Reported Trade Mark Cases February 2007

01 February 2007

Katharine Stephens and Zoe Fuller

TRADE MARKS - REGISTRATION

Decisions of the CFI



















Ref No. 

T-283/04
Georgia-Pacific Sarl  v OHIM
(17.01.05)
Decision not yet in English

Application (and where applicable, earlier mark) 

Kitchen towels

- Rolls of paper for household use, kitchen towels, hand towels of paper (16)

Comment 

The CFI dismissed the appeal, upholding the BoA’s ruling that the mark applied for (a 3D mark in the form of a design for the embossed surface of kitchen towels) was devoid of distinctive character under Article 7(1)(b). The criteria for judging distinctiveness of marks which consisted of the appearance of the product itself were no different from those applicable to any other mark. However, public perception of such marks might well be different. Therefore only a mark which departed significantly from the norm in the sector concerned would be capable of acting a guarantee of origin.

Consumers were used to an embossed surface for kitchen towels, and perceived it as an indicator of its capacity to absorb moisture rather than of origin. As this was the public perception, it did not matter that, technically, it was the thickness of the paper that actually determined its ability to absorb. As for the embossed motif, samples revealed that it was merely another variant of those commonly used in the sector. The motif was due to aesthetic and decorative concerns rather that indicating commercial origin. For the consumer, an embossed motif was the typical form of presentation of these products. The motif was not sufficiently specific and arbitrary to hold the attention of the average consumer and distinguish the towel from others (especially as the consumer recalled images of different marks imperfectly and did not pay much attention to the outside of the towel).

   


















Ref No. 

T-477/04
Aktieselskabet af 21. November 2001 v OHIM; TDK Kabushiki Kiasha (TDK Corp.)
(06.02.07)

Application (and where applicable, earlier mark) 

TDK
- Clothing, footwear, headgear (25) 

TDK

TDK logo

- apparatus for recording transmission or reproduction of sounds or images (9)
(1 CTM; 35 national trade marks)

Comment 

The CFI upheld the BoA’s decision to allow the opposition under Article 8(5).

As some of the requirements under that Article were undisputed, the CFI considered it only necessary to determine (i) whether the earlier marks (owned by TDK Kabushiki Kiasha) enjoyed a reputation; and (ii) whether the use of the mark applied for would take unfair advantage of the distinctive character or reputation of the earlier marks.

To establish the reputation requirement, the earlier mark must be known to a significant part of the public concerned by the goods or services covered by that trade mark. The CFI held that this requirement had been fulfilled; the production, marketing, sponsorship (in particular of sporting and musical events) and advertising of the earlier marks and sales levels achieved by goods bearing the earlier marks were widespread in Europe.

The BoA was correct to conclude that there was a possibility that the mark applied for could be used on sports clothing, and, based on the sponsorship activities involving the earlier marks (particularly in the sporting field), such use would lead to the perception that the clothing was manufactured by, or under licence from, TDK Kabushiki Kiasha. The CFI held that such a possibility was sufficient to constitute evidence of a future risk of the taking of unfair advantage of the reputation of the earlier marks.

   


















Ref No. 

T–88/05
Quelle AG v OHIM; Nars Cosmetics Inc
(08.02.07)

Application (and where applicable, earlier mark) 

 "NARS"

- clothing, footwear, headgear (25)

 "MARS"

 - footwear and sportswear (25) [two marks registered in Germany]

Comment 

The CFI dismissed the appeal; the opposition failed under Article 8(1)(b).

It was settled case law that a complex mark and another mark (being identical/similar to a component of the complex mark), may be regarded as similar where the component forms the dominant element within the overall impression given by the complex mark. When considering whether an element was dominant, account had to be taken of the intrinsic qualities of each component and their relative positions.

In this case, there were clear visual differences between the marks. In so finding, account was taken of the difference in the relative size of the MARS name and the logo; the latter being the dominant element. The marks were also conceptually different. However, there was some phonetic similarity; but when assessing the marks globally, this phonetic similarity was consider of less importance as the goods at issue (clothing and shoes) would be seen by the relevant consumer and thus the visual impact of the marks was the most important factor.

   


















Ref No. 

T-366/05
Anheuser-Busch Inc v OHIM ; Budějovický Budvar, národní podnik
(15.11.07)

Application (and where applicable, earlier mark) 

BUDWEISER
–alcoholic beverages (33)

 Budweiser-Budvar logo

 - beer (32)

Comment 

By order, the CFI dismised Anheuser-Busch’s appeal against the decision by the BoA finding the opposition by Budvar successful under Article 8(1)(b).

A few days after the BoA’s decision, Anheuser-Busch restricted the goods in its application to “alcoholic beverages, namely wines and spirits”. They then appealed, emphasising the fact that, following amendment, the goods comprising the application were dissimilar to those covered by the earlier mark. The CFI found that the BoA had not erred in its decision. Further, since the appeal was manifestly unfounded, the Court did not have to consider the issues of inadmissibility raised by Budvar.

   


Shape marks

Dyson Ltd v Registrar of Trade Marks (ECJ (Third Chamber); C-321/03; 25.01.07)

Dyson applied to the UK Patent Office for a series of marks in class 9 for vacuum cleaners. The following description was applied to both representations: “the mark consists of a transparent bin or collection chamber forming part of the external surface of the vacuum cleaner as shown in the representation”. The marks were refused under Sections 3(1)(a) and (c). Patten J. would have dismissed the appeal (see CIPA June 2003), but for questions relating to the interpretation of the ECJ’s decision in Philips v Remington (C-299/99) and therefore referred questions to the ECJ. The A.G. was of the opinion that the applications did not constitute trade marks within the meaning of Article 2 (see CIPA October 2006).

Vacuum cleaners 

The ECJ stated that to be capable of constituting a trade mark, the subject matter of an application must satisfy the three conditions set out in Article 2: it must be (i) a sign (ii) capable of being graphically represented and (iii) capable of distinguishing the goods and services of one undertaking from those of another undertaking. Although the English Court had not raised this as an issue, the ECJ held that it was not precluded from providing the national court with all those elements for the interpretation of EC law which may be of assistance to the national court deciding the case before it.

The ECJ observed that Dyson had stated that the application did not seek to obtain registration of particular shapes of the transparent collecting bin nor did the marks applied for consist of a particular colour. It was common ground that the subject matter of application was for all the conceivable shapes of a transparent collecting bin forming part of the external surface of a vacuum cleaner and was therefore not specific. Additionally, the collecting bin’s transparency allowed for the use of various colours. The ECJ held that Dyson could not maintain that the subject matter of the main application was capable of being perceived visually and that the graphical representations put forward in Dyson’s application were mere examples of the subject matter.

The ECJ concluded that the subject matter of the application was, in fact, a mere property of the product concerned and therefore did not constitute a “sign” within the meaning of Article 2.

Statement of reasons on which decisions are based

Kustom Musical Amplification Inc v OHIM (CFI (third chamber); T-317/05; 07.02.07)

Kustom Musical Amplification, Inc (KMA) applied to register a three-dimensional mark in the form of the body of a guitar (reproduced below) for ‘stringed instruments, namely guitars’ in Class 15.

Guitar image

The examiner rejected the application on the basis that the mark applied for was devoid of any distinctive character under Article 7(1)(b). OHIM sent internet links, without providing KMA with hard copies of their content, in notices of grounds for refusal. The notices informed KMA that the shape applied for was not eligible for registration and that the internet findings submitted to KMA formed the basis of this decision (although the decision itself did not mention that new evidence constituted the factual basis of the analysis).

The BoA dismissed KMA’s appeal. In its decision, the BoA referred to these links and mentioned further internet links.

KMA appealed to the CFI to annul the contested decision on the basis of, first, a failure to state adequate reasons and infringement of the right to be heard and, second, infringement of Article 7(1)(b).

The CFI upheld KMA’s plea and annulled the contested decision. The BoA had infringed Article 73 by taking into account facts which were not communicated to KMA prior to the adoption of the contested decision. The mere communication of internet links in OHIM’s notices of the grounds for refusal, without the provision of hard copies of the pages to which those links led, did not enable the applicant to identify the guitar shapes taken into consideration by the BoA before the adoption of the contested decision. Some of the links at issue had been inaccessible, and due to the continual updating nature of websites, any accessible link may not have led to the same guitar taken into account by the examiner or BoA. Furthermore, some links were only notified to KMA in the contested decision.

The CFI held that the conclusion in the contested decision that the mark applied for should be rejected was based on facts which were not communicated to KMA prior to the adoption of that decision. This infringement of KMA’s right to be heard vitiated the conclusion reached in the contested decision. The CFI did not need to examine KMA’s other arguments.

Language of opposition proceedings

Calavo Growers Inc v OHIM; Luis Calvo Sanz SA (CFI (second chamber); T-53/05; 16.01.07)

Luis Calvo Sanz SA (Luis Calvo) applied to register as a CTM the figurative mark reproduced below for various foodstuffs in classes 29, 30 and 31.

Calvo logo

Calavo Growers Inc. (Calavo Growers) owned a registered CTM for the word mark CALAVO in respect of foodstuffs in classes 29 and 31. Calavo Growers filed a notice of opposition against the application. The language of the opposition was Spanish, however the explanation of the grounds of the opposition contained within the notice was in English.

The Opposition Division allowed the opposition in part; it found a likelihood of confusion between the two marks in respect of certain goods. However, the Opposition Division did not take into account the explanation of the grounds of the opposition as it was not drafted in the language of the proceedings and no translation had been provided.

Luis Calvo appealed the decision and the BoA allowed the appeal. The BoA considered that the notice of opposition had confined itself to giving “likelihood of confusion” as a ground of appeal, with no further explanations. The Opposition Division was not competent to examine the opposition of its own motion; it is required to be impartial and cannot act as judge and party at the same time.

The CFI annulled the BoA’s decision. The opposition filed by Calavo Growers was admissible. Although the English explanation of the grounds could not be taken into account, the statement “the opposition is based on a likelihood of confusion” was a perfectly clear specification for the relative grounds for refusal of registration requirement by Article 42(3) of Regulation No. 40/94. It enabled OHIM and Luis Calvo to know the ground on which the opposition was based so that the examination and defence could be organised.

The CFI held that the Opposition Division restricted itself to examining the facts, evidence and arguments provided by the parties and remained within the bounds of the dispute as defined by Calavo Growers. Further, the CFI held that the Opposition Division’s decision could be legitimately adopted on the basis of the evidence before it and there was no need to have recourse to the English explanation of grounds or any other source of information.

Appeals from the UK Trade Marks Registry

Sunrider Corporation T/A Sunrider International v Vitasoy International Holdings Ltd* (Warren J; [2007] EWHC 37; 22.01.07)

The facts were as follows:

Sunrider owned the trade mark VITALITE for various goods including herbal and nutritional supplements and foods and, in class 32, nutritional syrups and herbal drinks.

Vitasoy owned a number of registered trade marks for VITASOY, for soybean drinks, and VITA, in class 32 for dairy milk products, juice drinks, teas, carbonated drinks and bottled water.

Vitasoy sought the cancellation of the VITALITE trade mark under Sections 5(2)(b), 5(3) and 5(4)(a) of the Trade Marks Act.

The Hearing Officer found that there was no risk of confusion in relation to the VITALITE and VITASOY marks. In relation to the VITALITE and VITA marks, he found that:

  • although VITA was not similar in sound or appearance to VITALITE, it was quite possible that consumers would see VITALITE as the LITE version of VITA (in the sense of, for example, being low in sugar or fat); and

  • use of VITALITE in respect of all goods in Class 32 was likely to cause confusion with VITA. In relation to the “grey area” of herbal drinks, he found that Sunrider’s beverages were not herbal per se, but, being drinks which were proper to Class 32, they were potentially similar goods to those of Vitasoy’s registration.

Sunrider appealed.

In relation to the similarity of the marks, Warren J. declined to depart from the Hearing Officer’s conclusion in the absence of a distinct and material error of principle.

In relation to the similarity of goods, the judge upheld the appeal in part, in relation to “herbal drinks”. He found that:

  • “herbal drinks” under the VITALITE Class 32 specification were not similar goods to those within the VITA Class 32 specification. A beverage which is identified primarily as a carbonated and non-alcoholic drink made from or including sugar cane, guava and mango does not become a “herbal drink” by having a herb added as a minor ingredient; at the least, a herbal drink is to be identified because of its herbal content, even if that content is minor. On that basis, the nature of the herbal drink is self-evidently different from the VITA drink.

  • The two drinks are less likely to be in competition - although they may be considered to be complementary products, one is not the alternative to the other.

  • The differences between the two products outweighed the similarities.

Warren J. also considered a discrete point on the effect of Section 48. Sunrider argued before the Hearing Officer that Vitasoy had acquiesced for a continuous period of 5 years in Sunrider’s use of the registered VITALITE mark. Sunrider submitted that the 5 year period started to run from the date of the application for registration of the VITALITE mark rather than from the date of its registration. Warren J. construed the Act in light of the Directive and found that the wording did not mean that the 5 year period of time could run at any point of time prior to registration of the later mark: Rather, it had to be during a period when the mark was actually registered, not one where the mark was only deemed to be registered i.e. between application and registration.

In a Supplemental Judgment (31.01.07) on the relief which ought to be granted, Warren J. held that:

  • in relation to the extent to which the VITALITE Class 32 mark should be allowed to stand, the original Class 32 specification did not include syrups other than for making a beverage. He limited the specification accordingly; and

  • as to whether he should make a declaration of invalidity, the result of which would be to leave in place the specification amended as set out above, or whether he should give Sunrider the option of surrendering its mark to the extent necessary to conform with that specification, Vitasoy was entitled to the declaration of invalidity. He noted that if there were no differences in practice on the facts of this case, then Sunrider was not in any way disadvantaged by a declaration as compared to a surrender.

Hachette Filipacchi Presse S.A. v Saprotex International (Proprietary) Ltd* (The Chancellor of the High Court, Morritt J.; [2007] EWHC 63 (Ch); 24.01.07)

The Chancellor dismissed the appeal from the decision of the Hearing Officer. The Hearing Officer had dismissed the opposition under Sections 5(2) and 5(3) against Saprotex’s application to register ELLE in respect of knitting wool and yarn in Class 32. The opponent, Hachette Filipacchi Presse (HFP), was the proprietor of the mark ELLE, registered in Classes 16, 25 and 41 in respect, inter alia, of periodicals relating to women and women’s clothing.

HFP’s first allegation in relation to the Hearing Officer’s decision under Section 5(3) was that he had erred in a manner described as “structural”. In dealing with the issues under Section 5(2), the Hearing Officer dealt with the full factors on which counsel for HFP relied to show the ELLE brand’s link with knitting. He held that these factors did not establish a natural association between knitting and magazines/clothing. On appeal, HFP submitted that, had the Hearing Officer revisited the factors upon which HFP relied in the specific context of Section 5(3), he must have concluded that the opposition under that section was made out. The Chancellor saw no error in the Hearing Officer’s decision; the earlier section was the starting point from which the rest flowed. Such a flow was both logical and accurate.

The second alleged error in relation to Section 5(3) originated in a point not taken before the Hearing Officer and not mentioned in the Appellant’s notice. Amendment was allowed and the Chancellor further considered the evidence of one of Saprotex’s witnesses. However, he found that there was no suggestion that the Hearing Officer should have recognised that the market for knitting wool should be divided between traditional and fashion yarns and that the profile of the knitter falling in to the latter category was such that she might well be a fashion conscious reader of ELLE magazine.

The Chancellor also dismissed the appeal under Section 5(2). It was correct to consider as a threshold test the question of whether the clothing for which HFP had registered its trade mark ELLE was similar to the knitting wool in respect of which Saprotex sought to registered its mark before considering whether any such similarity gave rise to a likelihood of confusion.

Finally, the Chancellor criticised HFP’s solicitors for not providing a certificate under PD 52 para 5.6(3) (i.e. a certificate stating that the appeal bundles complied with the requirement that they only included documents which were directly relevant to the subject matter of the appeal). As a consequence, he disallowed, as between solicitor and client, the costs of copying the documents for the use of the Court.

TRADE MARKS – INFRINGEMENT

Res judicata

Special Effects Ltd v (1) L’Oréal SA (2) L’Oreal (UK) Ltd* (Chadwick, Lloyd, Leveson L.JJ; [2007] EWCA Civ 1; 12.01.07)

L’Oréal opposed an application by Special Effects to register the mark SPECIAL EFFECTS in relation to soaps, perfumery and other cosmetics including hair products in Class 3. L’Oréal relied on grounds of non-distinctiveness and its prior unregistered rights in FX and SPECIAL FX in the UK in relation to identical goods, and its three earlier UK registered trade marks for FX and FX STUDIO LINE). The Hearing Officer rejected the opposition and the mark was registered.

In May 2005, Special Effects brought proceedings against L’Oréal for infringing its SPECIAL EFFECTS trade mark. Alongside their defence, L’Oréal counterclaimed for a declaration of invalidity on the grounds of non-distinctiveness and the existence of their earlier trade marks, as well as relief on the basis of passing off. Special Effects argued that L’Oréal’s opposition to the application for SPECIAL EFFECTS precluded it from challenging validity on the grounds which had been relied on unsuccessfully in the opposition proceedings.

The first instance decision was decided in Special Effects’ favour: cause of action estoppel and/or issue estoppel applied to prevent L’Oréal from raising in court proceedings arguments which had failed in opposition proceedings. L’Oréal appealed.

The Court of Appeal allowing the appeal, held as follows:

  • Cause of action estoppel - The CA identified that the cause of action in the proceedings before it was Special Effects’ allegation of infringement and L’Oréal’s defence and counterclaim on the basis of invalidity and passing off. However, regarding the opposition proceedings, the CA thought it an “inappropriate and artificial use of language” to describe an applicant for registration as having a ‘cause of action’ for registration. Likewise, it held that an opponent does not have a ‘cause of action’ for preventing the registration applied for. Cause of action estoppel did not therefore apply in this case.

  • Issue estoppel - The CA held that the co-existence of Sections 38 and 47 (which provide, respectively, for opposition to an application and for a declaration of invalidity against a registration) meant that opposition proceedings are not inherently final. The fact that invalidity proceedings could subsequently successfully be brought under Section 47 by the same or a third party, leading to revocation of the mark, meant that a decision to reject an opposition did not have the necessary degree of finality to be capable of being the basis of an issue estoppel.

  • Abuse of process - The CA held that it was not an abuse of process for L’Oréal to bring a counterclaim based on the grounds of invalidity on which they relied in opposition proceedings. The reasons for this were the preliminary nature of opposition proceedings, the manner in which they are usually conducted, and Lord Bingham’s comments in Johnson v Gore Wood [2002] 2 AC 1, at 31 (i.e. that it would be rare to find abuse of process without “unjust harassment of a party”). Further, since the legislation provides that a party may seek a declaration of invalidity despite having failed in opposition proceedings, it would be unusual to find abuse by a party availing himself of the right provided by that legislation.

  • Privity - Although it was not necessary for the CA to decide this point, the judgment also addressed the issue of privity. L’Oréal SA holds the trade marks, and is therefore the relevant entity in opposition; L’Oréal (UK) Limited uses the marks, and is therefore the relevant entity against which to bring infringement proceedings. The CA thought that if any estoppel constraint applied to the first, it might well be the case that it would also apply to the second in the circumstances of the case.

Use of a trade mark on scale model cars

Adam Opel AG v Autec AG (ECJ (first chamber); C-48/05; 25.01.07)

Adam Opel AG was the proprietor of the German figurative trade mark reproduced below (“the Trade Mark”) registered, inter alia, for motor vehicles and toys. Autec AG manufactured remote controlled scale model cars, marketed under the trade mark “Cartronic”.

 Opel logo

Adam Opel discovered that a remote controlled scale model of the Opel Astra V8 Coupé bearing the Trade Mark on the radiator grill was being marketed in Germany. Adam Opel initiated proceedings against Autec in Germany.

The German court stayed the proceedings and made a reference to the ECJ. The court asked whether, when a trade mark is registered for both motor vehicles and toys, the affixing by a third party of an identical sign to scale models of that car in order to reproduce it faithfully (and the marketing of these cars) constitutes “use” for the purposes of Article 5(1)(a) of the Directive.

The ECJ held that such behaviour would constitute “use” under Article 5(1)(a) which the proprietor is entitled to prevent, provided that use affects (or is liable to affect) the functions of a trade mark as a trade mark registered for toys. It was for the referring court to determine this. However, the ECJ noted that if the relevant public does not perceive the logo appearing on the scale model logo as an indication that the products originate from Adam Opel (or an undertaking economically linked to it), the referring court would have to conclude that such use does not affect the essential function of the Trade Mark in the context of toys. Indeed, Adam Opel did not appear to claim that Autec’s use affected the function of the Trade Mark.

Since motor vehicles and scale models of motor vehicles are not similar products, the ECJ considered the effect of Article 5(2) and concluded that Autec’s use of the Trade Mark was capable of being prohibited providing such use takes unfair advantage of, or is detrimental to, the distinctive character or repute of the Trade Mark in the context of motor vehicles. Again, this was an assessment of a factual nature for the referring court to determine.

The referring court also asked whether the use described in its first question constituted an indication of the kind of quality of the model car within the meaning of Article 6(1)(a). The ECJ held that the fixing of a sign to scale models in order to reproduce these vehicles faithfully is not intended to provide an indication as to a characteristic of these scale models, but is merely an element in the faithful reproduction of the original vehicles.

Use of a trade mark as a company name

Céline Sàrl v. Céline SA (A.G. Sharpston for the ECJ; C-17/06; 18.01.07)

Céline SA registered the French word “Céline” as a trade mark for clothes and shoes in 1928. Céline Sàrl was registered as a company in Nancy, France in 1992 to sell clothing and accessories under the name “Céline” (the business having been operated at the same premises and under the name “Céline” since 1950). Céline SA brought an action for trade mark infringement and unfair competition based solely on the use of the name “Céline” to designate the company Céline Sàrl and its business. It was not alleged that the mark “Céline” was affixed to any products by Céline Sàrl.

The AG considered the question of whether the adoption of a trade mark as a company name amounted to infringement. In doing so, she distinguished between formal adoption of a name and the way in which a name was subsequently used. She concluded that the mere adoption of a company or trade name did not normally constitute ‘use’ within the meaning of Article 5(1). It was for the national court to assess whether any subsequent use fell within Article 5(1).

The right of a trade mark owner to prohibit use under Article 5(1) was subject to Article 6(1)(a). It was for the national court to determine whether use of one’s own name was in accordance with honest practices in industrial and commercial matters. Honest practice in relation to adoption of a company or trade name implied reasonable diligence in contacting the proprietor of any identical or similar mark for similar or identical goods or services and complying with any reasonable condition requested, within a reasonable period, by such a proprietor. Honest practice might not include: use creating the impression of a material link with the trade mark owner; use affecting the value of the mark by taking unfair advantage of its distinctive character of repute; or use discrediting or denigrating the mark.

In her assessment, the AG was also of the opinion that had Member States enacted Article 5(5), that might provide a remedy against adoption of a trade mark as a company name. 

COPYRIGHT

Right of remuneration for the lending of copyright works

Commission of the European Communities v Ireland (ECJ (sixth chamber); C-175/05; 11.01.07)

Article 1 of Directive 92/100/EEC required Member States to provide a right to authorise or prohibit the rental and lending of originals and copies of copyright works. Article 5 of the Directive permitted derogation from this exclusive right in respect of lending, providing that at least authors obtain remuneration for such lending, although Member States may exempt certain categories of establishments from the payment of remuneration.

The Commission considered that, by exempting all categories of public lending establishments from the payment obligation, Ireland failed to fulfil its obligations under the Directive. The Commission initiated proceedings against Ireland.

The ECJ found the action brought by the Commission to be well founded. The interpretation of the Directive to exempt all public lending establishments was not in conformity with the principal objective of the Directive, namely the protection of rightholders with a view to ensuring that they receive appropriate income.

Furthermore, the ECJ held that the Directive must be strictly interpreted. The reference in the Directive to exempting only “certain categories of establishments” from the payment requirement did not intend to allow Member States to exempt all categories of lending establishments.

Reporter’s note: We are grateful to our colleagues at Bird & Bird for their assistance with the preparation of this report: Nick Aries, Rachel Fetches, Emily Forsyth and Matt Hervey.

ECJ and CFI decisions can be found at http://curia.eu.int/en/content/juris/index_form.htm and the reported cases marked * can be found at http://www.bailii.org/databases.html#ew.