10 July 2018

If you alter your mark, then register it!

Unlike the US trade mark authorities, the EUIPO does not require the owner of an EU trade mark registration (EUTM) to file evidence of use of the mark in the EU periodically in order to keep its EUTM registration alive.

However, third parties can challenge an EUTM on the basis of non-use any time after the fifth anniversary of registration. Third parties can make this challenge either as an attack or as a form of self-defence.

Third parties can attack an EUTM by filing an application to cancel it on the basis that there has been no genuine use of the EUTM in the EU during the five-year period immediately before the filing of the cancellation action.

Third parties whose applications to register EUTMs are opposed on the basis of being identical/similar to an EUTM which had already reached its fifth birthday at the filing date of the opposed application can, as a defence strategy, exercise their right to request proof of genuine use of the EUTM relied upon by the opponent. Likewise, where an invalidity cancellation application against an EUTM is based on an EUTM registered for at least five years, the owner of the EUTM can, as a defence strategy, require the cancellation applicant to prove use of its own EUTM.

If the opponent/cancellation applicant fails to prove genuine use of its own EUTM, that EUTM is deemed not to exist for the purposes of the opposition/invalidity action. If the opposition or invalidity action is based solely on that EUTM registration then the opposition or invalidity action fails.

This ability to require proof of use,  as a defence strategy, applies equally when a national TM from any EU member state is relied upon as the basis of either an opposition against an application to register an EUTM or an invalidity cancellation application against a registered EUTM.

Proof of use filed by the TM registration owner can be challenged on various grounds e.g. that it is simply token use. In the case of an EUTM the proof of use can be challenged on the basis that the geographical extent of the use is insufficient to qualify as genuine use in the EU, as required by the EU Trade Mark Regulation.

Another basis of challenge is that the mark shown in the evidence of use is so different from the version registered that the use does not qualify as use of the registration. Article 18 (1) (a) of the EU Trade Mark Regulation gives a limited amount of leeway to owners of TM registrations on this issue. It provides that use of  a mark “in a form differing in elements which do not alter the distinctive character of the mark in the form in which is registered” will constitute genuine use.

A body of case law on the point has gradually evolved. Back in 2003 in Case T/194/03, the General Court held that where the mark used differed from the mark registered “only in negligible elements” that would constitute genuine use of the registered mark. In the same case it was held that the test was whether the differences altered the distinctive character of the registered mark.

A mark used may differ from the mark registered because of an omission, an addition or e.g. a change in the stylisation.

While not a decision of the courts, it is interesting to note that in R 0287/2007 the EUIPO’s Board of Appeal agreed that the omission, in the evidence of use filed by the opponent, of the figurative element of the registered mark (see comparison of the marks below) meant that genuine use of the earlier Spanish registration had not been shown. The goods for which the opponent’s mark was protected did not include sea creatures.

According to the EUIPO’s current published guidelines, if the omitted element is in a secondary position and is not distinctive, its omission does not alter the distinctive character of the trade mark. The EUIPO’s guidelines also indicate that marks of strong distinctive character may be less influenced by alterations than marks of limited distinctiveness.

In its 2013 decision in T46/13, an opposition against an EUTM application based on an EU registration covering “liqueurs from Navarra” and “foodstuffs, the General Court held that, as a result of the omission of the word element “La Sabiduria del Sabor” from the mark (see comparison of the marks below) in the specimens of use filed, genuine use had not been shown.

That decision seems to have been swayed by the fact that the element of the mark which had been used had low distinctiveness (since it meant “Tastes/Flavours of Navarra”) while the omitted element (meaning “The Wisdom of Flavour”) had a much higher level of distinctiveness.

That decision can be contrasted with the earlier decision of the General Court in T-225/12 in which it was held that the omission, in the mark used, of the element appearing beneath  the larger words mark did not  prevent a finding of genuine use (see comparison of the marks below).

In that case the applicant argued that the element omitted in the specimens of use of the opponent’s mark could not be considered as “negligible”. The General Court disagreed, repeating the interpretation given in Case 194/ O3 referred to above of the purpose of what is now Article 18(1)(a), namely that it is to allow the owner of the TM registration.“in the commercial exploitation of the sign, to make variations which, without altering its distinctive character, enable it to be better adapted to the marketing and promotion requirements of the goods or services concerned.”

The issue of whether the sign used was “broadly equivalent” to the registered form and whether the use made of that sign consequently constituted use of the registration was recently considered by the Court of Justice of the European Union( CJEU) in Case C501/15 P. This case related to an opposition to an application to register an EUTM. The EUTMs relied upon by the Opponent, Cactus SA, were over five years old and the applicant, as a form of defence to the opposition, exercised her right to request that the opponent prove use of its EUTMs.

One of the EUTMs relied upon by the opponent was of the combination of the word Cactus and a stylised cactus device, protected for amongst other goods and services, the following Class 35 services “retailing of natural plants and flowers, grains, fresh fruits and vegetables”.

One of the issues was whether the fact that Cactus SA had only filed evidence of use of the cactus device without the word element of the mark meant that use of the EU registration of the device & word combination had not been shown – see the variation in the marks below.

The EUIPO initially found that the opponent had demonstrated use of the EUTM on the services set out above but, on appeal by the applicant, the Board of Appeal found that the opponent had not and that, consequently, the opposition failed. The opponent successfully appealed that decision to the General Court. The EUIPO then appealed the General Court’s decision to the CJEU.

The General Court had held that the cactus device was, in isolation, “essentially equivalent” to the combination mark. The CJEU rejected the EUIPO’s criticism that the General Court had not verified the extent to which the part of the trade mark omitted, namely the word element ‘Cactus’, had a distinctive character and was important in the perception of the sign as a whole, on the basis that it had rightly compared the sign as used in its abbreviated form to the sign as registered. The CJEU found that the absence of the word element in the abbreviated version of the mark was not sufficiently important in the perception of that mark as a whole as to alter its distinctive character.

Take home point

The decision is surprising to many trade mark practitioners who feel that the omission of the verbal (traditionally seen as the dominant) element of a combined word & device mark would automatically change the distinctive character of the mark. The word for Cactus is cacto in Portuguese, kaktusas in Lithuanian and kaktusz in Hungarian. The fact that the word Cactus might not be seen as the verbal equivalent of the device to non-English speakers within the European Union makes the decision that the isolated device is “essentially equivalent” to the composite mark challenging.

While Cactus SA eventually succeeded in having use of the abbreviated mark accepted as evidence of use and its opposition upheld, the  matter  went all the way to the CJEU, a process that took over seven years. Since the decision rested on the particular facts of the case, it will not be easily relied upon by others as clear cut case law on this issue.

The moral of the story for brand owners is that they should file fresh applications each time they amend their trade marks. The application costs are heavily outweighed by the cost and uncertainty of prolonged arguments about whether differences between the sign used and the mark as registered “alter the distinctive character of the mark in the form in which it was registered”. A finding that the differences do alter the distinctive character of the mark could lead to an opposition based on a 5-year old TM registration failing or, worse, a successful revocation action, leaving the brand owner with no trade mark protection.