RECENT DECISION OF THE EUROPEAN COURT OF JUSTICE

RECENT DECISION OF THE EUROPEAN COURT OF JUSTICE AND THE COURT OF FIRST INSTANCE

Kador & Partner, Munich, Germany, Jennifer Clayton-Chen

"Baby-Dry"

The Court of First Instance of the European Communities (CFI, judgement of July 8, 1999) recently handed down its first judgement in an appeal case against a decision of the Community Trade Mark Office in Alicante. The appeal had been filed by The Procter & Gamble Company against the refusal of its application for registration of the term "Baby-Dry" for disposable diapers as a Community trade mark on absolute grounds. The Court found that the Board of Appeal of the Community Trade Mark Office had observed that the dictionary definition of diapers refers to their ability to absorb, their intended purpose being essentially to absorb and thus to keep babies dry. These findings had not been contested by the applicant. Thus, the Board of Appeals was correct in finding that the term "Baby-Dry" immediately informs consumers about the intended purpose of the goods and is thus not registrable as a Community trade mark in accordance with Article 7 (1) (c) of the Community Trade Mark Regulation (CTMR).

However, the Court also found that the Board of Appeals was wrong in not considering the applicant's offer, presented for the first time in its grounds of appeal, to submit evidence of acquired distinctiveness by use. According to Article 7 (3) CTMR, a trade mark shall not be refused on the basis of Article 7 (1) (c) CTMR if the trade mark has become distinctive by use. The Board of Appeal had refused to take account of this argument on the ground that it had not been raised by the applicant before the examiner, and it had also not provided a time limit for the applicant to submit its evidence. The Court held that under the Regulation the Board of Appeals shall examine the appeal and then decide on it either by ruling on the substance of the issue or by remitting the matter to the examiner. Since the Board of Appeals had done neither, the Board's decision was annulled. The case now has to be newly decided by the Community Trade Mark Office.

"Chiemsee"

Where terms are concerned which might be considered being geographical indications this important and extensive judgement of the European Court of Justice of May 7, 1999 will in future have to be taken into consideration.

In the basic proceedings before the District Court of Munich the plaintiff, a German company based near the shores of lake Chiemsee South of Munich and owner of several registered device marks of the term "Windsurfing Chiemsee" in various graphical designs had challenged the use by two other parties, both located in the Chiemsee area, of the designation "Chiemsee" for the sale of sportswear. The District Court of Munich referred to the European Court of Justice for a preliminary ruling on the interpretation of Articles 3 (1) (c) and 3 (3) of the Trade Mark Harmonization Directive ("the Directive").

The decision is too extensive and detailed to be discussed at length in this article. However, a few important findings of the Court shall be summarized in the following:

Proceeding from the wording of Article 3 (1) (c) of the Directive which refers to "indications which may serve to designate geographical origin" the Court concludes that it is sufficient for a term to be non-registrable if it designates a place which is currently associated in the mind of the relevant trade circles with the category of goods concerned, or if it is reasonable to assume that such an association may be established in the future. Specifically, the Court states that, for Article 3 (1) (c) of the Directive to apply, it is not necessary for the deciding authority to assess the existence of a "real, current or serious need to leave a sign or indication free ("Freihaltebedürfnis")" as established by German case law. Furthermore, it is not necessary for the goods to be manufactured in the geographical location concerned in order to be associated with it; other ties between the goods and the geographical location may be sufficient, such as the fact that the goods were conceived and designed there.
The Court furthermore deals with the question what requirements must be met in order for a mark to have acquired distinctive character through use (Article 3 (3) of the Directive). The Court holds that, where a geographical designation has gained a new significance and its connotation, no longer purely descriptive, justifies its registration as a trade mark, no further differentiation is permitted as to the importance of keeping the geographical name available for use by other undertakings. It furthermore states that in determining whether a mark has acquired distinctive character by use, the competent authority must make an overall assessment of the evidence, and provides the national authorities with detailed guidance as to the aspects to be taken into account in assessing the (acquired) distinctiveness of the mark concerned. The Court also states that the national authority may have recourse under the conditions of its national law to an opinion poll.

"Lloyd/Loint's"

In another preliminary ruling on a case referred to it by the District Court of Munich, the European Court of Justice deals with the interpretation of Article 5 (1) (b) of the Trade Mark Harmonization Directive (likelihood of confusion). The Court first of all assesses that, while a global appreciation of the likelihood of confusion must, as regards the visual, aural or conceptual similarity of the marks in question, be based on the overall impression created by them, it is nevertheless possible that a mere aural similarity between trade marks may create a likelihood of confusion. The more similar the goods and services covered and the more distinctive the earlier mark, the greater will be the likelihood of confusion. The Court goes on to state that, in determining the distinctive character of a mark, the national court must make an overall assessment of all the relevant factors, and that it is not possible to state in general terms, for example by referring to given percentages relating to the degree of recognition attained by the mark within the relevant section of the public, when a mark has a strong distinctive character.