Cadbury's Color Conundrum - UK High Court Considers Registration for the Color Purple for Cadbury's After Settlement with Nestle

Sometimes a specific color is really important. Nothing highlights this more than the seemingly never-ending story of Cadbury's fight to register the color purple (or more specifically, Pantone 2685C) in relation to its iconic chocolate products. The fight over the color started nearly 20 years ago in 2004, so those born in the same year can now legally buy alcohol in the UK - which really puts the time spent in perspective. Nevertheless, color marks have always been difficult to register, however, in a highly anticipated victory Cadbury have done just that, potentially putting this matter to bed once and for all.

The case of Societe des Produits Nestle SA v Cadbury UK Ltd concerned an appeal against a decision by the UKIPO Hearing Officer, in which they rejected the registration of three trademarks (specifically applications 3019362, 3025822 and 3019361). Nestle opposed all three applications on the grounds that: (i) the marks did not fulfil the requirements of a "sign" under section 1(1) of the Trade Marks Act 1994, challenged under section 3(1)(a) of the Act; and (ii) whether the marks had distinctiveness under section 3(1)(b) of the Act. The oppositions against marks '361 and '822 were successful. Cadbury then appealed the decision against those two marks to the High Court, which handed down its decision this Summer.

Justice Meade initially focused on the core cases that were argued to be central to the matter. 

The first case was CJEU decision in Libertel Groep BV v. Benelux-Merkenbureau, which set out that "a colour per se, not spatially delimited, may... have a distinctive character within [the Trade Mark Directive then in force] provided that... it may be represented graphically in a way that is clear, precise, self-contained, easily accessible, intelligible, durable and objective". The key here is that a color mark has to be represented graphically clearly for it to be distinctive, and not merely set out as e.g. 'purple' without any distinction as to the hue or use of the color in packaging or otherwise. The case also noted that "...the latter condition could not be satisfied merely by reproducing on paper the colour in question; there had to be a designation using an internationally recognised code" (such as Pantone). 

The second case was the Court of Appeal decision in the Cadbury saga itself in 2013, where the Court of Appeal saw that the mark that was being applied for registration did not meet the requirements for registration, because it was not a "sign".

Justice Meade then discussed the legislative position in the matter, namely Article 2 of the Trade Mark Directive. Article 2 requires that, for a mark to be registered as a trademark, it has to: (i) be a sign; (ii) be capable of graphical representation; (iii) be capable of distinguishing the goods or services of one undertaking from those of other undertakings. 

"I wish I had any idea who owned this color..."

The main issue at hand in the Court of Appeal decision was whether the mark was indeed a 'sign', largely focused on its description as "applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods". The latter part of the description left a lot of leeway in the application of the color, so long as it was the "predominant colour" being applied to the packaging. The Court of Appeal rejected the mark as not being a 'sign' as it couldn't be clearly graphically represented and therefore lacks "clarity, precision, self-containment, durability and objectivity".

Justice Meade then moved on to the Hearing Officer's decision. 

The Hearing Officer noted, in relation to mark '361, that although it only referred to the application to packaging of the goods without any limitation to the surface area covered, it still didn't mean the mark would be a single color with no variation and would cover the representation of the trade mark that the Court of Appeal rejected. 

Justice Meade agreed with this position and set out that the formulation of the ‘361 mark is indeed worse than what was rejected by the Court of Appeal, nothing that "[r]emoving the wording held by the Court of Appeal to let in multiple forms and to be objectionably ambiguous is cosmetic at best and does not help".

In relation to mark '822, the Hearing Officer aligned its position to that of the above '361 mark, since it does not explain the use of the color and where it will be in the packaging or advertising materials. Justice Meade, however, disagreed with the Hearing Officer. 

He determined that the mark was for the color, which can include its application on the packaging or otherwise. He also distinguished the wording "predominant" from simply the color, which does not cause the same issues. There is no need to specify a simple color mark in relation to, for example, an area of packaging, since requiring that would limit color marks significantly. 

The appeal therefore succeeded in relation to the '822 mark, but not the '361 mark. 

Justice Meade did give some parting words on the issues around the '361 mark, highlighting that it "…leaves it significantly, undesirably and unnecessarily unclear whether combination marks including purple and other colours would be within the scope of the right applied for (and in particular whether they would be identical to ‘361)". How he distinguished the '822 mark from this is through its simplicity; only covering the color purple. 

Although the case is not a huge upheaval of the world of color marks, it does give some clarity as to appropriate wording for similar marks in the future and notes the pitfalls that can befall any application drafter. The key is sufficient specificity so as to not make the mark very difficult or impossible to understand but considering the '822 mark there is clearly room for some degree of generality. If anything Cadbury will be happy that the saga might just be over now, but who knows what the future will bring. 

You Gonna Keep That? - EU General Court Considers Trademark Registrations of Dormant Brands and Bad Faith

Many brands from the distant past have fallen by the wayside or haven't been used in years or even decades, despite some still fondly remembering them. These 'dormant' brands do also present an opportunity for revival and use of the potential remaining goodwill in those brands, but what happens when an unrelated third party decides to "revive" one of these dormant brands and register it as a trademark? The answer isn't always crystal clear, but a recent decision by the EU General Court set to look at just that and whether this could amount to a bad faith registration. 

The case of Ladislav Zdút v EUIPO concerned a trademark for a figurative mark for the brand "NEHERA" (EUTM 11794112), which was applied for and registered in 2013-2014, including a number of different types of goods such as clothing and footwear. Some 5 years after registration three interveners, Ms Isabel Nehera, Mr Jean-Henri Nehera and Ms Natacha Sehnal, filed an application for a declaration of invalidity of the trademark, alleging that the registrant, Mr Zdut, had acted in bad faith when he filed the application for registration of the contested mark. This was due to the first two interveners' grandfather, Jan Nehera, having established a business using the same brand in Czechoslovakia in the 1930s and had acquired a trademark in Czechoslovakia for the same. However, the brand has not been used since the 1940s. The application was rejected at first instance by the Cancellation Division, but the decision was reversed by the Second Board of Appeal which declared the trademark invalid. Mr Zdut subsequently appealed that decision, with the matter ending up with the General Court.

Considering the law around the matter, Article 52 of the CTM Regulation sets out that an EU trademark should be declared invalid where the applicant was acting in bad faith when they filed the application for registration of that trademark. 'Bad faith' in this regard "… presupposes the presence of a dishonest state of mind or intention" so it means that the applicant "…has filed the application for registration of that mark, not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark". 

However, the subjective intentions of the applicant must still be assessed objectively considering all the factual circumstances relevant to the particular case. These circumstances can include: (i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought. 

Even Superman had no respect for historical ownership
of things

Even outside of the specific circumstances above, the General Court noted that other factors, such as the origin of the sign at issue and of its use since its creation, the commercial logic underlying the filing of the application for the trademark, the reputation of the sign at the time of the registration, and the chronology of events leading up to that filing might be very relevant. 

The General Court then turned to the actual matter at hand. It initially noted that there is currently no registration for the "NEHERA" brand in the EU, and that the earlier Czechoslovakian trademark had lapsed in the 1940s and hasn't been used since. 

Interestingly Mr Zdut had been fully aware of the existence and reputation of Jan Nehera and of the old trademark in Czechoslovakia, and even had noted that he wanted to launch the brand to ‘pay a tribute’ to the ‘great days of the Czechoslovak textile industry of the 1930s’ and in particular to Mr Jan Nehera. 

Considering the law in light of the matter, the General Court set out that "[f]ree-riding behaviour with regard to the reputation of a sign or of a name… is, in principle, only possible if that sign or that name actually and currently enjoys a certain reputation or a certain celebrity". With that in mind, the EU courts have found an intention to take unfair advantage of the surviving reputation of an earlier mark, including where that mark was no longer used or of the current celebrity of the name of a natural person, where the surviving reputation or fame was established.  

In contrast to this position, there is no usurpation of the reputation of a term claimed by a third party and, therefore, no bad faith, where that term was neither registered, used, nor renowned in the EU. 

With that in mind, the General Court noted that in the absence of surviving reputation in respect of the former Czechoslovak trademark and of current celebrity in respect of Jan Nehera’s name at the time of filing, the use of the mark wouldn't be free-riding behavior indicating bad faith. Even though Mr Zdut knew of the individual and the original trademark, it isn't sufficient to establish the existence of bad faith. 

The interveners also highlighted an intention to create a link between the name and the new brand, but the General Court saw that this wasn't in itself sufficient to support a finding that unfair advantage was taken of the reputation of the sign or of the former name. 

The General Court also focused on the lack of a current reputation in relation to the old trademark or the name. As they noted, currently both have been forgotten by the relevant public, and the applicant had made considerable efforts to build up the brand again. This was far from merely parasitically taking advantage of an existing reputation. 

The General Court also determined that it is possible, in certain specific circumstances, that reuse by a third party of a previously renowned former mark or of the name of a previously famous person may give a false impression of continuity or of inheritance with that former mark or with that person. This can happen where the applicant presents itself to the relevant public as the legal or economic successor of the holder of the former mark, when there is no continuity or inheritance relationship. That could then be considered in establishing bad faith. However, no such intention was found in relation to Mr Zdut. 

In summary, the General Court found that the concept of bad faith presupposes the presence of a dishonest state of mind or intention, which they were unable to find in the present matter, and overturned the Board of Appeal's decision. 

The case is an important reminder for any brand owners (even historical ones), or their potential legatees, to make sure that those brands are properly registered if any use of the brand is ever even contemplated. If this isn't done it may present an opportunity for a third party to jump in and take over the brand, which could very well be fully legal and without much recourse down the line. It is possible that this matter will be appealed to the Court of Justice for an ultimate decision, but in the absence of that any dormant brands could very well be up for grabs. 

Yet Another Rejection - US Copyright Office Rejects Registration of Copyright in AI Created Artwork

How works created by artificial intelligence, or AI, are treated by various jurisdictions has been a hot topic recently, including in this very blog (for example here and here). It seems that, despite a briefly celebrated win in Australia, the technology is seeing setback after setback on whether AI-created works will be covered by IP and this seems more unlikely every day. The US Copyright Office was the latest blow in the battle for IP protection of AI-created works, which leaves the technology in a bit of a bind, however, it featured a familiar individual yet again. 

The US Copyright Office's Review Board recently released a decision on the copyright protection of a work, A Recent Entrance to Paradise, created by an AI program called Creativity Machine, developed by Steven Thaler. While the Creativity Machine was the author of the work, Mr Thaler was listed as the claimant alongside it as its owner. The work was autonomously created by the Creativity Machine, but Mr Thaler wanted to register the work as a work-for-hire to the owner of the program, himself. 

The US Copyright Office initially rejected the registration of the copyright in the work in 2019 as it "lacks the human authorship necessary to support a copyright claim", which Mr Thaler subsequently appealed this decision arguing that the "human authorship requirement is unconstitutional and unsupported by either statute or case law". Despite this, the Copyright Office rejected the registration on the same basis as before and noted that Mr Thaler had not provided any evidence of sufficient creative input or intervention by a human author in the work and that the Copyright Office won't abandon its longstanding interpretation of this matter which is based on precedent from the courts, including the Supreme Court. 

Being ever-persistent, Mr Thaler then yet again appealed, arguing in a familiar fashion that the Office’s human authorship requirement is unconstitutional and unsupported by case law. Mr Thaler also argued that there is a public policy piece to this where the Copyright Office 'should' register copyright in machine-created works because doing so would "further the underlying goals of copyright law, including the constitutional rationale for copyright protection". Mr Thaler also again rejected the Copyright Office's assertions of supporting case law. 

At the beginning of its decision, the Review Board accepted that the works were indeed created by AI without any creative contribution from a human actor. However, the Board noted that copyright only protects "the fruits of intellectual labor that are founded in the creative powers of the [human] mind". Mr Thaler was therefore tasked with either proving that the work was created by a human, which it hadn't been, or somehow convincing the Board to depart from long-established precedent.

The Review Board then moved on to discussing the precedent relevant to the matter at hand. 

Paragraph 306 of the US Copyright Compendium sets out that "the Office will refuse to register a claim if it determines that a human being did not create the work".  As such, human authorship is a prerequisite to copyright protection in the US. 

Similarly, 17 USC 102(a) affords copyright protection to "original works of authorship", and, while the phrase is very broad in its definition, it still requires human authorship. This has been supported by US Supreme Court decisions in Burrow-Giles Lithographic Co. v Sarony and Mazer v Stein where the Supreme Court required human authorship for copyright protection. In addition to the highest court in the US, the lower courts have also followed these decisions. 

Although the courts haven't directly decided on AI authorship in relation to copyright just yet, Mr Thaler has featured in a recent decision in the case of Thaler v Hirshfeld (the very same individual as in this decision) where the court decided that, under the Patent Act, an ‘inventor’ must be a natural person and cannot be an AI. 

The Board also discussed a recent report by the USPTO who discussed IP issues around AI. In this report, the USPTO noted that "existing law does not permit a non-human to be an author [and] this should remain the law". 

The Board also briefly touched on Mr Thaler's secondary argument, which was that AI can be an author under the law because the work-made-for-hire doctrine allows for non-human, artificial persons such as companies to be authors. The Board rejected this argument since the work was not made for hire. This was due to the requirement for such a work to be prepared by e.g. an employee or one or more parties who agree that the work is one for hire. No such agreement was in place between Mr Thaler and the Creativity Machine. Even outside of this, the doctrine merely addresses ownership and not copright protection, so human authorship is, yet again, required. 

The Board, therefore, rejected the appeal and refused to register the work. 

The decision by the Board is by no means surprising, as the status of AI-created works seems to be more and more established as the years go by as a no-go. While copyright protection could be possible in some jurisdictions, as discussed in the above blog articles in more detail, it seems highly unlikely to be possible in the US without legislative intervention. As AI develops the law will have to address this and potentially grant AI-creation some level of protection, however, this will take some time to come true. 

A Swirl of Personality - Can You Have Copyright in a Fingerprint in the US?

It's easy to forget how such a minor detail as a person's fingerprint can be an important part of their person. Even setting aside the old school method of identification of potential criminals, smearing their ink covered fingers onto a police log book, a fingerprint evokes a more romantic notion of individuality; a truly unique set of impressions that are yours and only yours. While there is some truth to this notion, it might not be entirely the case, but nonetheless it's a hard thought to let go of. Fingerprints have often also been used in art, undoubtedly playing to the above thinking, but as it has been used in creative works, could one own the copyright to a fingerprint? Luckily, the USP Copyright Office issued a decision answering this question earlier this month. 

The decision in Re Equilibrium concerned an application to register the copyright in a variety of works by the artist Manjit Dhaliwal. The works, including one titled "Equilibrium", comprised different partial fingerprints cropped into four geometric shapes, namely a square, hexagon, circle, and triangle. Mr Dhaliwal attempted to have the works registered as early as 2018, however, the Copyright Office rejected the applications for a lack of authorship in those works. Mr Dhaliwal then requested that the applications be reconsidered a total of two times, the latter of which is the decision in question. 

The matter concerned whether the works could be deemed as original works. This means that they have to be an "...original work of authorship fixed in any tangible medium of expression", meaning that they were (i) independently created by the author and (ii) possess sufficient creativity. This can include the mere arrangement of common or standard designs, but the author has to show some creative authorship in its delineation or form. 

Also, patterns can be protected by copyright (including a fingerprint pattern), so long as the use of the shapes in the patterns is sufficiently creative.  

After the discussion of the legal background, the Copyright Office then dove into the assessment of the works themselves. The Board quickly determined that none of the elements in the works, including the fingerprints, are sufficiently creative to be eligible for copyright protection. 

Specifically in relation to the fingerprints, the Copyright Office noted that copyright does not protect the design found on a human fingerprint, as copyright will only protect an original work of authorship created by a human being and not works produced by nature. Since a fingerprint is  a part of the human body formed by natural processes outside of human control, it cannot have human authorship, and thus isn't original. Even though the author had made alterations to the fingerprint by cropping and amending its lines, it still wasn't sufficiently original to be protected. 

The Copyright Office therefore rejected Mr Dhaliwal's application for registration of the copyright in the above works. 

The decision is quite a curious one, but makes sense, as protection in a fingerprint would extend its remit beyond human creation, but also into the realm of natural creation. Even though the artist had made alterations in the shape and lines of the prints, they remained largely as they were scanned, and very little originality was applied bar the shape and order of the scanned fingerprints. While unsurprising, it's always nice to see discussions of more novel things in the sphere of copyright within governing bodies. 

This is my Domain - US Supreme Court Decides on the Registration of Generic ".com" Domains as Trademarks

Since the advent of the world wide web, domain names' value to their owners have skyrocketed, with some, such as Google.com, being valued by some at roughly $31 billion. Although the valuation of that domain is a little ridiculous, being able to have the right domain at the right time can in itself create a business opportunity and thus be very valuable. However, domain names and their registration and trademarks has been a hot-button issue for some time, since the inclusion of ".com" along with a descriptive element might not be enough to allow for their registration. The USPTO has had a long-standing position where the inclusion of ".com" with a generic word would render that mark as generic and therefore ineligible for registration. This position has since been challenged, and the matter went up all the way to the US Supreme Court, which handed down its opinion earlier this week.

The case of USPTO v Booking.com BV concerned the registration of the mark "Booking.com" by, you guessed it, Booking.com BV, which is a site specialized in the booking of hotels for travelers. At first instance the mark was refused registration as the USPTO deemed it to be generic under the above rule, meaning the name would only have the descriptive meaning to consumers of the service and would not signify that particular website to consumers. Booking.com challenged the ruling, and ultimately took the matter all the way up to the Supreme Court.

Handing down the majority's judgment, Justice Ginsburg first discussed the registration of trademarks overall, particularly the requirements for a mark to be registered. This includes that the the mark has to be one "...by which the goods of the applicant may be distinguished from the goods of others", i.e. it has to be distinctive. Word marks, such as the domain above, can be distinctive in a sliding scale of sorts, namely (from least to most distinctive)  (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. A mark will have to achieve distinctiveness specifically "...in the minds of the public".

Justice Ginsburg then moved onto considering whether the mark in question is registrable or not. Booking.com applied to register the domain (and other variants of it, including visual features) as a trademark in relation to travel-related services; however, the application, as discussed above, was rejected at first instance. 

The main question the Supreme Court had to therefore consider is whether the term "Booking.com" is generic, specifically naming "...a “class” of goods or services, rather than any particular feature or exemplification of the class". As the domain is also a compound term (consisting of "Booking" and ".com" as separate elements), the Court would have to consider its meaning as a whole and not in isolation of those parts. Its meaning would have to be considered in the light of its meaning to consumers. In short, as noted by the Court, the consideration is "...whether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services".

The Court quickly noted that under evidence, consumers don't perceive the domain as being generic for hotel-reservation services, and as such, the term cannot be generic. The USPTO argued that, irrespective of that evidence, the term should be seen as generic since when a generic term is combined with a generic top-level domain like “.com,” the resulting combination is generic, barring exceptional circumstances. 

Finally, the Court considered whether the registration of  “generic.com” terms as trademarks would hinder competition, i.e. prevent a competitor from using the term "booking" when describing their services. The Court outright rejected this notion, noting that the risk of deterrence of using a term exists in relation to all descriptive marks. Even if a competitor uses that term, provided it's done in good faith, they would most likely be protected by fair use. 

The Court subsequently affirmed the decision of the Court of Appeals, and allowed the registration of the mark as it was not considered generic.

The case is a very important one, and surprisingly very late into the existence of domain names. It's important for brands that have more descriptive names to be able to potentially register their name as a trademark, particularly if it's in relation to a specific domain that is the heart and soul of that business. Competitors should be adequately protected by fair use and other similar doctrines, allowing for the use of those terms in describing their business, while allowing for sufficient protection of legitimate registered trademarks for those domains. 

Mind Your Language! - CJEU Decides on the Registration of Offensive Trademarks

Rude language can be a sore point of contention for many people. The offensive nature of trademarks has been litigated quite a bit in high-profile cases recently, including the case regarding the band "The Slants" (discussed more here) in the US. The European courts have faced the question of offensive trademarks sometime ago, and Advocate General Bobeck looked at this in some detail in the Summer of 2019. Following the AG's decision, the CJEU has finally considered the question of offensive trademarks and handed down their judgment earlier this year.

The case of Constantin Film Produktion GmbH v EUIPO concerned an application to register the name "Fack Ju Göhte" (EUTM 13971163), which is the name of a German comedy film produced by Constantin. The film saw tremendous success in the year it was published, and Constantin released a subsequent two sequels under the same name. The EUIPO refused the application under Article 7(1)(f) of the CTM Regulation, which prevents the registration of trademarks "...which are contrary to public policy or to accepted principles of morality". Constantin then appealed the decision, which ultimately ended up with the CJEU.

The Court began by limiting the scope of the issue, following the guidance of the Advocate General, to only consider whether the mark was contrary to accepted principles of morality, as the matter didn't relate to any issues of public policy.

To consider the above, the Court noted that, to determine the scope of Article 7(1)(f) "...it is not sufficient for the sign concerned to be regarded as being in bad taste. It must, at the time of the examination, be perceived by the relevant public as contrary to the fundamental moral values and standards of society as they exist at that time". This clearly shows that the morality the courts will be concerned with is transient, and the standard can fluctuate as morality does within wider society; however, the examiner will have to consider it within a snapshot in time when applied for.

Mittens just couldn't handle Rover learning any more bad words

Furthermore, the Court saw that this would be determined according to "...the perception of a reasonable person with average thresholds of sensitivity and tolerance, taking into account the context in which the mark may be encountered and, where appropriate, the particular circumstances of the part of the Union concerned". This includes "...elements such as legislation and administrative practices, public opinion and, where appropriate, the way in which the relevant public has reacted in the past to that sign or similar signs, as well as any other factor which may make it possible to assess the perception of that public".

Reviewing the judgment of the General Court, the CJEU determined that they had misapplied the law concerning Article 7. In their assessment, the General Court should have included, among the things they considered, the great success of the comedy, the fact that its title does not appear to have caused controversy, as well as the fact that access to it by young people had been authorised and that the Goethe Institute (which promotes the German language abroad) uses the movie for educational purposes. The General Court should not have merely considered the inherent vulgar nature of the English phrase it was compared to, namely "Fuck You", to decide that the mark would be contrary to public morality.

The Court also noted that one would have to take into account the freedom of expression, enshrined in Article 11 of the Charter of Fundamental Rights of the European Union when considering any infringement of Article 7(1)(f). The General Court considered that this would not be the case, which the CJEU clearly did not agree with.

Following the dismissal of the General Court's decision the CJEU then moved onto consider the trademark in question under Article 7(1)(f).

The CJEU thought that, following a discussion of the Board of Appeal's decision, the title of a film need not be descriptive of its content in order to constitute a relevant contextual factor in assessing whether the relevant audience perceives that title and an eponymous word sign as contrary to accepted principles of morality. Additionally, although the success of a film does not automatically prove the social acceptance of its title and of a word sign of the same name, it is at least an indication of such acceptance which must be assessed in the light of all the relevant factors in the case in order to establish the perception of that sign in the event of use of that sign as a trademark.

As said above, the movie spawned a further two sequels with the same name, all of which have had great success, and is used in educational purposes, it goes to show that it isn't against the public morality in Germany. The Court did note that, however, the perception of the phrase "Fuck You" will be different between German-speaking countries and English-speaking ones, especially when dealing with a phrase written phonetically and inclusive of other words, such as the name Goethe.

The CJEU determined that the EUIPO has failed to demonstrate to the requisite legal standard that Article 7(1)(f) precludes registration of the mark applied for under the above grounds.

The case is a very important one and highlights the potential evidence looked for when determining whether a mark is contrary to public morality or not. The case also demonstrates that freedom of expression is very relevant in this exercise, which this writer agrees with since the remit of trademarks should by no means be exempt from freedom of expression even though one could describe it as "commercial expression" rather than traditional expression as you would commonly think of it.

That's Just Offensive - US Supreme Court Allows for the Registration of 'Immoral' Trademarks

The notion of morality is deeply embedded in human society, coloring most facets of it in some ways. Whether it is laws prohibiting deplorable actions, or simply stopping you from saying hateful things (in some jurisdictions), morality is an important part of the legislative framework. In the world of IP you rarely deal with issues of morality, but sometimes they do crop up. In the last few years, the registration of 'disparaging' trademarks has been a hot topic in the US (discussed more here and here), but what about marks that one could class as immoral? The Supreme Court were therefore tasked with deciding this part of trademark law, and handed down their judgment very recently.

The case of Iancu v Brunetti concerned an application to register the mark "FUCT", which was the brand of Mr Brunetti's clothing line. Under examination by the USPTO, the application was rejected due to it being immoral due to vulgarity under 15 USC 1052(a). Mr Brunetti subsequently appealed the decision, arguing that it infringes on his First Amendment right to free speech, with the case ultimately landing on the Supreme Court's desk.

As decided in the Tam case, preventing the registration of 'disparaging' trademarks violated the First Amendment as it "...discriminate[d] against ideas that offend". The grounds for rejecting trademarks that are 'immoral' falls within the same provision of US legislation as rejecting the registration of 'disparaging' ones.

Justice Kagan, handing down the majority's judgment, swiftly determined that the provision similarly violates the First Amendment. The Government argued that the prohibition was a viewpoint-neutral one, and would only be restricted to certain kinds of immorality, therefore being somewhat restricted. The Court didn't buy this argument, and saw that "...It covers the universe of immoral or scandalous—or (to use some PTO synonyms) offensive or disreputable—material". This means that almost anything that fits that criteria could therefore be rejected by the USPTO.

The Court honed matters down further, noting that the provision aims to suppress certain views, albeit 'immoral' ones, and would violate free speech., even if allegedly captured through the use of "viewpoint-neutral" legislative language.

Justice Kagan wrapped matters up by drawing a line in the sand: "There are a great many immoral and scandalous ideas in the world (even more than there are swearwords), and the Lanham Act covers them all. It therefore violates the First Amendment".

While most Supreme Court decisions are incredibly important, the decision in this case is in no way revolutionary. The Court has clearly put an end to the limitation on registering negative trademarks, no matter how offensive or immoral. Applicants can therefore rejoice over the possibility to go ham on registering ever-more offensive marks to their hearts' content...

It Ain't Bad - Advocate General Kotott Considers Bad Faith in TM Applications

Picking the right trademark can sometimes feel like it's the make-or-break moment for a brand, particularly when you are building a brand from nothing. Maybe taking 'inspiration' from a very well-known brand might be the boost you need, since people might naturally gravitate to your brand thinking it is another – but of course without meaning it is that one! Toeing the line of registering a trademark in bad faith is a tough one, since when is an application truly made in bad faith? This issue hasn't been touched on by the EU courts in a while, and in the lead-up to a CJEU decision Advocate General Kokott has given their two cents in a recently published opinion discussing this very issue.

The case of Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO concerned the application for the registration of a figurative mark by Nadal Esteban for the trademark "STYLO & KOTON", with the letters o written using symbols that look like flowers (EUTM 9917436). The application was opposed by Koton, who had earlier rights in the figurative trademark "KOTON", in which the letter o was also written using flowers. Koton argued that Mr Esteban's mark had been registered in bad faith, and should be declared invalid. After a rejection most recently by the EUIPO General Court, the matter has moved for determination by the CJEU, with the AG issuing their opinion ahead of the decision.

Under Article 52(1)(b) of the Trade Mark Regulation, an application can be declared invalid if the applicant was acting in bad faith when filing the application. For the Article to apply the mark applied for has to be identical or similar for identical or similar goods/services to the third-party mark being 'copied'. The General Court rejected Koton's argument under this premise since the mark being applied for was in relation to dissimilar good/services.

The AG emphasized that in assessing bad faith you have to, in addition to the above "…take into account all the relevant factors specific to the particular case which pertained at the time of filing the application". Factors in considering bad faith could include a lack of intention of using the mark at all, or the intention to use it in order to mislead consumers over the origin of goods or services. This could also include the attempt to register a mark knowing or thinking that registration by another would be imminent (i.e. registering iPad thinking Apple might start a line of tablets).

The AG therefore considered that based on the variety of factors raised by the AG (as discussed above) "…It is not therefore essential for recognition of bad faith that a third party is using an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought". Bad faith can include the registration of a similar or identical mark for wholly unidentical goods/services. 

The General Court had not considered Mr Esteban's earlier application as a factor when assessing bad faith, which was refused, for identical goods and services. After the EUIPO rejected his application Mr Esteban changed the goods and services included in his application and the mark was registered. The AG considered this to be an important factor and one that needed to be included. What the earlier application allows an inference to be drawn as to his intentions at the time of filing.

This highlights just how different bad faith is to other causes for invalidity, as it "…is not an inherent defect in the trade mark itself, but stems from the circumstances in which it was applied for". An application also cannot be divided into good and bad faith parts under Article 52 of the Regulation, but must be looked at as a whole in the light of bad faith. As such the AG saw that "…The fact that an application was originally filed for a trade mark for goods and services in respect of which the applicant knew or should have known that identical or similar trade marks existed may in any event be an important indication that the application to register that trade mark for other goods or services was also filed in bad faith".

The General Court also failed to properly assess whether Mr Esteban's defense to bad faith had any 'economic logic'. Having considered the new factor, and Mr Esteban's defense to bad faith, the AG concluded that the application had indeed been filed in bad faith.

While we wait for the CJEU's decision in the matter, it seems that the Advocate General has highlighted important oversights made by the General Court.

KitKat Cut - The KitKat Shape Trademark Ultimately Rejected by CJEU

The KitKat shape trademark saga has been detailed on this blog in great detail, going back several years (e.g. here, here and here). The fight over the chocolate bar shape seems to have gone on forever, and this writer thought he would be old and grey before the matter ultimately concluded. After Advocate General Wathelet's opinion in April, the CJEU has finally taken the matter on, and the decision will decide the fate of the current KitKat shape registration.

While the facts of the case have been discussed extensively, it is still useful to recite the basics to anyone not familiar with the background. The case of Société des produits Nestlé v Mondelez UK Holdings & Services concerns the registration of the shape of the KitKat chocolate bar (EUTM 2632529), owned by Nestle. Cadbury challenged the registration, seeking to invalidate it, with the matter ending up with the CJEU 11 years later.

The case revolves around Article 52(2) of the CTM Regulation, which allows for the registration of marks that have acquired distinctiveness through the use of the mark in conjunction with the goods or services. The distinctive character of the mark has to exist in the entirety of the EU for it to avoid invalidation.

What underpinned the matter was whether evidence has to be proved for the entirety of the EU, and not just a select sample of countries. In the case of August Storck KG v OHIM, the CJEU saw that a mark can be registered under Article 7(3) (which has to be read in conjunction with Article 52 above) "…only if evidence is provided that it has acquired, in consequence of the use which has been made of it, distinctive character in the part of the [EU] in which it did not, ab initio, have such character". If no distinctiveness exists in relation to the mark from the very beginning, acquired distinctiveness would have to be shown in the EU.

When it comes to acquired distinctiveness, the Court emphasised that, for any mark devoid of inherent distinctiveness, "…evidence be submitted, in respect of each individual Member State, of the acquisition by that mark of distinctive character through use, the evidence submitted must be capable of establishing such acquisition throughout the Member States of the European Union". Evidence therefore does not have to be produced for each individual Member State, but can be produced in a way that shows acquired distinctiveness due to proximity in geography, culture or linguistics, and therefore acquired via another Member State even in the absence of evidence for that particular Member State.

The assessment of whether the evidence produced is enough to give the mark acquired distinctiveness in the EU is a matter for the EUIPO or its appellate courts in any given case.

The CJEU agreed with the General Court's decision, which rejected the argument by Nestle that the evidence covered the entirety of the EU, or a substantial part of it, leading to sufficient coverage. The Court therefore rejected all of Nestle's appeals, and the mark was invalidated.

The decision is a huge culmination of years of litigation, but by no means is the end of the KitKat shape trademark. While evidence was lacking for the current registration with regards to Belgium, Ireland, Greece and Portugal, Nestle are still within their rights to apply for a new registration, producing evidence to cover any missing Member States. Due to the clear monetary value of the mark, it is clear that Nestle will pursue to register the shape one way or another; however, this might just be the beginnings of a reboot for this particular litigation series

Well Red - Louboutin's Red Shoe Sole TM is Registrable, Says CJEU

The build-up with the Louboutin red sole case has been quite extensive and unique in that Advocate General Szpunar had to give not one, but two opinions on the case ahead of the CJEU's decision (discussed more here and here). There was some degree of uproar with the latest opinion, and hence many trademark practitioners have been salivating at the prospect of the CJEU decision, which could have quite a bit of an impact on the current trademarks regime in Europe. With that in mind, the decision has finally been released by the CJEU earlier this week.

Even though the facts of Christian Louboutin v Van Haren Schoenen BV have been discussed extensively on this blog, they are worth revisiting. The matter concerned a trademark registration (TM 0874489) in Benelux for a red colored sole on a women's high-heeled shoe by Christian Louboutin. The mark consisted of the color on the sole of the shoe, but did not take into account the contours of the shoe, which only served an illustrative purpose on the positioning of the mark. Van Haren sold a similar red soled shoe in the Netherlands, for which they were sued by Louboutin for trademark infringement. The mark was contested by Van Haren, and ultimately ended up with the CJEU.

The referring court asked, in essence, "…whether Article 3(1)(e)(iii) of Directive 2008/95 must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe… consists exclusively of a ‘shape’, within the meaning of that provision".

Stephanie had to forget her 'totally unique' shoe design
after the decision

The Court initially affirmed that EU legislation generally accepts that the 'shape' of a trademark within the meaning of Article 3(e), means a set of lines or contours that outline the product concerned, potentially excluding any colors that don't have an outline defining said 'shape'. Any marks that merely consist of that shape would be deemed invalid.

Nonetheless, the Court did determine that "…while it is true that the shape of the product or of a part of the product plays a role in creating an outline for the colour, it cannot, however, be held that a sign consists of that shape in the case where the registration of the mark did not seek to protect that shape but sought solely to protect the application of a colour to a specific part of that product". This would exclude any signs that merely apply a color to an apparent shape from the remit of Article 3(e), such as the shoe in the Louboutin trademark.

If the shape of the shoe is excluded from the mark, the Court considered that the mark therefore could not exclusively consist of a shape, as the main element of that sign is a specific colour designated by an internationally recognised identification code (in this instance Pantone 18‑1663TP).

In short, the Court concluded that "…Article 3(1)(e)(iii)… must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe… does not consist exclusively of a ‘shape’, within the meaning of that provision".

The case is quite important, as the registration of a trademark for a color, excluding any shape that is used to illustrate the placement of the color, would be allowed under the ruling. The decision completely ignored the AG's considerations of reputation and the addition of value through the introduction of the mark, which were the main points that many found contentious. Whether this omission will be challenged in future case law remains to be seen.

Toblenone - The Battle of the Peaks Begins Over the Toblerone Shape

Imitation is thought to be the greatest form of flattery, but in the world of IP, this is often the opposite of the case. Copying the looks of a product can be quite beneficial for the copying company, riding on the coattails of a potentially well-known look of a product, especially if they are undercutting the price of the original. This blog has discussed issues of generic packaging before, and the notorious KitKat saga, but none of the cases have looked at the matter of changing the shape of the original product, yet still seeking protection over the shape.

A recent case discussed in the Guardian has shed a new perspective, as discussed above, relating to the Toblerone chocolate bar. Poundland, a UK discount retailer selling products predominantly at £1, launched their Toblerone competitor Twin Peaks earlier this summer, aiming to compete against the reduced size Toblerone bar. This change featured bigger gaps in the Toblerone bar between the iconic triangular peaks, due to rising ingredient prices.

The matter has since gone to court, with Mondelez (the company that owns the Toblerone brand) arguing (possibly among other grounds) trademark infringement. Poundland have counterclaimed (possibly among other grounds) for invalidity and argued that "…the triangular prism shape of the Toblerone bar, which was registered under an EU trademark in 1997, is no longer distinctive partly because of the existence of the new version". Adding to this, they argued that "…any good reputation enjoyed by the Toblerone bar trademark has been “irretrievably abandoned” by the launch of the product with bigger gaps between its nine chunks, which the public “consider unfavourably in comparison”".

Mondelez put a wholly different spin
on the change to the Toblerone bar

The crux of the question is therefore whether the trademark registered by Toblerone (EUTM 31237) would no longer be distinctive due to the change in the Toblerone chocolate bar, and even if it's distinctive, whether the Twin Peaks bar creates a different impression so as to not infringe on the trademark or other possible rights under common law.

Arguably, Poundland potentially do have a point. The Toblerone bar has reduced its size by about 10%, and changed its shape from the registered 12 peaks to 11, with the gaps between the peaks has doubled by this writer's estimate. The base of the bar has also arguably become thinner. The Twin Peaks bar does not feature the wider gaps of the new Toblerone bar, including having a curved gap rather than a flat one, and splits the peaks into two. The Twin Peaks bar is also sold in a loosely fitting wrapper packaging, rather than a hard triangular cardboard package.

Case law has looked at changes to earlier registrations, and it does not necessarily bode well for Toblerone. In The Coca-Cola Company v OHIM the cola manufacturer changed the look of their iconic bottle, removing its distinctive fluting, and due to this change the EU General Court rejected their application for a lack of acquired distinctiveness, as "…[the bottle] was a mere variant of the shape and packaging of the goods concerned, which would not enable the average consumer to distinguish the goods from those of other undertakings". It is possible for the registration to be attacked (although the name and the triangular packaging will still arguably remain protected), so Toblerone would benefit from a new registration for the reduced size bar, unless it is simply treated as a stop-gap while prices are still high for some ingredients.

The Toblerone question is a very curious one, and this writer for one would love to see the case actually go to court (but heavily doubts this will happen). The point of changing the shape of a product with an existing trademark registration hasn't been dealt with by the judiciary much at all, so more light on this issue would be very helpful for both would-be registrants and competitors alike.

Source: The Guardian

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.

Impulsive Decisions - Reputation of a Trademark in Europe

In the world of trademarks the goodwill, or in other words reputation, of goods and services is paramount for their protection and enjoyment in a relevant territory. As commerce has become more and more global, with other territories seeing goods or services after their introduction to others, jurisdictional issues are even more poignant and relevant, providing a judicial headache for many attempting to benefit from those limitations (for example, in the recent NOW TV case, discussed here). Community Trade Marks, or CTMs for short, are registered as European-wide trademarks, but the goods or services' introduction to all of the Member States can sometimes differ, and potentially leave their registration open to challenge. Could, however, a proprietor prove goodwill in a Member State through use in other Member States, without actually having a commercial presence for that item in the Member State in question? Luckily, the European Court of Justice answered this question over a month ago.

The case of Iron & Smith v Unilever dealt with a national application for the mark "be Impulsive" in Hungary, lodged by Iron & Smith. The application was challenged by Unilever on he basis of their earlier mark "IMPULSE" (CTM 3116233); however they failed to demonstrate goodwill in Hungary, although Unilever had done so, arguably at least, in the UK and Italy.

The Court was asked four questions, the first three of which were distilled down by the Court as "...what conditions, in circumstances such as those at issue in the main proceedings, are to be met in order for a Community mark to be regarded as having a reputation in the European Union, pursuant to Article 4(3) of Directive 2008/95".

Extending beyond one's limitations can be a good thing

After a brief consideration of precedent relating to goodwill the Court quickly saw that "...if the reputation of an earlier Community mark is established in a substantial part of the territory of the European Union, which may, in some circumstances, coincide with the territory of a single Member State, which does not have to be the State in which the application for the later national mark was filed, it must be held that that mark has a reputation in the European Union". What this means is that you don't have to prove reputation all over Europe, but only in a substantial part of it (how ever that might be defined), in order to establish reputation in any Member State. This is a curious finding, as not all nationals of all Member States are aware of goods or services elsewhere in the Union, and effectively creates goodwill in those that have not, and might never, see those goods or services.

The final remaining question for the Court was also put in very succinct terms: "...in what circumstances Article 4(3)... is applicable if the earlier Community trade mark has already acquired a reputation in a substantial part of the territory of the European Union, but not with the relevant public in the Member State in which the registration of the later national mark concerned by the opposition has been applied for".

The Court, again, briefly considered earlier decisions, and concluded that "...if the earlier Community trade mark has already acquired a reputation in a substantial part of the territory of the European Union, but not with the relevant public in the Member State in which registration of the later national mark concerned by the opposition has been applied for, the proprietor of the Community trade mark may benefit from the protection introduced by Article 4(3)... where it is shown that a commercially significant part of that public is familiar with that mark, makes a connection between it and the later national mark, and that there is, taking account of all the relevant factors in the case, either actual and present injury to its mark, for the purposes of that provision or, failing that, a serious risk that such injury may occur in the future". The answer relates heavily to the above, as if goodwill is proved in a significant part of the Union, it is possible to rely on a CTM to invalidate a national mark, provided there is actual or potential damage to the CTM or its owner if the national mark were to be registered.

Overall the decision of the Court seems odd, effectively creating goodwill where none have existed in evidential terms, but aligns itself with earlier precedent. To prove goodwill or reputation in any European Member State one only has to prove it in a 'significant' portion of the European Union, which, to this writer's mind, expands the remit of an unused CTM beyond that for which it is intended (even if the mark is registered in the whole of Europe). Although the Court's rationale aligns itself with earlier decisions, it seems to give rights where no rights existed, potentially even hindering legitimate competition. Nevertheless, this writer will not purport himself to know better than the judges at the Court, but is puzzled by this outcome nonetheless.

Source: IPKat