Third-party use of a trademark in a prize draw: Permissible use or infringement? | In Principle

Can a renowned trademark be used to encourage participation in a contest? Is displaying someone else’s trademark as a promotional prize merely informational, or is it trademark infringement? The Court of Justice addressed this issue in its judgment of 11 January 2024 in C-361/22, Inditex. The case involved a promotional campaign in the form of a contest, where the prize was a gift card from a well-known fashion brand. The promoter used the brand’s logo in a depiction of the card without the proprietor’s permission.

A Spanish media company called Buongiorno conducted a promotional campaign in 2010 for a multimedia subscription service. In the campaign, users could take part in a prize draw where one of the prizes was a gift card from Zara (a clothing retailer in the Inditex group) worth EUR 1,000. After clicking on the ad banner, the user would see the logo of the well-known Zara brand in a rectangle resembling a gift card.

Inditex, as the proprietor of the trademark, filed suit against Buongiorno, alleging that it was trying to profit from the renown of the Zara trademark through improper use of the mark, and that it was acting to the detriment of the brand’s reputation. Essentially, Inditex claimed that the appeal of the Zara brand was being used as a magnet to attract users to take part in the contest.

Buongiorno responded that the mark was being used solely for informational purposes, and not as a trademark, i.e. to identify the origin of goods or services. Thus it argued that its actions fell within the bounds of permissible use of the mark.

After losing in two lower courts, the proprietor appealed to the Supreme Court of Spain, which submitted a request for a preliminary ruling to the Court of Justice. The Spanish court wanted to determine whether a third party’s trademark can be used more broadly for informational purposes, or only in situations where it is necessary, and the informational purpose cannot be achieved in any other manner.

The Court of Justice held that a third party can use a trademark to identify or refer to goods or services as those of the proprietor of the trademark, in accordance with honest commercial practices, but only when necessary to indicate the intended purpose of a product or service offered by the third party.

Consequently, according to the Court of Justice, it is up to the national court to examine whether the third party’s use of the trademark in this instance met the criterion of necessity and did not exploit the reputation of the mark or mislead users as to the origin of the goods or services, or as to links between the companies.

The judgment of the Court of Justice in C-361/22, Inditex, is an important contribution to the debate over the limits of trademark protection and the right of third parties to use the trademark. Although the case arose under an earlier version of the Trademark Directive (2008/95/EC, rather than the current (EU) 2015/2436), the mechanisms for trademark protection and interpretation explored in the judgment remain relevant. The case is a reminder that trademark rights cannot be circumvented under the pretext of providing users information about the prize in a contest. The use of the trademark must be justified, necessary, and transparent within the market context. Otherwise, a finding of infringement is nearly unavoidable.

Patrycja Gierdal, Intellectual Property practice, Wardyński & Partners