Following its first ever oral hearing, the EUIPO Grand Board of Appeal has issued clear guidance on the registration of country names as EUTMs. Brand owners will need to tread carefully if they wish to register country names as EUTMs absent evidence that the mark in question has acquired distinctiveness through use throughout the EU.
What has happened?
- In 2014, Iceland Foods, a well-known and long-established UK chain of supermarkets specialising in frozen foods, obtained EUTM registrations for the word ICELAND and the logo depicted below, both in respect of various foodstuffs and retail services connected with various foodstuffs.
- In 2018, Icelandic Trademark Holding (on behalf of the government of the country of Iceland) applied to cancel both registrations on the ground that the word ICELAND is descriptive of the goods/services covered by the registrations, designating their geographical origin. The actions were successful and both registrations were cancelled by the EUIPO. Iceland Foods appealed, and the appeal was referred to the Grand Board of Appeal of the EUIPO.
- The Grand Board has upheld the decisions to cancel the registrations, holding that Iceland is universally recognised as a place name and that it is already known for – or it is reasonable to assume that it will in future be used to designate – the categories of goods/services covered by the registrations. The fact that Iceland is so familiar to the average consumer and that country names are often used in relation to foodstuffs and their retail were relevant factors. Evidence that the marks had acquired distinctiveness through use was insufficient since it did not cover all EU member states.
- It must be remembered that this case relates solely to Iceland Food's EUTM registrations. Its UK registrations remain valid and it may be possible for it to obtain national registrations in many EU member states based on acquired distinctiveness through use.
- Although there are EUTMs consisting of country names, the decision reiterates that care should be taken before adopting such a name. This is particularly so where the country in question is an EU or EEA member state. (It seems clear from the decision that the Grand Board was keen to fully protect the interests of a key EU trading partner, especially on trade in foodstuffs.) Country names from further afield and with which the public is less familiar might be less problematic.
- Either way, brand owners are likely to encounter problems if the geographical name in question is well-known and is known for producing the goods/services in question or is likely to become so known in future (eg because it is geographically diverse or already produces a variety of goods/services).
Want to know more?
The legal position
EU legislation prohibits the registration of trade marks which "consist exclusively of signs or indications which may serve, in trade, to designate the… geographical origin… of the goods or of rendering of the service, or other characteristics of the goods or service" (Article 7(1)(c) EUTM Regulation). EU case law has interpreted this to mean that geographical place names are prohibited from registration where:
- The place is already famous or known for the category of goods/services concerned and is therefore associated/linked to those goods/services.
- It is reasonable to assume that the place name might designate the geographical origin of the category of goods/services concerned.
In other words, there must be a current or foreseeable association between the geographical name and the goods/services concerned. Conversely, registration of geographical names is acceptable where that name is unknown to the average consumer (or at least unknown as the designation of a geographical location) or where (because of the type of place) the average consumer is unlikely to believe that the category of goods/services concerned originates there.
According to EU case law, Article 7(1)(c) pursues an aim that is in the public interest – to keep signs or indications that designate characteristics of goods/services free for all undertakings to use to describe their goods/services. It is in the public interest for geographical names to remain available because they may be an indication of the quality or other characteristics of the goods/services and may influence consumer tastes by eg associating the goods/services with a place that gives rise to a favourable response.
The parties' positions
The supermarket argued that it was unlikely that consumers would misunderstand the ICELAND mark as referring to the origin of the goods/services concerned and claimed that the mark had acquired distinctiveness through almost five decades’ worth of use. They pointed to the fact that the EUIPO had previously allowed registrations for ALASKA which is a sizeable geographical location.
The representatives for the country countered by saying that the geographic place, Iceland, was known or likely in future to become known for all the goods/service covered by the registrations. Further, the supermarket’s use of the name intended to “hinder Icelandic entities in trade, and attempt to stop them from referring to their geographical origin, and their home country in relation to their trademarks”. Lastly, they stated that the country of Iceland has positive associations of eco-quality and sustainability that are likely to add value to goods/services and that the supermarket should not unfairly benefit from consumers' "favourable responses".
The Grand Board received lengthy third-party submissions from concerned groups such as Fisheries Iceland, International Trade Mark Association (INTA) and the Swiss Association Against the Misuse of Swiss Indications of Source. The submissions made by the Swiss and Icelandic organisations supported the EUIPO's initial decision to invalidate the trade marks. However, INTA argued that countries do not have an exclusive right to geographic terms and that a detailed assessment of descriptiveness for each good/service covered was required to assess the validity of the ICELAND registrations.
For the first time since the EUTM system was created in the early 1990s, the Grand Board held an oral hearing. The hearing was a lively event. Much was made of the fact that Iceland Foods had opened three franchise stores in the country of Iceland, sponsored its football team and has some Icelandic majority shareholders. It was observed that it had not attempted "to distance itself commercially from the country of Iceland" (the implication being that it was positively trading off of the connection).
The supermarket's owner argued that the name was adopted to create the idea of a large place where frozen foods could be purchased in the average consumer's mind, with only coincidental reference to the country.
The main points made by the Grand Board are as follows.
- As with all marks, distinctiveness/descriptiveness is judged from the perspective of the average consumer with reference to the goods/services concerned. Here, this was the public at large.
- Case law does not support the presumption that country names automatically designate the geographical origin of the goods/services concerned.
- Iceland is an EEA Member State with a considerable fishing industry, as well as water and eco-friendly energy reserves. It is firmly placed on the tourist map, being known for its nature, flora and fauna. The geographical name Iceland projects positive associations of eco-quality and sustainability that the country has worked hard to achieve over many years and which are liable to add value to the goods/services its national undertakings market abroad.
- Iceland is universally recognised as a country name across the EU. The degree of familiarity of relevant consumers with the geographical name is "very high". This high degree of familiarity will make it more likely that relevant consumers will perceive the goods/services covered by the registrations as produced in Iceland (ie increase the likelihood of a current or foreseeable association with Iceland).
- It is common – and in some cases, obligatory – to indicate the country of origin or place of provenance of foods on the product itself. "It follows that consumers, when seeing a name corresponding to that of a country on foodstuffs or agricultural products, are more likely to perceive it as relating to the place of origin and thus perceive it in a descriptive sense." This is so even if the country is not particularly known for the food in question.
- Iceland is known as the producer of a number of food stuffs covered by the registrations, including fish, seafood and seal meat. Other foods covered by the registrations, such as cereals and snack foods, are prepared and packaged in most – if not all - countries in Europe. In addition, it is reasonable to assume that Iceland might produce or process other foodstuffs covered by the registrations in future eg given that greenhouses powered by geothermal energy can grow a variety of foods. Even if certain foodstuffs in question are not grown in Iceland (like coffee, tea and cocoa) they may still be processed there and adapted to the local taste (just like Irish breakfast tea is in Ireland). This is particularly so given the recent work of Business Iceland to increase product exports.
- The registrant's surveys – which attempted to show that Iceland was not known for the vast majority of goods/services covered by the registrations - were defective since they did not cover Denmark (which has particularly strong links with Iceland) and they asked interviewees which goods came spontaneously to mind as being associated with Iceland (not the right question).
- Given all this, it is reasonable to assume that ‘ICELAND’ is capable of designating the geographical origin of the goods/services in question in the minds of average consumers. Due to the degree of familiarity amongst the relevant persons with the country of Iceland, and with that nation’s characteristics, as well as with the goods/services concerned, it is reasonable to conclude that the sign is liable to be used in the future by undertakings as an indication of the geographical origin of the goods/services. Consequently, it is plausible, credible and reasonable to consider the contested mark descriptive of the goods/services at issue from the perspective of the relevant public.
- The Grand Board also rejected the supermarket chain’s evidence that the marks in question had acquired distinctiveness through use on the grounds that no evidence was filed for Denmark, Finland, the Netherlands or Sweden. It also rejected its argument that the colours in the logo version of the ICELAND mark were sufficient to add distinctiveness.
In its concluding remarks, the Grand Board also noted the following.
- "… even if a country name may on occasion function as a trade mark (and indeed there are multiple examples of various country names registered as trade marks), the matter has to be approached with caution." It went on to reiterate that geographical marks that include the name of a country may, by their very nature, be perceived differently from other geographical indications, such as the names of regions, lakes and mountains, which might only be known locally. This is because average consumers are more in the habit of making assumptions about the origin of products on the basis of their national provenance than in relation to other types of geographical signs. This is especially so for the names of the countries of the EU or EEA, with which the relevant EU public is more familiar, which are in closer geographic proximity to that public and which are more likely to be perceived as embodying certain favourable characteristics that influence acquisition of goods/services. Conversely, country names from further afield and with which the public is less familiar may be less problematic.
- Consequently, the Grand Board rejected Iceland Food's argument relating to Alaska (being a validly registered mark) by stating that "Iceland is a sovereign state, whereas Alaska is a region of the United States over 3 1/2 times further away from mainland Europe". Iceland is also a member of the EEA and therefore economic trade links with the EU are far greater than with Alaska. The Grand Board pointed to the fact that applications for Andorra and SudTirol had been refused registration and the Iceland mark was more akin to those cases.
- It seems clear from this that whether a geographical name is properly registrable will depend on a variety of factors. The names of EU or EAA member states will be particularly difficult to register, especially for items like foodstuffs. Country names from further afield and with which the public is less familiar might be less problematic.
- Either way, brand owners are likely to encounter problems if the geographical name in question is (a) well-known and (b) known for producing the goods/services in question or is likely to become so known in future (eg because the location is geographically diverse or already produces a variety of goods/services). This is particularly so if relevant consumers are likely to make assumptions about the origin of the goods/services because of the nature of the geographical name (eg because it is a country name) or goods/services in question (eg because foodstuffs commonly feature the country of origin on their packaging).
- The Grand Board also commented that, "The monopolisation of a country name cannot lead to the inequitable situation in which traders with real and genuine connection to a certain geographic location are forced to constantly ‘look over their shoulder’ when referring to the real geographical origin of goods and service or… when using it as part of their trade mark. The Grand Board notes that the registration of the mark at issue has in fact been used to prevent the Icelandic entities from obtaining registration of trade marks alluding to Iceland (oppositions against Iceland Gold or Inspired by Iceland). Consequently, the honest practices defence cannot be used in favour of EUTM proprietor and should not influence discussions pertaining to registration matters as opposed to questions of infringement."