II.B.What are the Rights to be Conferred on Trademark Owners?

II.B.2.Trademark Rights

Let us now look at the different elements of Article 16.1 of the TRIPS Agreement in turn:

The owner of a registered trademark must have the exclusive right – i.e. he must be the only person authorized – to refuse or permit the use of his trademark or signs confusingly similar to it on similar or identical products.

The registered trademark must be protected against confusing use in the course of trade. The trademark only has to be protected in commercial dealings rather than in a private context.

Only the use of a sign similar or identical to that registered as a trademark, on products similar or identical to those in respect of which the trademark is registered, that is likely to confuse the relevant group of consumers, falls under the exclusive right of the trademark owner (for the more extensive protection of well-known trademarks see below under II.B.3.). Article 16.1 TRIPS requires that, in cases where an identical sign is used on identical products, it is presumed that a likelihood of confusion exists (e.g. even if the buyer is aware that he is buying a counterfeit product). The question of likelihood of confusion in cases where the signs and products are not identical but only similar to those registered has to be assessed case-by-case and on the basis of the individual market situation.

Typically, in assessing whether the use of a sign on particular products causes a likelihood of confusion with a registered trademark, the relevant authorities would consider both the similarity of the sign with the registered sign and the similarity of the products with those in respect of which the trademark is registered, and decide on the basis of the overall impression whether there is a likelihood of confusion. This means that a strong similarity of signs might be balanced out by a strong dissimilarity of the products on which the sign is used – and vice versa. By way of illustration, let us consider the following hypothetical examples. Imagine that there is the trademark

duly registered for "document delivery services, paper envelopes and wrapping material".

Let's now assume someone uses the following sign:

for the products "refreshments, especially fruit juices and ice cream".

In assessing whether this use results in a likelihood of confusion, it would be taken into account that while the sign used (namely Ferdex) is very similar to the registered sign FedEx, the products on which it is used are quite different. On that basis, an overall assessment could come to the conclusion that hardly any consumer would think that a fruit juice labelled "Ferdex" could possibly come from the provider of the document delivery services FedEx, and that therefore, there is no likelihood of confusion. The case would be considered differently if the mark were to be considered as a well-known mark (see below under II.B.3.).

However, imagine inversely a trademark:

duly registered for "restaurant and catering services; especially self-service restaurants, foods, drinks, refreshments; paper wrappings, entertainment services".

Now assume that someone uses the following sign:

Here, although the signs used are quite dissimilar, the strong similarity of the products for which they are used may well result in a situation where consumers might believe that a hot self-service meal labelled Donald's Burger that can be obtained from a machine at a bus station comes from the same enterprise that runs self-service restaurants under the trademark M-I'm loving it. Thus an overall assessment of the situation may well result in the view that here there is a likelihood of confusion.

As mentioned above, the assessment of whether there is a likelihood of confusion is to be made on a case by case basis taking into account the situation in the territory in question.

II.B.3.Rights with Respect to Well-known Trademarks

Whether a trademark will be liable to create confusion with a well-known mark will be determined by the competent authority of the Member concerned, and in so doing the said authority will have to consider the question from the viewpoint of the consumers of the goods to which the marks are applied. Article 6bis specifies that such confusion may occur in cases of reproduction, imitation or translation of the well-known mark, or even if only an essential part of a mark constitutes a reproduction or confusing imitation of the well known mark.

The TRIPS Agreement has extended the scope of this provision for Members in the following manner. According to Article 16.2 of the TRIPS Agreement the protection afforded in Article 6bis Paris Convention is extended to well-known service marks. This means that well-known trademarks also enjoy protection against the confusing use of signs with respect to services. Article 16.3 extends protection under Article 6bis Paris Convention to protection against use of the mark on non-similar goods, provided the well-known mark is registered and that such use would indicate a connection between those products and the owner of the well-known mark and that his interests are likely to be damaged by such use.

Article 16.2 of the TRIPS Agreement provides that, in determining whether a trademark is well known in its territory, a Member must take account of the knowledge of the trademark in the relevant sector of the public (e.g for trademarks on skies, among skiers) and must include knowledge obtained through the promotion of the trademark. This means that knowledge based on advertising efforts as well as on use of the trademark should be taken into account.

ILLUSTRATION:

Take the trademark "COCA-COLA", which is known in almost all markets beyond its main product (i.e. non-alcoholic beverages). Now imagine, someone else would start selling designer clothes under the label "COCA-COLA" – i.e. use the mark on goods not similar to those for which the original mark is registered. Because of the wide consumer knowledge of this mark, consumers may still wonder whether the beverage producer "COCA COLA" had now started also producing clothes under the same trademark. This confusion in the market could negatively affect the interests of the owner of the well-known trademark.

II.B.4.Licensing and Assignment of Rights

As the TRIPS Agreement concentrates on the trade-related aspects of intellectual property rights, one of its concerns is to ensure that intellectual property rights are and remain tradable assets. To this end, the TRIPS Agreement says in Article 21 that, while it is up to each Member to prescribe conditions in the licensing and assignment of trademark rights, an owner of a registered trademark must always be able to assign the trademark with or without the transfer of the business to which the trademark belongs. Before the introduction of the TRIPS Agreement quite a number of countries allowed the transfer or assignment of trademark only with the transfer of the corresponding business or goodwill located in the relevant territory, which effectively barred trademark rights from becoming independently tradable assets. While under the Paris Convention (Article 6quater) countries were free to regulate this aspect in their national legislation, it has become an obligation under the TRIPS Agreement to allow the assignment of trademarks independently from the corresponding business operation.

II.B.5.Other Requirements

According to Article 20, use of the trademark in the course of trade must not be unjustifiably encumbered by special requirements, such as use with another trademark (so-called "twinning"-requirements), use in a special form, or use in manner detrimental to the trademark's ability to distinguish the goods or services of one undertaking from those of other undertakings.

Exercises:

5. 
   You have successfully registered a trademark in a Member. What rights do you have (at a minimum)?
   
6. 
   Can individual Members set conditions on how trademarks can be licensed and assigned in their domestic legislation or are they constrained in some way under the TRIPS Agreement?
   
7. 
   Which elements are taken into account in the assessment of whether a particular use of a sign on products results in a likelihood of confusion?
   

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