General Court says "checkmate" to Louis Vuitton's patterns

Two parallel judgments of the General Court in the Louis Vuitton (LV) cases, T-359/12 and T-360/12, are a welcome example of clarity and completeness, destined to influence case-law on the invalidity of a Community trade mark (CTM) for lack of distinctive character, according to Articles 51(1)(a) and 7(1)(b) of Regulation 207/2009, as well as acquired distinctiveness through use, in respect to Articles 7(3) and 52(2) of the same Regulation.

In each of these cases the invalidity applicant, Nanu-Nana, challenged LV’s figurative CTMs, consisting of a chequerboard pattern, characterised by weft and warp structures, as represented below: one was in brown and beige (T-359/12), the other in light and dark grey (T-360/12). LV applied for to register the respective signs in 1996 and 2008, obtaining registration in 1998 and 2008 for various goods in Class 18 (leather goods, bags, cases, travel sets etc).

In 2009 Nanu-Nana lodged its invalidity claims at OHIM, based on several absolute grounds of refusal. It asserted that LV's patterns could not be registered as trade marks since they were descriptive and lacked distinctive character (Article 7(1)(b)(c)), were customary in the bona fine and established practice of trade (Article 7(1)(d)), consisted exclusively of a shape giving substantial value to the goods (Article 7(1)(e)(iii) and were contrary to public policy or to the accepted principles of morality. It also added that the marks were filed in bad faith according to Article 52(1)(b) of Regulation 207/2009.

Both the Cancellation Division and the Board of Appeal took the view that the marks at hand should be cancelled because they were not distinctive: they consisted of a pattern which would be applied to the surface of goods belonging to Class 18 as decoration rather than as commercial origin identifiers; nor did such patterns depart from the norms or the customs of the relevant sector.

The Board of Appeal also focused on the weft and warp structure composing the marks and explained that it could not count as a feature identifying the source of the products. The fact that it had been copied by competitors or infringers did not mean that the public could distinguish LV’s goods in the relevant market on the basis of it. No other distinguishing element was apparent within the contested marks which would have led to them having a different fate, given that they would anyway be used in combination with LV’s logo and house mark.

Another popular checkered pattern ...

In any event, both the Cancellation Division and the Board of Appeal agreed that the evidence submitted by LV did not show that its marks had acquired distinctive character through their use in a substantial part of the EU, comprising Denmark, Portugal, Finland and Sweden in the case of the brown and beige pattern, and Estonia, Latvia, Lithuania, Malta, Poland, Slovenia, the Slovak Republic and Bulgaria in respect of the other pattern. That was so, whether viewed from either at the time of the marks’ filing, according to Article 7(3), or after their registrations, according to Article 52(2).

In both cases the General Court confirmed the earlier decisions, and dismissed LV’s actions. In doing so, the Court provided substantive guidance on the assessment of invalidity of three dimensional and figurative marks -- even though Nanu-Nana limited its invalidity arguments before the Court to only the lack of distinctive character.

The main points of the General Court’s reasoning is as follows:

(a)   Lack of inherent distinctive character

The Court applied the case-law on the assessment of inherent distinctiveness of 3D and figurative marks which coincide with the appearance of the products, according to which consumers perceive those signs as commercial origin identifiers with some difficulty if they do not bear any graphic or word elements, unless they depart from the norms and customs of the sector. That was not the case for the LV's chequered board patterns: they were too basic, too common and lacked any specific character. Moreover, they had a long-standing link with goods in Class 18, where they had always been used for decorative purposes.

Did the Board of Appeal infringe the rules governing the burden of proof by considering it a well-known fact that the chequered board pattern was a basic and banal figurative feature? The General Court said no. At the outset, a registered CTM enjoys a presumption of validity, and it is for the invalidity applicant to put forwards the facts challenging the mark. However, the Board of Appeal is not prevented from considering well-known facts emerging during the invalidity proceeding, which are related to the arguments and evidence provided by the invalidity applicant.

(b)   Lack of proof of acquired distinctiveness

The starting point is that a CTM must have (inherent or acquired) distinctiveness throughout the EU given the unitary character of CTMs. It follows that a CTM cannot be registered if it is not distinctive in part of the EU. However, CTMs can acquire distinctive character through use either at the time of filing (Article 7(3)) or after registration in order for them not to be vulnerable to a validity challenge (Article 52(2)).

The General Court held that the Board of Appeal correctly made the overall assessment of the evidence provided by LV which, however, could not lead to the conclusion that its marks had acquired distinctive character because of the use made of them, in the relevant periods of time and in all the territory in which the marks were not deemed to be inherently distinctive -- in these cases the entire EU. Indeed, unless LV could have proved the contrary, the assessment of their distinctiveness was to be the same in the entire EU, and both were deemed to lack distinctive character ab initio in all Member States. Therefore, since LV could not present evidence of its CTMs’ acquired distinctiveness in some Member States, the mark were to be declared null and void.