Colour me orange: German Supreme Court sets high bar for acquired distinctiveness of abstract colour marks

Obtaining trade mark protection for abstract colour trade marks on the basis of acquired distinctiveness is particularly challenging because “traditional” evidence of the commercial success of the goods or services (turnover, market share, advertising expenses etc.) does not help to establish that the colour is perceived as a source indicator and not just decoratively. To prove acquired distinctiveness, the German Supreme Court (“GSC”) requires a survey conducted among the relevant public, which is not just costly but the outcome is unknown. Even if you obtain a favourable survey, an invalidity applicant attacking the colour mark can commission a survey, which may show a lower rate of association of the colour to a specific undertaking, as the GSC’s decision in OBI-Orange (case I ZB 58/25) shows.

Background

OBI operates home improvement stores and obtained registration of a German trade mark for the colour RAL 2008:

The trade mark was filed in 2010. The German Patent and Trade Mark Office (“GPTO”) accepted that the mark acquired distinctiveness and registered it in 2012 for “retail services in the field of building and home improvement products”.

Two competitors of OBI, Hornbach and Globus, who also use orange colours for their home improvement stores, filed applications for invalidity in 2015 and 2016 arguing that it had not acquired distinctiveness. The GPTO invalidated OBI’s trade mark, which the German Patent Court (“GPC”) confirmed. OBI filed an appeal with the German Supreme Court (“GSC”).

The German Supreme Court’s decision

The Court dismissed the appeal.

An invalidity action is well-founded (1) where the trade mark was not registerable at the filing date (e.g. lacked distinctiveness and had not acquired distinctiveness) and (2) where the trade mark has not acquired distinctiveness at the date of the decision on the invalidity application (since the invalidity applications were filed prior to the entry into force of the current EU Trade Mark Directive (“EUTMD”), the decision date was decisive; now Art. 4(4) EUTMD states that the date of filing the invalidity application is decisive for assessing whether the trade mark acquired distinctiveness). Therefore, the Court assessed the inherent and acquired distinctiveness at two points in time, namely the filing date of (1) the contested trade mark and (2) the decision date of the GPC.

1. Inherent distinctiveness at the filing date

The judges confirmed that the trade mark lacked inherent distinctiveness at the filing date. They argued that consumers are not used to inferring the commercial origin of goods or services from their colours. Further, the public interest in keeping colours free for competitors must be considered. Only in special circumstances can colour marks be inherently distinctive, for example where the goods or services are limited and the relevant market is very specific.

The GPC rightly found that such circumstances did not exist. The retail sector for building and home improvement products was not deemed a specific market. The retail services cover a broad range of goods and are offered by various operators online and offline. Three of the largest retailers of building and home improvement products in Germany used the colour orange at the filing date. 

 

2. Acquired distinctiveness at the filing date

The Court further confirmed the GPC’s finding that OBI’s survey from 2012 in combination with further evidence was not sufficient to establish acquired distinctiveness at the filing date.

In the 2012 survey, several groups of respondents were analysed, including (1) those interested in building and home improvement products, (2) those who have purchased those articles and (3) the general public. Unsurprisingly, the groups had differing levels of association of the colour.

The judges held that the relevant public consists of persons who have purchased the relevant goods and services or may be interested in purchasing them. In the case of mass-consumption goods that serve basic everyday needs, or whose occasional purchase may potentially be contemplated by anyone, the relevant public comprises the general population.

The goods subject to OBI’s services were considered to be mass-consumption goods, such as hammers, screws, tape and lightbulbs, which everyone might have a need to purchase. OBI’s argument that women, affluent and older people are less interested in those goods was rejected. The Court reiterated that the relevant public consists of all people who have or may have an interest in the goods. Whether such an interest is likely to arise with a certain degree of probability or within a particular period of time is irrelevant. Equally, it is immaterial whether all building and DIY products to which the retail services at issue relate are of interest to all consumers.

Based on the entire public, the survey showed that, in 2012, 45.6 % of respondents associated the colour with OBI.

This survey was considered to contain several methodological flaws. Inter alia, the questionnaire clarified that retail services also cover large stores. This was deemed a leading question.

Further, the colour card shown to the participants contained a white border. This could have led participants to express their opinion on the colour combination orange/white and not on the colour orange alone. Since OBI also used white in its branding, the results of the survey might have been influenced in its favour.

In any event, the Court accepts claims of acquired distinctiveness, in principle, only when a survey shows that 50 % or more of the relevant public perceive the sign as a trade mark, unless there are exceptional circumstances.

OBI argued that the survey may not be given decisive weight. According to the case law of the Court of Justice of the EU (“CJEU”), an overall assessment of the evidence is necessary.

The judges countered that the CJEU also held that EU law does not prevent surveys from being required to establish acquired distinctiveness, if this assessment proves to be difficult. The Court considered such difficulties to exist for the abstract colour trade mark in question because OBI frequently used it with its word mark “OBI”. Thus, information on turnover, market share and advertising expenses does not indicate whether consumers perceive the colour as a trade mark.

3. Distinctiveness at the decision date

In the course of the proceedings, OBI produced a new survey from 2020. It showed that 49.6 % associated the colour orange with a particular commercial source. However, one of the invalidity applicants commissioned its own survey in 2021, which showed a rate of association of only 30 %.

The judges held that the trade mark owner bears the burden of proof that its trade mark acquired distinctiveness. If the proprietor succeeds in establishing acquired distinctiveness, the invalidity applicant need only cast doubt on that finding and need not prove that the trade mark had not acquired distinctive character. If, after all evidence is considered, doubts remain as to whether acquired distinctiveness is established, the trade mark must be declared invalid.

The judges found that the survey from 2021 from one of the invalidity applicants cast sufficient doubt on acquired distinctiveness of the contested trade mark, even though an expert appointed by the GPC did not identify any methodological flaws in either the 2020 survey or the 2021 survey.

Other items of evidence submitted by OBI (like turnover, market position and marketing activities) did not convince the Court because, here again, the colour was frequently used with the word “OBI” and five major competitors were using orange or red at the decision date.

Comment

Even though the CJEU’s case law indicates that surveys are just one piece of evidence to consider in the overall assessment of acquired distinctiveness (Oberbank and Others at para. 48), they are given decisive weight in Germany, at least when the colour is not used in isolation but, as is frequently the case, together with word or figurative marks.

Also noteworthy is the threshold of 50 % association rate. According to the CJEU, it is sufficient that a significant part of the public identifies, on the basis of the colour, the commercial origin of the goods and services (e.g. Oberbank and Others at para. 42). 50% is undoubtedly a significant part of the public. But should 40% or even 30% automatically be regarded as insufficient, particularly where the mark has enjoyed long-standing and intensive use? It seems that the CJEU left this question up to the national courts (Oberbank and Others at para. 43).