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European IP Bulletin, Issue 2, May/June -
Trade Mark
Trade Mark
Goulbourn v OHMI - Redcats (Silk Cocoon), T-174/01, ECJ
The CFI annulled the decision of the Board of Appeal overturning the Opposition Division’s decision regarding the application to have ‘Silk Cocoon’ registered as a Community Trade Mark.
The applicant, Ms Goulbourn, filed an application to OHIM ("the Office") to register the sign "Silk Cocoon" in Class 25 as a CTM on 28 May 1997. The application was then published in the CTM Bulletin on 20 July 1998 and an opposition was raised on 20 October 1998 by the intervener, acting under its former name "La Redoute SA" under Article 42(1) of Regulation No. 40/94 ("the Regulation"). The opposition was based on the existence of a mark registered in France in 1989 and an international mark registered in 1984 and protected in the Benelux countries, Italy, Monaco and Switzerland, which consisted of the sign "COCOON" also designating goods in Class 25.
In accordance with Article 43(2) and (3) of the Regulation, the applicant requested that the intervener provide proof that the earlier marks had been put to genuine use during the preceding five years. The intervener then provided documents which included extracts from its mail-order catalogues which the applicant rejected as being insufficient to satisfy the requirements of Article 43(2) of the Regulation and of Rule 22(2) of Commission Regulation (EC) No. 2868/95, since they provided no indication as to the place, time or extent of use of the earlier marks. The intervener later informed the Office that its name had changed to "Redcats SA" and in a later letter to the Office declared that it was a well-known European mail-order company with several million copies of its catalogue distributed in various European countries and that purchases made by the recipients amounted to several hundred thousands of French francs.
By decision of 14 April 2000, the Opposition Division rejected the opposition pursuant to Article 43(2) and (3) of the Regulation on the ground that the intervener had not proved that the earlier mark had been put to genuine use. The intervener then filed notice of appeal at the Office, pursuant to Article 59 of the Regulation, and provided proof of sales. The Third Board of Appeal (BOA) of the Office annulled the decision of the Opposition Division on the grounds that genuine use within the meaning of Article 43(2) of the Regulation "is to be understood as real use of the mark on the market, so as to draw attention of potential consumers to the goods or services effectively offered under the mark". The BOA took the view that, with respect to the extent of use of the earlier mark, the intervener had provided sufficient evidence to prove genuine use. The BOA also took the view that it was not necessary to take into consideration the new evidence submitted by the intervener since it had stated in earlier correspondence that it was well known in the field of mail-order sales.
The applicant then lodged an action against the BOA and the intervener. The first plea alleged breach of Article 43(2) and (3) of the Regulation in respect of the notion of "genuine use". The second plea alleged breach of the right to be heard. The third plea alleged that the BOA was wrong in basing its decision on the fact that the intervener’s sales catalogue was widely distributed in the French-speaking Member States ("the disputed fact"), although that fact was not validly raised during the proceedings.
In order to interpret the notion of "genuine use" under Article 43(2) of the Regulation the Court did a comparative analysis of the different language versions (German, French, Italian, Portuguese, Spanish, Dutch and English) of those provisions and found that the BOA based its assessment on a correct interpretation. The Court found that, contrary to the applicant’s claim, it is not possible to contrast "genuine use" with "real use". Accordingly, the first plea was rejected. On the second plea, the Court noted that under the second sentence of Article 73 of the Regulation, a decision of the Office could be based only on facts on which the parties concerned have had an opportunity to present their comments. The Court found that since the Opposition Division did not take account of the disputed fact and the BOA based its decision on that fact, procedural equity and the general principles of the protection of legitimate expectations required the BOA to indicate at the outset of the proceedings to the party concerned that it intended to take into account the fact in question. Since the BOA did not indicate at the outset to the applicant that it intended to take the disputed fact into account, the Court upheld the second plea.
In those circumstances, the Court found it unnecessary to adjudicate on the applicant’s third plea and annulled the contested decision.
Ansul BV v Ajax Brandbeveiliging BV, C-40/01, ECJ
The ECJ held that "put to genuine use" within the meaning of Art.12(1) of the Trade Marks Directive (89/104/EEC) meant "actual use" of the mark and did not include "token use" of a mark merely to maintain the right to the mark.
This case relates to the use of the trademark "Minimax" which was registered in the Benelux trade mark office in 1971 by the proprietor, Ansul. In 1988, the authorisation for fire extinguishers sold by Ansul under the trade mark expired and Ansul stopped selling fire extinguishers under that mark from 1989. From 1989 to 1994, Ansul continued to sell component parts and extinguishing substances for fire extinguishers bearing the mark to undertakings with responsibility for maintaining them. Ansul applied a sticker showing the trade mark on maintained and repaired equipment bearing the mark and mentioning the fact that the product was once again ready for use. Ansul also used the mark on invoices relating to those services. It also sold the stickers to undertakings that maintained fire extinguishers.
In 1994, Ajax Brandbeveiliging BV ("Ajax"), a subsidiary of the German company Minimax GmbH (which had been the proprietor of the Minimax trade mark in Germany for over 50 years) started using the trade mark in the Benelux countries for various goods, in particular fire extinguishers and extinguishing substances, and for certain services, including the installation, repair, maintenance and refilling of fire extinguishers. Ansul objected to this use by letter and then itself obtained from the Benelux trade mark office in 1994 a trade mark for the word mark for certain services, including the maintenance and repair of fire extinguishers. Ajax then brought an action before the Rotterdam District Court for an order to revoke Ansul’s rights in the Minimax trade mark for non-use between 1989 and 1994, and the annulment of its 1994 trade mark on the ground that it had been filed in bad faith. Ansul counterclaimed for an injunction barring Ajax from using the trade mark in the Benelux countries. The Court dismissed Ajax’s claim and upheld Ansul’s counterclaim. Ajax then appealed that judgement to the Regional Court of Appeal in The Hague, and the decision was overturned. Ansul then appealed to the Hoge Raad der Nederlanden, which decided that the outcome of the main proceedings depended on the interpretation of the concept of "genuine use".
There is jurisprudence on the issue of genuine use under Benelux trade mark law, as it was prior to harmonisation. The Hoge Raad der Nederlanden ruled that when assessing genuine use:
- all facts and circumstances should be taken into consideration,
- the facts and circumstances are decisive when taken into consideration together with
a. what is common in the relative field,
b. what is usual in trade in general,
c. what is commercially justified, and
d. whether the use gives the impression that its aim is that goods and/or services find their way to consumers under the trade mark, and that - account must be taken of the kind, extent, regularity, frequency and duration of the use in connection with the nature of goods or services, and finally the size of the enterprise should be taken into consideration.
The Hoge Raad der Nederlanden further found that the interpretation given to Article 5(3) of the Uniform Benelux Law of Trade Marks which refers to "normal use" must be compatible with the interpretation of the corresponding concept of "genuine use" in Article 12(1) of the Trade Mark Directive 89/104/EEC. Accordingly, it decided to stay proceedings and to ask the ECJ whether or not this is still a relevant criterion under the EC Trade Marks Directive 89/104, and if not, which criterion should be applied. Furthermore the The Hoge Raad der Nederlanden asked whether there can be genuine use in a case where new goods are not sold under the mark, but the mark is used in connection with maintaining those goods.
The ECJ ruled that Article 12(1) of the Trade Mark Directive 89/104/EEC must be interpreted as meaning that there is "genuine use" of a trade mark where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services. Also, genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark. The ECJ agreed with the ruling of The Hoge Raad der Nederlanden. The ECJ also ruled that the fact that a mark that is not used for goods newly available on the market but for goods that were sold in the past does not mean that its use is not genuine, if the proprietor makes actual use of the same mark for component parts that are integral to the make-up or structure of such goods, or for goods or services directly connected with the goods previously sold and intended to meet the needs of customers for those goods.
CFI Applies Genericity test
In Alcon Inc. v OHIM, Dr Robert Winzer Pharma GmbH (BSS), T-237/01, ECJ (5 March 2003), the CFI applied the genericity test formulated by the ECJ in Merz & Krell [2001] C-517/99. Additionally, in considering whether the mark in question had acquired distinctiveness, the CFI looked for real evidence that the mark was now perceived as an indication of origin, rather than depending upon the efforts of the mark proprietor to achieve that aim.
Alcon held the registration for the acronym BSS (standing for "Balanced Salt Solution") for preparations for ophthalmic surgery and ophthalmic pharmaceuticals. The intervener filed a successful application for a declaration of the mark’s invalidity under Article 51(1)(a) of the Community Trade Mark Regulation, on the grounds that it had become customary in the current language or in the bona fide practices of the trade under Article 7(1)(d) of the CTM Regulation.
The CFI began by confirming that, although there was no direct case-law on the genericity provision of the CTM Regulation, the reasoning of the ECJ in Merz & Krell on the parallel provision of the Directive approximating the Member States’ trade mark laws applied. Therefore, Article 7(1)(d) had to be read as prohibiting registration only when mark has become customary in the trade for designating the goods or services for which it is to be registered. This can only be assessed by reference to the goods or services for which registration is sought and on the basis of the target public’s perception of the sign. The target public is considered to be the average consumer who is reasonably well informed, observant and circumspect and is likely to pay for the type of goods in question. Generic signs cannot function as a trade mark by distinguishing the goods of one undertaking from those of other undertakings unless they have acquired distinctiveness through the use made of them.
Here, the relevant public were medical specialists, particularly ophthalmologists and ophthalmic surgeons, in the whole European Union, because such specialists are familiar with scientific terms in English as it is the technical language in this area of science. The evidence of chemical, medical and pharmaceutical dictionaries, as well as scientific articles, showed that the relevant scientific community viewed BSS as a generic term for balanced salt solution, so it was unreigstrable under Article 7(1)(d). The fact that Alcon had been the first company to adopt the acronym as a trade mark in 1959 was irrelevant because a sign that was once capable of acting as a trade mark can lose the capacity to act as a trade mark and become generic over time.
Despite the finding of genericity, under Articles 7(3) and 51(2) of the Community Trade Mark Regulation, Alcon could retain the mark if it showed that it had acquired distinctiveness in the mark through use in a substantial part of the EU with respect to the goods for which it had been registered. However, it failed to do so. The CFI recalled the indicia of acquired distinctiveness set out by the ECJ in Windsurfing Chiemsee [1999] ECR 1-2779: the market share held by the mark; the intensity, duration, and geographical scope of the use of the mark; the investment by the proprietor in promoting the mark; the proportion of the relevant public who identify the goods as coming from a particular undertaking because of the mark and statements of professional associations. Acquired distinctiveness is present if, because of these indicia, a significant proportion of the relevant public identify the goods as coming from a particular undertaking because of the trade mark. Alcon relied on documents showing that it had taken steps to prevent third parties from using the mark, including a "Policing BSS" Schedule and agreements entered into with third parties, as well as data on turnover and advertising spend. However, these factors were only relevant in so far as they had objective results leading to the public perceiving the sign as a trade mark. Alcon had failed to show any evidence that this was the case.
The fact that Alcon tended to use BSS together with other signs (e.g. ALCON BSS) did not help its case as this suggested that Alcon did not think that BSS was distinctive enough to be used without any additional element to identify the product.
The importance of this case lies in the guidance that it provides on how to apply the tests previously adumbrated by the ECJ, in particular its treatment of the Windsurfing Chiemsee test for acquired distinctiveness. Money and effort invested by a would-be trade mark proprietor in developing his sign as a trade mark is irrelevant unless his efforts are successful.
ECJ Defines Identical Marks
In LTJ Diffusion SA v Sadas Vertbaudet SA, C-291/00 (20 March 2003), the ECJ responded to a French Article 234 reference calling for clarification of what is meant by an identical trade mark in Directive 89/104, which approximates the trade mark laws of the EU Member States. The restrictive definition given is relevant to registrability, infringement and invalidity under both Directive 89/104 and the Community Trade Mark Regulation.
The claimant, who held a registration for the sign ARTHUR in the form of a hand-written signature with a dot in the letter A, brought an action for infringement and invalidity based on the defendant’s registration and use of the mark ARTHUR ET FÉLICE in upright capital letters. French case-law and legislation deemed the reproduction of just the distinctive elements of compound marks (contrefaçon partielle/partial infringement) and the reproduction of a whole mark, together with elements that would not affect the identity of the mark (adjunction inopéranté/ineffective addition) to be the use of an identical mark. Whether this approach was legitimate under Directive 89/104 formed the basis of the Tribunal de grande instance de Paris’ reference to the ECJ.
The ECJ began by confirming that its judgment applied to registration, infringement and invalidity under Articles 4(1)(a) and 5(1)(a) of Directive 89/104, as well as to the parallel articles of the Community Trade Mark Regulation. However, for convenience, its comments were addressed to Article 5. The Court recalled that the function of a trademark is to guarantee the origin of trade marked goods, enabling consumers to distinguish the goods of one undertaking from the goods of other undertakings without the risk of confusion. Article 5 safeguards this guarantee by protecting trade mark proprietors against competitors trying to take advantage of the mark by selling products illegally bearing it. Unlike Article 5(1)(b), Article 5(1)(a) provides absolute protection, without the need to show confusion where the signs and the goods or service are identical. The concept of identity between signs must be interpreted strictly and Article 5(1)(a) must not be allowed to encroach on situations that more properly fall under Article 5(1)(b). Therefore, there is identity between a sign and an earlier mark when "the former reproduces, without any modification or addition, all the elements constituting the latter."
However, the concept of identity is rooted in the average consumer’s perception of the sign and the earlier mark. There will be identity if the differences between the two are so insignificant that they "may go unnoticed by the average consumer." To assess whether this is the case, a global appreciation of how the average, reasonably well informed, reasonably observant and reasonably circumspect will perceive the two marks is required. A mark produces an overall impression on consumers and they seldom have a chance to make a direct comparison between two marks, leaving them reliant on imperfect recollection. The consumer’s level of attention will also vary depending on the type of goods or services that he is considering.
Understandably, the ECJ has taken a restrictive approach to the circumstances in which the absolute protection of Articles 4(1)(a) and 5(1)(a) can be employed. Trade mark proprietors who cannot prove this standard of identity can always rely on Articles 4(1)(b) and 5(1)(b), where only similarity between the earlier mark and the later sign need be shown, although the likelihood of confusion must also be proven. Additionally, there may be some room for manoeuvre in the ECJ’s much-used global appreciation standard. It will be for national courts to determine which different elements of a later sign may go unnoticed by the average consumer.
Third Party Liability Under Injunctions
World Wide Fund for Nature (Formerly World Wildlife Fund) v World Wrestling Federation Entertainment Inc and THQ/Jakks Pacific LLC [2003] EWCA Civ 401 (27 March) concerns the interpretation of the injunction granted in World Wildlife Fund for Nature & Another v World Wrestling Federation Entertainment Inc. [2002] EWCA Civ 196. In that case, the Court of Appeal upheld an injunction enforcing a contract preventing the World Wrestling Federation ("the Federation", which is now known as World Wrestling Entertainments) from using the initials "WWF" except in a certain form. THQ was a licensee of the Federation and was not a party to the agreement or the injunction. Before the injunction came into effect THQ produced video games containing a prohibited form of the WWF logo. Eliminating reference to WWF from the programming would have been very expensive and difficult, so THQ successfully brought this action seeking 1) a declaration that if it marketed the video games, it would not be in breach of the order or in contempt of court, 2) an order that if it was in contempt, any injunction would be stayed. Was continued marketing of the games by THQ a contempt of court?
Ordinarily, third parties cannot be held in contempt for failing to respect injunctions they are not subject to. However, it was argued that THQ was aiding and abetting a breach by the Federation. This could only be the case if the Federation had actually committed a breach by failing to prevent its licensees’ use of the logo.
The Federation was not absolutely liable for all uses by licensees that would have been breaches if carried out by itself. The clause in the injunction restraining the use of the initials by the Federation "whether by its officers, servants, agents, subsidiaries, licensees…" could not be interpreted as imposing absolute liability for the acts of independent third parties such as THQ, as opposed to officers, servants and agents. Instead of imposing absolute liability for licensees’ actions under existing agreements, it prohibited the Federation from authorising or causing licensees to do prohibited acts in the future.
Nevertheless, the Federation would be in breach if it failed to take all reasonable steps within its power to prevent THQ from committing acts that would violate the injunction. Under the licensing agreement, the Federation had the power to instruct its licensees to stop using a trademark that conflicted with the IP rights of a third party. However, it did not unreasonably fail to exercise that power. It instructed its licensees to discontinue use of the offending logo and they complied. THQ’s failure to comply was caused by practical problems, rather than any failure on the Federation’s part.
There was no breach by the Federation for THQ to aid and abet. However, the result would have been the same if there had been a breach. There was no concerted action between THQ the parties and any breach would have been the result of THQ’s independent commercial interests. THQ did not deliberately frustrate the injunction. Its acts were motivated by its commercial interests, rather than a wilful attempt to interfere with the administration of justice.
Although in the absence of a breach, this issue did not arise, their Lordships considered how they would rule if it had. Carnwarth LJ, who delivered the main judgment on the first point, differed from the majority. He would have refused a stay because the parties’ rights were contractual, so they should have looked to the contracts to resolve any difficulties. The Federation’s failure to inform THQ of the injunction was irrelevant, as was any contractual cap on the Federation’s liability to THQ.
Blackburne J and Peter Gibson LJ would have granted a stay. Removing the embedded logos would have caused THQ considerable losses, whereas the World Wildlife Fund would have at most suffered dilution and tarnishment and even that was not convincingly proven. It was unclear whether THQ would have recovered the full extent of its losses from the Federation. The royalty payments that would accrue to the Federation through sales of the games were irrelevant.
The public interest in the availability of video games was not such that it encouraged their Lordships to take a more favourable view towards THQ than they otherwise might have.
DaimlerChrystler Corporation v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), T-128/01, CFI
The CFI annulled a decision of OHIM's Second Board of Appeal refusing the registration of a figurative mark representing a vehicle grille as a Community trade mark on the grounds that the mark had sufficient distinctive character.
The case centred around whether a sign representing a grille, normally placed on the front of a car, fulfilled Article 7(1) (b) of regulation 40/94 of having distinctive character and 7(1) (3) of acquiring a distinctive character. The applicants filed to register this sign for a community trade mark at OHIM under class 12-vehicles; apparatus for locomotion by land , air or water. The application was refused by the examiner and then the Board of Appeal on grounds of lacking distinctive character and failure to demonstrate that the sign had acquired distinctive character through use.
DaimlerChrystler Corporation (DC) filed a case at the Court of first Instance asking the court to annul OHIM’s decision and to order OHIM to pay costs.
The courts held in favour of the applicant on the main issue of the sign having a distinctive character, agreeing that the target public (as defined in Lloyd Shuhfabrick Meyer [1999] ECR I-3819) was indeed the general public as the goods were intended for general consumption in the EU. It was pointed out that any sign with distinctive character, either by nature or use, could act as an indicator of origin. Furthermore, the fact that the sign was of a grille did not immediately exclude it from being distinctive Henkel v OHIM (Image of a detergent product) [2001] ECR II-2663.
The courts took note of the evidence by the expert witness that grilles do not have a purely technical function and can be used by the public as a means of distinguishing between different models and between different manufactures of cars. Furthermore a sign can serve several purposes at once Glaverbel v OHIM (Designs applied to a sheet of glass) [2002] ECR II-0000 and a technical function may be outweighed by its distinguishing function. It was also found that the sign in question was not commonplace at the time when the applicant filed for the mark and it could therefore leave an impression on the public
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