Case study: the European Court of Justice’s interpretations of absolute grounds for the refusal of Community Trade Mark

 

The laws of trademark extending to the EU member states are implementing the Trade Mark Directive (First Council Directive of 21 December 1988). The Community Trade Mark (CTM) came into effect as a result of Council Regulation No 40/94 1993 (Regulation). Now the European Court of Justice (ECJ) offers the final solutions of the disputes related to CTMs. Dealing with the absolute grounds for the refusal of trademarks， its interpretations to the provisions of the Article 7 of Regulation and the similar to the Article 3 of TM Directive can be found out through the particular cases.

Distinctiveness of a CTM is defined in Article 4 of Regulation: “A Community trademark may consist of any signs capable of being represented graphically， particularly words， including personal names， designs， letters， numerals， the shape of goods or of their packaging， provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.” This is also the definition of the CTM. The Article 7 (1) (b) of Regulation gives a further overlapping explanation that trademarks are not to be registered if they are devoid of distinctive character. Descriptive marks are， under the Article 7 (1) (c) of Regulation， as: “they consist exclusively of signs or indications which may serve， in trade， to designate the kind， quality， quantity， intended purpose， value， geographical origin， time of production of the goods or of rendering the service， or other characteristics of the goods or service.” These marks are not to be registered as CTMs because of the descriptiveness.

In China， using the English letters or combinations of English words for applications of trademark may be widely accepted by companies， but they should consider the descriptiveness of their marks when the applications are submitted to the European offices. Examples might be the refusals of ‘jumbo’， ‘mini’， ‘best’ ’24 hours service’ or ‘slimming & fit’ designating to relevant products. Some cases present that even in England， the native English country， using the English letters as trademarks caused problems which should be interpreted by the judge in particular cases.

1. Descriptive marks

In 1998， an applicant was submitted to OHIM (the office for registrations of CTMs) for applying a word combination—“Baby-Dry” as a CTM for baby nappies. The OHIM rejected to register such a descriptive mark because the word combination describes the ‘intended purpose’ of the products to ‘keep the baby dry’. When the case was appealed to the ECJ (European Court of Justice)， the court took those two provisions together and said the purpose of the prohibition of registration of purely descriptive signs or indications as trademarks is to prevent registration of signs or indications which， because they are no different from the usual way of designating the relevant goods or services or their characteristics， could not fulfill the function of identifying the undertaking that markets them and are thus devoid of the distinctive character needed for that function. The Court made a guideline that the word combination should be taken into assessing steps as following:

a). Whether it satisfies the definition of Article 4 of Regulation？

b). Whether， from a consumer’s view， its characters “differ from the usual way of designating the class of goods or services in question or one of their essential characteristics”？

c). Whether it is a normal way of referring to designating the kind， quality， quantity， etc of the goods， service or its essential characteristics in common parlance？

After these assessing steps， the ECJ held that the word combinations， such as ‘Baby-Dry’， being a ‘syntactically unusual juxtaposition’， are lexical inventions. If they fulfill the requirement of Article 4， they cannot be refused under Article 7 (1) (c) of Regulation.

If a combination of words consists a describe word and a non-describe word， it may be registered. For example， ‘DUBOSILK’ for silk products would not be treated as descriptiveness because the ‘silk’ is descriptive but the ‘dubo’ is an invention. A contrary example was also offered by the ECJ. In Deutsche Krankenversicherung v OHIM， a CTM application for ‘Companyline’ for insurance service was refused by OHIM. When reached ECJ， it held that the two words ‘company’ and ‘line’ were generic words， denoting a line of service， and the combination were incapable of distinguishing， then the ECJ upheld the OHIM’s decision.

2.The Ellos AB v OHIM case

In ‘Ellos’ case， a CTM application for ‘Ellos’ for ‘clothing， footwear， headgear or customer service for mail-order sales’ was refused by OHIM. The refusal to register the term is based on the descriptive nature because the word ‘ellos’ in Spanish means ‘males’. Accordingly， the Court referred the question to Article 7 (1) (c) of Regulation No 40/94， and interpreted the provision together with Article 7 (2) which states “paragraph 1 shall apply notwithstanding that the grounds of non-registrability obtain in only part of the Community”. In the findings (judgment) of the Court， it set out the distinctiveness of a trade mark should be assessed in relation to the goods or services in respect of which registration of the sign has been requested， and the perception of the section of the pubic targeted which is composed of the consumers of those products or services. In this case the section of the public targeted is Spanish-speaking consumers that are in relation to the part of the Community. Since the word ‘Ellos’ which is used in Spanish-speaking part may designate the purpose of those goods for male customers and has established a specific and direct relationship between the sign and the category of the goods and service sought by the application for registration， thus “the link between the meaning of the word ELLOS， on one the hand， and ‘clothing， footwear， headgear’， on the other， appears sufficiently close to be caught by the prohibition laid down in Article 7 (1) (c) and (2) of Regulation No 40/94.”

3. Marks devoid of distinctiveness

Marks designating a geographical origin could not be registered as a trademark under the EC TM regulation because of lacking the distinctiveness， but the TM regulation set out an exemption as: “Paragraph 1 (b)， (c)， and (d) shall not apply if the trademark has become distinctive in relation to the goods and services for which registration is requested in consequence of the use which has been made of it”. The law of trademark in China has the similar provisions， but it maintains the trademark rights to the owners that has used and registered their marks， such as ‘Qingdao’ for beer. Thus， under the TM Regulation， the use of marks could not be necessarily treated as a CTM unless the consequence of use leads to the products or services for which the registration is requested distinctive from the others. In a leading case in ECJ， a trademark--- ‘Cheimsee’ for sportswear is using the name of a well-known lake in Germany， but the Court held that ‘Cheimsee’ had been used for sportswear in a considerable time and the average consumers had recognized the direct link between the mark and the products rather than the name of lake. This link makes the mark distinctive， so it could be continually treated as a valid trademark. This case states the main point of a trademark is its distinctiveness rather than the merely geographical character.

A contrastive case in the UK could help to explain the point. A company， British Sugar， used ‘Treat’ as a mark of its products since 1986 and registered as a trademark in 1992. Its validity of registration was challenged in 1995. The court held that even this mark had been used before and after the registration for almost ten years， but the word ‘treat’ was common in everyday used by English-speaking people. It was not recognized by the public in a trademark sense， and then it has no distinctive function that a trademark requires. The Article 11 of the Law of Trade Mark of P. R. China 2001 sets out the similar provision as the EC TM Regulation but it precludes the geographical names of the administrative divisions as or above county level.

As China has been a party of WTO， the European Community gives the chances to the Chinese companies to apply the registrations for CTMs. We should take account of both the harmonizing EC laws and the interpretations of the ECJ， because those interpretations are to be implemented throughout all the member states which number will be increased to 27 in the year of 2005.