Germany: The Liberalization of the Court of First Instance of the EC - Recent Decisions Show a Possibly More Lenient Approach to Trade Mark Registrability

Last Updated: 13 February 2002
Article by Claus Eckhartt

In February of this year, the Court of First Instance of the European Communities („CFI") implemented various amendments to its rules of procedure with a view to expedite the proceedings. One of the main reasons for introducing this "fast track" procedure are the substantial amount of proceedings currently pending before the CFI and the European Court of Justice („ECJ") whose subject matters are decisions from the Board of Appeal of the Office for Harmonization in the Internal Market (trademarks and designs) („OHIM") in Alicante to which an appeal has been filed. In total, 30 decisions have been issued by the CFI to date relating to trademark matters; more than 50 trademark cases are still pending. Most of the cases deal with refusals of trademark applications on absolute grounds. However, there are some cases concerned with procedural aspects. Clearly, the decisions of the CFI have a decisive impact on the way the Examiners of OHIM and the members of the Boards of Appeal view the issues involved when refusing Community trademark applications on absolute grounds. Practitioners are therefore well advised to closely monitor the case-law of the CFI, albeit the final decision is with the ECJ. While the decisions handed down so far may not give the complete picture of the approach of the CFI regarding the various questions involved. as yet, it is certainly a worthwhile exercise to briefly review what is available.

Competence of the CFI and Basic Principles

According to Art. 63 of the Community Trademark Regulations, actions may be brought before the European Court of Justice against decisions of the Boards of Appeal. The recitals 12 and 13 in the CTMR make it clear that it is the CFI which is to have jurisdiction over appeals from the OHIM Boards of Appeal. The jurisdicion of the CFI was initially confined to staff cases and the review of the competition decision decisions of the EC Commission. Now the CFI has jurisdiction to hear all cases brought under Articles 173 and 175 of the Treaty of Rome by non-privileged applicants. As a consequence, the judicial control was added in relation to CTMs.

The majority of decisions handed down so far deal with cases where the Boards of Appeal have confirmed a decision of OHIM in respect of a lack of distinctiveness, a presumed descriptiveness and/or customary usage of a Community Trademark Application as set forth in Articles 7 (1) (b), (c) and (d) of the CTMR. Recurring basic principles stated by the CFI in its decisions are:

  • The decisive factor of a sign capable of being represented graphically is to be eligible for registration as a Community trademark if its capacity to distinguish the goods of one undertaking from those of another (Case T-163/98 Procter & Gamble vs. OHIM - Baby-dry");
  • the assessment of the absolute grounds for refusals involves taking account of a range of elements, in particular the general impression made by the mark examined as a whole and the peception which the average consumer is likely to have of the goods or services in respect of which registration is sought, in each of the languages of the European Union and for each of the goods or services in question (Case T-24/00, The Sunrider Corporation vs. OHIM – „Vitalite");
  • as to the question whether a sign is descriptive, it must be determined whether it is currently associated in the mind of the relevant class of persons with the category of goodsor services concerned, or whether it is reasonable to assume that such an association may be established in the near future (Cases T-357/99 and T-358/99, Telefon & Buch Verlagsges. mbH vs. OHIM, „Universaltelefonbuch" and „Universalkommunikationsverzeichnis").
  • The absolute gound of refusal laid down in Art. 7 (1) (c) of the CTMR must be assessed in relation to the goods or services in respect of which registration of the sign is applied (Case T-63/98 Procter & Gamble vs. OHIM, - „Baby-dry").
  • In relation to the question whether a term has an exclusively descriptive character, the test is whether it is too vague and indeterminate to confirm a descriptive character on the particular term in relation to particuklar goods and services or whether the relevant section of the public establishes immediately and without further reflection a definite and direct association with the goods and services in question. The relevant section of the public is deemed to be the average, reasonably well informed and reasonably observant and circumspect English-speaking consumer (Case T-359/99, Deutsche Krankenversicherung vs. OHIM –„Eurohealth"?; ECJ case C-342/97 Lloyd vs. Schuhfabrik Meier);

  • Previous regisrtations as trademarks in certain Member States may only be taken into consideration, without being given decisive weight, for the purposes of registering the Community trademark in view of the fact that the purpose of the Community trademark is to enable the products and services of undertakings to be distinguished by identical means throughout the entire Community, regardless of frontiers (Case T-122/99- Procter & Gamble vs. OHIM – „Soap bar shape");

  • Each of the absolute grounds for refusal connected with lack of distinctiveness, descriptiveness and customary usage has its own sphere of application, and they are neither independent nor mutually esclusive; it is sufficient that one of the absolute grounds for refusal applies; even if those grounds are applicable separately, they may also be applied cumulatively (Case T-345/99 – Harbinger Corporation vs. OHIM „Trustedlink")

In the first decisions, the CFI applied stringent standards relating to the inherent distinctiveness of Community trademark applications. In general, the decisions of the Boards of Appeal were confirmed. Decisions of refusal of registrations were issued either according to Art. 7 (1) (b) or Art. 7 (1) (c) of the CTMR.

In the decision „Baby-dry" (T-163/98), trademark protection was denied for the goods „diapers" on the grounds that this term did not have capacity of distinguishing the goods of one untertaking from those of another one. The CFI confirmed the Board Of Appeal’s opinion that "Baby-dry", read as a whole, immediately informs consumers of the intended purpose of the goods. Furthermore, it did not exhibit additional features which might render a sign as a whole distinctive. However, the CFI accepted the applicant’s arguments that the Board of Appeal was wrong when refusing to examine the applicant’s evidence that the term in question had become distinctive in consequence of the use made of it.

Subsequently, „Companyline" was rejected by the CFI for the services „insurance" (T-19/99) with the reasoning, that the words „company" and „line" are generic words simply denoting a line of goods or services for undertakings. Coupling them together without any graphic or semantic modification did not imbue them with any additional characteristic such as to render the sign, taken as a whole, capable of distinguishing the applicant’s services from those of other undertakings.

The trademark application for „OPTIONS" in conjunction with the services „insurance, warranty, financing, hire-purchase and lease-purchase" was also considered by the CFI as being devoid of any distinctive character in the English and French languages, thus confirming the Board of Appeal’s opinion in its decision (T-91/99). In those proceedings, the applicant had not disputed the lack of distinctiveness of the word „OPTIONS" in the French language. Furthermore, no submissions were made to the end that it had acquired a distinctive character in a substantial part of the Community. In the decision „TrustedLink" (T-345/99) the CFI held that this term is customary in English-speaking countries within and outside the Community having the meaning of a reliable link or a link which can be relied on also in relation to goods and services in the field of electronic commerce. The joining of „trusted" and „link", whether written separately or as one word merely describes the desired quality of a link, in this case reliability. In this decision, the CFI furthermore confirmed the opinion of the Board of Appeal that each of the absolute grounds for refusal connected with a lack of distinctiveness, descriptiveness and customary usage (Art. 7 (1) (b), (c) and (d) of the CTMR) has its own sphere of application, and they are neither independent nor mutually exclusive. It is sufficient that one of the absolute grounds for refusal applies. Even if such grounds apply separately, they must also apply cumulatively.

Similar considerations were adhered to in a subsequent decision of the CFI relating to the application for registration of the term „Investorworld" in relation to „financial sevices" (T-360/99). In the case „electronica" (T-32/00), the CFI then again confirmed the decision of the 2nd Board of Appeal to reject the trademark „electronica" for organizing trade fairs and conferences regarding electronic components assembly, although the applicant restricted them to those to be held in Munich exclusively.

More Lenient Approach in Recent Rulings?

In recent decisions of the CFI, a more lenient approach as to the question of inherent registrability of Community trademarks is becoming increasingly apparent. In the case concerning the trademark „VITALITE" (T-24/00), the CFI was of the opinion that the trademark was susceptible to trademark protection in relation to the goods „mineral water and baby food" on the grounds that the term „VITALITE" does not go beyond the acceptable limits of suggestion, even if it promotes the growth of babies and even if an image of vitality has been given to mineral waters for promotional purposes. In that decision, the CFI again stressed the rule that it is for OHIM to establish, in each case, the existence of an actual, ascertainable use of the word in question by competitors to describe the goods in respect of which registration is sought or of the existence of a need to use that term if an application was rejected on the ground that it is exclusively descriptive and as such had to remain freely available to all competitors. The link between the meaning of the word „VITALITE" on the one hand and the word in question on the other hand does not seem to be sufficiently close to be caught by the prohibition laid down in Art. 7 (1) c) of the CTMR. The CFI noted that the term is a case of evocation and not designation for the purposes of the aforementioned provision. In any event, the lack of distinctiveness could not result from the mere findings, in the contested decision, of the absence of a „minimum amount of imagination".

Relating to the „Double Mint"-case (T-193/99), the Examiner and the Board of Appeal ruled that the wordmark „Double Mint„ could mean either that the goods in question („chewing gum") contain twice the usual amount of mint or that they are flavoured with two varieties of mint. The CFI subsequently overturned this decision by arguing that the consequences of such a double meaning would be that the term is ambiguous and vague and therefore to be accepted for trademark protection. To this, OHIM filed an appeal currently pending before the ECJ.

In the application for registration of the term „Easybank" for „internet banking" services, the Board of Appeal was of the opinion that this trademark was immediately descriptive of the fact that all the services offered by an online bank have the common characteristic of being more easily accessible by virtue of the use of electronic tools as compared to normal banks. The CFI, however, held (T-87/00) that the meaning of the term „Easybank" was too vague to be of a descriptive character in relation to services capable of being provided by an online bank. The CFI emphasized that the term „Easybank" did not give information as to particular services as transactions, such as e.g. cashing of a cheque or an order to invest at the stock exchange. The court outlined in detail that the term „Easybank" was neither to be kept freely available for competitors nor did it lack sufficient distinctiveness to serve for identifying the commercial origin of the services in respect of which its registration is applied for.

The most recent cases decided on by the CFI were those concerned with three-dimensional representations of two-layer dish-washing tabs in various colours. In total, 11 judgements were handed down with more or less the same content. The CFI held that the tablets in question which are of either round or rectangular shape consist of the basic geometric shapes and have an obvious shape for a product intended for use in washing machines or dish-washers. The use of basic colours such as blue or green was common-place and typical for detergents. When evaluating the registrability of the tabs as trademarks, the CFI analyzed the various tabs in relation to their respective elements: the shape of the tab, the colours and other prominent features. In doing so, the CFI referred to the „Puma/Sabèl" case of the ECJ which stated that for the assessment of the distinctiveness of trademarks consisting of various elements, the overall impression of the combinations of the various elements had to be analyzed as a whole. The CFI then entered into a detailed analysis of the separate features considering them to be individually insufficiently distinctive and concludes by remarking that the combination also lacks overall sufficient distinctiveness in its entirety. It will be interesting to see whether the parties involved, major players in the household cleaning product area, will try their luck with the ECJ as the final instance.

To the above decisions, the judgement of the CFI of October 3, 2001, in the case „Newborn baby" has to be added, where (T-150/00), the CFI continued its more lax approach to the registrability of trademarks. With respect to the goods „dolls to play with and accessories for such dolls in the form of playthings", the court argued, in contrast to the Board of Appeal, that even if the words „newborn baby" were descriptive in relation to dolls and the accessories mentioned, it does not follow that the public targeted perceives a direct and specific link between the sign in question and those accessories. It then reiterated its case-law relating to a presumed lack of distinctiveness by stating that such could not be found merely due to the fact that the sign is unimaginative or is not „fanciful".

ECJ Decision „Baby-dry"

Turning finally to a case which was mentioned at the beginning, the ECJ rendered its judgement on the „Baby-dry" case one day after the CFI’s tablet decisions. The ECJ followed the opinion of the Advocate General who had argued that the objective of Art. 7 (1) (c) CTMR was not to avoid monopolization of certain words necessary for trade, as this function was guaranteed by Art. 12 CTMR. The Advocate General stated that the trademark „Baby-dry" is of an „extremely elliptical nature" having an „unusual structure" and is „resistant to any intuitive grammatical analysis which would make the meaning immediately clear." Consequently, the ECJ ruled that combinations like „Baby-dry" cannot be regarded as exhibiting, as a whole, a descriptive character; they are lexical inventions bestowing distinctive power on the mark so formed and may thus not be refused. Their syntactically unusual juxtaposition is not a familiar expression in the English language, either for designating babies‘ nappies or for describing their essential characteristics. It is to be hoped that this decision will be read carefully by the Examiners of OHIM.

© Claus Eckhartt 2001. Claus Eckhartt is an attorney-at-law and partner with the Intellectual Property law firm Bardehle Pagenberg Dost Altenburg Geissler Isenbruck, Munich.

First published in MIP Trademark Yearbook 2002, EuromoneyPLC, London, 2001

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