A Community Trade Mark (CTM) is a trademark which offers protections across the European Union as a whole, as opposed to protection on a national level in different member states. CTMs are considered in many circumstances to be simpler (less administration) and more cost-effective than protection on a national level.
There are various grounds for refusal of registration of CTMs and national trademarks. One of these is that a mark will not be registered if is similar or identical to an earlier mark with a reputation in the Community. The basis of this ground for refusal is that the new mark would take advantage of the reputation of the earlier mark, so it would usually be the owner of the earlier mark who would oppose a new registration.
Recently, Iron & Smith applied to register the words 'be impulsive' as a Hungarian national trademark (a figurative sign featuring the words), but the application was opposed by Unilever on the basis of its CTM 'IMPULSE'. Unilever claimed its mark had a reputation across the EU and Iron & Smith's mark would take advantage of that reputation, even in Hungary.
Unilever held a market share of 5% in the UK and 0.2% in Italy, Iron & Smith claimed this did not evidence a reputation across the EU, or in Hungary, merely in two large member states.
The Court of Justice of the European Union (CJEU -the highest court for such matters) offered the following guidance: if a mark has a reputation in a substantial part of the EU, which may sometimes coincide with the territory of only one member state, which does not have to be the state in question (Hungary in this case), it must be held that the mark has a reputation across the EU. If a reputation is established in this way, the question becomes whether a commercially significant part of the public (of, here, Hungary) would make a connection between the two marks and therefore there is actual injury to the earlier mark, or a serious risk of injury to the mark in the future.
The CJEU only offers guidance on interpretation of the law, so it is for the national court to make a final ruling.in: EU/International, Trade Marks