According to Article 3 (1) (c) Directive 89/104/EEC (the Directive), trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service, shall be refused or - if registered - liable to be declared invalid.
In its judgment of 4 May 1999 in the case Windsurfing Chiemsee (C-108/97), the European Court of Justice (ECJ) ruled that Article 3 (1) (c) of the Directive:
"[..] pursues an aim which is in the public interest, namely that descriptive signs or indications relating to the categories of goods or services in respect of which registration is applied for may be freely used by all, including as collective marks or as part of complex or graphic marks. Article 3(1)(c) therefore prevents such signs and indications from being reserved to one undertaking alone because they have been registered as trade marks."
This public interest is also known as the Freihaltebedürfnis.
Pursuant to Article 3 (3) of the Directive, a trade mark shall not be refused registration or be declared invalid in accordance with Article 3 (1) (c) if, before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character.
Thus, through use of the mark, the ground for refusal/invalidity of Article 3 (1) (c) will not apply if that use has caused the trade mark to acquire a distinctive character.
Judgment of the Dutch Supreme Court
On February 16, 2007, the Dutch Supreme Court gave judgment in the case Adidas/Marca Mode II. The trade mark in suit concerned Adidas’ three stripe trade mark. Adidas had invoked that trade mark against the use by Marca Mode and others of a two stripe sign on clothing, arguing trade mark infringement.
In the second instance, the Court of Appeal had ruled that the two stripe sign of Marca et al. does not infringe the three stripe trade mark of Adidas. The Court held that a two stripes sign differs considerably from a three stripes sign. As a consequence, the Court found that there is no likelihood of confusion between the two and therefore no infringement on the basis of article 13A subsection 1b of the Benelux Trademark Act (the BTA) (which corresponds with the now applicable article 2.20 subsection 1b of the Benelux Intellectual Property Treaty (the BIPT)). For the same reason, the Court found there was no likelihood that the public would make a connection between the mark and the sign and therefore no infringement on the basis of article13A subsection 1c of the BTA (which corresponds with article 2.20 subsection 1c of the BIPT).
The Court of Appeal came to this decision after concluding that a three stripes sign like Adidas’ had little inherent distinctiveness. Through intensive advertising campaigns Adidas had, however, turned its three stripe sign into a highly distinctive trade mark. The court considered therefore that the trade mark had acquired a large scope of protection in as far as it concerns three stripe signs, but the court added that this does not automatically mean that the scope of protection of this trade mark also extends to other combinations of stripes. In the opinion of the Court of Appeal stripes and simple stripe combinations are, in their essence, not suitable for such wider protection; stripes and simple stripe combinations are very usual, and therefore need to be available for free use by third parties, even if one particular stripe combination has become a well-known, highly distinctive trade mark. Adidas’ appeal to the Supreme Court was related to these findings.
Thus, the Supreme Court had to tackle the question whether the Freihaltebedürfinis applies in infringement cases when the scope of protection of a valid trade mark has to be assessed.
In its assessment, the Supreme Court rightly considered that in the case Windsurfing Chiemsee, the ECJ had concluded that Article 3(3) does not permit any differentiation as regards distinctiveness by reference to the perceived importance of keeping the sign available for use by other undertakings. The Supreme Court on the other hand also referred to the more recent ECJ judgment of 6 May 2003 in Libertel (C-104/01). In that case, and in the context of Article 3 of the Directive, the ECJ held that when it comes to determining distinctive character of a given colour as a trade mark "regard must be had to the general interest in not unduly restricting the availability of colours for the other traders who offer for sale goods or services of the same type as those in respect of which registration is sought." The Supreme Court has applied the reasoning of this decision to situations where distinctive character has been acquired through (intensive) use.
Both the Chiemsee and the Libertel decision relate to whether a sign meets the requirements of the Directive and can therefore be registered. The Supreme Court has raised doubts as to whether the time of registration of a mark is the only point at which the Freihaltebedürfnis should be considered. It has therefore questioned whether the Freihaltebedürfnis should also play a role in infringement proceedings when determining the scope of protection of a validly registered trade mark, which lacks inherent distinctive character, but which has acquired such as a result of (intensive) use.
Accordingly, the Supreme Court has referred the following questions to the ECJ:
Should the general interest that other parties in the course of trade should not be unjustifiably restricted from using certain signs (Freihaltebedürfnis) be taken into account when assessing the scope of protection of a trade mark, which inherently lacks distinctive character or which consists exclusively of a sign that designates the characteristics of the goods and/or services (as meant in Article 3 (1) (c) of the Directive), but which has acquired distinctive character through use and which has been registered?
If the answer to question 1 is affirmative, does it then make a difference whether the public concerned regards the underlying signs, which should be kept free for use by other parties, either as signs which serve to distinguish the goods or on the contrary as mere decoration of the goods?
If the answer to question 1 is affirmative, does it make a difference whether the sign, which according to the trade mark owner infringes its trade mark, is either devoid of distinctive character as meant under article 3 (1) (b) of the Directive, or whether the sign is inherently capable of designating a characteristic of the goods or services, as meant in article 3(1) (c) of the Directive?
It will take a few years before the ECJ will provide clarity on this issue. In the meantime, various Dutch courts have shown some inclination to take the Freihaltebedürfnis into account in infringement cases when assessing the scope of protection of trade marks.