Shape trademarks: the Court of Florence’s innovative interpretation of “substantial value”

The Court of Florence recently expressed an interesting view on the interpretation of absolute grounds of registration invalidity provided for signs constituted by the shape of a product, and, in particular, substantial value.

The case concerned the shape of the world wide famous Hermes’ “KELLY” and “BIRKIN” bags, the shape of which was registered as 3D trademark in Italy and before the EUIPO.

Capture

Hermes alleged the infringement of its famous trademarks by an Italian company offering for sale bags highly similar to the ones protected with Hermes shape trademarks. The alleged infringer resisted claiming, as usual in these cases,  that the above trademarks were invalid since, besides other things, they consist of a shape giving substantial value to the bag.

The Court of Florence dismissed such claim, excluding the existence of a substantial value with an unusual (and deeply interesting) interpretation of this prevention.

Firstly, the decision (available heredefines substantial value as a real and concrete aesthetic plus-value – relevant per se to the product, being instead irrelevant the existence of any particular decoration or added part – that cannot be separated from the product itself and is capable of prevailing on the product’s shape features that are necessary to its function.

Then, the Court expressly excluded that the mere ornamental attitude of the product’s appearance could be of relevance in the evaluation on the existence of a substantial value. Differently from the main case law on this ground of refusal (see decision of 15 February 2012 of the Court of Venice on Crocs shoes or decision of 16 June 2015 of the Court of Milan on Flou’s Nathalie bed), the decision essentially denies that substantial value consists in the capability of the shape to influence the consumer’s choice of purchase, so to be itself the main reason why the product is in fact chosen and bought. In the Court’s view, this capability of the object’s shape to catch the consumers’ attention is connected only with trademark reputation.

Only when the aesthetic appearance of the product’s ornamental shape is so relevant to give a particular aesthetic value inseparable from the product itself trademark registration is prevented. Having this interpretation of substantial value in mind, the Court affirmed that “KELLY” and “BIRKIN” bags where valid trademarks as their shape trademark may be separated from the product itself and does not merely consist in the standard appearance of bags.

This decision interestingly tries to plot a demarcation line between substantial value and trademark reputation/distinctiveness that are often overlapped in the context of the discussions on substantial value. The distinction proposed by the Court of Florence could indeed be of help in drafting a clear and new definition of substantial value, whose interpretation is still not crystal clear when applied to real cases. As a matter of fact, and as actually noticed by the Vespa case (see here), the current interpretation of this condition often leads the trademark owner to deny the attractiveness and distinctiveness of the shape of a product when substantial value is under discussion on the basis that an actual recognition of the shape of the product on the market may lead to the assertion of the existence of a substantial value.

The interpretation of the Court of Florence would not fall into this trap and appears to be more logical in the overall context of the trademark protection, as it denies any relevance of the trademark distinctive character in the context of absolute grounds of registration invalidity provided for signs constituted by the shape of the product. This interpretation, although interesting, is however new and currently isolated. While certainly providing food for thought, it downplays the meaning, and legal sense , of the requisite of substantial value as a reason to attract consumers. If only reputation is attractive, what is the meaning, and sense, to verify the occurrence of a substantial value? ‘Substantial’ to what effect?!

Maria Luigia Franceschelli

Court of Florence, case No. 5850/2010, 31 January 2017, Hermes International Scpa, Hermes Sellier SA, Hermes Italie SpA vs. Papini Paolo & C. Snc and Corsini Giorgio di Gianna e Paola Corsini Snc.

The Coca-Cola contour bottle without fluting cannot be a valid three-dimensional trademark according to the EU General Court

On 29 December 2011 The Coca-Cola Company filed an application at OHIM for registration of a Community trademark of the following three-dimensional sign consisting of the shape of a bottle (on the left), a variation of the popular Coca-Cola contour bottle with fluting (on the right):
bottle 1.pngbottle 2.jpg

On January 2013 the examiner dismissed the application having found that the mark applied for was devoid of distinctive character (under Article 7 (a)(b) of regulation No 207/2009) and had not acquired said character through use (under Article 7(3)). The applicant filed a notice of appeal with OHIM against the examiner’s decision, which was however dismissed by the OHIM Board of Appeal.

Against the decision of the Board of Appeal The Coca-Cola Company brought action before the EU General Court, which on 24 February 2016 (in case T-411/14, full text here) entirely dismissed the appeal and, as a consequence, confirmed the previous ruling of OHIM Board Appeal.

With two pleas Coca-Cola claimed: (a) that the mark it applied for has a distinctive character, being a natural evolution of the shape of the bottle “contour” with fluting which is popular and distinctive worldwide; and (b) that in any event mark it applied for has acquired distinctive character throughout the use in the market in combination with the contour bottle with fluting.

 Taking into account the first plea, the General Court recalled that the distinctive character must be assessed by reference to (i) the goods or services in respect of which registration has been applied for, and (ii) the perception of them by the relevant public.

More specifically, it emphasized, when those criteria are applied account must be taken of the perception of the average consumer  in relation to a three-dimensional mark consisting of the appearance of the goods themselves: in this respect average consumers are not in the habit of making assumptions about the origin of goods on the basis of their shape or the shape of their packaging in the absence of any word or graphic element, and it could therefore prove more difficult to establish distinctive character in relation to such a three-dimensional mark than in relation to a word or figurative mark.

Then, the Court examined the mark applied for, founding that either the lower, the middle and the top section of the bottle (i) do not enable the average consumer to infer the commercial origin of the goods concerned and (ii) do not display any particular features which stand out from what is available on the market.

Therefore, considering the mark applied for as a whole, the Court held that it is devoid of distinctive character for being a mere variant of the shape and packaging of the goods concerned, which will not enable the average consumer to distinguish the goods of Coca-Cola from those of other undertakings.

In considering the second plea, the Court underlined that for the mark to have acquired distinctiveness through use, Coca-Cola has the burden to demonstrate that at least a significant proportion of the relevant public throughout the European Union, by virtue of that mark, identifies the goods or services concerned as originating from Coca-Cola.

In evaluating that, the Court examined all the items of evidence already provided by Coca-Cola to the OHIM Board of Appeal, founding that none of them, considered both in isolation and as a whole, was sufficient to establish that the mark applied for has acquired distinctive through use.

In particular, the surveys submitted by the applicant covered only a part of the European Union (only 10 of 27 Member States) and the other secondary evidences such as investments, sales figures, advertising and articles did not, due to their imprecisions and inconsistencies, compensate for that deficiency: For example, the sales figures proved that Coca-Cola has sold large beverages throughout the EU, but the data provided referred to the ‘contour bottle’ without specifying whether that means the mark applied for or the contour bottle with fluting, consequently it does not enable a conclusion to be drawn regarding the relevant public’s perception of the three-dimensional sign applied for.

Furthermore, the Court pointed out that in general a three dimensional mark may acquire distinctive character through use, even if it is used in conjunction with a word mark or a figurative mark, when the relevant class of persons actually perceive the goods or services, designated exclusively by the mark applied for, as originating from a given undertaking (as stated in case C-353/03, Nestlè SA v. Mars UK Ltd). However, in the case in point the Court noted that the mark which Coca-Cola applied for was not clearly distinguishable from the mark it was alleged to be a part of, due to the fact that it was not obvious from the evidence provided by the applicant and particularly from the advertising material, whether the bottle that is shown in them is a representation of the contour bottle with fluting, or a representation of the mark applied for.

In view of the above, the General Court found that the mark Coca-Cola applied for has not even acquired distinctive character.

We can only agree with the whole outcome: to grant a trade mark in these circumstances would have given a perpetual monopoly to Coca-Cola in the shape of a bottle that is very commonplace on the market. The General Court set forth its arguments in a commendable way without being affected by the global popularity of Coca-Cola and its famous iconic bottle contour with fluting.

It remains to be seen whether, within two months of notification of the decision, Coca-Cola appeal the decision of the General Court to the Court of Justice of the European Union.

It may be not a coincidence and neither a déjà vu, but in the 1986 the House of Lord (Coca-Cola Co.’s Application [1986] 2 All ER 274) denied the Coca-Cola Company trademark protection for shape and design of the Coke bottle, assuming that it was “another attempt to expand on the boundaries of intellectual property and to convert a protective law into a source of monopoly”.

Matteo Aiosa

General Court of EU (Eight Chamber), The Coca-Cola Company v. Office for Harmonisation in the Internal Market, 24 February 2016, case T-411/14

Buddha in a cafè? No trademark for the Italian Supreme Court

On 25 January 2016 the Italian Supreme Court (decision no. 1277, full text here) ruled on the validity of “Buddha Bar” and “Buddha Cafè” trademarks in a three instances dispute in which the defendant came always out winning.

The French companies George V Entertainment e George V Records, respectively owner of Buddha Bar and Buddha Cafè community trademarks, asked the Court of Milan to declare the infringement of their marks by the Italian entrepreneur owner of the “Buddha – Cafè” in Milan. However, both the Tribunal and the Court of Appeal of Milan rejected the claimants’ demand and, indeed, upheld the counter-claim of the defendant affirming the invalidity of the trademarks for lacking of distinctiveness under Article 7, a) of Community Trademark Regulation.

In appealing to the Supreme Court, the French companies argued that their signs would be deemed as particularly evocative and strong trademarks for the reason that they establish an anomalous connection between words which are conceptually disjointed: from the one side Buddha and on the other side Bar and Cafè.

For its part, the Supreme Court pointed out that, in order a sign to be valid pursuant to Article 4 of CTM Regulation, it is not enough that it should have an ‘expressive content’, but it is essential that the meaning of the term must be capable of distinguishing the goods or services of one undertaking from those of other undertakings. This remark concerns the standard law, and therefore it is undisputed.

More perplexingly the Court, as already set forth by both the Tribunal and the Court of Appeal, denied the distinguishing character of the term Buddha assuming that it not only (a) calls to mind a religion but also (b) transmits adhesion or interest to a philosophy and a way of life which characterize a custom pertaining to the most different expressions of the social behavior like literature, music, figurative arts and cuisine, so as to have become a trend.

As a consequence the Court said that the combination between the term “Buddha”’ and the terms “Bar” and “Cafè” is not unusual, because such meeting places are historically linked to specific expressions of the literature and in general of the art of the occidental cultural tradition.

In the light of the above, the Supreme Court dismissed the appeal proposed by the companies George V Entertainment and George V Records, hence confirming the invalidity of their two community trademarks.

The final and debatable outcome is that anyone cannot use the Buddha’s name on an exclusive basis to “denote a product or service”.  From a general perspective the upshot is even more puzzling: the most of characters and movements of culture, literature, art, and philosophy used to hang out at cafès, then, following this decision of the Supreme Court, none of the term referred to them should never be registered as a denominative trademark in combination with the words “bar” or “cafè” for cafeteria’s products or services.

It should be also noted that the Court, once established the lack of distinctive character, has deemed absorbed – then has failed to consider – the question whether the trademarks are contrary to public policy. Maybe simply affirming the invalidity of such trademarks due to their vilification of Buddhist thought would have been quite logically and reasonably commendable.

Matteo Aiosa

Italian Supreme Court, 26 January 2016, No. 1277, George V Entertainment s.a. and George V Records e.u.r.l. v. Buddha Cafè S.r.l.