Trade Marks

European Court of Justice – Opinions and Decisions

Nichols Plc v Registrar of Trade Marks (Opinion of Advocate General Ruiz-Jarabo Colomer) (C-404/02; 15.1.04)

This case had been referred to the ECJ by the English High Court to assess the distinctiveness of surnames as trade marks.

The UK Trade Marks Registry granted a trademark application for "NICHOLS" in respect of vending machines but refused it in relation to the food products usually sold by these machines. The Registry concluded that the surname Nichols was a surname common in the UK. It also held that as the food and drinks market was made up of a large number of operators it would be difficult for consumers to identify the commercial origin of the products from such a common surname. The position was different in respect of vending machines where the number of operators was considerable smaller.

On appeal the High Court decided to stay the proceedings and referred the question on distinctiveness of a surname to the ECJ. 

AG Ruiz-Jarabo Colomer commented on the fact that the UK Trade Marks registry consistently refuses to register ordinary names which occur frequently in the London telephone directory if there are a large number of operators in the market for the goods or services designated. However, he concluded that the distinctiveness of a sign comprising a surname depends on whether in relation to the goods or services for which registration is sought the relevant consumer considers it identifies the goods and services of an undertaking as compared with those of others. In his opinion the frequency of the occurrence of the surname in question is one of the factors which may be taken into consideration, although it is not decisive.

Gerolsteiner Brunnen GmbH & Co v Putsch GmbH (ECJ (Fifth Chamber); Case C-100/02; 7/1/2004)

Gerolsteiner Brunnen GmbH & Co produced mineral water and various soft drinks made from spring water in Germany.  In 1985 it registered the word mark “GERRI” in respect of mineral water and other non-alcoholic drinks.  In the 1990s, Putsch GmbH marketed soft drinks under the name “KERRY Spring”.  The water used to make those drinks came from Irish spring water of County Kerry.  Gerolsteiner sued Putsch in Germany for infringement of its GERRI trade mark. Putsch however, claimed that there was no risk of confusion between the marks and that KERRY was simply a description of the origin of the mineral water. 

At first instance, the Munich Regional Court found for Gerolsteiner and restrained Putsch from using the KERRY Spring name for mineral water and soft drinks. Putsch, appealed and the Munich Higher Regional Court dismissed Gerolsteiner’s claims.   Gerolsteiner appealed that decision before the Bundesgerichtshof. The Bundesgerichtshof stayed the proceedings and referred to the Court of Justice the interpretation of Article 6(1) Trade Marks Directive (Council Directive 89/104/EEC).

Article 6(1)(b) Directive 89/104/EEC says the proprietor of a trade mark cannot prohibit a third party from using, in the course of trade, indications concerning, inter alia, the geographical origin of goods provided the third party used them in accordance with honest practices in industrial or commercial matters. This article   does not require the third party to use the description of origin as a trademark. In the present case, the term “KERRY Spring” was expressly included in the list of mineral waters recognised by Ireland and published by the Commission and was used as a geographical indication of origin. However, as the referring court concluded that there existed a likelihood of aural confusion for the purposes of Art. 5(1)(b) Directive 89/104/EEC between “GERRI” and “KERRY” it asked the ECJ to clarify whether such a likelihood of confusion between a word mark and geographical indication of origin entitled the proprietor of the mark to rely upon Article 5(1)(b) of the Directive to prevent a third party from using the indication of geographical origin.

The ECJ concluded that Article 6(1)(b) only required for the use of the indication of geographical origin to be in accordance with honest practices in industrial or commercial matters. Therefore, the fact that there existed a likelihood of aural confusion between a word mark registered in one Member State and an indication of geographic origin from another Member State was therefore insufficient to conclude that the use of that indication in the course of trade was not in accordance with honest practices.

Therefore, it was for the national courts to assess in each particular case whether or not the indication of origin was being used in accordance with honest practices in industrial or commercial matters.

Court of First Instance Decisions on appeal from OHIM

Joined Cases T-146/02, T-147/02, T-148/02, T-149/02, T-150/02, T-152/02 & T-153/02 – SiSi-Werke GmbH & Co v (Trade Marks and Designs)(OHIM)

CFI (Second Chamber); 28/1/2004

SiSi-Werke GmbH & Co. Betriebs KG (Sisi-Werke) filed eight applications for trade marks at OHIM for three dimensional shapes consisting of various stand-up pouches for packaging drinks. The pouches were narrow at the top and wider at the bottom.  Registration was sought in respect of a variety of goods and service in Classes 1, 3, 5, 6, 16, 20, 29, 30, 32, 33, 39 and 40. OHIM examiner refused the applications on the ground that the marks were devoid of any distinctive character under Article 7(1)(b).  Sisi-Werke appealed the decision and limited its trade mark applications to certain drinks in Classes 32 and 33. OHIM’s Board of Appeal dismissed the appeals maintaining that the marks were not distinctive under Article 7(1)(b). The Board of Appeal found that consumers would not perceive the stand-up pouches as an indication of commercial origin but solely as a form of packaging.  Sisi-Werke further limited is specification to fruit drinks and fruit juices, in Class 32. Sisi-Werke appealed to the CFI seeking an annulment of OHIM’s Board of Appeal.

A sign’s distinctiveness could only be assessed by reference to the goods or services for which registration is sought and second on the basis of the perception of that sign by the relevant public. The marks applied for consisted of the appearance of the packaging for the products concerned, the graphic representation of various stand-up pouches designed to contain fruit drinks and fruit juices. The relevant public consisted of all end consumers. Fruit drinks and fruit juices were intended for everyday consumption. The Court noted that the perception of the relevant public was not necessarily the same in relation to a three-dimensional mark consisting of the appearance of the product itself as it was in relation to a word mark, a figurative mark of a three-dimensional mark not consisting of that appearance, this is because the public was not necessarily used to recognising a three-dimensional mark as a sign identifying the product. Since a liquid product had to be packaged for sale, the average consumer would perceive the packaging first and foremost simply as a means of packaging the product for sale. A sign which fulfilled functions other than that of a trade mark was distinctive for the purposes only if it was capable of being perceived immediately as an indication of the services in question, so as to enable the relevant public to distinguish, without any possibility of confusion, the goods or services of the owner of the mark from those of a different commercial origin.

The CFI concluded that consumers are used to drinks being sold in different and various packaging.  In the present case, the packaging was not sufficiently unusual for the average consumer to perceive it, per se, as an indication of the specific commercial origin of the product. The overall impression produced by the appearance of the pouches concerned also had to be considered in examining the distinctive character of the marks at issue.  In an examination of each of the individual features it could be concluded that most of the feature were either basic shapes of stand-up pouches or were too insignificant to be capable of being appreciated by the relevant public. Similarly, the metallic finish would be regarded by the relevant public as deriving from the constituents of the foil used in the manufacture of the pouches and not as an indication of the commercial origin of the products.  The CFI dismissed the appeal concluding that the Board of Appeal was correct in finding that the 8 graphic representations of the stand-up pouches were devoid of distinctive character in relation to the products for which registration was sought.

English High Court - Appeals from the UK Trade Marks Registry

AC Prodal 94 SRL v Spirits International NV(High Court (Laddie J.) (4 November 2003) 

The appeal to the High Court to overturn a decision of a hearing officer was dismissed. Laddie J. held that it was not the duty of the High Court to overturn a decision of the Trade Marks Registry simply because it had reached a conclusion that the Court may have decided differently had it been the court of first instance.

The hearing officer had refused registration of two trade mark applications consisting of labels attached to vodka bottles in which the most distinctive feature was the word "STALINSKAYA". The hearing officer had concluded that the applicant's and the opponent's mark "STOLICHNAYA" were conceptually similar as in the UK the marks would be perceived primarily as invented words. Laddie J. held that the hearing officer was perfectly entitled to conclude that for most people the word Stalin would not be immediately recognised. In his opinion all the hearing officer was doing was to try and assess the impact of the two marks bearing in mind the consumer's imperfect recollection. He also concluded that the hearing officer had reached a conclusion that was open to him to come to and that was a fair assessment of the visual similarity. In his view the hearing officer decision could not be criticised as it is a fair assessment of the similarities between the marks in question.

Dixy Fried Chickens (Euro) Limited v Dixy Fried Chicken (Stratford) Limited(High Court (Laddie J.) - 3 December 2003) 

The appeal to the High Court to overturn a decision of a hearing officer succeeded. Before the Registry the applicant for revocation (Stratford) had succeeded under section 5(4)(a) of the Act by demonstrating to the satisfaction of the hearing officer a case in passing off. Laddie J. criticised the evidence in the case as “a shambles” and held that the material before him and the hearing officer had got nowhere near making out a prima facie case of the likelihood of passing off as described in REEF Trade Mark ([2002] RPC 19).  In REEF Trade Mark it had been held that a party seeking to rely on its passing off rights under section 5(4)(a) must prove on the balance of probabilities that the use of the mark could be prevented (the Judge holding in this case, as it seemed to be an open question, that this was to be assessed at the date at which the application for registration was made) by an action in passing off, which included providing evidence at least to raise a prima facie case that such party’s reputation extends to the goods comprised in the specification of goods for the registered mark, and that such evidence “will include evidence from the trade as to reputation; evidence as to the manner in which goods are traded or their services supplied”.  Laddie J. emphasised that the need for proper substantiation was particularly important where, as in this case, one of the arguments advanced by Stratford was that a franchise agreement relied on by the trade mark proprietor was a forgery.  The stronger such allegation, the better the proof needed, and when such allegations were made, not only must it be clear what is said to be forged but the indicia of that forgery must be identified so that the party against whom the allegation is made has a proper opportunity to respond (Hornal v Neubeuger Products Limited ([1957] QB 247)).

English High Court - Designs

Società Esplosivi Industriali SpA v Ordnance Technologies Ltd (formerly SEI (UK) Ltd) and others, (High Court (Lewinson J.) - 21 January 2004) 

This case illustrates the relatively wide scope that the courts are prepared to give to the meaning of “design document” under section 213(6) Copyright, Designs and Patents Act 1988. The claimant, Società Esplosivi Industriali SpA (SEI) was an Italian manufacturer of weapon systems. The defendant, Ordnance Technologies Ltd (OTI), designed warheads, and in particular warheads known as “shaped charges”. The two companies entered into various collaborative agreements to bid for defence contracts.  One of the numerous disputes between the parties the subject of the Judgement concerned OTI’s alleged breaches of one of these agreements, the Third Teaming Agreement, under which the parties agreed to collaborate in developing and bidding for contracts for new-generation multiple warhead systems (MWS). SEI was to be the lead contractor in the bid process and on any contract secured for the design, development and production of the MWS, while OTI would be the exclusive sub-contractor to SEI for engineering design.

Clause 4(a) of the Agreement, dealt with the ownership of intellectual property rights arising from the collaboration, as follows:

“4. Design Rights

a) By way of definition:

i) “Background” Intellectual Property Rights (IPR) means all information, including inter alia, Patents, Registered Designs, process expertise (and proprietary rights as identified in the Confidentiality Agreement referred to in Clause 1 above) which SEI or [OTI] use in the achievement of the contract requirements and

ii) “Foreground” IPR is that which results from the bid preparation or from work on MWS sub-contract by the application of background information to the contract requirements”.

Clause 4(b) broadly provided that ownership of such IPR was divided so that SEI owned Foreground IPR in warhead systems and SEI and OTI jointly owned Foreground IPR in forward-shaped charge warhead subsystems, with SEI having “free user rights” in respect of these IPR.

SEI argued that it was an implied term of the Agreement that OTI must provide it with copies of materials embodying Foreground IPR, as otherwise SEI’s rights in and free use of such IPR would be useless, as it could not use a design that it could not see. OTI argued that SEI was entitled only to that which was necessary to enable it to perform its contemplated tasks, namely manufacturing drawings, and final reports on the various practical tests. OTI also argued that since clause 4 was headed “Design Rights” it did not extend to material the subject of copyright.

Lewison J agreed, for the reasons advanced by SEI, that it was an implied term of the Agreement that OTI provide SEI with copies of materials embodying Foreground IPR. Material protected by copyright fell within the definition of “Intellectual Property Rights” in clause 4 of the Agreement, being covered by the broad wording “all information”, since although the definition specifically mentioned registered designs and patents, it did not mention unregistered designs either, which OTI accepted were covered by the definition. This reasoning was reinforced by the fact that the Agreement was intended to operate throughout the world and the parties must have contemplated that IPRs might have to be enforced anywhere in the world. It was wrong, therefore, to suggest that the definition of IPRs was limited to “design right” in the sense in which that phrase was used in English law, as in many jurisdictions industrial designs were wholly or partly protected by the law of copyright.

He also rejected OTI’s argument limiting design documents to production drawings. A design might begin as a sketched out concept, leaving much detail to be worked up later, but each stage of the evolving design, provided that it was recorded in a design document, was entitled to the protection of design right. This accorded with the decision of Court of Appeal in A. Fulton Co. Ltd v Totes Isotoner (UK) Ltd [Court of Appeal - 4 November 2003], where the design in question was a roughly dimensioned sketch of a case for a folding umbrella which Jacob LJ had stated “conveys all you need to know”, by which he meant that it conveyed to a designer what he needed to know in order to translate the sketch into a physical product, even though the sketch could not itself have been used for manufacture. Examples of design variations considered during a mathematical modelling process in the present case had been produced to the court. Each variation resulted in a three page document, the first of which recorded the shape of the shape charge, its dimensions, material composition, and similar information about the warhead casing, with the second and third pages depicting graphically the predicted jet and its penetrative capability. Lewison J accepted SEI’s argument that the first page was a design document, protected by design right, while the second and third pages, though not design documents, were protected by copyright, and in either case fell within the definition of IPR in clause 4.

Parallel Imports

Boehringer Ingelheim Pharma GmbH & Co. KG v. Munro Wholesale Medical Supplies Limited (The Scottish Appeal Court in Edinburgh; 15.01.04)

The rights of pharmaceutical trade mark owners against parallel importers of their products have been further strengthened by this authoritative decision of the Scottish Appeal Court in Edinburgh.  This Judgement of 15 January 2004 in the case of Boehringer Ingelheim Pharma GmbH & Co. KG v. Munro Wholesale Medical Supplies Limited upheld BI’s previously obtained interim interdict (injunction) preventing sales by Munro of re-boxed 30 capsule packs of the BI product trade marked SPIRIVA.

Munro had argued that they should be entitled to re-box 60-capsule packs of SPIRIVA which they imported from Germany into 30-capsule packs because they said it was necessary for them to do so as otherwise they would not have effective access to the market or a substantial part of it – being the market for 30-capsule refill packs.  They relied upon what they alleged to be “well established medical prescriptive practices based, inter alia, on standard sizes recommended by professional group and sickness insurance institutions.” This is one of the factors cited in the ECJ ruling in the Boehringer Ingelheim KG & Others v. Swingward Limited & Others ([2002] 2 CMLR 26) (“Swingward”)) case at paragraph 47 as possibly providing an impediment hindering effective access.

On the Scottish test for interim interdict the Court may have regard to the relative strength of the cases put forward by the respective parties at the interlocutory stage as one of the factors that go to assessing the balance of convenience.  However the Appeal Court here made it clear that this was only of assistance in a case where one or other party could show that they were very likely to succeed at the end of the day.  It was the Appeal Court’s view that Munro had not shown this here.  Munro had relied upon statistical material to the effect that 80% of prescriptions for the drug in Scotland for the first 5 months of 2003 were for single 30-capsule packs.  Although not the subject of evidence at this interim stage it was assumed that similar statistics may apply across the whole of the UK.  Munro argued on any fair reading 80% was a substantial part of the market to which they were being denied access.  However, the Appeal Court held the statistics did not in their view “provide compelling prima facie support for the proposition that there existed or exists (in the sense indicated in the authorities) a well established medical prescriptive practice…which hindered or hinders effective access to the market or a substantial part of it by importers of refill packs containing 60 capsules.”

This is partly because for most of those five months 60-packs were simply not available anyway.  The Appeal Court indicated that in order for there to be a well established prescriptive practice it must “causally have a practical inhibiting effect on access to the market of refill 60-capsule packs”.  The Appeal Court Judges remarked that “No doubt the marketing of familiar 30-packs would initially be an easier task and thus a preferred course for the parallel importers.”  It may be that the Court’s thinking here related back to the clear European Authorities in this area and in particular the Swingward case which held that the trade mark owner may oppose re-packaging if it is based solely on the parallel importer’s attempts to secure a commercial advantage.

This is a robust and straightforward decision by the Scottish Appeal Court which although at interim stage nonetheless has set down a helpful precedent for trade mark owners in the pharmaceutical area.  It should at the least prevent parallel importers relying on the mere fact that the trade mark owner sells in a certain pack size in a certain market (i.e. the state of importation) as entitling them to be able to always re-box to sell that particular pack size.  This decision helpfully cuts through this area of conflicting and ever evolving European and UK case law on this important subject and gets to grips with the heart of the matter.  Arguably this decision will help trade mark owners to establish that certain acts by parallel importers claimed to be necessary by them to give effective access to a market are purely commercially driven and in reality are based on an attempt to ride on the back of the relevant brand and valuable reputation built up by the trade mark owners. 

(The summary of this case is by Gill Grassie at Maclay Murray & Spens).