29 June 2020
Brands update - July 2020 – 3 of 9 Insights
Gömböc Kft v Hungarian IP Office
In this case, the CJEU considered the extent to which a relevant authority can take into account information – such as the perception or knowledge of the relevant public – in addition to the shape of the trade mark applied for when assessing the exclusions for shapes which are necessary to obtain a technical result, and give substantial value to the goods. The Court also summarised the tests and rationale for these exclusions and considered whether owning design protection automatically entails refusal.
Almost everyone knows about toys which have one stable point of balance (eg a Weeble or roly-poly toy). They right themselves by means of a heavy weight inside to create a low centre of gravity. It is much more difficult to create such a body using a homogenous material. It is even harder to create one which only has one stable point of equilibrium (ie a stable resting position) and one unstable equilibrium (ie which would only balance if there was absolutely no vibration or air movement) at the opposite end.
The gömböc is a homogenous 3D convex body which has one stable and one unstable resting position (called mono-monostatic). It was conceived by the Russian mathematician Vladimir Arnold in 1995, and proven and embodied by two Hungarian scientists in 2006. There are a variety of gömböcs. They are difficult to produce, as high manufacturing precision is essential.
The applicant, Gömböc Kft, applied in Hungary for a 3D trade mark for a gömböc shape for "decorative items", "decorative crystalware and chinaware" and "toys" in classes 14, 21 and 28.
The Hungarian IP Office refused registration on the grounds that the mark is the shape of goods which is necessary to obtain a technical result, and gives substantial value to the goods.
The Office relied on the knowledge of the characteristics of the shape that the public was able to obtain from the applicant's website and from the considerable publicity the gömböc had enjoyed in the press.
Regarding "toys", all of the shape's elements were designed to obtain the result that the toy, which the mark represented, would always return to a point of stable equilibrium. Where "decorative items" is concerned, the mark "embodied a striking and attractive shape which is an essential element" of the marketing and purchase of the goods in question.
After the applicant's appeals were dismissed, the Hungarian Supreme Court referred three questions to the Court of Justice. In doing so, it pointed out that:
Must the assessment under Article 3(1)(e)(ii) of Directive 2008/95 ("the shape of goods which is necessary to obtain a technical result") be limited to the graphic representation of the sign, or whether other information, such as the perception of the relevant public, should also be taken into account?
Whether Article 3(1)(e)(iii) ("the shape which gives substantial value to the goods") must be assessed only on the basis of the perception or knowledge of the relevant public as regards the product that is graphically represented?
Whether Article 3(1)(e)(iii) must be interpreted as meaning that the ground for refusal must be applied systematically to a sign which consists exclusively of the shape of the product where the appearance of that product enjoys protection under the law relating to designs, or the sign consists exclusively of the shape of a decorative item?
The court first explained the free competition objectives of the "technical result" ground of refusal, namely:
The Court summarised the main principles, namely:
The competent authority may either base its assessment directly on the overall impression produced by the sign or examine in turn each of the components of the sign. In this regard:
At Stage 1, information in addition to the graphic representation alone – such as the perception of the relevant public – may be used to identify the essential characteristics of the sign.
At Stage 2, information in addition to the graphic representation of the sign may be taken into consideration to establish whether those characteristics perform a technical function of the goods. However such information must originate from objective and reliable sources and cannot include the perception of the relevant public.
The "substantial value" ground of objection is to prevent registration of a shape which has "such a great influence on the attractiveness of the product that restricting the benefit of the shape to a single undertaking would distort the conditions of competition on the market" (a further rationale is set out under Question 3 below).
Again, there is a two stage test:
The presumed perception of the sign by the average consumer may be taken into account in identifying the essential characteristics of the sign but it is not a decisive factor. Here, the Hungarian authorities were entitled to:
The shape mark exclusion is not limited to shapes having an exclusively aesthetic, artistic or ornamental value. Other factors may be relevant, such as whether the shape is dissimilar from other shapes in common use on the market concerned.
The objective of this ground of refusal is to prevent the exclusive and permanent right that a trade mark confers from serving to extend indefinitely the life of other rights in respect of which the EU legislature has sought to impose time limits.
The CJEU noted that the protection of designs under the Designs Directive 98/71 is expressly "without prejudice to any provisions of [EU] law or of the law of the Member State concerned relating to unregistered design rights, trade marks or other distinctive signs, patents and utility models".
Furthermore, the rules for trade mark and design protection are different. Several forms of IP protection can co-exist provided that the relevant conditions for registrability are met.
Shapes applied for in relation to decorative items could be refused under the ground in Article 3(1)(e)(iii) but this was not automatically the case. The substantial value may be due to other factors unconnected with its shape, such as the story of its creation, its method of production, the material it contains or the identity of its designer.
Therefore, it still needed to be proved that "the consumer's decision to purchase the product in question is based to a very large extent on one or more characteristics of that shape".
There is no automatic refusal for shapes which give substantial value to the goods simply because the sign enjoys design law protection or consists exclusively of the shape of a decorative item.