Will there be a shortage of available trademark names in the future?

James Nurton has published an interesting article for IPWatchdog that focuses our attention on one potential problem – a future trademark names depletion in the US and the EU.

According to professor Barton Beebe of NYU School of Law, 75% of English words in daily use are already registered as trademarks in the US as well as 55% of common surnames.

When it comes to the European Union, the situation is even more concerning. The professor’s data shows that 77% of the 20,000 most common English words are registered as trademarks.

In some classes of goods and services, the situation is even worse. For example, in class 25 – clothes, shoes, etc. 80% of common words are registered.

This trend is similar for other languages as French, Italian, Spanish.

According to Beebe, this can be a serious challenge for the trademark registration process in this century. The problem is that in the presence of “trademark crowding” the cost for registration of new trademarks will arise because the registration process will be accompanied by more oppositions from owners of earlier rights. And at some moment new registration can be really difficult.

There are different solutions to this problem. For instance, Patent Offices can do an examination of whether the applied-for trademarks are identical or similar to already registered signs for the same Nice classes. The EUIPO doesn’t do that whereas there are such checks in other jurisdictions. The Offices can start requiring for narrow specification of goods and services limiting the trademark protection scope. Another option is the requirement for trademark use to be examined by the Patent Offices ex officio. For example, you need to prove trademark use every 5 years in the US otherwise the Patent Office will cancel the trademark registration.

Apart from this procedure and legislation options, new technologies can be of help. One immediate example is blockchain. What is typical for this technology is the fact that it offers uniqueness. A blockchain record is immutable. This corresponds with one of the trademark characteristics, it is a source of trade origin. Trademarks are valid to the extent the mark is used in the market in the way how it is registered.

So blockchain can be helpful in the future but what I mean is not this technology to be used for proving trademark use of fight against counterfeit goods. Probably in the future, the blockchain coding signs can be trademarks themselves identified by consumers through different technical tools, for example.

This topic is quite interesting. What is for sure is the fact that trademark registration becomes more and more complex. There are millions of registered marks all around the world and every new application can face oppositions or cancelations by owners of already registered signs.

That’s why the application process must be preceded by a good trademark clearance search and analyses that to show all possible risks.

AC Milan lost a dispute regarding its EU trademark

The General Court of the European Union has ruled in case T-353/20 AC Milan v EUIPO, InterES.

The well-known Italian football club AC Milan has filed an application for the following European trademark for different goods including stationery and office supplies:

The German company InterES Handels- und Dienstleistungs Gesellschaft mbH & Co KG has filed an opposition against this application based on its earlier German word mark MILAN with priority from 1984, registered for similar goods.

The EUIPO upheld the opposition finding both marks similar. The decision was appealed, however unsuccessfully.

First and foremost, the Court considers that the owner of the earlier mark proved genuine use. Although this mark has been used in combination with a figurative element representing the head of a bird, this by itself cannot alter the distinctive character of the mark where the dominant element is still the word MILAN.

When it comes to the comparison of both trademarks, the Court finds that although the mark applied for consists of graphic elements and a year, the dominant element that attracts the consumer’s attention is the word part AC MILAN, which is dominant in the mark’s composition.

According to the Court, although some consumers will recognize the latter mark as associating with the football club, the word MILAN in both signs refers mainly to a city in Italy.

With regard to the contention by the football club that consumers cannot be confused between the mark because AC Milan has a strong and long-lasting reputation, the Court reminds that in case of similarity assessment the only reputation that is relevant is that one of the earlier marks if there is such. The reputation of the mark applied for is irrelevant.

Taking into account all facts and arguments, the Court upheld the opposition.

A Subsidiary can have problems in case of competition disputes in the EU

The European Court has ruled in case C‑882/19 Sumal SL v Mercedes Benz Trucks España SL. This dispute has the following background:

Mercedes Benz Trucks España is a subsidiary company in the Daimler group, the parent company of which is Daimler. Between 1997 and 1999, Sumal acquired two trucks from Mercedes Benz Trucks España, via the intermediary Stern Motor SL, a dealership for the Daimler group.

On 19 July 2016, the Commission adopted Decision C(2016) 4673 final relating to proceedings under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39824 – Trucks), a summary of which was published in the Official Journal of the European Union of 6 April 2017 (OJ 2017 C 108, p. 6) (‘the decision of 19 July 2016’).

According to that decision, 15 European truck producers, including Daimler, participated in a cartel that took the form of a single continuous infringement of Article 101 TFEU and Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3), consisting of concluding collusive arrangements on pricing and gross price increases for trucks in the European Economic Area (EEA) and on the timing and the passing on of costs for the introduction of emission technologies for those trucks as required by the standards in force. For 3 of the participating companies, that infringement took place between 17 January 1997 and 20 September 2010 and, for the 12 other participating companies, including Daimler, between 17 January 1997 and 18 January 2011.

Following that decision, Sumal brought an action for damages before the Commercial Court no 07 of Barcelona, Spain seeking to obtain from Mercedes Benz Trucks España a payment of EUR 22 204.35, corresponding to the additional cost of acquisition that it bore due to the cartel in which Daimler, the parent company of Mercedes Benz Trucks España, had taken part.

By a judgment of 23 January 2019, that court rejected the action on the ground that Mercedes Benz Trucks España could not be sued by means of that action since Daimler, which alone is referred to in the Commission decision, must be regarded as solely responsible for the infringement concerned.

Sumal brought an appeal against that judgment before the referring court, which wonders whether the actions for damages following decisions of competition authorities making findings of anticompetitive practices may be brought against subsidiary companies which are not referred to in those decisions but which are wholly owned by the companies directly referred to in those decisions.

In that regard, it sets out the differences in the positions adopted by the Spanish courts. Whereas some of those courts accept that such actions may be brought against subsidiary companies, relying on the ‘doctrine of a single economic unit’, others reject such actions on the ground that that doctrine permits the civil liability of a subsidiary company to be attributed to a parent company but does not permit a subsidiary company to be sued as a result of the conduct of its parent company.

In those circumstances, the Provincial Court of Barcelona, Spain decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)  Does the doctrine of the single economic unit developed by the [Court] itself provide grounds for extending liability from the parent company to the subsidiary, or does the doctrine apply solely in order to extend liability from subsidiaries to the parent company?

(2) In the context of intra-group relationships, should the concept of single economic unit be extended solely on the basis of issues of control, or can it also be extended on the basis of other criteria, including the possibility that the subsidiary may have benefited from the infringing acts?

(3) If it is possible to extend liability from the parent company to the subsidiary, what would be required in order for it to be possible?

(4) If the answers to the earlier questions support the extension of subsidiaries’ liability to cover acts of the parent company, would a provision of national law such as Article 71(2) of the [Law on the Protection of Competition], which provides only for liability incurred by the subsidiary to be extended to the parent company, and then only where the parent company exercises control over the subsidiary, be compatible with that line of the Court’s case‑law?’

The Court’s decision:

  1. Article 101(1) TFEU must be interpreted as meaning that the victim of an anticompetitive practice by an undertaking may bring an action for damages, without distinction, either against a parent company who has been punished by the Commission for that practice in a decision or against a subsidiary of that company which is not referred to in that decision, where those companies together constitute a single economic unit. The subsidiary company concerned must be able effectively to rely on its rights of the defence in order to show that it does not belong to that undertaking and, where no decision has been adopted by the Commission under Article 101 TFEU, it is also entitled to dispute the very existence of the conduct alleged to amount to an infringement.
  2. Article 101(1) TFEU must be interpreted as precluding a national law which provides for the possibility of imputing liability for one company’s conduct to another company only in circumstances where the second company controls the first company.

Facebook filed a trademark for META but whether this will be a successful registration

Recently Facebook has announced that the mother company behind its services related to Facebook, Instagram WhatsUp, Oculus will be renamed META.

Apart from all corporate and marketing arguments, it is interesting what the case of trademark protection is. Although company names are registered in relation to the Commercial Law, most of the companies prefer to have an identical mark for the same name.

This is the case with Facebook too. They filed an application for a US trademark META in classes 9, 28, 35, 38, 41, 42, 45.

The main question is to what extent they will successfully register this name.

One brief trademark search for META for the same classes shows that there are 2 988 filed or already registered trademarks for META around the world. That’s a lot.

What’s more, the US company NFT Technology Inc filed an application for META № 97097845 in class 9 – software on the same day when Facebook did that.

It is interesting whether Facebook did a preliminary trademark clearance search and analysis. Taking into account the similarity and identity between the goods and services and the signs that are already registered or filed, there are possibilities for many oppositions if Facebook tries to register such a trademark globally.

In one word, although the proclaimed Metaverse can be a new big space for business and communication, the IP universe can become quite small for Facebook from a trademark protection point of view.

But is it possible for Facebook to be forced to stop using META in case of a conflict?

This depends on many circumstances. If Facebook uses this name only as a corporate name probably there will be no problems. But if the company starts offering products or services under such a mark, it could be an issue taking into account all available earlier trademarks for META.

Time will tell whether trademark conflicts will arise or not. What is for sure is the fact that choosing a trademark for global use is really challenging these days and most likely will become even more challenging in the future.

Despite the pandemic intellectual property is on the rise for 2020

WIPO has published its annual World Intellectual Property Indicators Report for 2020.

Despite the pandemic and all accompanying economic problems, the data clearly shows that the interest in intellectual property rights is rising on a global basis.

According to the report, there is a 13,7% increase in trademark applications for 2020, a 1,6% increase in patents applications, 2% for designs, and 5,1% for plant varieties.

A number of patent applications:

Trademark applications trend 2006 – 2020:

Design application trend 2006 – 2020:

Design applications by country:

Source: WIPO.

Nike is preparing for the Metaverse with trademarks for virtual clothes and shoes

Facebook, one of the biggest social media networks in the world, has announced the launch of its new project called Metaverse. The idea behind it is very similar to the novel Ready Player One by the American author Ernest Cline.

Metaverse is supposed to be a virtual place that replicates entirely the real world. Everyone will have an avatar and will be able to communicate, work and buy products or services within it.

For the time being, we are far away from the finalized product, which could be potentially controversial, but nevertheless, some companies start to prepare their business model for this new development.

Recently, Nike has filed several US trademarks such as Air Jordan, Nike, Just do It, and more, which target virtual clothes, shoes, etc.

One of the assumptions is that every user of the Metaverse will be able to buy virtual products for its avatar, including clothes, cars, houses, and so on, in order to show social status, for instance. Such products can be unique, especially in the light of blockchain technology. What’s more, it is logical that these virtual products can be branded as their real equivalents.

So from that perspective, some innovative companies as Nike have started to prepare their business strategy for the new virtual future, including their IP portfolios.

It is interesting how Nike specified the goods in class 9 – Downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online and in online virtual worlds.

There are no virtual clothes or shoes etc in the Nice Classification that is responsible for the list of goods and services necessary for the trademark application process. Probably this is the reason why Nike identified these products as computer programs, a term that is part of the Nice classification.

It is a fascinating idea whether the Nice Classification will undergo changes in the future in order to cover all sorts of new types of products and services that will emerge if Metaverse becomes a reality.

Ferrari FXX K design elements and a European Court decision

The European Court has ruled in case C‑123/20 Ferrari SpA v Mansory Design & Holding GmbH and WH. 

This dispute focuses our attention on the limited edition Ferrari car model FXX K that is similar to another model 488 GTB. There is a visual difference between both models in some design elements.

The German company Mansory Design & Holding GmbH,WH starts to produce and offer those design elements as tuning parts which can be used by owners of 488 GTB to make their cars look like FXX K.

Ferrari initiated a lawsuit in Germany for infringement of unregistered Community design but lost it. The decision was appealed and the German Supreme Court asked the European Court to clarify whether the making available to the public of images of a product, such as the publication of photographs of a car, could lead to the making available to the public of a design on a part or a component part of that product and, if so, to what extent the appearance of that part or component part must be independent of the product as a whole in order for it to be possible to examine whether that appearance has individual character.

The EU Court has ruled, inter alia, that EU law must be interpreted as meaning that the making available to the public of images of a product, such as the publication of photographs of a car, results in the making available to the public of a design on a part of that product or on a component part of that product, as a complex product, provided that the appearance of that part or component part is clearly identifiable at the time that design is made available.

In the first place, the Court noted that the material conditions required for the protection of a Community design to arise, whether registered or not, namely novelty and individual character, are the same for both products and parts of a product. Provided that those material conditions are satisfied, the formal condition for giving rise to an unregistered Community design is that of making available to the public within the meaning of Article 11(2) of Regulation No 6/2002. 

In order for the making available to the public of the design of a product taken as a whole to entail the making available of the design of a part of that product, it is essential that the appearance of that part is clearly identifiable when the design is made available. However, that does not imply an obligation for designers to make available separately each of the parts of their products in respect of which they seek to benefit from unregistered Community design protection.

In the second place, the Court pointed out that the concept of ‘individual character’, within the meaning of Article 6 of Regulation No 6/2002, governs not the relationship between the design of a product and the designs of its component parts, but rather the relationship between those designs and other earlier designs.

In order for it to be possible to examine whether the appearance of a part of a product or a component part of a complex product satisfies the condition of individual character, it is necessary for that part or component part to constitute a visible section of the product or complex product, clearly defined by particular lines, contours, colours, shapes or texture. That presupposes that the appearance of that part or component part is capable, in itself, of producing an overall impression and cannot be completely lost in the product as a whole.