Volkswagen's STREET mark rejected for descriptiveness and lack of distinctiveness

European Union

In Volkswagen v Office for Harmonisation in the Internal Market (OHIM) (Case T-321/14, September 10 2015), the General Court has again considered the absolute grounds for refusal under Articles 7(1)(b) and (c) of the Community Trademark Regulation (207/2009).

The decision concerned the trademark STREET, applied for by Volkswagen AG. The trademark was intended to cover all kinds of vehicles on land in Class 12, vehicles for children in Class 28, and wholesale and retail services in Class 35, all relating to motor vehicles and their parts. The examiner and the First Board of Appeal of OHIM rejected the application because, in their opinion, the word 'street' would be subject to the absolute grounds for refusal of non-distinctiveness and descriptiveness. The General Court affirmed. This decision is in line with the practice of OHIM and the General Court; nevertheless, because of the clear wording in this decision, it warrants several remarks.

At the beginning, the practice of OHIM and of the courts in Luxembourg was to allow trademarks quite liberally and to interpret the absolute grounds for refusal narrowly and restrictively. This went on until the BABY-DRY decision (Case C-383/99 P), and the EU authorities returned to the long-established practice of the European patent offices. The BABY-DRY decision was somehow interpreted as the 'original sin' in trademark law.

However, the 'original sin' was arguably not the BABY-DRY decision, but the fact that the provisions of Article 6quinquies, Section B2 of the Paris Convention were inserted, unnecessarily and without any obvious reasons, as Articles 7(1)(b) and (c) of the Community Trademark Regulation. These provisions were used for defining what a 'trademark' is, in addition to the 'real' definition of a trademark in Article 4 - ie, a trademark is a sign “capable of distinguishing the goods or services of one undertaking from those of other undertakings”. This is the exhaustive definition of a 'trademark' and nothing more is needed. The unnecessary reference in Article 7(1)(a) that signs which do not conform to Article 4 shall not be registered is equally unnecessary.

This raises the additional questions of:

  • whether Articles 7(1)(b) and (c) contain additional grounds for refusal not covered in Article 4, in which case signs conforming to Article 4, but not complying with Articles 7(1)(b) and (c), could be rejected; or
  • whether Articles 7(1)(b) and (c) are to be seen as a mere specification of Article 4, and not as an extension of the absolute grounds for refusal.

The decision in the present case seems to point to the second alternative. According to the author of this article, this is wrong.

The provisions of Article 6quinquies, Section B2 were introduced in the Washington version of the Paris Convention. The only purpose of these provisions was that, in some cases, the telle-quelle clause (Article 6quinquies, Section A1) cannot apply, because in another country where registration is sought, the trademark may possibly be “devoid of any distinctive character” or may “consist exclusively” of descriptive signs, or may “have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed”. This provision therefore serves exclusively for the purpose that, if a trademark is registered in one country and applied for in, or extended to, another country of the Paris Convention, then the other country may, in spite of the telle-quelle clause, refuse protection on the grounds of Article 6quinquies, Section B2. This clause has nothing to do with the definition of trademarks.

The combination of the definition of a 'trademark' in Article 4 on the one hand, and Articles 7(1)(b) and (c) on the other, confuses the situation. While it is clear under Article 4 that the real test can only be the perception of the relevant consumer, Articles 7(1)(b) and (c) open the possibility of hypothetical considerations by the examiners which have nothing to do with the perception of the public.

In the present case, the question was whether STREET is a trademark and will be understood by the relevant consumers as a trademark. If it qualifies as a trademark, it must be capable in the eyes of consumers to differentiate the relevant products. The question to be asked under Article 4 is whether consumers will consider, for instance, VW STREET as a distinctive sign, namely as a sign capable to differentiate the vehicles bearing that sign from an Alfa Romeo Giulietta, a Seat Ibiza or a Škoda Octavia. Under Article 7(1)(c), the question is whether STREET can be understood as descriptive or not. In this respect, the General Court came to the conclusion that 'street' designates the public road on which vehicles are driven so that the word 'street' would be descriptive for cars driven on roads. This also means that the average consumer is seen as a person who would understand the word 'street' applied to a car as descriptive of the purpose of a car. He/she would then make the observation that the car can serve as a vehicle on streets, but perhaps not on highways or international roads. Arguably, this means that the consumer is not an averagely intelligent person.

The provisions of Articles 7(1)(b) and (c), if taken as an additional definition of a 'Community trademark', create a playground for examiners to try out theories for the abstract allocation of meanings to non-distinctive or descriptive terms without applying the basic test under Article 4. The decision in the present case even increased this freedom by stating that prior decisions shall not necessarily apply to such qualification under Articles 7(1)(b) and (c). In fact, this means that BABY-DRY can be disregarded and that the General Court will accept prior decisions only if it believes that they are in line with its own opinion. Although the Luxembourg court system does not apply the stare decisis rule, a certain authority for prior decisions would ensure a stable practice.

Arguably, whether STREET is registrable for vehicles and similar products is a question to be solved under Article 4. It is not possible to reject this trademark under Articles 7(1)(b) and (c). Although it is unlikely that the practice of the General Court will change, such a change should seriously be considered.

Hans Georg Zeiner, Zeiner & Zeiner, Vienna

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