KitKat case makes even harder proving acquired distinctiveness in the EU

photo-1505664194779-8beaceb93744The European Court has issued a very important and long-awaited decision on joint cases C‑84/17 P, C‑85/17 P и C‑95/17 P, Société des produits Nestlé SA v Mondelez UK Holdings & Services Ltd.

In a nutshell, these cases concern an invalidity proceeding against the following Nestle’s three-dimensional trademark for a chocolate bar:

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The ground for this invalidation was a lack of distinctiveness. Nestle submitted various pieces of evidence for different EU member States with exception to Belgium, Ireland, Greece, and Portugal.

Initially, the EUIPO ruled that the mark has a proven acquired distinctiveness. The General Court, however, annulled this decision stating that such acquired distinctiveness has to cover all Member States.

The ECJ took the following position:

It follows that, with regard to a mark that is, ab initio, devoid of distinctive character across all Member States, such a mark can be registered pursuant to that provision only if it is proved that it has acquired distinctive character through use throughout the territory of the European Union (see, to that effect, judgment of 24 May 2012, Chocoladefabriken Lindt & Sprüngli v OHIM, C‑98/11 P, EU:C:2012:307, paragraphs 61 and 63).

Admittedly, in paragraph 62 of the judgment of 24 May 2012, Chocoladefabriken Lindt & Sprüngli v OHIM (C‑98/11 P, EU:C:2012:307), invoked by Nestlé and EUIPO, the Court did find that even if it is true that the acquisition by a mark of distinctive character through use must be proved for the part of the European Union in which that mark did not, ab initio, have such character, it would be unreasonable to require proof of such acquisition for each individual Member State.

However, contrary to what is argued by Nestlé and EUIPO, it does not follow from that finding that, where a mark is devoid of inherent distinctive character throughout the European Union, it is sufficient, in order for it to be registered as an EU trade mark pursuant to Article 7(3) of Regulation No 207/2009, to prove that it has acquired distinctive character through use in a significant part of the European Union, even though such evidence has not been provided in respect of every Member State.

In that regard, it must be pointed out that there is a distinction between, first, the facts to be proved, namely the acquisition of distinctive character through use by a sign that is devoid of inherent distinctive character, and, second, the means of proving such facts.

No provision of Regulation No 207/2009 requires that the acquisition of distinctive character through use be established by separate evidence in each individual Member State. Therefore, it is not inconceivable that the evidence provided to establish that a particular sign has acquired distinctive character through use is relevant with regard to several Member States, or even to the whole of the European Union.

In particular, as the Advocate General stated, in essence, in point 78 of his Opinion, it is possible that, for certain goods or services, the economic operators have grouped several Member States together in the same distribution network and have treated those Member States, especially for marketing strategy purposes, as if they were one and the same national market. In such circumstances, the evidence for the use of a sign within such a cross-border market is likely to be relevant for all Member States concerned.

The same is true when, due to a geographic, cultural or linguistic proximity between two Member States, the relevant public of the first has a sufficient knowledge of the products and services that are present on the national market of the second.

It follows from those findings that, although it is not necessary, for the purposes of registering, on the basis of Article 7(3) of Regulation No 207/2009, a mark that is, ab initio, devoid of distinctive character throughout all the Member States of the European Union, that evidence be submitted, in respect of each individual Member State, of the acquisition by that mark of distinctive character through use, the evidence submitted must be capable of establishing such acquisition throughout the Member States of the European Union.

That said, the question of whether the evidence submitted is sufficient to prove a particular sign’s acquisition through use of distinctive character in the part of the territory of the European Union in which that sign did not, ab initio, have distinctive character is a matter of the assessment of evidence, for which the bodies of EUIPO are primarily responsible.

Such an assessment is subject to the scrutiny of the General Court, which, where an action is brought before it against a decision of a Board of Appeal, has exclusive jurisdiction to find the facts and, therefore, to appraise them. However, that assessment of the facts does not, save where the evidence has been distorted by the General Court, constitute a point of law which is subject, as such, to review by the Court of Justice in an appeal (judgment of 19 September 2002, DKV v OHIM, C‑104/00 P, EU:C:2002:506, paragraph 22 and case-law cited).

Nevertheless, if the bodies of EUIPO or the General Court, after having assessed all of the evidence that has been submitted to them, find that some of that evidence is sufficient to prove the acquisition by a particular sign of distinctive character through use in the part of the European Union in which it is, ab initio, devoid of distinctive character and therefore to justify its registration as an EU trade mark, they must clearly state that that is the case in their respective decisions.

In the present case, first, it follows from the findings above that the General Court did not err in law when it found, in paragraph 139 of the judgment under appeal, that, for the purposes of applying Article 7(3) of Regulation No 207/2009, in the case of a mark that does not have inherent distinctive character throughout the European Union, the distinctive character acquired through use of that mark must be shown throughout that territory, and not only in a substantial part or the majority of the territory of the European Union, and consequently, although such proof may be produced globally for all the Member States concerned or separately for different Member States or groups of Member States, it is not, however, sufficient that the party with the burden of providing such evidence merely produces evidence of such acquisition that does not cover part of the European Union, even a part consisting of only one Member State.

Second, in light of those same findings, the General Court was right to hold, in paragraphs 170 to 178 of the judgment under appeal, that the decision at issue was vitiated by an error in law, in so far as the Board of Appeal found that the mark at issue had acquired distinctive character through use, thereby justifying the application to that mark of Article 7(3) of Regulation No 207/2009, without adjudicating on whether that mark had acquired such distinctive character in Belgium, Ireland, Greece and Portugal.

In brief, this decision will make much more difficult proving acquired distinctiveness across the EU at least because it will require such an evidence to cover the whole EU territory not only a substantial part of it.

Image: Giammarco Boscaro on Unsplash.
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