Search News & Insights
Danone’s Tertiary Brand Strategy Regained
Compagnie Gervais Danone ( “Danone”) owned an Irish trade mark registration for ESSENSIS which was registered amongst other things for yoghurt in class 29. This mark was used by Danone on its BIO ACTIVIA branded yoghurt products as a tertiary mark in relation to a culture that it called Bifidus ESSENSIS. The culture was exclusive to Danone and was not sold independently but only as an essential ingredient of Danone’s BIO ACTIVIA yoghurt product. Danone marketed its yoghurt product based on the health giving benefits of its product associated with its exclusive Bifidus ESSENSIS culture.
In 2006 Glanbia Foods Society Limited (“Glanbia”) launched a yoghurt product in Ireland under the trade mark ESSENCE. Danone commenced trade mark infringement proceedings and Glanbia counterclaimed for revocation of Danone’s ESSENSIS trade mark on the basis that Danone had not made genuine use of its mark in relation to any of the goods for which it was registered, namely yoghurt. Glanbia also sought a declaration of invalidity on the basis that Danone never had a bona fide intention of using its ESSENSIS mark in relation to yoghurt and had registered it in bad faith.
At trial and in spite of considerable evidence being presented as to the use of the ESSENSIS mark on the yoghurt packaging, its importance in Danone’s advertising campaigns and its unique nature to Danone’s product, the High Court judge, found that Danone had not established genuine use of the trade mark ESSENSIS in relation to yoghurt within 5 years of its registration date. The Court found that such use as had been made was in relation to a culture within the yoghurt product, but as Danone held no registration in class 1 for microbial cultures then no genuine use had been made of the mark. Accordingly, the Judge ordered that Danone’s ESSENSIS mark should be revoked, but refused the claim that it had been registered in bad faith.
Danone obtained a stay of the Court’s Order and appealed to the Irish Supreme Court. As a matter of fact the trial judge had found that Bifidus ESSENSIS had always been used on the packaging, marketing and advertising materials for the yoghurt in order to designate an ingredient in the yoghurt, that it was a unique culture to Danone, that the mark had been used to distinguish Danone’s BIO ACTIVIA yoghurt product from competitor products and that there had been genuine use in relation to the goods for which it was registered, namely yoghurt. The judge also recognised that Danone had made a “real commercial use” of ESSENSIS as part of the third level branding of its yoghurt, which was explained as the branding of a product by reference to a unique branded ingredient. Essentially Danone argued on appeal that based on these factual findings its ESSENSIS mark must have functioned in the minds of consumers as an identifier of the origin of its yoghurt products and that this constituted genuine trade mark use.
Ms Justice Macken gave the decision of the three member bench of the Supreme Court. The Court found that based on the trial judge’s findings of fact and on a correct application of the European Court of Justice’s decision in C-40/01 Ansul B.V. v. Ajax Brandbeveiliging B.V.  ECR I-2439 (“Ansul”), that Danone had made a genuine use of the ESSENSIS mark in relation to yoghurt.
The Court found no reason to factually distinguish Ansul as the trial judge had done. It found instead that the use of ESSENSIS as a mark for an integral constituent of yoghurt was an example of an even closer connection with the product for which it was registered than the subsequent use on spare parts for fire extinguishers as in the Ansul case. The Court found that the High Court Judge had placed an unduly restrictive interpretation on the principles from Ansul and that the ESSENSIS mark had been used in accordance with its essential function, namely to guarantee the identity of the origin of the goods or services for which the mark was registered in order to create or preserve an outlet for those goods or services.
This decision has been met with a collective sigh of relief from the European food industry. Had the High Court decision been upheld then any strategy of using a constituent ingredient as a tertiary brand in relation to a product would have been in jeopardy. For example a registered trade mark such as ESSENSIS would neither have been protectable in relation to the product in which it was found, nor in relation to the ingredient that it represented. Danone had requested the Supreme Court to refer various questions concerning the proper interpretation of the essential function doctrine in these circumstances to the ECJ. However the Supreme Court found this to be unnecessary as it considered that the principles from Ansul (a case in which Ms Justice Macken had presided as a member of the ECJ) were sufficiently clear that no reference was required.