30 July 2021
Brands Update – August 2021 – 2 of 4 Insights
The ECJ says a single tyre groove does not produce a technical result. This decision may encourage other applications to register limited parts of functional shapes as trade marks.
Four main issues arose in this case, which we discuss below. To understand the ECJ decision, it is necessary to consider what the General Court and EUIPO decided on these issues.
The General Court noted that, taking the registration alone, there is nothing to suggest that the sign has anything to do with a tyre/tyre tread or is otherwise functional – it resembles the shape of an inclined 'L'. Nonetheless, the EUIPO was entitled to consider extraneous material (such as expert reports) in determining what the sign represents (and whether it is exclusively functional). The EUIPO was also entitled to conclude that the sign represents a groove of a tyre, even though it is a figurative two-dimensional mark. Two-dimensional signs can represent three-dimensional products and fall foul of Article 7(1)(e)(ii).
However, the General Court pointed out that, while extraneous material can help to inform what the sign represents, it does not form part of the sign. This was important because (according to the General Court) the EUIPO had wrongly equated the sign with a tyre or tyre tread, when it isn't – at most, it represents an individual groove of a tyre tread. In particular, the fact that some of the registrant’s tyre models have a groove in the shape represented by the contested sign on the surface of the tyre does not mean that the sign is a tyre or whole tyre tread. Tyres and tyre treads are complex products composed of multiple elements, and the General Court's judgment asserted that:
"…the evidence submitted … shows that the groove represented by the contested sign does not appear alone on the applicant’s tyres. That groove appears repeatedly and criss-crossed on the tyre tread to the point where it creates a shape displaying interlacing and which is different from the shape of the initial, individual groove."
Therefore, the contested sign – even factoring in that it is a two-dimensional representation of a three-dimensional shape – is only a very limited part (a single groove) of another part (a tyre tread) which is formed of multiple interlacing elements, and which forms only part of a tyre.
The ECJ had no need to interfere with these rulings.
The General Court was of the view such signs could fall foul of Article 7(1)(e)(ii). However, it went on to say that, "That would be the case if that shape represented, quantitatively and qualitatively, a significant part of that product." It concluded that the contested sign is not made up exclusively of a shape which, on its own, represents, quantitatively and qualitatively, a significant part of those goods.
These statements by the General Court are interesting since one might expect a sign to fall foul of Article 7(1)(e)(ii) if it is exclusively technical no matter how much of the product it makes up and even if it has to be combined with other elements to perform its technical function.
When the case came before the ECJ it did not give a ruling on this issue or a clear steer regarding whether it is the correct interpretation of Article 7(1)(e)(ii). This is because it ruled that it had not been proven that the sign in question produces the stated technical result (see below). Whether the sign represents, qualitatively and quantitatively, a significant part of the product was therefore academic.
Interestingly, however, the ECJ did not completely dismiss the General Court's statement, possibly implying that it agrees with it. Having said that, there are also comments which suggest that the ECJ does not agree with the General Court on this issue. In particular, the ECJ restates (somewhat generously) the relevant part of the General Court's ruling in a way that implies that the General Court was merely giving one example of when part of a product might fall foul of Article 7(1)(e)(ii).
Importantly, the ECJ does say that the General Court did not exclude the possibility that Article 7(1)(e)(ii) could apply to a sign which contributes to the functioning of a product, even if that shape is not enough, in itself, to obtain the intended technical result of that product. However, like before, this does not indicate whether the sign must represent a quantitatively and qualitatively significant part of the product for this to apply.
The General Court distinguished the present case (where the sign does not track the outline of or represent a discrete component of the goods in question) from other shape trade mark cases (where they did). It concluded that the contested sign is not made up exclusively of the shape of the goods in question since it does not reveal the outline of the goods covered by the registration (tyres) and represents only a very small part of those goods.
This is an interesting comment. It could be argued that a groove (having depth) does represent part of the shape of a tyre or the shape of a component part of a tyre. Again, the ECJ did not need to rule on the point. Furthermore, this issue will have declining relevance in future since Article 7(1)(e)(ii) has been amended so that it prohibits the registration of signs consisting exclusively of the shape "or another characteristic" of the goods in question necessary to achieve a technical result. This case was decided under the original wording of Article 7(1)(e)(ii).
The General Court held that the evidence submitted does not establish that a single groove, in the shape of the mark registered, can achieve the technical result identified by the EUIPO (efficient traction, breaking and comfort). Rather, the evidence shows that it is the combination and the interaction of the different elements which form a tyre tread which may be capable of producing that technical result. The sign was therefore validly registered.
It was on this basis that the ECJ was able to uphold the decision of the General Court. It was enough (of itself) for the appeal to be dismissed – if the sign in issue does not produce the stated technical result, Article 7(1)(e)(ii) does not apply.
Unfortunately, it is not completely clear from the General Court's ruling why it considered that the sign does not achieve the stated technical result. Was the General Court saying that the groove had aesthetic characteristics and might even be shaped in a way that reduces the stated technical result (as argued by Pirelli) or (more likely) that a single groove is such a small part of an otherwise much larger, complex product that it (of itself) produces no discernible technical result? If the latter, this could mean that small parts of functional products might not fall foul of Article 7(1)(e)(ii).
Perhaps it was just stating that a technical result had not been proved. Indeed, the ECJ noted that the General Court had not said that the sign at issue does not achieve "any" technical function, only that it does not achieve the technical function stated by the EUIPO (efficient traction, breaking and comfort). All of this emphasises the importance of submitting the right evidence before the EUIPO. Without that, the higher courts might have their hands tied especially as an appeal to the ECJ is limited to points of law.
It's important to remember that the facts of this case are very specific. In particular, the sign in question is a figurative two-dimensional mark, not a three-dimensional shape mark. This was clearly a relevant factor in the rulings of the General Court and ECJ, even if this wasn't expressly acknowledged in the rulings themselves. Furthermore, a single groove is used in a very complex way in an end-product tyre.
The case might suggest a more lenient approach of the EU to the registration of parts of products – especially where those parts do not form, qualitatively or quantitatively, a significant part of the whole product – or it might turn out to be a one-off case decided very much on its own facts. This is particularly so given the changes to Article 7(1)(e)(ii). Whether others will test the water with applications to register small elements of products remains to be seen.
To discuss the issues raised in this article in more detail, please reach out to a member of our Brands & Advertising team.
30 July 2021
30 July 2021
30 July 2021