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. 

Not Taking a Break - EU General Court Sends Kit Kat TM for Reconsideration at EUIPO

The Kit Kat chocolate bar trademark saga is one that seems to just keep on giving and giving to the IP community, offering new and fangled ways where the iconic (or dare we might now say the opposite) chocolate bar has been fought over in Europe. After a hard-fought several rounds in the CJEU and the UK courts, it all seemed all over; however, the EU General Court offered us a new judgment as an early Christmas present in mid-December.

The case of Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd v EUIPO dealt with an EU registered trademark (2632529) for a three-dimensional mark comprising of the Kit Kat chocolate bar without any markings. The mark was subsequently challenged by Nestle's favorite candy competitor, Cadbury (now owned by Mondelez), and the matter has since ultimately ended up in the General Court, largely dealing with lack of use and distinctive character.

The GC only concerned itself with Article 52(2) of the Community Trade mark Regulation, in conjunction with Article 7(3), which set out that a trademark, even if potentially found invalid, might still be registrable should the mark have acquired a distinctive character with respect to the goods and services covered. Mondelez argued that the EUIPO had failed to correctly assess this distinctive character (allowing the mark to be registered), and directed their argumentation in four separate parts.

The Court initially dealt with the second part of their plea argues that the mark had not been used for all of the relevant goods it was registered for. The Board of Appeal had seen that, based on the evidence submitted, the mark had been used for all of the goods listed above. This assessment, according to the GC, would be done "...in relation, on the one hand, to the goods or services in respect of which registration has been sought and, on the other, to the presumed perception of the mark by an average consumer of the category of goods or services in question, who is reasonably well informed and reasonably observant and circumspect". Any proof employed would have to be viewed independently within the context of sub-sections within the broad terms of goods to identify whether the mark has been used for those goods.

Gilbert always forgot what his chocolate bars looked like

Under the evidence supplied, the GC did concede that the Kit Kat mark had been used for the majority of the goods listed; however, saw that it had equally not been used for bakery products, pastries, cakes and waffles, since the advertising materials only showed biscuit-like, chocolate treats with no real bakery goods included at all. This was deemed an error on the part of the Board of Appeal.

The first part of the plea dealt with a lack of use of the mark in the form as registered, and therefore would only stem from the branding or the use of other marks in conjunction with the contested mark. The EU courts have previously held that a 3D mark can acquire distinctive character even if used with other marks, as long as the public distinguishes the product from originating from a particular source as a result. The GC quickly rejected this argument, as surveys indicated a high percentage of individuals identifying the brand from just the shape alone.

They then moved onto the third part of the plea, which argues that there is a lack of use of the mark as an indicator of origin and insufficient evidence to that effect. The latter point would be assessed based on evidence showing that a significant portion of the public identifies the mark as an indicator of origin, which entails in it several factors, including market share and duration of use. The GC rejected this argument as well, having extensively discussed the evidence submitted and its application to the matter at hand, illustrating a clear recognition of the mark as an indicator of origin for those particular goods, and that it was sufficient to overcome this plea.

Finally, the fourth part of the plea asserted a lack of proof of distinctive character acquired through use of the contested trade mark throughout the European Union. Mondelez contested that, as Nestle only provided evidence with respect to 10 Member States out of 15, the Board of Appeal should not have extrapolated from that evidence applicable to the entire EU (with the Board only finding evidence of distinctive character for 5 being sufficient for the whole of the EU). According to established EU case law, a mark needs to have distinctive character in the whole of the EU, and would fail to be registered should it not have it for a part of the EU, even one single Member State. Evidence provided needs to be quantitively sufficient to prove distinctive character in the Member States concerned. The GC corrected the Board of Appeal's approach in assessing this, and set out that "…the relevant question is not whether it was shown that a substantial proportion of the public in the European Union, merging all the Member States and regions, perceived a mark as an indication of the commercial origin of the goods designated by that mark, but whether, throughout the European Union, it was proved that a significant proportion of the relevant public perceived a mark as an indication of the commercial origin of the goods designated by that mark".

The GC allowed this part of the first plea, determining that a lack of evidence for the rest of the Member States would mean that the mark has not been established to have distinctive character in the entire EU, and the registration is therefore invalid and would have to be re-examined.

The case is a very curious one, and highlights a potential big issue for applicants when it comes to evidencing the distinctive character in the entire EU. With surveys and other evidence gathering exercises being costly both monetarily and time wise, and newer launches in other territories being a hindrance for proving distinctive character. In the end, the threshold should be high; however, this writer would be a firm believer in statistics, especially for more notable, established brands, and would want more flexibility at the EUIPO (although, understanding the risks associated with giving away trademarks like candy). It will remain to be seen whether the case is appealed, and this writer would not want to see the fight for chocolate bars to ever end.

Source: Reuters

Ringing Hollow - Ringtone Trademark Rejected by EU General Court

Since the introduction of the new Trade Mark Regulation No 2015/2424, this writer for one has been awaiting the inevitable landslide of unusual trademark registrations, particularly for sounds and even smells. While this rush has yet to materialize, some attempts have been made, and quite recently one of those applications ended up in the EU General Court. This writer laments his lateness in relation to this case; however, it is interesting enough to have to be discussed even a month or two after the fact.

The case of Globo Comunicação e Participações S/A v EUIPO concerned the registration of a mobile phone ringtone by Globo for goods and services in classes 9, 16, 38 and 41, covering a wide array of tangible and intangible goods (the musical notation for the sound can be viewed here). The mark was rejected by both the Examiner and the Board of Appeal for a lack of distinctive character under Article Article 7(1)(b) of the old Trade Mark Regulation No 207/2009. The matter was subsequently appealed to the General Court, who handed down their judgment in mid-September.

The first matter dealt with by the General Court was a simple procedural point, where Globo argued that no reasons were given by the Board of Appeal as to why the mark was rejected under Article 7(1)(b). While the Court acknowledged that the Board of Appeal does have a requirement to state their reasons for rejecting a mark, this was not omitted in the case at hand, as the reasons issued (namely on the banality of the sign with regard to the relevant goods or services) and their correlation with the classes was clearly given, even if regarding all of the classes of goods as a whole. A single conclusion did not result in reasons only being given to one class, but all classes summarily.

The Court then moved onto the meat of the matter, namely whether the mark infringed Article 7(1)(b) through a lack of distinctive character. Globo argued that, contrary to previous findings, the brevity or the simplicity of the sound in question should not impact the assessment of its distinctive character. 

Some combinations of notes are a little less simple

As with 'traditional' marks, the assessment of distinctive character is based on the goods or services in respect of which registration of the mark is sought and to the relevant public’s perception of that mark. While this is much more straightforward in word or image marks, as observed by the Court: "...although the public is used to perceiving word or figurative marks as signs which identify the commercial origin of goods and services, the same is not necessarily true when the sign consists solely of a sound element". Arguably it is much more difficult to build an association with a sound, but a good example of a an arguable successful campaign to do so is the whistle adopted by McDonald's in their TV advertising.

The unfamiliarity of peoples' perceptions on sound marks is also added to by the classes of goods or services the mark is registered for. The use of sound marks in TV, for example, would lead to a much higher likelihood of consumer identification and association, while physical media does not lend itself to this perception. The Court explained that "...as regards certain goods and services linked, in particular, first, to tools for communicating or entertaining by means of television broadcasting or radio broadcasting and to telephony and, secondly, to IT media, computer software or to the media sector in general, sound elements, such as jingles or melodies, are used in order to enable the product or service at issue to be identified aurally as coming from a particular undertaking". Consumers would therefore have to perceive the sound as indicating a particular brand of goods or services via these mediums.

The Court found that, a sound that only consists of merely a banal combination of notes would not be perceived as referring to any particular brand, as it would cause a 'mirror effect', meaning it only refers back to itself. Following this, the General Court considered whether the sound in the mark in question would be distinctive, and found that it isn't, as the simple two note combination would only "...be perceived by the relevant public only as a mere function of the goods and services covered and not as an indication of their commercial origin". This was further exasperated by the excessive simplicity (only sounding like an alarm or a telephone ringing) and only therefore refers to itself, rather than the goods or services in was applied for. The Court concluded that the Board of Appeal did not err in their findings and dismissed the appeal.

The case shows the difficulty in the registration of simple sound marks, especially ones that are not 'jingle-like', i.e. serve as a longer, more distinctive part of a product or show for example. It will be interesting to see how the change in the requiremet of graphical representation changes things; however, as the sound was played in court, it seems unlikely that the addition of a playable example would sway the pendulum the other way.

Source: Ars Technica

Confusion Is Right - Likelihood of Confusion in a Part of the EU Doesn't (Necessarily) Lead to Pan-EU Injunction

Due to the vastness of the internal market in the EU, the enforcement of rights can be difficult, especially when those rights have been infringed in one Member State, but not necessarily in the rest (or to the same degree as in the original country of issue). The EU trademark gives for EU-wide protection, but in the event that national courts disagree on the interpretation of a degree of similarity between a registered EUTM and a competing mark, is EU-wide protection afforded or would the competing mark escape the clutches of the EUTM system? This question was recently answered by the CJEU in a decision handed down in late September.

The case of combit Software GmbH v Commit Business Solutions Ltd dealt with combit Software, a German software development and marketing company that holds the rights to the EU trademark for the word "combit" for similar goods and services. Commit Business Solutions is an Israeli company that sells software under the brand "Commit", on the web and in a number of countries, including in Germany, selling a German-language version of their Commit software in the country. Due to the similarity of the brands used, combit brought proceedings in Germany aiming to prevent the use of the mark for the marketing of Commit's software (with the matter ultimately being referred to the EU courts). As a peculiar part of the proceedings in Germany the court determined that, indeed, there was a likelihood of confusion in the EU for the German-speaking consumer; however, it also saw that there would be no likelihood of confusion for the English-speaking consumer. The court then referred the matter to the CJEU for ultimate determination, in particular for the lack of confusion for a significant portion of the Union.

What the referring court asked from the CJEU was summarized by the Court as whether "...Article 1(2), Article 9(1)(b) and Article 102(1) of Regulation No 207/2009 must be interpreted as meaning that, where an EU trade mark court finds that the use of a sign creates a likelihood of confusion with an EU trade mark in one part of the European Union whilst not creating such a likelihood in another part thereof, that court must conclude that there is an infringement of the exclusive right conferred by that trade mark and issue an order prohibiting the use concerned for the entire area of the European Union". This, in essence, is inquiring whether a partial likelihood of confusion in the EU would translate to a pan-EU injunction for the same, irrespective of the actual confusion determined for the other parts of the EU by the national courts.

With the EU being so different, pan-EU
injunctions are night impossible

The CJEU swiftly addressed the point, stating that when an EU trademark court finds "...that the use of a sign creates, in one part of the European Union, a likelihood of confusion with an EU trade mark, whilst, in another part of the Union, that same use does not give rise to such a likelihood of confusion, that court cannot conclude that there is no infringement of the exclusive right conferred by that trade mark". If there exists a likelihood of confusion in one part of the EU, the CJEU saw that it equates to an infringement of the conferred in the EU overall. This follows precedent in instances where a likelihood of confusion exists during opposition proceedings, but only with respect of one part of the EU.

While the above seems straightforward, the CJEU further complicated things. Following the decision in DHL Express France, if a court does not find a likelihood of confusion in a part of the EU (as in the case at hand) for any reason, such as a linguistic one, the mark isn't adversely affected and the scope of the injunction has to be restricted. However, the trade in which the potentially infringing sign is used has to be bona fide for the restriction to apply. The area restricted has to be clearly defined, not merely through linguistic borders, which does set a high threshold for a wider restricted area.

In summary, the CJEU set out that "...[the Articles of the Regulation] must be interpreted as meaning that, where an EU trade mark court finds that the use of a sign creates a likelihood of confusion with an EU trade mark in one part of the European Union whilst not creating such a likelihood in another part thereof, that court must conclude that there is an infringement of the exclusive right conferred by that trade mark and issue an order prohibiting the use in question for the entire area of the European Union with the exception of the part in respect of which there has been found to be no likelihood of confusion".

The finding of the CJEU is peculiar, since its rationale clearly leads in the direction of a pan-EU injunction, but can be restricted to only the areas affected in the EU if no likelihood of confusion arises. One has to wonder whether this would segment the single market, and potentially cause for the EU trademark to cease to function as intended; as an all-encompassing registration to protect an interest in the entire single market. Nevertheless, one can appreciate the rationale put forth by the Court. This writer will wonder whether the case will have bigger impact on the EU trademark, but doubts many courts will be brave enough to set very wide restrictions on any areas not covered by an EU trademark.

Source: IPKat