Trademarks, Brands, Patents, Designs, Made in Italy, Copyrights, Competition Law, Contracts and Enforcement

14 ottobre 2008

The bang of the Boards of Appeal at OHIM

Stefano Sandri

On 10 September 2008 there was a big bang at Alicante. The First Board of Appeal in the case R 497/2005, contrary to the CFI (T- T‑460/05, 10 October 2007, Bang & Olufsen v OHIM) denied registration to the application filed by Bang & Olufsen on the 3-d trademark for loudspeaker here below represented:

The decision was based on Article 7(1)(e)(iii) CTMR, and not on Article 7(1)(b)CTMR. According to the previous decision appealed to the CFI the Board argued in particular that „There is not doubt that the mark applied for is striking in some aspects. Nevertheless, it is not sufficient to argue that the shape is distinctive because its features are unusual. Therefore, the mark was barred from registration pursuant to Article 7(1)(b) CTMR.

The contested decision of the Board was annulled by the CFI by the above quoted judgment on 10 October 2007 which reaffirmed the distinctive character of the trademark. It is to be noted, however, that OHIM, by its letter of defense, asked the Court to determine whether a shape essentially inspired by aesthetic considerations – but which does not give substantial value to the goods within the meaning of Article 7(1)(e)(iii) CTMR – and which differs significantly from a shape commonly used in trade can perform a trade mark function. It is not certain that the position adopted by the Board of Appeal is the correct one and thus the Office in substance required an interpretation of Article 7(1)(e)(iii) CTMR. The Court in this respect was silent, since it is competent to judge only on the grounds of appeal raised by the applicant ( i.e. , violation of Article 7(1)(b)CTMR).

The Board, required to resume the proceedings and take the necessary measures to comply with the judgment, decided ex officio that these measures include the further prosecution of the examination procedure and, particularly, the extension to the examination of other possible absolute grounds for refusal provided for in Article 7(1) CTMR in which the contested trade mark might incur. Accordingly, trade mark protection is excluded when a shape falls within Article 7(1)(e) CTMR, regardless of whether that particular shape might actually be distinctive in the market place.

In doctrine, the rationale of Article 7(1)(e)(iii) CTMR has been seen as a tool to avoid that design and copyright protection having been limited in time could be bypassed by trade mark law, under the condition that the sign is exclusively. Article 7(1)(e)(iii) CTMR does not mention criteria how to determine the value the shape gives to the goods, however, “giving it a systematic and teleological interpretation, it appears that a shape gives substantial value to a good when it has the potential to determine to a large extent the consumer’s behaviour to buy the product. Article 7(1)(e)(iii) CTMR therefore concerns products which the relevant public buys largely for the value of their shape, that is to say, where the shape is the only or one of the essential selling features of the product. It must be more than a convincing design when compared to a product with identical other characteristics. “ This was the case in examination. The board, accordingly, make a deep assessment as to (i) what the circumstances are under which a shape gives substantial value to a product and (ii) whether or not the sign applied for consists ‘exclusively’ of a such a shape.

Calling back my decision on GANCINO QUADRATO SINGOLO (decision of the Boards of 3 May 2000 in the Case R 395/1999-3, paragraphs 1-2; 22-36) the Board annulled the contested decision of the examiner, inasmuch as it held that the trade mark applied for is not distinctive in accordance with Article 7(1)(b) CTMR (as decided by the CFI), but rejected the application for registration of the sign at issue, consisting exclusively of the shape of the goods giving substantial value to the goods in the sense of Article 7(1)(e)(iii) CTMR.

The reported decision signs a significant step ahead in the Board of appeal ‘competence in complying with the judgement of the Court, an issue that was already discussed at the occasion of the implementation to be done by the Office to the BABY-DRY case. At the same time, the decision addresses for the first time at depth the problem of the construction of the legal-real meaning of the unexplored “substantial value given to the product”.

A real big bang!

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