The European Court has issued a decision in case C‑21/18 Textilis Ltd, Ozgur Keskin v Svenskt Tenn AB, which concerns the following:
Svenskt Tenn markets and sells furniture and furnishing fabrics and other decorative accessories.
During the 1930s, Svenskt Tenn started to work with the architect, Joseph Frank, who designed various patterns for furnishing fabrics for it, including a pattern called MANHATTAN, which it markets and sells and in respect of which Svenskt Tenn claims to be the holder of rights under copyright law.
On 4 January 2012, Svenskt Tenn filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO). That figurative mark, designated MANHATTAN, was registered under number 010540268.
The goods and services for which that mark has been registered are in Classes 11, 16, 20, 21, 24, 27 and 35 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond to inter alia, lampshades (Class 11), table cloths, table napkins of paper; coasters of paper; wrapping paper; writing or drawing books (Class 16), furniture (Class 20), household or kitchen utensils and containers; brushes; glassware, porcelain and earthenware not included in other classes (Class 21), textiles and textile goods, not included in other classes; bed and table covers (Class 24), carpets; wall hangings (non-textile); wallpaper (Class 27), retail services connected with the sale of furniture, cushions, mirrors, wallpaper, carpets, lamps, textile fabrics, textile products, fancy goods, household and kitchen utensils and containers, tableware, glassware, porcelain, earthenware, candlesticks, paper napkins, bags, jewellery, books and magazines (Class 35).
The figurative mark MANHATTAN is represented as follows:
Textilis is a company incorporated under English law, owned by Mr Keskin, whose online trading activity began in 2013. The company has marketed fabrics and goods for interior decoration bearing patterns similar to those of the figurative mark MANHATTAN.
Svenskt Tenn brought an action for infringement of the trade mark MANHATTAN of which it is the proprietor and an action for infringement of its copyright against Textilis and Mr Keskin before the Stockholms tingsrätt (District Court, Stockholm, Sweden). It also applied for an order that Textilis and Mr Keskin, on pain of a penalty, be prohibited, first, from marketing or distributing in any other way to the Swedish public certain designated objects and, second, from using that mark in Sweden for fabrics, cushions and furniture.
In response to those actions, Textilis and Mr Keskin brought before that court a counter-claim for a declaration that the trade mark MANHATTAN is invalid, in that, first, it lacks distinctive character and, second, having regard to the way in which it is used, it is made up of a shape which gives substantial value to the goods, within the meaning of Article 7(1)(e)(iii) of Regulation No 207/2009.
The Stockholms tingsrätt (District Court, Stockholm) dismissed the counterclaim, inter alia on the grounds that, first, under Article 4 of Regulation No 207/2009, all signs capable of being represented graphically, in particular drawings may be EU trade marks, provided that they have a distinctive character and, second, the mark MANHATTAN is not a shape within the meaning of Article 7(1)(e)(iii) of that regulation.
The Stockholms tingsrätt (District Court, Stockholm) ruled that Textilis and Mr Keskin had infringed the trade mark MANHATTAN and, moreover, had infringed the copyright of which Svenskt Tenn was also the proprietor.
Textilis and Mr Keskin appealed against that judgment before the Svea hovrätt, Patent- och marknadsöverdomstolen (Svea Court of Appeal, Patents and Market Court of Appeal, Stockholm), seeking, inter alia, a declaration, on the basis of Article 7(1)(e)(iii) of Regulation No 207/2009, that the trade mark MANHATTAN is invalid.
In support of their appeal, they argue that a sign consisting of the pattern on a fabric cannot be registered as a trade mark without subverting the principle of the limitation in time of copyright protection. They are of the view that this is why Article 7(1)(e)(iii) of Regulation No 207/2009 precludes the registration as a trade mark of signs which consist exclusively of a shape which gives substantial value to the goods.
Conversely, Svenskt Tenn contends that signs consisting of the shape of patterns may be registered as EU trade marks, such as the figurative mark MANHATTAN.
The Svea hovrätt, Patent- och marknadsöverdomstolen (Svea Court of Appeal, Patents and Market Court of Appeal, Stockholm) seeks to ascertain whether a figurative mark such as MANHATTAN, which consists of the two-dimensional representation of two-dimensional goods, such as fabric, can be regarded as a shape within the meaning of that provision. It underlines in this respect that it is clear from Article 7(1)(e)(iii) of Regulation No 207/2009 that the ground for invalidity provided for in that provision applies to three-dimensional and two-dimensional marks representing three-dimensional shapes, such as, for example, the representation of a sculpture or a vase, as held by the EFTA Court, in paragraphs 110 to 115 of its judgment of 6 April 2017, Norwegian Board of Appeal for Industrial Property Rights — appeal from the municipality of Oslo (E-05/16), or, as the Court of Justice held in the judgment of 18 June 2002, Philips (C‑299/99, EU:C:2002:377).
It is unsure, however, whether such a ground of invalidity may apply to two-dimensional marks that represent two-dimensional goods, such as, for example, a pattern on a fabric or the reproduction of a painting. In that regard, it observes that it would be paradoxical not to accept such a ground for refusal of registration for such cases, in so far as there is no justification for a difference in treatment between sculpture, which is three-dimensional, and painting, which is two-dimensional.
It states that, unlike the mark at issue in the case which gave rise to the judgment of 12 June 2018, Louboutin and Christian Louboutin (C‑163/16, EU:C:2018:423), which consisted of a colour applied to the sole of a shoe, the figurative mark MANHATTAN at issue in the case pending before it is a work protected by copyright.
It queries whether the amendment of Article 7(1)(e)(iii) of Regulation No 207/2009 by Regulation No 2015/2424, under which registration is refused not only for signs which consist exclusively of ‘the shape’, but also ‘another characteristic of the goods’, which gives substantial value to it, is capable of altering the assessment to be made by virtue of that ground for invalidity. In that regard, it wishes to know whether, in the case before it, Regulation No 207/2009 or Regulation No 207/2009, as amended, taking account of the fact that the date of registration of the mark MANHATTAN, like that of the application for a declaration of invalidity and that of the judgment at first instance under appeal, is prior to 23 March 2016, the date of entry into force of Regulation 2015/2424.
It states that, in any event and whatever the applicable version of Article 7(1)(e)(iii), if it is accepted that that provision applies to two-dimensional marks representing two-dimensional goods, the question arises as to the criteria for determining whether a sign such as that at issue in the main proceedings, may be regarded as consisting ‘exclusively of the shape which gives substantial value to the goods’ where the registration of that sign as a trade mark relates to a number of classes of goods and that the mark is designed in such a manner that it can cover the whole or substantial parts of the goods or be used as a logo.
In that regard, it points out the difficulty in assessing such a ground of invalidity, since the applicant for the trade mark is required only to indicate the goods for which it intends to use the mark and not to specify the practical conditions of use of the sign for which it seeks protection.
Thus, as the case may be, a mark may be affixed to the goods as a whole, like, for example, a furnishing fabric, paper or a tray, so that it becomes a key feature of the goods themselves and, in many of those cases, there is identity between the trade mark and the goods, or it may occupy a minor position on the goods, in particular where the mark is used as a logo.
In the light of those facts, the Svea hovrätt, Patent- och marknadsöverdomstolen (Svea Court of Appeal, Patents and Market Court of Appeal, Stockholm) decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:
‘1. Is Article 4 of [Regulation 2015/2424] to be interpreted as meaning that Article 7(1)(e)(iii), in its new wording, is applicable to a court’s assessment of invalidity (under Article 52(1)(a) of the Trade Marks Regulation) that is made after the entry into force of the amendment, namely after 23 March 2016, even if the action concerns a declaration of invalidity where the action was brought before that date and therefore concerns a trademark registered before that date?
2. Is Article 7(1)(e)(iii) of [Regulation No 207/2009], in the version applicable, to be interpreted as meaning that its scope covers a sign which consists of the two-dimensional representation of a two-dimensional product, for example fabric decorated with the sign in question?
3. If the answer to question 2 is in the affirmative, according to what principles is the wording ‘signs which consist exclusively of the shape (or another characteristic) which gives substantial value to the goods’ in Article 7(1)(e)(iii) of [Regulation No 207/2009, as amended,] to be interpreted, in a situation where the registration covers a wide range of classes of goods and goods and the sign may be affixed in different ways to the goods? Is the assessment to be made in accordance with more objective/general criteria, for example with the starting point of how the mark appears and how it is possible to affix it to different goods, that is to say without regard to the manner in which the trade mark proprietor may de facto have affixed or may intend to affix the sign to various goods?
The Court’s decision:
1. Article 7(1)(e)(iii) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the [European Union] trademark, as amended by Regulation (EU) 2015/2424 of the European Parliament and of the Council of 16 December 2015, must be interpreted as meaning that it is not applicable to marks registered before the entry into force of Regulation No 207/2009, as amended by Regulation 2015/2424.
2. Article 7(1)(e)(iii) of Regulation No 207/2009 must be interpreted as meaning that a sign such as that at issue in the main proceedings, consisting of two-dimensional decorative motifs, which are affixed to goods, such as fabric or paper, does not ‘consist exclusively of the shape’, within the meaning of that provision.