Nike and Puma fight over FOOTWARE

From a marketing perspective, a good trade mark provides information on the goods and services but is still sufficiently distinctive to stand out – and get registered as a trade mark. Sometimes, the creative alteration of a descriptive word does not go far enough, as the following case concerning Nike’s ‘FOOTWARE’ trade mark shows.

Background

On 14 March 2019, Nike obtained registration of EU trade mark no. 018035847 ‘FOOTWARE’ for various goods and services in class 9 (including ‘computer software and firmware used to allow electronic devices to share data and communicate with each other’), class 38 (including ‘telecommunication services’) and class 42 (including ‘cloud computing featuring software for connecting, operating and managing networked devices via wireless or wired networks’).

On 18 March 2020, Puma filed an application for a declaration of invalidity arguing that Nike’s trade mark lacked distinctive character, was descriptive and generic (Artt. 59(1)(a), 7(1)(b) to (d) EUTMR).

The Cancellation Division of the European Union Intellectual Property Office (‘EUIPO’) rejected Puma’s application. Upon appeal, the EUIPO’s Board of Appeal (‘BoA’) annulled the decision and declared the trade mark invalid on the ground of descriptiveness (Art. 7(1)(c) EUTMR).

Nike brought an action before the General Court.

The General Court’s decision

The General Court dismissed the action (case T-130/23).

Relevant public

The judges confirmed the BoA’s finding that the relevant English-speaking public would have an average to high degree of attention vis-à-vis the goods and services of the contested trade mark.

Perception of ‘FOOTWARE’

The BoA held that a significant part of the relevant public could understand the term ‘footware’ as ‘footwear’, either because it might perceive it as a misspelling or because it might understand it directly as ‘footwear’.

The General Court upheld this finding by reference to consistent case law (in particular the Doublemint decision of CJEU, case C-191/01 P, IPKat here), according to which a sign is considered descriptive if at least one of its possible meanings designates a characteristic of the goods or services. For this reason, the BoA was justified to base its assessment solely on the part of the English-speaking public which would perceive the sign as ‘footwear’.

Connection to the goods and services

Puma had submitted evidence showing that, at the application date of the contested trade mark, footwear incorporating software or hardware constituted an established product on the growing market of the Internet of Things. The evidence contained several references to ‘smart shoes’, which included, inter alia, ‘a computer inside a shoe’, wireless connectivity and embedded chips with tracking technology.

For these reasons, the General Court confirmed the BoA’s finding that the relevant English-speaking public could perceive the sign ‘FOOTWARE’ (read as ‘FOOTWEAR’) as a specific and direct reference to the kind or intended purpose of the goods and services in question.

Nike argued that the use of the goods and services for shoes did not constitute a central, significant or relevant characteristic of those goods and services. In its response, the General Court recalled that Art. 7(1)(c) EUTMR lists specific characteristics, which can be described by a mark (kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service) and refers to “other characteristics of the goods or service” for which the sign can be descriptive.

The judges found that the case law requiring a characteristic in the meaning of Art. 7(1)(c) EUTMR to be easily recognisable, objective, inherent, intrinsic and permanent to the nature of the goods or services, does not apply to the characteristics explicitly mentioned in Art. 7(1)(c) EUTMR but only to “other characteristics of the goods or services”.

Since the BoA found the sign to describe the kind and intended purpose (i.e. characteristics explicitly mentioned in Art. 7(1)(c) EUTMR), it was not deemed necessary to assess whether these characteristics are intrinsic, permanent or objective.

A regards the intended purpose, the General Court found that a sign falls foul of Art. 7(1)(c) EUTMR if it is descriptive for one of the intended purposes of the goods and services, which the relevant public would take into account when making a choice.

Since all goods and services of the contested trade mark could be used for connected shoes, the General Court held that ‘FOORWARE’ (understood as ‘FOOTWEAR’) was descriptive for the relevant goods and services.

Comment

1. Justifying the finding that ‘FOOTWARE’ could be perceived as ‘FOOTWEAR’ by reference to the Doublemint decision of the CJEU seems a stretch. There, the CJEU required a sign to “be refused registration […] if at least one of its possible meanings designates a characteristic of the goods or services concerned”. The term ‘FOOTWARE’ does not have the meaning ‘FOOTWEAR’. Rather, as the General Court acknowledged, the latter perception of the term can only be based either on a misreading or an assumed misspelling.

2. The BoA and the General Court made empirical findings relating to the relevant public which they did not support with evidence. Does the average English-speaking consumer (who is reasonably observant and circumspect) with an average or, as in the present case, partially even a high level of attention misread signs? This could be reasonable to assume if the relevant goods were ‘shoes’ or ‘footwear’ because consumers would think of the word ‘footwear’ and might be susceptible to misperceiving the sign ‘FOOTWARE’. However, the trade mark was registered for IT-related goods and services, where consumers are used to the term ‘ware’ because of words like ‘hardware’ and ‘software’.

Apart from that, should trade mark offices and courts expect the average consumers to consider a trade mark to be misspelt? How often does that happen in reality? What is the empirical basis for such a finding?

3. Probably an easier way to justify the decision would have been to apply the CJEU’s Koninklijke KPN Nederland judgment (case C-393/99 P): An alteration of a descriptive term must be sufficiently far removed from the perception which the descriptive word creates in order to be distinctive and non-descriptive. According to the CJEU, this applies not only to the visual but also to the phonetic perception (to that effect Koninklijke KPN Nederland at para. 99). In other words, a sign remains descriptive if it is phonetically identical with a descriptive term, regardless of how it is written. Since ‘FOOTWARE’ is pronounced identically to ‘FOOTWEAR’ and the latter term is arguably descriptive for the relevant goods and services, it must be regarded as descriptive, meaning that it should not have been registered for this reason. 

Picture is by 洪駿璿 and used under the licensing terms of pexels.com.