Austria: A Protected Playground For Observations Of Examiners

Last Updated: 16 June 2016
Article by Hans Georg Zeiner

In a recent decision[1] the General Court again dealt with the absolute grounds of refusal of Article 7 Para 1 lit (b) and (c). The decision concerned the trademark STREET applied for by Volkswagen AG. The trademark was intended to cover all kinds of vehicles on land in class 12, vehicles for children in class 28 and wholesale and retail services in class 35, all relating to motor vehicles and their parts. The examiner of the OHIM and the First Board of Appeal had rejected the trademark STREET, because in their opinion this word would be subject to the absolute grounds of refusal of non-distinctiveness and descriptiveness. This decision is in line with the practice of the OHIM and the General Court, but nevertheless, because of the clear wording in this decision, it requires several comments and remarks.

At the beginning the practice of the OHIM and also of the courts in Luxembourg was to admit trademarks quite liberally and to interpret the absolute grounds of refusal narrowly and restrictively. This went on until the BABY-DRY decision[2] of the ECJ and then everybody got shocked and returned to the long establish practice of the European Patent Offices. The BABY-DRY decision was somehow interpreted as the original sin in trademark law.

However, the original sin in trademark law is not the BABY-DRY decision, but the impossible fact that the provisions of Article 6quinquies, Section B, 2. were inserted unnecessarily and without any obvious reasons as Articles 7 Para 1 lit (b) and (c) into the Community Trademark Regulation (CTMR)[3]. Thereby these provisions were used for defining what a trademark is, in addition to the real definition of a trademark in the CTMR in Article 4. A trademark is a sign "capable of distinguishing the goods or services of one undertaking from those of other undertakings". This is the exhaustive definition of a trademark and nothing more is needed. The unnecessary reference back in Article 7 Para 1 lit (a) CTMR that signs which do not conform to Article 4 CTMR shall not be registered is equally unnecessary and ununderstandable. The CTMR would be exactly the same, if that provision were not there.

This raises the additional question, whether Article 7 Para 1 lit (b) and (c) CTMR contains additional grounds of refusal not covered in Article 4 CTMR, in which case signs conforming to Article 4 CTMR, but not complying with Article 7 Para 1 lit (b) and (c) CTMR could also be rejected or, if Article 7 Para 1 lit (b) and (c) CTMR is just to be seen as specification of Article 4 CTMR and not as an extension of absolute grounds of refusal. The decision cited in the beginning seems to indicate the second alternative. The author of these lines humbly submits that this is wrong.

The provisions of Article 6quinquies, Section B, 2. were introduced in the Washington version of the Paris Union Treaty. These provisions had the only purpose that in some cases the telle-quelle clause[4] cannot apply, because in the other country where registration is sought, the trademark may possibly be "devoid of any distinctive character" or may "consist exclusively" of descriptive signs or may "have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed". This provision therefore serves exclusively for the purpose that, if a trademark is registered in one country and applied for in or extended to another country of the Paris Union, then the other country may, in spite of the telle-quelle clause, refuse protection on the grounds of Article 6quinquies, Section B, 2. Paris Union Treaty. This clause has nothing to do with the definition of trademarks.

The combination of the trademark definition between Article 4 CTMR, on the one hand, and Articles 7 Para 1 lit (b) and (c) CTMR, on the other hand, confuses the situation. While it is clear under Article 4 CTMR that the real test for what a trademark is can only be the relevant consumer, Article 7 Para 1 lit (b) and (c) CTMR open the possibility of hypothetical considerations of the examiners, which have nothing to do with the perception of the public.

Applied in the instant case, namely the sign STREET, the question is therefore, whether STREET is a trademark and will be understood by the relevant consumers as a trademark. If it qualifies as a trademark it must be capable in the eyes of the consumer to differentiate the relevant products. The question to be asked under the definition of Article 4 CTMR is, whether the consumer will consider for instance VW STREET as a distinctive sign, namely as a sign capable to differentiate the vehicles so labelled from an Alfa Romeo Giulietta, a Lancia Thema, a Seat Ibiza or a `koda Octavia. If one takes the approach of Article 7 Para 1 lit (c) CTMR the question asked is, whether the word STREET can be understood as descriptive or not. On this line the General Court came to the conclusion that STREET is a designation of the motorway on which a car is driving so that the word STREET would be descriptive for cars which drive on motorways and therefore not a trademark. This means also that the average consumer is seen as a person who would understand the word STREET applied to a car as descriptive for the purpose the car is used for. He would then make the observation that the car can serve as vehicle on streets, but perhaps not on highways or international roads. This is taking the consumer not for an averagely intelligent person, but for a mentally retarded person.

The provisions of Article 7 Para 1 lit (b) and (c) CTMR, if taken as an additional definition of Community trademarks creates a playground for examiners to try out theories of abstract allocations of words to non-distinctive terms or to descriptive terms without applying the basic test under Article 4 CTMR, namely what will be the perception of the consumer. The decision cited at the beginning of this article has still made the wall around this playground higher by stating that prior decisions shall not necessarily apply to such qualification under Article 7 Para 1 lit (b) and (c) CTMR. In fact this means that BABY-DRY can be disregarded and that the General Court will accept the holdings of prior decisions only, if it believes that they are in line with its own opinion. It is true that in the Luxembourg court system does not apply the stare decisis rule, but a certain authority of prior decisions would be good for warranting a stable practice.

This article does not want to criticize the decision cited at the beginning, namely whether the word STREET is registrable for vehicles and similar products or not, but this is a question to be solved under Article 4 CTMR. The author believes that it is definitely not possible to reject this trademark under Article 7 Para 1 lit (b) and (c) CTMR. There is hardly any hope that the practice of the General Court will change, but a change in the sense of the above observation should be seriously considered.

Footnotes

[1] Judgement of the General Court of 10 September 2015, Case T-321/14

[2] Judgement of the General Court of 20 September 2001, Case C-383/99 P

[3] Community trade mark regulation, (EC) No 207/2009

[4] Article 6quinquies, Section A, 1., Paris Union Treaty

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