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Thursday, 17 April 2014

Red and yellow and pink and green… or just black and white? Important new European Common Practice on black and white trade marks

Having been announced back in November’s Alicante News, details were published on 15 April in this Common Communication of the new European trade mark Common Practice as regards black and white trade marks, and how they are to be compared to colour versions of the same. In this Kat’s view, this is a highly significant change in practice that will affect many trade mark owners, perhaps adversely. Its aim is to ensure common trade mark practice throughout Europe, but as you’ll see below there’s something of a bull in a china shop to how supposed consistency is being achieved.
It means terrible disaster for the world of
trade marks, Rainbow Cat, terrible disaster!
What follows is an explanation of what is and isn’t changing, where it is changing, when and in respect of what. In short, practice is changing some places, where the scope of protection a black and white mark provides will be significantly less than it used to be. Elsewhere it won’t be changing either because the Member State isn’t interested or it can’t legally change. In some places the change will apply even to pending application and proceedings, elsewhere only to new ones. Sorry to spoil the ending, but this Kat’s not impressed.
Three things in scope, six out – plus six countries who aren’t having anything to do with it
Three issues are in scope:
1.    Priority: is a trade mark in B&W and/or greyscale from which priority is claimed identical to the same mark in colour?
2.    Relative grounds: is an earlier trade mark in B&W and/or greyscale identical to the same mark in colour?
3.    Genuine use: is the use of a colour version of a trade mark registered in B&W/greyscale (and vice versa) acceptable for the purpose of establishing genuine use?
Six are out of scope, and so remain subject to local practice:
4.    Priority: is a trade mark in colour from which priority is claimed identical to the same mark in B&W and/or greyscale? (so the question the other way around is not addressed).
5.    Relative grounds: is an earlier trade mark in colour identical to the same mark in B&W and/or greyscale? (so again the question the other way around is not addressed).
6.    The assessment of similarities between colours is not addressed including the question: is an earlier trade mark in B&W and/or greyscale similar to the same mark in colour?
7.    Acquired distinctiveness: where marks registered in B&W that have acquired distinctiveness in a specific colour due to extensive use (the Specsavers scenario – see links below).
8.    Colour marks per se.
9.    Infringement issues (although one would expect the new practice for relative grounds at 2. above would impact on infringement as well – again see below).
The common practice is only common to a degree:
Italy, France and Finland have not participated. Sweden, Denmark (and Norway) opted out of implementing the practice due to legal constraints. The statements those last three states have given suggest that as their existing laws provide for black and white marks to cover all colours, they are not in a position to adopt a change in practice without new legislation.
Alright, get on with it – what is the common practice?
The world's most famous black and white cat
If you’ve got your head around what this isn’t about, here’s what you need to know.
1.    Priority: is a trade mark in B&W and/or greyscale from which priority is claimed identical to the same mark in colour?
The new Common Practice explains that:
“A trade mark in B&W from which priority is claimed is not identical to the same mark in colour unless the differences in colour are insignificant.
A trade mark in greyscale from which priority is claimed is not identical to the same mark in colour or in B&W unless the differences in the colours or in the contrast of shades are insignificant.“
The gist of this change appears to be that an applicant’s ability to claim the usual six months priority under the Paris Convention will be lost if the earlier mark is in black and white while the later mark is in colour.
“Insignificant” means differences which are “so insignificant that they may go unnoticed by the average consumer”, the Court of Justice of the European Union’s (CJEU) identity test in Case C-291/00 LTJ Diffusion. The Common Communication provides that (its emphasis) “an insignificant difference between two marks is a difference that a reasonably observant consumer will perceive only upon a side by side examination of the marks.”
2.    Relative grounds: is an earlier trade mark in B&W and/or greyscale identical to the same mark in colour?
The new Common Practice explains that:
“An earlier trade mark in B&W is not identical to the same mark in colour unless the differences in colour are insignificant.
An earlier trade mark in greyscale is not identical to the same mark in colour, or in B&W, unless the differences in the colours or in the contrast of shades are insignificant.“
So the effect is that if you have an earlier mark in black and white, if you file an opposition against an application for the mark in colour then your earlier mark will not be considered identical. The Common Communication takes the view that a black and white and coloured version of the same sign should now only be considered identical under “exceptional circumstances”, applying the “insignificant differences” test above.
3.    Genuine use: is the use of a colour version of a trade mark registered in B&W/greyscale (and vice versa) acceptable for the purpose of establishing genuine use?
Art 10.1(a) of the Trade Marks Directive (Directive 2008/95/EC) makes clear that use of a trade mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered constitutes use of the mark as registered. The new Common Practice explains that:
“A change only in colour does not alter the distinctive character of the trade mark, as long as the following requirements are met:
a) the word/figurative elements coincide and are the main distinctive elements;
b) the contrast of shades is respected;
c) colour or combination of colours does not possess distinctive character in itself and;
d) colour is not one of the main contributors to the overall distinctiveness of the mark.
For establishing genuine use, the principles applicable to trade marks in B&W also apply to greyscale trade marks.”
This purports to follow the guidance of the General Court in Case T-152/11 “MAD” (sadly not available in English, although referred to in the current OHIM Guidelines on Proof of Use, see page 41).
What is the meaning of this??!
Those behind this Common Practice, led it would appear by OHIM, take the view that the concept of identity is one that needs to be interpreted strictly, in line with the decision in LTJ Diffusion.
The Common Practice must be implemented within three months of 15 April, so 15 July. OHIM will implement it with effect from 2 June 2014.
The impact of this is likely to be significant. The new practice will be applied by all 22 trade mark offices which have signed up plus OHIM to all applications and proceedings filed after the implementation date. However, in some offices, including the Benelux and German offices and OHIM, the practice will be applied on the implementation date retrospectively to all pending applications and proceedings. This is controversial to say the least. It means that an applicant that has already paid its filing fee may find it is now going to get less than it applied for. An opposition or cancellation may suddenly take on a different complexion, and the party expecting to win might suddenly find itself on the losing side.
Brand owners may now need to review their entire portfolios, especially those heavy in devices and logos and where colour is an important part of their brand image. A portfolio with a handful of black and white registrations will now provide a much narrower scope of protection than a comprehensive portfolio with numerous colour variants of marks. That sort of protection just got a lot more expensive. More filings equal more fees for the offices, OHIM and, this Kat supposes, lawyers, but ramping up the price for no gain based on a desire for consistency that won’t even be achieved (because Italy, France, Finland, Sweden, Denmark and Norway are having nothing to do with it) doesn’t seem fair. Merpel’s not holding back – she thinks it’s outrageous.
So is it all down to similarity now?
Taking a closer look at the impact on relative grounds oppositions and cancellations (of most interest to this Kat who spends a lot of his time litigating trade marks), it is worth taking a step back. The new practice does not say that a black and white version of a mark can’t be used to successfully oppose a colour variant. It won’t be as easy as it was: depending on the practice in the particular office concerned, before the two would be treated as identical. Now in most cases the opposer will need to argue the variants are confusingly similar. That’s a much tougher ask, potentially requiring evidence of confusion or a likelihood of the same. In some cases this won’t be a problem, but this Kat can recall disputes he’s been involved in where it could break a case that would previously have been a dead cert.
Nyan Cat - link below for those
who've never seen it in action
Infringement issues are expressly out of scope of the common practice. But it can’t be right that there is now one rule for relative grounds and one for infringement. Shouldn’t they be the same? So anyone now trying to assert a black and white mark against a colour variant (or something similar in colour) must now be in a much more challenging position. Or will marks registered prior to the change be treated under the old practice and new ones less favourably? Will acts which are infringements today cease to be come 2 June onwards?
It may take a while, but the CJEU is bound to be called open to look at this at some stage. The issue pervades all aspects of trade mark law and seems to be far too significant to be left to the offices themselves to decide. This is a question of law – not practice – and the scope of protection provided by a trade mark. Alternatively, might this be the subject of a judicial review in one or more jurisdictions?
Where is this actually a change?
The Common Communication implies that the change is not going to be a change everywhere, and that some offices already work in this way. This Kat does not know which, and speaking to his colleagues gets the impression that it is far from obvious that the change moves in the direction of the majority.
Speaking from an English law perspective, the new practice goes very much against the law here. In Specsavers International Healthcare Limited & Others v Asda Stores Limited [2010] EWHC 2035 (Ch), Mr Justice Mann in the High Court held at paragraph 119 that (emphasis added):
“If the registered mark is limited to a colour, then the mark that is used has to be compared, as used, to the mark that is registered, as registered (and therefore in colour). If the registered mark is unlimited as to colour then it is registered for all colours. This means that the colour of the offending sign becomes irrelevant. It will not be possible to say that its colour prevents there being an infringement. At this point one can take one of two courses, each of which ought to have the same result. The first is to imagine the registered mark in the same colour as the offending sign. The second is to drain the colour from the offending sign. Either way one then has the material for comparison. One could even imagine them both in a third colour. It does not matter… As a matter of visual convenience it seems to me to be easier to imagine the registered mark in a colour than to imagine the offending sign drained of colour, and I propose to adopt that course.
The English Court of Appeal is of the same view, see paragraph 96 of the appeal in the same case Specsavers International Healthcare Ltd & Others v Asda Stores Ltd [2012] EWCA Civ 24 and Jacob LJ in Phones4u Ltd & Anor v Phone4u.Co.UK & Ors [2006] EWCA Civ 244 at paragraph 70.
Is the UKIPO, OHIM et al empowered to ignore the law and the practice that has been adopted here (and elsewhere) for many years?
Readers will be clear that this Kat is pretty bemused (not to mention frustrated) by all this, and does not think he is alone (and Merpel is not the only company). Perhaps readers would, be they in agreement or otherwise, add a comment on how the present approach in their jurisdictions differs (or does not differ) from the new Common Practice. 
Nyan Cat. Careful if you have your sound turned up loud...


Anonymous said...

That's just frightening, especially for genuine use. If one has a registration for EUROPEANTMDN in black and white and capitals then is the use (in colour, with a difference of shades between the European and tmdn) in the common practice note, genuine use, on that basis?

Pedro Malaquias said...

Plainly incredible...

And I agree, saying that infringement is not adressed is completely absurd. Relative grounds and infringement (have to) follow the same rules, unless adaptations are required (which is clearly not the case).

And also, from what I am aware, this decision is contrary to the previous practice of most EU countries.

Robert Cumming said...

It might be administratively more convenient for parties to file only a black and white/greyscale mark but isn't the system supposed to protect what is actually in use based on an objective analysis rather than a more subjective of "all variations test" cf Sieckmann?

The iPuffin said...

Well it was always an unchallenged line "file in black and white - it covers you in all colour combos". There was never clear legal support for that.

A bit like there was never clear legal support for "class heading covers all goods in the class".

What is most concerning is that this has come out without any prior consultation and without any thought as to the consequences. I think it will also have further consequences on non-use cases OTHER than those purely around colour by implication.

K Gymer said...

If the UKIPO believes that this new Common Practice is consistent with UK law, then presumably it intends to end any possibility of obtaining registration for a series of identical marks differing only in colours, which has certainly been an accepted "common practice" in the UK for very many years. And what does that mean for such existing series registrations? Previously it was always accepted that use of one mark in a series counted as use of all, so use of a B&W mark certainly counted as use of the colour ones in such series & vice-versa. Are they all to be treated as subject to separate invalidation now if challenged? Has the IPO made any comment?

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