Cannabis mark ruled contrary to public policy

Europe

Background

On 19 December 2016, Ms Santa Conte (“Ms Conte”) made an application to register an EU trade mark for the following figurative sign in relation to various food and drink products and services in Classes 30, 32 and 43, including baked goods, chocolate and deserts, and soft drinks.

CNB STR

The application was originally rejected in September 2017 by the examiner on the grounds that the mark was devoid of any distinctive character and/or was descriptive as to origin or character, contrary to Articles 7(1)(b) and 7(1)(c) of Regulation (EC) 207/2009 (now Articles 7(1)(b) and 7(1)(c) of Regulation (EU) 2017/1001 (“the EUTMR”)).

Ms Conte appealed first to the EUIPO Board of Appeal, which dismissed her appeal in August 2018 on the ground that the mark was contrary to public policy under Article 7(1)(f) of the EUTMR. As one of the absolute grounds for refusal, the Board of Appeal was permitted to consider this for the first time at this stage, despite it not having been considered as part of the original decision.

Appeal to the General Court

Ms Conte appealed this decision to the General Court on the basis that the Board of Appeal had failed in its duty to examine the relevant facts on its own motion, including an assessment of the meaning of the sign and how it is understood by the relevant public. It was argued that marijuana is not a plant, but a psychoactive substance obtained from cannabis flowers, and that the active substance THC is only a percentage of the cannabinoids in those flowers (i.e. nothing to do with the leaves depicted). Additionally, the words “STORE AMSTERDAM” were merely indicative of the source of the cannabis used in the products.

The Court’s decision

The Court made it clear that the relevant factor to consider is what perception the public will have of a mark, whether that perception is scientifically accurate or not. Therefore, it was irrelevant that the psychoactive substance THC is not actually contained in the leaves depicted, because this particular shape of the leaf is often used as a “media symbol” for marijuana and therefore would be identified as such by the public.

In relation to the words ‘STORE AMSTERDAM’, Ms Conte did not deny that Amsterdam is widely associated with “coffee shops”, which lawfully sell high THC marijuana. The General Court concluded that customers would likely associate products branded with this mark as containing similarly high levels of THC. The Court cited case law, which states that provided there is at least one possible interpretation of a sign that could be an absolute ground for refusal, the sign must be refused registration. Given the possible interpretation of the words “STORE AMSTERDAM” already mentioned, the Court held the same logic should apply in relation to this mark and registration should be refused.

When considered in its entirety, the Court held that the mark applied for would be perceived as indicating that the products contain narcotic substances which are illegal in most Member States. It was held irrelevant whether the products actually did contain high levels of THC, given that it is the public’s perception of the products as a result of the trade mark that is of relevance. Nor did it matter where in Europe the products were sold. Given the mark applied for would be Europe-wide, it was important to consider the interpretation in Member States where high levels of THC are illegal on public health and/or morality grounds. The court additionally highlighted Article 38 of the Treaty on the Functioning of the European Union, which permits EU-level intervention to aid member states with tackling cross-border drug trafficking. The Court held that its general obligation under this duty was sufficient for it to conclude that allowing the registration of such a mark would be contrary to public policy.

Furthermore the Court emphasised that, given the purpose of a trade mark is to indicate origin of products so that if consumers are happy with the products they will buy them again, the use of such a mark could be seen to be encouraging the purchase of narcotic substances (or at least trivialising their consumption), which is contrary to wider EU drugs policy.

Implications of the case

The decision of the General Court makes it clear that for the purposes of interpreting iftrade marks are contrary to public policy, EU-wide public health objectives must be taken into account. The judgement also reiterates the importance of Article 7(2) of the EUTMR, which states that marks can be rejected on the basis of non-registrability even if this applies in only a small part of the EU (e.g. only in one Member State).

As far as cannabis-derived products go, the use of the traditional leaf image and the words “CANNABIS” and “AMSTERDAM” are each likely to continue to raise flags given the varying levels of restrictions on the sale of cannabis across the EU and the controversy surrounding proposed legalisation across many Member States. However, this is likely to change as attitudes shift. The Court suggested alternative wording, such as “HEMP” or in this case the Italian equivalent “CANAPA” might be considered more appropriate. Additionally, registration for national trade marks remains a possibility, particularly where only certain, more liberal territories are targets for the sale of the relevant products.