Retailers boosted by opinion on trade mark rights in e-commerce

Out-Law News | 06 Jul 2020 | 9:37 am | 4 min. read

Retailers trading online or from bricks and mortar premises can rely on their trade mark registrations to prevent competitors from operating an online marketplace under a confusingly similar name, a senior adviser to the EU's highest court has said.

In a non-binding opinion, advocate general (AG) Gerard Hogan advised the Court of Justice of the EU (CJEU) to rule that retail services are similar to online marketplace services in the context of trade mark rights. Trade mark law experts at Pinsent Masons, the law firm behind Out-Law, said that AG's views will be welcomed by retailers as potentially expanding the scope of protection provided by their trade marks. 

Traub Florian

Florian Traub

Partner

The reality is that consumers now fully expect bricks-and-mortar stores to engage in e-commerce, and the law should protect trade marks for retail services accordingly, without artificial limitations around the specific distribution channel.

The AG was providing his opinion in a case that revolves around a dispute between Wallapop, the operator of an online marketplace accessible via apps and a webpage, and Unipreus, a retailer of sports goods operating from physical premises and a website. Wallapop applied to the European Union Intellectual Property Office (EUIPO) to register 'Wallapop' as an EU trade mark (EUTM). The trade mark was to cover 'online trading services relating to the operation of an online marketplace and related services'. Unipreus opposed the application. It relied on its earlier Spanish trade mark registration for 'wala w' covering 'retailing of sporting articles' under the same class of goods as that which Wallapop's mark was to apply to.

"The question in this case is whether the opposition should fail on the basis that online marketplace services are different from retail sales in a shop or on a classic website, both of which were covered by Unipreus' trade mark registration," said Florian Traub, intellectual property expert at Pinsent Masons. "Via a shop or website, the retailer sells goods directly to the consumer.  In contrast, an online marketplace is a digital space allowing the exchange of goods between third party sellers and consumers. There is no involvement of or other link with the operator of the marketplace itself."

For its opposition to succeed, Unipreus needed to convince the EUIPO that retail services via a shop or website are similar to online marketplace services.

The EUIPO, and subsequently its Fifth Board of Appeal, agreed with Wallapop that the services were different and rejected the opposition. Unipreus appealed to the EU's General Court. The General Court upheld the appeal, holding that Unipreus' opposition should succeed. This prompted Wallapop to raises its own appeal before the CJEU, with the CJEU asked to rule specifically on the question of whether retail and online marketplace services are similar.

The CJEU is often advised on how it should rule in cases before it by its advocates general, who are independent legal experts to the court. The CJEU is not bound to follow the views of the AG, but commonly it does so. In his opinion, AG Hogan advised the CJEU that it should uphold the judgment of the General Court and allow Unipreus' opposition to succeed. In his view, retail services and online marketplace services should be regarded as similar for the purposes of a trade mark opposition under Article 8(1)(b) of the EU's Community Trade Mark Regulation of 2009.  

"This case provides some clarification on the application of the test for similarity of services in the context of e-commerce", said Traub. "The CJEU would be well advised to follow the opinion of AG Hogan and to resist the temptation of artificially drawing a distinction between retail services on the one hand and the provision of an online marketplace on the other."

In his reasoning, AG Hogan referred to an earlier CJEU ruling in the case of Praktiker in which retail services had been defined as both the legal sales transaction itself as well as all the activity carried out for the purposes of concluding, or encouraging, the conclusion of the transaction. He also relied on the judgment in the Tulliallan Burlington case in which the CJEU had held that "the concept of retail services included a shopping arcade’s services aimed at the consumer with a view to enabling him or her to conveniently view and purchase those goods, for the benefit of the businesses occupying the arcade concerned". 

Hogan said: "The same may be said by analogy so far as intermediation services offered by an online retail shopping platform are concerned. While the traditional shopping arcade serves the purpose of providing a different range of retail offerings in one single convenient physical premises, a retail online platform such as that provided by Wallapop is, in effect, a form of ‘virtual’ shopping arcade which can be accessed via the internet." 

The AG rejected the idea of a "sharp distinction between intermediated online services, online trading and retail trading at physical premises". This distinction, he said, "does not take account of market realities, the changes in consumers’ habits with regard to online shopping and, above all, the perceptions of the average consumer".

Traub said: "As AG Hogan has acknowledged, sales in shops, via a website or on an online marketplace are just different forms of the same thing, namely retailing. The reality is that consumers now fully expect bricks-and-mortar stores to engage in e-commerce, and the law should protect trade marks for retail services accordingly, without artificial limitations around the specific distribution channel."

Gill Dennis, who also specialises in intellectual property law at Pinsent Masons, said: "If the CJEU chooses to follow the AG's opinion, trade mark owners will benefit. The judgment would confirm the scope of protection provided by a registration for retail services as extending to retail via all mediums, on and offline, regardless of the manner in which the trade mark owner itself is trading. This brings some clarity to this issue, which is particularly welcome at a time when we are seeing unprecedented reliance on digital services."

The CJEU's judgment in the case is likely to follow in the coming months. "It would be surprising if the CJEU went against its AG in this case," said Traub. "His reasoning appears perfectly sound."

Under Article 8(1)(b) of the EU's Community Trade Mark Regulation, the owner of an earlier trade mark can oppose a later trade mark application where the marks, and the services they will cover, are identical or similar, leading to consumers being confused about which business is providing services to them. If an opposition is successful, the trade mark application will be refused.