Dear readers,

This issue of Trademark Insight once again contains some noteworthy decisions from recent months. Of particular interest are the decisions on the legal concept of complex likelihood of confusion (komplexe Verwechslungsgefahr) (German Federal Patent Court), on a trade mark conflict over homonyms (General Court) and on the genuine use of a recycling symbol (General Court). Selected decisions on the protection of reputation and bad faith are also summarized. As always, we report on current case law on the likelihood of confusion and distinctiveness, and in the Country Focus section of this edition, our colleague Aleksandra Kuc-Makulska presents valuable insights on the impact of two recent CJEU cases on the trade mark referential use exception in Poland.

We look forward to receiving your feedback and suggestions by e-mail to [email protected]. 

We wish you a useful read,

Thorsten Klinger und Dr. Andreas Renck

Index

Trademark law in the European Union and Germany

Written by Thorsten Klinger, Christine Stoeber, Robert Taeger und Sophia Siegling

• Legal concept of complex likelihood of confusion (BPatG)
• Protection of reputation in favour of "OREO" against "PORLEO"  (EUIPO)
• Distinctive character of a name  (BPatG)
• Registrability of the representation of a biscuit  (EUIPO)
• Invalidity based on an identical earlier company name  (GC)
• Protectability of a bear-shaped trade mark  (GC)
• Invalidity of the EU trade mark "Neo Safety" due to bad faith  (EUIPO)
• Necessary degree of similarity of signs in case of protection of reputation  (GC)
• Genuine use of a recycling symbol (Pfandzeichen)  (GC)
• Technical effect of a bottle-shaped 3D-mark (GC)
• Registrability of a colour mark with a white side stripe  (EUIPO)
• Bad faith of the application "CorrosionX"  (EUIPO)

Country Focus: Poland

Written by Aleksandra Kuc-Makulska

• The impact of CJEU Audi and Inditex cases on trademark referential use exception in Poland

Legal concept of complex likelihood of confusion (BPatG) 

The German Federal Patent Court (BPatG) dealt with the likelihood of confusion between the trade mark application "BLACK HORSE" shown below left and the earlier trade mark "POWER HORSE" shown below right, each claiming protection for non-alcoholic beverages in class 32. The German Patent and Trademark Office (DPMA) had previously rejected the opposition on the grounds that the trade mark applied for was sufficiently different from the earlier trade mark.

The opponent’s appeal however was successful as the trade mark applied for did not differ sufficiently. The required assessment of the similarity of the signs according to the overall impression does not mean that individual components of a complex trade mark cannot also be decisive, which is true in this case. While the two trade marks are overall clearly different, there are also similarities. Whether these similarities were sufficient for finding a direct likelihood of confusion was evaluated using the special case of a “complex similarity” between the signs.

This legal concept had been developed in the case law of the German Federal Patent Court and had already been applied (e.g. in the case of Silver Horse, discussed in Trademark Insight issue 11|2022). It is based on the empirical principle that the opposing trade marks are almost never perceived side by side at the same time. Ultimately, it is only the public’s imperfect recollection that decides. If signs are phonetically, visually and conceptually very similar, confusion cannot be ruled out with the necessary certainty on the basis of memory. In the present case there are such phonetic, typographical and conceptual similarities which - considered as a whole - prevent the conflicting signs from being reliably distinguished, which ultimately leads to the finding of a likelihood of confusion due to complex similarity.

Although the legal concept of complex similarity (and therefore complex likelihood of confusion)has already been applied by the BPatG for more than 50 years - admittedly only in exceptional cases - the BPatG allowed an appeal on a point of law here, as it could not be ruled out that the question of the admissibility of this legal concept would be relevant for a larger number of similar cases in the future.

(BPatG, decision of 26.6.2023, 26 W (pat) 24/18)

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Protection of reputation in favour of "OREO" against "PORLEO" (EUIPO)

As part of opposition proceedings, the Fourth Board of Appeal of the EUIPO dealt with issues relating to the exploitation of reputation. The proprietor of the trade mark "OREO" shown below on the right had filed an opposition against the trade mark application "PORLEO" shown below on the left, based on likelihood of confusion and exploitation of reputation.

After the Opposition Division allowed the opposition only to the extent of similar goods and services and rejected it for the rest, the opponent's appeal against this decision was successful. Following the opponent’s arguments, the Board of Appeal assumed that the reputation of the earlier trade mark was being exploited. As the world's best-selling biscuit trade mark of the 21st century, the opposing trade mark enjoyed an enormous reputation in the EU and its reputation extended beyond biscuits. The comparison of the signs also demonstrates that all elements of the opposing trade mark are present in the central element of the trade mark applied for. The signs were still distantly similar overall, which was regarded as sufficient for the assumption of an exploitation of reputation.

The protection of the reputed earlier trade mark therefore also extends to remotely similar food products, which creates a risk of exploitation of reputation in the form of free-riding.

(EUIPO BK, decision of 19.6.2023, R 1901/2022-4)

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Distinctiveness of a famous name (BPatG)

The German Federal Patent Court (BPatG) dealt with questions regarding the distinctiveness of personal names after the trade mark applied for "james last" (shown below) was rejected by the German Patent and Trademark Office (DPMA) due to a lack of distinctiveness for, inter alia, music software in class 9 and clothing in class 25.

The BPatG overturned the DPMA’s decision. It is true that "james last" is the name of a well-known German bandleader and composer. However, contrary to the opinion of the DPMA, this fact alone does not imply that the targeted general public understands the sign in relation to the claimed goods and services as a factual reference to the life and work of the artist and as a marketing instrument for his music.

Personal names that are merely understood by the public as descriptive or promotional indications, lack distinctiveness. Therefore, it is crucial to consider whether the public is familiar with the personal name in question. After all, the public always associates the names of famous people with their success in life, on which their fame is based. Accordingly, names of famous people are not distinctive for goods and services for which these names are also an indication of quality (Diesel, Otto, Wankel).

However, this is not applicable to "james last" for the claimed goods. The artist had neither characterised a certain style of clothing nor invented music software that was named after him or used to describe him. Nor did the claimed goods have any characterising conceptual content that would allow a thematic description. Neither was it found that the customary use of (famous) personal names in advertising for the purpose of association to the claimed goods could preclude the function as an indication of origin of the trade mark applied for.

(BPatG, decision of 12.6.2023, 28 W (pat) 1/20) 

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Registrability of the representation of a biscuit (EUIPO)

In this decision, the Fifth Board of Appeal of the EUIPO dealt with the registrability of below figurative trade mark application for confectionery and snack goods in Classes 29 and 30. The application was initially refused by the Examination Division on the grounds of lack of distinctiveness.

The Fifth Board of Appeal concurred with this assessment and stated that the sign applied for merely represented the relevant goods themselves or parts thereof (such as bread spread). The figurative mark application simply depicts a rectangular section of a sand-coloured biscuit, with notches on the sides and small circular indentations in the middle. The small red square illustrated next to the biscuit is perceived as a simple basic geometric shape and the free spaces adjacent to the biscuit do also not affect the message conveyed by the sign from the consumer's perspective.

In particular, the sign lacks distinctiveness even when taking into account the labelling habits in the confectionery and snack industry. It is customary in the trade to offer snacks and confectionery in a wide variety of packaging colours, among which the colour yellow is by no means an exception.

(EUIPO BK, decision of 21.8.2023, R 2208/2022-5)

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Invalidity based on an identical earlier company name (GC)

The proceedings are based on a legal dispute between two companies of the same name, both founded a few days apart in 1991. In 2013, aTmos Industrielle Lüftungstechnik GmbH, Düsseldorf (hereinafter referred to as the trade mark proprietor), which was founded first, applied for the EU word mark "aTmos" at issue here for various goods and services relating to air conditioning and ventilation systems in classes 11, 37 and 42. In 2019, aTmos Industrielle Lüftungstechnik GmbH, Riedstadt (hereinafter referred to as the applicant) filed an application for invalidity on the grounds of conflicting earlier company name rights in the same field of goods.

The General Court has now confirmed the decision of the Board of Appeal, which granted the invalidity request. The applicant had successfully demonstrated the existence of earlier company name rights. Under the principle of comprehensive examination the defence of earlier rights of the trade mark proprietor must also be examined. However, the trade mark proprietor had not provided any evidence of the existence of such earlier rights. Even assuming a balance between the signs, this balance was disturbed by the trade mark application, as it could be regarded as use contrary to accepted principles of morality.

The trade mark proprietor was unsuccessful in arguing that the Board of Appeal had exceeded its right of examination by relying on considerations that went beyond the information provided by the parties to the proceedings. It claimed that the applicant itself had introduced and recognised the earlier establishment of the trademark owner and thus its earlier company name rights in the appeal proceedings. In this respect, the court clarified that the Board of Appeal is obliged to comprehensively examine the factual and legal situation. It is true that Art. 95 EUTMR provides that the Board of Appeal may only base its decision on an application for invalidity on the facts and evidence submitted by the parties. However, this does not mean that the EUIPO must treat the undisputed statements of a party as proven. Rather, as part of the legal aspects, the existence of the factual requirements of a relative ground for refusal is also subject to examination by the EUIPO. The Board of Appeal therefore also had to examine the actual existence of earlier rights on the basis of the trade mark proprietor's submissions without thereby infringing Article 95 EUTMR.

(GC judgment of 12.7.2023, T-694/21)

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Protectability of a bear-shaped trade mark (GC)

In the context of invalidity proceedings, the General Court dealt with the distinctive character of the trade mark shown below, which is protected for jewellery in class 14, among other things.

The application for invalidity was rejected by the Cancellation Division and the Board of Appeal. On appeal before the General Court, the invalidity applicant argued that the sign showed the shape of the goods and did not deviate sufficiently from the norms and customs of the market to justify protection. The GC confirmed the preceding EUIPO-decisions and dismissed the action as unfounded.

It is worth noting that the public does not automatically perceive a sign depicting the shape of a good as distinctive. This also applies to two-dimensional representations of shapes of goods.

However, the sign will not necessarily be perceived as depicting the shape of goods. The fact that the claimed goods could also have the shape of a teddy bear is not sufficient as other possible uses of the trade mark exist. As a result, the case law on shape marks is  not applicable.

The evidence submitted by the invalidity applicant concerning teddy bears as a design element in the jewellery sector was not sufficient for the General Court to assume that it was a common motif. The GC held that the public does not associate the teddy bear motif with jewellery, and moreover would not immediately perceive the sign as a teddy bear. The motif is found to leave room for mental effort and imagination, which also emphasises the distinctive character.

(GC judgment of 26.7.2023, T-591/21 )

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Invalidity of the EU trade mark "Neo Safety" due to bad faith (EUIPO)

The EUIPO’s Fourth Board of Appeal ruled that EU trade mark "Neo Safety", registered for various clothing items in class 25, was invalid due to bad faith. The application for this EU trade mark by a Chinese company in 2017 was preceded by a long-standing business relationship with the Polish invalidity applicant, who is the owner of various prior rights to the signs "neo" and "neo tools" for protective workwear, helmets and gloves in Class 9.

In line with the Cancellation Division, the Board of Appeal also assumed that the trade mark proprietor was acting in bad faith and dismissed its appeal as unfounded. Bad faith exists in particular if the trade mark is registered for the purpose of unfairly prejudicing the interests of third parties. This was the case here, as the applicant had proven that there had previously existed a business relationship with the trade mark proprietor, in the context of which it had ordered several thousand items of protective workwear with the imprint "NEO" from the trade mark proprietor. The coincidence in the distinctive element "neo" also supports the assumption of economically connected companies among the public. Finally, the trade mark proprietor had not presented any commercial logic for filing the mark

The overall circumstances therefore suggested the filing served as a tool to acquire the trade mark rights by an entity who had long-term business relationship with the invalidity applicant and who was aware of the existence of the brand ‘NEO’. . The trade mark application at the time of the end of this business relationship infringed the interests and expectations of the applicant and violated the principle of consideration and fair play.

(EUIPO BoA decision of 16.8.2023, R 2391/2022-4)

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Necessary degree of similarity of signs in case of reputation (GC)

The General Court dealt with the likelihood of confusion between the trade mark application shown below on the left and the earlier trade mark "mó" shown below on the right as well as with the requirements for invoking reputation.

As in previous instances, the GC did not consider the requirements of likelihood of confusion and reputation to be met. The Court agreed with the opponent that the protection against exploitation of reputation (in relation to the protection awarded under a likelihood of confusion) allowed a lower degree of similarity of the signs to suffice as long as there was a link between the trade marks. However, neither the wording of the law nor the case law indicates that the standard for assessing the similarity of signs within the scope of these grounds for refusal (likelihood of confusion and exploitation of reputation) is different.

The GC found that the relevant public will only perceive the trade mark application (bottom left) as geometric shapes and not as letters. The signs are therefore visually dissimilar. Since consumers do not recognise any letters in the signs, a phonetic similarity cannot be established either. Due to the dissimilarity of the signs there was neither a likelihood of confusion nor were the requirements of reputation fulfilled.

(GC judgment of 12.7.2023, T-487/22)

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Genuine use of a recycling symbol trade mark (GC)

In the context of opposition proceedings concerning the two signs shown below, the General Court ruled on the question of the genuine use of the earlier trade mark shown at the bottom right for services in classes 35, 40 and 42. The EUIPO’s Opposition Division had previously rejected the opposition against the sign shown at the bottom left for lack of genuine use, which was later confirmed by the Board of Appeal. In their view, the earlier trade mark would not be perceived by the public as an indication of commercial origin, but merely as an indication of participation in a waste disposal system. For this reason, the opposing trade mark had not been used as a trade mark.

The appeal brought by the opponent was unsuccessful. The Office was right to assume that there was no genuine use. The opponent (Deutsche Pfandgesellschaft [DPG], German Association managing the deposit and recycling system for returned bottles), had brought together numerous retailers and used the sign shown on the right as an indication of participation in the recycling system. It should be taken into account that the earlier trade mark was not filed as a certification mark but as an individual mark. In principle, the use of a trade mark containing a statement about the quality of goods or services could also classify as genuine use of an individual mark. However, it is then also necessary for the public to infer from them the promise that the goods or services thus labelled are manufactured or marketed under the control of an undertaking that is responsible for this quality.

However, this is not the case here. The general public had only become familiar with the sign as an indication of participation in the DPG deposit system. The assignment to the DPG system also did not constitute an indication of origin, but only an indication of participation. The Office did therefore not err in law in rejecting the opposition for lack of genuine use of the earlier trade mark.

(GC judgment of 6.9.2023, T-774/21)

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HeadingTechnical effect of a bottle-shaped 3D-mark (GC)

In this judgment, the GC dealt with the technical result of the shape of the below trade mark application for a bottle shape for goods in classes 29, 30, 32 and 33, including dairy products, beer and other alcoholic and non-alcoholic beverages.

The application was initially found to be inherently distinctive by the General Court in a previous judgment, as the combination of its elements could not be regarded as completely commonplace.

After remitting the case to EUIPO’s Second Board of Appeal, the latter rejected the application, among other factors due to the technical result caused by the shape of the sign, namely in relation to goods whose storage and filling is particularly facilitated by the claimed bottle shape. The special bottle shape prevented the contents from leaking or spilling when the bottle was moved and increased stability.

The latest action brought by the applicant against this decision was unsuccessful. The sign was found to consist exclusively of the shape of the product, which is necessary to achieve a technical result. The inlet has a regular shape which, among other functions, enables or facilitates the appropriate pouring of the contents. The bulbous main part allows the goods in question to be accommodated, as the wall of the middle part is straight, while it tapers below the bead and ends in a rounded end piece. The bead allows the goods to be stored in a hole, for example in shelves designed for this purpose. The additional stability provided by the bead is particularly important from a technical and functional point of view.

The fact that the combination of individual design elements of the container created an overall aesthetic value that was not purely functional was irrelevant in the GC’s view.

(GC judgment of 5.7.2023, T 10/22)

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Registrability of a colour mark with a white side stripe (EUIPO)

In this decision, the First Board of Appeal of the EUIPO dealt with the registrability of the below colour mark for confectionery in class 30. The application was refused by the Examination Division due to lack of distinctiveness, which the Board of Appeal has now confirmed.

As claimed by the applicant, the application consists of a systematic arrangement of colours and shapes, i.e. seven stripes alternating in the colours red and white (also on the extreme left and right) in a proportion indicated by percentages. However, contrary to the applicant's argument and according to the Board of Appeal, this does not lead to the conclusion that this sign is necessarily distinctive within the meaning of Article 7(1)(b) EUTMR.

Neither the combination of the colours red and white nor the arrangement of these colours could confer distinctive character on the application.

(EUIPO BoA decision of 21.9.2023, R 730/2023-1)

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Bad faith of the application "CorrosionX" (EUIPO)

EUIPO’s First Board of Appeal declared the EU trade mark "CorrosionX" invalid due to bad faith. The Cancellation Division had previously granted the cancellation request of U.S. Corrosion Technologies, LLC, and trade mark proprietor appealed that decision.

The First Board of Appeal now confirmed that the EUTM was filed in bad faith. It’s worth noting that in related proceedings, a previous decision (EUIPO BoA decision of 24.8.2020, R 2982/2019-4) had not yet become final in this legal matter. In those proceedings, the Fourth Board of Appeal had only ruled on the existence of an agent relationship and rejected the cancellation request in other respects (namely with regard to any bad faith).

It is clear from the invalidity applicant's extensive evidence in these proceeding that the trade mark proprietor was attempting to sell its own goods as those of the invalidity applicant. It is not apparent why the trade mark proprietor was entitled to register the trade mark which it had previously used as a distributor for the German market. Although the EU trade mark system is based on the "first-to-file" principle, this is restricted by the concept of bad faith. This undefined legal concept is to be interpreted in the light of the purpose of EU trademark law and exists where the application does not correspond to recognised, honest business practices.

The contested EU trade mark is identical to the cancellation applicant's earlier US trade marks. The trade mark proprietor was also aware of this at the time of filing the contested EU trade mark, as is also apparent from its statements in the aforementioned previous proceedings. It follows from this that an intensive business relationship existed, which gave rise to a duty of consideration and fair play which certainly should not lead to unauthorised trade mark applications. The application demonstrated a malicious intention on the part of the trade mark proprietor to participate more directly in the sales success of the products previously marketed in the name of the applicant.

(EUIPO BoA decision of 15.9.2023, R 1795/2022-1)

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Country Focus

The impact of CJEU Audi and Inditex cases on trademark referential use exception in Poland

Referential use is a use in commerce of another's trademark for the purpose of identifying or referring to goods or services of the trademark holder. It is one of the limitations to trademark protection provided for in Directive 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks (“TMD 2015”). The exception has not been fully implemented into Polish trademark law. Polish regulations still reflect the wording of previous trademark directives, which results in significant differences between Polish and EU laws and decisions. Current case law of the CJEU does not make things simpler.

EU laws concerning referential use

TMD 2015 indicates that a third party cannot be prohibited from using another’s trademark for the purpose of identifying or referring to goods or services as those of the trademark holder, in particular, where the use of the trade mark is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts.

The scope of referential use in TMD 2015 is significantly broader in comparison with the previous regulations. Referential use was introduced in TMD 1988 – the first community regulation that harmonized trademark laws of the member states. Both TMD 1988 and its successor, TMD 2008, limited referential use exception to instances, where it was necessary to indicate the purpose of a product or service. The 2015 EU trademark reform has therefore abandoned the “necessity” premise (and only kept this scenario as an example) and opened referential use exception to many new possible use cases.

What the Polish law states

Despite the fact that TMD 2015 was officially implemented into Polish Industrial Property Act in 2019, its provisions on referential use still reflect the phrasing of previous trademark directives. Therefore, under Polish regulation, referential use can only be invoked if a third party proves that trademark use is necessary to indicate the intended purpose of a product or service. The scope of this exception is thus much narrower than it is according to current EU law.

Decisions in Audi and Inditex cases

In early 2024, the CJEU ruled on cases C-334/22 (Audi, referenced by a Polish Court) and C-361/22 (Inditex), confirming that the scope of referential use as indicated in TMD 2008 is narrower than in TMD 2015.

In Inditex, an information service provider used plaintiff’s ZARA trademark in its advertising campaign for a subscription to a multimedia content streaming service. After having subscribed to the service, subscribers could participate in a prize draw and win a ZARA-gift card. The ZARA trademark was placed on a visualization of the gift card. Since the dispute arose in 2010, national provisions implementing TMD 2008 applied. However, national courts believed that the defendant’s actions better corresponded with the wording of TMD 2015 rather than the previous directive. Therefore, the national court referred the case to the CJEU to establish whether the provision of TMD 2008 could be interpreted broadly, covering the scope of exception as introduced in TMD 2015.

In its judgment, the CJEU confirmed that the referential use exception within the meaning of TMD 2008 can only be raised when the use of a trademark is necessary to indicate the intended purpose. It emphasized that such interpretation is supported both by the legislative history of TMD 2015 and the objectives pursued in TMD 2008. Therefore, since the scope of previous provision is more limited, it cannot be interpreted in a way that would encompass the extended scope introduced in TMD 2015. This has been clarified in Audi, where the CJEU held that despite the existence of significant differences between the past and current provisions relating to referential use, Article 14 (1) lit. c clearly provides that the use of a trademark necessary to indicate the intended purpose is still within the scope of the exception.

The impact of the decisions on Polish law

The referential use provision of TMD 2008 may not be interpreted broadly, so it can be inferred that Polish regulation, which follows this iteration of the directive, must be treated accordingly. This means that the significant gap existing between Polish and EU rules regulating the referential use exception may not be reduced through the means of interpretation.

Since the case law does not help in limiting the gap, the Polish legislator would have to independently introduce necessary amendments and finally implement the new scope of referential use into Polish trademark law. For now, no such changes are planned.

If your business model includes referential use in Poland, please note that the exceptions under EU trademark law will not necessarily apply.

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Disclaimer: Please note that the decisions included in this newsletter are a subjective selection of relevant trademark decisions made by the authors without any claim to completeness.