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Dilution, free-riding, damage and the 'investment climate'

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

The IPKat's friend, Advokat Mats Björkenfeldt (Hjalmar Petris Advokatbyrå HB, Sweden) is known to have some strong opinions on various areas of intellectual property law (see earlier IPKat posts here, here and here). Well, now he's having another rage! This time he writes:

"The more I read about European Trade Mark Law and Unfair Competition, the more confused I get. The latest is this: I read in EU Competition Law in Context, Hart Publishing, 2009 [details here], the following:

Nina Korjus, réferendaire to a judge at the General Court of the European Union, has in that book an article called "Unfair Competition and Trade Marks". When it comes to ?Dilution and free-riding? she says that there are ?three types of injury against which Article 5(2) of the [Trade Mark] Directive ensures such protection for the benefit of trade marks with a reputation?? But when she analyses the LÓréal case [see earlier IPKat posts here and here], she could not find any injury; instead she gives this answer to the outcome of the case in the end of her article (p. 181):

?Protection of trade mark rights is important not only for the right owners but also for the society as a whole. In fact, it is in the interest of countries to have the strongest possible enforcement mechanism to protect the investment climate and labour markets and also to reduce the loss of tax revenues that are directly affected by the lack of efficient protection against, inter alia, trade mark counterfeiting. Efficient protection of trade mark rights against unfair competition should thus be provided??

But, one question is still unanswered: if there's no injury in sight, in what way is the ?investment climate? influenced by a free-rider?"

Good point, says the IPKat, if my return on investment is not diminished by another's activity, why should I worry? Merpel says, I'm not so sure the question is a valid one: a failure to obtain a maximised profit is as much a part of the 'investment climate' as the likelihood of actual damage, is it not?

Full post as published by IPKat on December 21, 2009 (boomark / email).