Trade marks: validity and infringement of shape marks

Background

Signs are unacceptable for registration as a trade mark if they lack distinctive character (Article 7(1)(b), Community Trade Mark Regulation (207/2009/EC)) (the Regulation) (Article 7(1)(b)).

A trade mark will not be refused registration if, before the date of application for registration, it has acquired a distinctive character as a result of use.

Only a mark that departs significantly from the norm or customs of the sector, and so fulfils its essential function of indicating origin, does not lack distinctive character for the purposes of Article 7(1)(b) (Mag Instrument v Office for Harmonisation of the Internal Market, www.practicallaw.com/9-103-2468).

A sign shall not be registered as a trade mark if it consists exclusively of a shape which gives substantial value to the goods (Article 7(1)(e), CTM Regulation ;Article 3(1)(e)(iii), the Directive) (Article 3(1)(e)(iii)).

The European Court of Justice (ECJ) has held that if a three-dimensional trade mark could be protected by other intellectual property (IP) rights such as registered designs or patents, it may fall foul of Article 3(1)(e)(iii) (Hauck GmbH & Co KG v Stokke A/S C-205/13).

Facts

L owned a three-dimensional Community trade mark (CTM), and UK trade mark, for “motor vehicles” in Class 12, which consisted of a three-dimensional mark representing the shape of a London taxi cab. L sued F for trade mark infringement and passing off in relation to F’s launch of a new model of London taxi.

Decision

The court held that the marks were invalid because they were devoid of distinctive character and did not have acquired distinctiveness.

The average consumer of taxis was the average taxi driver, not members of the public who hired taxis since they were consumers of taxi services, not of taxis. Both the CTM and the UK trade mark would have been perceived by the average consumer of taxis as a variation of the typical shape of a taxi. Also, even if the shape was regarded as departing significantly from the norms and customs of the sector, it would not have been perceived as identifying the origin of the goods. So, the marks were devoid of inherent distinctive character. This assessment would be the same even if the relevant average consumer was a consumer of taxi services.

From the average taxi driver’s perspective, the marks had not acquired distinctiveness. Relevant factors included lack of market share of goods bearing the mark and that L’s advertising was not specific to the shapes of the vehicles. The iconic nature of the shape showed that the taxi shape was well-known and identified with London, but not that taxi drivers perceived taxis embodying the CTM or UK trade mark as originating from L because of their shapes, as opposed to the word or figurative trade marks under which the vehicles were sold.

The marks had not acquired distinctiveness from the perspective of consumers of taxi services. There was no evidence that consumers of taxi services identified the source of L’s taxis because of the shape of those taxis. L did not have a monopoly of taxis and the trade origin of the taxis was always indicated by means of badges on the front and rear of the vehicles bearing L’s word and figurative trade marks. The origin of the taxis in the sense of the manufacturer’s identity was irrelevant to consumers of taxi services.

The trade marks consisted exclusively of the shape which gave substantial value to the goods. The shape which was the subject of the UK trade mark was also registered as a design. Applying Hauck, this was a relevant consideration as the ECJ had held that a key purpose of Article 3(1)(e)(iii) was to prevent trade marks from being used indefinitely to extend the time-limited protection of other IP rights. While the shape of the CTM was not protected by a registered design, it could have been and so it was also invalid.

L had stopped producing the goods many years before the relevant period, but relied on second-hand sales and sales for scrap as evidence of use. On the facts, the small number of sales of used taxis did not constitute genuine use. Disposals of taxis for scrap could not amount to use of the CTM at all: destroying goods bearing a trade mark was not trade mark use. So the CTM should be revoked for non-use.

Even if the marks were valid, there was no infringement as there was no likelihood of confusion on the part of taxi drivers between the trade marks and F’s new taxi. There was only a low degree of similarity with the marks.  Also, there was no detriment to the marks’ distinctive character: the average consumer, whether of taxis or taxi services, would think that the shapes of the new taxi were a species of the genus London taxi. Nor had any unfair advantage been taken of the marks.

L’s claim in passing off was also rejected as L had no relevant goodwill. Consumers of taxi services did not rely upon the specific features of the taxi shape as denoting a particular source. There was also no misrepresentation, as there was no evidence that the new taxi shape was likely to lead consumers of taxi services to believe that it came from the same source as L’s taxis.

Comment

This decision illustrates the difficulties involved in registering and enforcing a trade mark registration in respect of the shape of goods and the importance of educating the public by means of promotion and advertisement to regard the shape of the goods as designating the origin of the goods. The decision is also of interest because of its analysis of whether the trade marks consisted exclusively of the shape which gave substantial value to the goods so as to be invalid, in the context of balancing the unlimited monopoly protection given to three dimensional shapes as trade marks and the time-limited protection afforded to registered design or patents. Also of note is the discussion of the extent to which second-hand sales of trade-marked goods, or sale of those goods as scrap, may suffice to establish genuine use of a trade mark, a point which will ultimately have to be resolved in future by a reference to the ECJ.

Case: The London Taxi Corporation Ltd (t/a The London Taxi Company) v Frazer-Nash Research Ltd and another [2016] EWHC 52 (Ch).

First published in the March 2016 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.