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Tuesday, 28 October 2014

Knives, nails and nippers: forging ahead with the Laguiole mark

Here's a guest post by our good friend Valentina Torelli on a very important General Court ruling on a Community trade mark issue which should appeal particularly to lawyers, as will be explained.  The ruling, available on the Curia website, is available in no fewer than 19 languages, including Maltese -- but not English. Merpel (who, it should be noted, is very fond of Malta and the Maltese) continues to believe that it is reprehensible for important decisions to be posted in minority languages if translations into the main working languages of the European Union are not made first. How many Maltese intellectual property practitioners depend on rulings such as this to be translated into Maltese, she wonders, taking note of the fact that the major Maltese IP practices whose websites she has visited all seem be to be in English and offer their clients no Maltese language option at all.

Anyway, this is what Valentina writes: 
Last week the General Court gave judgment in a keenly-awaited decision, Case T-453/11 LAGUIOLE, in which it again discussed the intriguing relationship between Community trade marks (CTMs) and other distinctive signs in the light of the protection afforded by national laws.
Earlier this year, the Court of Justice of the European Union (CJEU) had to determine the scope of protection under Article 8(4) of the Community Trade Mark Regulation (CTMR) in CTM invalidity proceedings under Article 53(2)(c) CTMR. In its controversial ruling in Case C-530/12, OHIM v National Lottery Commission [extensively reported by the IPKat here], the focus was on the probative value of national law: does it need to be considered by OHIM and by the General Court as a matter of fact or as a matter of law?  The CJEU preferred the latter solution, the parties to the proceedings being asked to provide the Office with the particulars of the national law and case-law for the sake of its decisions.
In LAGUIOLE the General Court had the chance to clarify two important issues in relation to the enforcement of national distinctive signs in OHIM invalidity proceedings: (i) how to interpret the four requirements provided in Article 8(4) CTMR according to both the Community and the national law, in order for an earlier distinctive sign to prevail over a CTM [these four requirements are listed and discussed below], and (ii) the applicability of the principle of specialty (here, where the French business name “Forge de Laguiole” was involved, could the French law on business names be invoked to invalidate a potentially conflicting CTM registration?)
Mr Gilbert Szajner – the applicant before the General Court – filed CTM 2468379 for the word LAGUIOLE back in November 2001. In January 2005 the mark was registered for various goods and services in Classes 3, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18, 20, 21, 22, 24, 25, 26, 27, 28, 34 and 38.  In July 2005 the French company Forge de Laguiole SARL (the intervener in the General Court proceedings) applied for partial invalidity of the LAGUIOLE mark under Article 53(1)(c) in combination with Article 8(4) CTMR, on the basis of its previous business name, used for activities such as “manufacture and sale of all cutlery, cisellerie, gift items and souvenirs — all items related to the art of the table”.  Invalidation was sought for a substantial number of goods and services in Classes 8, 14, 16, 18, 20, 21, 28, 34 and 38.
The French Intellectual Property Code (IPC) provides that a trade mark registration will be refused if it undermines an earlier right, including business names, if there is a likelihood of confusion of the relevant public. 
Consequently, the holder of an earlier right may apply to invalidate a trade mark, unless the latter was filed in good faith or was used as a trade mark for more than five years (Articles L. 711-1 - L. 711-4 IPC) — these being the national provisions relied upon in this case. 
The Cancellation Division dismissed the application for invalidity.  This decision was however reversed by the Board of Appeal which declared the LAGUIOLE mark null and void in respect to all the products listed above (though still valid for services in Class 38). 
The Board of Appeal decision [R 181/2007-1]
First the Board considered that, according to French case-law, a company's business name is in principle protected in relation to all the activities included in its subject matter. Such protection is limited to actual activities as materially undertaken only when the company's subject matter is too vague or it does not encompass those activities. As to the Forge de Laguiole business name, the Board found that the company's subject matter was enough defined for “manufacture and sale of all cutlery, cisellerie”. Regarding the remaining activities (“gift items and souvenirs - all items related to the art of the table”), while the subject matter was considered imprecise, due protection must be afforded to the French company's business name for those activities effectively undertaken. Indeed, The Board observed that, solely for luxury and travel goods, no real activity was apparent and that, for some of the services in Class 38, all the products covered by the LAGUIOLE CTM fell under the scope of protection of the French company's business name.
Secondly, the Board found there might be a likelihood of confusion among French consumers if the LAGUIOLE CTM was used in relation to similar or identical goods to “cutlery, cisellerie, gift items and souvenirs - all items related to the art of the table”, sold to the same Forge de Laguiole consumers through the same distribution channels.

Finally, in the light of the French company's repute, the Board considered that its business name had a strong distinctive character so as to enjoy broader protection in respect to activity sectors other than those covered by the company's subject matter.
Preliminary matter before the General Court 
Szajner appealed to the General Court, which initially had to solve a preliminary matter relating to the admissibility of the French Supreme Court judgment of 10 July 2012 (Coeur de princess/Mattel France no. 8-2012.010), delivered after the Board of Appeal's invalidity decision and cited by Szajner for the first time before the General Court. Although OHIM contrasted the applicability of this French judgment in the present case by means of the well-known CJEU case-law in Case C-263/09 P Edwin/OHIM [noted on this weblog here], this did not stop the General Court taking into account a probative element introduced by a party to the proceeding, namely the French Supreme Court's judgment, in order to demonstrate that the Board of Appeal erred in applying national law. Indeed, Szajner had complied with the CTM Implementing Regulation by providing the particulars of the relevant national case-law, as Edwin suggests.  Accordingly the court applied that French judgment in the light of the principle of retroactivity of case-law interpretation.
Substance of the case before the General Court 
Szajner’s application rested on a sole plea in law, misapplication of Article 53(1)(c) CTMR in conjunction with Article 8(4) CTMR. These combined provisions allow the holder of an earlier sign to apply to invalidate a CTM, provided that the four cumulative requirements pointed out in Article 8(4) are met:

  1. The sign is used in the course of trade;
  1. The sign is of more than mere local significance;
  1. The rights to that sign were acquired prior to the date of application for registration of the Community trade mark or the date of the priority claimed for the application for registration of the Community trade mark;
  1. The sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.
Citing Joined Cases T‑318/06 to T‑321/06 GENERAL OPTICA, the first two requirements — use of a sign in the course of trade, this being of more than mere local significance —must be interpreted under the Community law while, as regards the remaining two, Article 8(4) allows invocation of the national law, ie French law in the present case.
The parties agreed that the Forge de Laguiole complied with the first three requirements as set out above, but disagreed as to whether it could prohibit the use of the later LAGUIOLE mark and as to whether business names are subject to trade mark principle of speciality under the relevant French law. 
Applicability of the principle of speciality to business names 
Like the Board of Appeal, the General Court analysed the activities included in the Forge de Laguiole’s subject matter and in particular the clarity of its wording. Companies’ subject matter result from their statues, as provided at the time of their incorporation and, in the specific case of French companies, from their Kbis extracts. Moreover, under French practice, companies’ activities are classified in compliance with the administrative classification of Companies’ Main Activities (Activités Principales des Enterprises, “APE”) which is arranged in accordance with the Classification by Activity Families (Nomenclature des Activités par Famille “NAF”).
In this case, on the basis of its Kbis extract Forge de Laguiole was engaged in the activities of “manufacture and sale of all cutlery, cisellerie, gift items and souvenirs - all items related to the art of the table”. Indeed, the French company claimed to extend the protection of its business name to other activities sectors, such as “household arts”, "world of wine", “items for smokers”, “items for golfers”, “items for hunters”, “leisure or accessories, such as gift boxes, cases, boxes”. In practice, Forge de Laguiole is a French company that can boast an old tradition in the manufacture and sale of knives and among them of the special Laguiole knife type.

However, until the French Supreme Court’s judgment of 10 July 2012 was released, French case-law regarding the applicability of the principle of speciality to business names was controversial.  That judgment clarified that, yes, the scope pf protection of business names was limited to the activities effectively carried out by companies, irrespective of the administrative classifications. This being so, the General Court found that the Forge de Laguiole business name could entitle its holder to prohibit the use of the LAGUIOLE mark only in respect of the activities effectively undertaken by the French company.
Turning to the evidence provided by the intervener that it developed a diversification of its activities, other than just the “manufacture and sale of all cutlery, cisellerie, gift items and souvenirs - all items related to the art of the table”, before the filing of the contested LAGUIOLE mark, the Court held that Forge de Laguiole could furnish such proof only for “knives”, “cutlery” and their related “gift items and souvenirs”. On this basis the Court set aside the Board’s invalidity decision with reference to all the other products falling within other sectors of activity. 
Assessment of the likelihood of confusion

Was there a likelihood of confusion between the business name Forge de Laguiole and the LAGUIOLE CTM in the mind of the average French consumers, taking into account only the activities proved to be carried out by the intervener?
Comparing the signs, the Court found an average visual and aural similarity while the conceptual similarity was high. In particular, no dominant element was found in the Forge de Laguiole denomination, as it comprised only descriptive and generic elements, so that the average consumer would create a link either with the village of Laguiole or with the French company’s activities in the knife and cutlery sector. Moreover, contrary to the Board of Appeal, the Court held that the intervener did not furnish proof of repute of its business name. 
With reference to the identity or similarity between the activities effectively undertaken by Forge de Laguiole and the goods and services covered by the LAGUIOL mark, the Court pruned the number of conflicts found by the Board of Appeal. In particular, the Court argued that a likelihood of confusion was apparent only as follows:
* “tools and implements, hand-operated” and “spoons” in class 8 were identical to the intervener’s activities;  
* “pliers, razors, razor blades; nail files, nail nippers, nail clippers” in class 8, “paper cutter” in class 16, “corkscrew and bottle openers” in class 21, “cigar cutters and pipe cleaners” in class 34 were highly similar to the intervener’s activities;  
* “shaving cases and manicure sets” in class 8 and “shaving brushes and fitted vanity cases” in class 21 were averagely similar to the intervener’s activities. 
Consequently, the General Court upheld the sole plea in law presented by the LAGUIOLE mark holder and annulled the decision of the Board of Appeal in so far it invalidated CTM for all goods other than those listed above.

That said, it would have been interesting if the General Court had accepted the argument of the reputation of the Forge de Laguiole business name, and the possible outcomes to which that factor would have led: we’ll have to wait for the next national judgment to raise the bar in this respect.

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