Decision highlights overlap between Articles 7(1)(b) and 7(1)(c)

European Union

In LG Electronics Inc v Office for Harmonisation in the Internal Market (OHIM) (Case T-561/10, November 22 2011), the General Court has upheld a decision of the Second Board of Appeal of OHIM in which the latter had found that the word mark DIRECT DRIVE was descriptive and lacked distinctiveness.

In January 2010 LG Electronics Inc filed an application to register the word mark DIRECT DRIVE as a Community trademark (CTM) for goods in Classes 7 and 11 of the Nice Classification. The application was rejected by both the OHIM examiner and the Second Board of Appeal of the OHIM.

On appeal to the General Court, LG put forward the following pleas:

  • the examiner and the Board of Appeal had infringed Article 7(1)(c) of the Community Trademark Regulation (207/2009);
  • the examiner and the board had infringed Article 7(1)(b) of the regulation; and
  • the examiner and the board had failed to take into account prior registrations of, and applications for, Community and national trademarks.

The General Court pointed out that the assessment of whether a trademark is descriptive under Article 7(1)(c) must be based on the average consumer’s perception of the mark. In the present case, the perception of consumers in the English-speaking part of the European Union was to be taken into account, since the mark applied for was composed of English terms. If, in normal usage from the point of view of the average consumer, a sign or indication serves only to designate the goods or services for which registration is sought, then this sign or indication falls within the scope of Article 7(1)(c).

The application for DIRECT DRIVE covered the following goods:

  • Class 7: “Electric washing machines for household purpose; electric vacuum cleaners; automatic dishwashers”.
  • Class 11: “Electric laundry dryers; air conditioners.”

The General Court held that the word 'drive' means not only “a trip or journey in a car”, but also “a mechanism for transmitting (esp. rotary) motion to the wheels of a vehicle, a turntable etc”, and that the words 'direct drive' in English had a specific meaning - namely, “driven directly by the motor, without an intervening belt”.

Given that the goods concerned were all electric appliances (ie, driven by an electric motor without interference from a revolution-reducing device such as a gearbox), the General Court dismissed all of LG’s arguments relating to the first plea, reasoning that the English-speaking public would perceive the mark as descriptive of the goods concerned.

In light of this, the General Court held that the second plea should also be rejected. In particular, the court established that there is a measure of overlap between the scope of Articles 7(1)(c) and 7(1)(b). If a trademark is descriptive of the goods or services, then it is necessarily devoid of any distinctive character with regard to the same goods or services.

With regard to the third plea, LG argued that OHIM was under a duty to exercise its powers in accordance with the general principles of EU law, including the principle of equal treatment. LG submitted that:

  • OHIM had previously registered the trademark INVERTER DIRECT DRIVE for the same classes of goods; and
  • two word marks that were identical or similar to DIRECT DRIVE had been registered or applied for in Canada.

LG contended that, in accordance with the principle of equal treatment, the trademark applied for should be registered.

The General Court held that the principle of legality and sound administration overruled the general principle of equal treatment in order to ensure that a mark is not improperly registered. The General Court pointed out that the CTM regime is independent of any national systems, and the assessment of a trademark is to be made in reference only to relevant Community rules. Neither the court nor OHIM are bound by a decision given in a member state or a third country. In any case, the third plea had to be dismissed because the court had already concluded that the mark at issue could not be registered.

Based on the above, the General Court dismissed LG’s action in its entirety and upheld the board's decision.

An interesting aspect of the decision is that it points out the clear link between Articles 7(1)(c) and 7(1)(b): if a mark has been refused as being descriptive, then the question of whether it is devoid of distinctive character is moot. Further, the General Court clearly stated that neither the General Court nor OHIM is bound by an earlier decision if following that decision would be contrary to the applicable legal rules.

Christian Kragelund and Lisbeth Guldbæk Lemb, Gorrissen Federspiel, Aarhus

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