Functions of a Trademark
The scope of trademark right can be viewed in the light of the various functions of the mark. These are primarily constructs used in law and the functions of a trademark can be seen as a helpful tool in legal analysis. Functions can also be seen as justifying the existence of a trademark system and the protection of the trademark.
It is conceivable that a trade mark should be protected only in those situations where use would adversely affect the essential function of the trade mark. However, such an approach is too straightforward because in practical situations the interests of the various parties must be taken into account. Stakeholders include at least trademark holders, consumers and other traders.
In my view, function theory and doctrine play a very important role in the degree and level of protection of a trade mark, but it cannot be the only point of view defining the scope of protection.
Often, the most traditional function of a trademark is its origin function, which means that the trademark creates the impression that all of the goods or services associated with it have a common origin. However, this is not the only function; there are several different ones.
A common classification is to break down three functions: the origin function, the quality function, and the investment, advertising, or communication function. Some scholars adds a distinctive function to these, which can be derived from the typical legal definition of a trademark: the function of the trademark is to distinguish it from the other products available. The distinction function makes it easier to find the right product and to choose between different goods and services.
The distinction function and the origin function are, according to many researchers, so intertwined that they can often be referred to as the distinction- and origin function.
The CJEU has consistently referred to the essential function of a trade mark in its case-law. Thus, the interpretation adopted by the CJEU also seems to combine the distinction and origin functions.
An investment or advertising function is a function of the intrinsic value (independent goodwill) of a trademark. I often use the term “advertising function” for the sake of clarity, although it should be noted that tasks can also be seen separately.
The advertising function can also be thought of as providing protection for the investment made by the trademark owners to make the brand known. It is natural that the intrinsic value of a trade mark usually correlates with its reputation.
For the first time, the CJEU may be considered to have provided significant protection to its advertising and investment function in the case of the well-known trademark L’Oreal.
The importance of the advertising function is undoubtedly emphasized in today’s society. At the same time, the extent of trademark protection has a direct impact on competition. The more extensive the protection of trademarks is, for example, through protecting the investment made in them, the more difficult it may be for competitors to enter the market.
Other views have been expressed, however, such as the promotion of competition to the extent that the trademark provides information and encourages investment in product quality.
The importance of the advertising function in recent years has been influenced in particular by globalization and increasing competition, and these factors will certainly continue to increase the pressure to find an adequate level of protection taking into account the interests of the various parties involved.
The protection afforded to the advertising function and the consequent expanding trademark protection have sparked intense debate for and against.
I think it is important to secure the investments made by brand owners, including the intrinsic value of the brand, by providing protection for the advertising function, but at the same time the protection cannot go too high so as to significantly jeopardize competition and the public interest.
Traditionally, one function of a trademark can also be considered the economic function and the value of the trademark. As intangible assets, trademarks may be sold, licensed, or be the subject of various franchising, sponsorship or merchandising agreements.
As stated above, a function-only approach is not meaningful, let alone justified. For example, Advocate General Poiares Maduro has aptly stated in his Opinion in Google France and Google that:
“Whatever protection is given to innovation and investment, however, this protection is never absolute. It must always be balanced against other interests in the same way as trade mark protection itself must be balanced against other interests. In my view, the present cases call for such a balancing act with regard to freedom of expression and freedom to conduct a business.”
Nevertheless, functions play a significant role in trademark law and practice.
C-487/07 L’Oréal SA, Lancôme parfums et beauté & Cie SNC and Laboratoire Garnier & Cie v. Bellure NV, Malaika Investments Ltd and Starion International Ltd
C-236/08–C-238/08 Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08), Google France SARL v Viaticum SA and Luteciel SARL (C-237/08) ja Google France SARL v Centre national de recherche en relations humaines (CNRRH) SARL and others (C-238/08)