“Position” Trade Marks: the General Court of the EU on the Likelihood of Confusion. The “Adidas’ Three Stripes” Case

On May 21st, 2015 the General Court of the EU laid down some key issues on the assessment of the likelihood of confusion between “position marks”, meaning those figurative marks that are registered with the indication of the specific position where the mark is displayed on a certain good (full text here).

Case T-145/14, Adidas AG v. OHIM, concerned the application for registration, by Belgian Shoe Branding Europe BVBA, of a “position mark” for adidas“footwear”, consisting in two parallel lines placed on the side of a shoe, similar to the famous Adidas’ “three stripes”, though differing in number and inclination. Adidas AG filed a notice of opposition, based on its earlier rights.

Both the Opposition Division and the Board of Appeal of the OHIM rejected Adidas’ opposition.

However, the General Court annulled the decision of the Board of Appeal, ruling that: 1) the marks at issue have more common elements than differences; 2) the average consumer of that kind of products does not demonstrate a high degree of attention, normally perceiving a mark as a whole and not proceeding to analyse its various details, so that the overall impression produced by the two marks is that of similarity; 3) a mark bearing similar characteristics to those of a highly distinctive mark with a strong reputation may mislead the public into believing that the goods come from the same undertaking.

One of the key issues of the commented case is defining the degree of attention of the average consumer when he prepares and makes his choice between different products. In fact, while on one hand the Board of Appeal stated that the average consumer is accustomed to seeing geometric designs on shoes and pays attention to the details of “sport shoes”, on the other hand the General Court judged that, since “sport shoes” are everyday consumer goods, the relevant public is made of the average consumer with an average degree of attention. The Board of Appeal was probably right, because consumers, when purchasing “sport shoes”, usually seek good quality, solid and technical shoes, with specific features and produced by a trusted mark, hence applying a medium / high degree of attention.

It must also be pointed out that, despite what the General Court stated in this decision, previous EU decisions have admitted that the more famous a mark is, the more likely the average public will notice even the smaller differences; because it knows the trade mark in almost every detail and, therefore, can more easily recognize and distinguish imitations, so that the risk of confusion/connection between the signs is more difficult to occur (see Claude Ruiz-Picasso and Others v. OHIM, T-185/02, 22 June 2004, confirmed by C-361/04, 12 January 2006; on the renowned mark see also Court of Bologna, 20 October 2011, in GADI, 2013, n. 5954, p. 264 ss.).

Eleonora Sbarbaro

General Court of the EU (EGC), Adidas AG v. Office for Harmonisation in the Internal Market, 21 May 2015, Case T-145/14

The EU trademark reform has reached the final steps

The reform of the European trademark system may become a reality before the end of 2015.

In addition to the Commission Regulation no. 2869/1995 on the fees payable to the Office for Harmonization in the Internal Market, the reform package presented by the Commission on March 2013 focuses, as known, the Trademarks Directive 2008/95/EC and the Community Trademark Regulation 2009/207/EC.

The Commission’s “Proposals” are based on the “Study on the Overall Functioning of the European Trade Mark System” (available here), realized by the Max-Planck Institut of Munich upon request of the same Commission and published on February 2011. The Proposals  aim at  modernizing and  harmonizing the community and national trademark’s systems (by simplifying the registration procedure and intervening on the substantive law) as well as at strengthening the enforcement of  counterfeiting.

On June 10th 2015, the Council’s Permanent Representatives Committee has approved the final compromise texts of the trademark reform package, and on June 16th 2015 the compromise agreement has been voted by the Parliament’s Legal Affairs Committee.

The final text of the Regulation can be found here, while the final text of the Directive is here.

The approved texts are actually not yet absolutely “final” as they still need to go through the legal-linguistic revision before the final endorsement by the Council and by the European Parliament. So, unless there are further delays, while most of the provisions of the Regulation will come into effect in early 2016, the Member States will have three years to transpose the Directive into national law.

The new features introduced by the reform range from formal ones, such as the adoption of the names “european trademark” instead of “community trademark” and “European Intellectual Property Office” instead of “Office for Harmonization in the Internal Market” and the reducing of registration fees, to substantive ones, such as the rejection of the requirement of the graphic representability, the extension of the absolute grounds of refusal or invalidity of the registration provided for signs constituted by a shape to signs constituted by “another characteristic”, the addition to the provision concerning the rights conferred by the registered trademark of the specification that the owner of the trademark may also prohibit the use of the sign in comparative advertising if made in a way which is contrary to the Directive 2006/114/EC and the introduction of provisions on the goods in transit in the EU.

Even if the reform presents some positives, it is not exempt from criticism.

Inter alia, by reducing registration fees of community trademarks it maintains the community and the national trademarks systems in competition.

Also, by extending the provisions on the shape trademarks to sign constituted by other characteristics, the revision makes non-traditional trademarks harder to register. This kind of trademarks will indeed not be registrable if they exclusively consist of a characteristic (such as, for example, a sound or a smell) which can be considered imposed by the nature of the product, or necessary to obtain a technical result or giving substantial value to the product.

But the most discussed and criticized provision is the one providing that the trademark owner is entitled to prevent third parties from bringing fake goods, in the course of trade, into the Member State where the trademark is registered. First of all, because the text has udergone many changes and, secondly, because its last version provides that the entitlement of the owner shall lapse if during the proceedings to determine whether the registered trade mark has been infringed, evidence is provided by the declarant or the holder of the goods that the proprietor of the registered trade mark is not entitled to prohibit the placing of the goods on the market in the country of final destination. This clearly gives trademark owners great power to prevent fake goods transiting through the Community as it will be very difficult for the holder to prove a negative.

In the end, the reform doesn’t take advantage of the occasion to codify consolidated principles affirmed by the EU Court of Justice such as those expressed in the General Motors case (C-375/97), in which the famous trademarks have been defined as registered trademarks known by a significant part of the consumers of the products or services which said marks cover in a substantial part of the EU territory. The provisions on famous trademarks contained in the current Directive and  Regulation do not express such a definition of reputation and this lacuna could have been filled by the reform as the principles expressed in the said case are unanimously shared.

Sara Caselli

* due to a technical error, “steps” was erroneously reported as “jokes” in the title. We apologize.

The Court of Milan bans UberPop on grounds of unfair competition

On 25 May 2015 several Taxi Drivers Association obtained an interim injunction from the Court of Milan (Mr. Marangoni – full Italian text here) restraining, pursuant to unfair competition grounds, Uber from providing, on the Italian market, the “Uber Pop” application which is the digital platform connecting demand for car rides with offerings from private car owners.

First of all, the Court of Milan has noted that Taxi service in Italy is heavily regulated by public laws.

Secondly, the Court stated that Uber Pop is a direct competitor of taxi drivers. In fact, even though Uber Pop is a private transport service (drivers use their own cars), it actually has the same features as a public transport service, such as taxis. Indeed, the drivers are contacted by the users through a phone app and they have to drive the user to the destination they choose. Uber pop may not be considered as a car sharing or a ride sharing: in these cases the car owners aim at sharing the costs of the drive for reaching their personal destination.

Having said that, the Court stated that Uber’s “surge pricing” system (i.e. when drivers are scarce, and demand is high, prices go up), actually allows Uber to apply fares that are much lower than the taxi fares. Uber’s drivers are able to apply the “surge pricing” system because they are not subject to, nor have to comply with, the laws regulating the Taxi service, hence they do not have to bear the expenses required to the owners of a transport license (like taxi drivers), such as costs for installing meters, insurance obligations or purchase of a car exclusively dedicated to third parties’ use, frequent maintenance checks, etc.

According to the Court’s opinion the breach of  public laws constitutes an act of unfair competition by means of art.  2598 n. 3 Italian Civil Code if (i) it constitutes the “main and direct cause” of  the decrease of a competitor’s advantage or if (ii) a connection can be established between the breach of public law and the competitive advantage reached by a competitor.

In the Court’s view, the lack of authorization and the non-regulated behaviour of Uber Pop’s drivers entail a competition advantage and, therefore, constitutes an act of unfair competition.

With this decision, the Court of Milan confirms a long standing  Italian case law according to which a breach of a public law amounts to an act of unfair competition by means of Art. 2598 n. 3 of the Italia Civil Code only if the competitor, by virtue of the breach of law, obtains a competitive advantage that would not be reached but for that  breach, hence damaging (subtracting clients to)  its competitor  (see Supreme Court n. 8012/2004).

The interim injunction has been confirmed by the well-grounded appeal decision (Mrs. Tavassi – full Italian text here) dated 2 July 2015. It must be noted that some consumers’ associations joined the appeal proceedings; the decision highlighted that not all the associations have the same position on Uber’s activity and the Judge seemed to share the position of the association Movimento Consumatori which filed a complaint before the Italian Antitrust Authority.

Gianluca De Cristofaro

Court of Milan, 25 May 2015, Taxi Drivers Association vs. Uber

Court of Milan, 2 July 2015, Taxi Drivers Association – Consumers’ Association vs. Uber

EU General Court rules Lego mini-figures should continue to be protected as shape marks

By a decisionlegoman of June 16, 2015, T-395/14 (full text here), the General Court of the EU (GC) knocked down a challenge by Best Lock Ltd, a British brand of plastic building bricks that are compatible with and competitor of the Danish firm Lego, arguing that the community 3D trade mark (TM) reproducing the shape of Lego’s famous figurines, registered in 2000, was invalid pursuant to Article 7(1)(e)(i) and (ii) of Regulation No 207/2009 (Reg.) because the shape of the little men was determined by the nature of the goods themselves and consists exclusively of a shape necessary to obtain a technical result, namely, the possibility of joining them to other interlocking building blocks for play purposes. The GC said that the contested TM does not consist “exclusively” of a functional shape. The “exclusivity” condition, according to ECJ’s previous case law (Lego Juris v OHIM, 14 September 2010, C-48/09 P, par. 51), is fulfilled only when all the shape’s essential characteristics perform a technical function. In the present case, however, the ability to join to other building blocks can not be considered the key elements of the Lego figures. Holes on the feet and backs of the legs “do not, per se, enable it to be known whether those components have any technical function” (par. 33), but rather are necessary in order “to confer human traits on the figure in question” (par. 35). Their function is therefore aesthetic and fully distinctive.

The GC decision is just the last episode of a judicial saga between the two companies started with a patent challenge in Germany in 2004 (BGH, 2 december 2004, I ZR 30/02), where Lego bricks were denied patent protection. After that, in a further case in 2010 (Lego Juris v OHIM, cited), the Canadian competitor Mega Bloks prevented Lego from registering its building brick also as a trademark. In case of defeat also in the present judgement, the Danish toy giant would be devoided of any IP protection for its creations. The GC, however, desregarded the ECJ’s previous findings on Lego bricks and concluded that the contested trade mark had nothing in common with the mark at issue in those proceedings, except for the fact that it was produced by the same company (para. 37). The Courts gives no other reasons for differentiating the two cases. Curiously, therefore, Lego will be able to sue only competitors producing and selling replicas of the little figures and not of the building bricks. Why is not completely clear, but rather confirms how the EU Courts findings in this complex area are always strongly facts based and a more thorough norms’ exegesis would be surely welcomed.

                                                                                                                                                                                                                                                                    Jacopo Ciani

General Court of the European Union (Third Chamber), 16 June 2015, T-395/14, Best-Lock (Europe) Ltd v. OHIM

The CJEU on the assessment of the likelihood of confusion between Arabic words which are visually similar, but different in pronunciation and concept

On March 28, 2014, the Brussels Court of Appeal lodged a request for a preliminary ruling by the Court of Justice of the European Union (Case C-147/14, full text here). The reference was made in the course of a proceedings concerning the infringement of the two Community trademarks “EL-BENNA” and “E-BNINA”, registered by the Management Loutfi Propriété intellectuelle SARL (“Loutfi”) for goods in Class 29, 30, 32, from the Benelux trademark “EL-BAINA”, filed by the AMJ Meatproducts NV (“Meatproducts”) for goods in Class 29 and 30. The Court of Appeal held that both Loutfi’s and Meatproducts’ trademarks were registered for goods (halal products) that were identical or at least similar, and that the relevant public for assessing the likelihood confusion was the normal Muslim consumer of halal food in the EU, who had at least a basic knowledge of Arabic. Furthermore, comparing the marks orally and conceptually, the Court determined that the words EL BENNA, EL BNINA and EL BAINA did not have a meaning in one of the official languages of the European Union, and all of them had different meanings and pronunciations in the Arabic language.

On the basis of that, the Court asked CJEU if the Article 9 (1)(b) of CTMR must be interpreted as meaning that, in the assessment of the likelihood of confusion between a Community trade mark in which an Arabic word is dominant and a sign in which a different, but visually similar, Arabic word is dominant, the difference in pronunciation and meaning between those words may, or even must, be examined and taken into account by the competent courts of the Member States, even though Arabic is not an official language of the European Union or of the Member States. The CJEU (Tenth Chamber), with the decision of 25 June 2015, ruled that: “Article 9(1)(b) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark must be interpreted as meaning that, in order to assess the likelihood of confusion that may exist between a Community trade mark and a sign which cover identical or similar goods and which both contain a dominant Arabic word in Latin and Arabic script, those words being visually similar, in circumstances where the relevant public for the Community trade mark and for the sign at issue has a basic knowledge of written Arabic, the meaning and pronunciation of those words must be taken into account”.

It might seem absurd that for the Community trade mark the relevant public does not necessarily coincide with the ethnic belonging to a Member State of the European Union. However, the decision of the CJEU is consistent with its previous guidance, both in the identification of the relevant public, i.e. the Muslim as “the average consumer of the category of products concerned (which) is deemed to be reasonably well-informed and reasonably observant and circumspect” (CJEU 22 June 1999, case C-342/97, Lloyd/Klijsen; Lloyd/Loint’s), and in the global appreciation of the likelihood, having taken “into account all factors relevant to the circumstances of the case” (CJEU 11 November 1997, case C-251/95, Puma/Sabel). 

– Update –

The parameter of the average consumer is further strengthened by the decision of 21 January 2016, case C-75/14, “Verlados” / “Calvados” the CJEU stated that, in order to assess whether there is an ‘evocation’ in the field of geographical indications (within the Article 16(b) of Regulation (EC) No 110/2008) it must be taken into consideration “the phonetic and visual relationship between those names and any evidence that may show that such a relationship is not fortuitous, so as to ascertain whether, when the average European consumer, reasonably well informed and reasonably observant and circumspect, is confronted with the name of a product, the image triggered in his mind is that of the product whose geographical indication is protected”.

A consideration is compulsory: are we really sure that at the present time, where consumers make millions online purchases every day with a simple click spending a matters of seconds to choose and buy a product – just relying only few images and a brief description of the same and without the possibility to try it – the parameter of the average consumer which is reasonable observant and circumspect is still true? Maybe a change of course should be considered with reference to the attention paid by the “e-consumer”, and the right of withdrawal within at least 14 days provided by the consumer laws is a clear indication of the need of a major protection for those who make online purchases.

 Matteo Aiosa

Court of Justice, Tenth Chamber, 25 June 2015,  C-147/14, Loutfi Management Propriété intellectuelle SARL.v AMJ Meatproducts NV- Halalsupply NV.

The impact of peaceful coexistence in the assessment of likelihood of confusion: a new decision from the General Court

In the Rioja Alta case (full text here), concerning the conflict between the “VIÑA ALBERDI” community trademark and the prior German trademark “VILLA ALBERTI” (both registered and used for wines), the General Court tackled the issue of peaceful coexistence as a factual circumstance which may rule out the likelihood of confusion.

The General Court has not actually stated anything new in the case at stake. It has simply repeated principles already expressed by previous judgments. And yet the decision is interesting because the Court has carefully assembled those principles, providing a generally applicable list of factors to be taken into account when assessing the impact of coexistence of trademarks in evaluating the likelihood of confusion, i.e. the adverse effects on the “essential” function of trademarks (the distinctive function: see ECJ, C-206/01, Arsenal, par. 51). Such factors include:

1) the fact that the trademarks in conflict were known by the relevant public, and thus perceived as indicators of different origins, prior to the registration of the contested trademark (par. 80);

2) the duration of the coexistence (par. 80); and

3) the absence of litigation regarding the coexisting trademarks (par. 82).

Although the decision did not deal with the possible impact of coexistence in the assessment of unfair advantage and detriment, it seems reasonable to assume that a peaceful coexistence may have an impact on the acknowledgment of such elements too and, therefore, that the above “coexistence test”, with small amendments, may also be applied to the assessment of the adverse effects on trademarks’ “non essential” functions (and namely the functions of “communication, investment or advertising“: see ECJ, Interflora, C-323/09; ECJ, L’Oréal, C-487/07).

For a critical review of EU case law and legislation on trademarks and coexistence, see Pennisi, Tutela del marchio e azioni ritardate: dalla preclusione per tolleranza alla preclusione per coesistenza, in Riv. Dir. Ind., 2015, p. 18 ff., whereby the ECJ case law (and particularly the C-482/09, Anheuser-Busch, decision) laid down the basis for a “limitation as a consequence of coexistence” doctrine.

Riccardo Perotti

General Court (Fourth Chamber),30 June 2015, T-489/13, La Rioja Alta, SA v OHIM

The Court of Turin rules about authorship in copyright: toward protection of advertising ideas through moral rights?

A recent interim decision of the Court of Turin (full Italian text here) in a copyright dispute faced an interesting issue concerning the concept and scope of right to co-authorship, hence also a moral right pursuant to art. 20 of Italian Copyright law (Law No. 633/1941).

In a nutshell, Mr. Pagani, a former employee of the advertising company Leo Burnet, claimed to be the author of the “creative idea” from which Fiat advertisement “Fiat 500 cult yacht” (which was awarded, among others, the Cannes Lion 2014 at the International Festival of Creativity) was produced. He expressed this idea in a script exposed during a meeting at Leo Burnet. The proposal was discarded by Fiat. Four years later the script was revived and elaborated by two other employees of Leo Burnet to produce the advert Fiat 500 cult yacht. Credits on the advert were then attributed to these two employees.

Taking aside the question whether scripts may be autonomously protected as creative works, the Court of Turin considered that (i) advertisements can be the subject of copyright protection, as works characterized by innovative ideas or new form of expression of previous ideas; (ii) a video advert is a complex work, which includes visual and audio elements; (iii) conception of the advert is a crucial phase within the creative process: the project of the advert constitutes the “synthesis” to be developed during the production of the video; (iv) Mr. Pagani’s script (as mean of expression of the advert idea) included all the main elements that characterize the final advert: the promotional message, its way of expression (i.e., the particular environment, the narrator’s voice, the final advertising claim) and the targeted public.

In light of the above, Mr. Pagani’s script expressed more than a mere idea and contributed decisively to the final advert. Thus, the Court ordered to rectify the credits of the advert including Mr. Pagani among the authors and to notify the interested parties.

This decision is far from granting copyright protection to mere ideas, since protection of Mr. Pagani’s idea was conditioned to (i) the expression on a physical medium (i.e., the script) and (ii) the presence of all the main expressive elements of the final advert. However, it confirms a flexible view in acknowledging (co)authorship to creative contributions of a work (on a similar ground, see Court of Milan 21 October 2003, which considered co-author the scriptwriter who conceived the characters of a comic).

Francesco Banterle

 Court of Turin, 31 March 2015, Riccardo Pagani v. Leo Burnett Company S.r.l.