To what extent decorative signs can be trademarks – an EU Court decision

The European Court has ruled in case C‑456/19 Aktiebolaget Östgötatrafiken v Patent- och registreringsverket.

This case concerns a dispute from Sweden with the following background:

The appellant in the main proceedings is the proprietor of figurative marks registered at the PRV under Nos 363521 to 363523 for services provided by means of vehicles and transport services falling within Class 39 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.

Those figurative marks are represented as follows:

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On 23 November 2016, the appellant in the main proceedings filed three trade mark applications with the PRV for various services provided by means of vehicles and transport services falling within Class 39 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.

Those three applications were accompanied by the following description: ‘Colouring of vehicles in the colours red, white and orange, as shown’. The appellant in the main proceedings also specified that those applications did not concern the actual shape of the vehicles or the fields of the colour black or grey covering that shape.

By a decision of 29 August 2017, the PRV rejected those applications on the ground that the signs for which registration was sought under trade mark law were merely decorative, that they could not be perceived as signs capable of distinguishing the services covered by those applications and that they were therefore devoid of distinctive character.

The appellant in the main proceedings challenged that decision before the Patent- och marknadsdomstolen (Patents and Market Court, Sweden).

In support of its action, it stated that the marks applied for constituted ‘position marks’, consisting of ellipses of different sizes and in the colours red, orange and white, with a specific size and placed in a specific position on buses and trains used for the provision of transport services.

It provided the following images of the marks applied for, showing the outlines of the vehicles in dotted lines in order to make it clear that the protection applied for does not concern the shape of those vehicles:

The appellant in the main proceedings also submitted that the marks applied for created an impression comparable to that created by the marks registered under N 363521 to 363523 and that the distinctive character of the former should not be assessed differently solely on the ground that they were intended to be placed in a specific manner on the vehicles used for the transport service. More generally, it added that the various transport companies affix their own graphics or colouring to their vehicles, so that users of the services which they provide regard those graphics or colourings as indicators of commercial origin.

The PRV, for its part, argued that protection of the figurative elements of the marks at issue in the main proceedings was sought not in an abstract manner but in order to have those figurative elements appear on the vehicles used by the appellant in the main proceedings. Since the assessment of distinctive character must be carried out as a whole and since commercial transport vehicles are often decorated with coloured motifs, consumers would have to have familiarised themselves with such elements beforehand in order to regard them as a trade mark, failing which they would regard them as decorative elements. In view of the diversity in the colouring and decoration of the transport vehicles used in the economic sector concerned, the signs at issue in the main proceedings could be perceived as an indication of commercial origin only if they differed sufficiently from the norm or customs in the sector, which is not the case.

By judgment of 29 March 2018, the Patents and Market Court dismissed the action brought by the appellant in the main proceedings on the ground that the evidence adduced did not suffice for a conclusion that the colours and shape of the signs for which protection under trade mark law was sought departed to such an extent from the manner in which other undertakings decorate their vehicles, with the result that the view could not be taken that those signs are perceived by the relevant public as an indication of commercial origin.

The appellant in the main proceedings appealed against that judgment to the Svea Court of Appeal, Patents and Market Court of Appeal, Stockholm, Sweden.

That court notes that the fundamental requirement laid down in Article 3 of Directive 2015/2436 is that, in order to be a trade mark, a sign must be distinctive.

In that regard, it points out that, in accordance with the settled case-law of the Court, the perception of the distinctive character of a sign by the relevant public is not necessarily the same in relation to a three-dimensional mark consisting of the appearance of the product itself as it is in relation to a word or figurative mark. Indeed, since average consumers are not in the habit of presuming the origin of goods on the basis of their shape or that of their packaging, it may be more difficult to establish the distinctive character of a three-dimensional mark than that of a word or figurative mark. That is why, as the Court has held, a sign which is indistinguishable from the appearance of the product can be regarded as having distinctive character only if it departs significantly from the norm or customs of the economic sector concerned.

As regards a trade mark designating a service, the referring court states that the Court, in paragraph 20 of its judgment of 10 July 2014, Apple (C‑421/13, EU:C:2014:2070), held that the layout of a retail store can also be capable of distinguishing the products or services of one undertaking from those of other undertakings when the depicted layout departs significantly from the norm or customs of the economic sector concerned.

The referring court observes, however, that, in that judgment, the Court did not specify the conditions under which the requirement for a significant departure from the norm or customs of the sector must be applied in respect of a mark designating a service.

Moreover, it points out that, in that same judgment, the Court did not examine whether the mark at issue was not independent of the appearance of the material objects which enabled performance of the services in respect of which that mark had been registered.

Thus, the national court entertains doubts regarding whether, for an assessment of the distinctive character of signs intended to be affixed to certain parts of the vehicles of a provider of transport services in order to distinguish that provider, such signs must depart significantly from the norm or customs of the economic sector concerned.

In those circumstances, the Svea hovrätt, Patent- och marknadsöverdomstolen (Svea Court of Appeal, Patents and Market Court of Appeal, Stockholm), decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

(1)  Must Article 4(1)(b) of [Directive 2015/2436] be interpreted as meaning that, in the case of an application for registration of a trade mark which designates services and where the application relates to a sign, placed in a particular position, which covers large areas of the physical objects used to perform the services, it must be assessed whether the mark is not independent of the appearance of the objects concerned?

(2) If the first question is answered in the affirmative, is it necessary for the trade mark to depart significantly from the norm or customs of the economic sector concerned in order for the mark to be regarded as having distinctive character?

The Court’s decision:

Article 3(1)(b) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks must be interpreted as meaning that the distinctive character of a sign for which registration as a trade mark in respect of a service is sought, which sign is composed of coloured motifs and which is intended to be affixed exclusively and systematically in a specific manner to a large part of the goods used for the provision of that service, must be assessed by taking into account the perception of the relevant public of the affixing of that sign to those goods, without it being necessary to examine whether that sign departs significantly from the norm or customs of the economic sector concerned.

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