Examining Wordmarks after BABY-DRY – Still Worthwhile Exercise?

(IPRinfo 4/2001)

Dr. Annette Kur
Max Planck Institute for Foreign and International Patent, Copyright and Competition Law, Munich.

The New Age of European Trademark Law: What we have learned from the ECJ so far

Ever since the implementation of the First Trademark Directive (89/104/EC) we have been living in a New Age of Trademark Law. The authority to shape and interpret national law is now vested in European institutions. If we are wondering about the true meaning of a clause in the Trademark Act, at least if it concerns a subject matter which has been addressed in the Directive or the Community Trademark Regulation CMTR (40/94/EC), we have to turn to the European Court of Justice (ECJ) in Luxembourg for an answer.

And to the ECJ we, i.e. the trademark community, have indeed turned in quite a number of cases when there have been doubts as to the correct interpretation of certain essential trademark law provisions. In the Puma (C-251/95) and Adidas/Marca Mode (C-425/98) cases, we have learned to distinguish likelihood of confusion from mere association – which is to be assessed, as we were told in Meyer/Klijsen (C-342/97), from the perspective of an average consumer.

In the Canon – CANNON (C-39/97) case, the meaning and correct interpretation of the similarity-of-goods criterion were explained to us, while ”Chevy” (C-375/97) was concerned with the prerequisites for protection of a trademark’s reputation when it is used for dissimilar goods.

Soon, when considering the Davidoff/Durffee case (referred to the ECJ by the German Federal Supreme Court, dec.of 27 April 2000), the European Court will also have to answer the question how the gap can be filled between these two kinds of protection, i.e. when a mark’s reputation is affected by its use for identical or similar goods.

Furthermore, in BMW/Deenik (C-63/97), the Court made it clear that a mark must be used ”as a mark” in order to give rise to infringement claims under the Trademark Act. Again, by answering one question, the decision raised a couple of others, which are now under consideration in the pending case of Hölterhoff/Freiesleben (C-2/00).

Another major field of interest for ECJ case law concerns the principle of exhaustion. After the principle of global exhaustion had been laid to rest in Silhouette (C-355/96), the British courts have taken up the fight for its survival in a modified form, but the battle was lost in Sebago (C-173/98), and, finally, Davidoff (C-414/99). Many decisions, too numerous to list here, have dealt with marketing of parallelly imported products, and with repackaging, relabelling, and rebranding of goods.

What about requirements for protection?

The judgements mentioned so far have one thing in common: they all concern the rights conferred once a trademark has been granted. Indeed, until recently the Chiemsee decision (C-108/97 & C-109/97) was the only one where the ECJ had dealt with the requirements for protection.

However, the picture is now changing quickly. New questions come up from national courts, among them the famous Remington case (C-299/99), concerning the eligibility for protection of a three-dimensional (largely technical) shape, and the Sieckmann case (C-273/00, pending), which probes the issue of eligibility for protection of smell marks. Apart from that, a range of cases concerning the registrability of Community marks – most of them wordmarks – have now finally reached the doorstep of the ECJ, after having commenced their way some years ago in the sunny town of Alicante.

The first of these cases, the BABY-DRY case, was decided on September 19, 2001 (C-383/99P). More cases will follow, among them the Doublemint case (T-139/99), which was decided by the Court of First Instance (CFI) in January 2001 and was appealed by Office for Harmonisation in the Internal Market (Trade Marks and Designs) OHIM (=> Case C-191/01).

The picture will be completed further by judgements concerning questions which have been referred to the European Court by national courts, among them Bravo ( C-517/99, decided on 4 October 2001) and Biomild, where the Advocate General’s opinion is expected early 2002.

But are there really any new insights to be expected from these decisions? Has not BABY-DRY made all further discussions superfluous as regards the protectability of wordmarks, by opening the register so wide that hardly anything will have to stay outside? And moreover: is it worthwhile at all to continue examining wordmarks after BABY-DRY?

BABY-DRY – the case and the judgement

The case at stake in the BABY-DRY decision can be resumed briefly as follows: Procter and Gamble had filed an application at OHIM for the registration of the mark BABY-DRY for diapers or, as the European Court of Justice prefers to call it, for babies’ nappies. The application was refused by the examiner, whose decision was upheld by the Third Board of Appeal.
The applicant argued before the Board that the trademark had acquired distinctiveness through use, but the Board held this argument to be inadmissible, as it had not been brought before the examiner.

The case was appealed to the Court of First Instance, which dealt in its decision mostly with the question whether the Board had been right in rejecting the argument of acquired use. This was denied, and the case was therefore referred back to the Board of Appeal. However, the CFI also declared in a dictum that the rejection of BABY-DRY had been correct as such, as the mark was descriptive of the goods and services for which protection was sought.

Against this, Procter and Gamble appealed to the ECJ, which consequently embarked on the question whether the CFI’s interpretation of Article 7 (1) c of the CTMR complied with the true meaning of the provision.

According to the ECJ, this was not the case. As a starting point, the Court held (at 39) that ”the signs and indications referred to in Article 7 (1) c of Regulation No. 40/94 are …only those which may serve in normal usage from a consumer’s point of view to designate, either directly or by reference to one of their essential characteristics, goods or services such as those in respect of which protection is sought”.

It then concluded (at 43) that the word combination BABY-DRY did not ”satisfy the disqualifying criteria”, mostly because in view of their ”syntactically unusual juxtaposition”, it did not constitute ”a familiar expression in the English language, either for designation babies’ nappies or for describing their essential characteristics.”

Astonishingly enough, the Court did not consider the aspect that whilst BABY-DRY might appear as a ”syntactically unusual juxtaposition” to a native English speaker, such linguistic refinement may be lost on the large majority of consumers in the European Union.

Many of these will be familiar with the English words used in the context, but, not having English as their mother tongue, they are less sensitive towards the unusual way of combining them. If placing oneself in the shoes of those consumers, BABY-DRY may appear as descriptive for babies’ nappies as a term possibly can be. This applies in particular if in the native language of such a consumer the adjective is normally placed after the noun, which is the case in quite a lot of languages used within the EU. The complete disregard of this aspect constitutes a major flaw in the BABY-DRY decision.

Possible consequences for future practice

More important than the outcome in this particular case is the fact that in view of the rather sweeping language used in paragraph No. 39 of the judgement, the possibilities for trademark offices to reject an application for a wordmark on the ground of descriptiveness appear minimal.

If only clear designations of a product or its essential characteristics may be said to fall short of the test, any additional element, be it the ”syntactically unusual juxtaposition” of two words, or even the mere addition of one letter, must be considered as rendering the mark registrable.

Moreover, if the designation must be immediately clear in its meaning, it may also be argued that an ambiguity of any kind might already save the mark from being descriptive or non-distinctive – a way of reasoning which was indeed used by the CFI in the Doublemint decision, and which was cited with approval in the Advocate General’s opinion in the BABY-DRY case.
In practice, this would mean that only those designations may be kept out of the register which are so clearly descriptive or non-distinctive that there can be no doubt as to the exact connotation of the word or combination of words. The remaining task for trademark examiners would therefore be to filter out words or combinations of words which immediately convey the quality or the kind of goods they designate – like, for instance, ”first flush” for tea, or ”hiking boots” for shoes.

This invites the question whether it is really worthwhile to continue examining wordmarks under these circumstances. Or, to put it the other way round: would it do any harm if the examination of wordmarks would be given up for good, meaning that purely descriptive and non-distinctive designations could make their way into the register?

Would it not be obvious anyhow that in view of Article 6 of the Trademark Directive (and correspondingly: Article 12 of the CTMR), everyone would still remain free to use those terms in a generic or descriptive sense – not to mention the fact that they could always be declared invalid?

In fact, in the BABY-DRY decision the ECJ – in contrast to the Chiemsee case – makes an express reference to Article 12, stating that Articles 7 and 12 have to be taken together in order to capture the true meaning of the requirements for protection. From that point of view, it might seem superfluous to bother at all about possible registration of purely descriptive terms.
In view of the limitations which each right is subject to, the owners of such signs would never be granted exclusivity. If, in spite of this, some applicants still wanted to pay money for something that is without any real value from a legal point of view – why not let them go ahead?

The truth is, however, that real life is more complex than even the soundest theory. Although there is no doubt at all that purely descriptive marks would be legally valueless, it still might happen that bona fide users of such designations would be scared off such conduct, simply by somebody pointing out that this sign has been officially registered as a trademark.
In particular, small entrepreneurs might be susceptible to such reactions, especially when confronted with warning letters from large companies, threatening to pursue their alleged claims up to the highest instance. How could someone not knowing much about trademark law be aware that the claim would certainly fail before court? How could he take the risk?
And gradually, as more and more competitors actually do respect the generic or descriptive word as being the ”property” of one company, the originally unprotectable sign will grow into something that becomes, in the end at least, rather close to a true monopoly right.

It is not least this risk that weighs in favour of the maintenance of wordmark examination, even if this task may sometimes appear as somewhat boring and frustrating in the eyes of the highly qualified staff carrying out the watch-dog function. Their work still does some good.

And who knows – in their judgements to come, the ECJ might still modify the very strict approach taken in the BABY-DRY decision, and give the offices back a little more freedom in the assessment of protectability of wordmarks.

Links:

The Court of Justice of the European Communities and the Court of First Instance of the European Communities: Judgement search:
http://curia.eu.int/jurisp/cgi-bin/form.pl?lang=en

Ratkaisujen haku suomeksi Euroopan yhteisöjen tuomioistuimista:
http://curia.eu.int/jurisp/cgi-bin/form.pl?lang=fi