Whisky is a point of pride for Scotland (enough where the addition of an extra letter gets some people's blood boiling), and as such there is a huge incentive to protect both the product and its name. This blog recently discussed a case in the European courts where the very name was the focus of the matter, and after an opinion from Advocate General Øe, the case has finally ended up on the lap of the CJEU, which gave its judgment only last month.
As a short primer, the case of Scotch Whisky Association v Michael Klotz concerned the sale of a whisky called "Glen Buchenbach" by Mr Klotz, which was produced in Germany. The name is derived from the Buchenbach, a valley in Swabia, and the addition of the word 'Glen' at the front of it. The Scotch Whisky Association, whose objectives include protecting the trade in Scottish whisky both in Scotland and abroad and the use of the PDO for whisky. The SWA objected to the use of the word 'Glen' in conjunction with a whisky not originating from Scotland.
The first question, in essence, asked whether "…Article 16(a) of Regulation No 110/2008 must be interpreted as meaning that, for the purpose of establishing that there is ‘indirect commercial use’ of a registered geographical indication, the disputed element must be used in a form that is either identical to that indication or phonetically and/or visually similar to it, or whether it is sufficient that that element evokes in the relevant public some kind of association with the indication concerned or the geographical area relating to it".
The court determined that, for the use to be covered by Article 16(a), the use needs to be in an identical form or at least in a form that is phonetically and/or visually highly similar to the geographical indicator. The use, however, still can be both direct and indirect to potentially fall under the provision. The Advocate General distinguished the uses as "…‘direct’ use, which implies that the protected geographical indication is affixed directly to the product concerned or its packaging, ‘indirect’ use requires the indication to feature in supplementary marketing or information sources, such as an advertisement for that product or documents relating to it".
With this in mind, the court still rejected the argument that all that is necessary is a simple association in the mind of the relevant consumer for there to be infringement. This would deprive Article 16(b) of any practical effect (the provision precludes any "any misuse, imitation or evocation" of a GI), and therefore should not be applicable to Article 16(a). A simple 'impression' would also fail in being indirect use, which would not be identical or phonetically/visually similar to the GI being protected. A simple 'association in the minds of the public' would not be an infringement.
Glenn's budding fake beverage business took a beating that night
The court then moved onto the second question, which asked "…whether Article 16(b)… must be interpreted as meaning that, for the purpose of establishing that there is an ‘evocation’ of a registered geographical indication, the disputed element must be phonetically and/or visually similar to that indication, or whether it is sufficient that that element evokes in the relevant public some kind of association with the indication concerned or the geographical area relating to it". The question focusses on the context of the use of the mark, and not just the mark itself, i.e. what the impression is that the mark gives in its full context to the relevant consumer, or the use of wording that associates the goods with a GI.
Previous case law, particularly the case of Viiniverla, has determined that 'evocation' covers situations where "…the term used to designate a product incorporates part of a protected [GI], so that when the consumer is confronted with the name of the product in question, the image triggered in his mind is that of the product whose indication is protected". This is assessed through a decision on the presumed reaction of the consumers in the light of the term used, and that there is a link between the term and the GI. The appearance of the goods and the similarity of the name and the GI can be taken into account.
In short, the court set out that "…for determining whether there is an ‘evocation’ within the meaning of Article 16(b)… the decisive criterion is whether, when the consumer is confronted with a disputed designation, the image triggered directly in his mind is that of the product whose geographical indication is protected… taking into account, as the case may be, the partial incorporation of a protected geographical indication in the disputed designation, any phonetic and/or visual similarity, or any conceptual proximity, between the designation and the indication". They did, however, reject the argument that evocation as to geographical region should be included, as this does not create a sufficient link with the GI and the goods being sold.
The court did also reject the argument of including context within the assessment, setting out that "…for the purpose of establishing that there is an ‘evocation’ of a registered geographical indication, account is not to be taken either of the context surrounding the disputed element, or, in particular, of the fact that that element is accompanied by an indication of the true origin of the product concerned".
Finally the court moved onto the third question, which asked "…whether Article 16(c)… must be interpreted as meaning that, for the purpose of establishing that there is a ‘false or misleading indication’, as prohibited by that provision, account must be taken of the context in which the disputed element is used, in particular where that element is accompanied by an indication of the true origin of the product concerned".
After brief consideration, the court set out that "…Article 16(c)… must be interpreted as meaning that, for the purpose of establishing that there is a ‘false or misleading indication’, as prohibited by that provision, account is not be taken of the context in which the disputed element is used". This follows their logic in the above question, where context was also disregarded. The addition of further information, and therefore avoiding infringement through its inclusion, could compromise the protection offered by GIs.
Overall the decision is important, particularly in establishing the remit through which GI infringement is assessed. Thinking of the issues further, this writer agrees with the court, as the inclusion of context could indeed compromise the protection offered, and allow for the sale of 'infringing' goods with enough contextual information to avoid infringement (whether consumers notice it at all or not).
Repackaging branded goods can be a legitimate way to resell branded goods in a different jurisdiction, avoiding the potential confusion of where the goods actually originate from (and whether they are counterfeit). The allowance is still a tough line to toe, particularly when minimal efforts are taken to repackage the relevant goods. In the light of this, what amounts to repackaging, and what would be a potential minimum standard for repackaging so as to avoid trademark infringement in the EU? Luckily, the CJEU was poised to answer this question in a case that was decided last month.
The case of Junek Europ-Vertrieb GmbH v Lohmann & Rauscher International GmbH & Co KG concerned the sale of medical dressings made by Lohmann, sold under the brand "Debrisoft" (TM No. 8852279). Junek parallel imported and sold sanitary preparations in Austria, including Debrisoft products. In a package of Debrisoft, purchased by Lohmann in Austria, Junek had affixed a label onto the box that contained its address and telephone number, a barcode and a central pharmaceutical number. The label was applied to a non-printed part of the packaging. Junek had not notified Lohmann of the reimportation of the products, nor had they supplied Junek with the modified packaging. Lohmann then took Junek to court for trademark infringement.
The referring court set out a single question for the CJEU, which, in essence, asked "…whether Article 13(2) of [the CTM Regulation] must be interpreted as meaning that the proprietor of a mark may oppose the further commercialisation, by a parallel importer, of a medical device in its original internal and external packaging when an additional label, such as that at issue in the main proceedings, has been added by the importer". Additionally the court asks whether the principles in the cases Bristol-Meyers Squibb and Boehringer Ingelheim apply without restrictions to parallel imports of medical devices.
When it comes to repackaging of goods, the Court emphasised that any repackaging done by a third party without the proprietor's consent could create a risk in terms of the guarantee of origin of the goods. Even so, original proprietors cannot prevent the importation of repackaged goods simply to derogate from the free movement of goods, although the repackaging should not adversely affect the original condition of the goods or the reputation of the mark.
When repackaging, be honest
The CJEU has previously in the above two cases set out the principles under which exhaustion of rights operates in relation to parallel imports. A proprietor can oppose the further commercialisation of pharmaceutical products imported from another Member State in its original internal and external packaging with an additional external label applied by the importer, unless:
(i) it is established that the use of the trade mark rights by the proprietor thereof to oppose the marketing of the relabelled products under that trade mark would contribute to the artificial partitioning of the markets between Member States; (ii) it is shown that the repackaging cannot affect the original condition of the product inside the packaging; (iii) the new packaging states clearly who repackaged the product and the name of the manufacturer; (iv) the presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark and of its owner; thus, the packaging must not be defective, of poor quality, or untidy; and (v) the importer gives notice to the trade mark proprietor before the repackaged product is put on sale, and, on demand, supplies him with a specimen of the repackaged product.
In the light of the above, 'repackaging' of goods also includes relabeling the products bearing the mark.
The Court distinguished the current case from the facts of Boehringer Ingelheim, which dealt with repackaging, albeit both affixing an external label and opening the packaging and inserting an information leaflet. In contrast, Junek had only affixed a small label on the outside of the packaging, which didn't obscure the mark or any other details. The Court concluded that their actions therefore would not amount to repackaging as set out in Boehringer Ingelheim. Due to this the Court precluded Junek from preventing the importation of the goods to the Member State.
The Court summarised its answer to the question as "… Article 13(2)… must be interpreted as meaning that the proprietor of a mark cannot oppose the further commercialisation, by a parallel importer, of a medical device in its original internal and external packaging where an additional label… has been added by the importer, which, by its content, function, size, presentation and placement, does not give rise to a risk to the guarantee of origin of the medical device bearing the mark".
Clearly the Court drew a line in the impact a small label could have to the guarantee of origin of goods, as it does not affect the consumer's knowledge of the origin or the contents of the package. One can indeed appreciate this common sense approach, as the prohibition of the addition of a parallel importer's details could also result in the impossibility of resolving any issues with the product when imported separately from the original proprietor.
The build-up with the Louboutin red sole case has been quite extensive and unique in that Advocate General Szpunar had to give not one, but two opinions on the case ahead of the CJEU's decision (discussed more here and here). There was some degree of uproar with the latest opinion, and hence many trademark practitioners have been salivating at the prospect of the CJEU decision, which could have quite a bit of an impact on the current trademarks regime in Europe. With that in mind, the decision has finally been released by the CJEU earlier this week.
Even though the facts of Christian Louboutin v Van Haren Schoenen BV have been discussed extensively on this blog, they are worth revisiting. The matter concerned a trademark registration (TM 0874489) in Benelux for a red colored sole on a women's high-heeled shoe by Christian Louboutin. The mark consisted of the color on the sole of the shoe, but did not take into account the contours of the shoe, which only served an illustrative purpose on the positioning of the mark. Van Haren sold a similar red soled shoe in the Netherlands, for which they were sued by Louboutin for trademark infringement. The mark was contested by Van Haren, and ultimately ended up with the CJEU.
The referring court asked, in essence, "…whether Article 3(1)(e)(iii) of Directive 2008/95 must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe… consists exclusively of a ‘shape’, within the meaning of that provision".
Stephanie had to forget her 'totally unique' shoe design after the decision
The Court initially affirmed that EU legislation generally accepts that the 'shape' of a trademark within the meaning of Article 3(e), means a set of lines or contours that outline the product concerned, potentially excluding any colors that don't have an outline defining said 'shape'. Any marks that merely consist of that shape would be deemed invalid.
Nonetheless, the Court did determine that "…while it is true that the shape of the product or of a part of the product plays a role in creating an outline for the colour, it cannot, however, be held that a sign consists of that shape in the case where the registration of the mark did not seek to protect that shape but sought solely to protect the application of a colour to a specific part of that product". This would exclude any signs that merely apply a color to an apparent shape from the remit of Article 3(e), such as the shoe in the Louboutin trademark.
If the shape of the shoe is excluded from the mark, the Court considered that the mark therefore could not exclusively consist of a shape, as the main element of that sign is a specific colour designated by an internationally recognised identification code (in this instance Pantone 18‑1663TP).
In short, the Court concluded that "…Article 3(1)(e)(iii)… must be interpreted as meaning that a sign consisting of a colour applied to the sole of a high-heeled shoe… does not consist exclusively of a ‘shape’, within the meaning of that provision".
The case is quite important, as the registration of a trademark for a color, excluding any shape that is used to illustrate the placement of the color, would be allowed under the ruling. The decision completely ignored the AG's considerations of reputation and the addition of value through the introduction of the mark, which were the main points that many found contentious. Whether this omission will be challenged in future case law remains to be seen.
Video games have effectively become mainstream entertainment during this writer's lifetime, and with that increased popularity their value to companies has also gone up. If one video game becomes popular, other developers often jump at the chance of taking advantage of the popularity with their own spin. An example of a recent explosion in video game types are battle royale games, where several players fight for survival with limited resources, with the last person standing winning that particular session. The two most popular ones are PUBG (PlayerUnknown's Battlegrounds) and Fortnite, developed by PUBG Corporation and Epic Games respectively. As the two battle royale titans battle it out for popularity, there is a risk of lawsuits going either way to protect their interests.
According to the Korean Times, PUBG have filed a lawsuit against Epic Games for copyright infringement in Korea, alleging that "…Fortnite was copied from… PlayerUnknown's Battlegrounds", including replicating the 'experience' for which PUBG is known, including the game's 'core elements' and user interface. PUBG have raised concerns over replication as early as September 2017, when Fortnite's battle royal mode was announced, including over Fortnite's "…User Interface, gameplay and structural replication in the battle royale mode". PUBG are, however, licensees of Epic Games' Unreal Engine 4, which adds yet another layer of complications into the mix, and a potential pitfall for PUBG in their claim.
While it is unclear, at least to this writer, how the Korean courts will deal with a claim concerning the claims on video game formats (any readers with further knowledge should let me know!), how do other jurisdictions deal with these questions?
PUBG's lawyers had a dream about the wording of the court ruling
There has been very little video game related litigation in the UK. The most recent one, Nova Productions Ltd v Mazooma Games Ltd, dates back to 2006. In the case the UK Court of Appeal saw that "…Not all of the skill which goes into a copyright work is protected... An idea consisting of a combination of ideas is still just an idea. That is as true for ideas in a computer program as for any other copyright work". The court's emphasis was on the lack of protection for the ideas surrounding a game, which could, at least in this writer's view, preclude the protection of video game formats like battle royale.
In the US the situation is slightly different. In Tetris Holding LLC v Xio Interactive the New York District Court found that a Tetris clone had infringed the copyright in the work, although protection was largely extended only due to the similarities in aesthetics between the games. The underlying rules of the game (i.e. format, one could argue) can be protected only if the expression of those rules is somehow limited, or isn't part of scènes à faire. Similarly, in DaVinci Editrice SRL v Ziko Games LLC, the District Court of Texas decided that "…the rules, procedures, and limits that make up the game play are not protectable expression". To add more fuel to this fire, the US Copyright Office has set out that "…Copyright does not protect the idea for a game… or the method or methods for playing it. Nor does copyright protect any idea, system, method, device, or trademark material involved in developing, merchandising, or playing a game". One can appreciate that the American system protects the aesthetic expression of a video game (and arguably rightfully so), rather than the rules under which it operates.
Clearly the protection of a video game format, i.e. the rules that underpin the game itself, are very difficult to protect, particularly under copyright. While this writer does not know what the Korean regime is for copyright in this area, it seems very doubtful that it would be very different from the above. As both PUBG and Fortnite differ dramatically in their aesthetics (although a more detailed analysis of all elements of each game could yield some infringing elements), it would seem that PUBG have more to lose than just a copyright lawsuit should things go badly.
Artificial intelligence is absolutely a hot button issue these days, particularly with a focus on what's coming in the near and more distant future and AI's potential impact on people's lives (both in the good and the bad). This writer is very interested in AI, having recently published an article discussed the same in relation to copyright, and in that vein was quite thrilled with the release of the House of Lords' report on AI last month. The report is very detailed and discusses many facets of the technology and its potential impact, but what potential recommendations does the report give from a legal perspective?
The Report (titled AI in the UK: ready, willing and able?) considers the development, implementation and impact of AI in the UK in the future, and recommends that the government take certain actions sooner rather than later. This article will endeavour to focus on some of the more interesting, potentially IP specific issues, and general law considerations.
A big point in the Report is the mitigation of risks associated with AI. Largely this relates to any assumed liability for an AI's actions, negligence or malfunction, which, as the law stands, is not covered. The Report does recommend that "…the Law Commission consider the adequacy of existing legislation to address the legal liability issues of AI and, where appropriate, recommend to Government appropriate remedies to ensure that the law is clear in this area. At the very least, this work should establish clear principles for accountability and intelligibility". Without accountability, one could imagine AI skirting liability, and causing potential issues for those wishing to pursue any damages resulting from an AI's decisions.
The consideration of liability ties into the matter of whether AI should be treated the same as humans, or have separate legal or non-legal entity status. For example, should IP rights be awarded to the AI, or the AI's creators (more on which here)? Both paths have their issues, but the Report fails to address this aspect in detail.
Another point of contention in the Report is the amassing of data by large corporations, which would therefore, in a way, control the development of AI and the marketplace for the same. The Report encourages that "…publicly-held data be made available to AI researchers and developers" to facilitate AI development for smaller players. Even so, it does highlight a need for "…legal and technical mechanisms for strengthening personal control over data, and preserving privacy" in the light of AI; however, this has been, at least arguably, largely achieved through the introduction of the GDPR this month.
A human future without TPS reports
In an attempt to kerb any misuses of data, or its monopolisation, the Report recommends that "…the Government, and the Competition and Markets Authority, to review proactively the use and potential monopolisation of data by the big technology companies operating in the UK". Clearly this might create a data competition framework, where companies with large swathes of data could be prevented from merging due to competition issues, or simply to prevent the centralization of requisite data for AI creation and/or operation.
The Report does discuss the IP issues with the development of AI in university settings, and the commercialization of research. As was discussed in the Hall-Pesenti Report last year, licencing of technologies could be problematic, and both the Report and Hall-Pesenti have sought to mitigate this. In this vein, the Report recommends that "…universities should use clear, accessible and where possible common policies and practices for licensing IP and forming spin-out companies", and that a policy should be drafted for Universities to enforce the same. Even so, Universities should be able to protect the know-how relating to AI, but within a reasonable framework.
Although not discussed in the House of Lords' report, the Hall-Pesenti Report also highlights a need for the reform of copyright in relation to data published in research, which would infringe copyright. This is problematic since "[t]his restricts the use of AI in areas of high potential public value, and lessens the value that can be gained from published research, much of which is funded by the public". In terms of reform the report suggests that "…the UK should move towards establishing by default that for published research the right to read is also the right to mine data, where that does not result in products that substitute for the original works". In terms of the development of AI this makes perfect sense, but when that data relates to human individuals, particularly in the light of the GDPR that just recently came into force, we should be cautious for giving AI free reign over all data. A balance needs to be struck with the interests of individuals, but the robust development of AI, provided the developments are for the public good.
As one can imagine, AI is a very difficult and potentially thorny subject, and there will be without a doubt many pitfalls we will end up in and will need to play catch-up with. Nonetheless, the potential of the technology could outweigh these issues, but maybe this writer is too optimistic in terms of AI's future.
Many good things come in pairs, for example, shoes, ear plugs and twins, but sometimes even the best pairing won't be enough. This is the case even with trademarks, where the use of two terms that name or describe goods will be difficult to register. A recent case in the Canadian Trade-Marks Opposition Board considered this issue, and further highlighted that, even though a very novel argument, the marks themselves might not be as novel.
The case of Molson Canada 2005 v Drummond Brewing Company Ltd concerned a registration for the trademark "BEER BEER" (TM 1619343) for beer by the Drummond Brewing Company. Due to the quite clear descriptive nature of the mark, Molson Canada opposed the registration, even though it has been used for the goods in Canada since 2009.
The mark was opposed under sections2, 16, 12 and 30 of the Canadian Trade-Marks Act.
The Trade-Marks Opposition Board first considered the grounds under section 30(i), which requires a statement by the applicant that they are satisfied that they are entitled to use the mark in Canada in association with the relevant goods and/or services. The courts will only reject an application under the section if it has been applied for in bad faith. What plays a part in this is an earlier rejection for an application in 2009 for "BEER BEER" by Drummond Brewing due to the descriptive nature of the mark, which potentially indicates an element of bad faith for the new registration.
Donald's new beer brand: BEER BEER BEER BEER
Board Member Kathryn Barnett rejected this argument, as the provision only looks for an entitlement to use the mark, rather than any claims on rights to it. The Applicant's witness statements also indicated a clear belief in the entitlement to use the mark in Canada.
The Board then moved onto matters relating to section 12 of the Act, which prohibits the registration of mark if it, among other things, contains the name of the goods or services or that it clearly is descriptive of the quality of the goods or services relating to the mark.
The first ground under section 12(1)(c) for containing the name of the goods, i.e. beer, based on "…the immediate and first impression of the everyday user of the goods and services". This can include composite marks, including both a word and design element, if the portion of the word in the mark is dominant. The Board rejected this argument, as the mark is "BEER BEER", and not simply just 'BEER'. The name of the goods is simply the single use of the word, not double, and therefore escapes the remit of section 12(1)(c).
The Board then moved onto section 12(1)(b), which prevents the registration of clearly descriptive or deceptively misdescriptive marks from the point of view of the average consumer. The mark has to be assessed in its entirety as a matter of immediate impression to the aforementioned consumer. This is to prevent the registration of a common trade term for goods or services, placing legitimate traders at a disadvantage.
What lies at the heart of this decision is Pizza Pizza v The Registrar of Trade-marks, where the mark 'PIZZA PIZZA' was deemed to not be descriptive of the goods, namely pizza. Molson Canada contested that the phrase 'BEER BEER' would indeed be descriptive, which was, as discussed above, deemed so when applied for previously. The phrase would, in their view, describe a "…“real” or “prototypical” beer, or as a generic marking, or both".
The Board ultimately sided with the opponent, Molson Canada, and decided that the mark was indeed descriptive of the character or quality of the goods, and rejected the application. Due to this the Board deemed it unnecessary to consider the rest of the grounds of opposition.
The decision was an interesting one, and something this writer has never thought about; distinctiveness through the use of 'descriptive' terms in a novel way. While the decision makes perfect sense, it still shows that when you're creative with your marks, even the simplest thing could potentially (although not very often) be distinctive.
The rights of animals, whether it is simply to extend human rights to them or even legal rights, are a very contentious and often emotionally charged topic of conversation. A good example of this is the recent monkey selfie legal saga, which grappled with the vesting of intellectual property rights in a monkey (discussed more on this blog here and here). The parties settled the matter out of court late last year, but the Court of Appeals saw to still rule on the matter, irrespective of this settlement (which is within their powers to do). This is very important, since it will set the legal position of animals' rights in IP firmly on one camp; yes or no. This writer has been waiting for the ruling with baited breath, which was published only last week.
By way of a brief primer, the case of Naruto v David Slater concerned a series of photographs taken by a crested macaque in 2011 (named Naruto by its Next Friends in the litigation, PETA). The monkey took the photograph using Mr Slater's camera, which he had configured and left for the monkeys in the area to play with. One such picture became an Internet sensation, leading to Mr Slater asserting his rights in the picture as its author. PETA took the matter to court, claiming the monkey had rights in the picture, and that Mr Slater had infringed its copyrights by publishing it. Even though the parties settled the matter, as discussed above, the Court saw it fit to decide on it anyway due to its importance as a developing area of the law.
Naruto's representatives were aghast at the ruling
Judge Bea, handing down the majority's judgment, started off with determining whether PETA could represent Naruto as its next friends in the case. This is established through showing that "…(1) that the petitioner is unable to litigate his own cause due to mental incapacity, lack of access to court, or other similar disability; and (2) the next friend has some significant relationship with, and is truly dedicated to the best interests of, the petitioner". The Court agreed that Naruto would indeed fulfil the first requirement, but needed to assess whether PETA had a significant relationship with the animal. PETA agreed that it had does not claim to have a relationship with Naruto that is any more significant than its relationship with any other animal, and thus fails the second requirement.
The Court emphasised that animals do not have authorisation by the courts to be represented by a next friend. In other words "…if animals are to be accorded rights to sue, the provisions involved therefore should state such rights expressly".
Judge Bea then moved onto the matter of whether Naruto itself has standing under Article III of the Constitution. Under a previous Court of Appeals decision in Cetacean Community v Bush, the court rejected standing for "…all of the world's whales, porpoises, and dolphins" under environmental protection laws as animals were not expressly included within the provisions. In short, the court concluded that the test for animal standing as "…if an Act of Congress plainly states that animals have statutory standing, then animals have statutory standing. If the statute does not so plainly state, then animals do not have statutory standing".
Under the Copyright Act there is no express mention of any animal rights for intellectual property. The provisions do, however, imply a requirement of humanity or the possibility of marital relations. The Court did conclude that, based on the statute and the Cetacean decision, "…that Naruto - and, more broadly, animals other than humans - lack statutory standing to sue under the Copyright Act".
The case is a very important one, not only for the unusual nature of judgments being issued after settlement, but it puts the rights of animals under copyright to bed once and for all. Clearly, animals cannot have rights, and this writer considers this to be the most logical outcome, even without an express mention to that effect in the legislation. One can therefore finally see a conclusion to all of this monkey business.
One would've never imagine a chocolate bar could be litigated over for many years, but the Kit Kat saga has proven that even the most seemingly mundane things can be worth a tremendous monetary investment. After the EU General Court decision last year (discussed more here) you could have imagined the matter has been largely concluded. This was clearly not the case, as Mondelez appealed the decision, which has now reached the desk of Advocate General Wathelet. They issued their opinion only last week, which will give direction to the CJEU who will decide the matter once and for all later this year.
Although discussed extensively on this blog, the case still merits a short introduction. The matter Société des produits Nestlé v Mondelez UK Holdings & Services concerns the design of the Kit Kat chocolate bar, which Mondelez has registered as a trademark (EUTM 2632529). Cadbury, now Mondelez, filed for an application of invalidity regarding the mark sometime after, with the matter being decided by the General Court last year. Nestle appealed the decision (which went against them), ending up heading to the CJEU via the Advocate General.
The case on appeal hinges on the extent of the territory that you need to show distinctive character that is acquired through use of the trade mark under Article 7(3) of the CTM Regulations. In the General Court Nestle failed to show use throughout the EU, not just in a substantial part of it, and therefore the mark was invalidated.
A Kit Kat Kounterfeit
Per the decision in August Storck KG v OHIM, the CJEU set the bar for the acquisition of distinctive character through use as requiring "…evidence… that [the mark] has acquired, through the use which has been made of it, distinctive character in the part of the [EU] in which it did not, ab initio, have such character". Adding to this, the CJEU noted that an argument for acquired distinctiveness could be rejected if there is no evidence of use, as detailed above, in a single Member State. Subsequent cases have shown that partial acquisition of distinctive character within the EU is not enough, as there needs to be 'quantitatively sufficient evidence' of acquired distinctiveness.
Looking at the above, the AG did, however, not shut the door entirely on partial acquisition of distinctiveness. They added that a mark could have acquired distinctiveness in the entire EU if evidence is provided for "…a quantitatively and geographically representative sample" of the EU. This means taking into account the various links between the national markets of Member States, and whether those links negate a lack of evidence for acquired distinctiveness in the bigger picture within Europe. Potentially a more regional approach has to be taken and therefore acquired distinctiveness could be extrapolated for any missing countries, i.e. produce evidence for the Nordics and other such 'collectives' of countries if evidence for all Member States is missing for others within those 'collectives'.
Having considered the missing evidence discussed in the General Court's decision, the AG concluded that Nestle's appeal should be dismissed.
While we are still awaiting the CJEU's decision on this matter, things don't look great for Nestle, or 3D marks in general. It will be difficult for many proprietors of such marks to show acquired distinctiveness within the EU, or most of it. It remains to be seen whether the CJEU will go in a different direction, but it seems very unlikely considering the General Court's decision and now the AG's opinion.
Having looked at the legal intricacies of using protected Geographical Indications in a recent case regarding Champagne, this writer has grown to appreciate the complexities of PDOs and the law surrounding them. What amounts to an infringement of GIs rights is very tricky, and any clarification from higher courts is always appreciated. Scotch whisky is one GI that is vehemently defended, and many third-parties would want to benefit from the image that the GI imparts, but to avoid the 'pesky' issues of actually conforming to the classification. In terms of a name for a whisky produced outside of Scotland, what amounts to an infringement of a GI? Ahead of a CJEU decision, Advocate General Øe gave their opinion of this question.
The case of The Scotch Whisky Association v Michael Klotz dealt with the production and sale of a whisky called "Glen Buchenbach" in Germany by Mr Klotz. The SWA objected to the sale of the whisky using the term 'Glen', which, in their view, referred to a geographical location in Scotland and implies the product is a Scotch whisky. The use could potentially therefore infringe on the Geographical Indications Regulation, which protects Scotch whisky as a GI.
The German courts referred three questions to the CJEU on the matter, which were considered by the Advocate General.
The first question, in essence, asked "…what is meant by ‘indirect commercial use [of a] registered geographical indication’ for a spirit drink, within the meaning of Article 16(a) of Regulation No 110/2008".
The first part of the first question then focusses on whether "… in order to establish the existence of such use, prohibited by Article 16(a), it is necessary that the disputed indication be used in identical or phonetically and/or visually similar form to the protected geographical indication, or whether it is sufficient that the disputed indication evokes in the relevant public some kind of association with the indication or the geographical area relating thereto". In brief, this is whether the indication has to be phonetically or visually identical to the GI, or if the public associate the term with the GI without similarity (i.e. 'Glen' would be associated with Scotland, and therefore Scotch whisky).
The Advocate General determined that, under Article 16(a), the expression of 'direct or indirect commercial use' requires that "…the use is made of the disputed indication in the form in which it was registered or at least in a form with such close links to it that the sign at issue is manifestly inseparable from it". This means that the use would have to be in an identical or phonetically and/or visually similar form, and not just associated with the GI.
The Court has firmly established that 'direct' use would amount to the use of the GI, or a corresponding term or translation, in conjunction with goods that don't meet the specification. However, the Advocate General had to consider what amounts to 'indirect' use of a GI. In his view, this requires use where "…the indication… feature[s] in supplementary marketing or information sources, such as an advertisement for that product or documents relating to it". Additionally, broadening the provision would make following provisions, such as Article 16(b), redundant, and has to therefore be kept narrower, and won't cover cases of mere association by the public. This interpretation supports the interpretation of the objectives of the Regulation and the Article, which clearly seek to protect GIs from misuse, and to ensure quality of the goods.
The AG probably needed a drink after the case
In terms of the second part of the first question (additional information in relation to an 'association' with a GI in the minds of the public), the Advocate General swiftly concluded that the Court would not have to rule on the point, in the light of the above, but he did make brief observations on the same. In his view there is no ambiguity under the provision on what amounts to infringement, which differs from Article 16(b) that is not at issue in the matter. The Advocate General added that, in considering any "misuse, imitation or evocation" under Article 16(b), a court could take into account the context where the disputed indicator is used, and the same would apply if the Court would consider 'association' as a possibility under Article 16(a).
The second question, split into two parts as well, asks clarification on "…the concept of ‘evocation’ of a registered geographical indication relating to a spirit drink, within the meaning of Article 16(b)".
As with the first question, the first part of the second question asks whether, in determining the existence of 'evocation' "…the disputed designation must be in an identical or phonetically and/or visually similar form to the protected geographical indication, or whether it is sufficient that the designation evokes in the relevant public some kind of association with that indication or the geographical area relating to it".
Having considered relevant case law, the Advocate General concluded that for the purposes of identifying an ‘evocation’ "…the only determining criterion is whether, ‘when the consumer is confronted with the name of the product, the image triggered in his mind is that of the product whose designation is protected’, which the national court must verify by taking into account, as appropriate, the partial incorporation of a protected name in the disputed designation, a phonetic and visual relationship, or a conceptual proximity". He also outright rejected the concept of evocation in relation to a mere association with the GI in the might of the relevant public.
As above, the second part deals with the existence of 'evocation' and whether it has to be determined looking at the use in isolation, or whether the context of the use can be taken into account. Having briefly discussed the matter, the Advocate General concluded that "…for the purposes of establishing the existence of an ‘evocation’… it is not necessary to take account of additional information found alongside the sign at issue in the description, presentation or labelling of the product concerned, in particular with regard to its true origin". That is because this information is largely irrelevant in the assessment, and that 'evocation' can exist even in the absence of confusion in the relevant public.
Finally the Advocate General considered the third question, which asked, in essence, "…whether, for the purposes of determining whether there is ‘any false or misleading indication… liable to convey a false impression as to its origin’, within the meaning of Article 16(c)… it is necessary to take account of the context in which the disputed element is used, in particular where the disputed element is accompanied by an indication of the true origin of the product". The question concerns the use of the name 'Glen', whether its use is false or misleading, and if its use in context can be taken into account (i.e. the use of a German location, Buchenbach, after the name).
Having considered all parties' arguments extensively, the Advocate General determined that "…for the purposes of establishing the existence of a ‘false or misleading indication’ prohibited by [Article 16(c)], it is not necessary to take account of additional information found alongside the sign at issue in the description, presentation or labelling of the product concerned, in particular with regard to its true origin". He also noted that, in the current case, the use of the name 'Glen' does not have a sufficiently clear and direct link with the protected geographical indication, or with its origin country, in order for it to be a 'false or misleading' indication.
The Advocate General's opinion is very important, particularly in the light of GIs and the assessment of their protection and remit thereof. It clearly narrows down the use of any disputed indication in isolation, avoiding any other contextual indicators as to origin or otherwise; however, the CJEU's ultimate decision will set the scene in a more concrete fashion later in the year. This writer expects them to follow the opinion, but that is by no means a certainty.
The protection of designs is complicated, no less because the design of a particular product can often be tied to the end function it is meant to achieve. A functional element of a design might not attract protection as a design, since the regime only protects (to put very simply) aspects of designs that are of more aesthetic value. What amounts to a feature that won't be protected is difficult to decide, as many aesthetic features can often achieve a technical result as well. This prompts the question, when is a feature like that protectable or not? The CJEU took on this question on a case decided only a few weeks ago.
The case of DOCERAM GmbH v CeramTec GmbH concerned the manufacture and sale of technical ceramic components by DOCERAM, in particular, weld centring pins for the automotive and textile industries. Many of these designs are registered as Community designs (RCD 242730). CeramTec also manufactures and sells similar centring pins in the same variants as DOCERAM's registrations. DOCERAM subsequently took CeramTec to court for design infringement, with the matter ultimately ending on the desk of the CJEU.
The referring court asked two questions, which related to the factors in determining whether a design is one that is solely dictated by its technical function, and therefore not registrable under Article 8(1) of the Community Design Regulation.
The first question, as set out by the Court, asked whether "…Article 8(1)… must be interpreted as meaning that, in order to ascertain whether the features of appearance of a product are solely dictated by its function, the existence of alternative designs is decisive, or whether it must be established that function is the only factor which dictated those characteristics".
Some 'functional' designs are a little less useful
Having considered the legislation and relevant case law, the Court determined that "…Article 8(1)… excludes protection… for features of appearance of a product where considerations other than the need for that product to fulfil its technical function, in particular those related to the visual aspect, have not played any role in the choice of those features, even if other designs fulfilling the same function exist". In short, even if alternative designs exist, the only relevant consideration is whether the technical function is the only factor which determined the features in question and the applicability of Article 8(1).
With regards to the second question, the referring court asked whether "…Article 8(1)… must be interpreted as meaning that in order to determine whether the relevant features of appearance of a product are exclusively dictated by its technical function, that finding must be based on the perception of the ‘objective observer’".
The Article does not set out any requirements on the perspective of the assessment above, unlike other provisions in the Regulation. That in mind, the objective of the Regulation nonetheless does require national courts to take account of all the objective circumstances relevant to each individual case when determining whether features of a design are covered by the provision.
The Court finally set out that "…in order to determine whether the relevant features of appearance of a product are solely dictated by its technical function… the national court must take account of all the objective circumstances relevant to each individual case. In that regard, there is no need to base those findings on the perception of an ‘objective observer’".
The case sets out clear guidelines on the assessment of features in designs that may or may not be solely dictated by their technical function. Designs are often a pile of uncertainty, being very difficult to protect (as illustrated well by the Trunki case, more on which here). Having a clearer idea as to how the lines are drawn for protection helps both proprietors and others disputing the registrations.