Welcome to 2020! Here's what happened around the IP blogs while you were digital detoxing over eggnog.

Mittens is casually easing into another decade of IP blogging Source: Cats are on top

End of the year (and decade) content 

Patent industry insiders shared their Christmas wishlists on IP Watchdog. Their wildest IP dreams for 2020 range from no more monkeys in courtrooms (literally) to the USPTO Director taking on the responsibility of instituting America Invents Act trials and the US government maintaining a database of patent ownership and transactions.

IP Watchdog also asked its experts to gaze into their crystal balls and make predictions about the future. Some are looking forward to major IP decisions on the US Supreme Court docket, while others forecast more litigation on AI, deep fakes, cannabis, and paparazzi photos.

Patently-O made graphics showing the number of utility patents issued per year and per decade. 2019 and the 2010s both saw record numbers.

Kluwer Patent Blog shared it's top 10 most popular posts of 2019. Posts on management and leadership at the European Patent Office dominate the list.

Kluwer Copyright Blog also shared its top 10 most popular posts of 2019. The top spots are occupied by posts clarifying various aspects of the new Copyright Directive.

The 1709 Blog published a thorough, lengthy recap of copyright news in 2019. Catch up on the eventful year here.


Patents

Do some changes in the Inventor Rights Act of 2019 sound familiar to you? Patently-O explained their historical underpinnings.

Longstanding and economically efficient balance in Standard-Essential Patent (SEP) licensing is being destabilized by misinformation and manipulation of commercial practices and of benchmarks in Fair, Reasonable and Non-Discriminatory (FRAND) licensing. This is epitomized in litigation between Apple and Qualcomm, commencing January 2017, until settlement in April 2019 and in the US Federal Trade Commission’s antitrust action against Qualcomm also commencing around the same time and now on appeal. Find out more on IP Finance.

Trade Marks

Over the past few weeks, two courts cases dealt with the scope of protection of the PDO “Aceto Balsamico Tradizionale di Modena” and the PGI “Aceto Balsamico di Modena”. Both courts agreed that "Acerto" and "Balsamico" are generic and common terms which do not fall under the scope of protection of PDOs/PGIs, but one of them found enough “evocation” to establish infringement. Kluwer Trade Mark Blog wrote about these decisions. 


Copyright

In reaction to the impact of illegal distribution of audiovisual content, some important improvements in the fight against piracy were made. Kluwer Copyright Blog compared two types of court orders created for sport events: "fast injunctions" in Italy and "super injunctions" in the UK.

On the 13th December 2019, Mr Justice Mann delivered his judgement of Aiwa Co. Ltd V Aiwa Corp in the UK High Court. This was an appeal from the UK Trade Mark Registry, a decision of the hearing officer delivered on 4th February 2019, concerning the issue of whether the sale of second-hand goods could suffice as "genuine use" with the consent of the proprietor to enable a registration and avoid revocation for non-use.

Background

Aiwa was founded in 1951 and was once a well-known global brand of audio products such as speakers, boomboxes and stereo systems. In the late 1990s the company became unproftinable, it was bought out by Sony in 2003, but continued to be unsuccessful and there have been no retail sales of new goods using that mark since 2008, although it was still used in relation to spare parts and second hand sales. In 2016, Hale Devices Inc. acquired the Aiwa trade marks for the US, changed its name to Aiwa Corporation and marketed a speaker under the Aiwa brand.

In 2017 a Japanese company called Towada Audio acquired Sony's AIWA trade mark portfolio and changed its name to Aiwa Co Ltd in order to re-establish the brand. Aiwa Corporation filed its own application to register an Aiwa mark in July 2017 and Aiwa Limited opposed the registration based on its already registered marks. Aiwa Corporation commenced revocation proceedings based on non-use of Aiwa Ltd's registered marks for a five year period. The main question which the hearing officer addressed was whether the evidence of second-hand sales of Aiwa products, and some other lesser alleged use, amounted to use which stood in the way of revocation or as a counter to the new registration sought by Aiwa Corporation. The hearing officer concluded that no genuine use with the consent of the owner had been shown in respect of any of the claimed goods and services so far as second-hand sales were concerned, and that other alleged use was not genuine use. He ordered the revocation of Aiwa Ltd's marks and dismissed the opposition to the registration of Aiwa Corporation's new marks.

Aiwa Ltd appealed on the grounds that the hearing officer erred in making a simple unreasoned finding that there was no relevant use with the consent of the proprietor, arguing that there was consent to genuine use, when looking at the facts and law properly.

In the present case, Mr Justice Mann agreed the approach of the hearing officer was erroneous. He stated that there are two elements to non-use – first, genuine use, and second, use by the proprietor or with its consent, such as demonstrated in the case of London Taxi where the only potential user was the proprietor [IPKat posts here and here]. As such, the hearing officer should have considered these elements separately and not assumed that the absence of proprietorial consent automatically meant that there was no genuine use. Therefore, the decision could not stand, and the matters were reconsidered.

Consent and second-hand sales

Both parties agreed that there was no express consent but the Applicant argued that there was implied consent (relimg on The Sunrider Corp v OHIM EU Case T-203/02 as establishing that implied consent would qualify). Further, that the concept and nature of consent was the same whether the question was non-use, exhaustion of rights or infringement, relying on Einstein Trade Mark [2007] RPC 23. Therefore, they argued that when Sony Corporation put its marked goods on the market in the UK it exhausted its rights which involved implied consent to onward sales in the UK, with the result that sales could take place thereafter without infringement. Moreover, that implied consent to onward sales was a consent to genuine use of the mark in the course of onward sales, including second-hand sales.

The Respondent disputed this line of reasoning and the end result, focusing on the nature of the required consent; arguing that whilst only implied consent could quality (in the absence of express consent), there was no implied consent to subsequent sales for these purposes.

Exhausted kittens Image: Julie Falk

The court stated that consent is relevant to the arising of the "exhaustion" of the rights but once exhaustion has happened, the proprietor cannot complain about 'infringements' of their marks in relation to goods to which the marks are properly applied - not because there was consent but but because they have no more rights in relation to those goods – since the rights are exhausted. The provisions of which are not phrased in terms of consent – they are phrased in terms of not being able to claim infringement or not being able to prohibit the use of the mark.

Accordingly, the part of the case on consent failed. In relation to after-sales-services provided by Sony Corporation and various activities by Aiwa Ltd, those were acts of the proprietors and therefore were considered under the heading of genuine use.

"Genuine use"

Arnold J helpfully summarised the principles on "genuine use" at in London Taxi [Although that case was the subject of an appeal, the Court of Appeal agreed with Arnold on this point without any comment on his reasoning or analysis] :

1.  Genuine use means actual use of the trade mark by the proprietor or by a third party with authority to use the mark: Ansul [2003] R.P.C. 40 at [35] and [37].

2.  The use must be more than merely token, that is to say, serving solely to preserve the rights conferred by the registration of the mark: Ansul at [36]; Sunrider [2006] ECR I-4237 at [70]; Verein [2009] ETMR 14 at [13]; Centrotherm [2014] ETMR 7 at [71]; Leno Merken [2013] ETMR 16 at [29].

3.  The use must be consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of the goods or services to the consumer or end user by enabling him to distinguish the goods or services from others which have another origin: Ansul [2003] R.P.C. 40 at [36]; Sunrider [2006] ECR I-4237 at [70]; Verein [2009] ETMR 14 at [13]; Silberquelle [2009] ETMR 28 at [17]; Centrotherm [2014] ETMR 7 at [71]; Leno Merken [2013] ETMR 16 at [29].

4.  Use of the mark must relate to goods or services which are already marketed or which are about to be marketed and for which preparations to secure customers are under way, particularly in the form of advertising campaigns: Ansul [2003] R.P.C. 40 at [37]. Internal use by the proprietor does not suffice: Ansul at [37]; Verein [2009] ETMR 14 at [14]. Nor does the distribution of promotional items as a reward for the purchase of other goods and to encourage the sale of the latter: Silberquelle [2009] ETMR 28 at [20]–[21]. But use by a non-profit making association can constitute genuine use: Verein at [16]–[23].

5.  The use must be by way of real commercial exploitation of the mark on the market for the relevant goods or services, that is to say, use in accordance with the commercial raison d'être of the mark, which is to create or preserve an outlet for the goods or services that bear the mark: Ansul [2003] R.P.C. 40 at [37]–[38]; Verein [2009] ETMR 14 at [14]; Silberquelle [2009] ETMR 28 at [18]; Centrotherm [2014] ETMR 7 at [71].

6.  All the relevant facts and circumstances must be taken into account in determining whether there is real commercial exploitation of the mark, including: (a) whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods and services in question; (b) the nature of the goods or services; (c) the characteristics of the market concerned; (d) the scale and frequency of use of the mark; (e) whether the mark is used for the purpose of marketing all the goods and services covered by the mark or just some of them; (f) the evidence that the proprietor is able to provide; and (g) the territorial extent of the use: Ansul [2003] R.P.C. 40 at [38] and [39]; La Mer [2004] FSR 38 at [22]–[23]; Sunrider [2006] ECR I-4237 at [70]–[71], [76]; Centrotherm [2014] ETMR 7 at [72]–[76]; Reber EU:C:2014:2089 at [29], [32]–[34]; Leno Merken [2013] ETMR 16 at [29]–[30], [56].

7.  Use of the mark need not always be quantitatively significant for it to be deemed genuine. Even minimal use may qualify as genuine use if it is deemed to be justified in the economic sector concerned for the purpose of creating or preserving market share for the relevant goods or services. For example, use of the mark by a single client which imports the relevant goods can be sufficient to demonstrate that such use is genuine, if it appears that the import operation has a genuine commercial justification for the proprietor. Thus there is no de minimis rule: Ansul [2003] R.P.C. 40 at [39]; La Mer [2004] FSR 38 at [21], [24] and [25]; Sunrider [2006] ECR I-4237 at [72]; Leno Merken [2013] ETMR 16 at [55].

Second hand use of the stereo Image: Bart Everson

8. It is not the case that every proven commercial use of the mark may automatically be deemed to constitute genuine use: Reber EU:C:2014:2089 at [32].

In the present case, Mr Justice Mann emphasised that it was not possible to come to a general conclusion as to whether all second-hand sales of branded goods amount to genuine use of a mark for the purposes of revocation or preserving the mark in opposition proceedings. Each case will depend on its own facts (though many sets of facts will be similar, although it would be likely that the facts of the present case would be typical of most others). Therefore, he confined the findings to the present case, while acknowledging that they may have parallel applications in other situations.

The most significant factors for present case were (i) whether the mark amounted to real commercial exploitation of the mark on the market for the relevant goods or services; and (ii) was the use of the mark deemed to be justified in the economic sector concerned for the purpose of creating or preserving market share for the relevant goods or services.

The Court accepted Mr Richard Davis submission for the appellant, Aiwa Ltd, that the appearance of the mark on second-hand goods was capable of performing that part of the function of a trade mark which involves distinguishing goods originating from Sony Corporation from other goods. However, Mr Justice Mann stated that this would not be enough, as it would mean that virtually any second-hand sale without more was a genuine use of the mark. Therefore, the Court was unable to find that the level and nature of activity generated in relation to second-hand sales was capable of maintaining a market share for goods bearing the mark or was such that it preserved an outlet for the goods or services that bear the mark.

The evidence of advertisement and second-hand sales were considered advertising and selling goods which had been marketed some time before when the original purpose was fulfilled, and there was no relevant market share to maintain any more. Thereofr,e it was impossible to see how Arnold J's criteria set out in London Taxi were fulfilled on the facts of these advertisements and sales, particularly as the sales were by persons other than the proprietor and the level of second-hand sales gave little or no support to the averment of genuine use. As such, there was no genuine use and although the Court’s reasoning was not the same as the hearing officer's, it also found that there was no genuine use with the consent of the proprietor, and the appeal was dismissed.

This case offers a warning to those who might want to relaunch a brand in need of revival. Although Mr Justice Mann does not exclude the possibility of second-hand sales constituting genuine use, and agreed that the evidence of second-hand sales in this particular case was rather "thin." In addition, the involvement of the proprietor in the second-hand sales might also have contributed to the fulfilling of Arnold's London Taxi factors; as they would then have a real interest in those factors and may be consenting somehow in order to create the important effect described in those factors. 

The Court of Justice of the European Union (CJEU) has ruled that the indication of the affiliation with a local waste collection may influence consumers’ purchasing decision and consequently contribute to maintain or create a share in the market for the goods or services protected by the mark.

Earlier this week, in its judgment in C‑143/19 P, the CJEU annulled the General Court (GC) and the European Union Intellectual Property Office (EUIPO) decisions regarding the revocation of the collective mark “Representation of a circle with two arrows”. This judgement dealt, in particular, with the issue of the genuine use of collective trade marks and the assessment of the use of such mark on the market.

Collective trade marks were introduced into the EU trade mark system with the aim of enabling consumers and traders to recognise packaging which is included in the dual system and goods with such packaging, and to distinguish them from other packaging and good.

Der Grüne Punkt's trade mark

Background


On 12 June 1996, Der Grüne Punkt — Duales System Deutschland GmbH (Der Grüne Punkt) filed an application for registration of an EU collective trade mark with the EUIPO. The application was granted.

As from 2 November 2012 the Cancellation Division of EUIPO revoked the mark for certain goods as it had not been put to genuine use for the goods for which it had been registered. The Fifth Board of Appeal of EUIPO dismissed the Der Grüne Punkt’s appeal against this decision, observing that from the consumer’s point of view the contested mark had not been used to show the origin of the goods at issue.

In the appeal proceedings before the GC, this court held that the applicant has not demonstrated, for the relevant period, genuine use.

The CJEU decision

The applicant invoked infringement of Article 15(1) of Regulation No 207/2009 together with Article 66 (now articles 18(1) and 74 of Regulation (EU) 2017/1001) claiming the use of the mark not only for the packaging of goods but also for the packaged goods at issue. According to Der Grüne Punkt, the contested mark indicates certain intangible characteristics of the goods at issue, namely the undertaking’s conduct.

The CJEU, after recalling the case-law concerning both the function of collective trade marks and genuine use, stated that there is ‘genuine use’ of a collective mark where the mark is used in accordance with its essential function, which is to distinguish the goods or services of the members of the association from others which have another origin in order to create or preserve an outlet for the goods or services. [57]

According to case law proving that the use of the mark create or preserve an outlet for the goods or services that bear the sign entails the use of the mark on the market for the goods or services protected by that mark. Such exam must be conducted considering all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark. (Ansul, C‑40/01)

The CJEU pointed out that the GC did not perform the examination to establish the use of the mark on the market. In fact, the GC considered that the consumer understands that the packaging and not the product itself is part of a sound waste management system but it did not analyse if this indication is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark. [68]

Some of the economic sector concerned covers everyday consumer goods, such as food, drinks that generate packaging waste on a daily basis. It cannot be excluded that the indication of the affiliation with a local waste collection may influence consumers’ purchasing decision and consequently contribute to maintain or create a share in the market for the goods or services protected by the mark. [70]

Comment

The decision recognises the importance of the use of the mark as the indication of the affiliation to a sound waste management system for the consumer. Such an indication, influencing the consumer’s purchasing decision, contributes to maintaining or creating a share in the market for the good or services protected by the mark. This allows demonstrating the genuine use of the mark.

Could such a decision, which is in any case limited to the proof of the genuine use, be seen as a sort of embryonic step to the further development of the functions of trade mark? Could trade mark law acquire a specific and stronger role in the framework of environmental sustainability?

Is a skull shaped bottle for vodka devoid of distinctive character and does it substantially enhance the attractiveness of the goods and strongly influence consumer preferences? A recent decision of the Cancellation Division considered the absolute grounds for resual of a 3D shape mark, which offered this Kat the opportunity to post a cat in a Ghostbusters costume!

The Party Products

Crystal Head Vodka is a brand of vodka made by Globefill in Canada, created by actor Dan Aykroyd [of Ghostbusters fame] and American painter John Alexander.

Globefill registered its EU 3D shape mark [shown below] in August 2016, in Classes 32 [Beers (alcoholic and non-alcoholic); fruit juices and fruit drinks; bottled water; non-alcoholic carbonated beverages; preparations for making all of the foregoing] and 32 [Vodka; brandy spirits; prepared alcohol cocktails; wines; gin; rum; sake; tequila; vermouth; whisky; aperitifs with a distilled alcoholic liquor base; anisette; schnapps; ouzo; sherry; kirsch]. The mark consists of a 3D representation of a skull in clear glass with a short tubular opening on the top, which is rounded and slightly wider round the edge, with a flat base. Globefill also hold copyright, a registered design right and patent for the same skull shaped bottle design.

EUTM No 15 736

The Application 

The application was for a declaration of invalidity against the EU trade mark (EUTM) on the absolute grounds for refusal [Art 59(1)(a) Regulation (EU) 2017/1001]. The application claimed that the mark was devoid of distinctive character [Art 7(1)(b)] and that the shape gives substantial value to the goods [Art 7(1)(e)(iii)].

Distinctive character - Article 7(1)(b)

Only a mark which departs significantly from the norm or customs of the sector and thereby fulfils its essential function of indicating origin is not devoid of any distinctive character for the purposes of Article 7(1)(b). 

The applicant argued that the EUTM consists merely of the form of a bottle and average consumers are not used to seeing the shape of bottles as being distinctive, and so are not capable of fulfilling the essential function of guaranteeing trade mark origin. 

The proprietor filed evidence to show that there are currently just over 1,000 3D EUTMs registered for goods in Class 33. Almost all of them are bottles. Many of these bottles contain a prominent word which distinguishes them, while many of them are variations on a standard bottle theme, for example, square-sided bottles, or fluted or ribbed bottles. A few of them represent a different shape such as the Big Ben Tower or a violin, but there is just one skull shaped bottle which is the proprietor’s crystal head bottle, serving to demonstrate that the EUTM is different from anything else on the market.

Absinthe brings the idea of a headache to mind....

The Cancellation Division found that the EUTM differs considerably from the shape of a typical bottle. So much so that without the opening on the top, it would be impossible to be certain that the skull was a container for liquids, as the shape of a skull does not lend itself to the act of pouring out a drink. The examples of skull-shaped containers provided by the applicant show that, aside from the fact that some are used for different products and some of them are used as decanters rather than bottles for the sale of beverages, none really resembled the EUTM. Several of the bottles retained the traditional shape of a bottle and merely incorporate 3D features on one side to bring a skull to mind. Therefore, the Cancellation Division found that the EUTM departs significantly from the norm or customs of the sector and thereby fulfils its essential function of indicating origin and consequently not devoid of distinctive character.

Does the shape provide substantive value to the goods? Article 7(1)(e)(iii)

Under Article 7(1)(e)(iii) EUTMR, signs that consist exclusively of the shape or another characteristic that gives substantial value to the goods cannot be registered, or if registered they are liable to be declared invalid. 

The applicant argued that this provision is designed to prevent the monopolisation of the external features of goods which do not necessarily perform a technical or practical function, but which substantially enhance the attractiveness of goods and strongly influence consumer preferences. The applicant argued that if the EUTM remains on the register, the protection conferred by the mark could be used to stop anyone else using the idea of a skull shaped bottle, allowing the proprietor to gain an unfair market advantage. The applicant claimed that the proprietor wished to prevent the entire drinks market from using skull shaped bottles which is a matter for design law, not trade mark law with its potentially perpetual term of protection, and precisely the ‘evil’ at which the prohibition on shape marks under Article 7(1)(e)(iii) is aimed. The applicant claimed that although the skull design is not that dissimilar from other shapes in use, it is different enough for the average consumer to notice the aesthetics and place value on that, and therefore the shape and design of the EUTM gave substantial value to the goods in question.

"Alas, poor Yorick! I knew him, Horatio, a fellow of infinite jest, of most excellent fancy." Image: Athalia Perez Aguilar

The EUTM proprietor argued that in practice, minimal labelling is used on its crystal head products. Therefore, the relevant public is obliged to rely on the shape of the mark to identify the product, rather than a distinguishing word placed on a label. 

In response, the applicant pointed out that the proprietor always sells its goods with the brand name affixed to the bottle and did not accept the proprietor’s argument that its crystal head bottle may be displayed on a shelf for sale without showing the brand name. In its opinion, if the proprietor wished to rely on this, it should have provided evidence that consumers make purchases without ever seeing the brand name. The applicant argued that this was merely a clever marketing ploy to make the consumer pick the product up and check the brand name.

The proprietor explained that its product retails in the UK for less than its recommended retail price and therefore, on these facts alone, the EUTM gives no substantial value to the goods. In addition,  the proprietor noted that to fall foul of this provision, the shape must ‘substantially enhance the attractiveness of goods and strongly influence consumer preferences’. However, the goods are sold around the average price for the luxury vodka sector, and the proprioator argued that whilst the EUTM might enhance the attractiveness of the product to a small degree, it does not strongly sway the preference of the consumer who is primarily intent upon purchasing a luxury vodka product, and therefore it is the goods themselves that determine the market success of the goods, not their packaging.

The decision

The Cancellation Division stated that the concept of ‘value’ should be interpreted not only in economic terms, but also that the goods would be purchased primarily because of their particular shape or another particular characteristic. Likewise, that the shape, or other characteristic, may be pleasing or attractive is not sufficient to exclude it from registration. If that were the case, it would be virtually impossible to imagine any trade mark of a shape, or another characteristic, given that in modern business there is no product of industrial utility that has not been the subject of study, research and industrial design before its eventual launch on the market. 

Following the case of Loudspeaker (T-508/08) EU:T:2011:575, the Cancellation Division determind that 5 questions need to be answered in the affirmative when deciding whether an EUTM falls foul of Article 7(1)(e)(iii): 
1) Is the design of the EUTM a very important element in the consumers’ choice?
2) Is the design of the EUTM very specific? 
3) Is the design of the EUTM an essential element of the branding policy of the proprietor and does this increase the appeal (the value) of the product?
4) Are the aesthetic qualities of the EUTM emphasised first by the proprietor when promoting its product?
5) As the EUTM perceived as a pure and timeless sculpture?

The Cancellation Division found that the applicant failed to demonstrate that the proprietor emphasised the aesthetic qualities of the EUTM first when promoting its products. There was no evidence of a systematic promotional campaign that placed the primary emphasis on the design of the bottle, which could have been demonstrated with adverts or screenshots of the proprietor’s website. Instead, most of the extracts seemed to be commentaries on events or interviews which was not deemed evidence of a regular marketing campaign focusing on the aesthetics of the bottle.

The Cancellation Division took the view that the applicant merely demonstrated that there are people who like the appearance of the crystal head bottle, but not that the EUTM proprietor promotes the appearance and aesthetics of its bottle to the extent that it has become an essential part of its branding, increasing the appeal, and therefore the value, of the product contained within the bottle. Furthermore, the proprietor demonstrated that the appearance of the bottle did not strongly sway the preference of the consumer, who is primarily intent upon purchasing a luxury vodka product, by way of several compelling items of evidence, such as winning blind taste test awards. Therefore, concluding that the applicant failed to prove that the design of the EUTM was an essential element of the branding policy of the proprietor which increased the value of the product and the application was rejected.

Legal interpretation is of particular interest to this Kat, so she was intrigued to hear about this case which turned on the correct interpretation of a trade mark specification; the literal vs the "common sense approach". Here's what happened.

Background to the case

Kat Alliance Image: Andy Miccone

In January 2011, AxiCorp applied for registration through WIPO designating the European Union for the word mark AXICORP ALLIANCE in Classes 3, 5, 10 and 35. The applicant, Alliance Pharmaceuticals, opposed the registration based on its earlier marks; EU word mark ALLIANCE (registered August 2006 in Class 5),  an EU figurative mark (registered December 2003 in Class 5) and an unregistered word mark ALLIANCE, used in the course of trade for ‘pharmaceutical preparations and substances’ in the UK.

In May 2017, the Opposition Division rejected the opposition in its entirety on the grounds of lack of evidence of genuine use of the earlier EU trade marks and the unregistered mark in the course of trade. The applicant appealed and by decision of 7 February 2018, the Fifth Board of Appeal of EUIPO partially annulled the Opposition Division’s decision and remitted the case to the Opposition Division. This is the contested decision in the present case.

The Applicants Case: Infringement of Regulation 2017/1001 or an infringement of a rule of law relating to its application

The applicant sought partial annulment of the contested decision in so far as the Board of Appeal had dismissed the appeal as regards the grounds for opposition set out in Article 8(1)(b) and (5) of Regulation 2017/1001. In support of the action, the applicant relied on a single plea in law, alleging that the Board of Appeal construed the specification of the earlier EU trade marks incorrectly, and so concluded that the evidence of use submitted did not show genuine use of those marks in connection with the goods included in that specification. In particular, the applicant disputed the Opposition Division’s narrow construction of the specification, which was confirmed by the Board of Appeal, that ‘chemical preparations for pharmaceutical purposes’ were excluded from ‘pharmaceutical preparations’.

Too narrow? Image: VirtKitty

The applicant submitted that the narrow construction of the specification was contrary to the EUIPO’s examination guidelines on how exclusions are to be worded in specifications, arguing that if the intention is to exclude types of goods, the conjunction to use is the disjunctive conjunction ‘or’ and not the coordinating conjunction ‘and’. As such, the words ‘but not including infants’ and invalids’ food and chemical preparations for pharmaceutical purposes’ was meant to be construed as excluding only the first category of goods - foods for infants and invalids - and as including the second category of goods - chemical preparations for pharmaceutical purposes. Moreover, the applicant submitted that the narrow construction of the specification adopted was incorrect as it resulted in a specification that makes no commercial sense, contrary to the normal canons of construction of legal texts.

The EUIPO's arguments for a narrow literal approach so that trade mark owners are obliged to draft with clarity and precision

The EUIPO disputed the applicant’s arguments, submitting that an example of the drafting of an exclusion taken from the EUIPO’s examination guidelines cannot provide the basis for a rule determining the conjunction which should be used when drafting an exclusion in a specification. It maintained that it is the responsibility of the applicant to draft clearly and precisely the specification of the goods and services in respect of which protection is sought. Further, the EUIPO argued, the way in which the specification was interpreted was neither unreasonable nor contrary to grammatical rules, even though other interpretations could not be excluded. Thirdly, the EUIPO stated that the extent of the protection sought must be capable of being determined on the basis of the register alone. Therefore, where the designation of goods or services lacks clarity and precision, the scope of the mark must be interpreted narrowly because the proprietor of the mark should not gain from the infringement of its obligation to draw up the list of goods and services with clarity and precision.

The Courts Decision

The Court pointed out that, the interpretation of the specification given by the Board of Appeal, that ‘chemical preparations for pharmaceutical purposes’ were excluded, was possible from the wording of the specification. However, that interpretation did not duly take into consideration other factors that were essential for the purpose of understanding the scope of that specification; the actual intention of the proprietor of the marks concerned and the need to give an appropriate scope to that wording, one that precludes a reading leading to an absurd result for the proprietor. The actual intention of the applicant for registration of an EU trade mark is not irrelevant. Indeed, the Court of Justice has observed that a situation in which the extent of the protection conferred by a trade mark depends on the approach to interpretation adopted by the competent authority and not on the actual intention of the applicant runs the risk of undermining legal certainty both for the applicant and for third party economic operators (Chartered Institute of Patent Attorneys, C 307/10, EU:C:2012:361).

In the present case, the Court found that if the approach adopted by the Board of Appeal were correct and the registrations of the earlier EU trade marks covered pharmaceutical products except for those ‘using pharmaceutical chemical preparations’, thereby covering only ‘natural’ preparations or preparations ‘of herbal origin’ which do not contain chemical substances or synthetic components, those registrations would cover only goods which were not contemplated by the applicant and which were not expressly referred to in the specification of those marks. Such a situation is incompatible with the requirements of predictability and legal certainty.

Further, the Court stated that although it is true that the literal interpretation of the specification of a mark is preferred, that principle is of little use where two literal interpretations are equally possible. In such a situation, it is the interpretation which, among a number of possible interpretations of EU legal instruments, is the one which does not lead to an absurd result that must be preferred. The interpretation of EU law provisions is based first and foremost on the text, since that approach reflects the core principles of predictability and legal certainty. However, if the text is ambiguous or the literal meaning would lead to a nonsensical result, the meaning may be reappraised after being placed in context and interpreted in light of the provision of EU law as a whole, bearing in mind the objectives and its state of evolution at the time.

Don't be absurd! Image: Lisa Zins

Thus, the Court found that in the context of Article 47(2) of Regulation 2017/1001 and assessing the evidence of genuine use of a mark, if two possible literal interpretations of the specification of that mark exist, but one of them would lead to an absurd result as regards the extent of the protection of the mark, the Board of Appeal must resolve the difficulty by opting for the most plausible and predictable interpretation of that specification. The Court held that it would be absurd to adopt an interpretation of the specification which would have the effect of excluding all of the applicant’s goods, leaving only goods in respect of which it has not sought trade mark protection.

As such, in the present case, the Board of Appeal had equated ‘chemical preparations for pharmaceutical purposes’ with final pharmaceutical chemical or synthetic preparations and therefore all the evidence of use of the earlier EU trade marks were rejected, despite the applicant’s main business activity was the marketing of pharmaceutical preparations and those marks were registered in respect of ‘pharmaceutical preparations’. The Court agreed with the applicant that it would be absurd to assume that it intended to seek registration of an EU trade mark in respect of a category of goods which it then restricted by a broadly equivalent category of goods.