Brands Update: quick read

UK developments

• The Court of Appeal has ruled that Aldi's lemon cider product infringes Thatchers' trade mark registration for its lemon cider label. The decision is an important one for brand owners in the battle against look-alike products. Overturning the decision of the High Court, the Court of Appeal effectively held that this was a straight-forward unfair advantage by "transfer of image" claim. More in our full article here.

• It is rare for a trade mark to be refused registration (or invalidated, once registered) on the basis that its use is prohibited in the UK by an enactment or rule of law. That is what happened to Oatly's registration for the mark POST MILK GENERATION. The Court of Appeal recently reinstated the original decision of the UKIPO that the mark was invalidly registered under the Common Market Organisation Regulation which only permits the use of the designation "milk" for milk (the "normal mammary secretion"). The decision focuses on the construction of that Regulation, which is not relevant here, except perhaps to know that it was construed quite narrowly. The decision potentially has wider implications for the use of terms such as “milk-free" and other terms which reference an original product but are to be used for substitutes.

• The High Court has ordered easyGroup to pay easyfundraising's costs (in its successful defence of the former's trade mark infringement claim) on an indemnity basis due to the "way that the claimant conducted" the litigation. Relevant factors were: (a) the long history and build up to the issue of the claim form with various letters before action being sent by the claimant to the defendant followed by silence (over a 10-year period), (b) the serial changes to the basis for the claim, with the claimant relying on different trade mark registrations and different grounds, (c) the lack of evidence from anyone within easyGroup itself and (d) the joinder of the fourth defendant (a significant investor in the defendant's business) with no proper basis for such joinder, it being done to put pressure on the defendant only.

• The High Court has dismissed an attempt by a licensee to terminate a non-exclusive trade mark licence despite the fact that the licence itself contains no right of termination for the licensee (only the licensor). The licence terms were very clear (no mention of a right of termination for the licensee, only the licensor) and this was in-keeping with the context of the licence which was very one-sided (in favour of the licensor) as the licence was of the licensor's famous name and therefore represented her life works. There was no restraint of trade just a complaint about the nature of the bargain struck. It is worth noting that, in some cases, the court will construe agreements (including licences) as including a right to terminate even if such a right is not expressly contained within the agreement (eg where the wording is ambiguous, and the context suggests it was intended). This was not one of those cases.

EU developments

• The ECJ has confirmed in the EUIPO v Neoperl case that there is no particular order that should be adopted when a tribunal/court is considering the absolute grounds of objection. In particular, there is no rule that an application must satisfy the requirements of Article 7(1)(a) (ie that it is capable of being represented in a clear and precise way) before the other absolute grounds are considered. Which grounds are considered and in what order will vary from case to case. If a mark fails on any one ground, it is not necessary for the tribunal/court to consider the other ground(s). It also confirmed that the General Court does not have the power to assess (ie confirm, modify or overturn) a ground that the EUIPO Board of Appeal has not itself yet determined. Therefore, the fact that the Board had not adopted a position on Article 7(1)(a) in this case precluded the General Court from doing so. Some commentators have suggested that this is something new – it isn't. The point had already been decided in the Centrotherm case (at para 48). It should be noted that the position is different for the Board of Appeal, which can raise grounds not determined by the EUIPO at first instance. In fact, both the examination division and Board can raise additional absolute grounds at any stage prior to registration. This means that there is a risk that an applicant could successfully appeal one absolute ground only for another to be asserted by an organ of the EUIPO later on. 

• The General Court has delivered a decision addressing the distinctiveness of trade marks for virtual goods. The ruling contrasts with the EUIPO’s current approach to assessing similarity between virtual and physical goods/services in oppositions. It is an important decision that should be considered carefully by all brand owners – read our article here.

• EU case law on similarity of marks has not always been consistently applied especially where the marks in question are wholly figurative. It won't come as a surprise then that Giorgio Armani SpA was recently able to persuade the EU General Court that the marks below are visually similar despite findings to the contrary by the EUIPO and Board of Appeal. The Court based its finding on the fact that both marks consist of six horizontal black lines on a white background and would be remembered as forming a V-shape. The presence of the eagle's head in the earlier mark and the horizontal line at the base of the opposed application was not sufficient to distinguish them. While the marks were conceptually different and could not be compared aurally, similarity in one relevant aspect (here, visual similarity) can be sufficient for marks to be considered similar overall. Given the Court's finding, the opposition in question was remitted back to the Board of Appeal for it to consider whether there was a likelihood of confusion or unfair advantage/detriment. Some will question whether the decision accords with others such as the Zitro case and whether Armani's fame (wrongly) influenced the analysis, but comparing figurative marks is never easy and there will always be room for honest differences of opinion. Carefully arguing such cases is key.

EUTM application opposed	The earlier EUTM registration

• A recent decision of the Grand Board of Appeal of the EUIPO is a further reminder of the importance of considering any negative connotations a mark might possess prior to filing an application. The Grand Board ruled that the expression 'MARICON PERDIDO' is not registrable as an EUTM for goods/services such as audio-visual recordings and entertainment as it is contrary to accepted principles of morality. It held that, "… the expression … which may be translated into English as a ‘hopeless poofter’, would offend a significant portion of the Spanish general public as a homophobic slur, contrary to human dignity and accepted principles of morality." The evidence submitted by the applicant had failed to demonstrate that the expression "has been rehabilitated or reappropriated". The fact that the applicant was part of the group subject of the slur was irrelevant. The encroachment on freedom of expression was justified. The ruling is consistent with others on the point including the recent COVIDIOT ruling. Brand owners should bear in mind that these sorts of mark are often also open to challenge for lack of distinctiveness as was the case with the 'Russian Warship: GO F**K YOURSELF' mark'. For more on public policy/morality, see our quick guide.

• A recent decision of the EUIPO Board of Appeal suggests that the EUIPO is now more consistently (and correctly) applying the principle that, where marks only share elements which are of low/no distinctiveness, there is unlikely to be a likelihood of confusion. In this particular case, the Board held that there was no likelihood of confusion between the two marks below even when used/registered for identical services (restaurants etc) because the word Oktoberfest would be understood as referring to the annual Munich beer festival and was therefore of weak distinctiveness. Absent any enhanced distinctiveness through use of the earlier registration, the differences between the marks were sufficient to distinguish them. Interestingly, the Board assumed that genuine use had been proved for all services covered by the earlier registration – that approach (avoiding the time to review evidence) makes sense if the tribunal is going to find no likelihood of confusion anyway.

EUTM application opposed	The earlier Romanian registration

• The EUIPO Board of Appeal has upheld a refusal to register a motion mark consisting of the opening and closing of a window. The Board agreed with the Examination Division that the mark lacked distinctiveness since the average consumer would view it as merely showing the functioning of a window (just like any other marketing video showing how a product operates) and not as an indicator of origin. Whether the window was unique was irrelevant since the application was for the opening and closing motion of the window, not the window itself. The Board also added an additional ground of objection (as it is entitled to do) – that the mark consists exclusively of a characteristic necessary to achieve a technical effect. The decision is a reminder that it is difficult to register motion marks consisting of an aspect of the normal functioning of a product since the average consumer is unlikely to view it as a trade mark and it is liable to face 'technical effect' objections.