The EUIPO delivers its verdict on the longstanding dispute between the State of Iceland & Iceland Foods

EUTM Cancellation Action: (1) Promote Iceland, (2) The Icelandic Ministry for Foreign Affairs and (3) SA – Business Iceland v. Iceland Foods Limited.

Background

Three Icelandic authorities (“Icelandic Applicants”) filed an application for a declaration of invalidity against Iceland Foods Limited’s registered EU trade mark No. 002673374 for ‘ICELAND’ (word mark), targeting all goods and services covered by the registration. The applicants cited various absolute grounds for invalidity under the European Union trade mark regulation. The trade mark had originally been the subject of various oppositions brought by third parties in 2005, but the mark proceeded to registration in 2014, after which followed a long-running dispute between Iceland Foods and the Icelandic Authorities.

The Applicants’ arguments

In their evidence, the Icelandic Applicants sought to highlight the various things that the nation of Iceland is famous for, in order to stress the popularity of Iceland as a tourist destination, and to affirm the country’s strong trade ties with other EU jurisdictions. The Icelandic Applicants reasoned that these factors meant that the term ‘Iceland’, when used in conjunction with goods sold within the EU, is one which would be considered to be an indication of the quality of the goods and an indication of their geographical origin. They argued that Iceland enjoys particular fame in the fields of food and drink production. Accordingly, the Icelandic Applicants argued that ‘ICELAND’ cannot function as a trade mark for the goods and services covered by the registration, on the basis that it simply describes their geographical origin and their quality.

The Icelandic Authorities also reasoned that the sign ‘ICELAND’ for the relevant goods and services could deceive the public as to their geographical origin, as Iceland Foods Limited is based in the UK. They also argued that it was clear that Iceland Foods intended to hinder Icelandic entities in their trade and would attempt to prevent them from using the sign in question to refer to Iceland as a geographical origin, and to their home country. They referred to WIPO’s Standing Committee which has active concerns about the use and registration of trade marks consisting only of a country name.

The Icelandic Applicants argued that, in line with the general principles of trade mark law, the name of a country cannot be registered, as to do so would allow a single party to monopolise a sign which may service to designate origin and thus distort fair competition on the single market. The Applicants cited the ‘Passionately Swiss’ case (15/12/2011, T-377/09), in which it was held that major geographical places or regions (including countries) known to the relevant public will generally be perceived as the geographical origin of the goods and services concerned. They also referred to the ‘OSLO’ case (R 2919/2016-5), where it was held that, even though the mark was not found to have a reputation in connection with the particular goods in question, the name of the Norwegian capital city could be used in the future as an indication of origin, and therefore must remain available to all undertakings.

Iceland Foods Limited’s response

In its response, Iceland Foods sought to highlight its own reputation and history, citing its 50 year heritage and the fact that it is one of the biggest supermarkets in the United Kingdom. It also sought to cast doubt on the reputation of the nation of Iceland as a source for goods or services, arguing that it exported a trivial amount of goods (but accepting that it had a reputation as a tourist destination and is well-known for the production of fish, seafood, aluminium, and related products).

Iceland Foods sought to rely on further case law on geographical names, also citing the ‘Passionately Swiss’ case, but distinguishing this from the current set of facts on the basis that ‘Iceland’, unlike ‘Swiss’, does not have any inherent connotation of quality. Accordingly, Iceland Foods argued that the name ‘ICELAND’ will not be associated with the quality of goods or services. Iceland Foods also cited the same case in arguing that where, as in the present case, a geographical name has a fairly narrow reputation, the potential competitive impact of the contested EUTM on goods and services which are remote from those for which the country of Iceland has a reputation (fish, seafood, and aluminium) is likely to be regarded as speculative at best. This meant that it is highly unlikely that consumers would be deceived as to the origin of goods and services for the simple reason that they would not deem ‘ICELAND’ to refer to any such origin.

Finally, Iceland Foods also put forward materials to support its argument that the mark in question had acquired distinctiveness through use. This included evidence regarding its trade mark portfolio, the floating of the business in 1984 on the London Stock Exchange, extensive use of various business promotional and marketing materials over a sustained period of time, and long-standing coverage of the brand in the media and press.

The decision of the EUIPO

In assessing whether or not the trade mark would fall foul of the absolute grounds for invalidity, the EUIPO held that the relevant public for the purposes of their assessment was the public of English-speaking countries of the UK, Ireland and Malta, but also those countries where ‘ICELAND’ would be understood by the general public as a result of a basic understanding of English, namely Sweden, Denmark, the Netherlands and Finland.

Turning to the descriptiveness and geographical terms generally, the EUIPO commented that it is in the public interest that signs that may serve to designate a geographical origin of goods or services remain available, as they may be an “indication of the quality and other characteristics of goods concerned”, but also may influence consumer preferences. The EUIPO reasoned that the registration of geographical names as trade marks is not possible where such a geographical name is either already famous or is known for the category of goods concerned, and that a geographical place known to the public will generally be perceived by this public as the geographical origin of the goods. This, they reasoned, “will normally be the case for major geographical places or regions, as well as for countries”.

The EUIPO were persuaded that at least some manufacturing, production and export of goods took place in the country of Iceland prior to the filing of the trade mark in concern, covering a range of goods in Classes 29, 30, 31 and 32 (even though they were not persuaded that Iceland had a particularly strong reputation for any such goods). They also noted the current practice in the trade to indicate the geographical origin of foodstuffs, beverages and agricultural products, and that, even for those goods which are not currently produced in Iceland, it is reasonable to assume that Iceland may be associated with those goods at some point in the future.

On the issue of acquired distinctiveness, the EUIPO confirmed that, contrary to the Icelandic Applicant’s assertions, it is possible to overcome an absolute grounds objection by providing evidence of acquired distinctiveness in relation to country names. However, whilst Iceland Foods had done so in relation to the UK (where they have very extensive operations) and Ireland, they had failed to meet the requisite threshold in relation to the country of Malta, and had failed to provide any evidence at all in relation to Sweden, Denmark, the Netherlands and Finland.

Having failed to prove that the trade mark in concern had acquired a distinctive character through the use which had been made of it in all of the relevant territories, the EUIPO concluded that the application for invalidity should be upheld, and that the registered trade mark should be declared invalid for all the contested goods and services. Iceland Foods has confirmed that it will file an appeal against the EUIPO decision.

Impact

This decision is a sobering reminder for consumer brands that their trade marks are not immune from cancellation attacks, even where they have traded under those brands successfully for many years, or even decades. It is clear from the EUIPO’s decision that geographic names and indications are subject to a particularly stringent assessment of distinctiveness, and a finding of ‘descriptiveness’ will be more readily made where a brand name consists of the name of a place, region or country. Businesses should therefore think twice before adopting any brand names that have potential geographic connotations, no matter how tenuous the link might seem be in practice.