The Legal Protection of “Zombie Trademarks”
A topical issue between doctrine and practice in trademark matters is related to “zombie trademarks” as an illustrative case of the existing boundaries between the laws of trademarks and unfair competition.
Such trademarks are also referred to as “ghost brands” or “orphan trademarks” in legal literature. However we prefer to use the term “zombie trademarks” because, in our opinion, it better describes the reality: unused trademarks which remain alive in the minds of consumers due to the popularity reached during their lifetime. Within this category we find brands such as Hispano-Suiza or SIMCA for cars or PRYCA, CONTINENTE or GALERIAS PRECIADOS identified with supermarket chains and department stores which today are still remembered.
Legally speaking, we refer to a situation where trademark holders no longer commercially use their signs and they either have been judicially declared expired for lack of use, or their owner has decided to abandon them or discontinue their renewal. In both cases, the legal consequence would be the cancellation of the trademarks from the Register, falling in the public domain and being therefore available for registration by any third party.
The so called “zombie trademarks” have high commercial value precisely for keeping their popularity over time and for this reason, in the case of being newly registered by a third party, the surviving reputation could be associated with the original owner of the mark so that its use might cause confusion to consumers as to the true commercial origin of the goods and services covered by the new registered sign.
Since the cancellation of the trademarks implies the loss by the holder of any property and exclusive rights held over them, “zombie” brands cannot rely on the protection afforded by the trademark regime in which case the principle of complementarity which governs the interactions between the trademark and unfair competition systems should apply. Under that principle, it is possible to resort to unfair competition law to prevent the unfair or anticompetitive use by third parties of signs not capable of being protected as trademarks or which do not meet all the necessary requirements for being awarded protection.
With the purpose of illustrating how the unfair competition law operates when the trademark law does not apply, we should recall Judgment num. 51/2014 of 12 February 2014, issued by the 15th Section of the Provincial Court of Barcelona (CENDOJ: ECLI:ES:APB:2014:710).
In that case, the Court of Appeal dismissed all actions of a trademark nature raised by the original owner of the legendary car brand Hispano-Suiza (infringement, invalidity and recovery) against the registration by a third party of a mark consisting of the same term and its later use. It should be noted that while the original owner of the Hispano-Suiza marks kept the trademarks on which he based his actions in force, some of them had been judicially cancelled for lack of use in over 70 years in connection with the manufacture, selling and repair of vehicles.
However, the Court upheld the cessation action based on the commission of unfair competition acts consisting of acts of confusion, acts of exploitation of another’s reputation and unfair advertising due the defendant’s presentation of a vehicle in the Geneva motor Show alongside with a vehicle of the original Hispano-Suiza holder and the expression “the rebirth of a legend” in addition to the use in advertising of other signs associated with the legendary car.
In this regard, we would like to highlight the Court’s findings that confirm the possibility that a sign maintains its reputation over time in the market despite its lack of use and that for this reason it is worthy of protection under the Unfair Competition Law:
“Reputation is the prestige held in the market by a product or service. It is obvious that its existence will be much easier to prove if it is actively present in the market. However, from the above it does not follow that prestige cannot be maintained despite that the product or activity is no longer in the market or not very active. In our case, we believe that prestige has been maintained and precisely it is the reason why the defendants have had so much interest in approaching the plaintiff (and pretend confusion), presenting their product as the continuation of the former (…) “.
The prohibition of use set forth by the Judgment does not however, refer to the use of the trademark Hispano-Suiza as such, over which the owner holds full rights, but to its use in conjunction with other signs or in a manner that relates the features of the products of the current holders with those of the original brand.
To conclude, although the registration of “zombie” trademarks by third parties is possible, the right to use them conferred by the Trademark Law is limited by the additional protection provided by the Unfair Competition Law which prevents that the use of the trademark is carried out unfairly with regard to other subjects participating in the market other than the trademark owner.
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