By Jessica Nowlan

A new definition entered trademark law in Ireland recently when the Irish High Court found well-known European yogurt brand DANONE guilty of engaging in third level branding in Compagnie Gervais Danone -v- Glanbia Foods Society Ltd.

The concept of third level branding means the use of a trademark to refer to a unique ingredient in a branded product and marketing the product based on that ingredient. In this case, the plaintiff DANONE, had trademark protection for the bacteria, Bifidus ESSENSIS, in their brand of ACTIVIA yoghurt. The defendant, GLANBIA, launched a new yogurt product onto the Irish market called “Essence”. The plaintiff alleged that the defendant’s “Essence” sign infringed its trademark “ESSENSIS”.

Unlike in the United States, Ireland does not have two methods of protection for trademarks. Under Irish law, a trademark must be registered to avail of protection against use by an unauthorized third party. A precondition to registration in Ireland is that the applicant must be using or must intend to use the trademark. This case is interesting because the plaintiff registered the trademark concerned, used that trademark yet it was still revoked for reasons that are outlined below.

DANONE registered ESSENSIS as a trademark in Ireland in respect of a number of classes of goods, one of which was for milk products. The plaintiff alleged that the defendant infringed their mark by using the word “Essence” in its name for a yogurt product, “YOPLAIT Essence”.

The defendant counterclaimed and called for revocation of the ESSENSIS trademark on two grounds; it was not being used as a trademark in respect of the goods for which it was registered; and the registration of the trademark was in bad faith as the plaintiff never had a bona fide intention of putting ESSENSIS to use in the state. This counterclaim meant that the plaintiff had to prove genuine use of their trademark to be successful in showing that infringement occurred. If a trademark is revoked for non-use, it is impossible for there to be infringement of trademark.

The law in Ireland and the European Union provides that a trademark will be revoked where it is not put to a “genuine use” for a continuous period of five years. The burden of showing “genuine use” is on the trademark proprietor. The Irish court relied on the definition of “genuine use used by the European Court of Justice in The Sunrider Corporation v. Office for Harmonisation in the Internal Market (OHIM) “There is genuine use of a trade mark where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered in order to create or preserve an outlet for those goods or services.”

The plaintiff used the mark in connection with the marketing, promotion and sale of its “DANONE ACTIVIA” yogurt, by placing the words “with Bifidus ESSENSIS® cultures” on its packaging. The product’s packaging outlined the benefits of Bifidus ESSENSIS and explained that “ACTIVIA” was the only yogurt to possess such cultures. The advertising of ACTIVIA further emphasized that the Bifidus ESSENSIS cultures were unique to ACTIVIA yogurt. The plaintiff asserted that Bifidus ESSENSIS was so unique that it guaranteed the identity of the origin of the yogurt because when customers saw the trademark they would identify the origin of the yogurt as being DANONE.

The court found that the trademark was used by DANONE for its yogurt but it was always used in conjunction with the word “Bifidus” and always as the name of an ingredient in the yogurt. The trademark was never used alone to designate the yogurt. The court also found that the culture “Bifidus ESSENSIS” was unique to DANONE and that DANONE used this to distinguish the Activia yogurt from its competitors

The court ruled that DANONE had established real commercial use of the mark ESSENSIS, however, that use was as a third level brand in that it had solely been used as a unique branded ingredient within the product. Therefore, the brand was not used in respect of the class of goods for which it was originally registered, milk products. Accordingly, the court revoked the mark for non-use.

The interesting thing about this case is that despite DANONE actually using the trademark ESSENSIS, the mark was still revoked for non-use. The Irish court has emphasized that use of a trademark will only be “genuine use” where that use is in accordance with the trademark’s registration. In the present case the mark was being used for a different class of good to that which it was registered and the court did not regard the use as ‘genuine use’.

This case signified a real victory for a smaller producer attempting to compete with a multinational corporation in a new niche market. The Irish court allowed the defendant to continue its use of the “Essence” sign on its competing yogurt drink. The defendant was prevented from engaging in activities that would act as an inhibitor to other market entrants. This decision sends a signal to multinationals that size does not mean market victory; you must act in accordance with trademark law. This case highlights the importance of registering a trademark in the exact class in which you intend to you use it. The mere use of a trademark in Ireland will not give rise to proprietary rights in that mark if it is incorrectly registered.