Date: 4 October 2019
The Court of Justice of the European Union (CJEU)’s recent decision in Deichmann v EUIPO (C-223/18 P) illustrates the need to be careful that a trade mark’s description is not at odds with its representation. Whereas the General Court’s decisions in All Star CV v EUIPO (Case T-611/17) and adidas v EUIPO (Case T-307/17) highlight the difficulty faced by trade mark owners when it comes to maintaining registrations based on acquired distinctiveness through use.
The first case involves a mistake in a trade mark application filed by the Spanish company and brand known as “Munich”, which produce shoes with a characteristic “X” symbol. The story began in 2002 when Munich filed a EUTM application for the figurative mark shown below for sports footwear in Class 25. The mark was registered in 2004.
In 2011, the major German footwear retail chain Deichmann applied to revoke the EUTM on the basis of non-use. Deichmann’s application was upheld by the EUIPO’s Cancellation Division, and the mark was revoked in its entirety.
The problem for Munich was that EUIPO’s Cancellation Division took the view that the evidence showed use of forms which altered the EUTM’s distinctive character, within the meaning of Article 15(1) (a) CTMR (now Article 18(1) EUTMR). Munich claimed that the EUTM’s dotted lines had the sole purpose of showing the placement of the trade mark on the product but, as the Cancellation Division pointed out, this was not covered by the registration. In other words, Munich claimed that the EUTM was actually a position mark, meaning that it was a sign positioned on a particular part of a product in a constant size or particular proportion to the product.
The Cancellation Division could not accept this statement; since the mark had been filed and registered as a figurative mark, the image used by Munich on sports footwear had to be the image above.
That decision was overturned by the Fourth Board of Appeal, with the decisive factor being public perception of the mark rather than classification. In essence, it found that Munich’s evidence showed use of its EUTM for “sports footwear” in Class 25 for the relevant period. As regards the EUTM’s distinctive character, the Board held that “as it [was] this graphic representation which defin[ed] the mark,...whether the mark [was] a position mark or a figurative mark [was] irrelevant”.
On appeal, Deichmann argued that Munich’s EUTM was not registered under the category “other marks” and so could not be regarded as a “position mark” but only as a figurative mark. However, in Deichmann (T-68/16), the General Court found the case-law recognised that figurative marks could in fact be “position” marks. According to the court: “it cannot be inferred from the mere fact that the ‘figurative mark’ box was ticked when the mark at issue was registered that it may not be regarded, at the same time, as a ‘position mark’”. The mark was a cross applied to show position regardless of the nature of the shoe.
Undaunted, Diechmann persevered but, at the very outset, the CJEU put paid to its hopes, stating first of all that on the relevant date, the applicable law did not define “position marks”, meaning that the classification of Munich’s EUTM as a figurative mark or a position mark was irrelevant in the assessment of both distinctiveness and genuine use. Contrary to Deichmann’s reasoning, the fact that the mark at issue had been registered as a figurative mark was irrelevant for the purpose of determining the scope of the application for protection, and Munich had succeeded in demonstrating genuine use of its EUTM by providing proof of the sale of shoes to the side of which intersecting lines were applied.
While in Deichmann the General Court rejected the non-use attack on Munich’s EUTM, in All Star CV v EUIPO (Case T-611/17) it adopted a harsher line to another application concerning use of a mark for sports shoes.
At issue in this second case was the 3D mark shown below, registered by All Star CV for (amongst other things) “footwear and their parts and fittings” in Class 25.
The trade mark reproduced the image of the Converse All Star shoe sole. First made in 1917, the shoe was redesigned in 1922, following a request by Chuck Taylor (a professional basketball player) for increased ankle support and flexibility. Chuck Taylor joined Converse as a salesman, promoting the shoes which became known as Chuck Taylor All Stars, the first celebrity-endorsed athletic shoe. By the time the 1960s bounced into view, the shoes were worn by 90% of US professional basketball players.
The EUIPO’s Cancellation Division upheld an application for a declaration of invalidity filed by one of the largest global retail companies, Carrefour Hypermarchés, on the basis that the mark was devoid of distinctive character within the meaning of Article 7 (1)(b) EUTMR and that All Star CV had failed to provide any evidence to show that the mark had acquired distinctive character through use. In essence, the Cancellation Division found that the contested mark had characteristics which were simple variations of the usual features found on other forms of soles. It added that the relevant public perceived the presence of patterns on soles as an indication of some of its qualities – in particular, its ability to grip the ground (see Embossed pattern; Case T–283/04) and, even if the average consumer did not perceive the patterns on the sole as having a technical function, he would perceive them as decorative motifs as opposed to a sign indicating the origin of the product. In response, All Star CV filed an appeal with EUIPO, criticising the Cancellation Division for having declared the mark invalid in its entirety, when the action concerned only the goods in Class 25. The Cancellation Division duly revised its decision and annulled the registration in respect of the goods in Class 25 only.
All Star CV then filed a second appeal, which was dismissed by the Fourth Board of Appeal. The problem was that the evidence adduced by All Star CV failed to provide any information as to the perception of the mark in question by the relevant public. The Board held that, insofar as the shape of the sole was a mere variant of the usual characteristics found on the other forms of soles, it was unlikely to distinguish the products in question from others available on the market. Also, as the contested trade mark was deemed to be non-distinctive in all the Member States of the EU, All Star CV was required to provide evidence of the distinctive character acquired through use in each of the 27 EU Member States. However, the evidence was at best limited to 20 Member States and the information relating to market share was provided for only four Member States. Therefore, the Board found that All Star CV had failed to demonstrate that the mark had acquired distinctive character through use within the meaning of Article 7(3) EUTMR.
On appeal, the General Court agreed with the Board insofar as it found that the simple geometrical shapes (the horizontal lines and diamonds) on the sole were no different from those that generally appeared on soles available on the market and, therefore, the contested mark did not diverge significantly from the standard or customs of the sector and so was unable to fulfil its essential function of identifying the trade origin. In addition, since the primary function of the patterns on the sole surface was to ensure that the footwear adhered to the ground, the Board had been correct to conclude that the relevant public would perceive the contested mark as suggesting some of its technical qualities, as opposed to indicating trade origin.
The court confirmed that the Board had erred in requiring evidence to be adduced for each individual Member State, as it was clear from the case law that this was excessive (see Chocoladefabriken Lindt & Sprungli v OHIM; C-98/11) and nothing in the EUTMR imposed such a requirement. It was possible, therefore, that evidence of the acquisition of distinctive character acquired by use of a sign could be of relevance to several Member States or the whole of the Union (see Nestlé Products Company and Mondelez UK Holdings & Services; C-84/17 P, C-85/17 P and C-95/17 P). Unfortunately for All Star CV, such an error was not sufficient to justify annulment of the contested decision, since the evidence it had adduced was in itself qualitatively insufficient to demonstrate distinctiveness acquired through use.
Evidence of acquired distinctive character through use was also a problem for the German sportswear manufacturer adidas in the latest episode of its long-running dispute with the Belgian company Shoe Branding Europe (adidas v EUIPO; Case T-307/17). The General Court upheld the EUIPO’s decision that adidas couldn’t register its three-stripe motif as an EU figurative mark for clothing, footwear and headgear, on the basis that the “extremely simple” trade mark at issue was devoid of any distinctive character.
On 21 May 2014, adidas obtained registration of the EU trade mark shown below for “clothing; footwear; headgear” in Class 25:
In the application for registration, the mark was identified as a figurative mark corresponding to the following description:
“The mark consists of three parallel equidistant stripes of identical width, applied on the product in any direction.”
On 16 December 2014, Shoe Branding Europe filed an application for a declaration of invalidity on the ground that the mark was devoid of distinctive character, which was granted by the Cancellation Division. That decision was upheld by the Second Board of Appeal, on the grounds that (i) the mark at issue had been registered as a figurative mark; (ii) the mark was inherently devoid of distinctive character; and (iii) the evidence adduced by adidas failed to establish that the mark had acquired distinctive character through use throughout the EU.
Unfortunately for adidas, both the Cancellation Division and the Board had found that the “vast majority” of the evidence it had produced showed forms which varied significantly from the form of the mark as registered. Such evidence related to signs other than the mark at issue and failed to show genuine use of the mark. The court agreed with EUIPO, finding that the Board had been entitled to dismiss the evidence for several reasons:
1. Given that the mark was “extremely simple – consisting of three black parallel lines in a rectangular disposition against a white background”, even a slight variation could produce a significant alteration to the characteristics of the mark as registered and could be enough to alter the public’s perception of that mark (see hyphen v EUIPO; Case T-146/15).
2. Many of the images featured an inverted colour scheme (e.g. three parallel white stripes on a black background) and, although the court accepted that reversing the colour scheme would not impose a significant variation in some situations, that did not apply here due to the mark’s extreme simplicity.
3. Stripes on images of clothing were slanted at an angle which differed from the mark as registered. The photographs of footwear broadly suffered the same disadvantage in that the stripes were thicker and much shorter than the stripes of the mark at issue, as well as being cut at a slanted angle.
The Board found the “dimensions” of the mark at issue had not been met, and the Court confirmed that such differences constituted significant changes and related to forms of use which could not be regarded as broadly equivalent to the registered form of the mark at issue.
Adidas had filed almost 12,000 pages of evidence before EUIPO, in support of its view that the mark had acquired distinctiveness as a result of the use which had been made of it within the EU. Although both the Cancellation Division and the Board acknowledged the “impressive” figures relating to turnover and marketing and advertising expenses, those figures encompassed adidas’ entire business and, therefore, included the sale and promotion of products which were irrelevant (such as sports bags), as well as the sale and promotion of goods which bore signs other than the mark at issue.
The court said there was no doubt that adidas had used some of its marks in an intensive and ongoing manner within the EU and had made considerable investments in order to promote those marks but the evidence failed to establish that the mark had been used or that it had acquired distinctive character.
A selection of market surveys led by adidas in Germany, Estonia, Spain, France and Romania were accepted as relevant evidence of acquired distinctiveness related to use of the mark in its registered form in those five Member States. However, the court found that adidas had not demonstrated that the domestic markets of the five Member States in which those surveys were carried out were comparable to Member States not covered by the market surveys. It followed that the Board had not erred in finding that adidas had failed to prove that the mark had acquired distinctiveness throughout the EU. Accordingly, the Court dismissed adidas’ appeal and upheld the Board’s decision that the mark should be declared invalid.
Given that consumers are not used to presuming the origin of a product on the basis of its shape alone without any graphics or text to guide them, it’s therefore not surprising that it might be more difficult to establish distinctiveness for marks such as Converse’s sole. It follows that only a 3D mark consisting of the shape of the product which significantly deviates from the norm of the habits of the sector concerned would be likely to fulfil its essential function of origin.
Adidas highlights the importance of ensuring that EU trade marks are accurately recorded because, as the General Court observed, the EUIPO is not able to take into account any characteristics of the mark which had not been set out in the application for registration or in the accompanying documents (see Jaguar Land Rover v OHIM; Case T-629/14).
Given that adidas had acknowledged that its mark was validly registered as a figurative mark, it followed from the case-law that a figurative mark was, in principle, registered in the proportions shown in its graphic representation. This case suggests that the General Court is likely to strictly adhere to the specific dimensions, proportions and overall configuration of the submitted mark. As the court explained, “it is for the trade mark applicant to file a graphic representation of the mark corresponding precisely to the subject matter of the protection [they] wish to secure. Once a trade mark is registered, the proprietor is not entitled to a broader protection than that afforded by that graphic representation”.
The loss of the mark “in all directions” won’t affect adidas’s ability to use and protect the three stripes because it owns trademarks on the logo in various specific positions. However, this decision does highlight the need for trade mark applicants to carefully consider how a trade mark will actually be applied and used on the goods, and consult a good trade mark attorney for advice if in doubt.
It is also evident from adidas that brand owners wishing to benefit from the CJEU’s ruling in Nestlé will need to produce evidence of a more detailed nature than that submitted by adidas, in order toestablish the organisation of the relevant distribution network and/or a specific geographic, cultural or linguistic basis for extrapolating evidence of acquired distinctiveness beyond one Member State.