveness

In 2002, in the US, the courts in Tommy Hilfiger440 and also in 2003 inWWE Inc. v Big Dog Holdings441 held that parody products would ratherincrease public identification with the senior marks instead of dilution byblurring. In contrast to these US decisions, the High Court of Englandand Wales in Ate My Heart Inc. v Mind Candy Ltd442 of 2011 rejected aparody defence. Justice Vos in this case remarked that: ‘[t]he distinction

438 ‘A parody that more loosely targets an original than the parody presentedhere may still be sufficiently aimed at an original work to come within ouranalysis of parody. If a parody whose wide dissemination in the market runs therisk of serving as a substitute for the original or licensed derivatives, it is moreincumbent on one claiming fair use to establish the extent of transformation andthe parody’s critical relationship to the original. By contrast, when there is littleor no risk of market substitution, whether because of the large extent oftransformation of the earlier work, the new work’s minimal distribution in themarket, the small extent to which it borrows from an original, or other factors,taking parodic aim at an original is a less critical factor in the analysis, andlooser forms of parody may be found to be fair use, as may satire with lesserjustification for the borrowing than would otherwise be required’. Campbell vAcuff-Rose Music, Inc., supra note 391, footnote 14.

439 Columbia Pictures Corp. v National Broadcasting Co., 137 F. Supp. 348,350 (S.D. Cal. 1955).

440 Tommy Hilfiger, supra, Chapter 2, note 67.441 World Wrestling Fed’n Entm’t, Inc. v Big Dog Holdings, Inc., 280 F.

Supp. 2d 413, 441–2 (W.D. Pa. 2003) citing both Hormel Foods, supra, Chapter2, note 91, and Jordache, supra note 380.

442 Ate My Heart Inc., supra note 400.




between Lady Goo Goo and Lady Gaga has been blurred by thedefendants in the way that I have mentioned, for example, by the use ofthe tag on the YouTube video and indeed the choice of the name, GooGoo, similar as it is to Gaga’.443

Parody and Dilution by Tarnishment/Detriment to Repute

One would assume that the parody defence in Mutual of Omaha vNovak444 in 1986 would be unsuccessful and that the dilution bytarnishment claim would prevail. A designer called Novak produced adesign using the words ‘Mutant of Omaha’ and was sued by Mutual ofOmaha, an insurance company. The design, as found by the DistrictCourt, utilized ‘an accompanying logo depicting a side view of a warbonneted and emaciated human face’.445 The design initially was placedon T-shirts but later also on sweatshirts, caps, buttons and coffee mugs. Inthe spring of 1984 Novak produced designs using the words ‘MutantKingdom’ and ‘Mutant of Omaha’s Mutant Kingdom’ and an accompa-nying logo depicting a one-eyed tiger. With these designs Novak oftenused the phrase ‘Nuclear Holocaust Insurance’ or ‘Sponsored by Mutantof Omaha Nuclear Insurance Company’.446 The District Court granted apermanent injunction based on trademark infringement, but rejected thetrademark dilution claim, which it called trademark disparagement.447

According to the court, Novak’s design might be considered to be in poortaste by some consumers but ‘it was not likely to create in the mind ofconsumers a particularly unwholesome, unsavory, or degrading associ-ation with Mutual’s name and marks’.448 On appeal the Eighth Circuitconfirmed trademark infringement, but unfortunately did not reach thetrademark disparagement (dilution) issue.449

In 1996, in Hormel Foods,450 Hormel Foods, Inc., the proprietor of theSpam trademark, unsuccessfully sued Jim Henson Productions for trade-mark dilution by tarnishment, because of the use of a character in the

443 Id., para. 65.444 In the Mutual of Omaha v Novak case, trademark by tarnishment is called

trademark disparagement. Mutual of Omaha v Novak, 648 F. Supp. 905D.Neb.1986.

445 Id.446 Id., at 398 and 401.447 Id.448 Id.449 Mutual of Omaha Insurance Company v Novak, 836 F.2d 397 (8th Circ.

1987).450 Hormel Foods, supra, Chapter 2, note 91.




film Muppet Treasure Island called ‘Spa’am’. Hormel described thefictitious character as ‘evil in porcine form’ and the boar as unhygienic.The District Court, however, found ‘that Spa’am, a likeable, positivecharacter, will not generate any negative associations’.451 Moreover,contrary to Hormel’s contentions, the District Court also found noevidence that Spa’am is unhygienic or that his character places Hormel’smark in an unsavoury context.452 According to the court, the reference tothe fact that Spam is made from pork is unlikely to tarnish Hormel’smark, and absent any showing that Henson’s use will create negativeassociations with the Spam mark, there was little chance of a likelihoodof dilution.453

In the 2002 Tommy Hilfiger454 case, it was held that the mereassociation with pets, especially where the association is consideredlight-hearted, is not sufficient to find dilution by tarnishment.

Also in 2002, in Kraft Food Holdings, Inc. v Helm,455 it was held thatthe connection between the defendant’s mark VelVeeda with sexuallyexplicit content likely tarnished the plaintiff’s Velveeta mark. Thereforethere could be no parody of Kraft’s cheese products.

In 2003, in Caterpillar Inc. v Walt Disney Co.,456 where in the movieGeorge of the Jungle 2 Caterpillar bulldozers tried to destroy the home ofGeorge, Caterpillar’s claim of dilution by tarnishment was rejected.According to the court the Caterpillar bulldozers were not cast in anunwholesome or unsavoury light as viewers would understand thefantastic nature of the movie.

In the same year, in WWE, Inc. v Big Dog Holdings,457 it was held thatthe sine qua non of dilution by tarnishment is a finding that the plaintiff’smark will suffer negative associations through the defendant’s use.Because the Big Dog graphics were considered humorous and familyfriendly there could be no negative association and thus no tarnishment.

451 Id.452 Id.453 Id.454 Tommy Hilfiger, supra, Chapter 2, note 67.455 Kraft Food Holdings, Inc. v Helm, 205 F. Supp. 2d 942, 949–50, 953

(N.D. Ill. 2002).456 Caterpillar Inc. v Walt Disney Co., 287 F. Supp. 2d 913 (CD Ill 2003).457 World Wrestling Fed’n Entm’t, Inc. v Big Dog Holdings, Inc., 280 F.

Supp. 2d 413, 442–3 (W.D. Pa. 2003) citing Hormel Foods, supra, Chapter 2,note 91.




Based on 15 U.S.C. § 1125(c)(3)(A),458 in 2009 Starbucks v Char-bucks,459 Black Bear’s use of the Charbucks trademark could not qualifyunder the parody exception, because it was used as a designation ofsource for its own goods.460

In the UK in 2011, in Ate My Heart Inc.,461 besides the likelihood ofconfusion standard that was held sufficient, Justice Vos held that, basedon Article 9(1)(c) Community Trademark Regulation, there was a realrisk of actual tarnishment of the Lady Gaga trademark.462

The German Trademarks Act, Markengesetz (MarkenG),463 does nothave any explicit parody exception. However, Article 14(2)(3) MarkenGincludes: ‘ohne rechtfertigenden Grund’, which is the German equivalentof the ‘use without due cause’ clause of Article 5(2) Trademark Directive.An example of due cause in the German context would be parody basedon Article 5(1) Basic Law464 which protects the right to freedom ofexpression.

Schneider argues that until the Lila Postkarte case465 in 2005 Germancourts assessed whether the parody defence was successful or notpredominantly based on whether the trademark was used to identify thesource.466 An overview of the most salient pre-Lila Postkarte cases willbe given below: Mordoro-Poker in 1981, Lusthansa in 1982, adihash in1992, Mars condoms in 1994, Shell-Totenkopf in 1998 and Deutsche Pestin 2000.

458 15 U.S.C. § 1125.459 Supra, Chapter 2, note 209.460 However, since the case was decided before the Trademark Dilution

Revision Act, the parody exception may still apply even if the parody were usedto ‘identify the source of the defendants’ goods’. Just like Haute Diggity Dog,supra note 98.

461 Ate My Heart Inc., supra note 400.462 Id.463 Gesetz über den Schutz von Marken und sonstigen Kennzeichen (Mark-

engesetz – MarkenG), effective since 25 October 1994, Article 15 was amendedon 24 November 2011.

464 Basic Law for the Federal Republic of Germany 1949, translated byprofessors Christian Tomuschat and David P. Currie, 2012.

465 Lila-Postkarte, supra note 416.466 Bernadette Schneider, DIE MARKENPARODIE IN DEUTSCHLAND

(University dissertation, Cologne: Peter Lang Internationaler Verlag der Wissen-schaft 2010), at 45.




In 1981, in Mordoro-Poker,467 the Federal Court of Justice held thatfreedom of expression of the non-smoking organization, based on Article5(1) Basic Law, which was manifested via a parodic non-commercialcalendar for its members outweighed Philip Morris’s ‘encroachment uponestablished and practiced business operations’.

In 1982, in Lusthansa, the Higher Regional Court of Frankfurt heldthat the parody defence claimed by Harlekin, a company that soldLusthansa adhesive stickers, as a parody on Lufthansa was successful,because it did not use the mark to identify to the source, nor did they usethe trademark in the course of trade. The Higher Regional Courtinterpreted ‘in the course of trade’ narrowly: Harlekin was selling jokearticles, not airline flights.468

In 1992, in adihash, the Higher Regional Court of Hamburg held thatthe use of the slogan ‘adihash gives you speed’ printed on a T-shirt, andthereby using a mark similar to the trademark adidas was not allowed.469

The court held that the possibility of confusion could not be excluded,

467 Mordoro-Poker: Manufacturer of Marlboro cigarettes, Philip Morris, fileda law suit at the Regional Court of Munich against the non-smoking organizationAktive Heidelberger Nichtraucher in 1981 for using their altered advertisementon a calendar. The original advertisement was ‘Grand Marlboro-Poker with 1000prizes worth 150,000 Mark’ (Großes Marlboro-Poker mit 1000 Gewinnen imWert von 150 000 Mark) for sponsoring an evening school. Ernst-GüntherKrause, ‘Nichtraucher-Initiative München e.V.’, 18 May 2011, accessed 9February 2015 at: http://www.ni-muenchen.de/content/view/331/20/. This waschanged into ‘Grand Murder-Poker, with the prizes 1. gastric ulcer, 2. heartattack, 3. lung cancer’ (Großes Mordoro-Poker mit den Preisen 1. Magen-geschwür, 2, Herzinfarkt, 3. Lungenkrebs). One day before the hearing, PhilipMorris withdrew its claim. Then the non-smoking organization demanded fromPhilip Morris that they would issue a declaration of non-infringement for thecalendar. Philip Morris refused, and was sued at the Regional Court of Munich,which rejected the claim of the non-smoking organization. The latter appealedsuccessfully at the Higher Regional Court. In 1984 Philip Morris asked for arevision in the Mordoro-Poker case at the Federal Court of Justice, to no avail.Philip Morris’s claim of ‘encroachment upon established and practiced businessoperations’ were outweighed by the freedom of expression based on Article 5(1)Basic Law. It must have helped that the spread of the calendar was not forcommercial reasons but to promote public health. BGH GRUR 1984, 684, sec.823 I BGB, 17 April 1984.

468 Lusthansa: In Germany the long s, which is written as an f, can be foundin the blackletter typeface ‘fraktur’, which increases a likelihood of confusionbetween Lufthansa and Lusthansa. Lusthansa, OLG Frankfurt, BGH GRUR1982, 319, 320. The site Lusthansa was accessed 9 February 2015 at: http://www.lusthansa.de/.

469 Adihash, OLG Hamburg GRUR 1992, 58.




since one needed knowledge of the English language to appreciate thedifference between ‘adihash’ and ‘adidas’.

In 1994, in Mars condoms, the Federal Constitutional Court held that‘Mars macht mobil bei Sex, Sport und Spiel’, which was meant as aparody on a similar slogan by the chocolate bar producer, was consideredto be use of a designation in a trademark context which is not intended tobe covered by the protective scope of the freedom of expression (Article5(1) Basic Law).470 Therefore the parody defence was unsuccessful.471

In 1998, in Shell-Totenkopf, the Higher Regional Court of Hamburg472

held that the parody defence of a company selling T-shirts equipped withthe trademark logo of Shell in an altered form was not successful.Although there was no direct competition between the oil company andthe T-shirt company, the latter engaged in unfair competition, within themeaning of the unfair competition law; § 1 gesetz gegen den unlauterenWettbewerb (UWG), because the sales of the T-shirts took advantage ofthe repute of the trademark.473

Also in 1998, in Bild Dir Keine Meinung, artist Kuno Klaboschkemade postcards with the text ‘Bild Dir Keine Meinung’ (Do not formyour own opinion), which is a parody on the slogan used by thenewspaper Bild: ‘Bild Dir Deine Meinung’ (Form your own opinion). TheCourt of Appeals of Hamburg held that Klaboschke’s parody defence wassuccessful.474

Shell-Totenkopf and Bild Dir Keine Meinung were both decided by theHigher Regional Court of Hamburg in 1998. The difference is that thecourt in Bild Dir Keine Meinung determined that the trademark was usedmore artistically than commercially, and that the commercial income wasmarginal.

470 Basic Law for the Federal Republic of Germany 1949, supra note 464.471 Mars condoms: In the 1970s chocolate bar producer Mars used the slogan

in Germany ‘Mars macht mobil bei Arbeit, Sport und Spiel’) (Mars makes youmobile at work, sports and games). Mars (Schokoriegel), Wikipedia, accessed 9February 2015 at: http://de.wikipedia.org/wiki/Mars_(Schokoriegel). Marskon-dom, Markenverunglimpfung I, BGH GRUR 1994, 808, NJW 1994, 3342,decision of 27 May 1994. See also Sönke Becker, PARODIE UND KOMMERZ,EINE RECHTSVERGLEICHENDE UNTERSUCHUNG DES AMERIKANIS-CHEN UND DEUTSCHEN URHEBER- UND MARKENRECHTS (Heidelberg:C.F. Müller Wissenschaft, 2004), at 52.

472 Shell-Totenkopf, OLG Hamburg, GRUR 1998, 1121 (1122), 11 June 19973 U 222/96 operating consultant in 1998, 235.

473 Id. See also Schneider, supra note 466, at 183.474 Bild Dir Keine Meinung, OLG Hamburg, 4 June 1998, NJW-RR 1990,

1060.




In 2000, in Deutsche Pest, the Regional Court of Hamburg held that a vanin the yellow colour of the German post office Deutsche Post with the words‘Deutsche Pest’ (German plague) was used by a trade-fair constructioncompany.475 In weighing the interests of the freedom of expression and the‘general personality rights’ of the trademark holder, the court held that the‘defamatory disparaging criticism’476 does not prevail because a key part ofthe fundamental rights of the trademark holder was affected.

These examples of German case law demonstrate the variety in which thecourts are weighing parodic but tarnishing use of trademarks based on thefreedom of expression, with the origin of source doctrine,477 generalpersonality rights of the trademark holder or use in a designating context.

According to Schneider, Lila Postkarte was the watershed moment whenGerman courts no longer based their parody decisions predominantly onwhether there is confusion or not.478 As discussed in the introduction toChapter 5, Kozinski pointed out that general confusion excludes any claimbased on the right to freedom of expression.479 From the above mentionedcases one can determine that the courts in Lusthansa, adihash and Marscondoms based their parody decision predominantly on confusion, but theother cases did not. However, Lila Postkarte can be indicative of Germancourts following the structure of their implementation of Article 5(2)Trademark Directive more stringently.480

In Lila Postkarte, a postcard using the word Milka, with the purplebackground colour trademarked by chocolate manufacturer Milka, waspublished. The partly purple cow that was used in some of Milka’sadvertisements was described as a word in the following poem:481

Über allen Wipfeln is Ruh,irgendwo blökt eine Kuh.

Muh!Rainer Maria Milka482

475 Deutsche Pest, LG Hamburg GRUR 2000, 514.476 The Regional Court of Hamburg stated that ‘die ehrverletzende herabwür-

digende Kritik nicht obsiegen, weil ein Kernbereich der Grundrechte derMarkeninhaberin berührt sei’. LG Hamburg GRUR 2000, 514.

477 Schneider, supra note 466, at 45.478 Id.479 Kozinski, supra, Chapter 1, note 39, at 973.480 Para. 14 Abs. 2 nr. 3 MarkenG, which conforms to Article 5(2) Trademark

Directive, supra, Chapter 2, note 11.481 Schneider, supra note 466, at 46–7.482 An English translation is: ‘Over all the mountains is peace, bleats a cow

somewhere. Moo!’ The case in German plus an illustration of the Lila Postkarte




The imaginary poet Rainer Maria Milka was attributed, which is anallusion to Rainer Maria Rilke.483 In 2005, the Federal Court of Justiceweighed the freedom of art of Article 5(3) Basic Law484 against theguarantee of property protection of Article 14(1) Basic Law.485 The courtheld that that there was no disparagement of the trademark and that thetrademark was not only used commercially, therefore the freedom of artwas given priority.486 So the parodic use of the trademark was with‘rechtfertigenden Grund’ (due cause), conforming to para. 14 Abs. 2 nr. 3MarkenG,487 Germany’s equivalent of Article 5(2) Trademark Directive’s‘use with due cause’ clause.

Comparable to Lila Postkarte488 in the sense that it also follows thestructure of Article 5(2) Trademark Directive, but with an opposite result,is the Styriagra489 case of 2010: Richard Mandl, a producer of pumpkinseeds from the Austrian province Steiermark, coated the pumpkin seedsin a blue coloured sugar and sold them under the trademark Styriagra,alluding to the alleged aphrodisiacal properties of pumpkin seeds. Pfizer,holder of the Viagra trademark, sued the producer. The court of firstinstance held that the reputation of Viagra’s trademark was not affected.However, the court of appeal and the supreme court held that Mandl used

can be found here: ‘Verwendung einer bekannten Marke in humorvoller Weise’Kanzlei Prof. Schweizer – Urteilsdatenbank, (accessed 30 May 2015) http://www.schweizer.eu/bibliothek/urteile/index.html?id=12725.

483 Rainer Maria Rilke was a famous German-language poet, 4 December1875 – 29 December 1926. Rainer Maria Rilke, Wikipedia.

484 Article 5(3) Basic Law for the Federal Republic of Germany (Grundge-setz): Art and science, research and teaching are free. The freedom of teachingdoes not absolve from loyalty to the constitution (Kunst und Wissenschaft,Forschung und Lehre sind frei. Die Freiheit der Lehre entbindet nicht von derTreue zur Verfassung).

485 First sentence of Article 14(1) Basic Law for the Federal Republic ofGermany (Grundgesetz): Property and inheritance shall be guaranteed (DasEigentum und das Erbrecht werden gewährleistet).

486 Lila-Postkarte, supra note 416, para. 34.487 Supra note 480.488 The Austrian Supreme Court also refers explicitly to this case, Styriagra,

Austrian Supreme Court, 22 September 2009; 17 Ob 15/09v, paras 3.1 and 3.3.489 Id. Read Maximilian Schubert, ‘Styriagra: Pfizer Getting Seriously

“Excited” about the Sale of Blue Coloured Pumpkin Seeds’, Austrotrabant, 3December 2009, accessed 9 February 2015 at: http://austrotrabant.wordpress.com/2009/12/03/styriagra-pfizer-getting-seriously-excited-about-the-sale-of-blue-coloured-pumpkin-seeds/, and also Stephanie Bauer, ‘Austria: Trademark Parody– Humour is …’, 17 February 2010, accessed 9 February 2015 at: http://www.mondaq.com/x/94072/.




the Viagra trademark to attract the public’s attention to the Styriagratrademark and benefit from Viagra’s reputation,490 even though it recog-nized the humorous allusion of Styriagra to Viagra.491 Therefore, byusing the trademark Styriagra, Mandl had taken unfair advantage of orhad acted detrimentally to the distinctive character or repute of Pfizer, onthe basis of Articles 5(2) Trademark Directive and 9(1)c CommunityTrademark Regulation.

In France, in the Je boycott Danone case (2001–03), Olivier Malnuitused the trademark Danone in the name of the website Jeboycottdanone.net, which was advocating employers’ interests, and reproduced thetrademark logo of Danone wherein the red bar was substituted by a blackbar, and added the words ‘Je boycott’ (I boycott) above and ‘.net’ next tothe name Danone. The Paris High Court492 in two summary proceedingsordered Olivier Malnuit and Voltaire Network who were exploiting thewebsite to cease using the sign similar to Danone.493 The Paris HighCourt asserted that the use of the semi-figurative trademark (trademarklogo of which the trademark name is a part) on the websitejeboycottdanone.net exceeded the requirements of the right to freedom ofexpression, and took the consequences of a possible weakening of thetrademark into account.494

490 The Supreme Court cited para. 49 of L’Oréal and Others, supra, Chapter2, note 95: ‘to ride on the coat-tails of that mark in order to benefit from itspower of attraction, its reputation and its prestige, and to exploit, without payingany financial compensation …’ Styriagra, supra note 488, para. 3.

491 ‘Undoubtedly, the emphasis is, however, an attempt by the defendant tocreate by the reference to a well known brand awareness for its own product’.(Zweifellos im Vordergrund steht jedoch der Versuch des Beklagten, durch dieAnlehnung an eine bekannte Marke Aufmerksamkeit für sein eigenes Produkt zuerregen.) Styriagra, supra note 488, para. 3.4.

492 Paris High Court is the ‘Tribunal de Grande Instance de Paris’.493 Je boycott Danone, Paris High Court (Tribunal de Grande Instance de

Paris), preliminary injunction of 23 April 2001, Compagnie Gervais Danone/Olivier M., 7 Ways, ELB Multimédia. Paris High Court preliminary injunction of14 May 2001.

494 The Paris High Court also asserted that the weakening of the trademarkwould cause greater harm to the employees of the Danone group, without provenbenefit for wages affected by the closure (Attendu que le recours à la reproduc-tion des marques semi-figuratives Danone excède donc les besoins de la libertéd’expression; qu’il peut avoir, au contraire, un effet d’affaiblissement desditesmarques pour le plus grand préjudice des salariés du groupe et sans gain avérépour les salaires concernés par les mesures de fermeture). Paris High Courtpreliminary injunction of 14 May 2001.




In a separate decision the Paris High Court held simply that the parody,pastiche or caricature exception to author’s right is not applicable totrademark law.495

Olivier Malnuit and Voltaire Network successfully appealed.496 TheParis Court of Appeal stated that jeboycottdanone.net clearly does notintend to promote products competing with Danone. Instead the courtconsidered that the defendants strictly exercised their right to freedom ofexpression by using the sign similar to Danone which was necessary andpurely used in a polemical way, and that remarks about the products werenot in any way denigrating, but instead positive statements.497

In 2002, in CNMTR v societé JT,498 the Paris Court of Appeal held thatthe parody defence was admissible after CNMTR used the trademark‘Camel’, in the context of an anti-smoking campaign in combination with

495 ‘L’exception de parodie, de pastiche ou de caricature, propre à lalégislation des droits d’auteur, n’existe pas en droit des marques’. Paris HighCourt (Tribunal de Grande Instance de Paris) third chamber, first section,decision of 4 July 2001, Sté Compagnie Gervais Danone et Sté GroupeDanone/Olivier M., SA 7 Ways, Sté ELB Multimédia, association ‘Le RéseauVoltaire Pour la Liberté d’expression’ (ci-après ‘Réseau Voltaire’), Sté Gandi etValentin L. (exerçant sous le nom commercial ‘Altern B’).

496 Paris Court of Appeal (Cour d’appel de Paris) fourth chamber, section A,judgment of 30 April 2003, Olivier M., Réseau Voltaire/Compagnie GervaisDanone, Groupe Danone.

497 ‘Que, en effet, même s’il est fait, pour partie, référence aux marquesverbales et à la reproduction des marques semi figuratives appartenant à lasociété Compagnie Gervais Danone, à la seule différence tenant à la substitutiond’un trait noir dans la partie inférieure du cartouche au trait rouge de l’original,les signes “jeboycottedanone.net” et “jeboycottedanone.com” ne visent mani-festement pas à promouvoir la commercialisation de produits ou de services,concurrents de ceux des sociétés intimées, en faveur de l’association RéseauVoltaire et de Olivier M. mais relève au contraire d’un usage purementpolémique étranger à la vie des affaires; qu’il résulte des éléments du dossierque, d’une part, la référence à la marque Danone était nécessaire pour expliquerle caractère politique ou polémique de la campagne et, d’autre part, que,contrairement aux allégations des sociétés Groupe Danone et CompagnieGervais Danone, leurs produits n’étaient nullement dénigrés ni même visés,puisque, sur les sites litigieux, on relève, tout au contraire, des mentions tellesque “on aime vos produits. On a envie de continuer à les fabriquer, on a envieque les gens continuent à les acheter”;’ Paris Court of Appeal (Cour d’appel deParis) fourth chamber, section A, judgment of 30 April 2003, Olivier M., RéseauVoltaire/Compagnie Gervais Danone, Groupe Danone.

498 Comité national contre les maladies respiratoires et la tuberculoseCNMTR v société JT International GmbH et autre (CNMTR v société JT), ParisCourt of Appeal (Cour d’appel de Paris), 2002.




a picture of a dromedary lying on the ground with his legs foldedunderneath his emaciated body, in combination with the text ‘let yourselfbe fooled by the smoke’.499

The French Supreme Court, however, overruled the decision because itheld that a parody at the expense of a cigarette brand for the public healthgoal pursued by CNMTR and its right to freedom of expression do notjustify the violation of the rights of a cigarette brand that operates withinthe law.500

So in summary: in the Je boycott Danone case, the Paris High Courtapplied the principle of proportionality, and determined separately thatparody, pastiche and caricature are incompatible with trademark law.The Paris Court of Appeal, however, held that the defendants had usedthe trademark within their freedom of expression, and had not used thewebsite to promote competing products. The court seems to contend thatthe website was not used in the course of trade.

In CNMTR v societé JT, the Paris Court of Appeal accepted the parodydefence. However, then the French Supreme Court did not allow a parodydefence at the expense of the cigarette company that acted within the law,even though it was to further the public health goals.

The different approaches to parody as a defence in cases of trademarkdilution by the courts in the different EU member countries demonstratethat parody is a constant source of legal uncertainty. Further EU-wideharmonization might be desirable.

Olson argued that parody defences in the US case law are not balancedwith the trademark holders’ exclusive rights: ‘Under the current statutoryframework, if a mark holder seeks injunctive relief for an artist’starnishing use, he will fail every time’.501 One can argue that this viewcan be nuanced: in the US if the trademark holder can prove that histrademark is used in a sexually explicit context a dilution by tarnishmentclaim has a substantial chance of being successful. In the EU, however,trademark holders seem to be quite successful in proving detriment to thecharacter or repute of their trademark. Olson proposed to apply a

499 ‘[T]e laisse pas rouler par la cigarette’, CNMTR v société JT, Paris Courtof Appeal (Cour d’appel de Paris), 2002.

500 CNMTR v société JT, Supreme Court (Cour de cassation) – Deuxièmechambre civile, judgment number 1601, 05-13.489, 19 October 2006.

501 Alexandra Olson, Dilution by Tarnishment: An Unworkable Cause ofAction in Cases of Artistic Expression, 53 B. C. L. REV. 693, 734 (2012).




balancing test conform the fair use test for copyright law which shouldreplace the non-commercial use requirement and broad fair useexclusions.502

Free-Riding/UnfairAdvantage of Distinctive Character or Repute

Justice Vos explained that Ate My Heart Inc. v Mind Candy Ltd dealt notwith amusingly similar referential names such as Broccoli Spears. LadyGoo Goo was known on the internet and therefore could not exploit hername without taking unfair advantage of the Lady Gaga trademark.503

Criticizing and Commenting

It seems obvious that news reporters, commentators and criticasters mustbe permitted to use trademarks to report, comment or criticize thetrademarked product or service or the trademark holder.504 Critique on aperceived lack of social or environmental responsibility can be especiallyuseful to the public at large and is arguably indispensable for thedemocratic process. However, when journalists use a trademark logo toillustrate an article that has nothing to do with a particular trademark ortrademark holder, then an approach comparable to the parody/satiredichotomy would be welcome, in which the trademark can only be usedin cases where the trademark or the trademark holder is the subject.

Rowbottom argued that there should be different norms for profes-sional and amateur writers: ‘That condition specifically refers to thenorms of the mass media professional, and as a result the defence willoffer limited protection to the amateur digital speaker that is notacquainted with those journalistic practices’.505 One can argue that todistinguish between amateur and professional journalists is untenable andartificial.

Instead this book will propose the formality of linking back to theoriginal site as a precondition for the use of the trademark logo on socialmedia and this can be used as a defence against trademark dilutionclaims. Linking back conforms to the journalistic norm of the adversarialprocess, see Chapter 8.

502 Id., at 729.503 Ate My Heart Inc., supra note 400, para. 50.504 In the US, this is permitted under U.S.C. § 1125(c)(3)(B), in the EU,

Article 10 ECHR.505 Rowbottom, supra, Chapter 3, note 49, at 359.




Current Trademark Law’s Insufficient Protection of the TrademarkLogo on Social Media

Anti-trademark dilution protects the public interest, but also the indi-vidual rights of the trademark holders,506 which now indirectly adds tothe public interest by the added wealth and broadened products andservices assortments the trademark holders create. Therefore from both atrademark holder and public interest point of view one can argue thattrademark holders have a need to protect their expenditure of time, effort,labour, money and skills and strategies507 they have put into the goodwilland reputation of their trademarks.508

The anti-dilution laws in the US and EU are insufficient to turn the tideof massive unauthorized use of the trademark logo on social media.Google received more than 35 million copyright removal requests in amonth.509 Although Google did not publish information on the number ofrequests to remove trademarks, including trademark logos, one canassume that these numbers follow the trend of the copyright removalrequests. To deal with these on a case by case basis via litigation seemsnot feasible due to the sheer quantity.

The role of the trademark in society has expanded, from signifier ofthe source of origin to a signifier of reputation and goodwill,510 and the

506 ‘… great importance to the public interests as well as to the individualrights, of maintaining inviolate, that peculiar property which serves to designateand identify the goods, and wares, and merchandise of the artisan, the manufac-turer, and the merchant, which minister to the constant necessities of all, andwhich furnish the sole assurance and guarantee of their genuineness, purity andintegrity’. Derenberg, supra, Chapter 5, note 36, at 445.

507 ‘Any expenditure of mental or physical effort, as a result of which there iscreated an entity, whether tangible or intangible, vests in the person who broughtthe entity into being, a proprietary right to the commercial exploitation of thatentity, which right is separate and independent from the ownership of that entity’.D.F. Libling, The Concept of Property: Property in Intangibles, 92 LAW Q.REV. 103, 103–19 (1978).

508 David Tan juxtaposes the point of view that companies spend a lot ofmoney building their brands, and hence want greater protection for theirtrademarks, and whether there should be greater public usage because brandsderive their economic value as a result of the emotional investments byconsumers? Comments via email, on file with the author, 19 October 2010.

509 Google copyright removal receipts in the last month (35,754,665): 30May 2015, accessed 30 May 2015 at: http://www.google.com/transparencyreport/removals/copyright/.

510 ‘Moreover, such marks frequently perform functions which go beyondlinking goods or services to a uniform source. They present a powerful image of




expansion of trademark law has followed this development beyond therationale of decreasing economic search costs.

However, the anti-dilution laws suffer from some fundamental flaws,which have arisen because the ideas of Schechter have only beenpartially implemented. Instead of his proposal to protect trademarks thatare original and unique so that they can be distinctive from any other, theconcept of famous trademark or trademark with a reputation has beenimplemented, probably inspired by the well-known trademark doctrine,which was a Fremdkörper (alien body) in regard to the dilution doctrineuntil it was incorporated by TRIPS.511

The situation whereby multiple proprietors can use the identicaltrademark as long as they operate in different trademark classes isuntenable in the era of globalization and the internet, where markets arephysically and virtually connected, where travellers and internet userscome into contact with any trademark.

The fair use test in the US and the limitations and exceptions incombination with the two-step test can only partly be automated. Theyare largely based on qualitative, and thus per definition subjective,criteria, while only those factors that are based on quantitative, and thusobjective, criteria are suitable for automation. It is an illusion to presumethat litigation in a court of law could have the resources or priority toevaluate a flood of trademark abuse cases on a case by case basis. Asalready concluded in Chapter 4, litigation is not scalable.

Visuality of the trademark logo‘[a] reputation like a face is the symbol of its possessor and creator, andanother can only use it as a mask’.512 Just as trademarks tell stories, sodo trademark logos, arguably in a condensed form.513 One can see thetrademark logo as a symbol with a cluster of meanings. The OHIMacknowledges that trademarks do not only serve to indicate the origin of

quality, exclusivity, youth, fun, luxury, adventure, glamour or other reputedlydesirable lifestyle attributes, not necessarily associated with specific products butcapable of presenting a strong marketing message in itself’. Advocate GeneralSharpston in Intel Corp. Inc. v CPM United Kingdom Ltd (Case C-252/07),Opinion of Advocate General, 26 June 2008, para. 8.

511 Article 16(3) TRIPS, supra, Chapter 2, note 26.512 Judge Learned Hand in Yale Elec. Corp. v Robertson, supra, Chapter 2,

note 82.513 ‘[T]rade marks tell stories. Their expressiveness is the basis of commer-

cial activity, the trader-author the conduit of meaning, and the market-audiencethe monitor and arbiter of taste’. Megan Richardson, Trade Marks and Language,26 SYDNEY L. REV. 193, 196 (2004).




a product, but also to convey a certain message or image to theconsumer.514 Spiesel remarked that to determine whether the picture wasused fairly rests largely on a judgement about whether its meaning hasshifted.515 She also noted that this recoding is assessed by translating thatwhich has been observed into words. On social media trademark logosare encoded by the trademark holder with meanings to associate it with,for example, desirability and luxury. These attributes in turn are thendecoded by internet users. However, the user-generated content charac-teristics of social media make it possible that internet users recode themeaning of trademark logos in harmful ways.

Tushnet demonstrated that pictures have an immediacy and thereforetheir meaning is context-bound.516 Because the context is so relevant,trademark logos are vulnerable to unsavoury contexts.

This book will propose that only those trademark dilution defencesagainst trademark dilution claims of unauthorized trademark logos onsocial media will be effective under the condition of linking back thetrademark logo to the original site (see Chapter 8).

514 ‘It follows that trade marks do not only serve to indicate the origin of aproduct, but also to convey a certain message or image to the consumer, which isincorporated in the sign mostly through use and, once acquired, forms part of itsdistinctiveness and repute. In most cases of reputation these features of the trademark will be particularly developed, as the commercial success of a brand isusually based on product quality, successful promotion, or both and, for thisreason, they will be especially valuable to the trade mark owner. This addedvalue of a mark with reputation is precisely what Article 8(5) intends to protectagainst undue detriment or unfair advantage’. OHIM, The Manual ConcerningOpposition – Part 5, Article 8(5) CTMR, at 35.

515 Spiesel, supra, Chapter 4, note 48.516 Rebecca Tushnet, Worth a Thousand Words: The Images of Copyright

Law, 125 HARV. L. REV. 683 (2012).




7. Intermediary liability

Why the safe harbour provisions must besubstituted for strict intermediary liability

7.1 INTRODUCTION

With great power comes great responsibility.1

Before the advent of social media, towards the end of the ‘dot.combubble’,2 the idea took root that electronic commerce would be crucialfor society. Because of ‘the embryonic state of electronic commerce,policies should be crafted with care and with due recognition of itsfragile and evolving nature’.3 In this light it was thought that, amongother internet intermediaries, the online service providers (OSPs),4 whomerely host content posted by third parties, needed to be protectedagainst a flood of legal conflicts because of alleged copyright andtrademark infringements.5

Legislators on both sides of the Atlantic assumed that this would‘ensure that the efficiency of the internet [would] continue to improveand that the variety and quality of services on the internet [would]

1 Voltaire. Adrien Jean Quentin Beuchot, Pierre-Auguste-Marie MigerŒUVRES DE VOLTAIRE, VOLUME 48 (Paris: Lefèvre, 1832).

2 The ‘dot.com bubble’ took place between 1995 and 2000. Exuberantexpectations about technological advances led to speculation that anythingrelated to the internet would prosper.

3 Andrew Wyckoff and Alessandra Colecchia, The Economic and SocialImpact of Electronic Commerce, Preliminary Findings and Research Agenda,OECD (1998), at 12.

4 Online service provider (OSP) means an intermediary that is called aninternet society service in the E-Commerce Directive and a service provider inthe DMCA, supra, Chapter 1, note 5.

5 In this book copyright and trademark infringements on the internettogether are called content infringements.

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continue to expand’.6 The development of e-commerce proved to berobust and user generated content on social media started to blossom, andthe foreseen problems never materialized. Therefore, one can assert thatthis eliminated the raison d’être for the safe harbour provisions.7

The safe harbour provisions are supposed to give internet inter-mediaries, including OSPs, immunity in case of intermediary liability,8

because of content infringements by internet users,9 if they met twoprerequisites.

The first prerequisite is that an OSP has no actual knowledge norconstructive knowledge.10 And where it obtains such knowledge orawareness it must expeditiously remove or disable access to suchcontent.11 In the case of the safe harbour provisions in the Lanham Actthe first prerequisite is preventing future presentations of trademarkinfringements.

The second prerequisite is that OSPs should act neutrally in relation tocontent uploaded by third parties, for example user generated content onsocial media or internet auctions. However, this is in conflict with OSPs’desire to harness technology to further their entrepreneurial interests.

The jurisprudence shows that knowledge (the first prerequisite) isnarrowly interpreted, while neutrality (the second prerequisite) is broadlyinterpreted.

All these safe harbour provisions were introduced before the ascent ofone subspecies of OSP: the social media provider. An additional advan-tage of the concept of the safe harbour provisions, it was assumed, wouldbe that they would not have to filter inappropriate content, so that theycould primarily focus on their core activities,12 without having to fear

6 Viacom Int’l Inc. v YouTube, Inc., 718 F. Supp. 2d 514, 519 (S.D.N.Y.2010). Quoting ‘The Senate Committee on the Judiciary Report’, S. REP. NO.105-190 (1998), at 8.

7 Danny Friedmann, Sinking the Safe Harbour with the Legal Certainty ofStrict Liability in Sight, 9(2) JOURNAL OF INTELLECTUAL PROPERTYLAW AND PRACTICE 148–55 (2014).

8 Secondary liability is also called third party liability, applied to internetintermediaries this is also called intermediary liability.

9 The internet users that upload infringing content are the primary infrin-gers.

10 Awareness of facts or circumstances that infringing activity is apparent.11 17 U.S.C. § 512(c)(3); and Recital 46 of the preamble to and Article

14(1)(b) of the E-Commerce Directive, supra, Chapter 1, note 5.12 The US Congress was concerned that internet service providers were

forced to operate a human compiled directory of websites or to monitor a site forinappropriate content. In the legislative history it becomes clear that Congress




being sued for intellectual property infringements. However, this ideadoes not correspond well with reality. For social media providers therisks of being sued by content holders have become substantial, becauseof the massive amount of user generated content they are hosting. Socialmedia are already swamped by notice and takedown requests by allegedcontent holders.

This chapter will answer why the safe harbour provisions that excludesocial media from intermediary liability for trademark infringementunder certain conditions is not effective.

First the relevant safe harbour provisions in the case of trademarkinfringements are briefly introduced in Chapter 7.2. The question will beanswered why safe harbour provisions only give a false sense of safetyand do not provide real protection to social media providers.

Chapter 7.3 will investigate why OSPs in general and social mediaproviders in particular are not incentivized to proactively monitor forinfringing material and whether this could be changed via self-regulation,market power or legislation. Followed by why and how the intermediaryliability could provide relief to trademark holders.

Chapter 7.4 will explain the grounds that can pierce the veil of the safeharbour provisions and enable trademark holders to sue the OSPs,including social media providers: contributory liability, inducement aspart of contributory liability, and vicarious liability. This section alsoinvestigates inducement as a possible stand-alone action and someinteresting developments to use Facebook to sue primary infringers, theinternet users, on social media.

Chapter 7.5 will provide an overview of some seminal case law inwhich trademark and copyright holders have filed lawsuits against eBayand Google France. Although the internet auction and reference serviceare not purely social media, these cases illuminate the filter conditions ofthe safe harbour provisions relevant to OSPs, including social media.

Chapter 7.6 will answer the question to what degree OSPs, includingsocial media providers, should be obligated to filter infringing content.

Chapter 7.7 examines what the implications are of the safe harbourprovisions in case of trademark infringement in regard to the legalcertainty of social media providers, trademark holders and internet users.

wants liability to arise only in such cases if the infringement was ‘obvious’, suchas a ‘“pirate” site’, such that ‘online editors and catalogers would not be requiredto make discriminating judgments about potential copyright infringement’. H.R.Rep. No. 105-551 pt. 2 at 57–8; S. Rep. 105-190, at 48–9.

Intermediary liability 227



7.2 SAFE HARBOUR PROVISIONS

We cannot be liable for actions of third parties. As long as we follow aregime of taking things down that are reported to us, which we have doneover all these years, we are protected according to the law. Transcriptionof Kim Dotcom in 2012.13

The DMCA14 and the Communications Decency Act (CDA)15 are bothnot applicable to trademark infringements. However, the DMCA isrelevant to the subject, because it has been used as an inspiration for theE-Commerce Directive16 in the EU and also for the notice and takedownprocedures de facto used by eBay and social media providers. Case lawon the CDA is also relevant since it has pointed the way to theapplicability of the safe harbour provisions in the Lanham Act in the caseof trademark infringements. Then the safe harbour provisions of theLanham Act that are partly applicable in the case of trademark infringe-ments in the US will be examined, followed by the safe harbourprovisions of the E-Commerce Directive,17 applicable in the case of allintellectual property infringements in the EU, including trademarkinfringements.

DMCA and CDA

On 12 October 1998, the US Congress passed the DMCA,18 which forthe most part became effective on the same date.19 The DMCA has themost prominent safe harbour provisions in the US, or arguably world-wide. Although it is only applicable in the case of copyright infringementand not trademark infringements, it is relevant for this book: it inspiredthe safe harbour provisions in the EU which has led to the safe harbourprovisions in the E-Commerce Directive, applicable to all intellectual

13 Dotcom, supra, Chapter 4, note 53.14 Supra, Chapter 1, note 5.15 47 U.S.C. § 230 (2000).16 Directive 2000/31, supra, Chapter 1, note 5.17 Id.18 DMCA, supra, Chapter 1, note 5.19 Most provisions of the DMCA are effective on the date of enactment.

However, those provisions that are related to the WIPO copyright treaties becameeffective until these relevant treaties came into force. WIPO Performances andPhonograms Treaty, effective on 20 May 2002. WIPO Copyright Treaty effectiveon 6 March 2002, supra, Preface, note 11. The prohibition on the act ofcircumvention of access control measures does not take effect until two yearsfrom enactment (28 October 2000).




property infringements, including trademark infringements. Also, theDMCA20 has set a de facto standard in regard to notice and takedownprocedures; its structure has been followed by eBay and many socialmedia providers. It also provides a context to demonstrate how the safeharbour provisions in the Lanham Act differ from those in the DMCA.

In short: the DMCA21 exempts internet intermediaries for secondaryliability of copyright infringements, as long as they expeditiously removeinfringing copyright material or disable access of such material afterbeing notified, conforming to a specified notice and takedown proced-ure,22 or after they are aware of facts or circumstances that infringingactivity is apparent. The alleged copyright infringer has the opportunityto counter-notify the one who alleged to be authorized by the copyrightholder, in order to get the content back online.23 The copyright holderthen has 10 to 14 days to avoid the content being placed back bynotifying the designated agent of the OSP that he has filed a court orderto restrain the user from engaging in infringing activity on the servers ofthe OSP.24

Internet intermediaries can be divided into five categories: to providetransitory digital network communications,25 system caching26 or infor-mation residing on systems or networks at the direction of users,27 searchengines and hyperlinks.28 The latter two, called together informationlocation tools, can only be found in the DMCA.29 The member states ofthe EU deal with information location tools in a way similar to hosting.30

The DMCA and in slightly different wording the E-Commerce Direct-ive31 both distinguish between the different internet intermediaries’activities:

20 Supra, Chapter 1, note 5.21 Id.22 § 512(c)(1)(A)iii DMCA, id.23 § 512(g)(2)(B) DMCA, id.24 § 512(g)(2)(C) DMCA, id.25 § 512(a) DMCA, id.26 § 512(b) DMCA, id.27 § 512(c) DMCA, id.28 § 512(d) DMCA, id.29 Id.30 Google France and Google, supra, Chapter 2, note 95, para. 110. Read

Thibault Verbiest Gerald Spindler, Giovanni Maria Riccio, Aurélie van der Perre,Study on the Liability of the Internet Intermediaries, Markt/2006/09/E, 12November 2007, at 18–19/115.





– transitory digital network communication32/mere conduit;33

– system caching34/caching,35 and;– information residing on systems or networks at the direction of

users36/hosting,37 respectively.

The difference between these activities is how long the internet inter-mediaries store the information.

The DMCA38 is not applicable in the case of trademark infringements.However, the Lanham Act has its own safe harbour provisions39 forso-called innocent infringers and innocent violators, where the trademarkinfringement or trademark violation complained of is contained in or ispart of paid advertising matter.40 The following three groups of protagon-ists are eligible for these Lanham Act safe harbour provisions:

– those engaged in the business of printing;41

– publishers or distributors of newspapers, magazines or electroniccommunications;42

– domain name registrars.43

Only publishers of electronic communications will be discussed below,because social media providers fit in this category.

As already mentioned above the DMCA44 has set a standard for othersafe harbour provisions in regard to its notice and takedown procedures.Social media providers flooded by takedown requests by trademarkholders have tried to find refuge in DMCA45 style notice and takedownprocedures, as discussed in Chapter 3.3. Also being sued frequently bytrademark holders, internet auction eBay has implemented a VerifiedRights Owners (VeRO) programme which uses a notice and takedown

32 § 512(a) DMCA, id.33 Article 12 E-Commerce Directive, id.34 § 512(b) DMCA, id.35 Article 13 E-Commerce Directive, id.36 § 512(c) DMCA, id.37 Article 14 E-Commerce Directive, id.38 DMCA, id.39 § 32(2) Lanham Act, as codified into 15 U.S.C. § 1114(2) (2000).40 Id., § 1114(2)(B) Lanham Act.41 Id., § 1114(2)(A) Lanham Act.42 Id., § 1114(2)(B) Lanham Act.43 Id., § 1114(2)(C) Lanham Act.44 DMCA, supra, Chapter 1, note 5.45 Id.




procedure with nearly the same six elements required in § 512(c)(3)i-viDMCA, which eBay called: notice of claimed infringement (NOCI).46

The sixth element of NOCI: ‘a statement by you, made under penaltyof perjury, that the information in your notice is accurate and that you arethe copyright or intellectual property owner or authorized to act on thecopyright or intellectual property[47] owner’s behalf’,48 is putting thepenalty of perjury under the statement which includes that the infor-mation in the notice is accurate and that the complainant is authorized toact on the copyright or intellectual property owner’s behalf. This makesNOCI’s penalty more inclusive than § 512(c)(3)vi DMCA which, due tothe positioning of the comma, only puts the penalty of perjury on thesecond part: ‘A statement that the information in the notification isaccurate, and under penalty of perjury, that the complaining party isauthorized to act on behalf of the owner of an exclusive right thatis allegedly infringed’.49

Just as the DMCA prescribes that the complainant should be able tosend his complaint to a designated agent of the internet intermediary,50 sodoes eBay have a designated agent to whom complainants can send theircomplaints.51

Under the DMCA the liability of internet intermediaries that providehosting applies under the condition that they remove or disable materialupon notification52 sent to their designated agent53 by the alleged rightsholder and notify the subscriber. Upon receipt of a counter-notification tothe claimant, the hosting provider must replace the removed material orenable disabled material, in not less than 10 days nor more than 14working days54 if he wants to remain immune to secondary liability,

46 eBay: VeRO Reporting and Infringement, accessed 9 February 2015 at:http://pages.ebay.com/vero/notice.html.

47 To state ‘copyright or intellectual property’ is a tautological formulation,since copyright is part of the category of intellectual property. A more precise butstill broad formulation would be ‘copyright or industrial property’. Industrialproperty includes trademark rights, design rights and patent rights.

48 Supra note 46.49 § 512(c)(3)vi DMCA, supra, Chapter 1, note 5.50 § 512(c)(2) DMCA, id.51 Supra note 46.52 According to elements mentioned in § 512(c)(3) DMCA, supra, Chapter

1, note 5.53 § 512(c)(2) DMCA, id.54 § 512(g)(2)(C) DMCA, id.




unless the designated agent first received a notification from the allegedrights holders that he filed an action seeking a court order to restrain theOSP.55

Unlike the DMCA notice and takedown procedure,56 eBay’s NOCIdoes not include the possibility of a counterclaim. Just as the DMCAprescribes that internet intermediaries implement a policy against repeatinfringers,57 ‘eBay has adopted and implements a policy that provides forthe termination in appropriate circumstances of the accounts of users whorepeatedly infringe copyrights or other intellectual property rights ofeBay and/or others’.58

Another set of safe harbour provisions was created in 2000: CDA.59

These safe harbour provisions indemnify internet intermediaries fromintermediary liability arising from third party generated content: ‘Noprovider or user of an interactive computer service shall be treated as thepublisher or speaker of any information provided by another informationcontent provider’.60 However, these safe harbour provisions have so farbeen interpreted as granting internet service providers immunity fromstate and federal causes of action, such as torts including defamation andnegligence.61 The question whether it was applicable to intellectualproperty was answered in 2001, in Gucci Am., Inc. v Hall & Assocs.62

The court held that § 230(e)(2) CDA needed to be interpreted in such away that ‘it would neither limit or expand any law pertaining tointellectual property’.63 However, the court in Gucci Am., Inc. v Hall &Assocs.64 did refer to safe harbour provisions of the Lanham Act,65

thereby clarifying that these apply.

55 § 512(g)(2)(C) DMCA, id.56 § 512(g)(2)(C)DMCA, id.57 § 512(i)(1)(A) DMCA, id.58 Supra note 46.59 Communications Decency Act (CDA) codified in 47 U.S.C. § 230 (2000).60 47 U.S.C. § 230(c)(1) (2000), id.61 The Electronic Frontier Foundation gives an overview of cases when

CDA was claimed. Electronic Frontier Foundation, ‘Defamation: CDA Cases’,EFF, (undated), accessed 9 February 2015 at: https://ilt.eff.org/index.php/Defamation:_CDA_Cases.

62 Gucci Am., Inc. v. Hall & Assocs., 135 F. Supp. 2d 409, 413 (S.D.N.Y.2001).

63 Id.64 Id.65 § 32(2) Lanham Act, as codified into 15 U.S.C. § 1114(2) 2000.




LanhamAct

The safe harbour provisions in the Lanham Act, established in 2000,66 arenot well known among scholars.67 Perhaps they are overshadowed by theattention bestowed on the safe harbour provisions of the DMCA.However, § 1114(2) Lanham Act protects ‘innocent infringing and violat-ing’ publishers of ‘newspaper, magazine, or other similar periodical or inan electronic communication’68 against intermediary liability for trade-mark infringement, including OSPs that host user generated content.69

Social media providers that publish content written by its users (usergenerated content as discussed in Chapter 3.3) can be defined aselectronic communications.70 § 1114(2)(B) and (C) Lanham Act arerelevant.71

66 Id. US TRADEMARK LAW, RULES OF PRACTICE & FEDERALSTATUTES, USPTO, 9 August 2012, 205–7.

67 For example, Kaiser wrote an interesting paper about contributory trade-mark infringement and that this should be limited, but not a word was mentionedabout special safe harbour provisions in case of trademark infringements. BrianKaiser, Contributory Trademark Infringement by Internet Service Providers: AnArgument for Limitation, 7 J. TECH. L. & POL’Y 65 (2002). Chilling EffectsClearinghouse does not mention it either, Alexandri, Maya, Chilling EffectsClearinghouse, ‘Frequently Asked Questions (and Answers) about Trademark:What to Expect When You’re Expecting to Be Sued for Trademark Infringe-ment’, accessed 13 June 2015 at: http://www.chillingeffects.org/trademark/faq.cgi. Levin did point it out. Elizabeth Levin, A Safe Harbor For Trademark:Reevaluating Secondary Trademark Liability after Tiffany v. Ebay, 24 BERK.TECH. L.J. 491, 520.

68 15 U.S.C. § 1114(2), supra note 65.69 15 U.S.C. § 1114(2)(B)–(C), id.70 Electronic Communications Privacy Act of 1986 codified in 18 U.S.C.

§ 2510(12).71 15 U.S.C. § 1114(2)A, supra note 65, is not relevant for social media

sites. Where an innocent infringer or innocent violator is engaged solely in thebusiness of printing the mark or violating matter for others, the trademark holdershall be entitled as against such infringer or violator only to an injunction againstfuture printing. 15 U.S.C. § 1114(2)D is not relevant for social media sites. Adomain name registrar, a domain name registry, or other domain name registra-tion authority that takes any action described under clause (ii) affecting a domainname shall not be liable for monetary relief or, except as provided in subclause(II), for injunctive relief, to any person for such action, regardless of whether thedomain name is finally determined to infringe or dilute the mark.




§ 1114(2)(B) Lanham Act makes clear that the publishers of electroniccommunications, including social media, can be exempted from inter-mediary liability of trademark infringements if they are innocent infrin-gers or innocent violators of trademark rights, although they have toabide by an injunction against the presentation of such infringingadvertising matter in future transmissions of such electronic communica-tions.

What ‘innocent infringer or innocent violator’ means can be inferredfrom § 1114(2)(A), namely that the infringer or violator is engaged solelyin hosting infringing or violating matter for others,72 which in this book’scontext could mean that the social media provider is hosting infringinguser generated content.

§ 1114(2)(C) Lanham Act explains that the trademark holder’s injunc-tive relief against future infringement shall not be available if restrainingthe dissemination of such infringing matter would delay the normaltransmission of such electronic communication, in accordance withsound business practice.

Therefore the conditions under which the safe harbour provisions inthe Lanham Act apply significantly differ from those in the DMCA.73

Under the DMCA the internet intermediary can make use of the safeharbour provisions if he expeditiously removes or disables access toinfringing material after a complaint by an alleged copyright holder.74

Also, the one who uploaded the work is notified that the work will beremoved, but he can oppose this procedure by counter-notification.75

Under the Lanham Act, the OSP only has to prevent infringing matterbeing presented in the future,76 but only if this is not incompatible with asound business practice.77 And the Lanham Act lacks any notice andtakedown and counter-notification procedure as the DMCA specifies.78

As will be discussed below the safe harbour provisions of theE-Commerce Directive79 apply in the case of all intellectual property

72 § 1114(2)(A) Lanham Act: ‘Where an infringer or violator is engagedsolely in the business of printing the mark or violating matter for others andestablishes that he or she was an innocent infringer or innocent violator …’Supra note 65.

73 Supra, Chapter 1, note 5.74 § 512(c)(1)(A)iii DMCA, id.75 § 512(g)(2)(B–C) DMCA, id.76 15 U.S.C. § 1114(2)B, supra note 65.77 15 U.S.C. § 1114(2)C, id.78 § 512(g)(2)(B–C) DMCA, supra, Chapter 1, note 5.79 Id.




infringements, including all trademark infringements. In contrast, underthe Lanham Act the safe harbour provisions seem to apply to only asubspecies of trademark infringements: those trademark infringementsthat are part of paid advertising matter; for example, via keywordtriggered advertisements or banners.

This means that the safe harbour provisions in the Lanham Act do notgive any refuge to social media providers in the case of trademarkinfringements or violations that are not part of paid advertising matterand might render them liable for intermediary liability. Examples includeviolations of trademark dilution by blurring and tarnishment. Non-commercial use of the trademark logo on social media is unlikely, sincesocial media almost always include advertisements, as discussed inChapter 5.4. However, trademark infringement as part of paid advertisingmatter can be distinguished from trademark infringement in a contextwith paid advertisements. And the latter also could fall outside the safeharbour provisions of the Lanham Act and make the social mediaprovider liable for intermediary liability.

E-Commerce Directive

In 1997 the European Commission had already considered the need foran E-Commerce Directive.80 In March of 1998 the European Commis-sioner for the internal market, services customs and taxation, MarioMonti, stated that action should be taken on intellectual property legisla-tion.81 In November of 1998, the European Commission proposed a legalframework for a directive which included the concept of liability ofintermediaries:

To eliminate existing legal uncertainties and to avoid divergent approaches atMember State level, the proposal would establish an exemption from liabilityfor intermediaries where they play a passive role as a ‘mere conduit’ ofinformation from third parties and limit service providers’ liability for other‘intermediary’ activities such as the storage of information.82

The ambition of the proposal was to strike ‘a careful balance between thedifferent interests involved in order to stimulate co-operation between

80 European Commission, ‘Electronic Commerce: Commission PresentsFramework for Future Action’, IP/97/313, 16 April 1997.

81 Mario Monti, ‘Orientations for Electronic Commerce: Discussion atCouncil of Economy and Finance Ministers’, 10 March 1998.

82 European Commission, ‘Electronic Commerce: Commission ProposesLegal Framework’, IP/98/999, 18 November 1998.




different parties and so reduce the risk of illegal activity on-line’.83 Anamended proposal in 1999 for the directive did not change the safeharbour provisions contained therein.84 On 4 May 2000, the EuropeanParliament approved the E-Commerce Directive.85

The E-Commerce Directive86 was implemented to protect the develop-ment of electronic commerce within the information society,87 which‘offers significant employment opportunities in the Community, particu-larly in small and medium-sized enterprises, and will stimulate economicgrowth and investment in innovation by European companies, and canalso enhance the competitiveness of European industry, provided thateveryone has access to the Internet’.88 The E-Commerce Directiveincludes safe harbour provisions for ‘information society services’,89

including OSPs and applies horizontally.90

Recital 46 of the preamble to the E-Commerce Directive states:

In order to benefit from a limitation of liability, the provider of an informationsociety service, consisting of the storage of information, upon obtaining actualknowledge or awareness of illegal activities has to act expeditiously to removeor to disable access to the information concerned; the removal or disabling ofaccess has to be undertaken in the observance of the principle of freedom ofexpression and of procedures established for this purpose at national level;this Directive does not affect Member States’ possibility of establishing

83 Id.84 European Commission, ‘Electronic Commerce: Amended Proposal for a

Coherent Legal Framework in the Single Market’, IP/99/652, 1 September 1999.85 European Commission, ‘Electronic Commerce: Commission Welcomes

Final Adoption of Legal Framework Directive’, IP/00/442, 4 May 2000.86 Supra, Chapter 1, note 5.87 Information society is the EU term for the internet.88 Supra, Chapter 1, note 5.89 Information society service is the EU description of an internet inter-

mediary.90 ‘Horizontally’ means that it applies to all kinds of infringements, includ-

ing trademark infringements. ‘[T]he European legislature has opted for anall-encompassing “horizontal” approach, the US have dealt with copyrightliability within the framework of the copyright law’. P. Bernt Hugenholtz andKamiel Koelman, ‘Online Service Provider Liability for Copright Infringement’,WIPO Workshop on Service Provider Liability, Geneva, 9–10 December 1999,accessed 9 February 2015 at: http://www.ivir.nl/publicaties/hugenholtz/wipo99.pdf. See also the Explanatory Memorandum to the Commission’s originalproposal COM (1998) 586 final.




specific requirements which must be fulfilled expeditiously prior to theremoval or disabling of information.91

The E-Commerce Directive leaves open the possibility for member statesto establish procedures to remove or disable access to alleged infringinginformation after notification.92 However, since January 2012, the EU isin the process of drafting its own version of notice and takedownprocedures, called notice-and-action procedure.93

Since the E-Commerce Directive94 has not developed a Notice-and-action procedure, yet, there are no procedures of counter-notice andreplacement prescribed, yet.95 So instead of the notice and takedownprocedures, some member states have chosen to give the power toassume actual knowledge exclusively to a specialized authority or tocourts.96

7.3 KNOWLEDGE

A similarity between the DMCA and the E-Commerce Directive97 is thatboth contend that the immunity of intermediary liability is under thecondition that the OSP does not have actual98 or constructive know-ledge,99 and if they do so, that they expeditiously remove or disableaccess to the alleged infringing material.100 Compare these two sets ofprovisions:

§ 512(c)(1)(A) DMCA

‘(i): does not have actual knowledge that the material or an activityusing the material on the system or network is infringing;

91 Recital 46 of the preamble to the E-Commerce Directive, supra, Chapter1, note 5.

92 Recital 51 of the preamble to the E-Commerce Directive and Article 14(3) E-Commerce Directive, id.

93 European Commission, ‘Notice-and-Action Procedures’, announced Janu-ary 2012, accessed 9 February 2015 at: http://ec.europa.eu/internal_market/e-commerce/notice-and-action/index_en.htm.

94 Supra, Chapter 1, note 5.95 Supra note 93.96 Verbiest et al., supra note 30, at 41–6/115.97 Supra, Chapter 1, note 5.98 § 512(c)(1)(A)i DMCA and Article 14(1)(a) E-Commerce Directive, id.99 § 512(c)(1)(A)ii DMCA and Article 14(1)(a) E-Commerce Directive, id.

100 § 512(c)(1)(A)iii DMCA and Article 14(1)(b) E-Commerce Directive, id.




(ii) in the absence of such actual knowledge, is not aware of facts orcircumstances from which infringing activity is apparent; or

(iii) upon obtaining such knowledge or awareness, acts expeditiously toremove, or disable access to, the material’.

Article 14(1) E-Commerce Directive:

‘(a) the provider does not have actual knowledge of illegal activity orinformation and, as regards claims for damages, is not aware offacts or circumstances from which the illegal activity or informationis apparent; or

(b) the provider, upon obtaining such knowledge or awareness, actsexpeditiously to remove or to disable access to the information’.

Recital 46 of the preamble to the E-Commerce Directive puts it suc-cinctly: the OSP ‘upon obtaining actual knowledge or awareness ofillegal activities has to act expeditiously to remove or to disable access tothe information concerned’. There is no definition of the term actualknowledge. Member states have each implemented this legislation indifferent ways and their courts have developed different practices on theinterpretation of that term.101

As an example, the German Federal Court of Justice decided thatactual knowledge can be interpreted as specific actual human knowledge,as opposed to computer knowledge or general awareness of the pastpresence of illegal material on a server. Besides, negligence and con-ditional intent do not constitute actual knowledge.102

In the US, the common law doctrine of wilful blindness occurs whensomeone suspects wrongdoing and deliberately fails to investigate.103 In1992 in Hard Rock Café, the Seventh Circuit clarified that ‘wilfulblindness is equivalent to actual knowledge for purposes of the LanhamAct’.104 Then again, wilful blindness is limited by the Hard Rock Café’s

101 Verbiest et al., supra note 30, at 36–7/115.102 Haftung des Internetproviders (Liability of the internet provider) BGH,

23/09/2003, VI ZR 335/02, NJW 2003, 3764.103 Hard Rock Café Licensing Corp. v Concession Services, Inc., 955 F.2d

1143, 1149 (7th Cir. 1992).104 Id. In 2010 in Tiffany (NJ) Inc. v eBay, Inc., the Second Circuit held that

in the case of trademark infringement ‘[a] service provider is not … permittedwilful blindness. When it has reason to suspect that users of its service areinfringing a protected mark, it may not shield itself from learning of theparticular infringing transactions by looking the other way’. Tiffany (NJ) Inc. veBay, Inc., 600 F.3d 93 (2d Cir. 2010).




standard to only be able to ‘understand what a reasonably prudent personwould understand’ and not impose any duty of care that goes beyond thatrequirement.105 The concept of constructive knowledge or ‘facts orcircumstances’ from which ‘illegal activity’106 or ‘illegal activity orinformation’107 becomes apparent is also called ‘a red flag’,108 whichmeans that if the OSP comes across these it must pay special attention tothem and act, otherwise the exemption of intermediary liability will belifted (see Chapter 7.6 about the required level of monitoring).

Bliley of the Commission on Commerce of the US House of Representa-tives, explained the subjective and objective element of the red flag test:

In determining whether the service provider was aware of a ‘red flag’, thesubjective awareness of the service provider of the facts or circumstances inquestion must be determined. However, in deciding whether those facts orcircumstances constitute a ‘red flag’ – in other words, whether infringingactivity would have been apparent to a reasonable person operating under thesame or similar circumstances – an objective standard should be used.109

Ginsburg pointed out that US case law, such as developed in Perfect 10, Inc. vCybernet Ventures, Inc.,110 interprets the red flag in such a way that ‘the flagmay need to be an immense crimson banner before the service provider’sobligation to intervene comes into play’.111 Recent case law, such as ViacomInternational, Inc. vYouTube, Inc. of 2013, confirms this view.112

105 Supra note 103.106 17 U.S.C. § 512(c)(1)(A)(ii), supra, Chapter 1, note 5.107 Article 14(1)(a) E-Commerce Directive, supra, Chapter 1, note 5.108 ‘In determining whether the service provider was aware of a “red flag”

the subjective awareness of the service provider of the facts or circumstances inquestion must be determined. However, in deciding whether those facts orcircumstances constitute a “red flag” – in other words, whether infringingactivity would have been apparent to a reasonable person operating under thesame or similar circumstances – an objective standard should be used’. (ThomasBliley, Committee on Commerce, submitted the following report to the Commit-tee of the Whole US House of Representatives, together with additional views toaccompany H.R. 2281, 1998, at 53.

109 Id.110 Perfect 10, Inc. v Cybernet Ventures, Inc., 213 F. Supp. 2d 1146, 22 April

2002, (C.D. Cal. 2002) at 1177.111 Jane C. Ginsburg, Part II User-Generated Content Sites and Section 512

of the US Copyright Act, in COPYRIGHT ENFORCEMENT AND THEINTERNET (Irini A. Stamatoudi, ed., Alphen aan den Rijn: Kluwer LawInternational, 2010), at 190.

112 The decision by the District Court of the Southern District of New Yorkof 18 April 2013 was not yet published on 19 April 2013. Jonathan Stempel,




Trademark holders can only hold OSPs liable if they can prove thatthey have actual or constructive knowledge, as the DMCA andE-Commerce Directive113 require. This is different from the Lanham Actwhich states that trademark holders cannot recover profits or damagesfrom the infringement, unless they can prove that ‘the acts have beencommitted with knowledge that such imitation is intended to be used tocause confusion, or to cause mistake, or to deceive’.114 However, to proveintent of the infringers might be prohibitively difficult for trademarkholders.

Contributory Liability

In 1972 the contributory liability for copyright infringement doctrine wasestablished in the Gershwin Publishing Corp. v Columbia Artists Man-agement, Inc. case.115 Then, in 1982, in Inwood Labs., Inc. v Ives Labs.,Inc.,116 the Supreme Court established contributory liability as a courseof action under trademark law. The Inwood test for contributory liabilityis to determine whether a party induces another to infringe a trademark,or continues its service where he knows or has reason to know the otherparty is engaging in trademark infringement.

In 1984, in Sony Corp. of America v Universal City Studios, Inc.,117

the Supreme Court ‘consistently rejected the proposition that a similarkinship exists between copyright law and trademark law, and recognizedthe basic similarities between copyrights and patents’118 in the process.Because of these differences, the Supreme Court did not want to apply

‘Google again Beats Viacom in YouTube Copyright Case’, Reuters, 18 April2013, accessed 9 February 2015 at: http://www.reuters.com/article/2013/04/18/entertainment-us-google-viacom-idUSBRE93H17S20130418.

113 Supra, Chapter 1, note 5.114 § 1114(1)(b) Lanham Act included: ‘Under subsection (b) hereof, the

registrant shall not be entitled to recover profits or damages unless the acts havebeen committed with knowledge that such imitation is intended to be used tocause confusion, or to cause mistake, or to deceive’. 15 U.S.C. § 1114, supranote 65.

115 Gershwin Publ’g Corp. v Columbia Artists Mgmt., Inc., 443 F.2d 1159,1162 (2d Cir. 1971).

116 Inwood Labs., Inc. v Ives Labs., Inc. 456 U.S. 844, 854 (1982).117 Sony Corp. of America v Universal City Studios, Inc., 464 U.S. 417, 439

n.19 (1984).118 Id. An explanation is that the US Constitution is referring to the

promotion of works and inventions via the protection of copyright and patents,supra, Chapter 2, note 164, but not to trademark rights.




the Inwood119 trademark standard for contributory infringement in thecopyright case of Sony Corp. of America v Universal City Studios, Inc.120

The Supreme Court observed that in Inwood:121

[a] manufacturer or distributor could be held liable to the owner of atrademark if it intentionally induced a merchant down the chain of distribu-tion to pass off its product as that of the trademark owner’s or if it continuedto supply a product which could readily be passed off to a particular merchantwhom it knew was mislabeling the product with the trademark owner’smark.122

In 2004, in UMG Recordings, Inc. v Bertelsmann AG,123 a copyrightcase, the question was raised how strong the causality must be betweenthe defendant’s action and the infringement to hold that he attractedcontributory liability. In this case, UMG, a record label, sued Bertels-mann, an investor in Napster, because it claimed this investor hadassumed control over Napster’s operations and directed the infringingactivities that gave rise to Napster’s liability. The court refused to dismissthe claims.124 One can argue that Bertelsmann attracted contributoryliability on the contributory liability of Napster. The same can be said forvicarious liability:125 vicarious liability on the vicarious liability ofNapster. One could speak of secondary liability to the second degree.

In the 2003 and 2004 MGM Studios, Inc. v Grokster, Ltd. cases, theDistrict Court126 and the Ninth Circuit,127 respectively, concluded thatGrokster was not liable for contributory or vicarious copyright infringe-ment. The reason was that in contrast to the Napster case,128 Grokster‘may have intentionally structured their businesses to avoid secondaryliability for copyright infringement, while benefiting financially from the

119 Supra note 116.120 Supra note 117.121 Supra note 116.122 Supra note 117.123 UMG Recordings, Inc. v Bertelsmann AG, 222 F.R.D. 408 (N.D. Cal.

2004).124 Eventually Bertelsmann and UMG settled the case. John Ottaviani, ‘The

End Is Near: Bertelsmann Settles EMI Claims over Napster’, Eric GoldmanBlog, 28 March 2007, accessed 9 February 2015 at: http://blog.ericgoldman.org/archives/2007/03/the_end_is_near.htm.

125 Vicarious liability will be explained below, Chapter 7.3.126 MGM Studios, Inc. v Grokster, Ltd., 259 F. Supp. 2d 1029 (C.D. Cal.

2003).127 MGM Studios, Inc. v Grokster, Ltd., 380 F.3d 1154 (9th Cir. 2004).128 A&M Records, Inc. v Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).




illicit draw of their wares’,129 by using a decentralized search index it didnot control. Some US senators, disappointed by the Ninth Circuit’sdecision on Grokster, tried to make inducement a separate form ofsecondary infringement in the absence of control to directly preventinfringements. They drafted the Inducing Infringement of CopyrightsAct,130 which would have been also applicable in the case of trademarkinfringements. By amending § 501 of Title 17 of the U.S. Code, aninterpretation of the term ‘intentionally induces’ was given: ‘intentionallyaids, abets, induces, or procures, and intent may be shown by acts fromwhich a reasonable person would find intent to induce infringementbased upon all relevant information about such acts then reasonablyavailable to the actor, including whether the activity relies on infringe-ment for its commercial viability’.131 The proposal was not accepted.

In 2005 the Supreme Court made a final decision132 about whetherGrokster had attracted intermediary liability: ‘[O]ne who distributes adevice with the object of promoting its use to infringe copyright, asshown by clear expression or other affirmative steps taken to fosterinfringement, is liable for resulting acts of infringement by third par-ties’.133 Thus the Supreme Court overturned the Ninth Circuit’s decision.

According to Reese, the Grokster test for contributory liability consistsof two questions that both need to be answered affirmatively.134 Did thedefendant take active steps or affirmative steps to induce, promote, foster,encourage, stimulate, bring about, or cause, the infringement? Did thedefendant act with intent, object or purpose? The defendant’s businessmodel could be a complement, not the sole reason, to direct evidence inthe establishment of intent to encourage infringement.135

If an OSP has attracted contributory or vicarious liability or inducedthe direct infringer to infringe, the safe harbour provisions do notapply.136 One can imagine social media providers contributorily liable for

129 Supra note 126, at 33.130 Inducing Infringement of Copyrights Act of 2004 (S. 2560).131 Id.132 MGM Studios, Inc. v Grokster, Ltd., 545 U.S. 913 (2005).133 Id.134 Anthony Reese, The Relationship Between the ISP Safe Harbors and

Liability for Inducement, 8 STAN. TECH. L. REV. 1, 43 (2011).135 Reese, id.136 The court said that ‘inducement liability and the Digital Millennium

Copyright Act safe harbors are inherently contradictory. Inducement liability isbased on active bad faith conduct aimed at promoting infringement; the statutorysafe harbors are based on passive good faith conduct aimed at operating alegitimate internet business’. Columbia Pictures Indus., Inc. v Fung, No. CV




trademark infringement of the trademark logo, since social media provid-ers do have the technology available to know who is engaging intrademark infringement and can actually prevent it (see Chapter 9‘Implementation of a Paradigm Shift’).

InducementAs discussed above, in Inwood,137 there are two ways to render a thirdparty liable for contributory liability in the case of trademark infringe-ment:

– when a party induces another to infringe a trademark;– when a party continues its service where he knows or has reason to

know that the other party is engaging in trademark infringement

Inducement, as one of the bases for contributory liability, has beenrecognized in case law. In the 1971 case Gershwin Publishing Corp. vColumbia Artists Management, Inc.138 the court stated: ‘[O]ne who, withknowledge of the infringing activity, induces, causes or materiallycontributes to the infringing conduct of another, may be held liable as a“contributory” infringer’.

One can argue that Google Images induces internet users to copy andpaste protected copyright pictures and protected trademark logos thumb-nails. The only guidance Google Images gives is: ‘Images might besubject to copyright’. There is no mention of trademark rights. There isno reason why Google has to make copy-and-pastable copies of allprotected copyright pictures and trademark logos, even bigger than theoriginal and with the same resolution. This goes further than Kelly vArriba Soft Corporation139 and Perfect 10 v Google, Inc., et al.140 (as wasalready discussed in the Preface).

06-5578 SVW(JCx), 2009 WL 6355911 (C.D. Cal. 21 December 2009). TheNinth Circuit was scheduled to hear argument in the appeal from the DistrictCourt’s decision on 6 May 2011, at 8.

137 Inwood Labs., Inc. v Ives Labs., Inc. 456 U.S. 844, 854 (1982).138 Supra note 115, at 18.139 Kelly v Arriba Soft Corp. (280 F.3d 934 (CA9 2002) withdrawn, re-filed

at 336 F.3d 811 (CA9 2003)).140 Perfect 10 v Google, Inc., et al., 416 F. Supp. 2d 828 (C.D. Cal. 2006).




In 2005 in the EU, a directive called the Intellectual Property RightsEnforcement Directive 2 (IPRED2)141 was proposed to supplementIPRED1142 of 2004, to no avail. The draft included Article 3: ‘MemberStates shall ensure that all intentional infringements of an intellectualproperty right on a commercial scale, and attempting, aiding or abettingand inciting such infringements, are treated as criminal offences’.143 Heretoo, the idea was to make this form of inducement independent fromother forms of secondary liability for internet intermediaries as laid downin Articles 12 to 15 E-Commerce Directive.144

An important aspect of inducement is that there needs to be intent tocause another to violate the right. This element might be difficult toprove.

Vicarious Liability

Vicarious liability attaches to one who ‘has the right and ability tosupervise the infringing activity and also has a direct financial interest insuch activities’.145

One can argue that if social media is profiting from infringingactivities by internet users, because they attract more internet users andtherefore more revenue streams based on advertising and data-mining, itis not difficult to prove the right and ability to supervise this infringingactivity. Especially now that social media provide the technical means toinfringe, while they also can use their technological skills to preventcontent infringements on a massive scale (see Chapter 9 ‘Implementationof a Paradigm Shift’).

The DMCA explicitly states vicarious liability, receiving financialbenefit and having control over the infringing activity,146 as a reason toexclude the limitation of secondary liability for copyright infringement.In contrast, in the Lanham Act vicarious liability is not mentioned.

141 IPRED2, Proposal for a European Parliament and Council Directive oncriminal measures aimed at ensuring the enforcement of intellectual propertyrights, 12 July 2005.

142 Directive 2004/48/EC of the European Parliament and of the Council of29 April 2004 on the enforcement of intellectual property rights (EnforcementDirective).

143 Supra note 141.144 Supra, Chapter 1, note 5.145 Gershwin Publ’g Corp. v Columbia Artists Mgmt., Inc., supra note 115.146 § 512(c)(1)(B) DMCA, supra, Chapter 1, note 5.




Coleman wrote that ‘the Supreme Court has not articulated a standard forfinding vicarious liability for trademark infringement’.147

However, the federal courts have developed two doctrines for vicariousliability that can be relevant trademark infringements:

– doctrine of the application of agency principles to parties involvedin trademark infringement;148

– doctrine of the joint tortfeasor liability.149

Agency doctrine

In 1994, in Am. Tel. & Tel. Co. v Winback & Conserve Program, Inc., theThird Circuit held that the sales representatives (agents) of one ofAT&T’s resellers Winback & Conserve Program, Inc. (principal) weredirectly infringing AT&T’s trademarks. Because there was apparentauthority between Winback & Conserve Program and its sales representa-tives, the common law principles of agency could be applied. The ThirdCircuit held that the ‘applicability of common law doctrines in litigationunder federal statutes depends on whether those principles advance thegoal of the particular federal statute which plaintiffs allege has beenviolated’.150 The Lanham Act derived from tort common law, therefore ‘itis self-evident that application of at least some tort concepts of liabilitywill “advance the goals of [the Lanham Act]”’.151

The only feasible way for AT&T to assert its federal rights, would be to suethe principal, who, if an agency relationship is established, is able to exerciseat least some control over its agents, who authorized the sales representativesto enter into contracts on its behalf, and who receives direct financial benefitsfrom those contracts.152

147 Jane Coleman, ‘III. Vicarious Trademark Infringement: A. In General,Secondary Trademark Infringement’, undated, accessed 9 February 2015 at:http://www.secondarytrademarkinfringement.com/?p=105.

148 Am. Tel. & Tel. Co. v Winback & Conserve Program, Inc., 42 F.3d 1421,1437 (3d Cir. 1994).

149 David Berg & Co. v Gatto Int’l Trading Co., 884 F2d 306, 311 (7th Cir.1989).

150 Supra note 148, at 1429, citing Petro-Tech, Inc. v Western Co. of NorthAmerica, 824 F.2d 1349, 1356 (3d Cir. 1987).

151 Id., at 1433, citing Petro-Tech, Inc. v Western Co. of North America, 824F.2d at 1356.

152 Id., at 1434.




A more recent case of 2001 is Fare Deals, Ltd. v World ChoiceTravel.com, Inc.153 which follows the same reasoning.

Joint tortfeaser liabilityIn 1984, in David Berg & Co. v Gatto Int’l Trading Co.,154 a manufac-turer of processed meat David Berg agreed with distributor Gatto to sellhim substandard meat that the distributor was supposed to sell outside ofthe US without using Berg’s trademark. The distributor Gatto sold thesubstandard meat to Lake Erie Food Sales, Inc., who sold the substandardmeat partly in the US and also used the Berg trademark in advertise-ments. Berg not only sued Lake Erie but also Gatto, arguing that thedistributor had formed a partnership with the seller Lake Erie. TheSeventh Circuit held that ‘[b]ecause unfair competition and trademarkinfringement are tortious, the doctrine of joint tortfeasors does apply’.155

However, based on findings of fact, including the lack of any partnershipagreement:

[T]hat there was no evidence that Gatto and Lake Erie had any type ofpartnership agreement, that they held themselves out to the public or operatedas a partnership, that either had authority to bind the other in any transactionwith any third party, or that they exercised joint ownership of, or control over,the meat products after they were sold to Lake Erie.156

The E-Commerce Directive157 contains no vicarious liability provision. Itis left to member states’ legislation whether vicarious liability can beused to derogate the exemptions of intermediary liability under theE-Commerce Directive.158

7.4 WEAKENING INCENTIVES OF SOCIAL MEDIA TOFILTER

This section will first explain why market forces either prevent socialmedia from protecting and enforcing trademark logos or stifle the right tofreedom of expression. Trademark holders face considerable challenges

153 Fare Deals, Ltd. v World Choice Travel.com, Inc. 180 F.Supp.2d 678, 684(D.Md. 2001).

154 Supra note 149.155 Id., at 311.156 Id.157 Supra, Chapter 1, note 5.158 Id.




when they pursue direct infringers, that is, the internet users. Thereforethey often pursue social media providers instead. There are effectivemethods to incentivize OSPs to play a constructive role to keep theirwalled gardens clean of content infringements: via the bargaining powerof the trademark holders; or less effective methods, such as self-regulation between OSPs and trademark holders; or a method that solvesthe problem in its entirety: legislation that abolishes the safe harbourprovisions and establishes strict liability instead.

Market Forces:Attractiveness overAccountability

Due to the network effects,159 it is in the interest of social mediaproviders to have as many internet users as possible, because then thevalue of the advertisements they sell increases and they will be able tomine and sell more behavioural data from the internet users. There isnothing immoral about the ambition of a social media provider tobecome as attractive as possible in the eyes of the internet users.However, this changes where social media impose insufficient restrictionsto internet users, at the expense of trademark holders.

One cannot avoid the impression that the internal emails between thefounders of YouTube that emerged during Viacom International, Inc. vYouTube, Inc.160 are indicative of the temptations social media providersface. Once the founders of YouTube had to choose on the one handbetween monitoring proactively and subsequently removing infringingcontent from their servers or on the other hand leaving infringing contenton their servers as long as possible so that the popularity of their servicewould increase with internet users under the cover of the safe harbourprovisions. Especially as co-founder Chen’s reasoning demonstrates, hemade a calculated risk and clearly chose the latter option:

[In] a July 4, 2005 e-mail exchange, YouTube founder Chad Hurley sent ane-mail to his co-founders Steve Chen and Jawed Karim with the subject line‘budlight commercials’, and stated: ‘we need to reject these too’. [Hurleywanted to reject the takedown request by Anheuser-Busch, because of the useof Budweiser Light]

159 Arun Sundararajan, ‘An Overview of Network Effects’, NYU SternSchool of Business, 2006, accessed 9 February 2015 at: http://oz.stern.nyu.edu/io/network.html.

160 Viacom International, Inc., v YouTube, Inc., 10-3270-cv, 2012 WL1130851 (2d Cir. 5 April 2012).




Steve Chen responded, ‘can we please leave these in a bit longer? anotherweek or two can’t hurt’. Karim also replied, indicating that he ‘added back inall 28 bud videos’. Similarly, in an August 9, 2005 e-mail exchange, Hurleyurged his colleagues ‘to start being diligent about rejecting copyrighted/inappropriate content’, noting that ‘there is a cnn clip of the shuttle clip on thesite today, if the boys from Turner would come to the site, they might bepissed?’ Again, Chen resisted: ‘but we should just keep that stuff on the site.i really don’t see what will happen. what? someone from cnn sees it? hehappens to be someone with power? he happens to want to take it down rightaway. he gets in touch with cnn legal. 2 weeks later, we get a cease & desistletter. we take the video down’. And again, Karim agreed, indicating that ‘theCNN space shuttle clip, I like. we can remove it once we’re bigger and betterknown, but for now that clip is fine’.161

However, the Second Circuit was not sure whether these clips mentionedin the emails were part of the current clips-in-suit.162 The Second Circuitmade clear that although ‘the willful blindness doctrine may be applied,in appropriate circumstances, to demonstrate knowledge or awareness ofspecific instances of infringement under the DMCA’,163 it apparently didnot consider the emails as evidence of wilful blindness. Besides, the‘DMCA safe harbor protection cannot be conditioned on affirmativemonitoring by a service provider’.164 The Second Circuit concluded thatthe District Court correctly held that the safe harbour provisions requireknowledge or awareness of specific infringing activity, but it vacated theorder granting summary judgment because ‘a reasonable jury would findthat YouTube had actual knowledge or awareness of specific infringingactivity on its website’.165 However, when it was remanded to the DistrictCourt, it rejected the notion that YouTube exhibited wilful blindness orhad the ability to control infringing activity or ‘interacted with infringingusers to a point where it might be said to have participated in theirinfringing activity’.166 It held that the burden of proof remained onViacom, rejecting its ‘ingenious’ yet ‘extravagant’ argument that YouTubedid not deserve the safe harbour, and should instead monitor the contentsof videos being uploaded at a rate of more than 24 hours of viewing timeper minute.167 It is very probable that Viacom will also appeal this latestdecision.

161 Id., at 21.162 Id., at 22.163 Id.164 Id., at 23.165 Id., at 9.166 Supra note 112.167 Id.




ExcessiveYielding to Complainants

Some social media want to avoid any conflict with trademark holders andeither let them remove content manually or automatically after anyrequest by complainants, without checking whether the complainants areauthorized by the right holders and whether removal or disabling ofaccess is really needed. This can have serious chilling effects to the rightto freedom of expression. Uncritical removal of mistaken or bad faithcomplaints168 has nothing to do with filtering, which is distinguishinginfringing from non-infringing material.

In 2004 the Dutch organization Bits of Freedom uploaded a work ofthe famous Dutch writer Multatuli169 from 1871, which was reprinted in1981, with the explicit disclaimer that it is in the public domain, to tenDutch OSPs. Subsequently Bits of Freedom let a fake copyright holderrequest the OSPs to take down the work, which resulted in seven out often OSPs taking down the allegedly infringing material.170

Urban and Quilter investigated the DMCA notice and takedownprocedures and found that 9 percent of all complaints were statutorilyinsufficient, 30 percent of DMCA notices appeared to present an obviousquestion for courts, and that no less than 57 percent of DMCA noticesreferred to competitors.171 This can have serious chilling effects to thefreedom of expression.

Challenges to enforce trademark rights against direct infringersFor practical reasons trademark holders forgo suing the direct infringerswhich are the internet users that uploaded the infringing material: theinternet user cannot be traced, or if this is possible, he might not be in ajurisdiction where the trademark holder likes to litigate, or he might nothave enough financial resources to compensate for the damages.

168 Timothy Lee, ‘Warner Bros: We Issued Takedowns for Files We NeverSaw, Didn’t Own Copyright To’, Ars Technica, 10 November 2011, accessed 9February 2015 at: http://arstechnica.com/tech-policy/news/2011/11/warner-admits-it-issues-takedowns-for-files-it-hasnt-looked-at.ars.

169 In the Netherlands, Multatuli is the well-known pseudonym of EduardDouwes Dekker, who ranks number one as the greatest Dutch writer of classicalliterature.

170 Sjoera Nas, ‘The Multatuli Project, ISP Notice & Take Down’, Bits ofFreedom, 27 October 2004, accessed 13 June 2015 at: https://www-old.bof.nl/docs/researchpaperSANE.pdf.

171 Jennifer M. Urban and Laura Quilter, Efficient Process or ChillingEffects: Takedown Notices under Section 512 of the Digital Millennium Copy-right Act, 22 SANTA CLARA COMPUTER & HIGH TECH. L.J. 621 (2005).




In the case of social media, the identity is hard to verify since mostsocial media do not have a real identity policy, and if they do, theexecution of the policy might not be very reliable.172 And privacylegislation and an unwillingness to share customer information may makeit difficult but not necessarily impossible.173 Last but not least, one canargue it is not conducive to sue one’s current or potential customers. AsHugenholtz and Koelman point out: this can lead to situations where thetrademark holder cannot protect its rights effectively.174

Because social media are traceable and have financial means, they arefrequently sued by trademark holders in different jurisdictions. This addsto the legal uncertainty for social media providers.

An interesting development that might be beneficial for trademarkholders to go after the direct infringers is to serve them a summons viasocial media. In Federal Trade Commission v PCCARE247 INC., etal.,175 the US District Court of the Southern District of New York allowedthe Federal Trade Commission (FTC) to serve documents through emailto five India-based defendants. ‘For the sake of thoroughness, however,the FTC also proposes to serve the defendants by means of Facebook’.176

If defendants only serve via Facebook the question is whether dueprocess was followed. The condition that the Facebook accounts actuallywere operated by defendants was met, and a likelihood could bedemonstrated that service by Facebook message would reach thedefendants.177

172 Even if social media have a real name requirement, such as Facebookdoes, it does not necessarily mean that the execution of the policy is not flawed.Protalinski, supra, Chapter 3, note 42.

173 After an exigent circumstances information request, because a NewZealand boy put a message on his fake Texas Facebook page that he would starta killing spree in Texas, Facebook responded and investigators traced the internetprotocol address back to an ISP out of Auckland within eight minutes. Stuff-.co.nz, ‘NZ Teen’s Facebook Threat Sparks US Alarm’, 5 November 2011,accessed 9 February 2015 at: http://www.stuff.co.nz/national/5914950/NZ-teens-Facebook-threat-sparks-US-alarm.

174 ‘The intermediary may escape liability because the requirements of theliability limitations are fulfilled, whereas the actual infringer cannot be heldaccountable simply because his identity is unknown’. Hugenholtz and Koelman,supra note 90, at 31.

175 Federal Trade Commission v PCCARE247 Inc., Case 1:12-cv-07189-PAEDocument 87, 7 March 2013.

176 Id., at 8.177 Id., at 9.




Prior to Federal Trade Commission v PCCARE247 INC., et al.,178 JeffLeach, state representative of Texas, introduced Bill HB 1989,179 whichproposed Texas courts approve substituted service via social media. Theconditions are that the court finds that the defendant could be reasonablyexpected to receive actual notice, that there is confirmation that theaccount is authentic and that the defendant regularly uses it.180

However, one of the challenges is that it is difficult to establish that asocial media account is genuine. As already pointed out, even socialmedia with a real name policy, such as Facebook, have problemsenforcing it.181 Despite these challenges, serving a suit via social mediaseems promising, especially if they have the functionality to notify areceipt of the message, as for example Facebook provides. In case ofservice of suits, Facebook could switch off the possibility for users toavoid sidestepping the ‘receipts read’ functionality.182

Bargaining Power of Trademark Holders

In theory trademark holders are more powerful than social media,because of the business model of social media providers that depends onselling advertisements and data mined from internet users’ behaviour tothe trademark holders. In practice, however, trademark holders aredivided,183 they seem to lack empathy for trademark holders in differentindustries, and if they are competing in the same industry, they often donot want to cooperate.

However, the dominance of the social media in combination with thelegal lag, to paraphrase Veblen,184 necessitates trademark holders to unite.By legal lag, this book means technologies and business models developfaster than the law can catch up with these developments.

One of the important developments is that the filtering of servers isbecoming cost-efficient. One can compare it to scanning an anti-virus

178 Id.179 Bill HB 1989, filed 27 February 2013.180 If accepted, Bill HB 1989 would take effective on 1 September 2013.181 Protalinski, supra, Chapter 3, note 42.182 Jason Cipriani, ‘Stop Facebook from Marking Messages as “Seen”’,

CNET, 21 August 2012, accessed 9 February 2015 at: http://howto.cnet.com/8301-11310_39-57497485-285/stop-facebook-from-marking-messages-as-seen/.

183 One of the trademark holders’ leaders, who wants to remain anonymous,described them as divided as loose sand.

184 Veblen contributed heavily to the theory of cultural lag, that institutionsare looking backwards, while technology is oriented toward change. Veblen,supra, Chapter 1, note 23, at 191, 195.




programme. A proactive filter system that automatically enforcesinfringed content would save social media providers and trademarkholders the trouble of continuing a never-ending stream of notice andtakedown procedures and avoid legal conflicts with trademark holdersand internet users that result in costly litigation (see Chapter 9‘Implementation of a Paradigm Shift’). In short: filtering can prevent thisconflict and increase legal certainty for social media providers, trademarkholders and internet users.

One can also consider a reciprocal connection. Trademark holdersunharmed by legal conflicts have more budget to invest in advertising andbehavioural data of internet users. This can benefit social media. Theinverse is also true: if trademarks are hurt on social media, capital isdestroyed and the capacity to safely advertise on social media willdiminish and will stimulate trademark holders to bundle their forces orfind alternative avenues to advertise.

Self-Regulation

Self-regulation seems preferable from a perspective of the principle offreedom of self-determination. Avoiding legal conflicts is in all stake-holders’ interest. A consortium of 13 companies, copyright owners andOSPs ‘Content User Generated Services’ supports the rather conservative‘Principles for User Generated Content Services’185 to improve filtertechnology and remove infringing content. Article 13 clarifies that theprinciples do not ‘support disqualification from any limitation ondirect186 or indirect liability relating to material online under the Copy-right Act or substantively similar status of any applicable jurisdictionoutside the United States’. Therefore, unfortunately this consortium willnot be the catalyst for an improvement of the status quo.

In Hong Kong, the government has set up a tripartite forum of OSPs,copyright holders and internet users to come up with a voluntaryframework to prevent the unauthorized copying and dissemination ofelectronically stored products.187 Unfortunately, it did not work. The

185 On 18 October 2007 Principles for User Generated Content Services wasfounded, accessed 9 February 2015 at: http://www.ugcprinciples.com/.

186 Remarkably, Article 13 of the Principles states ‘direct liability’. There isno limitation for direct liability.

187 ‘Tripartite Forum for Drawing up a Code of Practice for Online ServiceProviders in Protecting Copyright in the Digital Environment: Analysis ofPossible Cooperative Items’, TF Paper No. 5/2008 (12 September 2008),accessed 9 February 2015 at: http://www.inmediahk.net/files/t%20forum.pdf.




same problems can arise in a tripartite forum of OSPs, trademark holdersand internet users. Because of the asymmetric distribution of power,OSPs are not inclined to change the status quo.

Francis Gurry, Director General of World Intellectual Property Organ-ization (WIPO), realized that the problem of multilateralism is that it is aslow process of reaching agreements that will not catch up with theexponential speed of technology’s development. Mr Gurry asked therhetorical question whether treaties can bring about social change, just aswith Facebook, Twitter and other social media. His answer:

No, it is a technology which has enabled an international change of behaviour.Whether that change of behaviour is good or bad is a different question. Butthe method has been a platform. So what I think we are seeing is theemergence of an increasing number of public private partnerships usingplatforms to try to achieve policy outcomes that once we may have tried toachieve through a treaty.188

Public private partnerships using platforms seems a logical step forwardin organic cooperation and self-regulation but so far it remains elusive.

Legislation

After more than a decade after the safe harbour provisions wereimplemented in the US and EU, respectively, one can determine that theobjectives of the US Congress and EU Parliament and Council, todevelop electronic commerce, have been successful. However, one canargue that this is not because of the safe harbour provisions, but despiteof it.189 The effects of the safe harbour provisions include that socialmedia providers are incentivized to filter content infringements passivelyand act only reactively after a formal notice and takedown request. Thishas led to a flood of legal conflicts between trademark holders and socialmedia providers, which causes social media providers to further entrench

188 Francis Gurry, ‘Interview Carried Out on the Occasion of the Lecture:Changing International Landscape of Innovation and Intellectual Property (14December 2010), starting at 10:26, accessed at: http://www.youtube.com/watch?v=h3uRGkkf56o.

189 The causal link between the development of e-commerce and the exist-ence of safe harbour rules can be doubted. In Hong Kong there are no safeharbour rules, and nevertheless, here too e-commerce seems to prosper. ProfessorMichael Pendleton, during a lecture on digital intellectual property rights,Chinese University of Hong Kong, Graduate Law Centre, Central, 3 November2010.




into their passivity and reactionary behaviour in order to comply with thesafe harbour provisions, and which on its turn leads to more legal actionsby trademark holders against social media providers and internet users. Inorder to break this vicious circle this chapter proposes to abolish the safeharbour provisions, so that the concomitant impediments to proactivefiltering must yield.

Seminal Cases

Before the introduction of safe harbour provisions, case law did notclarify much about intermediary liability.190 The advent of the safeharbour provisions in the Lanham Act and E-Commerce Directive191 didnot really change the capriciousness of case law.

This has been illustrated by comparable cases between trademarkholders and internet auction eBay in different jurisdictions which haveresulted in opposite rulings. This demonstrates a lack of internationalconsensus on the duty of care of the internet intermediary hosting contentuploaded by third parties and whether the safe harbour provisions applyto exempt the internet intermediary from secondary liability. In the US,Tiffany, Inc. v eBay, Inc. was won by eBay at first instance192 and onappeal,193 while in France both Hermès194 and LVMH195 won cases atfirst instance against eBay. But in Belgium, Lancôme lost againsteBay.196

First an overview will be provided of these seminal cases. Then anexplanation will be given why the rulings of the US and French courts,and the French courts and Belgian court have resulted in diametrically

190 Even before the DMCA there was controversy over ISP liability: PlayboyEnters., Inc. v Frena, 839 F. Supp. 1552, 1556 (M.D. Fla. 1993) where the courtruled that the service provider was liable and Religious Tech. Ctr. v Netcom, Inc.,907 F. Supp. 1361, 1372 (N.D. Cal. 1995), where the court did not find the ISPliable.

191 Supra, Chapter 1, note 5.192 Tiffany Inc. v eBay, Inc., 576 F. Supp. 2d 463, 527 (S.D.N.Y. 2008).193 Supra note 104. The Second Circuit ruled in favour of the service

provider.194 HermèsInt’l v eBay, Inc., Tribunaux de grande instance (court of first

instance) Troyes, 4 June 2008, 14 (Fr.).195 Christian Dior Couture v eBay, Inc., eBay Int’l,( better known as LVMH v

eBay, Inc)., Tribunal de commerce (commercial court) Paris, 1ere ch. B, 30 June2008, No. 2006077799, 1 (Fr.).

196 Lancôme Parfums et Beaute v eBay Int’l AG, Tribunal de commerce,Brussels, 31 July 2008, No. A/07/06032, 1–3.




different outcomes. After that some salient CJEU cases that can shine alight on the matter of intermediary liability: L’Oréal and Others andGoogle France and Google will be explored. The jurisprudence showsthat courts narrowly interpret actual knowledge, but broadly interpretneutrality of the OSPs, so that they fall within the liability exemption.

In Tiffany, Inc. v eBay, Inc.,197 Tiffany sued the internet auction eBayfor trademark infringement, trademark dilution and false advertisingbased on its allegations that eBay was selling counterfeit Tiffany mer-chandise. The US court found that when eBay was informed thatinfringing goods were posted on its site, it immediately worked toremove the seller from its site. According to the court it is the trademarkholder’s burden to police its mark, and companies like eBay cannot beheld liable for trademark infringement based solely on their generalknowledge that trademark infringement might be occurring on theirwebsites. Goldwasser concluded that therefore eBay is not required totake pre-emptive measures to remove possible or anticipated infringingproducts.198

France, as a member of the EU, implemented the E-CommerceDirective in its national law.199 Article 14 E-Commerce Directive200

states that an information society service is not liable provided that thehost site ‘does not have actual knowledge of illegal activity or infor-mation … or … upon obtaining such knowledge or awareness, actsexpeditiously to remove or to disable access to the information’. How-ever, in 2008 in Hermès v eBay,201 the French court held that eBay is notjust hosting, but ‘provides tools, permitting to market the sold goods tothe sellers, organise object presentation on their site … and createfunctioning rules and architecture of their auction service, [and] must beconsidered as authors of on-line communication services for intermedia-tion purposes’.202 As an ‘author’ of online services, eBay should policeits own site according to the High Court of Troyes. eBay should ‘ask the

197 Supra note 192.198 Kate Goldwasser, Knock it off: An Analysis of Trademark Counterfeit

Goods Regulation in the United States, France, and Belgium, 18 CARDOZO J.INT’L & COMP. L. 207, 220 (2010).

199 Section 6 Law for Confidence in the Digital Economy Law, No. 2004-575of 21 June 2004, Journal Officiel de la Republique Francaise, 22 June 2004, at11168.

200 Article 14 E-Commerce Directive, supra, Chapter 1, note 5.201 Hermès Int’l v eBay, Inc., Troyes High Court (4 June 2008), Docket No.

06/0264.202 Id.




sellers who specify in their ads the sold merchandise identification means(product reference, serial number, type number, certificate of authenticity,etc.) by any means and post the references, obtained in this way inclearly legible print, absence of knowledge of such elements or lack ofresponse’.203 Because eBay was not considered as just a host, but an‘author’ it should have taken pre-emptive measures to protect itself fromcontributory liability. Therefore the court ordered eBay to pay Hermès20,000 euro for the sale of three counterfeit bags.204

In three cases, which are called LVMH v eBay by some scholars,because LVMH or one or more of its companies were the plaintiffs: in2008 in the Paris Court of Commerce;205 in 2010 the Paris Court ofAppeal,206 and in 2012 the French Supreme Court,207 it was confirmedthat eBay failed to carry out its duty to ensure that its activity does notgenerate illegal acts harming other economic operators. It also confirmedeBay’s willingness to accept clearly illegal listings on all its sites whichencourage infringement. eBay bought misspelled versions of LouisVuitton as keyword for Google and Yahoo that triggered advertisementsto counterfeit brands of LVMH. Therefore the French courts held thateBay was not merely hosting, but also brokering and therefore does notqualify for the safe harbour exception of Article 6.1.2 Law Number

203 Id.204 Dan Goodin, ‘French Court Fines eBay for Sale of Counterfeit Hand-

bags’, The Register, 5 June 2008, http://www.theregister.co.uk/2008/06/05/ebay_counterfeit_ruling/.

205 Parfums Christian Dior et autres/eBay Inc, eBay International AG,Tribunal de commerce de Paris 1ère chambre B Jugement du 30 juin 2008. LouisVuitton Malletier/eBay Inc., eBay International AG, Tribunal de commerce deParis 1ère chambre B Jugement du 30 juin 2008. Christian Dior Couture/eBayInc., eBay International AG, Tribunal de commerce de Paris 1ère chambre BJugement du 30 juin 2008.

206 eBay/Parfums Christian Dior, Kenzo Parfums, Parfums Givenchy, Guer-lain, Cour d’appel de Paris Pôle 5, chambre 2 Arrêt du 03 septembre 2010. eBayInc et eBay International AG/Louis Vuitton Malletier, Cour d’appel de Paris Pôle5, chambre 2 Arrêt du 03 septembre 2010. eBay Inc, eBay International/Christian Dior Couture, Cour d’appel de Paris Pôle 5, chambre 2 Arrêt du 3septembre 2010.

207 eBay Inc., eBay International/LVMH et autres, Cour de cassation Cham-bre commerciale, financière et économique Arrêt du 3 mai 2012. eBay Inc., eBayInternational/Louis Vuitton Malletier, Cour de cassation Chambre commerciale,financière et économique Arrêt du 3 mai 2012. eBay Inc., eBay International/Christian Dior Couture, Cour de cassation Chambre commerciale, financière etéconomique Arrêt du 3 mai 2012.




2004-575 on the confidence of the digital economy,208 which is France’simplementation of Article 14(1) E-Commerce Directive.

eBay was held to be a major participant in the sales on its sites andplayed a very active role, in particular in commercial campaigns meant toincrease the number of transactions. The French court came to theconclusion that eBay, despite its Verified Rights Owners (VeRO) pro-gramme ‘deliberately refused to establish sufficient and appropriate meansto fight against counterfeiting’. Therefore the immunity for hosting doesnot apply. Just as in Hermès v eBay,209 the court suggested concretemethods to remove counterfeit goods that eBay should have used, includ-ing ‘obliging the sellers to provide … a certificate of authenticity of theproducts … punishing any seller of counterfeit merchandise by perman-ently closing their accounts upon first violation, and immediately with-drawing illegal advertising, reported by LVMH’.210 So the internetintermediary needs to prove that it implemented pre-emptive measures inorder to avoid contributory liability for trademark infringement.

In 2008 in Lancôme v eBay,211 the Belgian court found that eBay actedmerely as a host for the advertisements on its site. Despite Lancôme’sargument that eBay was utilizing the advertisements, eBay arguedsuccessfully that it had no control over the advertisements. The court heldthat eBay fell under the safe harbour provisions of the Belgian law212

implementing Article 14 E-Commerce Directive and that it did not havean obligation to monitor the information it was hosting and did not have

208 Article 6.2. Law number 2004-575 of 21 June 2004, on the confidence ofthe digital economy: ‘Natural or legal persons who host even free of charge, forthe provision of public services by public communication online, storing signals,writing, images, sounds or messages of any kind provided by recipients of thoseservices, can not be held civilly liable as a result of activities or informationstored at the request of a recipient of services, if the provider did not have actualknowledge of the illicit nature or of facts and circumstances showing thatcharacter, and from the time when they had this knowledge, they acted promptlyto remove the data or make access impossible.

The preceding paragraph does not apply when the recipient of the service isacting under the authority or control of the person referred to in that paragraph’.

209 Supra note 201.210 eBay Inc., eBay International/LVMH et autres, Cour de cassation Cham-

bre commerciale, financière et économique Arrêt du 3 mai 2012.211 Lancôme Parfums et Beaute v eBay Int’l AG, Tribunal de Commerce de

Bruxelles, 31 July 2008.212 Article 20 Loi sur certains aspects juridiques des services de la société de

l’information – Wet betreffende bepaalde juridische aspecten van de diensten vande informatiemaatschappij, MB 17 March 2003.




to actively search for illegal counterfeiting activities of its users. LikeFrance, Belgium is a member of the EU. But the outcome of the Belgiancourt was diametrically different from the French courts.

So why are the outcomes different? In Tiffany the US court held thateBay was just a hosting site that only had general knowledge and noactual knowledge of infringed trademarks. Therefore it had no affirmativeduty to search for counterfeit goods. In the French cases Hermès andLVMH, eBay was not found to be a host, and therefore generalizedknowledge was sufficient to establish contributory liability, because eBaydid not adhere to its affirmative duty as an ‘author’ of content to searchfor counterfeit goods.

The safe harbour provisions of the E-Commerce Directive have beenimplemented in both France and Belgium. However, in Lancôme theBelgian court decided that eBay was merely a host, and therefore itneeded to be proven that it had actual knowledge of infringing materialon its site. As pointed out in Chapter 7.2, actual knowledge of infringe-ment is a key issue in determining whether a host is liable.

CJEU casesIn L’Oréal and Others213 the CJEU decided that Article 14(1)E-Commerce Directive214 could be applied: the operator of an onlinemarketplace had not played an active role, had no knowledge nor controlof the data stored. Therefore the operator of the online marketplace couldnot be held liable as long as he expeditiously removes or disables accessto infringing content when the trademark holder has made him aware ofthis. However, the CJEU made clear that the operator plays an active rolewhen he ‘has provided assistance which entails, in particular, optimisingthe presentation of the offers for sale in question or promoting thoseoffers’.215 In such a case he cannot rely on the exemption from secondaryliability.

Google offered the possibility to not just select keywords, whichcorrespond to the trademark Louis Vuitton or LV, but also in combinationwith words such as ‘imitation’ and ‘copy’, which triggered the advertise-ment of a counterfeiter.216 However, in 2010 in Google France andGoogle217 the CJEU held that Google did not use the trademark in the

213 L’Oréal and Others, supra, Chapter 2, note 95.214 Supra, Chapter 1, note 5.215 L’Oréal and Others, supra, Chapter 2, note 95, para. 116.216 Google France and Google, id., para. 29.217 Id.




course of trade. This is questionable since Google is applying AdWordsBroad Match,218 which means that the AdWords system automaticallyruns advertisements on variations of the advertiser’s keywords, even ifthese words are not in the keyword list the advertiser selected. One canargue that where Google suggests alternative trademarks as keywords,Google no longer is merely a host of third party content, and thereforethe exemption of secondary liability under the safe harbour provisionsshould not apply.

Recital 42 of the preamble to the E-Commerce Directive219 makesclear that the exemptions from liability established in that directive coveronly cases in which the activity of the OSP is ‘of a mere technical,automatic and passive nature’, which implies that the OSP ‘has neitherknowledge of, nor control over the information which is transmitted orstored’.220 Google probably used an algorithm that maximizes theimpressions and conversion of the keywords. eBay had a similar systemthat bought keywords that trigger advertisements based on keywordspeople type into Google.

When keywords such as ‘imitation’ and ‘copy’ are suggested byGoogle,221 the reference service should be vicariously liable under USlaw since Google has control222 over the infringing activity and a directfinancial interest in such activities. However, the CJEU left the decisionwhether Google was neutral or not to the national courts.223

218 Google AdWords Broad Match explanatory, accessed 9 February 2015 at:http://support.google.com/adwords/bin/answer.py?hl=en&answer=6136.

219 Supra, Chapter 1, note 5.220 Id.221 Google France and Google, supra, Chapter 2, note 95, para. 101.222 The question is also whether Google had control over the keywords

African Slaves it suggested to eBay in 2005. eBay had automatically bought thekeywords African Slaves from Google, which automatically triggered the spon-sored link ‘African Slaves for Sale, eBay.co.uk, Low Prices! Big Selection!’.Lester Haines, ‘Need an African Slave? Try eBay. Low Prices! Big Selection!’,The Register, accessed 9 February 2015 at: http://www.theregister.co.uk/2005/01/24/ebay_african_slaves/.

223 Google France and Google, supra, Chapter 2, note 95, para. 119.




7.5 OBLIGATION TO MONITOR

Who will guard the guardians?224

A pressing question for social media providers, legislators and scholars,is to what extent should OSPs implement and operate filtering andcontrol mechanisms?225 If OSPs fail to monitor, would they be held liableto comply with a duty of care? And if they have a filtering system inplace, but fail to remove infringing material, is it considered that theyshould have been able to identify that material?226 Or if some infringe-ments are found, is there an obligation to prevent ‘similar’ infringementsof the same trademark?

Schellekens argued that social media providers’ resistance againstfiltering content infringements is caused by a fear that if they startfiltering to protect content holders, more parties will demand them tofilter, ‘making the social media slide down to the bottom’.227

In the US, the level of the duty of care of OSPs in the case oftrademark infringement is unclear. The safe harbour provisions of theLanham Act do not give any guidance. However, the Second Circuit inTiffany Inc. v eBay, Inc.228 makes clear that even though eBay knew as ageneral matter that infringement of the Tiffany trademark took place at itssite, this knowledge is insufficient to trigger liability under Inwood.229

Only when eBay was intentionally shielding itself from discoveringspecific infringements, would it probably trigger secondary liability.230

224 ‘[Q]uis custodiet ipsos custodes?’ Juvenal, SATIRE VI (around 115 AD)(G.G. Ramsey, transl. London: William Heinemann, 1918), lines 347–8.

225 Boyden: ‘There is thus no hard-and-fast rule in tort law or in copyrightlaw what level of specificity is required to obligate an ISP to take action’. BruceE. Boyden, Viacom International Inc., Comedy Partners, Country Music Tele-vision, Inc., Paramount Pictures Corporation, Black Entertainment TelevisionLLC, Brief of Amici Curiae Intellectual Property Law Professors in Support ofPlaintiffs-appellants and Urging Reversal, 10 December 2010, accessed 9 Febru-ary 2015 at: http://news.viacom.com/pdf/2010-12-10-IP_Law_profs_Boyden_et_al.pdf.

226 Kamiel Koelman and Rosa Julià-Barceló, Intermediary Liability in theE-Commerce Directive: So Far So Good, But It’s Not Enough, 4 COMPUTER L.& SEC. REP. 231, 231–9 (2000).

227 Maurice Schellekens, Liability of Internet Intermediaries: A SlipperySlope?, 8 SCRIPTED 154 (2011).

228 Supra note 192.229 Id., at 110.230 Id.




Until there are statutory rules on the duty of care of OSPs to avoidintermediary liability in case of trademark infringements, one can look atthe duty of care in the DMCA as a guidance: § 512(m)(1) DMCA statesthat service providers do not have any obligation to provide monitoringof its service or affirmatively seek facts indicating infringing activity,except to the extent consistent with a standard technical measure com-plying with the provisions of § 512(i) DMCA. In other words: ‘§ 512(m)is incompatible with a broad common law duty to monitor or otherwiseseek out infringing activity based on general awareness that infringementmay be occurring’.231

OSPs are eligible for the liability limitations if they adopt andimplement a filter system that conforms to the standard technicalmeasures of § 512(i)(2):

‘(A) have been developed pursuant to a broad consensus of copyrightowners and service providers in an open, fair, voluntary, multi-industry standards process;

(B) are available to any person on reasonable and nondiscriminatoryterms; and

(C) do not impose substantial costs on service providers or substantialburdens on their systems or networks’.

However, such a standard for monitoring copyright infringements doesnot exist.

Below it will be explained why § 512(i)(2)(C) DMCA is no longerrelevant. A ‘best available technology standard’ of filtering was suggestedby Helman and Parchomovsky, but remains elusive.232 Ginsburg wrotethat ‘the more reliable and less burdensome the filter, the more likelycourts are to favor its implementation’.233

In the EU, Recital 47 of the preamble to and Article 15(1) of theE-Commerce Directive234 articulate that member states of the EU areprevented from imposing a general monitoring obligation on OSPs.Monitoring obligations in a specific case are allowed, and do not affect

231 Viacom International, Inc., v. YouTube, Inc., supra note 160, at 23–4.232 Lital Helman and Gideon Parchomovsky, The Best Available Technology

Standard, 111 COLUM. L. REV. 1194 (2011).233 Jane C. Ginsburg, Separating the Sony Sheep from the Grokster Goats:

Reckoning the Future Business Plans of Copyright-Dependent Technology Entre-preneurs, 50 ARIZ. L. REV. 577, 591 (2008).





orders by national courts.235 Recital 48 of the preamble to and Articles14(3) and 15(2) of the E-Commerce Directive236 explain that memberstates can require OSPs that host content provided by third parties toapply a duty of care which can reasonably be expected from them andwhich are specified by national law to monitor, detect and preventinfringements.237

In L’Oréal and Others238 the CJEU explained that:

First, it follows from Article 15(1) of Directive 2000/31, in conjunction withArticle 2(3) of Directive 2004/48, that the measures required of the onlineservice provider concerned cannot consist in an active monitoring of all thedata of each of its customers in order to prevent any future infringement ofintellectual property rights via that provider’s website. Furthermore, a generalmonitoring obligation would be incompatible with Article 3 of Directive2004/48, which states that the measures referred to by the directive must befair and proportionate and must not be excessively costly.239

In 2011, in Scarlet Extended NV v SABAM,240 the CJEU held thatmember states cannot obligate internet intermediaries to ‘implement afilter system for all electronic communication via its services, withoutany distinction between its customers, works preventative, and is exclu-sively funded by the ISP [internet service provider] and does not know

235 Recital 47 of the preamble to the E-Commerce Directive, id.: ‘MemberStates are prevented from imposing a monitoring obligation on service providersonly with respect to obligations of a general nature; this does not concernmonitoring obligations in a specific case and, in particular, does not affect ordersby national authorities in accordance with national legislation’. Article 14(3)E-Commerce Directive: ‘This Article shall not affect the possibility for a court oradministrative authority, in accordance with Member States’ legal systems, ofrequiring the service provider to terminate or prevent an infringement, nor does itaffect the possibility for Member States of establishing procedures governing theremoval or disabling of access to information’.

236 Id.237 Recital 48 of the preamble to the E-Commerce Directive, id.: ‘This

Directive does not affect the possibility for Member States of requiring serviceproviders, who host information provided by recipients of their service, to applyduties of care, which can reasonably be expected from them and which arespecified by national law, in order to detect and prevent certain types of illegalactivities’.

238 L’Oréal and Others, supra note 213, para. 139.239 Id.240 Scarlet Extended NV v SABAM (Case C-70/1024), Judgment of the CJEU,

24 November 2011.




any restriction in time’.241 The CJEU seemed fearful that such anextensive filter system would be incompatible with guaranteeing abalance between protecting intellectual property on the one hand andallowing free enterprise, the right of privacy protection and the right toreceive or send information on the other hand. Unfortunately, the CJEUdid not use the opportunity to clarify exactly the degree to which internetintermediaries need to pre-emptively filter and sustain a business climatewhich is conducive to both trademark holders and internet intermediaries.

The solution envisioned by the Belgian government, to obligate OSPsto filter pre-emptively, is best suitable with the solution envisaged in thisbook.

Even though an OSP that meets the criteria of Article 14(1)E-Commerce Directive,242 so that it is exempted from liability, it can stillbe required to filter, based on Article 14(3) E-Commerce Directive,243

which promulgates that member states’ legal systems can require theservice provider to terminate or prevent an infringement or establishingprocedures governing the removal or disabling of access to infor-mation.244

Between 2005 and 2008 the German Federal Court of Justice245

demonstrated in Internet Auction I,246 II247 and III248 that even though anOSP falls within the safe harbour against intermediary liability of § 10Sentence 1 Telemediagesetz,249 which is Germany’s implementation ofArticle 14(1) E-Commerce Directive,250 it can still be held liable basedon so-called Störerhaftung.251 The ‘Störerhaftung’ could be interpreted as

241 Id.242 Supra, Chapter 1, note 5.243 Id.244 Recital 48 of the preamble to the E-Commerce Directive, id.: ‘This

Directive does not affect the possibility for Member States of requiring serviceproviders, who host information provided by recipients of their service, to applyduties of care, which can reasonably be expected from them and which arespecified by national law, in order to detect and prevent certain types of illegalactivities’.

245 Bundesgerichtshof (BGH), the Federal Court of Justice, is the highestcourt in the system of general, that is, civil and criminal jurisdiction in Germany.

246 Internet Auction Case I ZR 304/01 I, [2005] ETMR 25, 11 March 2004.247 Internet Auction II Case I ZR 35/04, [2007] ETMR 70, 17 April 2007.248 Internet Auction III Case I ZR 73/05 [2008] 30 April 2008.249 § 10 Sentence 1 Telemediagesetz = § 11 Satz 1 Teledienstegesetz 2001.250 Supra, Chapter 1, note 5.251 Interferer liability is a specific German doctrine codified in § 823 German

Civil Code (Liability in damages) and § 1004 German Civil Code Right (Right to




the German implementation of the third sentence of Article 11 Enforce-ment Directive,252 which prescribes that member states shall ensure thatproprietors are in a position to apply for an injunction against inter-mediaries whose services are used by a third party to infringe intellectualproperty.253 The consequence of this ‘interferer liability’, which excludesthe possibility of criminal enforcement or compensation of damages,254 isthat a preventive injunction against the intermediary can still be issued.When pointed by a rights holder to a clearly recognizable infringement,the intermediary should not only immediately stop the specific infringe-ment, but also take fundamental precautions to safeguard that no furthercorresponding infringement will take place. By applying Störerhaftungbased on Article 11 Enforcement Directive,255 the Federal Court ofJustice demonstrated that the safe harbour provision of Article 14(1)E-Commerce Directive256 does not relieve OSPs from an obligation topreventive filtering.

Technology

Paragraph 512(i)(2)(C) DMCA prescribes that a technical standard forfiltering should not impose substantial costs on service providers orsubstantial burdens on their systems or networks. In the same vein on theother side of the Atlantic, the CJEU implied in L’Oreal and Others257

that filtering all data would be disproportionate, and excessively costly.

satisfaction of the possessor). German Civil Code (Bürgerlichen Gesetzbuches), 2January 2002.

252 Supra note 142.253 Article 11 third sentence Enforcement Directive, id.: ‘Member States

shall also ensure that rightholders are in a position to apply for an injunctionagainst intermediaries whose services are used by a third party to infringe anintellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC’.

254 If someone, intentionally or negligently, harms the property of someoneelse, and causality can be established to the infringement of a protected rightthey can be subject to an injunction. Although fault needs to be proven for acompensation claim or intent in the case of criminal enforcement, it is notneeded for an injunction.

255 Supra note 142.256 Id.257 L’Oréal and Others, supra note 213, para. 139.




In 2012, in Stokke v Marktplaats,258 the Dutch Court of Appeal inLeeuwarden weighed the pecuniary disadvantages for the proprietorStokke of having to outsource the monitoring and notification process forinfringements on the internet auction and those of the internet auction tofilter in such a way that repeat infringements will be prevented. TheCourt of Appeal reasoned that since Stokke had to spend 700 euros, peryear, and adaption of the internet auction’s system to filter its serverswould cost a multitude of 700 euros, per year, that the proportionalityprinciple of Article 3(2) Enforcement Directive would preclude that theinternet auction needed to adapt its system.259 However, the Court ofAppeal seems to have forgotten that if one wants to make an economictrade-off, one should realize that not only Stokke but a multitude of otherproprietors have to bear the costs of monitoring and notifying the internetauction. If this had been taken into account, the equation would havelooked different.

Since filtering technology is based on computing performance, andtherefore subject to Moore’s law,260 which is the observation thatcomputing performance doubles every two years, the costs havedecreased exponentially. Just as the performance of virus and spam filtertechnologies have increased, while the costs have decreased, the perform-ance of intellectual property filtering software will increase while thecosts will further decrease. So the problem of substantial or excessivecosts of filtering technology is fictitious.261 It is bittersweet that theworldwide rise in censorship also is boosting filter technology.262

258 Stokke v Marktplaats, Gerechtshof (Court of Appeal) Leeuwarden,107.001.948/01, BW6296, 22 May 2012.

259 Id., para 10.5.260 Gordon E. Moore, ‘Cramming More Components onto Integrated Cir-

cuits’, Electronics Magazine, 1965, at 4, accessed 9 February 2015 at:http://download.intel.com/museum/Moores_Law/Articles-Press_Releases/Gordon_Moore_1965_Article.pdf; Intel Corporation, ‘Excerpts from a Conversation withGordon Moore: Moore’s Law’, Video transcripts, 2005, at 1, accessed at: http://large.stanford.edu/courses/2012/ph250/lee1/docs/Excepts_A_Conversation_with_Gordon_Moore.pdf.

261 A fortiori, when the safe harbour provisions could be abolished and socialmedia providers made liable for content infringements this would increase thedemand for filter technology so that investments into its innovation increasing itsefficacy decreases its costs.

262 Danny Friedmann, Paradoxes, Google and China: How Censorship CanHarm and Intellectual Property Can Harness Innovation, in GOOGLE ANDTHE LAW, supra, Preface, note 2, 316–328.




In Scarlet,263 the CJEU came up with three more principled argumentsagainst the obligation to filter all data: that an extensive filter would beincompatible with guaranteeing a balance between protecting intellectualproperty on the one hand and allowing free enterprise, the right ofprivacy protection and the right to receive or send information on theother hand. The right of privacy protection is under pressure from socialmedia, because they sell the behavioural data of its users. Then again,this is one of the conditions under which internet users can make ‘free’use of the service. However, filtering against content infringements doesnot interfere with the right of privacy protection to a greater extent thanin regard to behavioural data-mining. For social media the right toreceive or send information will only be restrained where it concernsinfringed content (see Chapter 6.4 which has already demonstrated thatprotecting intellectual property is compatible with the right to freedom ofexpression). The CJEU deemed filtering of all data incompatible withallowing free enterprise. However, one can argue that social media shouldallow only non-infringing free enterprise: that the freedom of oneenterprise stops where it infringes the freedom of another enterprise toexploit its intellectual property rights.264 Therefore these reasons areinvalid to justify a prohibition to filter all data against content infringe-ments.

Social media providers are best positioned to monitorBecause of the safe harbour provisions social media providers only filter inreaction to instigations by the content holders. This means that the contentholders need to search for the infringements themselves or pay third partiesfor this service or the social media providers to do this for them.

One can argue that social media are morally in the best position tofilter, since it falls within their control and at the same time they benefitfinancially from it. However, the District Court in Tiffany (NJ) Inc. veBay, Inc. held that ‘right holders bear the principal responsibility topolice their trademarks’.265 The Second Circuit in Tiffany (NJ) Inc. veBay, Inc.266 held that private forces give internet intermediaries ‘a strong

263 Supra note 240.264 Paraphrasing ‘Your right to swing your arms ends just where the other

man’s nose begins’. Zechariah Chafee, Freedom of Speech in Wartime, 32 HARV.L. REV. 932, 957 (1919).

265 Citing MDT Corp. v New York Stock Exch., 858 F. Supp. 1028, 1034(C.D.Cal.1994). ‘The owner of a trade name must do its own police work’. Supranote 192, at 518.

266 Supra note 104, at 109.




incentive to minimize’ intellectual property infringements.267 For onlineauction sites this might be so to a degree, but this does not apply forsocial media, as pointed out in Chapter 7.4 ‘Market Forces: Attractive-ness over Accountability’.

One can also argue that social media are technologically in the bestposition to filter,268 since they know their service from the inside out,have the right technical people on staff, and have access to all of theinformation on their servers. A fortiori, social media can set up andorganize their services in such a way which makes filtering againstcontent infringements effective, efficient and fast.

One can distinguish two groups of monitoring obligations: before andafter any notification of infringement. The latter group can be divided intothe following monitoring obligations to prevent further infringements:269

– Where the identity of the infringer is known and the identity of thegoods that are being infringed are known. This degree of mon-itoring is suggested by the Advocate General in L’Oréal v eBay.270

This seems arbitrary, since it would not address known infringerswho infringe a slightly different copyright or trademark; nor wouldit address a repeat infringer operating under a different name.

– Where the identity of the infringer or his internet protocol addressis known. This would enable checking whether the known infringerhas changed his ways for the good.

267 ‘But we are also disposed to think, and the record suggests, that privatemarket forces give eBay and those operating similar businesses a strong incentiveto minimize the counterfeit goods sold on their websites’. Id.

268 eBay suggested that Tiffany use technological tools, like Ranger Online.Tiffany rejected this technology and did not have the staff to do the monitoring.Tiffany Inc. v eBay, Inc., supra note 192, at 484.

269 ‘[O]nce a right has been infringed, the host provider may be required notonly to terminate the infringement but also to prevent further infringements (expost situation). Injunctive relief as to further infringements would therefore notbe ruled out’. Judge Bornkamm, E-Commerce Directive vs. IP Rights Enforce-ment: Legal Balance Achieved, presentation at GRUR Meets Brussels; Enforce-ment of IP Rights in the Digital Environment – Concern, Challenges and ActionsRequired for the Protection of the Single Market, Brussels 6 March 2007 GRURINT’L 642, 643 (2007).

270 L’Oréal SA Lancôme parfums et beauté & Cie Laboratoire Garnier &Cie v Bellure NV Malaika Investments Ltd Starion International Ltd (L’Oréaland Others) (Case C-487/07), Opinion of the Advocate General, 10 February2009, para. 182.




– Where the kind of infringement is known. This can provide clues ofhow to prevent similar infringements. For example, in the InternetAuction cases,271 one could monitor watches that were offered asnew Rolex hours, under a certain price. Or obviously keywords thatGoogle AdWords suggested, such as ‘imitation’ or ‘copy’, incombination with the trademark Louis Vuitton, as was establishedin Google France and Google.272

However, preventing content infringements before they are uploaded inan automatic way makes post-upload filtering and the costly manualnotice and takedown procedures unnecessary and prevents litigationaltogether (see Chapter 9 ‘Implementation of a Paradigm Shift’).

7.6 LACK OF LEGAL CERTAINTY

‘In all mercantile transactions the great object should be certainty: andtherefore, it is of more consequence that a rule should be certain, thanwhether the rule is established one way or the other: because speculatorsin trade then know which ground to go upon’.273

Although cost-efficient technology is already available to social mediaproviders to monitor and enforce against content infringements, the safeharbour provisions force them to feign that ignorance is bliss.274 Theopposite is true: the feigned ignorance makes social media providersvulnerable, since there is little space between being considered an OSP

271 Supra notes 246, 247 and 248.272 Google France and Google, supra, Chapter 2, note 95, para 101.273 Shrieval lecture of Lord Bingham in which he quoted Lord Mansfield, in

Vallejo v Wheeler (1774) 1 COWP. 143, 153. Lord Mance, ‘Should the Law BeCertain?’, The Oxford Shrieval lecture, 11 October 2011, accessed 9 February2015 at: http://www.supremecourt.gov.uk/docs/speech_111011.pdf.

274 Reed argued that Google Images’ biggest threat is when social mediasites, such as Pinterest, Facebook and Twitter, start with an effective andcomplete search function. ‘The worst thing that could happen for Google is thateach of the other social outlets like Facebook, Twitter, Pinterest etc developrobust, functional and complete search functions’. Frank Reed, ‘In the Age ofPinterest, Google Wants to Know How to Index Images’, Marketing Pilgrim, 25April 2012, accessed 9 February 2015 at: http://www.marketingpilgrim.com/2012/04/in-the-age-of-pinterest-google-wants-you-to-know-how-to-index-images.html. If these social media providers start with such a search function, it becomeseven harder for them to hide behind the argument that they cannot know whathas been uploaded to their sites, which is relevant to fall within the safe harbourprovisions which indemnifies them from intermediary liability.




and protected under the safe harbour provisions and being held liable forintermediary liability, as the jurisprudence shows.

In particular, one can argue that safe harbour provisions provide legaluncertainty to social media, trademark holders and internet users. In theUS the safe harbour provisions of the Lanham Act apply only partly totrademark infringements, but if they do apply, just as with theE-Commerce Directive275 safe harbour provisions, they do not provideany real refuge for social media providers, due to their multi-interpretableterms and uncertain duty of care to filter, as discussed in Chapter 7.6. Ifthe safe harbour provisions do not apply, then social media providerscould be held contributorily or vicariously liable for infringing usergenerated content. In the EU the safe harbour provisions of theE-Commerce Directive do apply to all trademark infringements, but heretoo, the unknown required level of filtering provides for legal uncertainty.Trademark holders file lawsuits against OSPs if they cannot get hold ofthe direct infringers, the internet users. US and EU case law, as discussedin Chapter 7.6, demonstrate that no predictable outcomes are to beexpected.

Urban and Quilter have researched DMCA notices and found out ‘thatcopyright claims have stated concerns beyond or in addition to copyrightinfringement, including trademark-type claims’,276 which only increasesthe legal uncertainty.

The excessive and uncritical removal of alleged infringing content, asdiscussed in Chapter 7.3, also does not contribute to legal certainty forthose internet users, including trademark holders in the role of internetuser, that upload authorized content. Many internet users do not knowwhat is authorized use of a trademark logo on social media. Transparencyabout what use of a trademark is authorized can be a first step inincreasing legal certainty for social media providers, trademark holdersand internet users (see Chapter 9 ‘Implementation of a Paradigm Shift’).

Social media are resistant to filtering actively and on their owninitiative for infringing content, because that can expel them from thesafe harbour. However, OSPs have discovered that they have been

275 Supra, Chapter 1, note 5.276 ‘A number of notices (193) appear to include claims in addition to, or

instead of, copyright infringement – such as unfair competition, trademark-typeclaims, or privacy concerns. In some instances, a sender may have had acognizable copyright claim, but they stated concerns beyond or in addition tocopyright infringement’. Urban and Quilter, supra note 171, at 678.




positioned in the ‘squeezed middle’.277 They may seek refuge in a safeharbour, but they are still a target of litigation by content holders, becausemoored they are an easy target. Therefore, ultimately, the question ofwhether the safe harbour provisions in the law of intermediary liability oftrademark infringement are not effective can be confirmed. In order toclose the gap, the safe harbour provisions should be abolished. Insteadstrict liability of OSPs, including social media providers, over intellectualproperty infringements on their servers should be introduced, after atransition period.

277 The word combination ‘squeezed middle’ of the year 2011 could apply toOSPs, because they are the ‘squeezed middle’ of the internet, between trademarkholders and the users. ‘Squeezed middle’, Oxford University Press (US and UK)word of the year 2011, accessed 9 February 2015 at: http://www.prnewswire.com/news-releases/squeezed-middle-is-named-oxford-dictionaries-word-of-the-year-2011-134361588.html.




PART III

Paradigm change

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8. Moral right of integrity

Moral right of integrity applicable tounauthorized and non-commercial use of thetrademark logo, regardless of the level offame/reputation

8.1. INTRODUCTION

Although corporations may embrace their brands with fervor and takepride in their creation, they do not have the type of soul that cries

out for protection via a moral right.1

This chapter poses questions about that statement and asks whethertrademark holders have the ‘type of soul’ that cries out for protection oftheir trademark logo on social media via moral rights. Moral rightspredominantly apply to copyright works and neighbouring rights, but inregard to attribution also to patent law.2 One can find the first theories onthe legal position of the author which included non-economical aspects inGermany, while in France they coined the name ‘droit moral’ (moralright), and France was most successful in propagating its version ofmoral rights doctrine (Chapter 8.2). Chapter 8.3 will discuss how moralrights made their way into some international treaties. After that Chapter8.4 will investigate the reception of the concept in two common lawcountries, the UK and US. Then Chapter 8.5 examines the relationbetween the trademark logo and moral rights. Chapter 8.6 examines the

1 Rierson, supra, Chapter 2, note 81, at 305.2 35 U.S.C. § 111: ‘An application for patent shall be made, or authorized

to be made, by the inventor, except as otherwise provided …’ The EuropeanPatent Convention (EPC) has a rule to publish the mention of the inventor, unlesshe has waived this right. Rule 20(1) EPC: ‘The designated inventor shall bementioned in the published European patent application and the European patentspecification, unless he informs the European Patent Office in writing that he haswaived his right to be thus mentioned’.

273



trademark logo as personification of the trademark holder, followed bytrademark dilution as de facto moral rights for trademarks (Chapter 8.7and a rationale of moral rights for the trademark logo (Chapter 8.8).

8.2 ORIGIN OF MORAL RIGHTS

Theories on Moral Rights

Strömholm wrote that towards the end of the 1880s German legal writershad created three schools of thought on the legal position of the author:3

The first school of thought is based on the work of Josef Kohler, whowas a proponent of a dualistic theory of copyright. Kohler distinguishedbetween economic and personal rights and advocated that the latter fallsoutside the law of intellectual property.4

The second school of thought is based on the work of Otto von Gierke,who was a proponent of a monistic theory of copyright and asserted thatthe whole of copyright was of a personal character.5 This prevailed inGerman copyright law and was implemented in § 11 German CopyrightAct (Urheberrechtsgesetz) since 1965:

Copyright law protects the author in his intellectual and personal relations tothe work and in the exploitation of the work. At the same time it also servesto guarantee an appropriate reimbursement for exploitation of the work.6

3 Stig Strömholm, Droit Moral: The International and Comparative Scenefrom a Scandinavian Viewpoint, 14 INT’L REV. INDUS. PROP. & COPYRIGHTL. 1 (1983).

4 Friedemann Kawohl, Commentary on Josef Kohler’s The Author’s Right(1880), in PRIMARY SOURCES ON COPYRIGHT (1450–1900) (eds., L.Bently and M. Kretschmer, 2008).

5 Otto von Gierke, DEUTSCHES PRIVATRECHT, Band I (1868), 756.Cited by Artur-Axel Wandtke, Zukunft des Urheberrechts und eine monistischgeprägte Urheberrechtskonzeption – Entwicklungslinien seit Josef Kohler, inFESTSCHRIFT 200 JAHRE JURISTISCHE FAKULTÄT DER HUMBOLDT-UNIVERSITÄT ZU BERLIN: GESCHICHTE, GEGENWART UNDZUKUNFT, (Stefan Grundmann et al., Walter de Gruyter 2010), at 1180.

6 § 11 German Copyright Act (Urheberrechtsgesetz) 9 September 1965(BGBl. I S. 1273), last amended by Article 12 § 4 Law of 13 December 2007(BGBl. I S. 2897): ‘Das Urheberrecht schützt den Urheber in seinen geistigenund persönlichen Beziehungen zum Werk und in der Nutzung des Werkes. Esdient zugleich der Sicherung einer angemessenen Vergütung für die Nutzung desWerkes’.




The third school of thought is based on the work of Philipp Allfeld, whoadvocated that copyright was a right with both economic and personalelements, each having its own special rules.7 This hybrid theory becamethe prevailing doctrine in France and other EU member states except forthe UK and Ireland, since they are common law countries. Interestingly,the EU has consistently excluded the harmonization of moral rights in thecase of author’s rights.8

Moral Rights avant la letter

Even earlier, in 1769, in Millar v Taylor,9 the Court of King’s Benchdecided that despite the Statute of Anne10 an author enjoyed the exclusiveright of publishing his work in perpetuity and recognized de facto:

– the right of attribution (‘It is just, that Another should not use hisName, without his consent’);11

– the right of disclosure (‘It is fit, that He should judge when topublish, or whether he will ever publish. It is fit he should not onlychoose the Time, but the Manner of Publication; how Many; whatVolume; what Print’);12

– the right of integrity (‘It is fit, that he should choose to Whose carehe will Trust the Accuracy and Correctness of the Impression; inwhose Honesty he will confide it, not to foist in Additions’).13

7 Philipp Allfeld, DAS URHEBERRECHT AN WERKEN DER LITERA-TUR UND DER TONKUNST. KOMMENTAR ZU DEM GESETZ VOM19.JUNI 1901 SOWIE DEN INTERNATIONALEN VERTRÄGEN ZUMSCHUTZE DES URHEBERRECHTES. 2., (vielfach veränd. Aufl., München:C.H. Beck 1928).

8 Rigamonti, supra note 33, at 357.9 Millar v Taylor, London (1769), supra, Chapter 6, note 437.

10 The Statute of Anne prescribed a copyright term of 14 years. An Act forthe Encouragement of Learning, by Vesting the Copies of Printed Books in theAuthors or Purchasers of such Copies, during the Times therein mentioned(Statute of Anne), commenced on 10 April 1710. Copyright History, accessed 9February 2015 at: http://www.copyrighthistory.com/anne.html.

11 Millar v Taylor, London (1769), supra, Chapter 6, note 437. Text can befound Millar v Taylor (1769), Copyright, Plagiarism and … McGuffey’s Readers,‘A Critical Resource on Intellectual Property in the Eighteenth and NineteenthCenturies’, accessed 9 February 2015 at: http://web.ics.purdue.edu/~epflugfe/McGuffey%20project/624.3.html.

12 Id. Millar v Taylor, London (1769), supra, Chapter 6, note 437.13 Id.

Moral right of integrity 275



Only the right of withdrawal was not de facto recognized.However, in 1774 in Donaldson v Becket14 the fledgling right of

disclosure and the future of moral rights in the UK were at one fellswoop sidelined, until the introduction of the Copyright, Designs andPatents Act in 198815 (see Chapter 8.5).

French and Mainstream Moral Rights

Morillot coined the term moral rights in 1878.16 ‘Even if Morillot wasthe first one to identify moral rights as a bundle of prerogatives they aredistinct from the exclusive right of the author, he merely founded it onrules of civil responsibility’.17

Lucas asserted that the moral rights doctrine in France was developedfirst in case law, followed by some scholarly writings18 and only in 1957were moral rights codified in the version as advocated by Desbois, inwhich ‘the relation that exists between the author and the work, themirror of his personality’.19

14 Text of Donaldson v Becket (1774), supra note, Chapter 6, note 437.15 Copyright, Designs and Patents Act, 1988, c. 48.16 André Morillot, DE LA PROTECTION ACCORDÉE AUX OEUVRES

D’ART, AUX PHOTOGRAPHIES, AUX DESSINS ET MODÈLES INDUSTRI-ELS ET AUX BREVETS D’INVENTION DANS L’EMPIRE D’ALLEMAGNE(Paris: Cotillon, 1878).

17 André Lucas, ‘Moral Right in France: Toward a Pragmatic Approach?ALAI 2009 Congress from 1710 to Cyberspace: Celebrating 300 Years ofCopyright and Looking to Its Future’, bla©a, (2009), accessed 9 February 2015at: http://www.blaca.org/Moral%20right%20in%20France%20by%20Professor%20Andre%20Lucas.pdf. bla©a is the UK national group of the InternationalLiterary and Artistic Association (ALAI) founded in Paris in 1878 under thepresidency of Victor Hugo.

18 Louis Marie Eugène Pouillet, TRAITÉ THÉORIQUE ET PRATIQUE DELA PROPRIÉTÉ LITTÉRAIRE ET ARTISTIQUE ET DU DROIT DE REPRE-SENTATION (3d ed., Georges Maillard and Charles Claro, eds., Paris: Marchalet Billard, 1908).

19 Henri Desbois, LE DROIT D’AUTEUR EN FRANCE: PROPRIÉTÉLITTÉRAIRE ET ARTISTIQUE, viii (Paris: Dalloz, 1978).




The current French author’s right is codified20 in the Code propriétéintellectuelle (1992) as Articles L121-1 to L121-9,21 which previouslywas scattered throughout La propriété littéraire et artistique of 1957.22

Article L121-1 Code de la propriété intellectuelle (1992) gives adefinition of moral rights: ‘The author has the right to respect for hisname, his quality and his work. This right is attached to his person. It isperpetual, inalienable and absolute. It is transferable upon death to theheirs of the author. The exercise can be given to a third party under awill’.23

There are four different kind of moral rights: right of disclosure, rightof withdrawal, right of attribution and right of integrity.

Right of disclosure24

Articles L121-2 and L121-8 Code de la propriété intellectuelle (1992):The author has the sole right to make his work available to the public andno one can force him.25 This doctrine was developed in the French Edenv Whistler case,26 in which the painter Eden did not want to disclose thepainting of Whistler’s wife, ordered by Whistler, because they disagreedabout the price.

Right of withdrawal27

Article L121-3 Code de la propriété intellectuelle (1992) points to thehigh court in the case of manifest abuse in the use or non-use of the rightof disclosure. Articles L121-4 and L121-7-1(2) Code de la propriétéintellectuelle (1992) deal with the right to reconsider or withdraw, in casean author can no longer reconcile the publication of his work with his

20 Law No. 92-597 of 1 July 1992, Journal Officiel de la RepubliqueFrancaise [J.O.] [Official Gazette of France], 3 July 1992, at 8801.

21 Articles L121-1 to L121-9 Code de la propriété intellectuelle, 1 July1992.

22 Law numbers 57-298 of 11 March 1957 sur la propriété littéraire etartistique.

23 Supra note 21.24 Right of disclosure is called droit de divulgation in French.25 André Lucas, Henri-Jacques Lucas and Agnès Lucas-Schloetter, TRAITÉ

DE LA PROPRIÉTÉ LITTÉRAIRE ET ARTISTIQUE, 307 (2d ed., Dayton, OH,Lexis Nexis, 2001) at 309. Rigamonti, supra note 33, at 364 and 362 footnote 57.

26 Eden v Whistler, Cour de cassation, ch. civ., 14 Mar. 1900, D.P. 1900, I,497 (Fr.).

27 Right of withdrawal is called droit de retrait et de repentir in French.




personal convictions. Merely pecuniary reasons are not sufficient accord-ing to the Cour de cassation.28 However, courts rarely exercise this rightof withdrawal.29 After the publication of his work, the author canreconsider or withdraw the work, as long as he indemnifies the assigneebeforehand for any prejudice the reconsideration or withdrawal maycause him.

Right of attribution30

Article L121-1 Code de la propriété intellectuelle (1992) prescribesrespect for the name of the author, also known as the right of paternity.Hughes articulated that the right of attribution ‘guarantees that theauthor’s selected form of identification with the work remains – whetherthe author used her own name, used a pseudonym, or wanted to remainanonymous’.31

Right of integrity32

Article L121-1 Code de la propriété intellectuelle (1992) states that thequality and work should be respected, regardless of the objectivelypositive or objectively negative influence of the modification on thework.33 This includes dividing the work so that it is no longer complete,resizing a work for reproduction on a stamp34 and putting the work in anundesirable context according to the author.35 France’s and Germany’sright of integrity goes further than Article 6bis Berne Convention, whichonly protects the right to claim authorship of the work and to object toany distortion, mutilation or other modification of, or other derogatory

28 Cour de cassation, le civ., 14 May 1991, 151 RIDA 1992, 272, noteSirinelli (Fr.).

29 Cornish and Llewelyn, supra, Chapter 2, note 102, at 461.30 Right of attribution is called droit de paternité in French.31 Justin Hughes, American Moral Rights and Fixing the Dastar ‘Gap’,

UTAH L. REV. 659, 660 (2007).32 Right of integrity is called droit au respect de l’intégrité de l’oeuvre in

French.33 Cyrill P. Rigamonti, Deconstructing Moral Rights, 47(2) HARV. INT. L.

J. 353 (2006) at 364.34 Echaurren v Italian Post Office [2001] E.C.D.R. 14 (Court of Rome).35 This is well illustrated by the Hundertwasser case in Germany. The court

held that putting a painting in a frame which extends the patterns of the paintingcan be perceived as a new ‘Gesamtkunstwerk’, made by the author, and thereforeviolates the right of integrity of the work. Hundertwasser, BGHZ 150, 32.Relevant are §§ 14 and 23 Gesetz über Urheberrecht und verwandte Schutzrechte(Urheberrechtsgesetz), 9 September 1965 amended on 22 December 2011.




action in relation to, the said work, if it would be prejudicial to theauthor’s honour or reputation. However, in France the exceptions are themodification of software (Article L121-7(1) Code de la propriété intel-lectuelle (1992)) and work-for-hire (Article L121-7-1(1) Code de lapropriété intellectuelle (1992)), which are as restrictive as Article 6bisBerne Convention. The same can be said for Germany’s motion picturesor works in motion pictures.36 The wording that moral rights areinalienable,37 even after the death of the author, was tested in 2004 whenan heir of Victor Hugo claimed that the author of a publication of twosequels to Les Misérables, a work in the public domain, violated Hugo’sright of integrity.38

8.3 INTERNATIONAL TREATIES

Moral rights doctrine spread successfully via a number of internationaltreaties, including the Universal Declaration of Human Rights39 andInternational Covenant on Economic, Social, and Cultural Rights.40 Onecan argue that these two treaties cover all moral rights as discussed inChapter 8.2.

A more limited set of moral rights, namely the moral rights ofattribution and integrity, is codified in the Berne Convention for theProtection of Literary and Artistic Works (Berne Convention).41 Article6bis(1) Berne Convention42 was added with the Rome Act in 1928:

Independently of the author’s economic rights, and even after the transfer ofthe said rights, the author shall have the right to claim authorship of the work

36 § 93(1) Urheberrechtsgesetz: ‘only grossly disfigurement or other grosslyimpairments to their works can be banned’. Id.

37 In France Article L121-1 Code de la propriété intellectuelle.38 CA Paris, 4e ch., 31 Mar. 2004, 202 RIDA 2004, 292, note Pollaud-

Dulian (Fr.).39 Universal Declaration of Human Rights, G.A. Res 217A (III), Article

27(2), U.N. Doc. A/810 (10 December 1948): ‘the right to the protection of themoral and material interests resulting from any scientific, literary or artisticproduction of which he is the author’.

40 International Covenant on Economic, Social, and Cultural Rights(ICESC), G.A. Res 2200A (XXI), Article 15(1)(c), U.N. GAOR, 21st Sess.,Supp. No. 16, at 49, U.N. Doc. A/6316 (1966), 993 U.N.T.S. 3: ‘benefit from theprotection of the moral and material interests resulting from any scientific,literary or artistic production of which he is the author’.

41 Supra, Chapter 2, note 3.42 Id.




and to object to any distortion, mutilation or other modification of, or otherderogatory action in relation to, the said work, which would be prejudicial tohis honor or reputation.

Article 1(4) WIPO Copyright Treaty43 incorporates Article 6bis BerneConvention44 and Article 5(1) WIPO Performances and PhonogramsTreaty45 provided the moral right of attribution and integrity to perform-ers, followed by Article 5 Beijing Treaty on Audiovisual Performances.46

The right of attribution of Article 6bis Berne Convention47 ‘the authorshall have the right to claim authorship of the work’, does not merelymean a right to prevent non-attribution. Hughes explained the compre-hensive character of the provision that is generally understood to meanthe right to publish anonymously or pseudonymously and to preventmisattribution of other works and to prevent others’ names attached toone’s works.48

Economic Rights and Moral Rights Dichotomy

Where a trademark is used in a non-commercial way, the trademark,including the trademark logo, cannot be protected against trademarkinfringement (as discussed in Chapter 5) nor trademark dilution (asdiscussed in Chapter 6). Moral rights stem from the fact that the work isa reflection of the personality of its creator. Economic and moral rightsbelong to each other just as a body belongs to a soul, as the WIPO Guideto the Berne Convention poetically puts it.49

43 Supra, Preface, note 11.44 Supra, Chapter 2, note 3.45 Article 5(1) WIPO Performances and Phonograms Treaty: ‘Independently

of a performer’s economic rights, and even after the transfer of those rights, theperformer shall, as regards his live aural performances or performances fixed inphonograms, have the right to claim to be identified as the performer of hisperformances, except where omission is dictated by the manner of the use of theperformance, and to object to any distortion, mutilation or other modification ofhis performances that would be prejudicial to his reputation’. WIPO Perfor-mances and Phonograms Treaty, 20 December 1996.

46 Beijing Treaty on Audiovisual Performances, adopted by the DiplomaticConference on 24 June 2012.

47 Supra, Chapter 2, note 3.48 Hughes, supra note 31, at 662–3.49 Claude Masouyé, Guide to the Berne Convention for the Protection of

Literary and Artistic Works (Paris Act, 1971), WIPO PUBL. No. 615(E) (Geneva1978), at 41.




Moral rights of author’s rights are called non-economic rights todistinguish them from the economic or exploitive rights of author’srights. A better term would be non-exploitive rights, since moral rightscan have a severe economic impact on the author, just as in the case oftrademark dilution or trademark infringement or unauthorized non-commercial use of the trademark logo on social media.

In the case of unauthorized use by third parties, the copyright holdercan use his economic rights to stop them. The only benefit in thissituation is that claiming both economic and moral rights might result inincreased damages awards.50

In the case of unauthorized non-commercial51 use of the trademarklogo by internet users on social media, the trademark holder cannot asserthis economic rights, since trademark infringement and trademark dilutionare not applicable. Therefore, one can argue that it would be desirablethat the law would enable trademark holders to apply moral rights insuch situations.

Right ofAttribution and/or Right of Integrity

Article 6bis(1) Berne Convention52 provides at least one of the preroga-tives to the author:53 either to claim authorship of the work, also knownas the right of paternity, or the right of attribution or the right of integrity,also known as the right of respect, or both these rights. According toWIPO Guide to the Berne Convention the author can assert that he is thecreator of the work.54 This right may be exercised by the author in theway he wishes, including publishing under his pseudonym or anony-mously. The author can at any time change his mind and reject hispseudonym or abandon his anonymity. Under the right of attribution anauthor can refuse that his name is used for a work that is not his. Theright of attribution is exercisable against those permitted to reproduce thework or to take excerpts from it.

50 Rigamonti, supra note 33, at 369.51 Although as already discussed in Chapter 5, on social media the non-

commercial use of unauthorized trademarks is highly unlikely, because the socialmedia provider uses advertisements and the data of the internet users.

52 Berne Convention for the Protection of Literary and Artistic Works, 24July 1971.

53 Masouyé, supra note 49, at 44.54 Id., at 41.




According to Article 6bis(1) Berne Convention55 the author can objectto any distortion, mutilation or other modification of, or other derogatoryaction in relation to, the work which would be prejudicial to the author’shonour or reputation. According to WIPO Guide to the Berne Conven-tion, the formula for the right of integrity is very elastic and leaves roomfor discretion to the courts. A person permitted to make a reproductioncannot omit or add to the work. In case of adaptations this can becomeproblematic. In general one can assume that one violates the moral rightsif one changes the nature of the work or the author’s basic message.56

Article 6bis(2) Berne Convention57 states that the moral rights will beexercisable after the death of the author at least until the expiry of hiseconomic rights, but the countries that do not provide protection of allthe rights in the work after the death of the author may provide that someof these rights may, after the death of the author, cease to be main-tained.58 This means that after the death of the author those countries stillneed to protect either the right of attribution or the right of integrity.59

8.4 COMMON LAW’S FUNCTIONAL EQUIVALENTSOF MORAL RIGHTS

In Drummond v Altemus60 in 1894, the court enjoined a publisher fromselling a book that contained lectures by a professor that includedadditions and omissions. The plaintiff based his claim not on copyrightlaw, but ‘upon his right, quite distinct from any conferred by copyright,to protection against having any literary matter published as his workwhich is not actually his creation, and, incidentally, to prevent fraud uponpurchasers. That such right exists is too well settled, upon reason andauthority, to require demonstration’.61

Common law countries, including the US and UK, have proved thatone does not need to implement Article 6bis Berne Convention62 byimplementing explicit moral rights legislation, instead court decisions canapply other doctrines that de facto protect moral rights.

55 Supra, Chapter 2, note 3.56 Masouyé, supra note 49, at 42.57 Supra, Chapter 2, note 3.58 Masouyé, supra note 49, at 43.59 Id., at 44.60 Drummond v Altemus, 60 F. 338 (C.C.E.D. Pa. 1894).61 Id., at 338–9.62 Supra, Chapter 2, note 3.




The patchwork of laws based on ‘breach of implied license, unfaircompetition, libel, and other relatively flexible legal categories that wereshown to be expandable to include something like a moral right’,63 arebeing used as what Kwall called ‘vehicles for redressing alleged vio-lations of interests’64 protected elsewhere by moral rights. This has led tosimilar results as in civil law countries with a moral rights doctrine.65

There are also some state laws that are used for this purpose.66

Moral Rights in the US

The right of withdrawal in the US and other common law countries canbe found, if at all, in contracts.67

The right to prepare derivative works, based upon the copyrightwork,68 can provide a right of integrity. Common law courts haverecognized that even if a contract is silent about modification of a work,the assignee or licensee of a copyright may not modify the work to thepoint where the publication of the modified work would harm theauthor’s reputation, as that would amount to libel.69 According to

63 John Henry Merryman, The Refrigerator of Bernard Buffet, 27 HAST-INGS L.J. 1023, 1038 (1976).

64 ‘[T]he increasingly liberal applications of unfair competition law gener-ally and § 43(a) of the Lanham Act in particular’ had made these causes of actionpopular ‘vehicles for redressing alleged violations of interests protected else-where by the right of integrity and paternity’. Roberta Rosenthal Kwall,Copyright and the Moral Right: Is an American Marriage Possible?, 38 VAND.L. REV. 1, 18 (1985).

65 William Strauss, The Moral Right of the Author (1959) reprinted in 2STUDIES ON COPYRIGHT (Arthur Fisher, ed., Washington, DC: SenateCommittee Prints 1963), at 991.

66 Some states have laws with moral rights implications. These will not beexplored in this book. See Hughes, supra note 31, at 666.

67 Neil Netanel, Alienability Restrictions and the Enhancement of AuthorAutonomy in United States and Continental Copyright Law, 12 CARDOZOARTS & ENT. L.J. 1 (1994) at 29–30.

68 17 U.S.C. § 106(2).69 In Carroll v Paramount Pictures, Inc., plaintiff libellant filed an action

against defendant libeller for alleged breach of contract and libel, arising out ofthe release and publication of a motion picture of ‘poor quality and vastlyinferior to the plays and motion pictures with which the plaintiff has beenassociated as producer in the past and reflects adversely on his name, standingand reputation’. Carroll v Paramount Pictures, Inc., 3 F.R.D. 95 (S.D.N.Y. 1942).In Ben-Oliel v Press Publ’g Co. the court held that the newspaper need notdirectly attack the writer as ignorant to libel her; the same result would be




Masouyé, the law of defamation is especially used as a common lawprotection for moral right protection.70

Another example of the right of integrity by different means is in thecase of compulsory licences for making a musical arrangement of awork, the arrangement cannot change the basic melody or fundamentalcharacter of the work.71

The author or after his death his heirs can terminate a grant of atransfer or licence of copyright or of any right under a copyright,including the right of attribution or the right of integrity, in the five yearperiod after the grant was executed for thirty-five years (in certain casesforty years).72

The protection of the integrity of the copyright management infor-mation (CMI) in the DMCA73 can be seen as a source of the rights ofattribution and integrity under certain conditions.74 If the name of theauthor was put in the CMI, it needs to be protected against the removal oralteration of this information that facilitates copyright infringement.However, Ginsburg pointed out that outside the narrow context of theVisual Artists Rights Act, which will be discussed below, there is no rightunder copyright to attribute authorship.75

The equivalent of the right of disclosure was recognized in the USafter Warren and Brandeis’ seminal Harvard Law Review article;76 as theauthor’s right to object to the unauthorized disclosure of unpublishedworks that laid the foundation for the doctrinal construction of the right

accomplished by attributing statements to her that would make her appear so.Ben-Oliel v Press Publ’g Co., 167 N.E. 432 (N.Y. 1929). In Ellis v Hurst thecourt held that the author who has disclosed his work to the public, but did wantattribution under his pseudonym rather than his own name, could do so, relyingon his state privacy rights. Because, using his name for the purpose of trade andadvertising was without his consent. Ellis v Hurst, 121 N.Y.S. 438 (Sup. Ct.1910).

70 Masouyé, supra note 49, at 44.71 17 U.S.C. § 115(a)(2).72 17 U.S.C. § 203. See Mary LaFrance, Authorship and Termination Rights

in Sound Recordings, 75 S. CAL. L. REV. 375 (2002).73 Supra, Chapter 1, note 5.74 17 U.S.C. § 1202.75 Jane C. Ginsburg, Thirtieth Anniversary Special Issue Updates and

Reflections: Article – Moral Rights in the U.S.: Still in Need of a Guardian AdLitem, 30 CARDOZO ARTS & ENT. L.J. 73, 74 (2012).

76 Samuel D. Warren and Louis D. Brandeis, The Right to Privacy, 4 HARV.L. REV. 193, 198 (1890).




of privacy. Privacy is also a cause of action in case of an infringement ofthe right of attribution.77

Via contract law the contract parties have the freedom to agree onwhatever right of integrity or attribution.78 In contrast to moral rightsdoctrine assignees or licensees of a copyright do not have the generalobligation to give attribution to the author’s name, if they did not arrangethis contractually.79 Cornish and Llewelyn pointed to collective bargain-ing agreements that avoid non-attribution of screen credits.80 Sprigman,Buccafusco and Burns have done some interesting experiments to deter-mine the perception of the value of attribution of creative works.81

The tort of unfair competition82 can also be used as an equivalent formoral rights.83 Paragraph 43(a) Lanham Act84 can be seen as the federalcounterpart to state unfair competition laws. Misrepresentation of theproduct’s origin has also been used as a cause of action to protect theright of attribution.85 Attribution and integrity are linked: one can arguethat if the integrity of a work is breached one cannot use the name of theauthor of the work as if its integrity was still maintained.

77 In Kerby v Hal Roach Studios, the court reversed in appeal, holding thatto suggest that the plaintiff, who was a woman, wrote an compromisinginvitation letter to men whom she did not know was to impute to her a laxness ofcharacter, and to spread such imputations abroad, as defendants did, was aninvasion of the right of privacy. Kerby v Hal Roach Studios, Inc., 127 P.2d 577(Cal. Dist. Ct. App. 1942).

78 The court in Granz v Harris held that substantially abbreviating record-ings constituted breach of contract or unfair competition. Granz v Harris, 198F.2d 585 (2d Cir. 1952).

79 Cleary v News Corp., 30 F.3d 1255, 1259–60 (9th Cir. 1994).80 Cornish and Llewlyn, supra, Chapter 2, note 102, at 458.81 Sprigman, Buccafusco and Burns have found out that when creators are

given a right to attribution as a default they value credit four times higher thanwhen attribution is not the default option. Because of the ‘creativity effect’, thatcreators over-value their works too much, so that they will not be used, theyprefer to make the non-attribution the default option. Christopher Jon Sprigman,Christopher J. Buccafusco and Zachery C. Burns, What’s a Name Worth?Experimental Tests of the Value of Attribution in Intellectual Property. 93 B.U. L.REV. 1 (2012).

82 Granz v Harris, 198 F.2d 585 (2d Cir. 1952).83 Prouty v National Broadcasting Co., 26 F. Supp. 265 (D. Mass. 1939).84 § 43(a) Lanham Act, 15 U.S.C. § 1125(a).85 Id.




In 1968 in Geisel v Poynter Prods. Inc.86 the court held that defendantsviolated plaintiff’s trade name by their use of plaintiff’s trade name inconnection with the advertising and sale of dolls prior to a certain date.

However, the most famous misappropriation case is Gilliam v Ameri-can Broadcasting Cos.87 in 1976. Paragraph 43(a) Lanham Act was usedas one of the claims made in the famous misappropriation case. TheMonty Python group had written and performed three television pro-grammes originally to be broadcast for the British Broadcasting Com-pany (BBC). The Monty Python group and the BBC had a script writers’agreement in which the procedure for the BBC was detailed in case theywanted to make minor alterations before the recording of the pro-gramme.88 Time-Life Films acquired the right to distribute in the USBBC programmes including Monty Python. ABC and Time-Life Filmsagreed that ABC had the right to broadcast two ninetyminute specials,each comprising three thirty minute Monty Python programmes.89 How-ever, of the ninetyminute special ABC omitted 24 minutes, to make spacefor commercials and to accommodate the interests of the advertisers byremoving ‘offensive or obscene matters’.90 Monty Python sought apreliminary injunction but although Judge Lasker of the US DistrictCourt of the Southern District found impairment of the integrity of thework and damages, he rejected the request.91 Instead Judge Lasker ruledthat ABC needed to broadcast a disclaimer, that the Monty Python groupdissociated itself from the programme because of the editing. However, apanel of the court granted a stay of the order that required ABC tobroadcast a disclaimer that ABC had edited the programme, until MontyPython’s appeal could be heard and permitted ABC to broadcast.92

The Monty Python group sought review of this decision by the USDistrict Court that denied them injunctive relief in their action against

86 Geisel v Poynter Prods., Inc., 295 F. Supp. 331 (S.D.N.Y. 1968).87 Gilliam v. American Broadcasting Cos., 538 F.2d 14 (2d Cir. 1976).88 Id., at 2.89 Id., at 4–5.90 Id., at 6.91 According to Judge Lasker it was unclear who owned the copyright and

that ABC would suffer significant financial loss if it were enjoined a week beforethe scheduled broadcast; and that Monty Python displayed a ‘somewhat disturb-ing casualness’ in their pursuance of the matter. However, Judge Lumbardacknowledged that ‘even if BBC owned the copyright in the recorded program,its use of that work would be limited by the license granted to BBC by MontyPython for use of the underlying script’. Id., 6–7, 10.

92 Id., at 7.




ABC for copyright infringement, breach of contract, and unfair com-petition and violation of § 43(a) Lanham Act.93

The court held that the editing and cuts made to the work constitutedan actionable mutilation of Monty Python’s work.94 Because the editingand cuts constituted an unauthorized creation of a derivative work of theunderlying script and therefore copyright infringement, the questionwhether ABC had the ownership of the copyright became irrelevant. Thepublic would attribute the distorted work to Monty Python and, therefore,Monty Python would suffer irreparable injury to its professional reputa-tion. The misrepresentation of the product’s origin is cause of actionunder § 43(a) Lanham Act.95

In 1980 in Follett v New American Library, Inc.96 The court grantedplaintiff author’s motion under § 43 Lanham Act, codified as 15 U.S.C§ 1125, although plaintiff editor’s revisions were more substantial thanthose which an editor would ordinarily perform, it was misleading todepict him as principal. The Lanham Act was designed to prevent thepresentation of an author’s work to the public in a distorted form and toprotect the public and artist from misrepresentations of the artist’scontribution to a finished work. The court held that defendants wererequired to make some accommodation to prevent such misrepresenta-tion.

In 1981 in Smith v Montoro97 it was held that misattribution can beseen as false description or representation in advertising.

In 1992 in King v Innovation Books,98 author Stephen King sought toenjoin defendants, a movie production company and distributor, fromassociating plaintiff’s name with defendants’ movie, titled after plaintiff’sshort story, based on claims under § 43(a) Lanham Act, 15 U.S.C.§ 1125(a).99 The order granting plaintiff’s preliminary injunction wasaffirmed to the extent it prohibited use of a possessory credit, butreversed to the extent it prohibited use of a ‘based upon’ credit.

93 § 43(a) Lanham Act, 15 U.S.C. § 1125(a).94 Gilliam v American Broadcasting Cos., supra note 87, at 25.95 § 43(a) Lanham Act, 15 U.S.C. § 1125(a).96 Follett v New Am. Library, Inc., 497 F. Supp. 304 (S.D.N.Y. 1980).97 Smith v Montoro, 648 F.2d 602 (9th Cir. 1981).98 King v Innovation Books, 976 F.2d 824 (2d Cir. 1992).99 § 43(a) Lanham Act, 15 U.S.C. § 1125(a).




Moral Rights Legislation in the UK

Instead of the author’s inalienable right to determine when his work is fitfor publication, in English law if an author fails to publish according tohis contractual obligation, he cannot be held to his specific performancebut he will be held liable for damages.100

To explicitly implement Article 6bis Berne Convention, which wasintroduced with the Rome Act in 1928, and which was in force in the UKsince 1931, the Copyright, Designs and Patents Act (CDPA)101 wasenacted in 1988, which laid a second layer of moral rights102 over theabove mentioned rights and privileges under the common law.103 Themoral rights in the CDPA are the right of attribution,104 the right ofintegrity,105 the right against false attribution of authorship,106 and theright of privacy relating to certain photographs and films.107 However, thewaiver provisions under the CDPA108 can be extremely broad and anyunconditional blanket waivers counteract with the theory of inalienability.

Moral Rights Legislation in the US

Although according to the House Report on the implementation of theBerne Convention,109 to which the US acceded only in 1988,110 theexistence of ‘a composite of laws’111 justified that no changeswere needed to provide protection according to Article 6bis BerneConvention.112

100 Clarke v Price (1819) 37 Eng. Rep. 270 (Ch.).101 Copyright, Designs and Patents Act (CDPA), 1988, c. 48.102 § 77–89, 94–95, 103 CDPA, id.103 § 171(4) CDPA, id.104 § 77 CDPA, id.105 § 80 CDPA, id.106 § 84 CDPA, id.107 § 85 CDPA, id.108 § 87 CDPA, id.109 H.R. Rep. No. 100-609 at 34 (1988).110 The US acceded to the Berne Convention for the Protection of Literary

and Artistic Works on 16 November 1988. The treaty entered in force for the USon 1 March 1989.

111 H.R. Rep. No. 100-609 at 34 (1988).112 Hughes, supra note 31, at 665–6.




However, on 1 December 1990, a very select group of works of visualart113 was favoured for the right of attribution via the Visual ArtistsRights Act (VARA),114 only ‘accentuating the lack of such rights forother expressive works’.115

In VARA the right of attribution means: the right to claim authorshipof that work,116 right to prevent the use of his or her name as the authorof any work of visual art which he or she did not create,117 the right toprevent the use of his or her name as the author of the work of visual artin the event of a distortion, mutilation or other modification of the workwhich would be prejudicial to his or her honour or reputation.118

In VARA the right of integrity means the right to prevent anyintentional distortion, mutilation or other modification of that work whichwould be prejudicial to his or her honour or reputation, and anyintentional distortion, mutilation or modification of that work is a

113 17 U.S.C. § 101 VARA gives a definition of what is a work of visual artand what is not: A ‘work of visual art’ is – (1) a painting, drawing, print, orsculpture, existing in a single copy, in a limited edition of 200 copies or fewerthat are signed and consecutively numbered by the author, or, in the case of asculpture, in multiple cast, carved, or fabricated sculptures of 200 or fewer thatare consecutively numbered by the author and bear the signature or otheridentifying mark of the author; or (2) a still photographic image produced forexhibition purposes only, existing in a single copy that is signed by the author, orin a limited edition of 200 copies or fewer that are signed and consecutivelynumbered by the author.

A work of visual art does not include –

(A) (i) any poster, map, globe, chart, technical drawing, diagram, model,applied art, motion picture or other audiovisual work, book, maga-zine, newspaper, periodical, data base, electronic information ser-vice, electronic publication, or similar publication;

(ii) any merchandising item or advertising, promotional, descriptive,covering, or packaging material or container;

(iii) any portion or part of any item described in clause (i) or (ii);(B) any work made for hire; or(C) any work not subject to copyright protection under this title.

114 Edward J. Damich, The Visual Artists Rights Act of 1990: Toward aFederal System of Moral Rights Protection for Visual Art, 39 CATH. U. L. REV.945, 958–64 (1990). Dana L. Burton, Artists’ Moral Rights: Controversy and theVisual Artists Rights Act of 1990, 13 VAND. J. ENT. & TECH. L. 463, 505(2011).

115 Hughes, supra note 31, at 673.116 17 U.S.C. § 106A (a)(1)(A).117 17 U.S.C. § 106A (a)(1)(B).118 17 U.S.C. § 106A (a)(2).




violation of that right,119 to prevent any destruction of a work ofrecognized stature, and any intentional or grossly negligent destructionof that work is a violation of that right.120 These rights of attribution andof integrity are protected only during the author’s lifetime.121

Works outside this definition can only rely on the above mentionedcommon law causes of action. To waive the moral rights unconditionallyis not possible.122

8.5 TRADEMARK LOGO AND MORAL RIGHTS

In Gilliam v American Broadcasting Co.,123 a misattribution case in thepre-VARA US, the connection between trademark and moral rightsseemed natural. Although concurring, Judge Gurfein noted that theLanham Act is ‘not a substitute for droit moral which authors in Europeenjoy’, because the ‘Lanham Act does not deal with artistic integrity. Itonly goes to misdescription of origin and the like’.124

In 2003, the US Supreme Court in Dastar Corp. v Twentieth CenturyFox Film Corp.125 ruled that § 43(a)(1) Lanham Act,126 cannot be used asa cause of action for non-attribution. Fox, SFM Entertainment and NewLine Home Video accused Dastar of reverse passing off, because itmarketed the Fox video (whose film rights were in the public domain) asits own. However, the Supreme Court interpreted that ‘origin’ in§ 43(a)(1)(A) Lanham Act127 did not mean the source of any idea,concept or communication.128 ‘Recognizing a § 43(a) 15 U.S.C.§ 1125(a), cause of action here would render superfluous the provisionsof the Visual Artists Rights Act that grant an artistic work’s author “the

119 17 U.S.C. § 106A (a)(3)(A).120 17 U.S.C. § 106A (a)(3)(B).121 17 U.S.C. § 106A (d)(1).122 An exception: ‘In the case of a joint work prepared by two or more

authors, a waiver of rights under this paragraph made by one such author waivessuch rights for all such authors’. Last sentence of 17 U.S.C. § 106A (e)(1).

123 Gilliam v American Broadcasting Co., supra note 87.124 Id., para. 4.125 Dastar Corp. v Twentieth Century Fox Film Corp. et al, 539 U.S. 23

(2003).126 Trademark (Lanham) Act of 1946 § 43(a)(1), Pub. L. 79-489, 60 Stat. 441

15 U.S.C. § 1125(a)(1) (2006).127 Id.128 Supra note 125, at 37.




right … to claim authorship.”’129 However, the substitution argument isnot convincing since VARA provides its protection to a very select groupof visual artists.

Hughes pointed out that § 43(a)(1) Lanham Act130 used the word ‘or’no less than 16 times.131 To demonstrate that Hughes’ qualification of§ 43(a)(1) Lanham Act as ‘unencumbered by clarity’132 was well chosen,§ 43(a)(1)(A–B) Lanham Act will be displayed whereby the word ‘or’has been shown every time in bold:133

(1) Any person who, on or in connection with any goods or services, or anycontainer for goods, uses in commerce any word, term, name, symbol, ordevice, or any combination thereof, or any false designation of origin,false or misleading description of fact, or false or misleading represen-tation of fact, which –(A) is likely to cause confusion, or to cause mistake, or to deceive as to

the affiliation, connection, or association of such person withanother person, or as to the origin, sponsorship, or approval of hisor her goods, services, or commercial activities by another person,or,

(B) in commercial advertising or promotion, misrepresents the nature,characteristics, qualities, or geographic origin of his or her oranother person’s goods, services, or commercial activities, shall beliable in a civil action by any person who believes that he or she isor is likely to be damaged by such act.

Trademark as a Vehicle of Communication

As Schechter asserted, trademarks do not only symbolize the proprietor’sgoodwill but also create it.134 The trademark functions to identify aproduct as satisfactory and thereby to stimulate further purchases by theconsuming public.135 By asserting that origin in § 43(a)(1)(A) LanhamAct does not mean the source of any idea, concept or communication, theSupreme Court in Dastar136 is ignoring the communication function ofthe trademark.

129 Supra note 125, at 24.130 Supra note 126.131 Hughes, supra note 31, at 686.132 Id., at 682.133 One can argue since § 43(a)(1)(A) Lanham Act refers to (B) using

another ‘or’, that the number is for (A) is 17 plus the 6 times ‘or’ in (B), whichbrings the total to 23.

134 Schechter, supra, Chapter 1, note 83, at 818.135 Id., at 818.136 Supra note 125.




Judge Scalia asserted that brand-loyal consumers do not believe thatbrands such as Coca-Cola Company or PepsiCo were the companies thatwere the origin of the drink, in the sense that they were the first to devisethe formula. ‘The consumer who buys a branded product does notautomatically assume that the brand-name company is the same entitythat came up with the idea for the product, or designed the product – andtypically does not care whether it is’.137 Hughes refuted Judge Scalia’sexamples by showing the unbroken line between the persons who devisedthe formula, name and logo, and the respective corporations. Hughesmade clear that neither company produces most of the cola marketedunder their names and that origin here does not mean manufacturingentity, but rather licensing of their brands.138 One can also think aboutoriginal equipment manufacturers (OEM) in China and EU and USlicensors. Judge Scalia acknowledges that origin of goods ‘might bestretched … to include not only the actual producer, but also thetrademark owner who commissioned or assumed responsibility for(“stood behind”) production of the physical product, so that “origin” canbe interpreted as “sponsorship” or “approval,” conform § 43(a)(1)(A)’,139

which can be categorized as protection against a likelihood of confusion.Excluding a likelihood of confusion, what is the link between moralrights and trademark dilution?

8.6 TRADEMARK AS PERSONIFICATION OF THETRADEMARK HOLDER

One must make a distinction between personality rights on the one handand the personality of the copyright holder on the other. Here thepersonification of the trademark by the trademark holder will be pro-posed as a linkage between the personalities of trademark holder andtrademark.

Personality Rights

Doctrinarily, the distinction between moral rights and personality rights isthat the rights of personality is a category of rights that includes but isnot limited to the moral rights. The rights of personality are also

137 Id., at 32.138 Hughes, supra note 31, at 687.139 Hughes points out that § 43(a)(1) Lanham Act has no less than 16 times

the word ‘or’ in the provision. Id., at 688.




inalienable and are premised on the personality and not on the existenceof any work.140 Patrimonial rights141 in Swiss law could be protected viarights of personality even before Switzerland introduced moral rights intoits Law on Copyright and Neighbouring Rights which entered into forceon 1 July 1993.142

Stability-dynamism paradoxAccording to Heraclitus one never enters the same river twice.143 Butwhen one enters the river for the second time, the river is still named thesame. The same can be said of authors, who regenerate all of their cellsevery seven years144 and accumulate experiences which might influencetheir work, but often still go by the same name. Trademark holders’products and services oftentimes change over time due to changes in themarket demands and innovation. However, oftentimes, the trademarkremains stable during these changes of the product, in order to accumu-late goodwill and not destroy the investments made via advertisements inthe brand. The trademark holders cultivate their trademark logo as abeacon of goodwill, welcoming customers back and inviting new ones.

In some civil law countries the author has moral rights even after hislife, in order to protect the honour of the family of the author. In thisway, moral rights can be seen as intergenerational. Like the family of anauthor that passed away and that share the name with the deceased,trademark holders operate under the same logo as their predecessors. Justas families cultivate values and pass them on to the next generation, sohave trademark holders corporate cultures they cultivate and continue.

140 Rigamonti, supra note 33, at 393.141 Rigamonti points to Friedrich Carl von Savigny, SYSTEM DES HEUTI-

GEN RÖMISCHEN RECHTS 1 (Berlin: Veit, 1840), at 339–40, for a classicdefinition of patrimony: the totality of an individual’s property rights andobligations. Id., at 392, footnote 221.

142 François Dessemontet, ‘Letter from Switzerland: The New CopyrightAct’, at 6–8, accessed 9 February 2015 at: http://www.unil.ch/webdav/site/cedidac/shared/Articles/New%20Copyright%20Act.pdf.

143 ‘Everything changes and nothing remains still … and … you cannot steptwice into the same stream’. Plato, CRATYLUS (360 BCE) (Benjamin Jowett,transl. 1871, New York: Vintage Books, 1991), para. 402, sect. a line 8.

144 ‘Every single cell in our skeleton is replaced every 7 years’. Institute forStem Cell Biology and Regenerative Medicine, Stanford School of Medicine,‘Research’, accessed 9 February 2015 at: http://stemcell.stanford.edu/research/.




Trademark holders can continuously keep a trademark registered forgenerations.145

As already pointed out in the literature review, Hughes clarified theinterest of non-owners in stable marks, that might outweigh the interestsof those who want to be able to recode the mark.146 And paradoxicallysome kind of stability is required in order to recode at all, becauseotherwise the difference of the recode in relation to the encoded versioncannot even be perceived.147

Personification of the trademark holder in the trademarkJust as the work includes constant idiosyncrasies of its author, thetrademark has unique everlasting DNA of its trademark holder. Feldmandoes not concur with this assertion.148

To continue the metaphor used above, the name of the ever changingriver might stay the same, but what if someone without permission ischanging the stones in the river so that the course of the river isrepositioned and that some shores will be inundated? When the contentof a copyright work is adapted a bit without the permission of thecopyright holder, this would constitute copyright infringement and aviolation of the right of integrity of the work. But if the work is adaptedin such a rigorous way, a transformation could take place, so that a newwork comes into being of which the transformer is the author. Atrademark is encoded with meaning by the trademark holders, then thetrademark is decoded by the consumers who come across it. Just as thecopyright of a work can be infringed and the right of integrity of itscontent violated, the recoding can constitute trademark dilution if thefamous trademark, or trademark with a reputation is used in an un-savoury way (as discussed in Chapter 6 ‘Trademark Dilution and ItsDefences’).

Copyright can be assigned but the moral right of the work cannot. Thequestion is whether a trademark can be assigned or transferred withoutthe accompanying goodwill. For example, when The Body Shop, acosmetics chain that was known for its corporate social responsibility andenvironmental policies, was sold to cosmetics manufacturer L’Oréal,

145 The iconic red triangle trademark of Bass Brewery was registered in 1875and has been registered continuously ever since.

146 Justin Hughes, ‘Recoding’ Intellectual Property and Overlooked AudienceInterests, 77 TEX. L. REV. 923, 941 (1999).

147 Id.148 ‘Unlike copyrights, trademarks do not equally express the “personality”

of the creator’. Feldman, supra, Chapter 2, note 77, at 173 (2003).




some were concerned that the goodwill that The Body Shop built up withsocial activism would de facto be lost. In particular there was acontroversy about whether The Body Shop as part of L’Oréal would stillhonour their pledge not to test on animals.149

Art becoming commoditized, trademarks becoming artProfessor Tang proposed to shift away from art’s classic ‘personhood’ or‘anti-commodification’ arguments, and asserted that due to the commodi-fication of art, moral rights can do for art what trademark law has donefor other commodities by ‘avoiding post-sale consumer confusion, pro-moting truthful source identification, and encouraging active mark polic-ing’.150 Based on the fact that trademarks have developed fromcommodious vehicles to carriers of meaning, and that there is a con-tinuum from commerce to culture, it can be argued that the trademarklogo can be well aligned with personhood. This book asserts that thetrademark could be better protected if moral rights were added to theactionable rights for trademark infringement and dilution.

Transforming and trans-codingTransformation can be understood as the introduction of new insights,understandings, expression and meaning to a work. Therefore it looks alot like recoding of a trademark. When trademarks are recoded in acounter-majoritarian manner, which media scholar Stuart Hall would call‘trans-coding’,151 Tan argued that they should be able to obtain protectionunder the freedom of speech guarantees.152

149 Founder of The Body Shop Roddick countered the criticism. ‘Rather, shesees herself as a kind of “trojan horse” who by selling her business to a hugefirm will be able to influence the decisions it makes’. Claudia Cahalane,‘Interview: Anita Roddick, “I Believe They Are Honourable and the Work TheyDo Is Honourable”’, The Guardian, 3 November 2006, accessed 9 February 2015at: http://www.guardian.co.uk/business/2006/nov/03/ethicalliving.environment.

150 Xiyin Tang, The Artist as Brand: Toward a Trademark Conception ofMoral Rights, 122 YALE L.J. 218, 222, 248–9 (2012).

151 ‘[T]aking an existing meaning and re-appropriating it for new meanings’.Stuart Hall, The Spectacle of the ‘Other’, in REPRESENTATION: CULTURALREPRESENTATIONS AND SIGNIFYING PRACTICES (Stuart Hall, ed., Lon-don: Sage Publications, 1997), at 270.

152 David Tan, ‘Lady Gaga and Popular Culture: Rethinking PersonalityRights and Trademarks’, presentation, University of Hong Kong, 10 October2012, at 7, accessed 9 February 2015 at: http://www.lawtech.hk/wp-content/uploads/2012/10/David-Tan-HKU-Oct-2012amend.pdf.




No bright line test is available to determine when transformation hastaken place. However in Kelly v Ariba Soft Corp.153 and in Perfect 10,Inc. v Google Inc.154 each court determined that repurposing of a work toaid identification of the original work is transformative. This repurposingof a work to aid identification of the original work is similar to thedescriptive use of trademarks as discussed in Chapter 5 ‘TrademarkInfringement and Its Defences’.

In Kelly155 and Perfect 10,156 thumbnail representations of images wereallowed to make these images searchable via search engines Ditto.comand Google. In these cases the objects of contention were the reproduc-tions of copyrighted photographs by Les Kelly and Perfect 10, respec-tively. The question remains why these search engines have to make theimages copy-and-pasteable, and why Google Images has only a ‘Imagesmay be subject to copyright’ disclaimer. Google Images does not limititself to indexing the pictures and providing thumbnails which link to theoriginal websites. Instead it provides first an overview with thumbnails,then after clicking on one thumbnail the image is given in high resolutionand in a bigger size than even the original imposed over the originalwebsite, so that the picture can be copied without even visiting theoriginal website. On the right hand side there is a link to the original site,a link to a full-size image, that also does not show anything of theoriginal site. Chapters 1 III iii and 7.4, discusses that this presentation ofimages, including trademark logos can pose serious problems for trade-mark holders.

Personality of the Trademark

‘For what are our faculties, but the extension of our personality? andwhat is property, but an extension of our faculties’.157

Rierson described famous trademarks as ‘anthropomorphized corporatechildren that have fictional personalities and “friends” on Facebook’.158

She illustrated this phenomenon with the Barbie trademark owned byMattel. The doll Barbie has over 2.5 million Facebook friends. ‘Matteldeliberately uses Barbie’s online image to create a specific persona

153 Supra, Preface, note 8.154 Supra, Preface, note 3.155 Supra, Preface, note 8.156 Supra, Preface, note 3.157 Frédéric Bastiat, THE LAW (1850) (Auburn, AL: Ludwig von Mises

Institute, republished 2007), at 2.158 Rierson, supra, Chapter 2, note 81, at 214.




associated with the famous Barbie trademark’.159 Rierson pointed out thatone should consider the intensely personal relationship the corporateworld has with its brands to understand the analogy between moral rightslaw and dilution.160

Trademarks often become at least as famous as celebrities. Trademarkholders often follow the same path as celebrated personalities, bypresenting their trademark as a persona. Therefore Tan’s scholarly workon celebrity, culture studies and the right of publicity has been enlight-ening.161 David Marshall’s Celebrity and Power citation162 by Tan, theword ‘celebrities’ can be substituted for ‘trademarks’ without comprom-ising any of its veracity:

[Celebrities] are the active agents that in the public spectacle stand in for thepeople … Celebrities, in this fluid construction of identity through consump-tion, represent flags, markers, or buoys for the clustering of cultural signifi-cance through patterns of consumption … The celebrity functions as asemistable identity and cultural icon that runs through several cultural formsand establishes an identity through which an audience can estimate thecultural forms’ relative value.163

8.7 TRADEMARK DILUTION SEEN AS MORAL RIGHT

Bird compared trademark dilution with moral rights in 2009.164 Portremarked that the trademark right in the US has become ‘more similar tothe nature and extent of moral right protection, rather than the mere rightto exclude’.165 Port argued that ‘[t]he only justification that makes sense[for US dilution laws] is to say that the holders of famous marks obtain apersonality right in and to that mark much like the notion of a moral

159 Id., at 274.160 Id.161 David Tan, Beyond Trademark Law: What the Right of Publicity Can

Learn from Cultural Studies, 25 CARDOZO ARTS & ENT. L.J. 913 (2008).162 David Marshall, CELEBRITY AND POWER: FAME IN CONTEMPOR-

ARY CULTURE 61, 244–5 (Minnesota: U of Minnesota Press, 1997). Tan, supranote 161, at 947, footnote 165.

163 Marshall, id., Tan, supra note 161, at 947, footnote 165.164 Robert C. Bird, Moral Rights: Diagnosis and Rehabilitation, 46 AM.

BUS. L.J. 407, 438–9 (2009).165 Kenneth L. Port, The Expansion Trajectory: Trademark Jurisprudence in

the Modern Age, 92 J. PAT. & TRADEMARK OFF. SOC’Y 474 (2010).




right’.166 Rierson asserted that trademark dilution is an unjustifiablemoral right for trademark owners and recommended that it be amendedor eliminated:

A better explanation for dilution, as well as its practical utilization, is that it isa moral right that has been statutorily conferred upon the corporations thatcreate, nurture, and profit from famous trademarks. Like the authors ofcreative works, these corporate entities would like to control all uses of theirmarks, particularly those that are offensive to them, and not just those thatcause them economic harm.167

One can argue that use of trademarks that is offensive has a negativeimpact on the value of the trademark therefore causes economic harm.

In contrast, Port asserted that the only justification for trademarkdilution law is that holders of famous marks obtain a personality right,much like the notion of a moral right.168 However, trademark dilution lawdoes not protect any non-famous trademark logo.

Why Trademark Dilution Does Not Pre-Empt the Need for a MoralRight for the Trademark Logo

As illustrated above by proponents and opponents trademark dilution lawcan be seen as a kind of moral right for trademarks. However, trademarkdilution only protects those trademark logos that are famous or have areputation. However, Chapters 5 and 6 made clear that the unauthorizednon-commercial use of a trademark logo, that has not reached therequested level of fame or reputation, can cause substantial damages tothe reputation and goodwill of the trademark logo.

Arguably, the unauthorized non-commercial use of the trademark logocan lead to confusion and/or to a violation of the integrity of thetrademark logo, therefore a special moral right to integrity for thetrademark logo, in contrast to trademark names, could be a remedy thatcould be automatically enforced, as will be demonstrated in Chapter 9‘Implementation of a Paradigm Shift’.

Trademark dilution doctrine is discriminatory against trademarks thathave not yet reached a certain level of fame or reputation, as concludedin Chapter 6. There is no convincing reason, but a semantic one, toprovide only famous trademarks or trademarks with a reputation the

166 Kenneth L. Port, Judging Dilution in the United States and Japan, 17TRANSN’L L. & CONTEMP. PROBS 667, 681–2 (2008).

167 Rierson, supra, Chapter 2, note 81, at 269.168 Port, supra note 166, at 681.




protection against trademark dilution. Often the argument is made thatbecause if a trademark is not famous or has no reputation there is nothingto dilute. A glass of wine can be diluted by adding water. However, fame,notoriety or reputation of a trademark is unlike wine. The differencebetween a trademark that is considered famous and one that is, forexample, famous in a smaller market is relative. To withhold theprotection against trademark dilution by tarnishment only for famousbrands seems to be arbitrary and perverse. Why should it be possible totarnish a trademark that is only famous in a small market? Besides, eachtrademark that is not recognized as famous has the potential to reach thatstage at some moment. One can also argue that to reward a trademarkwith extra protection once it has become famous or gained a reputationbecomes effective and cannot be seen as an ex ante incentive.

Compare this with the sensible principle in author’s right that themoral right protects the reputation or honour of each author, regardless ofhis level of reputation. To automatically enforce famous trademark logosagainst trademark dilution is not possible, unless these trademarks arefirst acknowledged as famous or in the possession of a reputation by therelevant trademark authority and a database is set up in which the famoustrademark logos can be distinguished from the non-famous trademarks.This book holds it preferable that logos that have passed the threshold ofdistinctiveness, inherent or acquired, and are registered as trademarksshould be protected against unauthorized use, including non-commercialuse by the moral right of integrity. As already alluded to in Chapter 6, themoral right of integrity is fully compatible with the right to freedom ofexpression on social media, by linking back to the original trademarklogo. As will be explained in Chapter 9, the application of the moral rightof integrity opens up the possibility of automatic enforcement.

8.8 RATIONALE FOR MORAL RIGHT OF INTEGRITYFOR THE TRADEMARK LOGO

‘Trademarks, trade names, logos, and the other symbols of commerce haveevolved. The law must evolve with them’. Judge Kozinski of the Ninth Circuit(1993)169

To copy-and-paste a trademark logo on social media and profit from itsattractiveness or reputation, is reaping where one has not sown. This

169 Kozinski, supra, Chapter 1, note 39.




equals misappropriation of or unjust enrichment from the trademarkholder who has expended labour, skills and money170 on its trademarklogo.

The rationale for moral right of integrity for the trademark logo is notonly its proprietary171 nature172 which deserves protection against plun-der,173 but also the destruction of capital invested in its reputation and theneed for stable trademark logos, as discussed in Chapter 8.4. Aokiasserted that a trademark logo can be seen as the result of a creativeprocess ‘which leads to their ability to be owned’.174 Lastowka demon-strated that some courts use trademark law to protect creativity,175 whichleads to a call to limit the scope of ownership when third persons useexisting trademarks for their successive creative efforts.176

Trademark logos are nothing more than, but also nothing less than,signifiers of the source of origin and carriers of reputation. Therefore thetrademark holder should not only be the sole determinant of this propertywhen used in a commercial manner, but also in a non-commercialmanner,177 just like the proprietor of any property used for commercial

170 Compare for misappropriation in copyright law Internat’l News Service vAssociated Press, 248 U.S. 215 (Sup Ct, 1918).

171 Locke: ‘Whatsoever then [man] removes out of the State that Nature hathprovided, and left it in, he hath mixed his Labour with, and joyned to itsomething that is his own, and thereby makes it his Property ‘. Locke, supra,Chapter 2, note 166, Ch. 5, § 27.

172 The Lockean notion that one is entitled to the fruits of one’s labor – andthe converse, that one is not entitled to profit from the results of someone’s else’slabor – was dominant in the 19th century and prevalent in early trademark law.Mark P. McKenna, The Normative Foundations of Trademark Law, 82 NOTREDAME L. REV. 1839 (2007).

173 ‘Man can only derive life and enjoyment from a perpetual search andappropriation; that is, from a perpetual application of his faculties to objects, orfrom labor. This is the origin of property. ‘But also he may live and enjoy, byseizing and appropriating the productions of the faculties of his fellow men. Thisis the origin of plunder’. Bastiat, supra note 157, at 5.

174 Keith Aoki, Authors, Inventors and Trademark Owners: Private Intellec-tual Property and the Public Domain, Part II, 18 COLUM.-VLA J.L. & ARTS191, 242 (1994).

175 Greg Lastowka, Trademark’s Daemons, 48 HOUS. L. REV. 779, 791–8(2011).

176 Dreyfuss, supra, Chapter 1, note 18.177 When testifying before Congress on the subject of the Federal Trademark

Dilution Act, counsel for Warner Brothers Studios said: ‘[T]he trademark owner,who has spent the time and investment needed to create and maintain theproperty, should be the sole determinant of how that property is to be used in a




purposes does not have to tolerate third parties using his property if he isnot using it commercially.

No excuse for copying someone’s trademark name, even more so forsomeone’s trademark logoAccording to Professor Beebe: ‘[o]ne reason why trademark law hastraditionally granted broader protection to inherently distinctive marks isto provide an incentive to trademark producers to generate new wordsrather than appropriate from the language preexisting words for commer-cial purposes’.178 Judge Kozinski in Dreamwerks Prod. Group Inc. vSKG Studio179 cast doubt on the defendant’s contention that ‘almostevery combination of words has been taken by someone doing businesssomewhere in what may be a loosely related field’,180 suggesting that thedefendant could easily have authored a new trademark. ‘A clever newtrademark’, Judge Kozinski wrote, ‘diversifies both the marketplace andthe marketplace of ideas; a takeoff or copy of a mark, even if accidental,adds nothing but confusion. This dispute could have been avoided hadDreamWorks been more careful, or a tad more creative, in choosing itsname’. Judge Kozinski’s words are a fortiori applicable to the trademarklogo.

‘Warming up’of undesirable user generated contentLessig explained that online behaviour is influenced by ‘laws, marketforces, social norms, and code, the equivalent of architecture in real-life,the physical and digital infrastructure of what we call cyberspace’.181

Norms are ‘social attitudes of approval and disapproval’, according toSunstein.182 Many internet users do not know that there is anythingwrong with copying and pasting a trademark on social media without theauthorization of the trademark holder. Their idea is that they can useeverything they find on Google Images which is copy-and-pasteable.

commercial manner’. Federal Trademark Dilution Act of 1995: Hearing Beforethe Subcomm. on Courts and Intellectual Property of the H. Comm. on theJudiciary, 104th Cong. 111 (1995) (statement of Nils Victor Montan, VicePresident and Senior Intellectual Property Counsel, Warner Brothers).

178 Beebe, supra, Chapter 1, note 75, at 673.179 Dreamwerks Prod. Grp., Inc. v SKG Studio, 142 F.3d 1127 (9th Cir.

1998).180 Id., at 1132.181 Lawrence Lessig, CODE V.2.0 (New York: Basic Books 2006), at 5–6,

24.182 Cass R. Sunstein, Social Norms and Social Roles, 96 COLUM. L. REV.

903, 914 (1996).




‘Why otherwise did Google make this technically possible?’ This rhetori-cal question is understandable. The norm of the internet users and thesocial media providers clearly differs from that of the trademark holders.The trademark holders have been overwhelmed by the opportunities butalso risks of social media, and some have been defeatist about what canbe done to teach internet users a norm that they should not use thetrademark logo unauthorizedly and respect its moral right of integrity.Because internet users see others use trademark logos unauthorizedly,Lee argued that this can lead to a ‘warming up’ instead of a chillingeffect on user generated content.183

Smith wrote that ‘[w]here the harms of imprecise exclusion outweighthe benefits of simple interface conditions, a governance regime, usingmore complex interface conditions, is justified’.184 The implication is thattrademark law would be expanded with the moral right of integrity forthe trademark logo. Therefore, one can conclude that the unauthorizeduse (including the non-commercial use) of the trademark logo should beprotected by the moral right of integrity. However, until this becomes areality trademark holders can already start protecting their trademarklogo on social media in a contractual way, see Chapter 9.3 ‘ContractualSolution’.

183 E. Lee, Warming Up to User-Generated Content, U. ILL. L. REV. 1459,1459 (2008).

184 Henry E. Smith, Intellectual Property as Property: Delineating Entitle-ments in Information, 116 YALE L.J. 1742, 1765 (2007).




9. Implementation of a paradigm shift

Proactive solutions in walled gardens of socialmedia as testing grounds towards algorithmicjustice

9.1 INTRODUCTION

When commerce writes code, then code can be controlled,because commercial entities can be controlled.1

Lessig prophetically added to the quote above that: ‘Commerce has apurpose, and government can exploit that to its own end. It will,increasingly and more frequently, and when it does, the character of theNet will change. Radically so’.2 However, this does not need to bedystopian as will be shown in this chapter.

In order to provide sufficient protection of the trademark logo on socialmedia, a paradigm shift is needed. Chapter 9.2 proposes an amendmentof the law. Until the legislation has been adapted, a contractual solutionwith a comparable outcome could be implemented as a testing ground forthe juridical solution, as will be proposed in Chapter 9.3. Mindful of theautomatic enforcement requirement, Chapter 9.4 makes the authorizeduse of the trademark transparent. Then, Chapter 9.5 explains that theunauthorized use of the trademark needs to be removed. Chapter 9.6suggests instead of the ineffective safe harbour provisions an effectivepre-upload filtering solution. Besides the advantage of automatic enforce-ment, Chapter 9.7 makes clear that the pre-upload filtering system alsoprovides the possibility of optimizing policy goals. Chapter 9.8 discussesthat when the above mentioned system has been implemented theparadigm will shift which can lead to a situation that can be calledalgorithmic justice. If that happens, legal certainty and predictability for

1 Lessig, supra, Chapter 8, note 181, at 72.2 Id., at 80.

303

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all stakeholders can be enhanced and trust3 in a fair system where thetrademark logo is respected can be restored.

9.2 JURIDICAL SOLUTION

‘For every day we stand entrenched in the legacy models of the past we aredenying the opportunity of the future.’4

Often, law is perceived as lapidary. But it is a living creature. It can givebirth to more law, or if it is cut off from the oxygen of societal utility, itcan become obsolete and perish. In 1927, Schechter placed his vision oftrademark expansion in a historical perspective: ‘There is no part of thelaw which is more plastic than unfair competition, and what was notreckoned an actionable wrong 25 years ago may have become suchtoday’.5 Schechter’s vision of trademark expansion was partly imple-mented 68 years later and only in a diluted form (as pointed out inChapter 6 ‘Trademark Dilution and Its Defences’). Then, the protectionand enforcement of content was impacted by the most disrupting mediumso far: the internet, which led to accommodations in the US and EU viasafe harbour provisions which lead to undesirable behaviour and whichincreased legal uncertainty (see Chapter 7 ‘Intermediary Liability’). Butthe rise of social media with its user generated content was not factoredin, thanks to the legal lag.6 Therefore a right to protect and enforce themoral rights for the trademark logo is proposed (see also Chapter 8‘Moral Right of Integrity’). One can distinguish three moral rights, which

3 ‘Trust is the expectation that arises within a community of regular, honest,and cooperative behavior, based on commonly shared norms, on the part ofmembers of that community’. Francis Fukuyama, TRUST: THE SOCIALVIRTUES AND THE CREATION OF PROPERITY (New York: Free PressPaperback, 1995), at 26.

4 Brian Fitzgerald, Ch. 9: Copyright 2010 – the Future of Copyright Law, inCOPYRIGHT LAW, DIGITAL CONTENT AND THE INTERNET IN THEASIA-PACIFIC (Brian Fitzgerald, Fuping Gao, Damien O’Brien and SampsungXiaoxiang Shi, eds., Sydney: Sydney University Press, 2008), at 173.

5 Schechter opens his 1927 article, which became the fundament of thedilution doctrine, with a sentence from the case Ely-Norris Safe Co. v MoslerSafe Co., 7 F. (2nd) 603, 604 (C.C.A. 2nd, 1925). Supra, Chapter 1, note 83, at813, footnote 1.

6 This author proposes to apply the theory of the cultural lag by Veblen onthe fact that the law is drafted in response to changes in society, but when thelaw is implemented, after a complex and lengthy legislative cycle, new changesin society require new law. Veblen, supra, Chapter 1, note 23.




will be demonstrated in Chapter 9.2, respectively as ‘the right to discloseand withdraw’, ‘the right of attribution’ and ‘the right of integrity’. Theserights could be implemented together with a proactive model of OSPliability that must substitute the de facto defunct safe harbour provisions.

Right to Disclose and Withdraw

The right to disclose and withdraw a trademark logo should be reservedfor trademark holders. Just as an author is the only one who can decidewhen and where his work will be disclosed, so too should the trademarkholder be the only one who decides when and where his trademark logowill be disclosed or withdrawn. Internet users should exclusively be ableto use a trademark with the permission of the trademark holder as long asthe trademark holder does not want to withdraw its trademark logo fromthe social media sites, which is more practical than one would expect atfirst glance, as can be read below (see Chapter 9.5 ‘Making unauthorizedtrademark use disappear’).

Right ofAttribution

The trademark logo has been described as a way to clarify what theorigin of the source is (see Chapter 2.8 ‘Consumer interest-relatedfunctions of trademark infringement’). This could be seen as the trade-mark version of the right of attribution. Chapter 6 ‘Trademark Dilutionand Its Defences’ concluded that the right to extend the trademark logo toother activities should be protected. This would make dilution by blurringsuperfluous, because at least the trademark logo could distinguishbetween two companies that use the same trademark name. The right toextend the trademark logo can be compared in copyright to the protectionof a derivative work that can only take place with the permission of theauthor. If the trademark logo is used as an illustration with a criticalcomment, this book argues that it would show respect for the journalisticprinciple of a fair hearing to all parties involved to link back to the site ofthe trademark holder as proposed in Chapter 6 ‘Trademark Dilution andIts Defences’. Metadata is now exclusively used or abused7 for copyright

7 Jonathan Bailey, ‘Facebook, Flickr Strip Copyright Data from Images’,Plagiarism Today, 5 November 2008, accessed 9 February 2015 at: http://www.plagiarismtoday.com/2008/11/05/facebook-flickr-strip-copyright-data-from-images/.

Implementation of a paradigm shift 305



protection,8 but there is no reason why the use of metadata cannot beextended to the protection of the trademark logo as well.

Right of Integrity

Dilution by tarnishment, in which a trademark with a reputation or afamous trademark is protected against usage in an unsavoury way, iscomparable to the right of integrity that protects against any distortion,mutilation or other modification of, or other derogatory action in relationto, a copyright work. This book opines that all trademark logos should beprotected from tarnishment and not just the trademark logos from famoustrademarks or trademarks with a reputation. Trademark logos that falloutside the scope of a famous trademark or trademark with a reputationcan still be famous or have a reputation within a more limited market orwill be famous in the future.9 Thus, there is no reason why suchtrademark logos should be declared outlaws.

The right to freedom of expression can be respected together with theright of integrity of the trademark. For example, if the trademark logo isused in an online parody, the right of integrity of the trademark logo canbe maintained by linking back to the original version of the trademarklogo.10

8 Conrad Chavez, ‘Facebook now Displays Image Copyright and CaptionMetadata in Photo Albums’, Conrad Chaves Blog, 27 June 2011, accessed 9February 2015 at: http://blog.conradchavez.com/2011/06/27/facebook-now-displays-image-copyright-caption-metadata/. Exchangeable image file for-mat (Exif) is a standard that specifies the formats for images, sound, usingmetadata tags, covering a broad spectrum, including copyright information.Exchangeable image file format, Wikipedia, accessed 9 February 2015 at:http://en.wikipedia.org/wiki/Exchangeable_image_file_format.

9 As pointed out in Chapter 8, the stability-dynamism paradox makes anydetermination of the fame or reputation of a trademark logo a historic snapshot.

10 It is relevant to also read Litman on linking back for copyright works:‘Authors have a legitimate concern, and that concern is often shared by thepublic. Finding the authentic version of whatever document you are seeking canin many cases be vitally important’. Jessica Litman, Symposium: Innovation andthe Information Environment: Revising Copyright Law for the Information Age,75 OR. L. REV. 19, 47 (1996).




9.3 CONTRACTUAL SOLUTION

Until the law is amended, the protection and enforcement of thetrademark logo on social media can be tested using contractual solu-tions.11 Samuelson’s words can be used again: ‘Both bodies of law[contract law and intellectual property law] must have to work together ifthe information economy is to achieve its full potential’.12 Chapter 9.3explains the walled garden phenomenon, then discusses the advantages ofdiversity, and investigates how market forces shape law in the privatesphere. Finally Chapter 9.3 looks at how technological developments canbenefit a contractual solution.

Walled Garden Phenomenon

Social media, such as Facebook, Twitter and Pinterest, have broughtapplications together behind what can be called walled gardens, whosefunctions once could only be found at different places on the internet.Helmond and Gerlitz articulated it thus: ‘The move from link to like asthe dominant web currency symbolizes the shift in the attention economyfrom search-driven navigation to the self-referential or gated dwelling insocial media’.13 The implications are that these applications can amplifyeach other, but also that all of these applications, where internet usersused to have a more private relationship with the applications, werebrought into a more public place. However, although the character of

11 Anthony Lester’s remark about UK defamation law could be applied hereto trademark law: ‘Our law suffers from the twin vices of uncertainty andoverbreadth. The litigation that it engenders is costly and often protracted. It hasa severe chilling effect on the freedom of expression …’ Anthony Lester, ‘TheseDisgraceful Libel Laws Must Be Torn Up, The Times’, 15 March 2011, accessed9 February 2015 at: http://www.thetimes.co.uk/tto/opinion/columnists/article2946193.ece.

12 Pamela Samuelson, Intellectual Property and Contract Law for the Infor-mation Age: Foreword to a Symposium, 87 CAL. L. REV. 1 (1999).

13 Anne Helmond and Carolin Gerlitz, Hit, Link, Like and Share: Organizingthe Social and the Fabric of the Web in a Like Economy, DMI-mini conference,University of Amsterdam, 24–5 January 2011, accessed 14 June 2015at: http://www.annehelmond.nl/wordpress/wp-content/uploads//2011/04/GerlitzHelmond-HitLinkLikeShare.pdf.




these walled gardens might seem in some aspects rather public,14 they arewalled and fall within the contractual barriers set by the walled gardenowner.

Therefore, inside a walled garden a different micro-ecology of rulesand regulations prevail in comparison to the outside. To demonstrate thewalled garden phenomenon first some physical world examples will begiven, such as the football World Cup and the Olympic Summer andWinter Games, where more restrictive rules of brand use are imposed inand even outside the stadiums.15

Cities that want to have a chance to host one of the above mentionedinternational sports events have to abide by the rules of the organizers,thanks to the fierce competition between bidding countries. The Fédéra-tion Internationale de Football Association (FIFA) and the InternationalOlympic Committee (IOC) demand that candidate countries agree with along list of requirements: from investments in infrastructure to rules inregard to advertisements and marketing activities. These so-called RightsProtection Programmes are rules to guarantee sponsors of these eventscomplete exclusivity, prevent ambush marketing,16 combat counterfeitmerchandise and trade, and to keep ‘clean venues’, where no advertisingor commercial identification is allowed.17 By purchasing a ticket thevisitor agrees to abide by the rules of the stadium, including the rules on

14 Social media allow the internet user’s profile to be partially searched andfound by people that are not a connection of that particular internet user,depending on the privacy settings of the internet user.

15 For example, within a one kilometre radius of a stadium no advertisingactivity is allowed except with the prior approval of the municipality; see Article2.1.2.2. of the 2010 FIFA World Cup South Africa By-laws of the eThekwiniMunicipality, Published in terms of Municipal Systems Act 32 of 2000, at 25,accessed 9 February 2015 at: http://ccs.ukzn.ac.za/files/Fifa%20ethekwini%20law.pdf. Aparna Watal gives a workable definition for ambush marketing:‘Casted as an “amorphous concept” by some academics, ambush marketing canbe broadly described to encompass activities that exploit the publicity value of anevent without incurring any obligations of a sponsor’. Aparna Watal, ‘FIFAWorld Cup 2010: An Analytical Study of the Effectiveness of South AfricanIntellectual Property Regime to Combat Ambush Marketing and Counterfeiting’(29 June 2010), at 4, accessed 9 February 2015 at: http://ssrn.com/abstract=1699722.

16 Engaging in ‘ambush marketing’ is prohibited by Article 2.1.1.1. of the2010 FIFA World Cup South Africa By-laws of the eThewkini Municipality, id.,at 25, footnote 58.

17 FIFA’s Rights Protection in the run-up to the World Cup 2010, accessed 9February 2015 at: http://www.fifa.com/mm/document/affederation/marketing/01/18/98/99/march2010rightsprotection_a5_20100308.pdf.




brand use.18 One should realize that in the case of ambush marketing theperpetrator is not using the trademark in a trademark sense, because it isnot in the course of trade or in a commercial way (see Chapter 5.2‘Commercial use’).

That the rules can be more restrictive for users of a brand inside thewalled gardens than outside could also be observed during the matchbetween the Netherlands and Denmark, at the football World Cup inSouth Africa.19 A group of women, who were first dressed in the Danishcolours, changed into orange skirts. That raised a lot of attention.20

Although the dresses did not bear any logo of beer brewer Bavaria, whoinitiated the action, the women became rapidly known as the ‘BavariaBabes’ after they were expelled from the stadium. The action by Bavaria,a competitor of Anheuser-Busch who was an official sponsor of FIFA’sWorld Cup, was considered ambush marketing, and was therefore prohib-ited in the stadium. FIFA had pressured the South African authorities tointervene, which they did. Two women were charged with ‘unauthoriseduse of a trademark at a protected event’ and ‘entry into a designated areawhile in possession of a prohibited commercial object’.21 In other words,organizations such as FIFA and IOC can stop the use of brands thatcompete with the brands of their sponsors in their stadiums. Outsidethese walled gardens such an exclusion of competition would be unthink-able.

Interestingly, the walled garden phenomenon can be applied to theonline world as well. Here too, the contractual solution can be morerestrictive than the law. This can be illustrated by comparing the law onregistration of trademark names in the Lanham Act22 with the terms ofservice of Second Life,23 where users can build virtual objects andengage in commerce. In the outside world, a refusal to register a

18 A distinction must be made between use of a trademark in a commercialway, or use of a trademark not as such, which will be called here brand use,using the jargon of the organizing entity.

19 Match between the Netherlands and Denmark, FIFA’s World Cup footballin South Africa, 20 June 2010.

20 ‘Bavaria Babes’ in action on YouTube. ‘Nederland Denemarken BavariaBabes’, 14 June 2010, accessed 9 February 2015 at: http://www.youtube.com/watch?v=U7Ih7hPTn4w&feature=player_embedded.

21 Based on South Africa’s Article 9(d) Trade Practice Act 1976 and Article15A Merchandise Marks Act number 17, 1941, which outlaw the misuse ofregistered marks and unfair competition.

22 Lanham Act § 2(a), 15 U.S.C. § 1052(a).23 Second Life, ‘Terms of Service’, accessed 9 February 2015 at: http://

secondlife.com/corporate/tos.php.




trademark cannot prevent that an unregistered trademark will be still usedin commerce. However, an account name that is considered ‘vulgar,offensive, or otherwise inappropriate’ by Second Life will be prohibitedfor all uses.

One of the first social media sites, The Well, described itself as ‘one ofthe most noted “walled gardens” in the world’.24 Conditions at one socialmedia site are different from another, which is reflected in the respectiveterms of use (as discussed in Chapter 3.3). Heymann wrote that ‘in anyonline environment, the system’s corporate owner can control almostevery aspect of the experience, either through the architecture of thesystem or by policies that exact compliance as a condition of partici-pation’.25 Heymann pointed out that especially in large or disparatecommunities or social networks that are not cohesive one can argue thatthe OSP has the responsibility to make the recognition more formal andto enforce such interests.26

Diversity

A plethora of walled gardens, each with a different set of contractualconditions, leads to a diversity that can lead to real innovations insystems. An example could be chartered cities, as proposed by economistPaul Romer.27 Chartered cities are city-scale administrative zones, withtheir own rules and regulations and institutions, which could be governedby another government than that for the rest of the country.28

Seasteading,29 a system for living and working, whereby working unitsconnect to sea settlements, are floating walled gardens, and each ownerof a unit has the power to connect to or disconnect from these

24 The Well, ‘The WELL: Learn about The WELL’, accessed 9 February2015 at: http://www.well.com/aboutwell.html.

25 Laura A. Heymann, A Name I Call Myself: Creativity and Naming, 2 U.C.IRVINE L. REV., 585, 614 (2012).

26 Id., at 624.27 Paul Romer, ‘Why the World Needs Charter Cities’, TED presentation,

July 2009, accessed 9 February 2015 at: http://www.ted.com/talks/paul_romer.html.

28 Chana Joffe-Walt and Jacob Goldstein, ‘Almost a Chartered City, NamedDot, Was Established in Honduras’, 483: Self-Improvement Kick, Act Two,Some Like it Dot, This American Life radio, 4 January 2013, accessed 9February 2015 at: http://www.thisamericanlife.org/radio-archives/episode/483/self-improvement-kick?act=2#play.

29 The Seasteading Institute, accessed 14 June 2015, undated at: http://www.seasteading.org/.




settlements. This could make the doctrine of social contract from afictitious to a pragmatic one. Seasteading founder Patri Friedman fore-sees ‘a Cambrium explosion of governance’30 at the different settlements.Those floating walled gardens that attract the most units obviously havethe most attractive contract. This can lead to competition by the othersettlements to come up with an even better contract.

Social media, the online walled gardens, can also be hatcheries ofinnovation.31 In respect of technical features: Facebook first made itpossible to put pictures and video on its Facebook page, then Twitterfollowed with the same features. In respect of terms of use: theoreticallyone could imagine one social media becoming more popular by protect-ing and enforcing a better privacy policy. However, in practice socialmedia have high exit barriers. In the case where there might be analternative for Facebook with the same or better fundamental features anda better privacy policy, the fact is that one is connected to friends, family,business connections and acquaintances through this particular socialmedia. The advantages of a better social media will be weighed againstthe disadvantages of having to learn how the new social media works,build up a new profile, again uploading cherished content, inviting theold connections to the new social media and losing some of the existingconnections in the process. Also there is the fear of a fragmentation ofone’s activities over several similar social media to keep contact with allone’s connections, which locks in most internet users to one particularsocial media for a certain purpose.

Just as with the chartered cities or sea settlements, the walled gardensof social media are exclusively based on the opt-in principle.

Market Forces Will Shape Law in the Private Sphere

Mayer-Schönberger and Crowley wrote that the experience of Lambda-Moo, one of the first user generated content sites, demonstrated that it isdifficult to establish a legitimate, transparent and inclusive mechanism

30 Patri Friedman, ‘Our Oceans and the Evolution of Societies’, TEDxSF, 30April 2012, accessed 9 February 2015 at: http://www.youtube.com/watch?v=BU92FVeO0qs.

31 Here competition induced innovation is meant. Not the ad hoc innovationby the internet users. Axel Bruns, Ad Hoc Innovation by Users of SocialNetworks: The Case of Twitter, ZSI DISCUSSION PAPER, Zentrum für SozialeInnovation, Vienna (2012).




governed by the internet users themselves.32 And as pointed out inChapter 3 ‘Protagonists of the Legal Conflict’, internet users are just oneof the relevant parties in the trinity of social media. Trademark holders,united, could hold the key to improving the protection and enforcementof their trademark logos. ‘No taxation without representation!’33 was oneof the sparks that caused the American revolution. The rationale that theone who pays should be able to determine its own faith, could also beapplied in the case of trademark holders and social media. As pointed outin Chapter 3.3, the business model of service providers, such as Face-book, Twitter and Blogger, is based on the revenue streams generated bythe advertisements of trademark holders, and on the data these socialmedia sites sell to the trademark holders. In other words, the trademarkholders are the most important clients for the social media sites, andtherefore it is reasonable that the trademark holders expect that theirinterests are taken into account by social media providers. The serviceproviders have invested money in social media sites and can expect theusers to abide by the rules they set. Each extra user adds value to socialmedia, because of the network effect:34 actively by creating user gener-ated content, and passively by watching advertisements, and by exposingtheir habits on the internet which are assessed, analysed and sold.

The Hong Kong government proposed that the copyright holders andsocial media start to work together to solve emergent problems.35

Another laudable objective would be that trademark holders and socialmedia work together. A proactive system of protection and enforcement

32 Viktor Mayer-Schönberger and John Crowley, Napster’s Second Life? TheRegulatory Challenges of Virtual Worlds, 100 N.W. U.L. REV. 1775, 1796(2006).

33 ‘No taxation without representation!’, is a slogan originating during the1750s and 1760s that summarized a primary grievance of the British colonists inthe Thirteen Colonies, which was one of the major causes of the AmericanRevolution. ‘No taxation without representation’, Jerome R. Reich, BRITISHFRIENDS OF THE AMERICAN REVOLUTION (New York: M.E. Sharp, 1998)at 41.

34 Network effects or network externalities. ‘We say that there are networkeffects if one agent’s adoption of a good (a) benefits other adopters of the good (a“total effect”) and (b) increases others’ incentives to adopt it (a “marginaleffect”)’, Joseph Farrell and Paul Klemperer, Chapter 31 Coordination andLock-In: Competition with Switching Costs and Network Effects, in HAND-BOOK OF INDUSTRIAL ORGANIZATION, VOLUME 3 (M. Armstrong andR. Porter, eds., Amsterdam: Elsevier BV, 2007).





of trademark logos, as will be proposed below, could play the role of traitd’union between these parties.

Because social media service providers set up the rules, they should beheld liable for upholding these rules (see Chapter 7 ‘IntermediaryLiability’). If they will be held liable, it will push them to set up onlyenforceable rules. Given the scale of the internet users on social media,the only rules that are capable of being enforced are automaticallyenforced rules. If trademark holders are financially healthy, serviceproviders can benefit. But the inverse is also true.

Technological Developments

To monitor whether a word mark is used on a website without author-ization has been possible for a long time. And the possibilities to monitorpictures of trademarked logos are being fine-tuned. This monitoring ofunauthorized use of a trademark by the trademark holder can be done bythe OSPs36 in combination with trademark holders or third parties, in acompletely automatic way. But the workload starts when unauthorizeduse is determined and a follow-up is needed. So far the course of actionhas been to look into the matter more closely, and then decide whether anotice-and-takedown action is required. If this happens, the user cancomplain and the process can continue. The uploader can sue the OSP forillicit removal and breach of contract, and the trademark holder can suethe OSP for primary and secondary liability for trademark infringement.Harper argued that to the maximum extent possible wrongdoers shouldbe held responsible for the wrongdoing.37

Technology improves at an exponential rate.38 This makes the acquisi-tion of knowledge about the user generated content faster and more

36 ‘[The] specific characteristics of the internet make intermediary liabilityrelatively more attractive than it has been in traditional offline contexts: the easeof identifying intermediaries, the relative ease of intermediary monitoring ofend-users; and the relative difficulty of direct regulation of the conduct of theend-user’. Ronald J. Mann and Seth R. Belzley, The Promise of InternetIntermediary Liability, 47 WM. & MARY L. REV. 1, 8 (2005).

37 ‘To the maximum extent possible, responsibility for wrongdoing must staywith wrongdoers. Responsibility for protection must stay at the edges withusers’. Jim Harper, Against ISP Liability, Telecommunications & Technology, 28REGUL. MAG. 30, 33 (2005).

38 Ray Kurzweil, ‘The Law of Accelerating Returns’, Kurzweil AI, 7 March2001, accessed 9 February 2015 at: http://www.kurzweilai.net/the-law-of-accelerating-returns.




predictable39 and exercising actual control: monitoring, analysing andenforcing, over this user generated content easier and more precise.Therefore, it is arguable that the duty of care for service providers needsto be upgraded, so it is aligned to the available technology.

9.4 MAKING AUTHORIZED TRADEMARK USETRANSPARENT

Unlike copyright law,40 trademark law does not have any prohibition onformalities. Next to registration, one can imagine that there is an extraformality for the trademark logo: namely to make transparent what kindof use is authorized. A substantial problem is that many internet users donot know what they can do with a trademark logo on social media sites.

Madison posed the question whether the laws and regulations shouldreflect the norms and preferences that have developed over time inparticular communities or should impose policy choices on those subjectsto its reach?41 However, it does not have to be an either/or question. Untilnow the internet users do not know what they can do with the trademarklogo. At best, if internet users are diligent, they can read the terms of useof the OSP. In order to increase the legal certainty for all stakeholdersinvolved, this book proposes the following proactive standardized solu-tion.

1. Trademark holders go to a database filled with trademark logos,authorized by the trademark holders;

39 David Kirkpatrick writes in his book THE FACEBOOK EFFECT (2010)that Facebook founder Mark Zuckerberg asserts that based on friend relation-ships and communication patterns he can forecast with a 33 percent accuracywho is going to be in a relationship in a week from now, according to NickO’Neill, ‘Facebook Knows Your Relationship Will End in a Week’, All Face-book, May 17, 2010, accessed 9 February 2015 at: http://www.allfacebook.com/facebook-knows-that-your-relationship-will-end-in-a-week-2010-05.

40 Stef van Gompel, Formalities in the Digital Era: An Obstacle or Oppor-tunity?, in GLOBAL COPYRIGHT: THREE HUNDRED YEARS SINCE THESTATUTE OF ANNE, FROM 1709 TO CYBERSPACE (Lionel Bently, UmaSuthersanen and Paul Torremans, eds., Cheltenham: Edward Elgar Publishing,2010), at 395–424. Read James Gibson, Once and Future Copyright, 81 NOTREDAME L. REV. 167 (2005) and Christopher Sprigman, Reform(aliz)ing Copy-right, 57 STAN. L. REV. 485 (2004).

41 Michael J. Madison, A Pattern-Oriented Approach to Fair Use, 45 WM. &MARY L. REV. 1525 (2004).




2. Trademark holders can upload a picture of their trademarked logo;3. With proprietary technology this picture can be changed into a link;4. The trademark holder selects the conditions under which the link of

their trademark logo can be used by internet users;42

5. The link to the trademark logo with the licence conditions thatauthorize certain use will be findable directly via the databaseonline, or via search engines after they have been indexed.

Current trademark logos on digital media are often accompanied with the®, to symbolize that the trademark logo has been registered. However,this book proposes that the symbol of ® or preferably another symbol ismade into a link to a pop-up screen to make transparent what isauthorized use of that particular trademark logo on social media sites.

Licence Conditions

Conforming to the licence system of Creative Commons,43 which makesattribution and use of online copyright works transparent, one canimagine a similar system for trademark logos on social media sites.Below a set of licence conditions is suggested.

Non-commercial licenceIf you sell any product or service, even though they have nothing to dowith the products or services of the trademark logo, it is consideredcommercial use, and not allowed under this condition. Any attempt toremove, edit, override or hack this feature will be viewed as unauthorizeduse. It will result in immediate loss of control over the use of this logo,liability and may lead to a lawsuit. This licence condition is symbolizedin Figure 9.1.

42 Click-wrap is a shrink-wrapped contract used on digital media, includingthe internet, which can be read and accepted by the consumer after clicking.Batya Goodman, Honey, I Shrink-Wrapped the Consumer: The Shrink-WrapAgreement as an Adhesion Contract, 21 CARDOZO L. REV. 319 (1999);Charles R. McManis, The Privatization (or ‘Shrink-Wrapping’) of AmericanCopyright Law, 87 CAL. L. REV. 173 (1999); Dan Streeter, Into Contract’sUndiscovered Country: A Defense of Browse-Wrap Licenses, 39 SAN DIEGO L.REV. 1363 (2002).

43 Creative Commons, co-founded by Lawrence Lessig in 2001, accessed 9February 2015 at: http://creativecommons.org.




Newest version licenceThis condition guarantees that the newest version of the logo is used.Most trademark holders propagate a standardized trademark solution.Any attempt to remove, edit, override or hack this feature will be viewedas unauthorized use. It will result in immediate loss of control over theuse of this logo, liability and may lead to a lawsuit. This licencecondition is symbolized in Figure 9.2.

Linked licenceTo make sure that the logo is not linked to a competitor, which wouldlead to confusion, or an unrelated subject, which would lead to dilution.In the case where the trademark logo is used for criticism purposes,internet users can easily get information of the brand according to theadversarial principle. Any attempt to remove, edit, override or hack thisfeature will be viewed as unauthorized use. It will result in immediateloss of control over the use of this logo, liability and may lead to alawsuit. This licence condition is symbolized in Figure 9.3.

Unchanged licenceIn order not to destroy the value invested in the brand and advertising, bybuilding goodwill and reputation, the integrity of the trademark is

Figure 9.1 Icon: non-commercial licence

Figure 9.2 Icon: newest version licence




guaranteed. Any attempt to remove, edit, override or hack this featurewill be viewed as unauthorized use. It will result in immediate loss ofcontrol over the use of this logo, liability and may lead to a lawsuit. Thislicence condition is symbolized in Figure 9.4.

Open licenceThe trademark holder invites users to use their trademark in creativeways, so that the trademark becomes part of art and culture and hasmaximum opportunities to spread. This licence condition is symbolisedin 9.5.

Figure 9.3 Icon: linked licence

Figure 9.4 Icon: unchanged licence

Figure 9.5 Icon: open licence




It is expected that the licences chosen by the brands are based on theirbrand personalities. One can argue that brands have, just as people do,different personalities, that vary along a continuum, with on one side ofthe spectrum complete introvertedness and on the other side completeextravertedness. A brand such as United Colors of Benetton might choosefor an open licence, given its history to actively link itself with societallyrelevant topics such as hunger, war and AIDS, shunned by most otherbrands, in the words of co-founder Luciano Benetton, ‘to develop citizenconsciousness’.44

9.5 MAKING UNAUTHORIZED TRADEMARK USEDISAPPEAR

If the user is using the trademark logo in an authorized way he knows hisuse is legitimate. If after agreeing with the licence conditions he is usingthe trademark logo from the database in an unauthorized way he can beheld liable, traced and sued. Any trademark logo, even edited ones, canbe found with reverse image search.45 However, if the licence system isused in combination with the pre-upload filtering system, as will beoutlined in Chapter 9.6, unauthorized logos can no longer be uploaded atall.

Another method would be if social media sites agree that a trademarkholder will be able to remove content that was put on the social mediawithout his permission. Compare this with Megaupload’s system where,according to its founder Kim Dotcom, content holders could removeinfringing links by themselves.46

44 ‘Top 10 Controversial United Colors of Benetton Ads, Buzz!’, 22 March2012, accessed 9 February 2015 at: http://top10buzz.com/top-ten-controversial-united-colors-of-benetton-ads/.

45 TinEye Reverse Image Search, available at: http://www.tineye.com/. By 23May 2012, TinEye had indexed 2,155,840,279 pictures. On its blog TinEye givesan example of what you can do to find back even edited photos. Read also LeilaBoujnane, ‘How to use image recognition?’, TinEye, accessed 9 February 2015at: http://blog.tineye.com/category/image-recognition/.

46 ‘Of course everybody knows that the internet is being used for legitimateand illegitimate uses. And I think every online service provider has the samechallenges that we had; YouTube, Google, everybody is in the same boat. Whatyou need to understand here is that we provided the content owners with anopportunity to remove links that were infringing on their rights. So not only didthey have an online form where they could take down infringing links, they haddirect delete access to our service. So they could access our system and remove




9.6 PRE-UPLOAD FILTERING TO SUBSTITUTE SAFEHARBOUR PROVISIONS

Content holders have been suing OSPs frequently for secondary liabilityfor soaring copyright and trademark infringements, contrary to what theUS legislator intended,47 since the introduction48 of the safe harbourprovisions for secondary liability for copyright49 and trademark infringe-ment,50 respectively (see Chapter 7 ‘Intermediary Liability’). The samehappened in the EU.51 In the EU, SABAM v Scarlet 52 made clear thatthere is no general monitoring requirement for internet intermediaries,yet. But the space for OSPs to look the other way, also known as wilfulblindness, is getting smaller. In trademark law wilful blindness is

any link that they would find anywhere on the internet without us involved. Theyhad full access. And we are talking about 180 partners, including every majormovie studio, including Microsoft, and all big content producers. And they haveused that system heavily. And you need to understand that that system was noteven something that was required by the law, we provided that voluntarily. Andthey have removed over 15 million links’. Dotcom, supra, Chapter 4, note 53.

47 The US Congress was concerned that OSPs were forced to operate ahuman compiled directory of websites or to monitoring a site for inappropriatecontent. Liability should only arise if the infringement was ‘obvious’. H.R. Rep.No. 105-551 pt. 2 at 57–58; S. Rep. 105-190 at 48–49.

48 Patry alleged that the Commerce Commission was ‘captured’ by the OSPsand therefore advocated for a safe harbour in the DMCA. William F. Patry, ChiefCopyright Counsel, Google Inc., presentation: ‘What Would Leadership inCopyright Policy Look Like?’, UCL IBIL Lecture, London, 3 April 2012.

49 17 U.S.C. § 512 Digital Millennium Copyright Act 1998, which gives asafe harbour for secondary liability of copyright infringement to passive OSPsthat provide transitory digital network communications, system caching, infor-mation residing on systems or networks at direction of users, informationlocation tools or non-profit educational institutions, and remove copyrightinfringements expeditiously after a notification. 17 USC. § 111(a)(3) deals withcable retransmission, any ‘passive carrier’ who has no direct or indirect controlover the content or selection of the primary transmission, and whose activitieswith respect to secondary transmission consist solely of providing wires, cables,or other communication channels, is exempted from liability, but only withrespect to the restricted acts of performing and publicly displaying a work.

50 § 32(2) Lanham Act codified into 15 U.S.C. § 1114(2) 2000.51 The safe harbour for secondary liability for all infringing material can be

found in the Articles 12–15 E-Commerce Directive, supra, Chapter 1, note 5.52 Although the dispute concerned whether there can be a general obligation

to filter file sharing activities and thus deep package inspection, no reference wasmade to the respect for communications, Article 7 EU Charter, supra, Chapter 2,note 34. SABAM v Scarlet, supra, Chapter 7, note 240.




accepted as knowledge in Louis Vuitton S.A. v Lee.53 The concept ofwilful blindness was revisited in the copyright infringement case Viacomv YouTube,54 where the Second Circuit explained that,c in the case ofconstructive or red flag knowledge, it is not a question between specificor generalized knowledge, but instead between a subjective and objectivestandard. The court distinguishes ‘actual knowledge’, which refers tosubjective awareness of specific infringing acts, from the red flagprovision, an objective standard asking whether the service provider wasaware of facts from which a reasonable person would have inferred theexistence of specific infringing acts.55 The Ninth Circuit used the samered flag doctrine in UMG Recordings v Shelter Capital Partners,56 and itis unlikely that the matter will be revisited by the Supreme Court anytimesoon. The questions are: how to spot red flags, and which shades ofcolour are still considered red. It seems that the safe harbour still causedOSPs to have become colour blind. How to transform the vicious circle,where internet intermediaries, including social media providers, filter lessto be more passive and eligible for the safe harbour, and therefore arebeing sued more for secondary liability, and forge it into a virtuouscircle?57 Goldman argued probably too optimistically that there is a‘tertiary visible hand’ that stops OSPs from a race to the bottom: theycare about their reputation.58

Some content owners have sought refuge in software that will detectand automatically send the notice-and-takedown requests to the OSP.This has helped to further deluge OSPs with notice-and-takedown

53 Louis Vuitton SA v Lee, 875 F.2d 584, 590 (7th Cir. 1989).54 Viacom International, Inc. v YouTube, Inc., 676 F.3d 19 (2d Cir. 2012).55 Anonymous, Copyright Law: Willful Blindness – Second Circuit Holds

that Willful Blindness Is Knowledge in Digital Millennium Copyright Act SafeHarbor Provision – Viacom International, Inc. v YouTube, Inc., 676 F.3d 19 (2dCir. 2012), 126 HARV. L. REV. 645.

56 UMG Recordings, Inc. v Shelter Capital Partners LLC, 667 F.3d 1022 (9thCir. 2011).

57 Self-regulation is not working if these incentives are continued.58 Sites want to be perceived as credible. Then again, Goldman makes clear

he understands that the reputation as an infringer of copyright might be profitablefor some sites. Eric Goldman, The Regulation of Reputational Information,in THE NEXT DIGITAL DECADE: ESSAYS ON THE FUTURE OFTHE INTERNET (Berin Szoka and Adam Marcus, eds., Washington, DC:TechFreedom, 2010).




requests,59 to which some of these OSPs have responded by implement-ing overly accommodating and uncritical removal policies (see Chapter7.4 ‘Market forces: attractiveness over accountability’ and ‘Excessiveyielding to complainants’).

A call for online service providers to proactively filter is becominglouder and seems inevitable. This book recommends the following modelfor liability for OSPs as a substitute for the safe harbour provisions:

1. Content holders (trademark and copyright holders) upload theircontent to the database of the OSPs. The data remain hidden forinternet users. It works according to a first-to-file system andapplies the legal fiction that the one who uploads the content first isauthorized to do so.

2. The OSPs filter all information to be hosted on their sites andcompare it with the content already in their database. If there is amatch, it will not be possible to upload the unauthorized version orif only later the match is discovered it will be still removed.Parodies and critical comments that take the licence conditions intoaccount will not be removed.

3. If a content holder is unable to upload content60 or whose content isautomatically removed, he or she can sue the content holder whouploaded that content first but illegally. After a court order the OSPwill substitute the content of the illegal content holder for thecontent of the legal content holder.

4. By logging in to the database, content holders can make theircontent visible to internet users via dedicated sites hosted by theOSP. So, when the filter technology comes across this content, itknows it is authorized. Even after disclosing content, content

59 According to Von Lohmann, Google receives 3 million notice-and-takedown requests, in more than 70 languages each year. Fred von Lohmann,Secondary and Intermediary Liability on the Internet, presentation at StanfordTechnology Law Review, 3 March 2011 Symposium. Gibbons wrote that 37percent of the DMCA notices it receives are invalid. T. Gibbons, ‘GoogleSubmission Hammer Section 92A’, PC World, 16 March 2009, cited in DisneyEnterprises Inc. et al., v Hotfile Corp. et al. amicus brief final, ElectronicFrontier Foundation, 5 May 2012, at 5, footnote 3.

60 This goes much further than, for example, the terms of service ofMegaupload, which lets its users tick a box with: ‘I accept the Terms of Service’,which include ‘You can not upload anything that is infringing anybody’s rights.You can only upload things that belongs to you’. ‘So we have a legally bindingagreement with these users that they are not supposed to upload anything thatdoes not belong to them’. Dotcom, supra, Chapter 4, note 53.




holders can withdraw it again, so that filter technology will removethis content, conforming to the moral right of withdrawal (seeChapter 8.2 ‘Origin of moral rights’).

5. Content holders who put their content on an OSP in the hiddenmode and still find out that their content is published on some sitehosted by the OSP can hold the OSP liable.

6. If content holders find that someone uploaded for the first time theircontent, because that person has appropriated that content, thenthey can sue that uploader. The content will be removed after acourt order. Only if the OSP refuses to remove the content, will theOSP be held liable. The illegal uploader can be sanctioned by theOSP and by the law.

7. This way content holders can upload their content at the databasesof OSPs, so that they have complete control over their content onthese OSPs and are guaranteed that infringing material cannot beuploaded or is removed automatically.

Compared to the flood of notice-and-takedown requests, the proactivesystem of OSP liability is much more effective, especially since thelitigious scenarios as sketched under points 3 and 6 will only rarely takeplace.

9.7 OPTIMIZING POLICY GOALS

Besides automatic enforcement by pre-upload filtering, this proactivesystem of OSP liability has the potential to make trademark law andcopyright law more effective in achieving policy goals.

Trademark Law

The proactive system can prevent internet users using a trademarked logoon a site that is incompatible with the trademark logo’s licence condi-tions. For example, when the internet user is authorized to use thetrademarked logo in a non-commercial environment, and he or she isusing it in an environment with advertisements, the trademark logo willautomatically be removed.

Certain use of trademarked logos, that have been judged by a court astarnishing, can be stored on the database of the OSP but not visible forthe users, so that any uploading of this infringing material on the serversof the OSP will not be possible, or when found will be automatically




removed. In this way, the storing of the infringing material on the OSP’sdatabase can be seen as ‘vaccinating’ against this kind of trademarkabuse.

Copyright Law

Experiments can be done with the automatic protection of copyrightswith variable durations. For example, the amount of visitors some contentgets can be made proportional to the duration of the copyright. Forexample: the more visitors the content is attracting, the longer it isautomatically protected. This system does not deviate from the regularcopyright law since it never exceeds the legal copyright terms ofduration, but offers variable degrees of automatic protection within thelegal term.

In the US, ‘the amount and substantiality of the portion used inrelation to the copyrighted work as a whole’61 is partly to assess whetherthe use of a copyright work is within the scope of fair use. Experimentscan be done with allowing a certain percentage of the work to be usedwithout permission, and removing the surplus automatically. This refersto the ‘amount of the work’. In the UK, ‘a substantial part is not definedin copyright law but has been interpreted by the courts to mean a“qualitatively significant part of a work” even where this is not a largepart of the work’.62 However, quantity has a quality all its own63 and willmake an automatic enforcement possible.

One can argue that this suggested system is compatible with theprohibition on formalities of the Berne Convention.64

The benefits of automatic enforcement and the avoidance of a lot oflegal procedures is a benefit that outweighs the full liability.

61 17 U.S.C. § 107: Limitations on Exclusive Rights: Fair Use.62 What is meant by a substantial part of a copyright work? IPO UK ‘The

defendants had infringed the plaintiffs’ copyright in the compilation by reproduc-ing a substantial part of it, even though large parts of the coupon had not beencopied. The test of infringement depended on the worth of the part taken, not thequantity’, Ladbroke (Football) Ltd. v William Hill (Football) Ltd., (1962).Reports of Patent, Design and Trade Mark Cases (1980) 97 (25): 539–52. Readalso ‘Taking a Substantial Part of a Copyright Work’ by Michael Pendleton andAlice Lee, INTELLECTUAL PROPERTY IN HONG KONG (Hong Kong:LexisNexis 2008), at 147.

63 Attributed to Mao, Lenin and Trotsky. Roberts, supra, Chapter 4, note 1.64 Article 5(2) Berne Convention, supra, Chapter 2, note 3. Whether this

prohibition is in the interest of copyright holders in the digital era is discussed byvan Gompel, supra note 40.




9.8 ALGORITHMIC JUSTICE

If the above mentioned proposals for pre-upload filtering in combinationwith a proactive system of OSP liability are implemented so that aparadigm shift is made, it will lead to algorithmic justice. Judges orarbitrators are humans and their interpretations of the law or contracts areby definition subjective, and their capacity is not scalable. Automatedenforcement is scalable, and has an air of objectivity. But, as Lessigmade clear,65 the choices that go into the programming are subjective too.As discussed in Chapter 9.7 ‘Copyright law’, algorithmic justice canmake the protection and enforcement of intellectual property rightseffective and much more refined towards social policy goals. Although, itis to be expected that there will also be a cat and mouse game betweendevelopers of enforcement systems66 that use fair-use algorithms to filterinfringing material on the one hand and those that want to abuse thesesystems67 on the other hand. But even a good faith effort to automaticallydistinguish infringements from fair use will have its fair share ofchallenges.68 Yen would perhaps argue that it is still fair use, becauseeventually in the end everybody will make mistakes.69 In contrast to thisview one could also argue, like the EFF70 did, that because one does nottake into account the fact that mistakes are going to be made, this willqualify as wilful blindness, which in its turn can be seen as knowledge.71

In 1998 Goldsmith had already articulated a rational assessment ofcontrol of the online realm thus: ‘the question is whether regulation willheighten the cost of the activity sufficiently to achieve its acceptablecontrol from whatever normative perspective is appropriate’.72 This bookapplied a rational assessment, and concluded that the current trademarklaws are insufficient, that a paradigm shift to the proactive protection and

65 Lessig, supra, Chapter 8, note 181.66 This happened before with filtering spam and viruses and is still happen-

ing.67 Ginsburg, supra, Chapter 7, note 233, at 589–91.68 Von Lohmann, Supra note 59, at 5.69 Alfred C. Yen, Torts and the Construction of Inducement and Contributory

Liability in Amazon and Visa, 32 COLUM. J. L. & ARTS 513 (2009).70 Von LohmannSupra note 59, at 7–8, footnote 6.71 In re Barboza, 545 F.3d 702, 707, 708 (9th Cir. 2008).72 J. Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199, 1223–4

(1998).




enforcement of the trademark logo via the moral right of integrity inlegislation or via contractual solutions in the walled gardens of socialmedia is needed, which will inevitably lead to algorithmic justice.




PART IV

Conclusions

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10. Conclusions

Given the massive unauthorized use of the trademark logo on socialmedia, and the frequent legal conflicts it causes between trademarkholders, social media providers and internet users, this book determinesthat the current trademark legislation in the US and EU – where the mostvaluable brands in the world are located and popular social media sitesoriginated – is insufficient to solve the problem and subsequentlyproposes a paradigm shift that takes into account the special signallingproperties of the trademark logo and the public desirability of its stability.

The ample access to the unauthorized use of the trademark logo has led tothe massive proliferation, scale and speed of the unauthorized use of thetrademark logo. This in combination with the permanence of the uploadedunauthorized trademark logos on the internet has led to the perception byinternet users, social media providers and image search engines that thetrademark logo is without protection. Trademark holders feel a loss ofcontrol, and all parties involved suffer from the uncertain boundaries of thetrademark logo. The emergence of new technology complicates the resolu-tion of the legal conflict. Given the massive number of unauthorized use oftrademark logos and the non-scalability of litigation and arbitration, auto-mation is a sine qua non for any feasible solution.

The laws against trademark infringement in the US and EU areinsufficient to solve the legal conflict. One of the problems is thatnon-commerciality of trademark use has been broadly interpreted, whilethis book asserts that every trademark use on a social media whichincludes advertisements is commercial use.

The descriptive use defence is not compatible with any unauthorizeduse of a trademark logo. Although some courts have explicitly orimplicitly acknowledged this, it has not been codified in a statute. Also,this book argues that the choice for the Nice Classification doctrine hasnon-favourable outcomes for the trademark holders in particular andsociety at large, since it excludes the protection of the non-famoustrademark to non-related goods or services and therefore stifles anexpansion of the trademark holder into new activities, whereby he doesnot need to start up building a reputation from scratch but can profit fromhis reputation (which might be high within a certain market or region) in

329



an unrelated field. Therefore Schechter’s proposal of protection againstidentical trademarks for non-competing products is still relevant.

This book contends that unauthorized use of the trademark logo on socialmedia should be prevented. However, the use of the trademark logo onsocial media will be always authorized where it is applied to exercise one’sright to freedom of expression, parody or critical comment, with the provisothat the trademark logo links back to the website of the trademark holder.This small formality is beneficial to the adversarial process, which is awell-established doctrine within the courts and also meets the journalisticstandard, and decreases legal uncertainty for all parties involved.

As the massive number of litigation cases against OSPs demonstrate,the safe harbour provisions are not effective. This book asserts that thepremium for ignorance has adverse effects on the willingness of OSPs,including social media providers, to monitor, although they are bestpositioned to proactively filter infringing unauthorized use of content,including trademark logos. Therefore this book asserts that the safeharbour provisions must be replaced with strict intermediary liability.

The trademark logo can be seen as the personification of the trademarkholder, and one can argue that the stability of the trademark logo is notonly in the interest of the trademark holder but also of society at large.One can argue that trademark dilution already provides a kind of moralright of integrity for the trademark logo. However, this right is limited totrademark logos that are considered famous or have a reputation, and,moreover, that are used in a commercial way. This book argues that thetrademark logo that did not reach the requested level of fame orreputation and is used in a non-commercial way should also be protectedagainst unauthorized use on social media. Therefore the moral right ofintegrity is proposed for the trademark logo.

Until the law is amended to include a moral right of integrity for thetrademark logo, so that it will be protected in the case of unauthorizeduse, regardless of whether it is commercial or not and regardless of itslevel of fame/reputation, this book suggests the implementation ofproactive solutions in the walled gardens of social media as a testingground for potential legislation. First authorized use of the trademarklogo on social media should be made transparent, so that the internet usercan contractually agree to abide by the authorized use of the trademarklogo. Then the unauthorized use of the trademark logo can be filteredduring the upload process, or removed after the upload process. Thisautomated solution is scalable, makes intellectual property protection andenforcement not only effective but also more calibratable to social policygoals, such as fair use, and will ineluctably lead to algorithmic justice.




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