Department of Law Spring Term 2020
Master Programme in Intellectual Property Law Master’s Thesis 30 ECTS
The challenge of securing shapes as EU trade marks
Does the CJEU set a reasonable criterion for the register and validity of shape marks?
Author: Luis Alberto Saavedra Layera
Supervisor: Kacper Szkalej
TABLE OF CONTENTS
ABBREVIATIONS ... 3
1. INTRODUCTION ... 4
1.1 Background ... 4
1.2 Purpose of the study and research questions ... 5
1.3 Delimitation ... 5
1.4 Methodology and materials ... 5
1.5 Structure ... 6
2. MEETING THE REQUIREMENTS TO BECOME AN EUTM ... 7
2.1 Essential requirements for trade mark protection according to Article 4 EUTMR ... 7
2.1.1 A sign ... 7
2.1.2 Capable of being represented on the Register ... 8
2.1.3 Capable of Distinguishing ... 9
2.2 Shape marks as EUTM ... 9
3. IS THE PRESUMPTION THAT SHAPE MARKS ARE NOT INHERENTLY DISTINCTIVE DULY JUSTIFIED? ... 10
3.1 Distinctiveness and origin function of trade marks ... 11
3.2 Assessing inherent distinctiveness of EU shapes marks ... 12
3.3 A misunderstood inherent distinctiveness of EU shape marks. Is it possible? ... 16
3.3.1 Ghost marks and trade mark use ... 16
3.3.2 Axiom or presumption? ... 18
4. IS THE CJEU IMPOSING AN INSUPERABLE OBSTACLE FOR A SHAPE MARK TO ACQUIRED DISTINCTIVENESS THROUGH USE? ... 20
4.1 Acquiring a secondary meaning ... 20
4.2 Territorial aspect of acquired distinctiveness ... 22
4.2.1 “Kit Kat” case ... 23
4.3 Assessment of the CJEU criterion ... 26
4.4 Looking for a more friendly standard for shape marks ... 28
5. HOW COHERENT IS THE CRITERION OF THE CJEU WHEN INTERPRETING EXCLUSIONS SET IN ARTICLE 7(1)(E)(I) AND (II) EUTMR? ... 30
5.1 Article 7(1)(e) EUTMR ... 30
5.2 “Nature of the goods” exclusion (Article 7(1)(e)(i) EUTMR) ... 31
5.2.1 Overlapping grounds of refusal ... 32
5.3 “Technical function” exclusion (Article 7(1)(e)(ii) EUTMR) ... 33
5.3.1 “Exclusively” and “Necessary” ... 34
5.3.2 Identification of the “essential characteristic” and determining Functionality ... 35
5.3.3 Alternatives and hybrid Shapes, balancing interests ... 37
6. IS ARTICLE 7(1)(E)(III) EUTMR A NECESSARY EXCLUSION?
... 40
6.1 Rationale ... 40
6.2 “Substantial value” ... 41
6.3 Assessment of the CJEU ... 43
6.4 Is the “substantial value” exclusion justified? ... 44
6.5 Should Article 7(1)(e)(iii) EUTMR be abolished? ... 47
7. CONCLUSION ... 50
BIBLIOGRAPHY ... 53
ABBREVIATIONS
AG Advocate General
BoA Board of Appeal of the EUIPO
EU European Union
EUIPO European Union Intellectual Property Office
EUTM European Union trade mark
EUTMR Regulation (EU) 2017/1001 of the European
Parliament and of the Council of 14 June 2017 on the European Union trade mark
EUTMRI Commission Implementing Regulation (EU)
2017/1431 of 18 May 2017 laying down detailed rules for implementing certain provisions of Council Regulation (EC) No 207/2009 on the European Union trade mark
CJEU Court of Justice of the European Union
GC General Court
OHIM Office for Harmonization in the Internal Market
1. INTRODUCTION
1.1 Background
Currently, innovations in technology and new ways of advertisement have made the use of shape marks a suitable tool for businesses to get consumers willing to purchase their products.
Moreover, the attractiveness of such non-verbal marks to producers is likely to increase because of the efficiencies that such marks offer as a source identifier, particularly because we live in an era of multi-lingual marketplaces and where people put greater reliance on visual stimuli. Therefore, it seems logic to held that granting protection to this kind of marks brings benefits for all the actors involve in the economic environment, particularly for trade mark owners, enhancing business expansion through the use of a more appealing kind of mark, and for consumers which perceive and appreciate that the shape of iconic products such as, for example, the “Kit Kat 4 fingers” chocolate bar, defines their commercial origin.
Additionally, having been specifically recognize in the EU legislation, shape marks are the most commonly sought non-traditional registrations at the EUIPO.1
According to the aforementioned situation, it would be possible to think that EU shape marks are not difficult to obtain. However, registration of shapes has raised justified and not justified concerns regarding competition, its overlapping with others intellectual property rights, and its role as a badge identifier. Moreover, during the previous years, the CJEU decisions regarding shape marks have shown that they are difficult to be registered in practice. Furthermore, among those that were originally protected by EUIPO, many have since been revoked when attacked by an alleged infringer.2 Thus, why is this situation happening? Besides the fact that EU legislation, specifically the EUTMR, had established general requirements for a shape (and any other kind of mark) to deserve protection as an EUTM, a shape mark should avoid to fall into some absolute grounds of refusal that have
1EUIPO Statistics in European Union Trade Marks, 1996-01 to 2020-04 Evolution, Section 2.3,
https://euipo.europa.eu/tunnelweb/secure/webdav/guest/document_library/contentPdfs/about_euipo/the_office /statistics-of-european-union-trade-marks_en.pdf
2Nordemann-Schiffel, A. (2018). “Why Product Shape Marks May Be in Bad Shape in the European Union,”
Inta Bulletin, Vol. 73, no18.
shown to be difficult to overcome for this type of mark. At this point, the role of the CJEU in the interpretation and application of these grounds of refusal has become critical to the current unfortunate trend of rejecting shape marks protection.
1.2 Purpose of the study and research questions
The purpose of this work is to make a critical analysis of the current criterion, established by the CJEU, to assess whether a particular shape deserves protection as an EUTM, and thus to determine where it is appropriate to re-think or make amendments in order to balance the public policy involved in its registration with the interest of shape marks applicants or right holders. Accordingly, the thesis should deal with and provide answers to the following questions:
Is the presumption that shape marks are not inherently distinctive duly justified? Is the CJEU imposing an insuperable obstacle for a shape mark to acquired distinctiveness through use?
How coherent is the criterion of the CJEU when interpreting exclusions set in Article 7(1)(e)(i) and (ii) EUTMR? Is Article 7(1)(e)(iii) EUTMR a necessary exclusion?
1.3 Delimitation
As the field of this thesis is EUTM, it is focus entirely on the Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (EUTMR), particularly on the interpretation and application of Article 7(1)(b) and (e), 7(2) and 7(3). The relevance of the EUTMR stems from the fact that deals with both substantial and procedural aspects of trade marks at EU level. Thus, no reference will be made to national legislation. Moreover, regarding case law, this will exclusively comprise CJEU judgments and EUIPO decisions. Indirect reference to national cases will be made only when a case was referred to the CJEU. This thesis does not deal with competition law, patent, design or copyright protection.
1.4 Methodology and materials
In order to reach the main aims of the thesis identified in subsection 1.2, the traditional dogmatic method is conducted. The sources of law have primarily consisted of EU legislation (EUTMR) and case law emanating from the CJEU and the EUIPO as the object of this thesis implies an analysis of the interpretation and application of the law. Moreover, legal doctrine, including books, legal articles, journal publications, and legal opinions as well as the EUIPO trade mark guidelines have been examined to assess the current practice in the area regarding this thesis. As to non-legal sources, they are used in this work in order to present relevant information and current opinions on the presented topic (e.g. reports).
1.5 Structure
This thesis is divided into seven chapters. The first one provides with the introduction on the topic, research questions, delimitation and method and materials. The second part focuses on the essential requirements for EUTM registration and how they are fulfilled by shapes marks.
The third one highlights the current criterion of the CJEU in the assessment of inherent distinctiveness of shape marks and the main critics that it has received. The fourth one provides with information regarding the assessment of acquired distinctiveness through use for EU shape marks, particularly the role that the CJEU has given to the territorial requirement, ending with a critical view of the function that the territorial factor plays in its assessment. The fifth part focus on how coherent and appropriate is the CJEU interpretation of the absolute grounds of refusal set in Article 7(1)(e)(i) and (ii) EUTMR (“nature of the goods” and “technical function" exclusion) regarding shape marks and the identification of the main difficulties in its current application. The sixth chapter studies the Article 7(1)(e)(iii) EUTMR (“substantial value” exclusion) concerning shape marks, the rationale of this provision and how its interpreted by the CJEU, followed by critical evaluation of its role as an absolute ground of refusal. The last, seventh part provides with final conclusions.
2. MEETING THE REQUIREMENTS TO BECOME AN EUTM
In this section, an examination of the requirements for a sign to be protected under EUTM legislation will be presented to highlight what can function and be protected as an EUTM.
Then, I will present an overview of what is a shape marks and how this kind of non-traditional mark fits the requirements set in EU law to be protected. Acknowledging the basics for shape marks protection will give us a general insight about how shape marks are recognized in EU legislation, which will serve as a start point to understand the rest of this work.
2.1 Essential requirements for trade mark protection according to Article 4 EUTMR
A notion of what is a trade mark can be find in Article 4 EUTMR. According to this Article, an EUTM “may consist of any signs, in particular the shape of goods or of the packaging of goods, provided that such signs are capable of: (a) distinguishing the goods or services of one undertaking from those of other undertakings; and (b) being represented on the Register of European Union trade marks, (“the Register”), in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor”.3
Additionally, the accomplishment of the requirements established in Article 4 EUTMR has been set as an absolute ground of refusal in Article 7(1)(a) EUTMR, remarking the fact that they are mandatory for a trade mark to be admitted to the register.
From Article 4 EUTMR is possible to identify three requirements for a trade mark to be registered: to be a sign, capable of being represented on the Register, and capable of distinguishing.
2.1.1 A Sign
3Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union Trade Mark, Art. 4.
According to Article 4 EUTMR and Article 3(3) EUTMIR, it is possible to say that word marks, figurative marks, shape marks, position marks, pattern marks, single colour and combination of colour marks, sound marks, motion marks, multimedia marks, and hologram marks may constitute an EUTM. Moreover, the list mentioned above is not exhaustive, as Article 3(4) EUTMIR states that a mark not covered by any of the types listed in Article 3(3) EUTMIR can qualified as a mark provided it complies with the representation requirements set out in Article (3)1 EUTMIR.4 Therefore, EUTM law recognizes both, traditional and non- traditional marks, including the possibility to protect a broad range of signs based on appearance, shape, sound, smell, taste and texture.
Additionally, although a trade mark is defined as “any sign”, which is a term very broad in scope and could be taken to mean “anything which can convey information”, it has its limits.5 Through the EU case law, it has been established that ideas, abstract concepts or general characteristics of goods do not qualify as a sign. For instance, in Dyson case the CJEU excluded the protection of a “transparent collecting bin forming part of the external surface of a vacuum cleaner” because it was intended to be registered in an abstract manner that could be applied to all of Dyson’s vacuum cleaners, not capable of being perceived by one of the five senses and appeals only to the imagination.6
2.1.2 Capable of being represented on the Register
As is it set in Article 4 EUTMR, a sign to be protectable as a trade mark requires to be represented in a clear and precise manner, in order to allows the competent authorities and the public to determine the scope of the protection afforded to its proprietor. Moreover, according to Recital 10 of the EUTMR, graphical representation is not required anymore, which facilitates the registration of non-traditional trade marks, particularly olfactory (smell), sound, and colour marks. It follows from the provisions aforementioned that the sign just
4“EUIPO Guidelines,” accessed May 22, 2020, https://guidelines.euipo.europa.eu/1803468/1786013/trade- mark-guidelines/1-1-signs
5Pila, J. & Torremans, P. , 2019, p.348
6Judgment of the Court (Third Chamber), January 25, 2007, in Case C‑321/03, Dyson Ltd v Registrar of Trade Marks.
required to be represented in any appropriate form using generally available technology, and thus not necessarily by graphic means, as long as the representation is clear, precise, self- contained, easily accessible, intelligible, durable and objective, facilitating trade mark holders to file and register non-traditional trade marks. These criteria stem from those established in the Sieckmann7 case with respect to the requirement for a clear and precise acceptable “graphical” representation under the previous wording of the EUTMR.
2.1.3 Capable of Distinguishing
Distinctive character established in Article 4 EUTMR refers to the capacity of a sign to distinguish the goods or services of one undertaking from those of another. Particularly, it just concerned with the abstract ability of a sign to serve as a badge of origin, regardless of the goods or services. An example for the lack of abstract capacity in the context of any goods or services could be the word “Trademark”.8 Different aspects of distinctiveness will be explained in much more detail when it analyzes the application of the absolute grounds for refusal of registration, specifically Article 7(1)(b) EUTMR.
2.2 Shape marks as EUTM?
Shape marks are one of the non-traditional trade marks that have been specifically recognize in EU legislation. Article 4 EUTMR stated that a trade mark “may consist of any signs, in particular the shape of goods or of the packaging of goods…”. Moreover, according to the EUIPO guidelines, shape marks are those “consisting of, or extending to, a three-dimensional shape, including containers, packaging, the product itself or their appearance”.9
Having been specifically recognize in the legislation, it would be possible to think that shape marks are not difficult to obtain. As the nature of a shape is to be perceivable visually, and
7Judgment of the Court, December 12, 2002, in Case 273/00, Ralf Sieckmann v Deutsches Patent- und Markenamt, para 55.
8“EUIPO Guidelines,” accessed March 3, 2020, https://guidelines.euipo.europa.eu/1803422/1786763/trade- mark-guidelines/1-2-distinguishing-character
9“EUIPO Guidelines,” accessed May 22, 2020, https://guidelines.euipo.europa.eu/1803468/1785874/trade- mark-guidelines/2-1-shape-marks
not an abstract concept or an idea, it can qualify as a sign and be represented in a clear and precise manner in the register without facing major difficulties. In this sense, Article 3(3)(c) EUTMIR establishes that is sufficient to submit a graphic or photographic reproduction of the shape that may contain different views.10 Concerning distinctiveness, it is hard to find a case where a shape cannot have the abstract capacity to distinguish the goods of one undertaking from those of another because the assessment in Article 4 and Article 7(1)(a) EUTMR is done without considering in relation to what product protection is sought.
Conversely, most of shape marks struggle with the capacity of being distinctive, not as it was defined in subsection 2.1.3, but as it set in Article 7(1)(b) EUTMR, that is regarding to the distinctive character of a trade mark with regard to specific goods or services. In this sense, it is worth to mention that there are different kinds of shapes marks, some of them are unrelated to the goods or services themselves, for instance the logo of an apple associated to computers. These ones are usually distinctive in terms of Article 7(1)(b) EUTMR. However, there are also shape marks consisting of the shape of the goods themselves or the shape of the packaging, in this cases it may be more difficult to come to a finding of distinctiveness, as such marks will not necessarily be perceived by the relevant public in the same way as a word or figurative mark.11
Therefore, it is possible to held that almost any shape is capable to fulfill the essentials requirements to be a trade mark set in Article 4 EUTMR, and consequently overcome the absolute ground of refusal set in Article 7(1)(a) EUTMR. Though, this provision, when assessing distinctiveness, should not be confused with the absolute ground of refusal established in Article 7(1)(b) EUTMR. Furthermore, as it will be analyzed in this work, there are other absolutes ground of refusal, specifically those set in Article 7(1)(e) EUTMR, which represent an obstacle for the registration and validity of a shape as an EUTM.
3. IS THE PRESUMPTION THAT SHAPE MARKS ARE NOT INHERENTLY DISTINCTIVE DULY JUSTIFIED?
10“EUIPO Guidelines,” accessed March 3, 2020, https://guidelines.euipo.europa.eu/1803422/1785874/trade- mark-guidelines/2-1-shape-marks
11“EUIPO Guidelines,” accessed March 3, 2020, https://guidelines.euipo.europa.eu/1803422/1788412/trade- mark-guidelines/11-1---10-1-preliminary-remarks
In this section it will be analyzed the absolute ground of refusal stated in Article 7(1)(b) EUTMR concerning distinctive character, focusing on inherent distinctiveness (acquired distinctiveness will be considered in section 4). First, an examination of distinctiveness and its function will be presented. Then, an analysis of the criteria set by the CJEU, and followed by EUIPO, when determining inherent distinctiveness will be carried out, including how this applies to shape marks and its flaws. The importance of examining how inherent distinctiveness of shape marks is assessed stem from the fact that it helps us to understand why the presumption that shape marks are not inherent distinctiveness exists, and why it could require a more flexible interpretation in order to facilitate the registration of shape marks.
3.1 Distinctiveness and origin function of trade marks
A shape to be capable of being protected as a trade mark needs to fit not only the basic requirements to constituted a trade mark, but also overcome the absolute ground of refusal established in Article 7(1)(b) EUTMR: “The following shall not be registered:…(b) trade marks which are devoid of any distinctive character”. The sign should serve to identify the product and/or services in respect of which registration is applied for as originating from a particular undertaking, and thus to distinguish that product or service from those of other undertakings.12 This means that, as it was expressed in section 2, it relates to the distinctive character of a trade mark with regard to specific goods or services.
Being distinctive on a trade context is the origin function of trade marks, as they should communicate a message about the source and quality of the goods or services that are labelled with the mark. This essential function of trade marks implies to guarantee the identity of the origin of the marked product to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the product or service from others which have another origin. For a trade mark to be able to fulfill its essential role in the system of undistorted
12Judgment of the Court (First Chamber), January 21, 2010, in Case C‑398/08 P, Audi AG v OHIM, para 33.
competition, it must offer a guarantee that all the goods or services bearing it have originated under the control of a single undertaking which is responsible for their quality.13
According to Friedmann the rationale for distinctiveness are at least three: it can reduce search costs for consumers as allows to designate goods or services to a source, it can help protect the source’s goodwill, which encourages that source to invest in product quality, and third, it helps to protect against unfair advantage of the reputation of a trade mark which is protecting the trade mark holder’s investments.14 Moreover, these advantages that distinctiveness brings to the development of the marketplace are even more evident when we talk about shape marks as they can be one of the most attractive kinds of trade marks (when the requirements are meet) due to they are easily perceived by consumers. Thus, convenient in economic terms for business.
3.2 Assessing inherent distinctiveness of shapes marks
In evaluating the distinctiveness of a mark to determine if it overcomes the absolute ground of refusal established in Article 7(1)(b) EUTMR, the registration authority has two alternatives. First, a mark can be inherently distinctive if its intrinsic nature, taking into account no use, makes possible to identify a particular source.15 Second, a mark can acquired distinctiveness through use if it has developed secondary meaning, which occurs when, in the minds of the public, due to marketing and commercial practices, the primary significance of a mark is to identify the source of the product rather than the product itself.16
Regarding inherent distinctiveness, which is the subject to treat in this section, the general criterion developed by the CJEU and follow by EUIPO to establish distinctiveness of a EUTM consists, firstly, in determine whether the sign is capable of distinguishing in relation to the goods for which registration of the sign has been requested, and secondly, the
13Judgment of the Court, September 29, 1998, in Case C‑39/97, Canon Kabushiki Kaisha v Metro-Goldwyn- Mayer Inc., formerly Pathe Communications Corporation, para 28.
14Friedmann, D., “The bottle is the message: only the distinctive survive as 3D Community trade marks”, Journal of Intellectual Property Law & Practice, Vol. 10, No. 1, 2015, 35 at pp.35
15Boyle, J. & Jenkins, J., 2016, p.142
16Ibid.
distinctive character is assessed in relation to the perception of the relevant public.17 In this sense, the “relevant public” has been interpreted as the “average consumer” who is deemed to be reasonably well-informed and reasonably observant and circumspect.18 The average consumer should be able to determine the distinctive character of the sign without conducting an analytical examination and without paying particular attention.19 If this happens, even a minimum degree of distinctive character is sufficient to render inapplicable the absolute ground for refusal.20
In this regard, the CJEU has developed the principle that, concerning shape marks, a shape should be assessed using the same criteria for assessing the distinctive character as in other types of marks.21 However, there is an established practice that the average consumer’s perception is not necessarily the same with regards to shape marks as it is for other types of marks, such as a word or a figurative marks, when the latter consists of a sign independent from the appearance of the goods it represents.22 The average consumer is deemed not used to making assumptions about the origin of products on the basis of their shape or the shape of their packaging in the absence of any graphic or word element.23 Thus, the CJEU has set a stricter standard for shape marks to be distinctive, the shape must depart significantly from the norm or customs of the sector, and the shape should not be merely a “variant” of a common shape of that type of product. 24 It should be noted that this standard also applies to any two-dimensional mark that depicture a graphic representation of a three-dimensional
17Judgment of the Court (Third Chamber), October 20, 2011, in Joined cases C-344/10 P and C-345/10 P, Freixenet, SA v OHIM, para 42.
18Judgment of the Court (Sixth Chamber), April 29, 2004, in Joined Cases C-456/01 P and C-457/01 P, Henkel KGaA v OHIM, para 47.
19Judgment of the Court (Second Chamber), October 7, 2004, in Case C-136/02 P, Mag Instrument Inc. v OHIM, para 53.
20Judgment of the Court (Sixth Chamber), April 29, 2004, in Joined Cases C-456/01 P and C-457/01 P, Henkel KGaA v OHIM, para 42.
21Order of the Court (First Chamber), June 28, 2004, in Case C-445/02 P, Glaverbel SA v OHIM, para 21-23.
22 Judgment of the Court (Second Chamber), October 7, 2004, in Case C-136/02 P, Mag Instrument Inc. v OHIM, para 30.
23Judgment of the Court (Sixth Chamber), February 12, 2004, in Case C-136/02 P, Henkel KGaA v Deutsches Patent- und Markenamt, para 52.
24Judgment of the Court (Second Chamber), October 7, 2004, in Case C-136/02 P, Mag Instrument Inc. v OHIM, para 31-32.
shape, such as a figurative mark consisted on a representation of a white and blue square- shaped packaging. 25
Contemporary cases before the CJEU have raised the issue of determine if a shape departs significantly from the norm or customs of the sector. For instance, in Jaguar v OHIM (“Jaguar”) the Court had to deal with a decision made by the BoA about, among other subjects, the inherent distinctiveness of a three-dimensional sign consisting of the shape of a car in respect of “vehicles for locomotion by air or water” and of apparatus for locomotion by land individualized in class 12 of Nice Classification.26
The sign at issue in “Jaguar”
The Court shared the same reasoning made by the BoA: as the “relevant public” was deemed to have a high degree of attention when purchasing the goods at issue (in particular, on account of their price), and the sign consists of a three-dimensional shape without any word or figurative element, it is necessary to determine whether the mark applied for departs significantly from the norm or customs of the sectors concerned.27
Then, the Court confirmed the decision of the BoA repealing registration of apparatus for locomotion by land sought in class 12. It was stated that car hulls have become more and more standardized, being merely another variation of the typical shape of a car, and that the features visible were typical for modern cars, such as a flat windscreen, a rounded front and a sloping coupe roofline.28 Therefore, none of the features as visible on the representation or
25“EUIPO Guidelines,” accessed March 10, 2020, https://guidelines.euipo.europa.eu/1803422/1787548/trade- mark-guidelines/11-3---10-3-shape-of-the-goods-themselves-or-shapes-related-to-the-goods-or- services
26Judgment of the General Court (Fourth Chamber), November 25, 2015, in Case T-629/14, Jaguar Land Rover Ltd, v OHIM.
27Ibid, para 22, 23 and 24.
28Ibid, para 27.
claimed by the applicant departed significantly from the customary and usual shapes of cars.29
Additionally, the Court annulled the decision of the BoA in so far as it refused registration of the mark applied for as regards “vehicles for locomotion by air and water” in Class 12, considering the mark as departing significantly from the norm and customs of the sector for this kind of vehicles.30
This case shows how the CJEU applies the criteria to determine if a shape departs significantly from the norm or customs of the sector as the shape of the car depicted in the mark was considered to be a regular shape in the automobile market for vehicles for locomotion by land, but distinctive regarding vehicles for locomotion by air and water, where that kind of shape was deemed to be original.
Another case from the CJEU relating to inherent distinctiveness is Gibson v EUIPO (“Gibson”). In this case the GC dismissed Gibson’s appeal against a decision that declared invalid its EUTM for the 3D shape of its Flying V guitars in respect of musical instruments in class 15 of Nice Classification.31
The sign at issue in “Gibson”
It was held that the V-shape body is now perceived as one possible variant of the many shapes of electric guitars on the market and no longer departed significantly from the norms and customs of the electric guitar sector. 32 The Court added that although the V-shape was highly original in 1958, that originality could not serve as a reference for an analysis of the perception of the relevant public in June 2010 (application filing date), when, at the latter
29Ibid.
30Ibid, para 26.
31Judgment of the General Court (Second Chamber), June 28, 2019, in Case T‐340/18, Gibson Brands, Inc. v EUIPO.
32Ibid, para 8.
date it was established that the market was characterized by a wide variety which necessarily influenced the perception of the relevant public (professional and amateur electric guitarists).33
This case remarks how crucial is timing for the assessment of inherent distinctiveness. As the Court said, “The originality of a shape must be evaluated in the light of the situation on the market taking as the starting point the date of filing of a three-dimensional mark”.34 Thus, applicants should be diligent when apply for shape marks as there is a risk that their marks will be subsequently imitated after they release them into the market, which may make them lose their inherent distinctiveness.
3.3 A misunderstood inherent distinctiveness of EU shape marks. Is it possible?
No matters how clear and necessary the rigorous criteria to evaluate inherent distinctiveness of shape marks seemed to be, some flaws in this assessment can be identified, basically, regarding the effects of its application and the infallibility of this presumption.
3.3.1 Ghost marks and trade mark use
Recent judgements suggest that shape marks for products are being registered under inherent distinctiveness by applicants claiming products other than those which they were expected to identify. This trend can be seen in the cases commented in the previous section. For instance, in Jaguar, where the GC held that the shape of the Land Rover Evoke car was distinctive just in respect of “vehicles for locomotion by air or water” but not in relation to the core goods, land vehicles in class 12, which were its primary aim as it can be deduced from the description of the goods sought.35 Similar situation happened in Gibson case, where the GC did not find the V-shape body guitar distinctive for “musical instruments”, thus the mark remained valid just for the rest of goods sought in class 9, 15 and 25, which as in Jaguar
33Ibid, para 52.
34Ibid, para 40.
35Judgment of the General Court (Fourth Chamber), November 25, 2015, in Case T-629/14, Jaguar Land Rover Ltd, v OHIM, para 4.
case, it was contrary to the main goods in respect protection was sought, its iconic Flying V guitar model. 36
As a consequence of the scenario describe before, it exists a high probability that trade mark owners do not use their shape marks, or not use them as they were granted. This situation may indicate that the current framework is favoring the increase of so-called “ghost marks”37, marks that does not exactly reflect the real use of the mark. Thus, diminishing the effectiveness of the register as an informational resource, raising the number of non-used trade mark registered , with third parties being unsure as to the nature and scope of the mark38, preventing competitors from valid registration of identical or similar marks which are actually used or intended to be used.Moreover, this situation goes against the principle that the requirement of trade mark use is necessary in order to reduce the total number of trade marks registered and protected in the Union and, consequently, the number of conflicts which arise between them.39 Therefore, although cancellation procedures are still available to revoked a trade mark that is not being used, this mechanism can be only use after 5 years following registration.40
As we can see, the situation, where shape marks are granted but not for the main goods that trade mark applicants had in mind, generates some conflicts between applicants and right holders that have not been solved properly. Furthermore, this uncertainty about the nature and scope of a shape mark would also deceive consumers when they identify and associate the origin and quality of a product shape with a particular undertaking whose shape mark do not cover that particular product shape.
36Judgment of the General Court (Second Chamber), June 28, 2019, in Case T‐340/18, Gibson Brands, Inc. v EUIPO, para 21.
37Porangaba, L., “Acquired Distinctiveness in the European Union: When Nontraditional Marks Meet a (Fragmented) Single Market,” Trademark Reporter 109, no. 3 (June 28, 2019), 619 at pp.631-632.
38Gangjee, D., “Paying the Price for Admission: Non-Traditional Marks Across Registration and Enforcement,”
In The Protection of Non-Traditional Trademarks: Critical Perspectives, edited by Irene Calboli, and Martin Senftleben. Oxford: Oxford University Press, 2018. Oxford Scholarship Online, 2019, p.77.
39Judgment of the General Court of First Instance (Second Chamber), March 12, 2003, in Case T-174/01, Jean M. Goulbourn v OHIM and Others, para 38.
40Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union Trade Mark, Art. 58.
3.3.2 Axiom or presumption?
As it has been explained in subsection 3.2, the current practice of the CJEU has settle as an axiom that average consumers are not generally accustomed to making assumptions about the origin of products based on their shape. Thus, it has become necessary for a trade mark owner, when establishing distinctive character in its shape mark, to demonstrate that the mark departs significantly from the norm or customs of the sector. However, this criterion far from being fully accepted, it has received some critics.
Some authors, such as Hastings Guise, have held that the view expressed by CJEU case law on shape marks is actually a presumption as to consumer behavior that does not take into account the nature of the goods and services at issue, which is clearly not the same across different sectors.41 This means that there are sectors where this presumption may not actually apply, being a presumption capable of rebuttal. Thus, when assessing inherent distinctiveness of a shape, the competent authority should seek if there is evidence to suggest that the average consumer of the relevant sector is more or less likely than those in other sectors to make assumptions about the origin of the product based on its shape.42 If the competent authority does not look for evidence, characterization of consumer perception of shape marks would be disregarding the differences that exist amongst consumers from one sector to the other. In this context, Guise held that the automotive sector is one in which the average consumer makes assumptions about the origins of a car based on its shape because, in situations where other graphic or word elements are not easily visible, such as when driving on public roads, many consumers will readily identify brands of car on the basis of shape alone.43 “A motorist arrives home and comments on social media that they ‘saw a Porsche broken down on the hard shoulder’. A negative message that cuts to the heart of Porsche's brand is mediated
41Guise, H., “London Taxi Case - The Role of Consumer Perception in Assessing the Inherent Distinctiveness of Shape Marks,” Fieldfisher, accessed March 15, 2020, https://www.fieldfisher.com/en/services/intellectual- property/intellectual-property-blog/london-taxi-case-the-role-of-consumer-perception-in-assessing-the- inherent-distinctiveness-of-shape-marks.
42Ibid.
43Ibid.
exclusively by that consumer's recognition of the distinctive shape of one of its cars. Clearly the shape is having a trade mark function”.44
In the same line of argumentation, Danny Friedman has said that, for instance, in the packaging beverage sector one can argue that a wine brand that is always selling its bottles with a crooked neck is for many consumers easier to remember than a word mark such as
“JP Chenet”, since some people are more visually than verbally inclined.45 Moreover, to recall a name in a language with which one is not familiar can be particularly challenging, especially in an economic union with 24 official languages.46
From my perspective, I agree with the aforementioned approach to inherent distinctiveness of shape marks. As it has been said above, there are some markets where the presumption may not apply, which makes shape mark not to be so different in terms of how the relevant public appreciate them as an origin identifier if we compared them with other kinds of mark.
Moreover, European consumers should not be taken to perceive shapes in the exact same way, there are cultural or linguistic variations and consumer attitudes that can make them consider some shapes as a product identifier in a particular sector. Therefore, the assumption that consumers instantly recognize a word or figurative mark as a designation of source, while this would not be the case with three-dimensional marks, may lacks support in some cases.
Furthermore, considering this situation is far from being harmful for shape marks applicants, on the contrary, it will help small and medium-sized enterprises, which will not be forced to invest heavily in costly promotions and surveys to prove acquire distinctiveness.
Of course, this presumption should be refuted on base an appropriate evidence. This could be problematic as we do not know what kind of evidence would be useful to refute this presumption, so it could be an open door for a subjective analysis by the competent authority, which could lead to controversial decisions. Thus, it should be necessary that the CJEU makes it clear which can be work as a proper evidence.
44Ibid.
45Friedmann, D., “The bottle is the message: only the distinctive survive as 3D Community trade marks”, 2015, Vol. 10, No. 1, Journal of Intellectual Property Law & Practice, 35 at pp.40
46Ibid.
4. IS THE CJEU IMPOSING AN INSUPERABLE OBSTACLE FOR A SHAPE MARK TO ACQUIRED DISTINCTIVENESS THROUGH USE?
In this section, it will be presented and discussed the requirements for a shape mark to acquire distinctiveness due to the use made of it in the EU. The focus will be put on how the CJEU has interpreted the territorial requirement of acquired distinctiveness, a condition that has proven to be tough to accomplished for shape marks according recent case law developed by the CJEU. In analyzing acquired distinctiveness through use I want to evaluate how challenging and controversial the criterion is. Thus, suggesting a change in the current practice developed by the CJEU in order to facilitate the registration of EU shape marks.
Though, mention will be made to other categories of non-traditional trade marks where deemed appropriate.
4.1 Acquiring a secondary meaning
As it was explained in subsection 3.2, in evaluating the distinctiveness of a mark, to determine if it overcomes the absolute ground of refusal established in Article 7(1)(b) EUTMR the registration authority has two alternatives: assessing that the mark is inherently distinctive, or if this is not possible, evaluating whether the mark has developed a secondary meaning or not. Regarding the latter, Article 7(3) EUTMR stated that a trade mark can be registered even if it falls in the situation set in Article 7(1)(b) EUTMR as long as it has become distinctive in relation to the products or services for which the registration is requested as a consequence of the use made of it. In other words, distinctive character acquired through use means that, although the sign lacks inherent distinctiveness originally with regard to the goods and services claimed, at least a significant proportion of the relevant public has, owing to the use made of it on the market, come to see it as identifying the goods and services claimed in the EUTM application as originating from a particular undertaking.47
47“EUIPO Guidelines,” accessed March 23, 2020, https://guidelines.euipo.europa.eu/1803422/1787924/trade- mark-guidelines/1-introduction
In examination procedures the applicant should prove that the distinctive character through use was acquired previous to the date of application for registration.48 However, when a mark has been registered infringing Article 7(1)(b) EUTMR, the mark may have acquired distinctiveness through the use after registration, in which case it cannot be declared invalid.49
According to the criterion developed by the CJEU to assess acquired distinctiveness, the following aspects should be taken into account: the market share held by the mark; how intensive, geographically widespread and long-standing use of the mark has been; the amount invested by the undertaking in promoting the mark; the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking; and statements from chambers of commerce and industry or other trade and professional associations.50 Then, an overall assessment of the evidence should be made.51 In this respect, Article 97 EUTMR contains a non-exhaustive list of means of giving or obtaining evidence, such as customer and market surveys.
The purpose of this assessment is that the applicant or the trade mark owner prove that the relevant class of persons identify the goods or services designated exclusively by the mark that is applied for as originating from a particular source.52 Though, it is important to notice that, according to the CJEU, the fact that the relevant public recognizes a trade mark by referring to another mark which designates the same goods and is used in conjunction with the former does not mean that the former trade mark is not used as a means of identification in itself as long as it can be able to fulfil the distinctive role on its own.53 For example, when Nestlé SA attempted to register the shape of its iconic chocolate bar as a EUTM, the proof of acquisition of distinctive character through use was based, to a large extent, on the
48“EUIPO Guidelines,” accessed March 24, 2020, https://guidelines.euipo.europa.eu/1803422/1787654/trade- mark-guidelines/3-1-examination-proceedings
49Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union Trade Mark, Art. 59 (2)
50Judgment of the Court of First Instance (Third Chamber), December 15, 2005, in Case T‐262/04, BIC SA v OHIM, para 64; Judgment of the Court, May 4, 1999, in Case T‐262/04, Windsurfing Chiemsee Produktions- und Vertriebs GmbH v Boots- und Segelzubehör Walter Huber and Franz Attenberger, para 51.
51“EUIPO Guidelines,” accessed March 23, 2020, https://guidelines.euipo.europa.eu/1803422/1789282/trade- mark-guidelines/8-assessment-of-the-evidence
52Pila, J. & Torremans, P. , 2019, p.364.
53Judgment of the Court (First chamber), September 16, 2015, in Case C-215/14, Société des Produits Nestlé SA v Cadbury UK Ltd, para 66.
identification of the commercial origin by making reference to the product known as “Kit Kat 4 fingers” and, hence, to the word mark KIT KAT.54 However, each of the surveys presented as evidence to prove acquired distinctiveness revealed that, when only the shape of the product in question was shown to respondents, a considerable percentage of them spontaneously and immediately related that shape with the word mark KIT KAT or the trade mark owner.55
4.2 Territorial aspect of acquired distinctiveness
Concerning the territorial requirement for acquired distinctiveness through use, it has been object of controversy how the CJEU has interpreted Article 7(2) EUTMR, mainly because of its effects for shape marks.
A general view of the criterion set by CJEU in this matter can be explain as it follows.
According to the unitary character of an EUTM and its equal effect throughout the EU56, and from the fact that the grounds of non-registrability established in Article 7(1) EUTMR apply even if they are obtained in only “part of the Union”, as it set in Article7(2) EUTMR, a sign should be distinctive throughout the EU, whether inherently or acquired through use.57 Hence, the acquisition of distinctive character through use must be proven for the part of the EU in which the trade mark concerned did not initially have this character.58
Such a high threshold seems to be designed to limit shape marks. This is because as the CJEU has usually considered them as inherently devoid of distinctive character for all EU consumers,59 the acquisition of distinctiveness for a shape should be proven likewise
54Judgment of the General Court (Fifth Chamber), December 15, 2016, in Case T‑112/13, Mondelez UK Holdings & Services Ltd v EUIPO and Société des produits Nestlé SA, para 59.
55Ibid.
56Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union Trade Mark, Art. 1(2).
57Judgment of the Court (Third chamber), July 25, 2018, in Joined Cases C-84/17 P, C-85/17 P and C-95/17 P, Société des produits Nestlé SA and Others v Mondelez UK Holdings & Services Ltd, para 67-68.
58Judgment of the Court (First chamber), June 22, 2006, in Case C-25/05 P, August Storck KG v OHIM, para 83. 59Judgment of the General Court (Second Chamber), June 28, 2019, in Case T‐340/18, Gibson Brands, Inc. v EUIPO, para 75.
throughout the EU. Thus, in determine the feasibility of a shape mark to acquired distinctiveness through use, it is necessary to assess how the CJEU has interpreted the geographical requirement that stems from the reading of Article 7(1)(b), 7(3) and 7(2) EUTMR, especially the segment “part of the Union” of the latter provision: Is the meaning of “part of the Union” comprising just a single Member State, a considerable number of Member States, or a part of the Union not corresponding to any administrative borders?
In Storck v. OHIM (“Storck”), a case concerning the registration of the shape of a gold- coloured twisted sweet wrapper, was the first judgment in which the CJEU started to elaborate a strictly geographic requirement, asking for evidence that the mark has become distinctive through use in all parts of the EU where it is not inherently distinctive, meaning in every Member State.60 This case raised the threshold for acquired distinctiveness of shape marks, making a significant change from a substantial part standard developed under prior practice by the CJEU and EUIPO.61
Years later, in Lindt v. OHIM (“Lindt”), a case regarding the registration of a golden-wrapped chocolate bunny, the CJEU clarified the criteria held in Storck saying that “…the acquisition by a mark of distinctive character through use must be proved for the part of the EU in which that mark did not, ab initio, have such character, it would be unreasonable to require proof of such acquisition for each individual Member State”.62 Although this judgment seemed to have open the door for a more flexible way of proving acquired distinctiveness through use for shape marks, the judgment did not provide additional guidance on how one could establish that a mark had become distinctive throughout the EU without adducing evidence in relation to every Member State.63
4.2.1 “Kit Kat” case
60Judgment of the Court (First chamber), June 22, 2006, in Case C-25/05 P, August Storck KG v OHIM, 83.
61Judgment of the Court of First Instance (Third chamber), December 15, 2005, in Case T-262/04, BIC SA v OHIM, para 69; Decision of the OHIM First Board of Appeal in Case R 746/2001-1, July 19, 2002, para 18;
Decision of the OHIM Second Board of Appeal in Case R 262/2004-2, October 20, 2005, para 30-32.
62Judgment of the Court (Fourth chamber), May 24, 2012, in Case C‑98/11 P, Chocoladefabriken Lindt &
Sprüngli AG v OHIM, para 62.
63Porangaba, L., “Acquired Distinctiveness in the European Union: When Nontraditional Marks Meet a (Fragmented) Single Market,” Trademark Reporter 109, no. 3 (June 28, 2019), 619 at pp.636.
The recent CJEU judgment in Nestlé v Mondelez (“Nestlé”) put the issue of geographic scope into the spotlight and ended with its apparent flexibility on acquired distinctiveness through use established in Lindt.64 Nestle’s attempt to register its iconic three-dimensional shape of a chocolate bar (the four-fingered Kit Kat bar) for goods in class 30 of Nice Classification.
Following the granting of registration, Cadbury (now Mondelez) brought invalidity proceedings at the EUIPO arguing such a shape to be lacking both inherent and acquired distinctiveness. The Cancellation Division found the mark invalid, but that decision was reversed on appeal. The BoA held that the shape had acquired distinctive character in the EU although Nestlé did not produce evidence for all the Member States. Few Member States, which would reflect about 10% of the EU population at the time, were left out of the assessment.65
Then Mondelez brought the case before the GC for judicial review. The GC, finding the EUIPO’s approach to be inconsistent with EUTM case law, reversed the decision on the grounds that evidence had not been provided or examined for all Member States.66 Finally, the parties appealed to the CJEU. Thus, what the Court said?
First, the CJEU stated that Article 7(3) EUTMR should be read in connection with Article 7(2) EUTMR, remarking in this way that the criterion to assess distinctiveness should be the same, whether inherently or acquired through use. Therefore, for Article 7(3) EUTMR to apply, the mark should have become distinctive through use throughout the EU.67
Then, the CJEU disregarded Leno Merken’s judgment, invoked by Nestlé and the EUIPO in order to justify the uniformity of geographic scope standards to be applied in proving genuine
64Judgment of the Court (Third chamber), July 25, 2018, in Joined Cases C-84/17 P, C-85/17 P and C-95/17 P, Société des produits Nestlé SA and Others v Mondelez UK Holdings & Services Ltd.
65Decision of the OHIM Second Board of Appeal in Case R 513/2011-2, December 11, 2012, para 88-92.
66Judgment of the General Court (Fifth Chamber), December 15, 2016, in Case T‑112/13, Mondelez UK Holdings & Services Ltd v EUIPO and Société des produits Nestlé SA.
67Judgment of the Court (Third chamber), July 25, 2018, in Joined Cases C-84/17 P, C-85/17 P and C-95/17 P, Société des produits Nestlé SA and Others v Mondelez UK Holdings & Services Ltd, para 67-68.
use and acquired distinctiveness. The Court held that the principle developed to proving genuine use, “the standard of substantial part disregarding territorial borders of Member estates”, did not apply to acquired distinctiveness through use. According to the Court, this standard was not applicable as it concerns to genuine use of EUTM that have already been registered, thus regulating by its own legal provisions. 68
Additionally, the CJEU clarify the judgment in Lindt, invoked by Nestlé and the EUIPO, stating that although the acquisition by a mark of distinctive character through use must be proved for the part of the EU in which that mark did not, ab initio, have such character, it would be unreasonable to require proof of such acquisition for each individual Member States. 69 Here the Court made a distinction between the facts to be prove and the means of proving such facts. Moreover, it was recognized that as no legislative provision requires that the acquisition of distinctive character through use be established by separate evidence in each individual Member State, it is not inconceivable that the evidence provided to establish that a particular sign has acquired distinctive character through use is relevant with regard to several Member States, or even to the whole of the EU. 70 In this regard, the Court provided two set of circumstances that would be helpful to provide evidence to prove acquired distinctiveness for all Member States concerned: when the economic operators have grouped several Member States together in the same distribution network, and when due to a geographic, cultural or linguistic proximity between two Member States, the relevant public of the first has a sufficient knowledge of the products and services that are present on the national market of the second.71
Finally, the CJEU upheld the decision of the GC because although Nestlé prove acquired distinctiveness through use in a substantial part of the territory of the EU, the evidence did not cover all member states: Belgium, Ireland, Greece and Portugal were missing in the market research. Thus, not fulfilling the standard of acquired distinctiveness of the CJEU.72
68Ibid, para 69 and 74.
69Ibid, para 77.
70Ibid, para
71Ibid, para 81 and 82
72Ibid, para 87 and 88.
4.3 Assessment of the CJEU criterion
As it was clearly stated in Nestlé and its predecessors, the CJEU extended the application of Article 7(2) EUTMR to Article 7(3) EUTMR, which means that both inherent distinctiveness and acquired distinctiveness through use are assess with the same territorial standard. Thus, shape marks, which are indistinctive uniformly throughout the EU, should prove distinctive character through use in each individual Member States whereas providing evidence for each member state or extrapolating the evidence. Is this high threshold, that seems to be definitive set in Nestlé, the correct way to assess acquired distinctiveness trough use for shape marks?
The CJEU in Nestlé judgment has justified its position stating that the territorial standard to determine acquired distinctiveness through use lies down in the unitary character of EUTM and their equal effect throughout the EU, and at the same time it has rejected the application by analogy of the substantial part criterion of genuine use arguing that it responds to a different rationale. 73
Regarding the unitary character of EUTM, expressly recognized in Article 1(2) EUTMR, the reason behind this principle is to avoid the need for a variety of national registrations and to transcend the EU internal borders. As the unitary character assumes that there is one large EU territory, it is also reasonable that when assessing distinctive character, the EU territory should be seen without consideration of EU internal borders, so that if evidence is available from the majority of that one territory, registration would be in order.74 Therefore, I think that the substantial standard without territorial borders held by EUIPO in Nestlé suits better with the unitary character of EUTM when assessing acquired distinctiveness through use.
Moreover, the CJEU has followed this criterion for the assessment of genuine use and reputation, carrying out a multifactor assessment where the territorial scope of the use is just
73Judgment of the Court (Third chamber), July 25, 2018, in Joined Cases C-84/17 P, C-85/17 P and C-95/17 P, Société des produits Nestlé SA and Others v Mondelez UK Holdings & Services Ltd, para 66-68.
74Cohen, T.,“Waking up from the European dream,” accessed April 7, 2020, https://www.linkedin.com/pulse/waking-up-from-european-dream-tobias-cohen-jehoram.
one of the factors which must be included in the overall analysis. 75 But that is not what the CJEU ruled in the recent Nestlé judgment, setting in this way two different notions of the single market.
The textual analysis carried out in the judgment fails to explain why a part of the EU could not (or should not) be discounted as negligible or counterweigh by other factors, as it used to be the practice before Storck, and as it does happen in the assessments of reputation and genuine use of EUTM.76
Additionally, it worth to noticed that the current criterion of the CJEU seems to be contrary to the principle of promotion of a single market and business expansion, enshrine in Recital 3 of the EUTMR.This is because, as it has been held by EUIPO, when a mark is rejected or cancelled because not providing evidence in a non-substantial part of EU, the assessment undermines investments made at large scale by the owner of the trade mark, and goes against the general objectives of EUTM protection, which are to encourage and open up economic activity in the entire Internal Market by communicating information about the goods and services covered by the trade mark. 77
Furthermore, as the current framework required evidence to be adduced for each Member State, extrapolating evidence or not, it raises transaction costs associated with registration, because the owner of a shape mark have to divert and invest important quantities of money in collecting evidence of the acquired distinctiveness in each corner of the Internal Market,78 economic resources that not every trade mark applicant can afford.
75Judgment of the Court (Second chamber), December 19, 2012, in Case C‑149/11, Société des produits Leno Merken BV v Hagelkruis Beheer BV, para 36-44; Judgment of the Court (Second chamber), October 6, 2009, in Case C‑301/07, PAGO International GmbH v Tirolmilch registrierte Genossenschaft mbH, para 27.
76Porangaba, L., “Acquired Distinctiveness in the European Union: When Nontraditional Marks Meet a (Fragmented) Single Market,” Trademark Reporter 109, no. 3 (June 28, 2019), 619 at pp.644; Judgment of the Court of First Instance (Third chamber), December 15, 2005, in Case T-262/04, BIC SA v OHIM, para 69.
77Decision of the OHIM Second Board of Appeal in Case R 513/2011-2, December 11, 2012, para 77.
78Ibid, para 78.
It is also important to remark that by cutting or banning shape marks from the register, an increase of the fragmentation of the single market integration and trade barriers takes place.79 Moreover, refusing registration of shape marks by imposing so high a threshold does not mean that they will not be use or have protection. This is because as this high threshold is almost impossible to achieve even for big companies, trade mark owners have turned to numerous national registrations instead. For instance, in Lindt v. OHIM, by the time of the CJEU judgment, Lindt had registered the golden rabbit-shape mark in fifteen Member States and enforced it against third parties in a few of them.80
Additionally, the raise of national registrations makes cancellation proceedings more challenging for third parties which are obliged to question the validity of the mark in a number of Member States which may obviously come to a different resolution on matters of distinctiveness due to different cultural, linguistic and market realities. Moreover, this situation also represents a high burden for small and medium companies as they should spend considerably larger sums when attempting to register or clear the use of a particular mark or product.81 Therefore, it is possible to state that the current framework set a discriminatory scenario, putting small and medium businesses in a disadvantage position compare to large companies.
4.4 Looking for a more friendly standard for shape marks
When looking for an appropriate criterion to assess the territorial requirement of acquired distinctiveness through use regarding shape marks, it is necessary to have in mind that EUTM give exclusive rights when they are registered, even in those countries where the trade mark has not acquired distinctive character. This principle, applying the substantial part standard, would lead to the contradictory situation where a Member State has to refuse registration of a descriptive shape as a national mark and, on the other hand, it is required to respect on its territory an EUTM for the same shape, for the sole reason that it has acquired distinctive
79Porangaba, L., “Acquired Distinctiveness in the European Union: When Nontraditional Marks Meet a (Fragmented) Single Market,” Trademark Reporter 109, no. 3 (June 28, 2019), 619 at pp.656.
80Ibid.
81Ibid, 619 at pp. 657.
character in the territory of another.82 Moreover, this will also give unfair competition advantages to owners of EU shape marks in those places where their marks are not distinctive. Thus, if we want to support the substantial part standard, what could be done to solve this inconsistency?
It has been stated that a possible approach to balance the unitary character of EUTM with market and cultural realities could be by the application of a multifactor assessment considering a substantial part standard connected to the origin function of trade marks.83 This implies that while evidence lacking for a minor or negligible part of the single market would not defeat a claim of distinctiveness, it is unlikely that at the infringement stage the mark would be found performing an origin function in that territory.84 Therefore, an EUTM may be rendered unenforceable where the use of an otherwise conflicting sign would not harm its origin function.85 For instance, if the shape mark in Nestlé had been accepted under the substantial part standard and Nestlé would want to enforce its rights against a third party that it is using the same mark, Nestlé should be able to show, at infringement stage, that the four- fingered chocolate shape has origin significance in the part of the EU for which no proof had provided for the purposes of registration.
It could be added to support the aforesaid that in an infringement proceeding the defense could invoke the defense contained in Article 14 (1)(b) EUTMR that accepts the use of signs or indications which are not distinctive, where that complies with honest business practices.
This would allow the continued use of product features such as shapes which are not distinctive as such, even after they have been registered as an EUTM, in particular where such use is made, or was already made before the registration, in a part of the EU where the registered trade mark has not been used to an extent which would be sufficient in itself to establish acquired distinctiveness.86
82Judgment of the General Court (Third chamber), May 17, 2011, in Case T-7/10, Ygeia v OHIM, para 52.
83Porangaba, L., “Acquired Distinctiveness in the European Union: When Nontraditional Marks Meet a (Fragmented) Single Market,” Trademark Reporter 109, no. 3 (June 28, 2019), 619 at pp.668 and 670.
84Ibid.
85Ibid, 619 at pp.664.
86Max Planck Institute for Intellectual Property and Competition Law, “Study on the Overall Functioning of the European Trade Mark System.,” (2011), p.147.
