CJEU says that all practically significant and demonstrated uses must be taken into account in examining distinctiveness

To what extent must the unusual use of a sign be considered by the competent authority in the examination of the distinctive character of such sign?

This is the question the Court of Justice of the European Union (CJEU) had to answer in case C-541/18.

Background

AS applied to the Deutsches Patent- und Markenamt (DPMA) to register a sign comprising an hashtag # and the phrase darferdas? as a trade mark for goods in class 25 (“Clothing, in particular tee-shirts; footwear; headgear”).

The DPMA rejected the application as it found the sign devoid of any distinctive character.

AS appealed this decision to the Bundespatentgericht, which held that the sign at issue represented a sequence of characters and words with the hashtag indicating - placed on the front of a tee-shirt - that the public was invited to discuss the question “can he do that?” (Darf er das?).

AS appealed the decision to the Bundesgerichthof.

The Bundesgerichthof reasoned as follow:

• to be considered as having a distinctive character, not all the possible uses of the sign have to be as a trade mark;
• it is sufficient for a use to be plausible;
• there must be practically significant possibilities of using the sign applied for in the case of the goods and services in respect of which protection is claimed in a way easily understood by the public as a trade mark.

Moreover, the Bundesgerichthof recalled the Deichmann case C-307/11 P, according to which Article 7(1)(b) of Council Regulation (EC) n. 40/94 of 20 December 1993 on the Community trade mark could not be interpreted as requiring the - at the time - Office for the Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) to extend its examination, based on the facts, of distinctive character to uses of the mark applied for other than that recognized as the most likely.

Having elaborated the above the Bundesgerichthof decided to refer the following question:

Does a sign have distinctive character when there are in practice significant and plausible possibilities for it to be used as an indication of origin in respect of goods or services, even if this is not the most likely form of use of the sign?

Analysis

The CJEU reasoned that sign comprising a hashtag cannot a priori be considered as lacking distinctive character. In fact, the analysis of the distinctive character must be conducted by the competent authorities within the meaning of article 3 of Directive 2008/95, considering the goods and services, the relevant public, and all the relevant facts and circumstances in concreto.

The CJEU, however, noted that the applicant for a trade mark is not required to indicate or even to know precisely, when applying for registration, the use he will make of the mark applied for, if registered.

This is because:

• the holder of a trade mark has a period of 5 years for beginning the actual use consistent with the essential function of a trade mark;

and

• the sign might have not been used before registration.

The competent authorities might consequently evaluate the way the mark will probably be shown to the average consumer only with regard to the customs of the economic sector concerned.

The uses which are not practically significant must be considered irrelevant except when the applicant has provided concrete evidence which makes a use, normally unusual in that sector, more likely. 

In the specific case, with regard to the clothing sector, the CJEU recognized that it is usual to place a mark on both the exterior of the goods and the labels sewn on the inside of them. The competent authorities will, then, have to take account of both these uses.

Considering Deichmann, first, the CJEU recalled that identical provisions in the directive to approximate the laws of the Member States relating to trade marks and in the regulation on the European Union trade mark must be interpreted in the same way; second, the CJEU stated that the Deichmann's approach remains relevant only in those cases where it appears that solely one type of use is practically significant in the economic sector concerned.

Consequently the CJEU stated that:

Article 3(1)(b) of Directive 2008/95/EC must be interpreted as meaning that in examining the distinctive character of a sign in respect of which registration as a trade mark is sought, all the relevant facts and circumstances must be taken into account, including all the likely types of use of the mark applied for. The latter correspond, in the absence of other indications, to the types of use which, in the light of the customs in the economic sector concerned, can be practically significant.

Comment

This decision, in that it indicates that the competent authorities must take into account all the likely types of us of the mark applied for, is quite straightforward. The outcome is probably what the majority of readers would have expected.

However, the CJEU  stressed that all the likely types of use are the types of use which can be practically significant, in the absence of other indications. These other indications are the uses which the competent authorities would have to considered as irrelevant except when the applicant has provided concrete evidence which makes the use more likely.

Potential trade mark owners might want to pay attention to this point!