The Spanish Supreme Court has concluded in its Judgment of 10 April 2024 (STS 1906/2024) that the use by Buongiorno Myalert (Buongiorno) of the ZARA sign to refer to one of the prizes which was included in the advertising campaign for its services constitutes an infringement of the reputed trademark ZARA not covered by the limitations of the effects of the trademark as the use was not necessary to indicate the intended purpose of the services offered.
The judgment of the Spanish Supreme Court was handed down three months after the Court of Justice of the EU ruled -in response to a request for a preliminary ruling referred by the same court- in its judgment of 11 January 2024, case C-361/22 on the scope of the limitations to which a trademark owner is subject to prevent the use by third parties of his sign to identify or refer to the goods and services as those of the proprietor, and the differences arising from the provisions of Directive 2008/95 (applicable to the case in question) compared to Directive 2015/2436 (currently in force).
The CJEU, after confirming that, indeed, the uses that may limit the effects of a trademark in accordance with Article 6.1.c) of Directive 2008/95 are more limited than those provided for in the current Article 14.1.c) of Directive 2015/2436, stated that it was for the Spanish Supreme Court, in this case, to assess whether in light of Article 6.1.c) of Directive 2008/95, the use made of the ZARA sign was necessary to indicate the intended purpose of a service offered by Buongiorno.
Background
Inditex sued Buongiorno for trademark infringement and unfair competition as a result of the defendant’s use of the reputed ZARA trademark as part of a marketing strategy to promote its mobile phone and internet services. Buongiorno presented a subscription offer that included participation in a prize draw to win a ZARA gift card. When interacting with the advertisement and clicking on the banner, the term “ZARA” appeared on the screen, framed, according to the Spanish Supreme Court, in a rectangle evoking the gift cards typically issued by this type of businesses.
Both at first instance and on appeal, the claim brought by Inditex was dismissed on the grounds, inter alia, that the uses made by Buongiorno did not affect the functions of the trademark ZARA and that, therefore, there was no infringement. In the first instance judgment, the court found that Buongiorno’s use of the ZARA sign was not a descriptive use that could be justified by the limitations on trademark rights provided for in the law.
The decision of the Spanish Supreme Court
The Spanish Supreme Court confirms, first, that in this case the conditions to find an infringement in Buongiorno’s advertising activities of the reputed trademark ZARA are met. The court relies on the established doctrine of the CJEU and the guidelines it has set for the assessment of reputation, as well as in determining the special scope granted to trademarks with reputation.
After stating that there is no doubt as regards to the reputed character of the ZARA trademark and that a use by the defendant in a promotional campaign for its services had been proven, the Spanish Supreme Court concludes that such use falls within the infringement outlined in Article 34.2.c) of the Spanish Trademarks Law, namely, an infringement of a trademark with reputation, given that:
- although the ZARA sign was not used by the defendant to offer products or services under that trademark itself, it was sufficient to meet the first requirement insofar as it consisted of the use of a sign identical to the trademark regardless of the similarity between the goods or services,
- and that the reference to the ZARA trademark in the context of advertising for its services constituted a form of taking advantage of its reputed character, thus fulfilling the second requirement for the application of Article 34.2.c) of the Spanish Trademarks Law, as it was a use that entailed an unlawful transfer of the trademark image that had not been authorised by its owner.
Secondly, the Spanish Supreme Court ruled out that the use made by Buongiorno could be covered by the limitation of the effects of a trademark, considering that such use did not solely respond to the need indicate the intended purpose of the product or service offered. Being this the only limitation applicable in accordance with the original wording of Article 37 of the Spanish Trademark Law corresponding to Article 6.1.c) of Directive 2008/95, applicable in the present case.
Without prejudice to the fact that the Spanish Supreme Court dismisses the application of the limitation to this specific case, it also refers to the current wording of Article 37 of the Spanish Trademarks Law, which corresponds to Article 14 of the Directive, and to the response obtained from the CJEU regarding the scope of the limitation of the effects of a trademark to note that with the current wording, the limitation would not be limited to the use necessary to indicate the intended purpose but could also include other types of referential uses.
Conclusion
The Spanish Supreme Court’s ruling, following the provisions of the CJEU in case C-361/22, puts an end to the discussion on the application of the limitation of the effects of a trademark, although based on the previous wording of the legal provision. On the other hand, it seems to leave the door open to new discussions arising from the differences in the current wording of the limitation, which -as both courts have acknowledged- would cover broader uses than the mere use necessary to indicate the intended purpose of the product or service. However, in a case like this where the court expressly concludes that the defendant’s advertising activities involved an unlawful transfer of ZARA’s trademark image and an exploitation of its reputed character, it would be difficult to find that the second requirement of the limitation is also met, that is the existence of a use made by the third party in accordance with honest practices in industrial or commercial matters.