Swedish Patent and Market Court of Appeal cancels Crocs three-dimensional trade mark

In an interesting decision from this month, the Swedish Patent and Market Court of Appeal considered whether the Crocs Classic footwear (depicted below), registered as a national three-dimensional trade mark, could be cancelled because it consisted exclusively of a shape, which resulted from the nature of the goods themselves and a shape necessary to obtain a technical result. Having found that the mark could not be cancelled on the above grounds, the Swedish Patent and Market Court of Appeal considered instead that the mark lacked acquired distinctiveness. The decision is interesting since it exposes the significance of surveys relating to acquired distinctiveness and the difficulties for trade mark holders to protect three-dimensional marks.

Background

In 2008, Crocs Inc applied for a three-dimensional trade mark registration for its ‘Crocs Classic’ footwear in Class 25 of the Nice Classification. Registration was rejected by the Swedish Intellectual Property Office (PRV) on the basis that the mark lacked distinctive character. Crocs submitted evidence in support of the mark’s distinctiveness, resulting in the successful registration of the Crocs Classic:


Crocs later granted its Swedish subsidiary a licence to use the trade mark in Sweden.

Despite this, a Swedish discount store, ÖoB, in the period between 2014 – 2015, advertised and sold the following footwear:

Crocs brought an action against ÖoB, claiming that ÖoB’s promotion and sale amounted to trade mark infringement of Crocs Classic. ÖoB counterclaimed that the Crocs Classic trade mark registration was invalid.

In May 2019, the Swedish Patent and Market Court dismissed Crocs’s claim relating to infringement of its three-dimensional trade mark and cancelled the registration pursuant to Chapter 2, Section 4 of the Swedish Trade Marks Act. It considered that the trade mark consisted of five essential characteristics (with each characteristic serving a function), namely the: 1) holes on the top 2) holes on each side 3) the heel strap 4) flat rivets, and 5) wide toe-area. According to the Swedish Patent and Market Court, the function of each characteristic could typically be attributed to the basic functions and properties of the type of footwear in question. It therefore concluded that the shape of the mark was the result from the nature of the goods themselves and the shape of goods was also necessary to obtain a technical result.

Crocs appealed the cancellation decision to the Swedish Patent and Market Court of Appeal.

Cancellation on the basis of ‘a shape of mark which is the result from the nature of the goods themselves and/or necessary to obtain a technical result’

According to settled case law, whether the shape of a mark is results from the nature of the goods themselves requires an assessment of the essential characteristics of the mark in question. In determining the essential characteristics, the competent authority may either base its assessment directly on the overall impression produced by the sign or first examine, in turn, each of the components of the sign concerned. (C-48/09 P, Lego).

In the present case, the Swedish Patent and Market Court of Appeal considered that it was merely the heel strap and the holes on top and sides of the footwear that could be regarded as essential characteristics. In this sense, the heel strap merely had a generic function, which was to hold the shoe in place while the function of the holes was to provide increased ventilation and to enhance the waterflow. However, the fact that footwear of the current type had good ventilation and enabled water to drain out could be accomplished in several different ways in order to achieve that same function: for instance, in terms of the number of holes, their size, design and location. The Swedish Patent and Market Court of Appeal’s conclusion was therefore that mark could not be considered as comprising a shape, which is the result from the nature of the goods.

Furthermore, it could not be concluded that the shape was necessary to obtain a technical result since the ventilation and drainage that the holes provide could not be regarded as ‘a technical result’ in the same sense that it is envisaged by Chapter 2, Section 4 of the Swedish Trade Marks Act.

Cancellation on the basis of ‘lack of acquired distinctiveness’

Since the shape of the mark was not struck by the provision in Chapter 2, Section 4 of the Swedish Trade Marks Act, the next question was whether other absolute grounds for invalidity, in light of Chapter 2, Section 5 of the same act, would apply. This provision brings into consideration whether mark has acquired distinctiveness.

For a mark to possess distinctive character, it is necessary that it serves to identify the product in respect of which registration is applied for as originating from a particular undertaking, and thus to distinguish that product from products of other undertaking (C-53/01–C-55/01, Linde). Only a mark which departs significantly from the norm or customs of the sector and thereby fulfils its essential function of indicating origin is not devoid of any distinctive character (C-136/02, Mag-Lite).

The extensive use of a sign consisting of the shape of a product may be sufficient for that sign to have acquired distinctiveness. In such case, it is required that a trader has been the only supplier of particular goods to the market and the extensive use of that sign has led to a substantial proportion of the relevant class of persons associating that shape with that trader (C-299/99, Philips).

The factors capable of demonstrating that the mark has come to identify the product concerned must be assessed globally and take into account the following: the market share held by the mark, how intensive, geographically widespread and long-standing use of the mark has been, the amount invested by the undertaking in promoting the mark, the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking, and statements from chambers of commerce and industry or other trade and professional associations (C-353/03, Nestlé).

Crocs relied on the marketing and sale success of the Crocs Classic in Sweden. These figures showed that a fairly large number of the Crocs Classic were sold in Sweden. However, according to the Patent and Market Court of Appeal, the information did not provide any real guidance on the question of whether the actual shape, through its use, had acquired distinctiveness and thereby enabled it to perform the essential function of a trade mark, namely, to identify the product’s origin.

Crocs also relied on a market survey that was conducted in early 2008 in which the interviewees were provided a picture of the footwear from the side. The word ‘Crocs’ and the cartoon crocodile were removed in the picture. The respondents answered a number of questions, including what they thought of when they saw the picture. The survey showed that 74 % of respondents stated that they knew the footwear as "Foppatoffeln" [In Sweden, ‘Foppatoffeln’ is a common name for the Crocs footwear in honour of Sweden’s renowned hockey player Peter Forsberg who suffered from a heel injury, prompting him to wear the Crocs footwear on TV and in other public contexts] and that merely 7% of the respondents knew it as Crocs.

Furthermore, it appeared that 54% stated that the footwear in question “originates from one specific company” and that 46% stated that the footwear “could originate from any company”. Finally, the survey showed that there was no “do not know” option for the respondents of the survey.

According to the Patent and Market Court of Appeal, the fact that there was no “do not know” option meant that there were shortcomings in the survey. It also noted that the option ‘whether the footwear could originate from any company’ was misleading, as it was obvious that only companies that manufacture the footwear could be considered. The marketing of the footwear at the time of the survey also took place in strong connection with Peter Forsberg.

Finally, the assessment of the results of the survey had to bring into consideration that the footwear at the time, had been advertised with other applied characteristics, i.e., the word Crocs and the cartoon crocodile, which further suggested that the shape of the product itself would be perceived as a characteristic.

According to the Patent and Market Court of Appeal, the above considerations, based on the format of the survey and its results, meant that it was not possible to draw any conclusions with sufficient certainty as to whether the shape of the shoe itself is perceived as a characteristic of the product. Nothing in the present case indicated that the mark acquired any distinctive character after the period of the survey and the trade mark was therefore cancelled.

Comment

This decision exposes the significance of surveys concerning acquired distinctiveness of a mark, in light of the conditions laid down in C-353/03, Nestlé. Also, the fate of three-dimensional marks appears rather unfortunate and may provide for significant hurdles for trade mark holders to overcome. In this case, both judicial instances flagged a variety of absolute grounds for invalidity. Both judicial instances questioned whether the mark results from the nature of the goods themselves, or is a shape necessary to obtain a technical result, as well as the lack of acquired distinctiveness. Even if the mark is now cancelled, the Crocs footwear have nonetheless sealed their fate in Sweden: not as Crocs, but rather as ‘foppatofflor’. 
Swedish Patent and Market Court of Appeal cancels Crocs three-dimensional trade mark Swedish Patent and Market Court of Appeal cancels Crocs three-dimensional trade mark Reviewed by Nedim Malovic on Thursday, December 31, 2020 Rating: 5

2 comments:

  1. thanks, very interesting (any english translation ...?)

    ReplyDelete
    Replies
    1. Hi Lorenzo, thanks! Unfortunately, there's no translation of the decision (yet).

      Delete

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