The interpretation of provisions regulating shape marks often raises various doubts on both the EU and national level, especially regarding the conditions under which registration of shape marks can be granted or maintained. The complexity of the assessment of shape marks on absolute grounds was recently addressed in two rulings of the EU courts, providing important clarification to brand owners interested in 3D marks.
The preliminary ruling in case C-237/19 Gömböc Kutató, Szolgáltató és Kereskedelmi Kft. v Szellemi Tulajdon Nemzeti Hivatala (‘Gömböc’) was recently handed down by the Court of Justice of the European Union (CJEU). The ruling provided guidance on the assessment of trade marks consisting exclusively of shapes necessary to obtain a technical result and shapes giving substantial value to the goods.
Reproduction from the CJEU judgment
In 2015, Gömböc Kft., the Applicant, applied for a registration of the above three-dimensional sign for ‘decorative items’ in Class 14, ‘decorative crystalware and chinaware’ in class 21 and ‘toys’ in class 28 of the Nice Classification. The Hungarian Intellectual Property Office (HIPO) established that the sign consists of a representation of a three-dimensional monostatic object, which due to its external design and the homogeneous material used always returns to its position of balance.
The application was refused. The HIPO found that, in regard to ‘toys’ in class 28, the shape of the object serves to achieve its technical objective of always returning to its point of stable equilibrium, and thus serves a technical function. As for the decorative items in classes 14 and 21, the HIPO concluded that the shape of the object gives a substantial value to goods due to its striking style and attractiveness.
Since the actions brought by the Applicant against the HIPO’s decision were dismissed at first and second instance, the Applicant brought an appeal seeking a review of that decision before the Hungarian Supreme Court. The Supreme Court decided to stay proceedings and asked the CJEU three following questions:
Is graphic representation of a shape mark the only factor that determines whether the shape is necessary to obtain the technical result sought, or may the perception of the public also be taken into account?
According to Directive 2008/95, signs that consist exclusively of the shape or other characteristic of goods that is necessary to obtain a technical result are excluded from registration. This provision aims to prevent granting monopoly on technical solutions or functional features of a product, which a user is likely to seek in the products of competitors.
In response to the first question, the CJEU stressed that the correct assessment of a shape mark, in order to ascertain whether or not it should be refused as a mark a consisting exclusively of functional shape, is a two-step process. It requires, (i) proper identification of the essential characteristics of the mark and, (ii) establishing whether these characteristics perform a technical function of the product concerned.
While conducting the first step, a competent authority is not limited to the assessment of a mark’s graphic representation, but it may also take into account the perception of the relevant public. It depends on the complexity of the case as to whether the additional criteria will be required. According to the CJEU, the competent authority should start with an assessment of the graphic representation and later, when needed, analyse additional features, such as the perception of the relevant public, in order to identify essential characteristics of the sign.
However, when establishing if these characteristics perform a technical function of the product concerned, a relevant authority must base its observations on objective and reliable information rather than on the perception of the public. This is because the relevant public does not necessarily have the required expertise and is not able to determine with accuracy what the technical features of the product in question are, and the extent to which the shape of the product forming the sign contributes to the technical result sought. Instead, the relevant authority should base its assessment on surveys or expert opinions on the functions of the product, scientific publications, catalogues, websites or any other relevant documentation which describe the technical features of the product. This is particularly important when the sign in question does not show the whole product such that the assessment based on the graphic analysis is not enough and more detailed observations are required.
In case of a shape mark, can the perception or knowledge of the buyer about the actual goods be taken into account, when assessing if the shape gives substantial value to the product?
According to Directive 2008/95, signs consisting exclusively of a shape that gives substantial value to the product cannot be registered. The CJEU stressed that the refusal must be based on an objective analysis, intended to demonstrate that the shape in question, on account of its characteristics, has such a great influence on the attractiveness of the product such that restricting the benefit of the shape to a single undertaking would distort the conditions of competition on the market concerned.
As a result, it must be apparent from objective and reliable evidence that a consumer’s decision to purchase the goods in question is, to a great extent, determined by one or more features of the shape that alone forms the sign. Characteristics of the product not connected to its shape, such as technical qualities or the reputation of the product, are irrelevant. On the other hand, the concept of a ‘shape, which gives substantial value to the goods’ is not limited to the shape of goods having an exclusively artistic or ornamental value.
In response to the second question, the CJEU stated that perception or knowledge of the relevant public may indeed be taken into account in order to identify an essential characteristic of the shape forming the sign. If there is objective and reliable evidence that the consumer’s decision to purchase the product in question is to a large extent determined by such an essential characteristic, the sign may be refused.
Must a shape mark be automatically refused if it consists exclusively of the shape of a product that already enjoys the protection conferred on designs, or if the shape is of a decorative item?
The CJEU concluded that EU law does not preclude coexistence of several forms of legal protection and thus it is possible to combine design and trade mark protection regarding the same shape. Moreover, there is no hierarchy between these separate forms of protections, so they are granted independently of each other.
Additionally, the ground of refusal based on substantial value of the sign may apply to decorative items (“product with an artistic or ornamental value”) but it does not happen automatically. In order for this ground to apply it must be apparent from solid evidence that the consumer’s decision to buy the product was linked to the characteristics of its shape.
The above ‘Gömböc’ case followed the previous judgement of the General Court dealing with assessment of signs consisting of functional shapes. In the latest ruling of the ‘Rubik saga’ (the case previously reached the CJEU and was referred back to the EUIPO Cancellation Division), the General Court sought to decide whether the internal mechanics of a shape should be taken into account when determining whether that shape is necessary to obtain a technical result for the purposes of an EU trade mark registration. The judgment concerned the registrability of a shape of the famous Rubik’s cube, a 3-D combination puzzle invented in 1974 by Hungarian sculptor and professor of architecture Ernő Rubik.
Reproduction from the GC judgment
The GC focused mainly on the following issues:
The essential characteristics of the contested mark are limited to the overall cube shape and to the black lines and little squares on each face of the cube, which are necessary to obtain the intended technical result of the actual goods concerned, so that the mark falls within the absolute grounds for refusal excluding the registration of shapes necessary to obtain a technical result;
The previous consideration of the differences in the colours on the six faces of the cube by the EUIPO’s Board of Appeal was an error as the colours do not constitute an essential characteristic of the contested mark;
The element which is not visible in the graphic representation of the contested mark could, like the internal rotating mechanism in the Rubik’s cube, legitimately be considered when assessing the functionality.
The GC decided that two essential characteristics of the cube shape are necessary to obtain the technical result and consequently the registration should be cancelled, upholding the decision of the EUIPO’s Board of Appeal.
Both judgments provide important guidance on the assessment of the functional characteristics of shape marks and, in particular, the correct analysis of their graphic representation.
In the Rubik judgment, the General Court confirmed that the assessment of functional character of a shape mark should not be carried out on the basis of its graphic representation only, but take into account all relevant material (including non-visible mechanisms). The fact that the rotating mechanism of the ‘Rubik cube’ was internal to the cube and not visible in the graphic representation of the contested mark did exclude it from being taken into account in the analysis of the functionality of the essential characteristics of that mark. The General Court confirmed that the absolute ground of refusal concerning signs consisting of shapes necessary to obtain a technical result can apply to signs even if the graphic representation does not display all the necessary elements for implementation of the technical solution.
The Gömböc ruling provides further clarification on absolute grounds for refusal of functional shapes. In its preliminary ruling, the CJEU held that in identifying essential characteristics of a shape mark, the assessment does not need to be limited to the graphic representation of that sign, but may also take into account the perception of the relevant public. In contrast, when establishing whether such essential characteristics perform a technical function of the product concerned, perception of the relevant public plays a secondary role and a relevant authority must base its observations on objective and reliable information. Finally, it was stressed that the coexistence of protection under different intellectual property rights should not be systematically excluded.
For more information on these cases and pertinent laws on the registration of shape marks, contact your regular CMS advisor or local CMS experts.