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Seminar 10 October 2015
Trademark Law and the Public Domain
Lotte Anemaet LLM MAVrije Universiteit Amsterdam
Contents
• Introduction of trademark law• Research problem and question• Economic perspective• Shapes and colors per se• Consumer perception• Descriptive signs• Conclusion• Discussion
Definition
Definition
• ‘Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark.’ (art. 15(1) TRIPS Agreement)
• “American Express”, “Boss”, “Holiday Inn”,
“Microsoft”, “Pizza Hut”, “Puma”
• “Mars”, “McDonald’s”, “Mercedes Benz”,
“Ralph Lauren”, “Jil Sander”
• “Adidas”, “Kit Kat”, “Kodak”, “Reebok”
• “BMW”, “CNN”, “IBM”, “M&M”, “YSL”
• “A6”, “501”, “No. 5”, “S 500”, “4711”
Words, letters, numerals
Drawings, pictures, colors
Shapes
Function
producer competitor
consumer
Function (macro): market transparency
• ensuring honest commercial practices
• consumer protection
• contribution to a functioning market
Protection requirements
‘Any sign, or any combination of signs,
capable of distinguishing the goods or
services of one undertaking from those
of other undertakings, shall be capable
of constituting a trademark.’
= requirement of distinctiveness
Art. 15(1) TRIPS Agreement
‘Members may require, as a condition
of registration, that signs be visually
perceptible.’
= optional requirement of visual
perceptibility
Art. 15(1) TRIPS Agreement
Example: Art. 2 EU Trademark Directive
‘A trade mark may consist of any sign capable
of being represented graphically, particularly
words, including personal names, designs,
letters, numerals, the shape of goods or of
their packaging, provided that such signs are
capable of distinguishing the goods or
services of one undertaking from those of
other undertakings.’
Distinctiveness
Distinctive signs?
• indication of product features– ‘makes clean’ for a
cleaning detergent
• use of generic terms– ‘apple’ for apples
– ‘camel’ for camels
... (-)
• fanciful signs– ‘persil’ for a cleaning
detergent
• signs adopted arbitrarily with regard to the goods or services– ‘apple’ for computers
– ‘camel’ for cigarettes
... (+)
• may exist from the very beginning
(arbitrarily-chosen, strong trademark)
• can be acquired or become stronger
through use (secondary meaning)
• but may also decrease (dilution)
• may even be lost (trademark becoming
a generic term)
No constant level of distinctiveness
secondary meaning
genericism
dilution
Overview of influence factors
(-)
(+)(-)
The possibility of acquiring
distinctiveness
Legal foundation
• Non-distinctive signs can acquire distinctiveness through use in trade
• Reason: to protect consumers against confusion because of the new meaning of the descriptive sign
• Finding a balance between protecting the public domain (= other competitors on the market) and protecting consumers against confusion (= the interest of the trademark owner)
Definition
• ‘In determining whether a mark is eligible for protection, all the factual circumstances must be taken into consideration, particularly the length of time the mark has been in use.’ �
(Art. 6quinquiesC(1) Paris Convention)
Definition
• ‘A trade mark shall not be refused registration or be declared invalid in accordance with paragraph 1(b), (c) or (d) [these are the grounds for refusal or invalidity because of descriptive character] if, before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character.’
(Art. 3(3) EU Trademark Directive)
Circular reasoning
• ‘Circular reasoning underlies the argument that confusing use of a descriptive term as a mark is misleading and can therefore be restricted to protect consumers. By granting and enforcing exclusive rights in descriptive marks, the government helps to make those marks source-identifying, which leads to the possibility of consumer confusion in the first place.’
• L.P. Ramsey, ‘Descriptive trademarks and the First amendment’, Tenn. L. Rev. 2002-2003, 70, at 1150.
Research question
Research question
• To what extent are trademark owners able and – even worse – encouraged to invest in these particular descriptive signs in order to have them registered?
• If EU trademark law creates dysfunctional incentives, it needs to be reformed.
• Hypothesis: the threshold of distinctiveness is too low and risky.
Economic perspective
Economic perspective
• The possibility of acquiring distinctiveness through use in trade leads to:
– Increasing consumer search costs
– Unfair economic advantages
– Higher prices
Shapes and colors per se
Case law: Henkel
• Number of signs that need to acquire distinctiveness through use in trade has been extended
• According to the CJEU:
‘Average consumers are not in the habit of making assumptions about the origin of goods based on the shape of their packaging, in the absence of any graphic or word element.’
(Henkel; para. 52)
Case law
• Only a trademark which significantly departs from the norm or customs of the sector is argued to have distinctive character (Henkel, para. 49)
• The same applies to colors per se: these only have distinctiveness in exceptional circumstances (Libertel)
• See also Linde Case: no stricter test may be used to non-traditional signs
Case law: Libertel
• Besides these actual assumptions, the CJEU also mentions a normative purpose:
• ‘It must therefore be acknowledged that there is, in Community trademark law, a public interest in not unduly restricting the availability of colours for the other operators who offer for sale goods or services of the same type as those in respect of which registration is sought.’ (Libertel, para. 55)
Consumer perception
Consumer perception
• Consumers have two purposes: a quick recognition of the product and avoiding confusion
• The stronger the trademark, the better consumers will know the qualities of the product, and the faster they will decide
• With a strong associative network, the trademark can easily recalled from memory
• Perceptions are largely driven by the unconsious part of the brain (about 96 percent; see Lakoff)
Associations of a trademark
• To achieve distinctive power a trademark must have strong, positive and unique associations
• Strong: how often information about the trademark is offered and how intensively consumers think about the information
• Positive: a product has positive features, but people’s attitude can also be based on affective reactions to the object
• Unique: few associations with other competing trademarks
Nespresso. What else?
Perception of colors and shapes
• Perception of colors and shapes depends on the circumstances, such as whether the sign has strong, positive and unique associations
• Other factors: motivations and characteristics of consumers
Colors could be very distinctive
• Very suitable for evoking feelings• Eyes perceive a difference in brightness of less
than two per cent• Good tool for remembering objects• Text, titles or names can only be observed if
there is color• Clearly visible from a distance• Children recognize colors very well
Cultural and descriptive
signs
Cultural signs
• Signs of cultural significance confirm the hypothesis that the threshold of distinctiveness is risky
• EU trademark law provides for the possibility of an outright exclusion of official signs, signs of high symbolic value, religious signs and functional shapes
• Cultural signs without high symbolic value do not fall under this outright exclusion and can be registered
Cultural signs
• Many cultural signs are registered as a trademark– CTM 000934760, ARCHIMEDES; CTM 000032102, BEATRIX
POTTER; CTM 001081314, BEETHOVEN; CTM 008560245, CHOPIN; CTM 001025386, WINSTON CHURCHILL; CTM 000531624 COLUMBUS; CTM 000945774, DESCARTES; CTM 001593128, EINSTEIN; CTM 003805942, GOETHE; CTM 001358621, VINCENT VAN GOGH; CTM 000071712, MICHELANGELO; CTM 005468996, MONA LISA; CTM 007088156, MONDRIAAN; CTM 000021071 MOZART; CTM 000000662, NEWTON; CTM 001334036, PICASSO; CTM 000143115, PLATO; CTM 000215921, PYTHAGORAS; CTM 000186932, MARCO POLO; CTM 000119354, REMBRANDT; CTM 004278214, SHAKESPEARE; CTM 000047365, VERMEER, CTM 000996199, LEONARDO DA VINCI; CTM 004179198, WILLEM II.
Descriptive signs
• CJEU also evaluates descriptive signs more on normative foundations than on actual assumptions about consumer perception
• Contrary to suggestive, fanciful or arbitrary marks, descriptive signs are deemed not to be capable of distinguishing the good or service of a given undertaking
Case law: Doublemint
• According to the CJEU:‘Accordingly, signs and indications
which may serve in trade to designate the characteristics of the goods or service in respect of which registration is sought are, by virtue of Regulation No 40/94, deemed incapable, by their very nature, of fulfilling the indication-of-origin function of the trade mark, without prejudice to the possibility of their acquiring distinctive character through use under Article 7(3) of Regulation No 40/94’ (Doublemint, para. 30)
Case law: Doublemint
• ‘By prohibiting the registration as Community trade marks of such signs and indications, Article 7(1 )(c) of Regulation No 40/94 pursues an aim which is in the public interest, namely that descriptive signs or indications relating to the characteristics of goods or services in respect of which registration is sought may be freely used by all.’ (Doublemint, para. 31)
Case law: Doublemint
• ‘In order for OHIM to refuse to register a trade mark under Article 7(1 )(c) of Regulation No 40/94, it is not necessary that the signs and indications composing the mark that are referred to in that article actually be in use at the time of the application for registration in a way that is descriptive of goods or services such as those in relation to which the application is filed, or of characteristics of those goods or services. It is sufficient, as the wording of that provision itself indicates, that such signs and indications could be used for such purposes. A sign must therefore be refused registration under that provision if at least one of its possible meanings designates a characteristic of the goods or services concerned.’ (Doublemint, para. 32)
Case law: Biomild, Postkantoor
• ‘Article 3(1)(c) of the Directive must be interpreted as meaning that a trade mark consisting of a neologism composed of elements each of which is descriptive of characteristics of the goods or services in respect of which registration is sought is itself descriptive of the characteristics of those goods or services for the purposes of that provision, unless there is a perceptible difference between the neologism and the mere sum of its parts: that assumes that, because of the unusual nature of the combination in relation to the goods or services, the word creates an impression which is sufficiently far removed from that produced by the mere combination of meanings lent by the elements of which it is composed, with the result that the word is more than the sum of its parts’ (Biomild, para. 43; Postkantoor, para. 104)
Empirical studies
• CJEU looks at the semantic meaning, but does not judge the sign in relation to for example the presentation of that word in the commercial context of the label
• Empirical studies show that descriptive marks used in a typical trademark-use context are no less source-indicating than suggestive, arbitrary, and fanciful marks
• It is the non-linguistic signs that make descriptive marks highly source-indicating
• Results are in line with theories of consumer psychology
Conclusion and discussion
Conclusion
• The assumptions regarding trademark perception are incorrect
• Consumers are definitely able to recognize descriptive and non-traditional signs as identifiers of commercial source
• The possibility of acquiring distinctiveness through use in trade may stimulate certain traders to invest in these signs.
• Is a more normative test necessary to exclude these signs?
Annex
• Funtionality doctrine– ‘The following shall not be registered or, if
registered, shall be liable to be declared invalid: (e) signs which consist exclusively of:
(i) the shape which results from the nature of the goods themselves;
(ii) the shape of goods which is necessary to obtain a technical result;
(iii) the shape which gives substantial value to the goods’ (Art. 3(1)(e) EU Trademark Directive)
Proposal for a Directive
• The following shall not be registered or, if registered, shall be liable to be declared invalid:
(e) signs which consist exclusively of:
(i) the shape or another characteristic which results from the nature of the goods themselves;
(ii) the shape or another characteristic of goods which is necessary to obtain a technical result;
(iii) the shape or another characteristic which gives substantial value to the goods
Limitations
• The trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade: – (a) his own name or address;
– (b) indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of goods or services;
– (c) the trade mark where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts; provided he uses them in accordance with honest practices in industrial or commercial matters. (Art. 6 (1) EU Trademark Directive)
