For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.
Showing posts with label General Court. Show all posts
Showing posts with label General Court. Show all posts

Tuesday, 24 June 2014

Five stripes and you're out -- The GC on decorative marks

Stripes appear to be a big deal in the clothing field. In the landmark Adidas decision [Case C-102/07, on which see the IPKat’s note here], the Court of Justice of the European Union (CJEU) established that three parallel stripes may play a distinctive role and, under certain conditions, trade marks covering them can prevent the use two stripes even even if used in a merely descriptive way. Some days ago, the General Court (GC) gave its assessment in another striking stripe case. The stripes at issue were five and represented on the side of sport shoes [Case T‑85/13, K-Swiss Inc v OHIM and Künzli SwissSchuh AG].


The dispute concerned the sign in subject of the Community figurative trade mark application No 4771978 (above), which the applicant K-Swiss Inc registered in 2007 with reference to “footwear” in class 25. 

In 2009, the Swiss company Künzli SwissSchuh AG (‘Künzli’) [the opponent Künzli Swiss is Swiss; the applicant K-Swiss is American; the confusing similarity between companies' names is only due to the irony of destiny] made an application for invalidity, claiming that K-Swiss’ trade mark was devoid of distinctive character under what is now Article 7(1)(b) of the Community Trade Mark Regulation 207/2009. Both the Opposition Division and the Board of Appeal granted Künzli’s application, holding that there was nothing about that sign that made it distinguishable from the appearance of the product. 

K-Swiss filed appeal to the GC, which upheld the Board of Appeal’s decision.

The GC first observed that the trade mark consisted of “the two-dimensional representation of the shape of a shoe with five parallel stripes on its side”. As the five stripe sign cannot "be disassociated from the products it designates, namely shoes", the GC considered it to be "indistinguishable from the appearance of the products designated".

Consumers are not used to making assumptions as to the commercial origin of products on the basis of signs which are indistinguishable from the appearance of the products themselves. As a consequence, the GC stated, such signs could successfully reach trade mark protection only inasmuch as they pass two different tests:
(a) First, they have to “depart significantly from the norm or customs” of the field. As the CJEU’s case law proves, such requirement applies to any kind of trade mark which is indistinguishable from the appearance of the products, be it a three-dimensional trade mark [Procter & Gamble v OHIM, Joined Cases C-473/01 P and C-474/01 PMag Instrument v OHIM, Case C-136/02 P and Deutsche SiSi-Werke v OHIM, Case C-173/04 P), a figurative trade mark consisting of a two-dimensional representation of the product designated (Storck v OHIM, Case C-25/05 P, and Henkel v OHIM, Case C-144/06 P), or a sign consisting of a design applied to the surface of the product (order in Case C-445/02 P Glaverbel v OHIM).
(b) If the first test is passed, examiners must then ascertain that the sign does not play a merely decorative role. According to the GC, this is the case whenever “a design applied to the surface of a product [is] be capable of being apprehended without the product’s inherent qualities being perceived simultaneously, so that the design can be easily and instantly recalled by the relevant public as a distinctive sign”.
As to the first test, K-Swiss claimed that sports and leisure shoe consumers are accustomed to get information as to the commercial origin of products from simple signs. That would be particularly true for stripes, whose distinctive use was a long-standing practice in the sector. However, the applicant argued that the trade mark at stake departed significantly from the norm of the field because the number of stripes depicted in it was unusual: since that number was limited to 5, consumers could have easily identified them as a distinctive sign of its products [indeed, agrees Merpel: counting the stripes on shoes’ sides could be the new barcode -- 5 stripes correspond to K-Swiss; 3 is Adidas; 4 is Paciotti; 2 is MarcaMode’s; one is for everyone and no one]. Further, K-Swiss alleged that, in the sub‑category of business and dress shoes, placing designs on the side of the shoes was not common. For this reason, the trade mark at stake had to be considered as unusual in that part of the field.

The GC dismissed K-Swiss’ arguments, finding that the applicant failed to provide evidence that the five parallel stripes applied to the external surface of shoes significantly departed from that which was customary in the the field. Moreover, the GC interpreted the circumstance that business shoes do not normally bear trade marks on their side as a further confirmation that the relevant public is not accustomed to considering designs applied to their surface to be an element identifying their commercial origin. In any case, as the trade mark at stake designated “footwear” in general, the GC found such argument irrelevant.

As to the second test, K-Swiss tried to convince the GC of the five stripes’ capability to be perceived as non-merely decorative by relying on the registration of a number of Community and national trade marks covering that very element, some of which were lodged by K-Swiss itself. The circumstance that OHIM and national offices considered that sign distinctive in the past, argued K-Swiss, confirmed the distinctive function of the five stripes.

Let's go!
In respect of the Community trade marks, the GC held that “OHIM must take into account the decisions already taken in respect of similar applications” but that, nonetheless, “principles of equal treatment and sound administration must be consistent with respect for legality”. Consequently, the GC continued, one “cannot rely, to his advantage and in order to secure an identical decision, on a possibly unlawful act committed to the benefit of someone else” [is this a British-style, understatement suggesting that some Community trade marks are actually unlawful, Merpel wonders?], and that, given that factual and legal circumstances diverge from case to case, the examination of every trade mark application has its own individual story.

The GC found to be equally irrelevant the circumstance that K-Swiss managed to have the five stripes registered as trade mark in eight Member States. Earlier national registrations are only one factor which may be taken into account when assessing the eligibility of a sign to be registered as a Community trade mark, the GC said, and OHIM is under no obligation to follow the assessment of the competent national authorities or to register the mark at issue as a Community trade mark on the basis of those considerations.

Friday, 13 June 2014

Name your non-registered trade mark -- The GC on Ronaldinho's 'R10' CTM

A few hours before the World Cup’s kick-off match, the General Court wrote another Chapter of the “R10” saga, concerning a trade mark related to one of the funniest Brazilian football players ever [Case T‑137/09 RENV, Nike International Ltd v OHIM, available in French and Spanish].

For those who are not familiar with the game, “R10” is the distinctive sign that is almost universally evocative the former Brazilian star player Ronaldo de Assis Moreira, better known as Ronaldinho -- "R” stands for “Ronaldhino”, “10” is the number he used to carry upon his strip when he played for Brazil and a number of quite important clubs. In the good old days, Ronaldinho was one of the most famous Nike product endorsers.
Ronaldinho -- "R10"

On January 2006 some Aurelio Muñoz Molina, who apparently has nothing to do with Ronaldinho, filed a trade mark application for the Community “R10” word mark No 4813713, in connection with products in classes 18, 25, and 35. On October 2006, DL Sports & Marketing Ltda (DL Sports), a mysterious company that owned other Ronaldinho-related rights, opposed on the basis of a Spanish “R10” non-registered mark. The Opposition Division allowed DL Sports a period to prove the existence and validity of the earlier non-registered right it relied on. For some reason, DL Sports failed to submit evidence in that regard.

While the opposition was still ongoing, DL Sports and Nike closed an assignment agreement whereby the first transferred to the US company various trade marks and trade mark applications covering the “R10” sign in the US, Europe and Argentina, along with “all rights, titles and interests related to the above mentioned trade marks” (the ‘Agreement’). Believing that the Agreement had transferred the ownership of the Spanish non-registered “R10” trade mark on which the opposition was based, Nike joined the procedure in place of DL Sports.

On February 2008, the Opposition Division rejected the opposition on the ground that DL Sports had not substantiated the existence of the earlier non-registered right. One month later, Nike appealed the decision to the First Board of Appeal. Without hearing the parties, the Board of Appeal considered the appeal inadmissible: since the Agreement made no specific mention of the Spanish “R10” non-registered trade mark, Nike was not qualified to be a party to the opposition.

Ronaldo -- "R9"
This ruling was the subject of subsequent decisions by the General Court (GC) [Case T-137/09, which found Nike’s right of defence had been violated as it had not be granted with the opportunity to present its comments or to produce additional evidence to show that its standing to sue] and the Court of Justice of the European Union (CJEU) [Case C‑53/11 P], which set aside the GC’s decision and remitted the question for an assessment on the merit of whether the assignment of the Spanish “R10” non-registered trade mark actually took place under the Agreement.

In the decision rendered yesterday [whose French version is curiously entitled “DOCUMENT DE TRAVAIL”, “working document”], the GC found that non-registered trade marks, like any registered rights, should be explicitly mentioned in a transfer agreement for their assignment to take place, and that this had not happened in the Agreement between DL Sports and Nike.

First, the GC noted that the first Recital of the Agreement carefully listed seven trade marks and 13 trade mark applications covering the signs “R10” and “10R”, while no non-registered trade marks were mentioned. Moreover, Clause 3 of the Agreement, stating that “the above mentioned trade marks cover the whole and all the trade mark applications registered by DL Sports upon the ’R 10’ and ‘10R’ signs”, appeared to confirm that the Agreement was limited to “registered” signs only, the GC held.

A further element that convinced the GC in the same sense was Clause 2 of the Agreement, according to which

“[DL Sports] transfers to [Nike] … all rights, titles and interest related to the above mentioned trade marks, as well as the goodwill related thereto and there included the common law rights and other rights related to said trade marks, and the claims, applications and grounds for appeal (either acknowledged by law or equity)”.

Cristiano Ronaldo -- "CR7"
In order to include the Spanish non-registered trade mark on which the opposition was based within the subject matter of the Agreement, Nike proposed a broad interpretation of that clause. By contrast, the GC found that the reference to the “above mentioned trade marks” further confirmed that no exclusive right other than the registered ones listed under Recital 1 was involved in the assignment Agreement.

Eventually, the GC focused on Recital 2 of the Agreement, according to which Nike “owns all the rights, titles and interests related to logos, designs, models, trade marks and other IP rights” related to Ronaldinho’s activity, on the basis of another agreement between Nike and the player.

Should this be true, the GC stated, Nike would have initially owned the Spanish non-registered trade mark at issue and no transfer of ownership from DL Sports would have taken place. Addressing the GC’s question, however, Nike insisted on alleging that the Spanish non-registered trade mark was actually the property of DL Sports at the moment the opposition was brought. Given that Recital 2 of the Agreement did not explicitly mention that trade mark and that Nike failed to provide further clarification on its relation with DL Sports at the time the opposition was filed, the GC concluded that Nike did not own the Spanish “R10” non-registered trade mark at the moment it joined the opposition and thus had no title to appeal the Opposition Division decision to the Board of Appeal.

The morals of this story are threefold: (i) although non-registered trade marks are often considered second-rate players, specific mention of them in assignment agreements involving all existing rights on a certain sign might be a good idea; (ii) to this end, mentioning the relevant territory where the non-registered trade mark is protected might be key to its a valid identification; (iii) if, for whatever reason, one should decide to ask a third company to register and enforce some trade marks in which one has an interest, with a view to a later assignment, a couple of preliminary meetings to agree upon a common strategy would be in order.

UPDATE: a learned Katfriend (katpat!) lets us know that, actually, “under Spanish law there is no such thing as a non-registered trade mark. There are notoriously known marks (6bis Paris Convention) but these fall under 8(2)(c) CTMR, not under 8(4).” While it is more than likely that "R10" was well-known back in 2006, the opposition was based on both Article 8(4) and 8(2)(c) CTMR. Further, the GC refers to the trade mark at issue simply as "non-registered mark" -- and all this bring us back to an old, tricky question: shouldn't EU Courts know national law?

Ronaldinho here
Ronaldo here.
Cristiano Ronaldo here
This Kat's apologies to those who are already fed up with all this football here

Thursday, 5 June 2014

Vampire vodka Dracula spectacular: a Transylvanian tale of non-use juice

This one is about proving genuine use of a Community trade mark. The decision is of the General Court, and it is Cases T‑495/12 to T‑497/12 European Drinks SA v OHIM, SC Alexandrion Grup Romania Srl intervening, handed down today.
European trade mark law operates a “use it or lose it” policy with Community and national trade marks. Once your mark has been registered for more than five years, if you don’t use it the mark becomes liable to revocation for non-use and also cannot be asserted in opposition or invalidity proceedings against a later mark (unless you prove use in those proceedings). Full of enthusiasm and with big plans for a mark, applicants will often file marks with broad specifications in numerous classes, hoping to secure as wide a possible protection for their new brand. But time flies, and business reality does not always meet with business theory, meaning broad registrations often come up short when it comes to proving use all those years later. 
The marks in dispute
This case concerned three applications back in 2009 by SC Alexandrion for CTMs inspired by that hematolagnia-indulging undead aristocrat, Count Dracula*. They were to be registered in respect of “Class 33: ‘Alcoholic beverages (except beers)” and related services in classes 35 and 39. European Drinks (ED) opposed these, relying on its figurative mark from 1995, registered in corresponding classes.
Applicant’s marks
Opponent’s mark

The oppositions failed at the OHIM level and at the Board of Appeal: ED failed to prove use.
The evidence of use relied upon
The mark in use
ED submitted:
1.    Six dated invoices in Romanian issued by another company to a wholesaler within a three month period each covering 432 bottles of vodka associated with the wording “V DRACULA”.
2.    An undated photograph of part of a bottle showing the DRACULA sign to the right/below.
3.    Undated promotional text in Romanian and English with no mention as to its medium, relating to “vodka DRACULA” and bearing the verbal element “DRACULA” in characters identical to those used in the photo.
What is the law on genuine use?
The General Court provided a very good summary of what proof of use is all about:
1.    In an opposition, the period in which use must be proved is five years prior to the date the application was published (Article 42(2) and (3) of Regulation No 207/2009, the CTM Regulation).
2.    The rationale for not allowing an earlier mark to be used in an opposition without proof of use is “to restrict the number of conflicts between two marks, where there is no good commercial justification deriving from active functioning of the mark on the market” (see Case T‑203/02 Sunrider v OHIM — Espadafor Caba (VITAFRUIT)).
3.    Genuine use of a trade mark means use in accordance with its essential function – as a badge of origin – “in order to create or preserve an outlet for those goods or services”, ie, real commercial exploitation. It does not include token use for the sole purpose of preserving the rights conferred by the mark (Ansul).
4.    The assessment of genuine use requires the usual overall assessment of all the relevant factors in the particular case.
5.    Use must be “viewed as warranted in the economic sector concerned in order to maintain or create a share in the market for the goods or services protected by the mark”, taking into account amongst other things the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark (VITAFRUIT and CERATIX (in French here)).
A different kind of Vampire Vodka, this
one seems to be available online
6.    Under Rule 22(3) of Regulation No 2868/95 (the CTM implementing regulation), evidence of use must concern the place, time, extent and nature of use of the earlier trade mark.
7.    The use must be public and outward in the relevant territory (VITAFRUIT).
8.    Extent of use is considered in particular by commercial volume as well as length and frequency of use (VITAFRUIT, HIPOVITON).
9.    A low volume of goods marketed under that trade mark may be offset by a high intensity or a certain constancy over time in the use of that trade mark or vice versa.
10.  Use need not always be quantitatively significant in order to be deemed genuine: turnover and the volume of sales of the goods under the earlier trade mark cannot be assessed in absolute terms but must be looked at in relation to other relevant factors, such as the volume of business, production or marketing capacity or the degree of diversification of the undertaking using the trade mark and the characteristics of the goods or services on the relevant market (HIPOVITON, VOGUE, Ansul).
11.  However, if you can only show a low volume of sales, you’ll be expected to put in more evidence, if you have it, to “dispel possible doubts as to the genuineness of the use of the mark” (HIPOVITON, VOGUE). So purely relying on a low volume of sales is a risky business.
12.  Genuine use of a trade mark cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of effective and sufficient use (VITAKRAFT).
13.  Use of the mark in a form differing in elements which do not alter the distinctive character of that mark in the form in which it was registered also counts towards proof of use of the mark (CRISTAL CASTELLBLANCH).
The General Court wasn’t impressed with what ED filed
With the above in mind, the General Court had the following criticisms of ED’s evidence, mirroring much of what the Board of Appeal had said:
  • The photograph and promotional text did not “substantiate the place, time or still less extent of the use”.
  • Five of six of the invoices date from the period between the applications being filed and published, and in these circumstances although they can be taken into account “the duration and the frequency of the use adduced [by them] does not support the conclusion that the products bearing the name of the earlier mark were marketed continuously over the relevant period”.
  • No information was provided about the identities of the companies in the invoices, nor the relationship between the company issuing it and the opponent.
  • It had not been established that the company on the invoice had used the mark with the opponent’s consent.
  • It had not been established that the mark had been used publicly and outwardly.

Amongst other factors the above led the General Court to conclude that:
  • The use on the invoices equating to 900 units a month was a “small” quantity in the relevant market (ie, alcoholic drinks). In fact, “the sales volume is marginal bearing in mind the average monthly consumption of vodka on the Romanian market” (How much, hic, vodka, is marginal, to, hic, consume, in an average, hic, month? Slurs Merpel).
  • Accordingly, 2,592 bottles of vodka over three months was not enough to establish genuine use in the circumstances, notwithstanding the finding in VITAFRUIT that 3,516 bottles of concentrated fruit juice was enough over 11 months.
  • The six invoices could not be considered as merely samples of a greater batch of sales and/or use.
Sadly for ED, it followed that its vampiric vodka failed to get over the line based on the scant evidence it was able to provide. Its oppositions were therefore dismissed. It was criticised for not doing a good enough job, and while that may well be the case, it may also be that it simply hadn’t made enough use and it was doing the best it could with what little it had.

The sharp-eyed (a sharp-toothed?) amongst you will note that the photograph of the use does not match the figurative trade mark relied upon by the opponent. That too was a live question in the case (whether the differences in the form in which the earlier mark was used and the form in which it was registered altered the distinctive character of that mark as it was registered), but the General Court declined to rule on the effect of the differences in light of its finding on the evidence of use.
This case is a useful illustration for those undertaking proof of use exercises (which is a common task for this Kat and his colleagues) of what to do and what not to do. Clear, precise, detailed information is your friend here – don’t just toss in a bit of paper. Tell the story of the use, fill in the gaps and convince the Office the mark has been put to use. There’s a good lesson here as to the unpredictability of the courts too. ED might be more than a little disappointed to see it failed to prove use when it sold 2,500 bottles over three months whereas 3,500 bottles over 11 months was enough in VITAFRUIT.
To all vodka lovers and all blood suckers, please remember to drink responsibly.
*Amusingly to this obviously not-very-well-read Kat, Wikipedia reveals that the original Dracula novel by Bram Stoker is a tale that “begins with Jonathan Harker, a newly qualified English solicitor, visiting Count Dracula in the Carpathian Mountains on the border of Transylvania, Bukovina, and Moldavia, to provide legal support for a real estate transaction overseen by Harker's employer". That almost sounds as if a property lawyer has been fiddling with the Wikipedia entry… 

Friday, 7 February 2014

The building blocks of a trade mark infringement claim: the EU General Court’s view on MAGNEXT v MAGNET 4

Cases T‑604/11 and T‑292/12 Mega Brands International v OHIM is a decision of the EU General Court concerning two sets of opposition proceedings brought by Diset SA against two Community trade mark applications of Mega Brands (creator of Mega Bloks, the long-time Lego rival) based on a Spanish national registration. Legally it is unremarkable, but its decision on the facts illustrates the subtleties, inconsistencies and analytical challenges associated with understanding and applying trade mark infringement law in Europe.

Applicant – Mega Brands
Opposer – Diset

MAGNET 4 (Spanish word mark)
Class 28: toys and playthings, in particular multi-part construction toys, its parts, its accessories and its fittings
Class 28: games, toys, gymnastic and sports articles not included in other classes; decorations for Christmas trees
The opposition was based on Article 8(1)(b) of the Community Trade Mark Regulation (Regulation No 207/2009) (the CTMR), ie, that Mega Brands’ applications were sufficiently similar in terms of both the marks and the goods and services of their specifications, such as to create a likelihood of confusion between the applications on the one hand and the mark on the other.
The Opposition Division of the Office for Harmonization in the Internal Market (OHIM) upheld the oppositions as did the Board of Appeal, which agreed with the Opposition Division. Next in the appeal hierarchy was the EU General Court (previously called the Court of First Instance). It upheld one opposition but dismissed the other.
Oh to be a kid again...
As many of you will know, the assessment of confusing similarity in trade mark opposition, infringement or validity cases under European trade mark law requires a “global appreciation” of all factors, in particular the visual, aural and conceptual similarities of the marks under analysis. Account should be taken of the perception of the average consumer, who is reasonably well informed and reasonably observant and circumspect and in this case, held the Board of Appeal, simply Spanish-speaking consumers (of what goods the judgment does not say).
The General Court remarked that the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details, before spending the next two paragraphs of its judgment doing precisely the opposite: noting the excessive size of the X in the device mark, its stylisation and the emphasis of “NEXT” as a separate element; the presence of “4” in Diset’s mark but not in Mega Brands’; and so on.
With these elements in mind, the global appreciations of both the Board of Appeal and General Court (as per the latter’s judgment) can be summarised as follows:

Board of Appeal’s view
General Court’s view
Goods and services
Identical in part
Diset’s mark’s distinctiveness
Weak (public will connect the mark with magnetic characteristics of toys)
Device mark’s degree of similarity with Diset’s mark
Certain degree
Very weak degree (because of the stylised elements noted above)
Medium degree
Not similar (unless, which it did not think was the case, Spanish speakers would associate the two with magnetism, in which case similar to some extent)
Likelihood of confusion established
No likelihood of confusion, based on an overall very weak degree of similarity and the weak degree of distinctiveness of Diset’s mark
Word mark’s degree of similarity with Diset’s mark
Medium degree
Average degree (given it lacked the distinguishing stylised elements of the device mark)
Likelihood of confusion established
Likelihood of confusion established, based on an overall medium degree of similarity and despite the weak degree of distinctiveness of Diset’s mark
While intended as a summary and to keep this post as brief as possible, the above table omits very little of the analysis in the General Court’s judgment. The Court adopts a fairly relaxed approach, briefly assessing the different elements of the marks and then rounding them up to reach a broad conclusion. With both the OHIM Opposition Division and the Board of Appeal behind it, Diset might have hoped it would win again, but the General Court, clearly considering itself free to look at the issues afresh (a highly debatable point, given the Court’s jurisdiction under Article 65(2) CTMR), agreed on the word mark but thought differently on the device.
Subject to any further appeal to the CJEU (which should only be on a point of law, which would be hard to find here), the opposition against the word mark is complete and successful. The device mark is still in play, and the case will return to the Board of Appeal to consider an opposition by Diset based on another mark (below).  Merpel, eager to butt in, thinks that one’s hopeless.

As well as neatly summing up the thought process adopted by the Board of Appeal and General Court in assessing likelihood of confusion, the case serves as a good illustration of what can happen when multiple tribunals apply the nebulous “global appreciation” test to the same facts – sometimes they agree but other times they reach completely opposite conclusions. Sadly, those conclusions play out on a depressingly slow timescale – Mega Brands’ device mark was applied for over six years ago (the word mark three and a half). The case also demonstrates some of the differences stylised marks have over simple word marks: stylised marks (generally) come with increased inherent distinctiveness, while also benefitting from an added method of distinguishing themselves from otherwise similar rivals (albeit that, in this case, it took half a decade of wait and legal proceedings before those differences bore fruit).

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