2018 – Vienna

Palace of Justice

In Case C-129/17 Mitsubishi EU:C:2018:594, the CJEU decided that the proprietor of a registered trade mark has the right to prevent third parties from introducing goods bearing his trade mark into the EEA and placing them under a customs warehousing procedure for the purpose of ‘removing all the signs identical to that mark and affixing other signs on products placed in the customs warehouse … with a view to importing them or trading them in the European Economic Area (EEA) where they have never yet been marketed’.

The Judgment with regard to liability for infringement seems to establish that de-branded goods must always be regarded as infringing goods in proceedings for infringement of registered trade mark in cases where the proprietor of the trade mark has not consented to the removal of his mark from the goods in question. It does not appear to be a condition of liability for infringement that the process of de-branding should take place either within the territory of the EEA or within the territory for which the proprietor’s trade mark is protected by registration.

We find it difficult to see how a trade mark proprietor’s negative right to prevent use of his registered trade mark by re-sellers in relation to the goods they are re-selling can be extended by interpretation to include a right to prevent the re-selling of de-branded goods in circumstances which involve no use of the registered trade mark by the re-sellers in the course of trade in relation to the de-branded goods they are re-selling.

If the factual position regarding the reputation of a trade mark has been considered and determined on assessment of the evidence filed in a case which has already been decided by the EUIPO, the determination can be cited and relied on in similar cases subsequently brought before the EUIPO: Case C-564/16 P EUIPO v. Puma SE EU:C:2018:509 at paras [58] and [69].

The Judgment in Puma further emphasises at paras [66], [76], [80] and [96] to [98] that the EUIPO must in such circumstances: take account of the contents of the previous decision; consider with especial care whether to decide in the same way or not in the case before it; not disregard the previous decision without giving the party who relies on it an opportunity to supplement its evidence as to the factual position concerning the reputation of the trade mark in question; and not depart from the determination made in the previous decision without providing an explicit statement of its reasons for doing so.

This may come to be regarded as the application of a general proposition to the effect that rules of evidence and procedure should be implemented, so far as it is possible to do so compliantly with the principle of legality, in a way which is conducive to the delivery of consistent decisions in similar cases. With that in mind, we note that the reasoning of the Judgment in Puma is potentially far-reaching: there are various kinds of factual determination to which the reasoning can logically be applied and there does not appear to be any specific justification for restricting the application of it to factual determinations made in cases decided by the EUIPO. In our view, further guidance is required from the supervising courts in Luxembourg as to the wider implications of the Judgment of the CJEU in Puma.

We consider that the reasoning of the Judgment in Case C-488/16 P Bundesverband Souvenir – Geschenke – Ehrenpreise eV (NEUSCHWANSTEIN) EU:C:2018:673 is open to re-appraisal in three respects.

First, as stated in paras [44] and [45] of the Judgment, the Court adopted the following position with regard to the goods covered by the contested trade mark: “… the fact that those goods are sold as souvenir items is irrelevant for the purpose of assessing the descriptive character of the name ‘Neuschwanstein’. The souvenir function ascribed to a product is not an objective characteristic inherent to the nature of that product, since that function is determined by the free will of the buyer and is focused solely on that buyer’s intentions. … merely affixing that name on, inter alia, the goods enables the relevant public to regard those everyday consumer goods also as souvenir items. The fact that they constitute souvenirs through the mere affixing of that name is not, in itself, an essential descriptive characteristic of those goods”.

This does not appear to allow for descriptiveness to be assessed by reference to features which goods may optionally, rather than inherently, possess in order to make them attractive to consumers. Thus, the name ‘Neuschwanstein’ may appropriately be assessed for descriptiveness having regard to the elements and aspects of presentation and configuration which goods within the coverage of the contested trade mark would be likely to possess for the purpose of making them attractive to consumers wanting to purchase memorabilia of the famous ‘fairy tale castle’ of that name. We think that the Court ought to have recognised the need for descriptiveness to be assessed on that basis in accordance with the principles set out in Case C-51/10 P Agencja Wydawnicza Technopol EU:C:2011:139.

Second, as stated in para [68] of the Judgment, the Court adopted the following position with regard to distinctiveness of the name ‘Neuschwanstein’: “It is precisely because of the contested trade mark’s lack of descriptive character that it is open to an entity, such as the Freistaat Bayern, to apply for the name of the museum location of which it is the owner to be registered as an EU trade mark, since Regulation No. 207/2009 does not, in principle, preclude it”.

This does not appear to allow for the possibility that registration of the name of a famous building such as the Neuschwanstein castle may be refused for reasons of “public policy” related to the status of it as a place of major historical or cultural significance c.f. the reasoning of the Judgment of the EFTA Court in Case E-5/16 Municipality of Oslo (06 April 2017) as applied by the Norwegian Board of Appeal for Industrial Property Rights in its Decision in Cases 16/148 to 151, 153 and 154 Municipality of Oslo (VIGELAND) (13 November 2017).

Third, as stated in para [83] of the Judgment, the Court adopted the following position with regard to the concept of bad faith: “… even in a situation where that applicant files an application for registration of a sign with the sole aim of competing unfairly with a competitor who is using a similar sign, it cannot be excluded that the applicant’s registration of the sign may be in pursuit of a legitimate objective”.

This seems to be allowing for the pursuit of self-interest by means of unfair competition to be regarded as legitimate for the purposes of the EU law concept of bad faith.

The Guidelines published by the EUIPO are well-written and helpful for the purpose of assisting users of the European Union trade mark system to understand the approach adopted by the Office in relation to issues of law and practice affecting the cases which come before it. However, the Guidelines do not have the force of law and we wish to emphasise that they should not be regarded as a substitute for research and analysis of the applicable case law in trade mark proceedings before courts and tribunals in the Member States.

It is often difficult to decide how strict or generous to be when identifying the ‘sub-categories’ of goods or services for which genuine use of a trade mark has been demonstrated in response to a request for proof of use or a claim for revocation on the ground of non-use.

We note that the General Court recently stated in Case T-94/17 ACTC GmbH v. EUIPO (TAIGA) EU:T:2018:539 at para [32]: “… the criterion of the purpose or intended purpose … is of fundamental importance in the definition of a sub-category of goods or services. In contrast, the nature of the goods at issue and their characteristics are not, as such, relevant to the definition of sub-categories of goods or services …”. The end result of the assessment then depends upon how broadly “the purpose or intended purpose” of the relevant goods or services is defined.

We think this approach is liable to be too generous because it concentrates on the genus to the exclusion of the species to which the relevant goods or services belong. In our view, the purpose or intended purpose should not be divorced from the nature and characteristics of the goods or services in question when seeking to place them in appropriately identified sub-categories in accordance with the applicable legislative requirements. In so far as the “the purpose or intended purpose” of the goods or services affects or is affected by their “nature and characteristics”, that should be taken into account.

Art. 7(2) EUTMR 2017 enables an objection to the registration of an EU trade mark to be based on the existence of absolute grounds for refusal anywhere within the EU. In combination with Art. 7(1)(b), it provides for refusal of registration at the EU level in cases where the relevant trade mark is devoid of any distinctive character “in only part of the Union”.

We think that it should, in principle, be open to question whether there are any minimum requirements as to size and economic significance (relative to the internal market as a whole) which must be satisfied before the absence of distinctive character in a geographical area forming “part of the Union” can be regarded as sufficient to justify refusal of registration.

On one view, it is a necessary consequence of the principle of the unitary character of the EU trade mark that there should be no further requirement for the geographical area forming “part of the Union” to be defined or delimited by reference to any national boundaries.

The view to the opposite effect is that there must necessarily be a further requirement for the geographical area forming “part of the Union” to be defined or delimited by reference to national boundaries because the EU trade mark system does not allow trade marks to be protected by registration at the EU level when they would not be eligible for registration in accordance with the parallel requirements for protection by registration at the Member State level.

In response to the opposing arguments presented to it on these lines, the CJEU preferred to address the interpretation of Art. 7(3) CTMR 2009 (now Art. 7(2) EUTMR 2017) simply in geographical terms: Joined Cases C-84/17 P, C-85/17 P and C-95/17 P Societe des produits Nestle S.A. EU:C:2018:596. It was determined that registration at the EU level should be refused if the trade mark in question does not possess a distinctive character throughout the European Union. As matters now stand, there should be no part of the European Union (“even a part consisting of only one Member State”: para [87]) in which the trade mark is devoid of any distinctive character.

We note that there are concerns as to whether this effectively establishes a requirement for EU-wide distinctiveness which trade marks that are not intrinsically distinctive in all Member States can rarely be expected to satisfy.

Art. 7(1)(e) CTMR 2009 was amended with effect from 23 March 2016 by Regulation (EU) 2015/2424 so as to enable objections to registration to be raised under the provisions of that Article in respect of the shape “or another characteristic” of goods. The amending legislation was (in accordance with the usual practice of the EU legislator) enacted without any transitional provisions. The pending Order for Reference in Case C-21/18 Textilis therefore seeks guidance from the CJEU as to the operation and effect of the amended version of Art. 7(1)(e) in relation to pre-existing subject matter and pre-enactment events. We think the EU legislator ought to have put in place transitional provisions for the purpose of preventing uncertainty in relation to such matters. We also think there is a strong case for requiring EU legislation to include such provisions for that purpose in all instances where uncertainty about such matters is otherwise likely to arise.

The CJEU re-affirmed in Case C-291/16 Schweppes S.A. EU:C:2017:990 at paras [51] to [54] that in order to guard against the risk of artificial partitioning of the internal market, the claimant in an action for trade mark infringement concerning the parallel importation of goods can be required to prove that his rights have not been exhausted in relation to the goods in question.

It is apparent from the Schweppes case that this will be the position where the defendant puts forward a clear and consistent body of evidence from which it may be inferred that the goods in question have been placed on the market in the EEA directly or indirectly under the control of the trade mark proprietor, acting alone or in collaboration with others.

We wish to emphasise that for the purpose of implementing these principles and making a fair and effective determination of the rights of the parties in such situations, it is necessary to have court procedures in place which each side can use to obtain relevant evidence and information from the other (subject to protection of confidentiality) with regard to the actualities, not simply the contractual framework, of their respective business operations.

Art. 13 TM Directive 2015 and Art. 21 EUTMR 2017 (previously Art. 18 CTMR 2009) cover the situation where a trade mark has been registered in the name of an agent or representative of a person who is the proprietor of it. The proprietor can demand that the trade mark is assigned to him if it was registered without his authorisation and there is no justification for the actions of the agent or representative.

The CJEU decided in Case C-381/16 Benjumea Bravo de Laguna EU:C2017:889 that in situations outside the scope of those provisions, a person harmed by the filing of a trade mark application “in fraud of his rights or in breach of a legal or contractual obligation” is likewise entitled to bring a claim against the applicant under provisions of national law in order to recover ownership of the trade mark as an object of property.

Such cases give rise to a problem which has not yet been addressed: if the relevant trade mark was registered pursuant to an application for registration which still remains liable to be declared invalid for having been filed in bad faith, the true owner to whom the trade mark is transferred will receive an object of property which may at any time be extinguished ex tunc at the request of anyone who chooses to attack the validity of the registration on that ground.

We think that EU law ought to allow this problem to be resolved by treating the filing of the original application for registration as a particular form of wrongdoing (involving breach of an inter partes obligation) which the true owner of the trade mark can counteract by choosing to adopt and ratify the original filing for the purpose of enabling his trade mark to be validly and effectively restored to him.