European Union: A Round-Up Of The CJEU Cases In 2017

Last Updated: March 19 2018
Article by Gowling WLG

In 2017, the Court of Justice of the European Union issued 19 decisions primarily focused on trade marks. Here, I summarise the most interesting of them.

Distinctiveness

Yoshida Metal Industry Co Ltd v EUIPO (Pi-Design AG, Bodum France SAS and another intervening) (Case C-421/15) involved two marks owned by Yoshida Metal Industry, part of the Yoshikin group. The group operates a cutlery factory in Tsubame, Japan, an area renowned for metalworking since the 17th century. The marks were for the following array of black dots, used by Yoshida on the handle of its 'Global' knives, crafted by hand and inspired by Samurai swords. The marks were registered in September 2002 and April 2003 in classes 8 and 21, for knives and knife blocks (amongst others):

IMAGES

In July 2007, the interveners, all part of Danish kitchenware group Bodum, applied for the marks to be declared invalid, under Article 7(1)(e)(ii) of Regulation 40/94, as it then was. The General Court concluded that the black dots represented dents which were necessary to obtain a technical result, namely preventing the user's hand from slipping accidentally. Accordingly the marks were invalid, pursuant to Article 7(1)(e)(ii), in so far as the essential characteristics of the signs at issue consisted exclusively of the shape of goods necessary to obtain a technical result. Before the CJEU, Yoshida argued that the signs represented a simple decorative pattern with no functional value. The CJEU dismissed Yoshida's appeal and upheld the General Court's approach, expressed at paragraph 64 of the General Court's judgment as follows:

"...While it is impossible to rule out any ornamental character as regards the configuration of the array of black dots, that configuration, as well as the shape of the black dots themselves, shows no significant characteristic and covers practically all of the handles represented. Similarly, the black colour of the dots, with its uniform and monochromatic nature, without being completely devoid of ornamental character, cannot make those dots a major non-functional element of the signs at issue."

In August Storck KG v EUIPO (Case C-417/16), the applicant was German confectionery producer August Storck, whose UK subsidiary Bendicks owns the Bendicks and Werthers Original brands. Storck applied in August 2013 for the following figurative mark in class 30 for chocolate amongst others:

The application represented the packaging of Storck's 'Knoppers' bar, a milk chocolate and hazelnut waffle, which is particularly popular in Germany. The CJEU upheld the General Court decision that the application was devoid of distinctive character and therefore should be refused under Article 7(1)(b) of Regulation 207/2009, as it then was. The General Court's analysis included noting that the different colours are commonplace and would be perceived only as aesthetic or presentational elements. Storck's interpretation that the figurative element represented a snow-covered mountain and a blue sky was not obvious; regarding the colours used, the white part could also bring to mind milk, a common ingredient in chocolate, which is often represented on chocolate packaging.

Marks containing a word indicating a geographical origin

In a bumper year for decisions involving marks containing words indicating a geographical place or origin, there were four judgments along these lines.

The first was Ornua Co-Operative Ltd v Tindale & Stanton Ltd España SL (Case C-93/16), a referral from the Alicante Provincial Court. Irish agri-food co-operative Ornua owns several EU marks containing the word KERRYGOLD for goods in class 29 including butter and other dairy products. Spanish importer T&S imports and distributes KERRYMAID margarine, manufactured in Ireland by Kerry Group plc.

In January 2014, Ornua brought an infringement action against T&S in Spain. The first instance court held that the only similarity between KERRYMAID and KERRYGOLD related to the element 'kerry', referring to the Irish county known for cattle breeding. It was agreed between the parties that in Ireland and the UK, Ornua's marks and T&S' sign peacefully co-exist.

In the key part of its judgment, the CJEU provided guidance on Article 12 of Regulation 207/2009, as it then was, which establishes that an EU trade mark owner cannot prohibit a third party from using a sign which indicates the geographical origin of goods or services, provided his use is in accordance with honest practices. When assessing whether a third party's use falls within this exception, relevant factors include the overall presentation of the third party product and any efforts by the third party to ensure that consumers distinguish its products from the trade mark owner's goods. When considering factors present in Ireland and the UK, the Spanish court should first ensure that there is no significant difference between the market conditions or the sociocultural circumstances between Spain (the part of the EU covered by the infringement action) and that part of the EU in which the geographical area corresponds to the geographical word contained in the marks and sign at issue (presumably Ireland at least). The national court's analysis as to whether the alleged infringer's conduct was in accordance with honest practices might differ in a part of the EU where consumers have a particular affinity with the geographical word contained in both mark and the sign, than in a part of the EU where that affinity is weaker.

In Juan Moreno Marín and others v Abadía Retuerta SA (Case C-139/16), the owners of a Spanish national mark for LA MILLA DE ORO, registered for wines, issued proceedings against Spanish winery and luxury hotel Abadía Retuerta, for its use of the sign 'El Pago de la Milla de Oro' on wine. Abadía Retuerta counterclaimed for invalidity, arguing that the claimants' mark was either an indication of geographical origin or an indication of the quality of the goods for which it was registered.

'La Milla de Oro' translates in English as 'the Golden Mile'. The evidence showed that there were areas in both the Ribera del Duero and the Rioja Spanish wine-producing regions known as 'la Milla de Oro'. Equally, there were districts of both the cities Madrid and Marbella known by the same name. In Madrid, the 'la Milla de Oro' district has a concentration of luxury businesses, prestigious jewellers and art galleries. In Marbella, the 'la Milla de Oro' district is known for its luxury properties and high-end restaurants attracting a rich and famous clientele.

The CJEU concluded that 'la Milla de Oro' either designates a geographical zone which varies depending on the accompanying geographical place name, or refers to a specific level of quality of goods or services, which again varies depending on the accompanying geographical place name. There is therefore no connection between wine and the geographical origin attributed to 'la Milla de Oro' alone, such that it could not constitute an indication of geographical origin. Nor was it likely that the mark was invalid for referring to the characteristic of a product or service, although this was for the referring court to examine in light of all the relevant facts. In the CJEU's view, however, given that 'la Milla de Oro' referred to a characteristic of a product or service that could be found "in abundance in a single place with a high degree of value", it was unlikely that it could refer to the characteristics of a specific and particular product or service.

The third case, EUIPO  v Instituto dos Vinhos do Douro e do PortoIP (Bruichladdich Distillery and others intervening) (Case C-56/16), concerned a mark registered in October 2007 and owned by Bruichladdich Distillery, a Scotch whisky distillery in the Rémy Cointreau group, for PORT CHARLOTTE in class 33 for whisky. In April 2011, the appellant IVDP, a Portuguese institute representing the port trade, applied for the mark to be declared invalid pursuant to Article 53(1)(c) of Regulation 207/2009, as it then was, on the basis of the existence of earlier rights, namely the appellations 'Porto' and 'Port'. Amongst others, IVDP argued that the inclusion of the word 'Port' in the mark constituted an imitation or evocation of the designation of origin 'Port', protected under Portuguese and EU law. Although the CJEU allowed parts of the appeal, it upheld the principal part of the General Court's decision. First, the sign PORT CHARLOTTE will be perceived as a logical and conceptual unit referring to a 'port' or harbour which is associated with the first name 'Charlotte'. The relevant public will not perceive any geographical reference to port wine. Secondly, there are differences between port wine and whisky in terms of ingredients, alcohol content and taste. These differences are not insignificant and are well known to the average consumer.

In the final decision, The Tea Board v EUIPO (Delta Lingerie intervening) (Case C-673/15 to C-676/15), Belgian lingerie supplier Delta Lingerie applied for various stylised forms of the word DARJEELING in classes 25, 35 and 38 for goods including lingerie. The Tea Board, an Indian representative trade body, opposed the applications, on the basis of an EU collective mark for DARJEELING in class 30 for tea, and the fact that 'darjeeling' is a protected geographical indication for tea, amongst others. The CJEU upheld the decision of the General Court in rejecting the opposition. There was no inconsistency in the General Court's finding that a consumer of tea would not be led to believe that Delta Lingerie's lingerie originated from the Darjeeling region of India, even if the positive qualities connected with the region were attractive to the consumer of lingerie.

The scope of IP Translator

Turning now to two cases which addressed the scope of the IP Translator judgment (Chartered Institute of Patent Attorneys (C-307/10)).

In IP Translator, handed down on 19 June 2012, the CJEU held that an applicant must identify the goods or services to be covered with "sufficient clarity and precision" to determine the extent of the protection sought. Where an applicant uses a class heading of the Nice Classification to identify the goods or services covered by his mark, he must specify whether his application is intended to cover all the goods or services listed in that class, or only some of them. If the application is intended to cover only some of those goods or services, these must specified.

It had been widely understood that the IP Translator judgment applied retrospectively, namely not only to marks applied for after the date of the judgment, but also to those applied for prior to the judgment. For example, on 20 June 2012 (the day after IP Translator was handed down), the President of the EUIPO adopted Communication No 2/12 stating:

'As regards [EU marks] registered before [the effective date of this Communication] which use all the general indications listed in the class heading for a particular class, [the EUIPO] considers that the intention of the applicant ... was to cover all the goods or services included in the alphabetical list of that class in the edition in force at the time when the filing was made.'

Further, in March 2016, what was then Article 28(8) of amended Regulation 207/2009 (now Article 33(8) of Regulation 2017/1001) came into force, providing for a transitional period of six months which expired in September 2016, in which trade mark owners could add new goods or services to any EU marks applied for before 22 June 2012, beyond those covered by the literal meaning of the class heading.

In the following two decisions, however, the CJEU held that IP Translator does not have retrospective effect and applies only to trade marks which were applied for after the judgment was delivered.

Brandconcern BV v EUIPO and Scooters India Ltd (Case C-577/14), relating to motor scooter brand Lambretta, was handed down in February 2017.

The first Lambretta scooters, manufactured in Milan, were launched in 1947. In 1972, Scooters India Limited (SIL), an Indian state-owned company, purchased the Lambretta machinery and brand. Production continued in India. Although successful through the 1980s, production of two-wheeled models stopped in 1997. Since then, SIL's production has centred on a three-wheeled model and spare parts. SIL owns an EU mark for LAMBRETTA, registered in August 2002, for various goods including in class 12 for 'vehicles; apparatus for locomotion by land, air or water'. In November 2007, as part of a long-running series of disputes between the parties, Brandconcern applied for partial revocation of this mark, including in class 12, on the basis of lack of genuine use. Brandconcern, based in Holland, sells Lambretta-branded clothing and shares a director with a subsidiary of Innocenti SA, which has plans to launch a new Lambretta-branded two wheeled scooter this year.

The Board of Appeal revoked the mark in class 12, amongst others. The evidence of use submitted by SIL related to the sale of spare parts only and did not relate to the sale of vehicles more generally. The General Court annulled this decision, finding that the Board should not have rejected SIL's evidence in this way. At the very least, some spare parts for scooters were included in the list of goods covered by class 12, with the result that the Board should have examined the genuine use of the mark in relation to those spare parts.

The CJEU upheld the decision of the General Court, finding that the correct approach when considering class headings is to apply the rules which were in force at the date of registration of the mark. The CJEU held that the applicable rules were summarised in Communication No 4/03 of the President of the EUIPO of 16 June 2003 (the CJEU did not explain why it came to this conclusion even though the communication was published eleven months after the date of registration of SIL's mark):

'The 34 classes for goods and the 11 classes for services comprise the totality of all goods and services. As a consequence of this the use of all the general indications listed in the class heading of a particular class constitutes a claim to all goods or services falling within this particular class'.

The CJEU therefore held that the words 'vehicles; apparatus for locomotion by land, air or water' should be interpreted to cover all goods listed in class 12, notwithstanding IP Translator.

Eight months later, in October 2017, the CJEU reiterated this decision in EUIPO v Cactus SA (Isabel Del Rio Rodriguez) (Case C-501/15). The CJEU held that in light of the need for legal certainty and to protect legitimate expectations, neither the IP Translator judgment nor the judgment of Praktiker Bau-und Heimwerkermärkte (C-418/02), which preceded it in July 2005, could affect the scope of protection of trade marks which were already registered at the date the IP Translator judgment was delivered.

As to whether Article 33(5) of new Regulation 2017/1001 is intended to have retrospective effect, this remains to be decided. The Article became effective on 1 October 2017, and the CJEU handed the Cactus judgment down just after this, on 11 October, but did not refer to the Article, which provides:

'The use of general terms, including the general indications of the class headings of the Nice Classification, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indication or term. The use of such terms or indications shall not be interpreted as comprising a claim to goods or services which cannot be so understood.'

Exhaustion

Schweppes SA v Red Paralela SL and others (Case C-291/16) concerned the scope of exhaustion in the context of the famous Schweppes tonic water brand. British confectionary and drinks company Cadbury Schweppes originally owned all the EEA marks for 'Schweppes'. In 1999, some parts of the portfolio, including the UK marks, were assigned to US beverage giant The Coca-Cola Company. Cadbury Schweppes (now Schweppes International) remained the proprietor of the rest of the marks, including those registered in Spain. Schweppes SA, a Spanish group company, has an exclusive licence to use the Spanish marks.

In May 2014, Schweppes SA issued proceedings against Spanish importers Red Paralela for infringing the Spanish marks. The defendants had imported into Spain Schweppes-branded tonic water which had originated from the UK. Schweppes argued that this was unlawful; the products had been placed on the market by Coca-Cola, not Schweppes. Coca-Cola had no economic or legal connection with the Schweppes group. In response, Red Paralela argued that Schweppes' rights had been exhausted. First, the Schweppes group had tacitly consented to Coca-Cola's products. Secondly, there were undeniable legal and economic links between Coca-Cola and Schweppes in their joint exploitation of 'Schweppes' as a universal mark.

There was evidence of Schweppes and Coca-Cola acting collaboratively. For example, a single global image of the 'Schweppes' mark had been promoted by Schweppes and maintained by Coca-Cola, such that there was confusion on the part of the Spanish public as to the origin of 'Schweppes' products. Equally, Schweppes and Coca-Cola had shared the benefit of joint EU-wide websites and had co-ordinated in marketing activities and filing strategies. In Holland, where Schweppes owned the national mark, Coca-Cola was Schweppes' licensee.

The CJEU referred the matter back to the Barcelona court, finding that where there are identical national marks in two member states covering the same goods that were formerly owned by the same proprietor, the rights will, in some circumstances, be exhausted.  Such circumstances include where the owner, either alone or in co-ordination with the owner of the other mark, has actively and deliberately promoted an image of there being a single global trade mark, and in consequence causes confusion as to the commercial origin of goods bearing that mark.  Another example is if there are economic links between the owners of the two marks (such as co-ordination of commercial policies or joint control over the use of the mark), such that they can determine, directly or indirectly, the goods bearing the mark and control the quality of those goods.

Enforcement

In Hummel Holding A/S v Nike Inc and another (Case C-617/15), Danish sportswear company Hummel issued proceedings against American sportswear company Nike in the Düsseldorf Regional Court in relation to Nike's sale of basketball shorts. Hummel alleged infringement of the following international figurative mark, which is effective in the EU, registered in class 25 for clothing, amongst others:

A trade mark infringement action may be brought in the courts of the Member State in which the defendant is domiciled or in which he has an establishment, pursuant to Article 97 of Regulation 207/2009 (applicable at the time; now Article 125 of Regulation 2017/1001) and Regulation 44/2001 (the Brussels Regulation).

The defendants to the claim were Nike Inc (Inc), based in the US, the ultimate holding company for the group, and Nike Retail BV (Retail), a subsidiary of Inc based in the Netherlands, which operates the Nike sales website, including in Germany. Nike argued that the German court lacked jurisdiction on the basis that wholesale or retail sales in Germany are not directly conducted by companies in the Nike group. Nike Deutschland (Deutschland), a subsidiary of Retail, based in Germany, was not a party to the proceedings.

The CJEU acknowledged that Deutschland does not have its own website and does not sell goods to end consumers or intermediaries. Nevertheless, the CJEU found that Deutschland negotiates contracts between Retail and intermediaries, supports Retail in advertising activities and in ensuring compliance with ongoing contracts, and provides aftersales services.

The CJEU confirmed that a "second-tier subsidiary" (i.e. the subsidiary of a subsidiary) based inside the EU can be an 'establishment' which fixes its ultimate parent (based outside the EU) with jurisdiction for the purposes of Article 97 (now Article 125) if certain conditions are met. First, the subsidiary must be a "centre of operations" with "a certain real and stable presence from which commercial activity is pursued, as manifested by the presence of personnel and material equipment". Secondly, the subsidiary must have "the appearance of permanency to the outside world", as an extension of the parent.

Conclusion

Unlike previous years, the highest profile trade mark judgments of 2017 at CJEU level were less focused on exotic marks.  Instead, the scope of IP Translator and the validity of marks containing indications of geographical origin were at the forefront of the court's decision-making.

At legislative level, the second phase of the implementation of the EU Trade Marks Regulation (2017/1001) came into force on 1 October 2017, along with Implementing Regulation 2017/1431 and Delegated Regulation 2017/1430.  We hope to see the first cases under these new Regulations in the coming year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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