The branding of one’s product or service can be defined as the words, phrases, symbols, designs or a combination of such which distinguish and communicate the differences between one product and another.
A trademark is a unique element that directs the consumer towards a specific product or service, helping one differentiate between similar products and identify the difference between them while simplifying the choice of the consumer towards what they truly desire. In most cases, an identifiable trademark also allows trust to develop between the person offering the product/service and the consumer based on the product/ service’s good repute.
Trademark protection is territorial in scope. The protection conferred by a Maltese trademark is limited to Malta’s territorial confines; however, European trademarks also exist, and these confer protection through one unitary trademark across all European countries.
The concept of unregistered trademark rights is also present under Maltese law and derive from general principles of Maltese law in the Commercial Code. In this respect, the Commercial Code provides that regardless of whether a name, mark or distinctive device has been registered as a trademark in terms of the Trademarks Act, traders may not make use of any name, mark or distinctive device capable of creating confusion with any other name, mark or distinctive device lawfully used by others.
Consequently, one’s primary rights to a trademark are established by use. Registering a trademark allows for greater resiliency to the mark one uses to identify his/her brand for an initial period of 10 years which may be renewed.
At their core, trademark rights prevent unfair competition between traders and deceit of consumers when encountered with two or more products or services which seem identical or which may easily be associated together. Trademark rights also prevent producers of counterfeit goods from gaining an unfair advantage in trade, which may be detrimental to the repute of the ‘original’ distinctive EU trademark.
Proprietors of EU trademarks are entitled to prevent all third parties from using, in the course of trade, signs which are identical with the EU trademark or those similar to it, in relation to goods or services which are identical to theirs. This applies in the absence of proprietors’ authorisation for such towards third parties.
Counterfeits, or ‘dupes’, are considered to be goods infringing intellectual property rights in Malta. They include goods (and their packaging) bearing a trademark that is identical to a validly registered trademark in respect of the same type of goods. Such goods are prohibited from entering Malta, as is their exportation, re-exportation, release for circulation and their placement in a free zone or free warehouse of goods.
The First Hall, Civil Court and the Court of Appeal are the competent courts in Malta concerning the protection of intellectual property rights. On May 11, the First Hall, Civil Court, presided over by Mr Justice Mark Chetcuti, delivered two judgments related to this topic; bearing case number 1019/2020 concerning dupe Nike shoes and case number 990/2021 regarding the Adidas brand.
At their core, trademark rights prevent unfair competition between traders and deceit of consumers
In both cases involving the Adidas and the Nike trademarks, the plaintiff companies sought a court declaration that the products withheld at customs were ‘fakes’ and thus were in breach of both local and EU law.
With regard to case number 990/2021, in its judgments, the court declared that the plaintiff companies were, among others, owners of the marks known as ‘three stripes device’, ‘three stripes device on footwear’, ‘trefoil device’, ‘adidas’ and ‘ADIDAS’, which marks feature on several products of theirs, including shoes, sandals, flip-flops, clothing garments and caps. Such marks had been registered as EU trademarks with their own distinctive numbers.
It further resulted that back in August 2021, customs officers at the Freeport in Marsaxlokk had found a total of 7,752 pairs of shoes, unloaded from the Yantian Express, which raised suspicion as to the authenticity of the products. The suspected products were indeed found to be counterfeits after having been tested.
As a result of these findings, the court ordered the destruction of the products within 90 days from the date of judgment, at the expense of the shipper, and without any compensation due to the same defendant for the same destruction.
Similarly, in case number 1019/2021, plaintiff Nike Innovatove CV sufficiently proved that it was the owner of Nike and other marks such as the ‘Swoosh Design’ used on several products by the plaintiff company and such trademarks had been registered as EU trademarks.
The court found that on May 17, 2021, a total of 2,400 pairs of Nike shoe dupes had been unloaded at the Marsaxlokk Freeport, and they too were found to be counterfeits following tests conducted by a representative of the plaintiff company. As in the Adidas case, the court also ordered the destruction of the shoes within 90 days from date of judgment at the expense of the shipper, being the defendant company.
Notwithstanding the demand made by the plaintiffs in both the Adidas and Nike cases, for the court to declare any further remedy in terms of law in favour of the plaintiffs, no such remedies were delved into and the court subsequently abstained from taking further cognisance of such demands in both respective judgments.
Rebecca Mercieca is an associate at Azzopardi, Borg & Associates Advocates.