Challenges with 3D marks

Registrations for 3D marks are extremely attractive to rights holders – so much so that the European Court of Justice is continually adopting a stricter interpretation of the absolute grounds for refusal.

Registering three-dimensional (3D) trademarks provides rights holders with the opportunity to gain a permanent monopoly for a specific product design. Obviously, most companies prefer to add this registration to their common design rights and often seek to obtain 3D trademark registrations for all sorts of shapes and designs – even some that hardly qualify as a trademark as such.

In order to prevent any circumvention and to ensure that the registration of a shape mark does not become an alternative to design registration, patent registration or copyright – which all enjoy limited periods of protection – the European Court of Justice (ECJ) is adopting an increasingly strict interpretation of the absolute grounds for refusal of trademark registrations set out in Article 7 of the EU Community Trademark Regulation (207/2009) on the.

This article examines when a product shape qualifies for 3D trademark protection in light of the relevant European case law over the past few years, as well as how the three absolute grounds for refusal laid down in Article 7(e) interact with one another and whether they are reasonable and necessary.

When is a 3D trademark distinctive?

All trademarks must possess distinctive character. However, ECJ case law illustrates a more restrictive requirement in relation to 3D trademarks. In Mag Instruments (2004, C-136/02 P) the ECJ stated that the relevant public is less likely to make assumptions about the origin of products on the basis of their shape or the shape of their packaging in the absence of any graphic or word element. As a consequence, it seems more difficult to establish distinctiveness in 3D trademarks than in word or figurative marks, as only a mark which departs significantly from the norm or customs of the sector is likely to indicate origin.

This same strict and sensible interpretation was applied recently when the General Court refused the registration of Lindt’s 3D chocolate bunnies (T-336/08, T-337-08, T-346/08 and T-395-08). These marks were not suitable to identify the trade origin of the goods, as the shape and packaging were typical ‘seasonal’ shapes used for chocolate confectionery.

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The General Court ruled that Lindt’s 3D chocolate bunnies were not suitable to identify the trade origin of the goods, as the shape and packaging were typical ‘seasonal’ shapes used for chocolate confectionery

But when do designs or shapes diverge significantly from the norms of the sector and function as a badge of origin? Despite its somewhat specialised design, the Voss bottle was found to be only a variant of the existing shapes, since bottles come in all sorts of shapes and sizes. As a result, it was found that the bottle did not possess sufficient distinctive character (T-178/11). This decision from the General Court has been appealed to the ECJ and it remains to be seen whether the court will be equally strict in its assessment of distinctive character and whether the decision will be interpreted as making it almost impossible to obtain 3D shape marks for products such as chocolate and bottles which vary in design and appearance.

Further to these challenges, applicants must also accept the uncertainties as to how acquired distinctive character is established. This is illustrated by the facts of the ongoing dispute over Nestlé’s registration for the 3D shape of a Kit Kat. In December 2012 the Second Appeal Board of the Office for Harmonisation in the Internal Market found that the shape had acquired distinctiveness in the market due to its strong presence and distribution among consumers. However, the UK IP Office nevertheless refused to register Nestlé’s mark – both due to lack of distinctiveness and due to the functionality of the design with reference to Article 7(e)(ii), as it found that the presence of breaking grooves was a feature necessary to achieve a technical result.

Nestlé appealed and Justice Arnold referred two questions to the ECJ, the most interesting in this regard being whether – in order to establish acquired distinctive character – it is necessary only to prove that the public recognise the mark and associate it with the applicant, or whether it must be proved that the public rely on this mark (as opposed to any other trademarks) as indicating the origin. The judge himself found that the answer must be the latter.

The ECJ’s decision is eagerly anticipated. If it agrees with Arnold, this could suggest there may be severe difficulties in establishing acquired distinctive character. When does the public rely purely on the shape of a product as a badge of origin rather than its actual name or logo? I cannot think of one example. Consequently, the result of such an outcome will be that shape marks either have inherent distinctive character – which, as shown above, is already very difficult to establish – or are not distinctive at all.

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In a case regarding registration of the iconic LEGO brick, the ECJ further clarified that the shape need not be exclusively functional to be excluded from registration, as long as all of the essential characteristics of a shape perform a technical function

What about functional shapes?

It is not possible for applicants to register trademarks for shapes which are necessary to obtain a technical result (see Article 7(e)(ii)). The obvious purpose of this provision is to prevent circumvention of time-limited patent rights by registering functional shape marks. The leading case is Philips (C-299/99), in which the ECJ clarified that the provision applies to shapes necessary to obtain a technical result, even if it is possible to achieve the same result with other shapes. The reasoning seems clear. If such a registration were possible, then every possible way of achieving the same technical result would soon be applied for as a trademark shape, thus excluding competitors from the technical solutions for an unlimited period.

In the later LEGO case regarding registration of the iconic LEGO brick (C-48/09), this interpretation was confirmed by the ECJ. The ECJ further clarified that the shape need not be exclusively functional to be excluded from registration, as long as all of the essential characteristics of a shape perform a technical function.

But which of a shape’s characteristics can be seen as essential? The only vague guideline issued by the ECJ in this regard is that the perception of the average consumer is a relevant criterion (C-48/09, para 76). Obviously, this is of little help when trying to assess whether a functional shape with aesthetic appeal is eligible for registration.

Due to the purpose of the provision, it is very probable that the non-functional characteristics must be considered essential in order for the ECJ to allow the registration of a shape which is necessary to achieve a technical result.

However, when a shape departs significantly from the norm, passing the distinctive character test, or when the aesthetic appeal of a functional shape is essential, there is a genuine risk that the shape can be seen as adding substantial value to the product and so be refused registration as a 3D trademark due to Article 7(e)(iii). The primary purpose of this provision is to ensure that designs with eye appeal are not granted a permanent monopoly, which would render the 25-year term of design protection irrelevant.

When does the shape add substantial value to a product?

In 2011 the General Court applied Article 7(e)(iii) when refusing Bang & Olufsen’s application for a 3D trademark depicting its speaker (T-508/08). The General Court noted that the design was an essential element of Bang & Olufsen’s branding, increased the appeal of the product at issue and was an important selling point. Further, it was stated that the fact that the shape was considered to give substantial value to the goods did not preclude other characteristics from also conferring considerable value. The motive for the decision is reasonable. A design as such should not enjoy protection for longer than 25 years. However, the reasoning behind the decision does create some doubt. The very fact that the design is an important element of Bang & Olufsen’s branding seems to suggest that such shape marks do function as a badge of origin. Further, does the added value not exist primarily in the fact that the design gives the consumer the aura of exclusivity that is Bang & Olufsen? Arguably, the primary added value of the speaker design is that it functions as a badge of origin – the meaning of a trademark.

In light of this reasoning, one might ask when it is possible for famous brands to obtain a 3D trademark registration for a design which functions as a badge of origin, without adding substantial value to the product.

A recent decision of the Brussels District Court (AR 2013-6154) regarding the protection of the Louboutin ‘red sole’ trademark illustrates this problem. The Benelux trademark for the red sole was declared invalid, as it was seen as adding substantial value to the shoes. Once again, one could argue that the red soles are valuable only because of what they represent – the luxury world-famous brand Louboutin. Consequently, the reasoning given by the Belgian court may appear dubious.

In some way it seems ironic that the success of the above-mentioned famous products and the designs’ ability to function as a badge of origin can lead to marks being declared invalid – as the success can be attributed to the added value of the design. In other words, one might conclude that trademark law does offer protection for a product’s design, provided that this is not too good or does not become too famous.

It seems ironic that the success of famous products and the designs’ ability to function as a badge of origin can lead to marks being declared invalid

How do the absolute grounds for refusal interact with each other?

As shown above, the 3D shape applied for must differ significantly from the norm and have more than a purely functional characteristic in order to possess distinctive character. However, at the same time, it may not have eye appeal, which adds substantial value to the product. This is a very thin line, as a design which does function as a badge of origin will often be seen as adding substantial value in itself.

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The Second Appeal Board of OHIM found that the Kit Kat shape had acquired distinctiveness in the market due to its strong presence and distribution among consumers. However, the UK IP Office nevertheless refused to register the mark

Picture: Jon Le-Bon/Shutterstock.com

The latest ECJ case law appears to follow the strict interpretation of the ‘added substantial value’ provision. In a recent opinion from the advocate general in the Hauck case regarding protection for a baby chair (C-205/13), the scope of the ‘substantial value’ provision also related to goods which were not usually perceived as objects (which performed a decorative function), but where the aesthetics of the shape constituted one of the product’s essential characteristics.

If the ECJ agrees with the advocate general, it will leave even less room for 3D shape marks to operate when it comes to shapes that are necessary to achieve a technical result. The essential characteristics may not perform a technical function, but at the same time none of these may be the aesthetics of the shape. On this basis, one might conclude that no shape necessary to achieve a technical result will be eligible for registration, regardless of its design, and that applicants are caught between these two provisions. However, obviously further decisions from the ECJ are awaited before such conclusions can be drawn.

The above-mentioned pending Nestlé case will also shed some light on how the absolute grounds interact with each other. The Kit Kat bar consists of three essential features - one resulting from the nature of the goods (the slab shape of the mark) and two which are necessary to achieve a technical result (the position and depth of the breaking grooves, as well as the number of fingers). In this regard, the ECJ has been asked to clarify whether the same absolute ground for refusal must apply to all essential features in order for a shape registration to be rejected or whether registration will still be refused as long as all essential features are covered by an absolute ground, regardless of which one it is. Arnold is of the opinion that it would be bizarre if such a shape could be registered and the answer does indeed seem obvious.

The third absolute ground for refusal listed in Article 7(e)(i) excludes “shapes which results from the nature of the goods themselves” and is not further analysed here. This is because the provision applies only to the registration of basic or generic shapes and did not, for example, succeed against the shape of a three-headed electric shaver in the above-mentioned Philips case. Due to its narrow interpretation, the need for this independent ground is limited, as it seems likely that such basic or generic shapes will be rejected anyway – due to either lack of distinctive character or the fact that the shape is necessary to obtain a technical result.

When assessing how the absolute grounds for refusal interact, it seems apparent that – apart from Article 7(e)(i) – they each serve the clear purpose of avoiding various kinds of circumvention. However, when the ECJ expands the applicability of each ground, the result is a very small playing field with little transparency for applicants of 3D marks.

Final comments

The reasoning behind the strict interpretation of the absolute grounds for refusal in relation to 3D shape marks is clear and comprehensive. There is an obvious case for free competition and the design and functionality of products can acquire protection through other IP rights.

Arguably, the difficulties in overcoming the increasingly strict requirements as to both inherent and acquired distinctive character should be sufficient to ensure that only actual badges of origin will enjoy trademark protection.

Consequently, the substantial value provision seems like an unnecessary obstacle. When a shape is sufficiently distinctive to qualify as a badge of origin and thus function as a trademark, it seems unreasonable to refuse trademark registration merely due to the value that the mark adds to the product.

Deleting the substantial value provision from the absolute grounds would leave the courts to decide only whether the shape is distinctive – and can function properly as a badge of origin – and whether the shape is necessary to obtain a technical result or result from the nature of the goods themselves. These requirements and their strict interpretation should be sufficient to ensure that only actual trademarks will enjoy protection as such.

Anders Michael Poulsen ([email protected]) is attorney at law at Awapatent A/S 

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