ECJ rules on trademark protection of stitching

In G-Star International BV v Benetton Group SpA (Case C-371/06), the European Court of Justice (ECJ) has held that a shape which gives substantial value to a product cannot be registered as a trademark even where that shape has acquired distinctiveness prior to registration (C-371/06, September 20 2007).

According to Article 3(1)(e), third indent of the Community Trademark Directive (89/104/EEC), "a sign which consists exclusively of the shape which gives substantial value to the goods" cannot be registered as a trademark for such goods. For example, the trendy appearance of a teapot cannot be trademark protected; consumers buy the product only because of its trendy looks.

In the case at hand, G-Star International BV, which is the proprietor of two shape marks consisting of the kneepad and stitching of jeans, brought an action before a Dutch court against Benetton Group SpA for trademark infringement of its 'Elwood' trousers. Benetton counterclaimed that G-Star's trademarks should be cancelled on the grounds that the stitching gave substantial value to the trousers. It also argued that trademark law does not aim to protect beauty. In response, G-Star claimed that it had heavily advertised the characteristics of its jeans; therefore, the reputation of the trousers was attributable to a large extent not to the attractiveness of the stitching, but to the attractiveness resulting from the recognition of the trademark among the public.

On appeal, the Dutch Supreme Court decided to refer the following questions to the ECJ:

"(1) Must Article 3(1)(e), third indent be interpreted as meaning that the prohibition contained therein permanently precludes the registration of a shape as a trademark where the nature of the product is such that its appearance and shaping determine its market value entirely or substantially as a result of their beauty or original character, or does the prohibition not apply where, prior to the application for registration, the attractiveness of the relevant shape to the public has been determined predominantly by the recognition of it as a distinctive sign?

(2) If the answer to the first question is to the latter effect, to what extent must this attractiveness have prevailed for the prohibition no longer to apply?"

In other words, the Supreme Court asked whether a shape which gives substantial value to a product can nevertheless be registered as a trademark if its attractiveness is a consequence of its recognition among the public. In short, if beauty becomes distinctive, can it be trademark protected?

The ECJ first referred to Article 3(3) of the directive. Under this provision, a sign which initially lacked distinctive character may be registered as a trademark if, by virtue of the use which has been made of it, it has acquired distinctive character. However, as the ECJ stressed, this provision does not apply to signs that cannot be registered under any of the grounds mentioned in Article 3(1)(e), including signs which give substantial value to the goods. This is consistent with the ECJ's decision in Philips v Remington (C-299/99, June 18 2002).

This can be seen as a victory for Benetton. However, in the Dutch proceedings it was held that G-Star's stitching and kneepad could be copyright protected and that Benetton had infringed these copyrights; Benetton thus faces another battle.

Interestingly, it took the ECJ just over one year to answer the questions. Normally, such procedure takes between two and three-and-a-half years. This is due to the fact that the ECJ decided not to ask for the opinion of the advocate general.

Paul L Reeskamp, Allen & Overy LLP, Amsterdam