18 May, 2017

Get a Grip - CJEU Decides on 'Hybrid' EUTMs With Technical and Decorative Features

The registration of trademarks can be quite finicky, especially when it comes to the nuance of graphical representation and what it covers (the Trunki case being a poignant reminder in the UK of the same in registered designs). One has to distinguish between the decorative and functional or technical features of the registration, without which your mark could be under threat for invalidity. After a lengthy battle in the EUIPO, spanning nearly 20 years, a case dealing with the same subject matter has faced its ultimate decision in the CJEU.

The case of Yoshida Metal Industry Co. Ltd v EUIPO dealt with the registration of a trademarks for the design of a knife handle by Yoshida (marks 1371244 and 1372580), which comprised of a metal handle with black dots in the handle (signifying circular indents in the metal). The marks were ultimately registered by the EUIPO; however, the decision was challenged by Pi-Design AG and Bodum. Having lost at the Board of Appeal and the General Court, Yoshida finally appealed to the CJEU.

Yoshida's arguments hinged only on the infringement of Articles 7(1)(e)(ii) and 51(3) of the Community Trade Mark Regulation.

Under Article 7(1)(e)(ii), a trademark cannot be registered if "signs which consist exclusively of… the shape of goods which is necessary to obtain a technical result". Case law, particularly in the LEGO decision, has noted that a shape cannot be rejected solely on the ground that it has functional characteristics. The dots used in the handles were, according to Yoshida, a hybrid mark, having both aesthetic and functional characteristics, therefore remaining registrable under Article 7.

The CJEU considered that, in adopting the wording used in Article 7 above, the exclusion of marks solely on their technical result or nature would be contrary to the law's intention, and clearly intends for marks that only incorporate the technical result and no aesthetic component to be unregistrable. Similarly, the introduction of one or more minor arbitrary elements in a sign, all of whose essential characteristics are dictated by the technical solution to which that sign gives effect, won't alter the conclusion that the sign would only achieve a technical result. Even so, a mark can still be registered if the sign incorporates major non-technical elements that play an important role in the shape of the sign.

Some sharp wit
The Court determined that "...the fact that the sign concerned has ornamental and fanciful aspects does not preclude the ground for refusal under Article 7(1)(e)(ii)... from applying, in so far as those aspects do not play an important role in the shape of goods at issue, all the essential characteristics of which must perform a technical function". In short, even if the sign has ornamental aspects along with the major technical features, it can still be rejected. This follows the decision by the General Court, who saw that Article 7(1)(e)(ii) applies where all the essential characteristics of the sign perform a technical function. The CJEU therefore rejected Yoshida's appeal under Article 7.

The second argument on appeal was under Article 51(3), which excludes particular goods and services applied for only if the invalidity grounds apply to those goods and/or services exclusively. Yoshida argued that the General Court had failed to consider Article 7 as above for all of the goods and services in question (particularly in relation to those that lacked handles, i.e. whetstones, and kitchen utensils and containers).

The Court swiftly despatched this argument, as Yoshida had neglected to bring the argument forward earlier during the proceedings, particularly at the stage when the consideration over the relevant goods were made. They had only limited themselves to the above argument under Article 7, ignoring Article 51 entirely. The CJEU therefore rejected the second argument simply for a lack of raising it at the General Court, barring them from arguing it at the CJEU.

The case brought up a very interesting argument, albeit a flawed one when looking at the wording of the Regulation. The CJEU's decision make sense, since, if Yoshida's argument were allowed, the introduction of any non-technical features to a sign could then avoid the limitation of registering those types of features. As long as the important parts of the sign registered for are the ones that create the technical feature, the mark should not be registered. This writer is sure that both Yoshida and Bodum are happy the case is over, even if the decision didn't swing their way.

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