Bang & Olufsen fails to register shape of loudspeaker as CTM

European Union
On October 6 2011 the General Court delivered its judgment in Bang & Olufsen A/S v Office for Harmonisation in the Internal Market (OHIM) (Case T-508/08), which concerned the absolute grounds for refusal and the limits of trademark protection. The new decision is in line with previous case law, including the judgment of the Court of Justice of the European Union in Phillips (Case C-299/99), but includes some interesting, and perhaps surprising, aspects.
 
The decision is the result of an ongoing legal dispute regarding Bang & Olufsen's application for the registration of one of its striking loudspeakers as a three-dimensional Community trademark:
 
The main issue in this case was how to apply the provisions on absolute grounds for refusal set forth in the Community Trademark Regulation (40/94), now the Community Trademark Regulation (207/2009).
 
In 2005 the OHIM examiner held that the mark applied for was devoid of any distinctive character within the meaning of Article 7(1)(b) of the regulation, and this was confirmed by the Board of Appeal. The matter was brought before the General Court, which, on October 10 2007, found that OHIM and the Board of Appeal had misconstrued Article 7(1)(b) of the regulation (Case T-460/05). The matter was referred back to the Board of Appeal.
 
The Board of Appeal annulled the examiner's 2005 decision, but – perhaps surprisingly – found that it was competent to examine the application on the basis of other absolute grounds for refusal. It rejected the application on the basis that the sign at issue consisted exclusively of the shape which gives substantial value to the goods within the meaning of Article 7(1)(e)(iii) of the regulation.
 
Before the General Court, Bang & Olufsen argued that the Board of Appeal was bound to apply the court's 2007 decision and proceed to register the mark without the possibility of raising other grounds for refusal.
 
In its decision of October 6 2011, the General Court found that, in 2005, neither the examiner nor the Board of Appeal had decided on the applicability of Article 7(1)(e)(iii) of the regulation and that subsequent examination under this provision was not excluded.
 
On the substance, the court noted that the shape of the loudspeaker revealed a very specific design which is an essential element of Bang & Olufsen's branding and increased the appeal of the product at issue - that is to say, its value. The court thus concluded that the mark was excluded from registration under Article 7(1)(e)(iii).
 
This decision once again illustrates the difficulties in obtaining registration for the shape of goods as a Community trademark. The obvious aesthetic characteristics of Bang & Olufsen's loudspeaker were found to involve a substantial value, thereby preventing trademark registration. One might wonder where to draw the line between:
  • the shape of a product that is considered to be distinctive as a trademark; and
  • the shape of a product that is considered to "consist exclusively of the shape which gives substantial value to the goods".
It is hoped that future decisions by the court will provide more guidance in this respect.

Lisbet Andersen, Bech-Bruun, Copenhagen

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