The Limits of Fair Use

The world known carmaker MAZDA has among many others registered trade marks for the word MAZDA and for its logo, which both are famous trade marks, also in Austria.

A firm in the province of Lower Austria offers chip tuning services for different types of cars. In chip tuning chips are built into the electronic command parts of the car to achieve a higher power output of the motor. However, chip tuning also leads to much higher wear, wherefore original warranties and guarantees are no longer valid. To advertise its services, the firm runs a website on which it enumerates for which cars they are offered. In doing so, it uses the word marks and the logo marks of the car manufacturers, among them the a/m marks of MAZDA – and MAZDA sued for trade mark infringement.

The tuning firm defended itself by saying that it only indicates for which cars it offers its services and thus relied on fair use according to Art. 6 para 1 lit c of the European Trade Mark Directive 89/104/EC.

The lower courts agreed, but the Austrian Supreme Court overturned partially on the basis of hitherto existing decisions of the European Court of Justice (ECJ). The lower courts had relied on the decision in C–63/97 BMW/Deenik. In it, the ECJ held that use of a mark is fair if it is necessary to designate the purpose of the goods and services. Without further explanations, it held not only the use of the word BMW but also that of the logos as covered. However, the Supreme Court further referred to a later decision of the ECJ in C–228/03 Gillette/LA–Laboratories, in which the ECJ further refined the notion of “necessary”. The use of trade marks of others is only necessary when such use is practically the only means to inform the public by a complete and meaningful information. Therefore, the exception of fair use has to be interpreted narrowly. This is anyway the case for normally distinctive or famous trade marks like the ones here in suit. It remains open if this is also the case with trade marks with no or very low distinctiveness.

In the present case, complete information is given by using the word mark. The additional use of the logo is not necessary. It is trade mark infringement irrespective whether the goods “chips” are similar to those for which the logo is registered or whether “chip tuning” is similar to the registered services since the logo is a famous trade mark and its use exploits without cause the fame of the MAZDA–logo.

Dipl.–Ing. Helmut Sonn