Shape of product marks I. Current law

2.17 The shapes of products or their packaging are listed in Article 4 CTMR and Article 2 TMD as forms of signs of which a trade mark may consist. For the assessment of protectability, the same rules are applicable as for other kinds of marks. In practice, this means that protection for shapes must be refused if they are devoid of distinctiveness, may serve descriptive purposes, or have become generic (Article 7 (1) (b)-(d) CTMR and Article 3 (1) (b)-(d) TMD). In addition, and unlike other forms of marks, signs are barred from protection in an absolute manner if they exclusively consist of shapes which result from the nature of the goods, are necessary to obtain a technical result, or give substantial value to the goods (Article 7 (1) (e) (i)-(iii) CTMR and Article 3 (1) (e) (i)-(iii) TMD).

II. Case law

1. Distinctiveness, descriptive character

2.18 It is an established principle in ECJ case law that the standards to be applied in the assessment of distinctiveness are the same for all forms of marks, including the shapes of products (Joined Cases C-53/01-C-55/01 – Linde, Winward, Rado, para 46. However, in the perception of the buying public, unusual forms of marks like shapes (and colours per se) are less likely to convey a message about commercial origin than other, more traditional forms of marks; therefore, it may be more difficult in practice to establish distinctiveness in relation to a shape of product mark than a word or figurative trade mark (Linde, Rado, Winward, paras 40, 41, 48; for a similar view on colour marks, see Case C-104/01 - Libertel, paras 65, 66).

2.19 As a matter of principle, the more closely the shape for which registration is sought resembles the shape most likely to be taken by the product in question, the greater will be the likelihood of the shape being devoid of any distinctive character for the purposes of Article 7 (1) (b) CTMR. Only a mark which departs significantly from the norm or customs of the sector and thereby fulfils its essential function of

indicating origin is not devoid of any distinctive character for the purposes of that provision (Case C-136/02 P – Mag Instruments/OHIM, para 31; see also Joined Cases C-456/01 P, 457/01 P – Henkel/OHIM, para 39). The interests of competitors in the availability of the shape do not constitute a relevant yardstick for appraising the protectability of the sign within the ambit of Article 7 (1) (b) CTMR and Article 3 (1) (b) TMD (Case C-173/04 P - SiSi Werke/OHIM, para 63).

2.20 Apart from Article 7 (1) (b) CTMR and Article 3 (1) (b) TMD, protection of shape of product marks may also be refused on account of their descriptive character (Linde, Winward, Rado, para 6). In that context, it must also be examined whether the shape should be freely available to all and not be registrable (Linde, Winward, Rado, para 74). However, as long as the sign falls outside the ambit of Article 7 (1) (e) CTMR and Article 3 (1) (e) TMD, its registration may not be denied as a matter of principle (Linde, Winward, Rado, para 75 last sentence).

2. Permanent exclusion from protection

2.21 The leading case addressing permanent exclusion under Article 3 (1) (e) TMD is Case C-299/99 – Philips/Remington, concerning a picture mark representing a triple headed shaver. Regarding the rationale underlying all grounds for exclusion listed in Article 3 (1) (e) TMD, it was held that it shall “prevent trade mark protection from granting its proprietor a monopoly on technical solutions or functional characteristics of a product which a user is likely to seek in the products of competitors. Article 3 (1) (e) TMD is thus intended to prevent the protection conferred by the trade mark right from being extended, beyond signs which serve to distinguish a product or service from those offered by competitors, so as to form an obstacle preventing competitors from freely offering for sale products incorporating such technical solutions or functional characteristics in competition with the proprietor of the trade mark” (para 78). Regarding in particular Article 3 (1) (e) (ii) TMD, the Court pointed out that the provision is intended to preclude the registration of shapes whose essential characteristics perform a technical function, with the result that the exclusivity inherent in the trade mark right would limit the possibility of competitors supplying a product incorporating such a function or at least limit their freedom of choice in regard to the technical solution they wish to adopt in order to incorporate such a function in their product (para 79). Finally, concerning the question whether Article 3 (1) (e) (ii) TMD would not be applicable if the same technical result could be obtained by other forms, it was stated that Article 3 (1) (e) TMD, second indent, must be interpreted to mean that a sign consisting exclusively of the shape of a product is unregistrable by virtue thereof if it is established that the essential functional features of that shape are attributable only to the technical result. Moreover, the ground for refusal or invalidity of registration imposed by that provision cannot be overcome by establishing that there are other shapes which allow the same technical result to be obtained (para 84).

2.22 Based on similar reasoning, the ECJ confirmed the decision by the Grand Board of Appeal at OHIM and of the General Court to cancel the CTM registration of the basic LEGO building block (Case C-48/09 P).

2.23 In Case C-371/06 – Benetton/G-Star, the ECJ was asked whether a shape of product mark could obtain protection in case that the appearance of the product (arrangement of stitches on a pair of jeans) had originally given substantial value to the goods in the meaning of Article 3 (1) (e) (iii) TMD, but had later-on, by virtue of intense advertising campaigns, acquired distinctive character, so that, at the time of filing the application, the reputation enjoyed by the goods was largely attributable not to the aesthetic attractiveness of the shape but to the attractiveness resulting from recognition of the trade mark. The ECJ referred to the fact that the obstacles listed in Article 3 (1) (e) TMD are not mentioned in Article 3 (3) TMD, with the consequence that those obstacles cannot be overcome by establishing that the sign has acquired distinctiveness through use.

2.24 Registration was further denied by the 1st Board of Appeals at OHIM for the shape of a loudspeaker on the basis of Article 7 (1) (e) (iii) CTMR, whereas the same shape had been found inherently distinctive in a previous decision of the General Court. The case is pending before the General Court (Case T-508/08 – Bang &

Olufsen/OHIM).

III. Opinions

2.25 Protection of shape marks was addressed in consultations with user organisations and other expert circles (judges from specialized courts) under two aspects: First, regarding difficulties to establish acquired distinctiveness throughout the Community (see on that issue Chapter 3 B). Furthermore, it was noted critically that this is an area where differences in legal practice are quite profound, not only between different offices, but also within the same office.

IV. Issues

1. Registration requirements for shape of product marks (and colours per se) 2.26 Trade mark protection for the shape of products is special in so far as it appears to

defy the general rule that protection for marks does not restrict competition in goods or services as such. Similar to industrial design protection, protection of shape of product marks bars others from making and offering the same article on the market, and by contrast to industrial designs, that barring effect can be maintained without any limitations in time. In view of those particularities, some trade mark laws in previous times entirely excluded protection for trade marks consisting of the shape of products, or at least required a showing of acquired distinctiveness through use. Today, total exclusion from trade mark protection of the shape of products or their packaging would not be a feasible option, as Article 15 TRIPS requires that all forms of signs capable of distinguishing goods or services must be accepted for registration as marks. However, it is still possible under international law to stipulate as a general rule that shape of product marks can only be registered upon a showing of acquired distinctiveness (or “secondary meaning”). That rule has been espoused in major non-EU jurisdictions such as the USA and Japan.

2.27 Under EU law, no such requirement applies. Shape of product marks (and even more so the packaging of goods) can be registered, if they are significantly different from shapes usually found in the relevant market sector. However, actual practice has established a rather high threshold. Most courts and authorities, in observance of the ECJ’s jurisprudence, appear to take a rather cautious approach towards the appraisal of inherent distinctiveness of product shapes. Where exceptions are made from that rule, the reasons for the decision are often not quite clear. The two main grounds for refusal, Article 7 (1) (b) CTMR/Article 3 (3) (b) TMD and Article 7 (1) (c) CTMR/Article 3 (1) (c) TMD, were not formulated with a view to unusual forms of signs such as product shapes, and are therefore not easy to apply. The situation is not improved by the division made in ECJ jurisprudence between Article 7 (1) (b) CTMR/Article 3 (3) (b) TMD and Article 7 (1) (c) CTMR/Article 3 (1) (c) TMD and the different subsets of the public interests on which each of those grounds is founded (see above Chapter 1 E). Those difficulties seem to be a major source for inconsistency and lacking transparency in OHIM’s and national offices’ registration practice, and this may result in unequal conditions for businesses seeking to protect their assets. Another source for concern regards the overlap between trade mark and industrial design protection:

it is unclear whether and how the criteria for appraising inherent distinctiveness of a shape mark are distinguished from the criterion of “individual character” under design law, and whether the distinction is one of grade or of substance.

2.28 The situation could be relaxed in two ways: It could be clarified in the Preamble or elsewhere, that a “significant” distance from customary shapes should not be required, so as to lower the present threshold for protection. However, this is likely to lead to a proliferation of such registrations, entailing a host of conflicts. Vice versa, it could be stipulated that acquired distinctiveness must always be established as a precondition for registration. While this bars the possibility for obtaining protection on the basis of inherent distinctiveness for a few, it would not result in a massive change of present practice, while reducing the inconsistencies which today seem to be the main source of discontent. Fears that this would lead to serious protection gaps are soothed by the fact that shapes which are significantly different from the norm and thereby might arguably qualify as distinctive, could regularly be protected as industrial designs, if they are new on the market and therefore incapable of showing acquired distinctiveness. It is also important to note here that, as proposed under Chapter 3 B, the requirements for establishing acquired distinctiveness in the Community should be eased to some extent, so that obtaining protection for shape of product marks as CTMs would not become unrealistic.

2.29 Nevertheless, to promulgate a hard and fast rule barring access to trade mark protection for shape of product rules is not warranted. Courts and offices should be left with some flexibility to assess the individual circumstances of the case.

However, in order to prevent inequality, guidelines should be given in the Preamble so as to preserve, or even enhance the cautious attitude reflected in ECJ jurisprudence concerning shape of product marks. The same would appear appropriate with regard to other forms of signs such as, in particular, colours per se.

2. Permanent exclusion from protection a) Application to shapes only?

2.30 According to the wording, the permanent exclusion clauses in Article 7 (1) (e) (i)-(iii) CTMR and Article 3 (1) (e) (i)-(i)-(iii) TMD only apply to shape of product marks.

However, in view of the case law of the ECJ which requires the examination of marks consisting of a two-dimensional rendering of three dimensional object (such as a product shape) to be carried out by applying the same standards applicable to 3D marks, it may well be that the exclusion in Article 7 (1)(e) CTMR and Article 3 (1) (e) TMD will be applied also to 2D marks (leading case: Case C-25/05 P – Storck/OHIM, para 29). (In the Philips case, which involved a 2D mark, it was agreed among the parties and the referring court that a 3D mark was at issue, and the ECJ treated it as such.) Also in a case like Benetton, the question might have been posed whether the trade mark – a pair of jeans displaying a special arrangement of stitches – actually consisted of a product shape in the strict sense.

That question was not posed to the ECJ, but had it been of crucial relevance in the case, it could have been expected that the Court would have addressed it on its own motion. It can therefore be concluded that the notion of ‘shape’ presently found in the legal texts is interpreted rather broadly.

2.31 Nevertheless, the confinement of the permanent exclusion clauses to shapes might be too narrow. For instance, the corresponding exclusion clause for functional signs in US trade mark law does not contain any such restrictions, but can be applied to all kinds of signs, like colours, smells, or sounds. Whereas the practical relevance of the exclusion clause for such other forms of signs may be much smaller in practice than for shape marks, there is no pertinent reason for generally excluding other signs from its ambit. For instance, if the sound of a motorbike is produced by the technical properties of the engine, it could be of relevance to assess whether the sound results from the nature, or rather from the technical performance, of the goods it is intended to designate.

b) Functional and value-conferring shapes

2.32 Regarding the first two grounds for permanent exclusion, Article 7 (1) (e) (i) and (ii) CTMR and Article 3 (e) (i) and (ii) TMD, exclusion from protection is motivated by the need to maintain the fundamental balance of interests reflected in the architecture of the intellectual property system. Where shapes are exclusively determined by the nature of the product, or by its functional or technical features, their attribution to a sole manufacturer, without any limits in time, would result in permanent monopolization of a(n important sector of a) market, and would thereby lead to serious distortion of competition. This complies with the basic rationale of Article 3 (1) (e) TMD which the ECJ identified in Case C-299/99 – Philips/Remington, namely to “prevent the grant of a monopoly on technical solutions or functional characteristics of a product which a user is likely to seek in the products of competitors”. However, the same arguments hardly apply to Article 7 (1) (e) (iii) CTMR and Article 3 (e) (iii) TMD. The legal objective of the clause is unclear, and case law under the TMD and CTMR as well as under its previous codification in the Uniform Benelux law is scarce and obscure. If it was originally meant as providing a demarcation line between the realms of industrial design and

trade mark protection, it has long forgone its purpose – in practice, it does not pose a meaningful obstacle against simultaneous or subsequent protection of shapes under both laws. Worse, it might present a dilemma for particularly ambitious designs: as indicated above, (only) products which are significantly different from pre-existing forms may, under the standards established in ECJ jurisprudence, qualify as being inherently distinctive – however, if that makes them also particularly attractive for consumers, they may, according to the logic of the law which was confirmed in Case C-371/06 – Benetton, for the same reason be barred from protection forever (that dilemma is brought to the fore in case T 508/08 Bang & Olufsen, pending before the General Court).

2.33 The problems are due to the fact that whereas the technical necessity of a shape can be assessed in a fairly stable and objective manner, the answer to the question whether a shape gives substantial value to a product (in terms of determining its commercial attractiveness) is essentially depending on the public’s apprehension, which involves subjective evaluations. It is inevitable that such evaluations change with time, and where they do, this will directly affect the type and impact of competitive advantage conferred by the sign. Where a shape has initially attracted consumers by its aesthetic appeal, but has later-on developed a high degree of distinctiveness and is mainly appreciated for that reason, the basic rationale for Article 3 (1) (e) TMD articulated by the ECJ in Philips does not apply any longer.

2.34 In view of those misgivings, it appears recommendable to delete Article 7 (1) (e) (iii) CTMR and Article 3 (1) (e) (iii) TMD. Of course, this does not mean that the competition concerns which underlie the first two subsections of Article 7 (1) (e) CTMR and Article 3 (1) (e) TMD are completely meaningless with regard to products the commercial value of which resides entirely or predominantly in their shape. If that is the case, they should remain excluded from protection. That result can be achieved by applying Article 7 (1) (b) or (c) CTMR and Article 3 (1) (b) or (c) TMD, based on the consideration that as long as the product is bought for its appearance without the appearance having become an indication of commercial origin, the shape is not to be regarded as distinctive. That principle could also be set out expressly, by stipulating that shapes determining the commercial value of the goods are excluded from protection, unless the shape has become distinctive through use.

V. Proposals

2.35 It should be indicated in the Preamble that shape of product marks (as well as trade marks consisting of colours per se) usually need to establish acquired distinctiveness for registration.

2.36 The basic notions to be expressed would be

- that for the assessment of distinctive character, the views of the public as well as the interests of competitors should be taken into account;

- that trade marks which are devoid of distinctive character, or which are descriptive, or which have become customary in trade, should only obtain

protection upon establishing that the initial obstacles have been overcome through use on the market within the Community;

- that this should apply in particular to forms of signs which are not immediately perceived by the public as indicating commercial origin, such as colours per se or the shape of products; and

- that where a sign exclusively consists of features which confer on the proprietor a monopoly on technical solutions or functional characteristics of a product which a user is likely to seek in the products of competitors, registration on the basis of acquired distinctiveness should be excluded.

2.37 Article 7 (1) (e) (i) CTMR and Article 3 (1) (e) (i) TMD should be reformulated so as to extend to all signs which exclusively result from the nature or the (technical) performance of the goods. Article 7 (1) (e) (ii) CTMR and Article 3 (1) (e) (ii) TMD could remain unchanged. Article 7 (1) (e) (iii) CTMR and Article 3 (1) (e) (iii) TMD should be deleted or replaced by a provision stating that shapes determining the commercial value of the goods are excluded from protection, unless the commercial value of the shape has become distinctive through use.

C. Disclaimers