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Thursday, 20 September 2007

ECJ functionality decision

The IPKat has learnt of a new decision of the ECJ on functionality.

G-Star is the owner of a Dutch trade mark consisting of the shape and stitching of jeans. Benetton produced jeans similar to G-Star’s, and G-Star brought an infringment action. Benetton counter-claimed for invalidity, arguing that the shape in question gave substantial value to the goods and was therefore barred from registration. G-Star responded that the shape had acquired distinctiveness though an advertising campaign which pre-dated its registration.

The Hoge Ra’ad referred the following questions to the ECJ:

(1) Must Article 3(1)(e), third indent, [of the Directive] be interpreted as meaning that the prohibition contained therein permanently precludes the registration of a shape as a trade mark where the nature of the product is such that its appearance and shaping determine its market value entirely or substantially as a result of their beauty or original character, or does the prohibition not apply where, prior to the application for registration, the attractiveness of the relevant shape to the public has been determined predominantly by the recognition of it as a distinctive sign?

(2) If the answer to Question 1 is to the latter effect, to what extent must this attractiveness have prevailed for the prohibition no longer to apply?

The ECJ answered that a mark barred from registration under the third indent of Art.3(1)(e) cannot be registered in reliance on Art.3(3) if, prior to registration, the mark has acquired distinctive character through use. This was apparent from the facts that: (a) Art.3(1)(e) was not mentioned in Art.3(3) and (b) the ECJ had previously said in Philips v Remington that, under no circumstances could a mark barred under Art.3(1)(e) be registered by virtue of Art.3(3).

The ECJ’s approach makes the answer to the question look obvious. However, the referred question is a bit more subtle. How frequently will the shape of goods really be truly inherently attractive, and how often will be attraction just come from the fact that the goods are the latest ‘cool’ status symbol, that ‘coolness’ originating not from the inherent shape, but from the fact that the manufacturer has, through advertising, whipped up a a cult following? It would have been useful if the court had spent its time explaining the meaning of the third intent of Art.3(1)(e) (‘a sign which consists exclusively of the shape which gives substantial value to the goods’), but that wasn’t squarely in the referred questions, and will have to wait for another day.


Anonymous said...

Indeed - they seem to have missed the point. Art 3(3) is an exception to refusal on the basis of non-distinctiveness/descriptiveness.. however, the argument here was whether the "substantial value" created by the shape mark was created not through its value as a design but rather because it had come to signify G-Star.

Any argument whether it was a shape mark?

Anonymous said...

Yes exactly. What would the UK have done ? Not treated it as a shape mark in the first place is the answer. Thus the most likely outcome would have refusal on non-distinctiveness grounds.

Art 3(1)(e) is and remains elusive and uncertain in scope.

Ilanah said...

Didn't notice any argument over whether it was a shape mark. Perhaps it happened at the lower stages, because the referred questions assumed it was a shape mark. Can any Dutch readers advise?

Jeremy said...

A colleague who opts for anonymity has emailed the IPKat aquick comment on this case: "It appears to be a consequence of the judgment that where a distinctive but not attractive shape, which is for argument's sake inherently registrable, becomes attractive due to its function as identifying a trendy brand, it actually becomes less registrable because Art 3(1)(e) kicks in. Furthermore, since 3(3) does not apply it has lost its registrability for good (unless the brand recognition collapses). Seems to me this is true to the letter but contrary to the spirit of the Directive?".

Anonymous said...

Sorry I don't see that. The exclusion relates to signs which consist exclusively of a shape giving substantial value to the goods (in the English version). If that 'value' is as a brand then I don't see how the exclusion can work ?

I do think there is an issue of divergent EU wide interpretations of the word 'shape', but that's another issue.

Meanwhile, Jeremy's colleague, don't fret too much. Do like the rest of us do - ignore the ECJ !!

Anonymous said...

The trademarks of G-Star were filed a shape marks....says an anonymous Dutch reader.

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