F1: Community TM institutions can't cast aspersions on national marks

If you were busily digesting the Chocolate Bunny ruling earlier today, you might have missed a further trade mark ruling from the European Union's senior court: Case C‑196/11 P, Formula One Licensing BV v OHIM, Global Sports Media Ltd, on an opposition relating to a Community trade mark that was filed a little over eight years ago and which may still have a few more years' mileage to it.

The following analysis is taken from today's Curia press release:

"The Court of Justice sets aside the judgment of the General Court which failed to acknowledge, in relation to trade marks, the distinctive character of the ‘F1’ sign

Neither OHIM nor the General Court are competent to call into question the validity of national trade marks capable of opposing the registration of a Community trade mark

In April 2004, Racing-Live SAS [a company which was subsequently replaced by Global Sports Media Ltd as proprietor of the trade mark applied for] filed an application for registration of a Community trade mark ... for a figurative trade mark (right) in respect of various goods and services (magazines, books, publications, reservation of tickets for shows, and arranging competitions on the Internet).

However, Formula One Licensing BV opposed that application. The opposition was based on the existence of an international word mark and two national word marks for ‘F1’, and the Community figurative mark (left), covering the same products and services as those indicated in RacingLive SAS’ application for registration.

By a decision given in October 2008, OHIM dismissed the opposition, considering that there was no likelihood of confusion between the trade mark applied for and those of which Formula One Licensing was the proprietor. Moreover, OHIM stated that the word element ‘F1’ was a descriptive element in the trade mark applied for.

Formula One Licensing subsequently brought an action for the annulment of OHIM’s decision before the General Court. By its judgment of 17 February 2011, the General Court dismissed the company’s action and confirmed OHIM’s decision. Formula One Licensing now claims that the Court of Justice should set aside the judgment of the General Court.

In its judgment delivered today, the Court of Justice notes, first, that that the Community trade mark does not replace the national trade marks of Member States and that those two types of trade mark co-exist in the economic life of the EU. The Court states that in this dual system of trade marks, the registration of national trade marks is solely a matter for the Member States and that, therefore, OHIM and the General Court are not competent for either the registration or the declaration of invalidity of those trade marks. Accordingly, the Court notes that the validity of a national trade mark may not be called into question in proceedings opposing the registration of a Community trade mark, but only in cancellation proceedings brought in the Member State in which the national trade mark was registered [quite right, though isn't strange that, while a national Community trade mark court can rule a CTM to be invalid, the organs of the CTM can't do the same to national marks?].

In addition, according to the Court, it cannot be found, in such opposition proceedings, that a sign identical to a national trade mark is devoid of distinctive character, that is, the ability to allow the public to associate the products and services designated by the sign with the company which applied for its registration. Such a finding would be likely to eliminate the protection which national trade marks are supposed to provide [Exactly! That's why the argument was raised, wasn't it?].

Hence, the Court notes that, in a situation such as that in the present case, OHIM and, consequently, the General Court, must verify the way in which the relevant public perceives the sign which is identical to the national trade mark, solely in relation to the mark applied for, and evaluate, if necessary, the degree of distinctiveness of that sign. In that respect, the Court points out that it is necessary to acknowledge a certain degree of distinctiveness of a national mark on which an opposition against the registration of a Community trade mark is based. In those circumstances, the Court finds that, in finding that the sign ‘F1’, identical to the national trade marks of Formula One Licensing, was devoid of distinctive character, the General Court called into question the validity of those trade marks in proceedings for registration of a Community trade mark and therefore infringed the regulation on the Community trade mark.

Therefore, the Court sets aside the judgment of the General Court and, since it is not in a position to give final judgment in the matter, refers the case back to the latter".

Says the IPKat, there are interesting issues at stake here. One is the presumptive validity of every national trade mark, which is a matter of law, versus the reality that some trade marks may have lost whatever distinctive character they had by the time a later Community trade mark is applied for: what is the value to the market place of preserving the effect of a monopoly which is based on a presumption that can be undermined?  A further question relates to national marks which are cited in support of an opposition but which are open to challenge and apparently invalid on the basis that they are in conflict with a protected geographical indication (this can easily happen in the case of a newly acceding EU Member State). The courts must find a comfortable balance between the need to balance commercial and legal certainty, the protection of investment in brands and branded businesses, competition and consumer choice

Adds Merpel, the moral of today's rulings is that, so far as distinctive character of a trade mark is concerned, it's better to be involved in the motor racing business than in the manufacture of chocolate rabbits.

Formula One car-catching cat here