The Judgment of this matter was delivered on September 11, 2007, in the European Court of Justice, through the reference for a preliminary ruling from the cour d’appeal de Nancy, France.

Facts of the case—

Celine SA was established In the year of 1928, almost 20 years later company filed for its wordmark to specify the goods, particularly “clothes and shoes,” to execute the sale of Fashion accessories and clothing. 

In this matter, Celine SARL claimed the right to trade as “Celine,” selling clothing and accessories. In 1950 the company was originally registered and transferred by its operators to Celine SARL.

Celine SARL filed a suit against Ceiline SARL for trademark violation and unfair practices. The case was decided to favour Celine SA, awarded damages and restricted Celine SARL from using the term “Celine.”

SARL advanced against the decision, contending that the utilization of “Celine” as an organization or shop name did not add up to encroachment since it was not the motivation behind either an organization or a shop name to recognize services and products and that, regardless, there could be no disarray concerning general society regarding the origin of the merchandise concerned.

The French Court of Appeal made a reference to the ECJ for a primer decision on the accompanying inquiry:

“Must Article 5(1) (of the Directive)…be interpreted as meaning that the adoption by a third party without authorization, of a registered wordmark, as a company, trade or shop name in connection with the marketing of identical goods, amount to use of that mark in the course of trade which the proprietor is entitled to stop because of his exclusive rights?”


Article 5 of the Trade Marks Directive( Directive 89/104/EEC Of December 21, 1988, to approximate the laws of member states relating to trademarks (o) 1989 L40, P1) or (the directive) laid down some rights on the owner or holder of the registered trademarks. According to this article, the proprietor has the right to restrain anyone from using or producing its trademark rights or any name any sign of any identical goods without his consent or create confusion between the general public.

Referring to “arsenal football club, case C-245/02; Anheuser-Busch [2004] ECR I 10909; Adam Opel,[2007] ECR I-0000.”  

The ECJ framed that the holder/owner/proprietor of the trademark may prevent any party if this condition satisfies:

Use must be—

1.For the course of trade

2.Without the assent of the owner of the trademarks

3. Regarding products or services which are indistinguishable from those for which the trademark is enrolled; and

4.Influence or be at risk to influence the trademark elements, specifically its fundamental capacity of ensuring to customers the origin o the products or services. 

Celine SARL disagrees that the sign has been used in “regarding the goods” The ECJ held that “the purpose of a company, trade or shop name is not, of itself, to distinguish goods or services…where…[it] is limited to identifying a company or designating a business which is being carried on; such use cannot be considered as being ‘concerning goods or services within the meaning of Article 5(1) of the Directive.” However, if the sign is also affixed to goods that are marketed or used so that a link is established between the sign and the goods or services, there is use ‘concerning goods or services. Such use of a sign may damage the trademark’s ability to act as a guarantee of origin.


Under Article 6(1)(a) of the directive, the ECJ affirmed that a trademark owner could not restrain a person using their name if the party has bona fide intentions and using its accordance with honest practices. “honest practices” defined as the duty to act fairly according to the legal interests of the trademark owner. A court should consider the degree to which extent the applicable public perceives the third party’s name as showing the connection between third party merchandise or services and that trademark proprietor and whether the trademark concerned appreciates a specific standing in the member state in which it is enrolled, and its assurance is looked.

The ECJ Affirmed the “TWO STAGE/phase” test. The court should initially consider Article 5, including whether utilization of an organization name, business trademark or shop name influences or is at risk to influence the elements of the imprint/.mark. Should that be the situation, Article 6(1)(a) of the Directive can work as a bar to utilize being forestalled just if the utilization by the third of his organization name, business trademark, or shop name is as per genuine practices in mechanical or business matters.

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