[Guest post] Asking ourselves ‘Y’ – Are shape marks shaping complex products’ aftermarkets?

The IPKat has received and is pleased to host the following guest contribution by Manon Vanderhaeghe and Jozefien Vanherpe (both KULeuven) reflecting on the current state of protection of 3D marks, particularly having regard to their enforcement. Here’s what they write:

Asking ourselves ‘Y’ – Are shape marks shaping complex products’ aftermarkets?

by Manon Vanderhaeghe and Jozefien Vanherpe

On 26 June 2024, almost three years after its initial application by Volvo Personvagnar AB (‘Volvo AB’), the General Court (‘GC’) annulled (T-260/23) the decision of the EUIPO Board of Appeal (‘BoA’) (R 1129/2022-5) that refused to register the following LED headlights as a three-dimensional trade mark (‘3D mark’) in class 11 (lights for vehicles) and class 12 (vehicles and conveyances; parts and fittings for vehicles). Depicted are the ‘Y-shaped’ headlights of the Volvo EX90 model, marketed under the name ‘Thor Hammer Headlight’.

EUTM No 18 560 591

Volvo’s quest for trade mark protection for this particular headlamp design did not stop there. In addition to applying for the protection of the 3D shape as such, Volvo Car Corporation (‘Volvo’) also applied for various figurative marks (seemingly representing different angles of the ‘hammer headlights’) for the same types of goods. However, they were only successful in registering one figurative mark, as depicted below on the top right.

These applications show that Volvo is trying to obtain a layered protection for what are essentially component parts of complex products. The shape of Volvo’s headlights is just one example of a 3D mark on such a component part in the automotive sector. These concern either the shape of the complex product in itself (here, the form of the car; see example) or, as is the case for the Volvo headlights, one of its components. Other examples of registered 3D marks for car components include for example car grilles, also referred to in para. 23 of the GC judgment.

Although relevant, this post does not aim to address the validity of the 3D mark, in particular its ability to serve as an indicator of commercial origin. Rather, it seeks to provide a theoretical analysis of the potential impact of these types of 3D marks at the enforcement level, in particular as to independent operators on product aftermarkets, such as the repair and maintenance market.

Implications for independent spare part manufacturers/ suppliers

3D marks offer the same rights under EU trade mark law as other types of signs, therefore allowing the trade mark holder to act against identical or confusingly similar signs (read: shapes). For the 3D shapes in our example, it is clear that any independent party (non-‘original equipment manufacturer’ or ‘OEM’), would be liable for trade mark infringement when it would manufacture a non-original component part (here: headlights), identical or confusingly similar to the 3D shape. In the case of confusing similarity, the inclusion of the distinctive elements of the 3D mark in the non-original components will of course play an important role, as this is considered to be part of the global assessment of the similarity of the signs.

This means that any repair or maintenance provider will have to turn to the OEM or an OEM-authorized entity in order to acquire components registered as trade marks. While, in the car sector, EU competition law restricts OEMs from contractually restricting a supplier’s ability to supply components, repair tools or diagnostic or other equipment to independent repairers and end-users, the exclusive rights conferred by 3D marks ensure that such products cannot be manufactured without the authorization of the trade mark holder.

De-branding – the case of the replacement of registered component parts

Questions also arise in relation to original (OEM) components, namely whether the removal of such components in the course of repair and maintenance activities could be qualified as ‘de-branding’, i.e. the removal of a trade mark from the goods to which it has been affixed. Traditionally, case law has considered de-branding mainly in relation to figurative trade marks such as logos or brand names, but again, as 3D marks offer the same exclusive protection to rightholders as other types of trade marks, the same rules apply. And while de-branding may be a commercial strategy for a figurative or word mark, the removal of components in order to, for example, replace them, constitutes an obligatory step within repair and maintenance practice.

IPKat-approved car lights

Existing case law of the Court of Justice of the EU (‘CJEU’ or ‘Court’) (see CJEU cases Portakabin [IPKat here] and, in particular, Mitsubishi) is not crystal-clear as to the question under which specific circumstances de-branding initiatives may be considered a relevant use of a trade mark, and therefore infringing whenever the product in question is subsequently commercialized in the EU (Geiregat, 2024; Kur, 2021). For repairers-resellers that replace a (broken) trademarked component in order to replace it with non-protected components, such uncertainty negatively affects their business operations. This discussion is theoretical at present, as, to the best of the author’s knowledge, there is no case law on the specific issue of de-branding when it comes to 3D marks.

Exhaustion and legitimate reasons – the case of the repair and maintenance of a registered complex product/ component

Another potential obstacle for the non-OEM repair and maintenance market, certainly if the 3D mark correlates with the shape of the goods for which it is registered, can be found at other levels. At this stage, these questions are, again, purely theoretical, as the existing CJEU case law on the exhaustion of 3D marks (Viking Gas; IPKat here) does not address the situation where the alteration of the goods also implies that modifications are to be attributed to the registered shape in itself.

The first question is whether, in those cases, the resulting (read: repaired or altered) car would still be regarded as a ‘sign’ that is either identical to the 3D mark—in case of small repairs or modifications—or confusingly similar—in case of more substantial modifications which retain the distinctive elements. Depending on the extent of the intervention and the distinctive elements of the 3D mark, the answer is likely affirmative, as repair would not have the objective of changing the appearance of the goods, but only of repairing what is broken.

Second, one could imagine uncertainty as to the application of the exhaustion limitation. This is because here, if an independent repairer-reseller were to alter any visible (registered) aspect of the sign, the sign itself is being ‘tampered with’, not the goods to which the sign is affixed. This deviates from traditional trade mark exhaustion cases, where the condition of the goods to which the trade mark is affixed is considered in the analysis whether the alleged infringer can successfully invoke the exhaustion limitation. As the Court accepts that the exhaustion principle applies when a first sale took place which allows the realisation of the economic value of a trade mark (see inter alia Viking Gas, §38 and cited case law), it is likely that this criterion will be fulfilled with regard to aftermarket practices.

Third, even if exhaustion applies, the question arises whether the convergence between the trade mark and the shape of the goods could further affect the applicability of the legitimate reasons exception under Artt. 15(2) EUTMR and TMD. One might wonder whether, in the case of 3D marks, any change that involves not only a modification of the goods but also of the trade mark itself, would be a lever in favour of this legitimate reasons defence. If we look at the examples cited above, it is clear that a change affecting the characteristics of the shape of the car, could also concern (distinctive) elements that fall under the protection of the 3D mark.

Concluding remarks

The protection of physical (components of) complex products by 3D marks gives rise to interesting (if at the moment very theoretical) discussions, both as to validity and scope of protection. Traditionally, components fall within the scope of protection of design law, if they are new and have an individual character; or patent law when they are novel, inventive and industrially applicable. However, this example demonstrates the willingness of OEMs to protect component parts of complex products, even through (multiple) trade mark registrations.

While the importance of liberalising the spare part market for complex products was specifically addressed in the legislative design of the newly adopted Design Package, such considerations are not reflected in EU trade mark law, such as in the form of a repair clause as it exists in EU design law. If you add a potential protection under EU copyright law to the mix, you get a layered protection of potentially long-lasting exclusive rights, with additional insecurities surrounding their scope. This leads to legal uncertainty in secondary markets (including the repair and maintenance market), and thus to a discouraging factor for independent repair services and the trade of repaired goods in the EU.

As for the Y: 3D marks and their validity have always been controversial, as they necessarily interact and restrict competition at the production level, which is not the general purpose of EU trade mark law (Kur and Senftleben, 2017, para. 1.01). As the commentary shows, further questions surrounding their scope could imply other market restrictions to aftermarket services, even outside the production stage. This is certainly true for trade marks that protect (aspects of) complex products, for which competition in the repair and maintenance market must be further supported in a well-functioning circular economy.