Function Theory and International Exhaustion – Why It Is Wise to Confine the Double Identity Rule to Cases Affecting the Origin Function

Abstract

In the current debate on the amendment of EU trademark legislation, the European Commission proposed to confine the so-called "double identity" rule – regulating protection against the use of identical signs for identical goods or services – to cases affecting the origin function. This proposal has been criticized for various reasons. A closer analysis shows, however, that by putting an end to the unpredictable and inconsistent function theory developed by the CJEU, it would substantially enhance legal certainty for both trademark owners and users. Moreover, it would avoid imbalanced protection of a trademark’s goodwill functions outside the specific system of anti-dilution protection for marks with a reputation. Against this background, the counterarguments do not have much weight. In particular, the proposal is unlikely to lead to a system of international exhaustion in the EU.

Keywords: trademark law, Community Trade Mark Regulation, EU Trade Mark Directive, function theory, exhaustion, comparative advertising, keyword advertising, freedom of expression, freedom of competition