Trade marks: shapes necessary for technical result or giving substantial value

By Audrey Horton

06-2020

The European Court of Justice (ECJ) has ruled on the interpretation of the Trade Marks Directive (2008/95/EC) (2008 Directive) and the grounds for refusal or invalidity in relation to signs that consist exclusively of the shape of goods that are necessary to get a technical result or the shape that gives substantial value to the goods.

Background

A trade mark must not be registered if it:

•           Consists exclusively of the shape of goods which is necessary to obtain a technical result (Article 3(1)(e)(ii)).

•           Consists exclusively of the shape which gives substantial value to the goods (Article 3(1)(e)(iii)) (Article 3, 2008 Directive, now Article 4, Trade Marks Directive (2015/2436/EU)).

Facts

G applied to register as a trade mark a sign representing a three-dimensional object which, due to its external design and the homogeneous material used, always returned to its position of balance on a horizontal surface. The shape was based on an innovative mathematical principle. The relevant registration category included decorative items, such as decorative crystalware and chinaware, and toys.

The Hungarian Intellectual Property Office rejected the application. G appealed.

The Hungarian appeal court referred to the ECJ questions on the interpretation of the 2008 Directive and the grounds for refusal or invalidity in relation to signs that consist exclusively of the shape of goods that are necessary to get a technical result or the shape that gives substantial value to the goods.

Decision

The ECJ ruled that Article 3(1)(e)(ii) means that, to establish whether a sign consists exclusively of the shape of goods which is necessary to get a technical result, assessment does not have to be limited to the graphic representation of the sign. Information other than that relating to the graphic representation alone, such as the perception of the relevant public, might be used to identify the essential characteristics of the sign. However, while information that is not apparent from the graphic representation of the sign might be taken into consideration to establish whether those characteristics performs a technical function of the goods, the information must originate from objective and reliable sources and cannot include the perception of the relevant public.

Article 3(1)(e)(iii) means that, in order to determine whether the shape gives substantial value to the product, the perception or knowledge of the relevant public regarding the product may be taken into consideration to identify an essential characteristic of the shape. Refusal on this ground should be based on an objective analysis, intended to demonstrate that the shape on account of its characteristics had such a great influence on the attractiveness of the product that restricting the benefit of the shape to a single undertaking would distort competition in the relevant market. Registration as a trade mark should therefore be refused if it is apparent from objective and reliable evidence that the consumer's decision to buy the product would be to a large extent determined by one or more features of the shape that alone form the sign. Characteristics of the product not connected to its shape, such as technical qualities or the reputation of the product, are, on the other hand, irrelevant.

It is also possible, in the light of the perception of the sign by, and the knowledge of, the relevant public, that the shape that by itself forms the sign is the tangible symbol of a mathematical discovery. If that fact makes the shape special and striking, it might be concluded that it is an essential characteristic and that it is necessary to assess whether, as a result of that fact, the shape gives substantial value to the goods. The fact that the characteristic does not in itself concern the aesthetic merits of the shape does not exclude the application of the ground of refusal.

Article 3(1)(e)(iii) also means that the ground for refusal should not be applied automatically to a sign that consists exclusively of the shape of the goods where the sign is protected under design law or where the sign consists exclusively of the shape of a decorative item. The objective behind the ground of refusal, to prevent the exclusive and permanent right that a trade mark confers from being used to extend indefinitely the life of other rights, does not mean that EU intellectual property law prevents the coexistence of several forms of legal protection. The fact that the appearance of a product is protected as a design does not prevent a sign consisting of the shape of the product from benefiting from protection under trade mark law.

By referring to the shape which gives substantial value to the goods, the ground of refusal might apply to a sign consisting exclusively of the shape of a product with an artistic or ornamental value. However, that does not mean that an application for registration as a trade mark of signs consisting of the shape of a product such as decorative items must be rejected automatically on this basis. For the ground to apply, it must be apparent from objective and reliable evidence that the consumer's decision to buy the product is based to a very large extent on one or more characteristics of the shape.

The substantial value of the type of item here might result from factors other than its shape, such as the history of its creation, its method of production, whether industrial or artisanal, the materials that it contains, which may be rare or precious, or even the identity of its designer.

Comment

This decision confirms that design and trade mark rights are cumulative and that protection of a shape by design registration is not fatal to its registration as a three-dimensional trade mark. In determining whether the shape gives substantial value to the goods, factors unconnected with the shape, such as its design history or designer, are irrelevant. Although the fact that the shape is decorative does not itself preclude trade mark protection, the aesthetic appeal of the shape might in fact give it substantial value. Similarly, while the shape might not be dictated exclusively by its technical result, for example if other shapes can be used for the self-righting function, nevertheless the mathematically innovative nature of the shape might be perceived by the public as an essential characteristic which could also give substantial value to the goods. Registration of three-dimensional trade marks is possible but may be difficult, particularly as the application of the ECJ's guidance by national courts may give uncertain results in practice.

Case: Gömböc Kutató, Szolgáltató és Kereskedelmi Kft v Szellemi Tulajdon Nemzeti Hivatala, C-237/19.

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