The graphic representation of the Rubik’s Cube will no longer be a trademark in the European Union

All of us will be familiar with the famous puzzle invented in 1974 by Erno Rubik. The cube has a core mechanism with intersecting axes allowing each of the six faces to rotate independently, thus giving shape to a six-colour puzzle.

Given the worldwide success it rapidly achieved, the puzzle inevitably inspired the appearance in the marketplace in the course of the years of a multitude of other models made of various materials and in a range of shapes and colours.

In these circumstances appropriate protection naturally had to be sought for the Rubik’s Cube and was obtained through intellectual property rights such as those afforded by EU trademark No. 162784.

EU trademark No. 162784, the mark in dispute

A conflict arose in connection with that trademark in 2006, when a famous German toy manufacturer filed an application for a declaration of invalidity on the ground, essentially, that the mark embodied a technical function consisting of the rotatable nature of the product and that third parties were thus prevented from selling similar puzzles which necessarily incorporated that mechanism and took a shape essential for the proper functioning thereof.

Up to now the EUIPO and the General Court had maintained that the representation of the Rubik’s Cube with its grid structure had sufficient distinctive character to perform the function of a trademark and that the internal mechanism could not, in any event, be perceived therein. However, in a judgment published on 10 November 2016 (C-30/15 P) the Court of Justice has overturned those previous rulings.

In that judgment, which is in line with the conclusions previously drawn by the Advocate General, the Court holds that the essential characteristics of a shape must be assessed in the light of the technical function of the actual goods at issue (a three-dimensional puzzle), also taking into account the elements which are not visible in the graphic representation of that shape and the rotatability of the individual elements of a three-dimensional puzzle of the Rubik’s Cube type. Thus, for want of arbitrary or decorative elements, the shape of the Rubik’s Cube does not qualify for registration as a trademark, as such a registration severely limits the freedom of other traders to market products characterized by the same or a similar technical result, i.e., that of a three-dimensional puzzle to be resolved through positioning moveable elements in a logical order.

Now the EUIPO will have to deliver a fresh decision taking into account the findings of the Court of Justice.

N.B. A Spanish version of this article was published in the economic newspaper Expansión


Author: Soledad Bernal Montes

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Infringement of an EU trademark... but not in the whole of the EU

The Court of Justice of the European Union has recently delivered its judgment in case C-223/15, combit Software (judgment of 22 September 2016, ECLI:EU:C:2016:719) concerning the interpretation of the unitary character of the European Union trademark in relation to the scope of infringement actions against confusingly similar signs.

In the case that prompted the Oberlandesgericht Düsseldorf to make a reference for a preliminary ruling, that court considered that a company’s use of the word sign “Commit” for computer programs gave rise, on the part of the average German-speaking consumer, to a likelihood of confusion with the EU trademark “combit”.  However, in the German court’s view, there was no such likelihood of confusion on the part of the average English-speaking consumer, who could easily understand the conceptual difference between the English verb “to commit” and the term “combit”, comprised of the letters “com” for computer and “bit” for binary digit.

In those circumstances, the Oberlandesgericht Düsseldorf asked the CJEU for guidance as to which of those two consumer groups should be taken into account in order to assess the likelihood of confusion, and whether the EU trademark should be considered as infringed throughout the whole of the EU or whether the Member States should be differentiated individually.  

In response to the referring court’s question, the CJEU indicated that where there is a likelihood of confusion in one part of the European Union, it must be concluded that the EU trademark has been infringed, even if that likelihood of confusion does not exist in other parts of the EU. This solution is in keeping with the approach followed for oppositions to EU trademark applications, where the existence of a likelihood of confusion with an earlier trademark in one part of the European Union will suffice in order for the application to be refused.     

The Court of Justice nevertheless goes one step beyond the question referred by the German court and analyses the consequences of the declaration of infringement. Here, the CJEU is supported by the case-law established in its earlier judgment of 12 April 2011, DHL Express France (C-235/09, ECLI:EU:C:2011:238).  In that judgment, the Court of Justice had ruled that a prohibition on proceeding with acts which infringe or would infringe an EU trademark must, as a rule, extend to the entire area of the EU.  However, it established the exception (paragraph 48 of the judgment) that where the defendant proves that the use of the sign at issue does not affect, particularly on linguistic grounds, the functions of the trademark in part of the EU, the EU trademark court must limit the territorial scope of the prohibition that it issues.

Based on that reasoning, the Court of Justice has now concluded that in a situation such as the one raised by the Oberlandesgericht Düsseldorf, the EU trademark court must issue an order prohibiting use of the infringing sign for the entire area of the European Union with the exception of the part in respect of which there has been found to be no likelihood of confusion. In the CJEU’s opinion, this solution, which initially seems to contradict the principle of the unitary character of the EU trademark, is imposed by the need for exclusive rights to be exercised only in cases where the use of a similar sign by a third party adversely affects the functions of the trademark.

Author: Carlos Morán

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Damages in cases of EU trademark application infringement

In the main proceedings from which the questions referred to the CJEU stem (judgment of 22 June 2016, C-280/15), the plaintiff –the holder of an EU trademark- filed a complaint for unlawful use of her trademark as a “hidden keyword” on an Internet website. The use in question had allegedly commenced prior to the publication of the plaintiff’s trademark application and had continued after publication of the registration of the mark.   

The plaintiff sought three orders, namely: (i) a declaration of infringement of her trademark; (ii) compensation for the advantage improperly obtained by means of the infringement, calculated by multiplying the duration of the infringement by the fee established in the licensing agreement; and (iii) compensation for the moral damages suffered on account of the infringement.

The relief sought by the plaintiff gave rise to some uncertainty, and so the court decided to refer the following three questions to the CJEU:

• First of all, the referring court asked whether Art. 102.1 EUTMR must be interpreted as meaning that an EU Trademark Court must issue an order which prohibits a third party from proceeding with acts of trademark infringement even though the trademark holder did not apply to the court for such an order.       

   

In reply to that question, the CJEU stated that Art. 102.1 EUTMR does not preclude an EU Trademark Court from refraining, pursuant to certain principles of national procedural law, from issuing an order which prohibits a third party from proceeding with acts of infringement on the grounds that the trademark holder concerned has not applied for such an order before that court.

• The referring court’s second and third questions concern the second sentence of Art. 9.3 EUTMR on compensations and specifically question the following two aspects: 

(i) Whether the holder of an EU trademark may claim compensation in respect of acts of third parties occurring before publication of the application for registration of the trademark concerned; and 

(ii)Whether, in the case of acts occurring after publication of the application for registration of that mark, but before publication of the registration, the concept of “reasonable compensation” in that provision means damages intended to compensate for all the harm suffered by that holder, i.e., recovery of the usual value derived by the third party from use of the mark and compensation for the moral damages suffered. 

The answer to the first question is clear: the second sentence of Art. 9.3 EUTMR establishes a strictly circumscribed exception to the rule that an EU trademark cannot prevail against third parties prior to the publication of its registration (Art. 9.3, first sentence). Therefore, no compensation can be demanded for acts that take place prior to the publication of the application for registration of the trademark.  

In order to reply to the second question, the CJEU makes an interpretation of the concept of “reasonable compensation”, based on the following points:

• The rights conferred by an application for registration of an EU trademark are conditional in nature, since at that point there is no certainty that the mark applied for will be granted.                                                       
• It thus follows that the reasonable compensation that may be claimed in an action based on a trademark application must be smaller in scope than the damages that may be claimed by the holder of a registered trademark. 
• Furthermore, a distinction is drawn in Art. 96 EUTMR between the actions in each case, i.e., (a) refers to any infringement action, whilst (b) refers to any action brought as a result of acts referred to in Art. 9.3, second sentence, EUTMR.  
• Also, Art. 13 of Directive 2004/48 establishes rules on the subject of damages which, on the one hand, provide for full compensation for the harm suffered, which may include moral damages, in the event of acts of infringement committed knowingly and, on the other, recovery of profits or the payment of damages which may be pre-established where the acts of infringement have not been committed knowingly. 

All this confirms that the “reasonable compensation” provided under Art. 9.3, second sentence, EUTMR must be smaller in scope than the damages that can be claimed by the holder of an EU trademark for acts of infringement committed after the registration of the trademark, and must be limited to the recovery of profits actually derived by third-party infringers from use of the mark during that period, with moral damages being ruled out.  

In light of the above points, the CJEU replied to the referring court’s questions as follows:

1)      Article 102(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark must be interpreted as not precluding an EU trade mark court from refraining, pursuant to certain principles of national procedural law, from issuing an order which prohibits a third party from proceeding with acts of infringement on the ground that the proprietor of the trade mark concerned has not applied for such an order before that court.
2)      The second sentence of Article 9(3) of Regulation No 207/2009 must be interpreted as precluding the proprietor of an EU trade mark from being able to claim compensation in respect of acts of third parties occurring before publication of an application for registration of a trade mark.  In the case of acts of third parties committed during the period after publication of the application for registration of the mark concerned but before publication of its registration, the concept of ‘reasonable compensation’ in that provision refers to recovery of the profits actually derived by third parties from use of the mark during that period.  On the other hand, that concept of ‘reasonable compensation’ rules out compensation for the wider harm which the proprietor of the mark may have suffered, including, as the case may be, moral prejudice.

Author: Ana Sanz

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EU Trademarks: CJEU obliges EUIPO to accept staggered partial renewal requests

In its judgment in case C-207/15 P, published on 22 June 2016, the CJEU found in favour of Nissan Jidosha KK and against the EUIPO in ex parte proceedings relating to the possibility of renewing an EU trademark in two stages.

Nissan had requested, within the six months preceding the due date, the partial renewal, in two classes, of a trademark registered in three. Subsequently, within the six-month grace period after the due date, the registrant submitted a further request for renewal in the remaining class, which the Office turned down.

Why was that? According to the EUIPO, the request for partial renewal in just two of the three classes in which the trademark had been granted registration entailed the surrender of the third class. The Office also maintained that reasons of legal certainty entered into play, given that the partial renewal in two classes had already been entered on the records, Nissan had been notified thereof, erga omnes effects had consequently been created and Nissan could therefore not be allowed to go back on its initial decision not to renew the trademark in the third class.

The EUIPO thus interpreted article 50 (relating to surrender) broadly and article 47 (relating to renewal) narrowly, contrary to the interests of Nissan in both cases.

However, in its judgment the CJEU has held that “it is not apparent from those provisions that the submission, during the periods referred to in Article 47(3) of Regulation No 207/2009, of requests for renewal of an EU trade mark, staggered over time and relating to different classes of goods or services, is prohibited”.

It seems strange that both the EUIPO and the General Court should have interpreted those provisions in a manner adverse to the interests of the trademark owner, rather than in favour thereof, when the controversy arose out of a gap in the regulations and the registrant and its representative acted entirely within the bounds of the law (at least according to the German, Portuguese, Finnish and Dutch language versions of article 47.3)

It is also rather surprising that the EUIPO should have come out so strongly in defence of legal certainty when we all know perfectly well that there is a six-month grace period for the renewal of an EU trademark and, therefore, that one should never assume that the registration may have lapsed until that term has expired. It appears to us that we should be equally cautious and draw no conclusions until after the expiry of that term in cases where the registration has been renewed but only partially.

We all look for legal certainty, but in doing so we ought to be consistent. From this standpoint, to deny a trademark owner the right to renew a registration in two stages, while the grace period is still running, would not seem logical when, in contrast, insufficient attention is paid to the need to keep the information on the status of the trademarks in the EUIPO databases current. On occasions updates are subject to delays of some months and this circumstance evidently generates uncertainty.

Author: Ramón Cañizares

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The Rubik’s cube: a shape necessary to obtain a technical result or a distinctive sign?

The outward appearance of goods is having an ever more important bearing on the decision of the consumer to make a given purchase. As a result, the filing of applications for three-dimensional trademarks, with a view to protecting shapes likely to influence that decision, has become a common practice.

However, the registration of marks of this type, consisting of the shape or representation of a product without anything else, has always been a controversial issue. The problem lies in striking a balance between granting an exclusive right to the trademark owner and avoiding the creation of a monopoly in the marketing of a given product.

From the prohibition on registration laid down in article 7.1e) EUTMR it follows that the three-dimensional trademark cannot and must not act as a system for the protection of technical results. For that purpose there are other more appropriate legal instruments, such as patents or utility models, whose limitation in time is essential to the proper functioning of the system for the protection of inventions.

That prohibition seeks to draw a line between the trademark and patent systems, preventing the grant of an exclusive right without limitation in time which would in practice entail the perpetuation of a monopoly in a technical solution.

At times, however, it is not easy to pinpoint those representations whose purpose is to protect the sign which identifies the business origin of a product rather than the technical features of that product.

The case of the “Rubik’s cube”, which has reached the Court of Justice of the EU, relates to that issue.

In 1999 the British company Seven Towns Ltd registered EU three-dimensional trademark No. 162784, in the shape of the Rubik’s cube, in respect of “three-dimensional puzzles” in class 28.

Goodbye OHIM, hello EUIPO

On Wednesday 23 March 2016 a large part of the changes provided for in the Amending Regulation took effect. Thus, what was formerly the Community trade mark (CTM) is now called the European Union trade mark (EUTM), while OHIM has similarly changed its name to the European Union Intellectual Property Office (EUIPO). 

However, while we may therefore bid OHIM rest in peace and wish long life to the EUIPO, the amendments to the EU trade mark system are not merely cosmetic.

As may be seen from this circular.