UK: Trade Marks - It´s Offical, Retail Services Can Be Protected

Although the Community Trade Mark Office and many national trade mark offices of the European Union, including the United Kingdom, have accepted trade mark applications covering retail services for at least five years, the European Court of Justice had not to date deliberated on the issue. Accordingly, there was always a small doubt as to whether the applications accepted covering retail services were in fact valid. This changed on 7th July 2005.

Praktiker Bau-und Heimwerkermarkte AG (Praktiker) filed an application before the German Trade Mark Office for the mark 'Praktiker' for inter alia, services described as:-

The German Trade Mark Office initially found that the concept of 'retail trade' claimed did not denote independent services having autonomous economic significance. Praktiker appealed the decision to the Federal Patents Court. It argued that the economic trend towards a service society necessitated a reappraisal of retail trade as a service. The consumer's purchasing decision was increasingly being influenced not only by the availability and price of a product, but also by other aspects such as variety and assortment of goods, their presentation, the service provided by staff, advertising, image and the location of the store. Such services provided in connection with retail trade enabled retailers to be distinguishable from their competitors.

The Federal Patents Court decided to stay the proceedings and refer the following questions to the European Court of Justice (ECJ) for consideration:-

1. Does retail trade in goods constitute a service within the meaning of Article 2 of the directive?

If the answer to this question is in the affirmative:

2. To what extent must the content of such services provided by a retailer be specified in order to guarantee the certainty of the subject matter of the trade mark protection that is required in order to:
(a) fulfil the function of the trade mark, as defined in Article 2 of the directive, namely, to distinguish the goods or services of one undertaking from those of other undertakings, and

(b) define the scope of protection of such a trade mark in the event of a conflict?

3. To what extent is it necessary to define the scope of similarity (Article 4(1)(b) and Article 5(1)(b)of the directive) between such services provided by a retailer and

By its first two questions, which were considered together by the ECJ, the Federal Patents Court was seeking in essence to ascertain whether the concept of 'services' referred to by the European Trade Mark Directive, is to be interpreted as including services provided in connection with retail trade in goods and, if so, whether the registration of a trade mark in respect of such services is subject to the specification of certain details.

Praktiker submitted that retail trade in goods constitutes a service within the meaning of the directive. A trade mark protecting it as a service is capable of fulfilling the function of the trade mark as an indication of origin. It is not necessary to specify the content of the services provided in order to determine the subject matter of protection.

The Court found that the objective of retail trade is the sale of goods to consumers. That trade includes, in addition to the legal sales transaction, all activity carried out by the trader for the purpose of encouraging the conclusion of such a transaction. That activity consists, inter alia, in selecting an assortment of goods offered for sale and in offering a variety of services aimed at inducing the consumer to conclude the above mentioned transaction with the trader in question rather than with a competitor.

The Court found that there was no overriding reason based on the directive or general principles of Community law which precludes retail services from being covered by the concept of 'services' referred to by the directive, and therefore the right of the trader from having the right to obtain through registration the protection of his trade mark, as an indication of the origin of the services provided by him.

The Court noted that the explanatory note to Class 35 of the Nice International Classification of Goods and Services included 'the bringing together, for the benefit of others, of a variety of goods…enabling customers to conveniently view and purchase those goods.' Further, the Court noted that the Community Trade Mark Office already accepted the registration of trade marks of retail outlets.

However, the Court made it clear that the term 'retail services' needed further specification. Applicants of trade mark applications must be required to specify the goods to which their retail services relate. The Court concluded that if such a requirement was not imposed it would make it difficult to determine when the services covered by registrations were to be deemed 'similar' for infringement and registration purposes. Further, an undue breath of coverage of registrations would make it easier to apply the provisions of the directive relating to revocation of trade mark registrations on the basis of non-use.

The Court did not answer the third question on the basis it had no jurisdiction to deal with the interpretation of Community law which did not appear to have direct relevance to the facts of the case at hand. In essence, the court found that the third question was a hypothetical question, which did require answering in this case.

So what conclusions are to be drawn from this case.

The European Court of Justice has confirmed that the protection of retail services is allowable under European Trade Mark Directive, however applications which simply specify 'retail services' should be rejected without a qualification as to the nature of goods sold in relation to such services.

Accordingly, Praktiker's specification ‘retail trade in building, home improvement, gardening and other consumer goods for the do-it-yourself sector’ would be acceptable, as would 'the bringing together, for the benefit of others, of a variety of goods…enabling customers to conveniently view and purchase those goods' providing the nature of the goods sold are defined. It should be noted that the Community Trade Mark Office has in the past allowed applications to proceed simply covering retail services and whether these registrations are now valid is open to question.

Although the Praktiker decision has not radically altered the established practice with regards the protection of retail services in the European Union, the case has more clearly defined what is and is not allowable, and would appear to open up any remaining EU member states to the protection of retail services under trade mark law providing such services are clearly defined.