Candidate no.

109073

Intellectual property law

Critically analyse the law relating to the absolute grounds for

refusing to register trade mark under trademarks Act 1994.

A trademark is a legal term used more commonly now due to the growing
popularity of consumerism. Trademark registration is governed by the
Trade Mark Directive (TMD) 2008/95/EC. Registration lasts 10 years after
which it can be renewed for a further period of 10 years. They work as an
advertising tool for businesses and corporations establishing a distinction
between competitors and products in general. English courts have defined
trademark law in section 1 of the Trademark Act (TMA) 1994, amplifying
on things like words, symbols, shapes etc. But placing conditions
regarding trademarks being represented graphically and being able to
distinguish itself from similar products in the market. Consumers are in a
constant state of need; searching for quality, cost effective or durable
products on the market (Bentley and Sherman 2009). Trademarks help in
making this progress faster and more efficient, resulting in the consumer
knowing exactly what brand they need and where they can purchase it
from. There is an increasing power struggle in the market between
manufacturers trying to distinguish themselves from competitors to make
their products unique. In this regard, non-conventional trademarks such as
colours, shapes and sounds are used as an alternative by businesses to
the more traditional word marks with the intention to become distinctive
(Sandri & Rizzi, 2003). Proprietors of trademarks enjoy exclusive rights
that they obtain after registering their trademark. This also includes
trademark infringement which gives them legal rights under the
trademark TMA to stop other businesses from using their ideas and lies

directly on the distinguishing function of their trademark. But to fully

register a trademark, certain hurdles need to be passed. A trademark will
not be registerable if it falls short from any of the absolute grounds of
refusal in section 3 of the Trademark Act. If a trademark is unable to
satisfy any of these requirements then it is incapable of registering
successfully.

Section 3(a) acts as the first hurdle; it states that a mark can be any sign
that is graphically represented, distinguishable and acts as a badge of
origin. This means that an ordinary consumer must be able to identify it
and are able to tell who the manufacture is. Historically, it has been
challenging to register a trademark due to the controversial status of
trademarks and the conditions of the CJEU. However, not all signs are
deemed acceptable as was seen in the case of Dyson ltd v Registrar of
trademarks C-321/03 [2007]. The application failed because the
subject matter of the transparent bins were not of a specific type and
thus were not perceived a sign as defined in the directive, but rather a
concept. The CJEU further stated that giving dyson the right would give
them an unfair advantage because no one else will be able to
manufacture any type of transparent bins on its external surface and in
the long run they would have received a competitive edge in the market.
This case established registrable signs and gave a clearer view on what
could be registerable.

Further issues were raised with registering unconventional marks due to

their intangible nature. Signs such as scents or sounds; items which
theoretically may be considered as a mark, created more difficulties with
fulfilling the test of being represented graphically. Depicting the mark on
the application form and demonstrating distinctive character proved to be
challenging. These were addressed in the leading case of Sieckmann v
Deutsches Patent- und Markenamt C-273/00 [2002] where the
claimant tried to register a scent. This case raised the question of whether

intangible products could be registered as trademarks. Items such as the

chemical formula, a sample of the scent and a verbal description were
deposited with the application. The courts questioned whether these
satisfied the test of graphic representation and it was initally rejected
because it was considered to be incapable of being distinctive. Why do
courts give so much importance to graphic representation?

The CJEU developed an adequate test in sieckmann for graphic

representation which affirmed that a mark must be self contained, easily
accessible, intelligible, durable and objective. Upon application,
sieckmanns claim failed; the court held that submitting the chemical
formula and describing the scent as balsamically fruity with a slight hint
of cinnamon was not adequately clear and precise because they could
not be identified visually and the written description provided was
insufficient to be distinctive. The aim behind the graphic representation
criterion is to empower a sign to be depicted visually in order for the
scope of protection of the mark to be precisely determined (para 45 and
46) by everyone. Many scholars argue that the CJEU has made it
impossible to register olfactory marks; scents need to be distinctive, and
therefore must function as a trade origin indicator (Karapapa, 2010). The
outcome from sieckmann showcased that while proprietors rights have to
be protected the courts also need to award property rights fairly and
marks are required to be presented correctly. Howell (2011) also claimed
that one of the reasons behind the CJEUs restrictions is due to their intent
of proprietors having increasing competition . But on the other hand,
categories like sounds or colours or odours are creations of nature.
Allowing such a monopoly would restrict freedom excessively in a sector
where technical progress is based on a process of ongoing improvement
of earlier innovations (Schober, 2013).

In the subsequent case of Libertel Groep BV v BeneluxMerkenbureau C-104/01 [2003], the CJEU had to determined whether

the colour orange satified the test set in sieckmann. A sign which is
devoid of any distinct character will be unable to register as a trademark
(89/104). When analysing whether a mark should be registered the courts
assessed in terms of the goods and services recorded on their application
and more importantly how the public would perceive it (Goulbourn, 2012).
The application was refused due to lack of distinctive character. It was
held that single colours could be registered as long as the colour is a sign,
has a distinctive character and is represented graphically. For instance, If
a trader mixes a combination of colours and creates a shade which the
reasonable consumer is unable to recognize conclusively then the courts
could change their approach. This could be seen as an example with the
company Heinz; they have been able to sucessfully trademark the distinct
turquoise shade that is manufactured on their baked beans products. In
cases concerning colours, the court acknowledged that, distinctiveness
without any prior use is inconceivable except for exceptional
circumstances, and particularly where the number of goods or services for
which the mark claimed is very restrictive and the relevant market very
specific (Libertel Groep BV v Benelux-Merkenbureau C-104/01 [2003]).

Section 3(2) of the Act further expands on provisions relating to exclusions

of shapes. The main function for trademarks is to protect identifying
symbols, thus preventing customer confusion (McCarthy, 1996). While the
TMA 1994 only refers to shapes of goods or their packaging, its
predecessor (community trademark regulation) includes two-dimensional
and three-dimensional shapes as well. The leading case in regards to the
interpretation of shapes of trademarks is the Koninklijke Philips
Electronics NV v Remington Consumer Products Ltd C299/99[2002] case. Philips developed a three-headed rotary electric
shaver shaped as a triangle and were able to trademark it successfully
under TMA 1938 solely on the basis of use. A few years later, Remington,
a competing company also manufactured a similar shaver. Philips sued for
infringement of its trademark and Remington sued back for revocation of

the TM. The significance of this case is due to the series of issues that
were questioned, and the output of the CJEU. A key issue was how to
interpret the wording of Article 3(1)(e) of the European TM directive, which
applies specifically to shape marks. According to this, a sign will not be
registered as a TM when it consists exclusively of a shape that results
from the nature of goods themselves, a shape that is necessary to obtain
a technical result, or a shape that gives considerable value to the goods
for which registration is sought (Lopes & Duguid, 2012).

The issue regarding its lack of distinctiveness was analysed. Jacob J

stated that a three headed shaver is unable to portray anything other
than just being a simple shaver with three heads. Advocate general RuizJarabo Colomer on the other hand, acknowledged that the three rotary
headed shavers seems to be the perfect example for a purely functional
shape. Philips argued that if a mark has acquired a reputation, the
grounds for refusal or invalidity under section 3(a) or (b), read in
conjunction with Article 3 in the case for 3(b) cannot be applied and
therefore, such a mark could not be characterised as devoid of distinctive
character as a matter of law. The court of appeal articulated that Philips
had established that the shape depicted in the TM was not necessary to
achieve a particular standard of shaving and that they had produced
designs which would have an equivalent mechanical performance and
could be produced at equivalent fee. The application of the three rotary
heads was not obligatory to it key function; which was to remove hair. One
or two heads would have sufficed for the same result. The triangle shape
also had no link towards the function of the shaver which is an additional
reason why permitting Philips to trademark the shaver

The CJEU were further asked whether registration should be denied in

cases which show that the essential features of a shape is only
attributable to the mechanical outcome. The CJEU approved that the
purpose of the provision was to prevent monopolies through trademark

protection (para 18). In this context, the court defined the term
exclusively to be read in the light of the expression essential
characteristics which perform a technical function (Alpin & Davis, 2009).
Registering such a trademark would inevitably result in the exclusivity
inherent in the trademark, thus limiting the possibility of competitors
supplying a product incorporating such a function or at least to limit their
freedom of choice in regard to the technical solution they wish to adopt in
order to incorporate such a function in their product (para 20). The Philips
case established that trademark law will not be used to protect a shape
marketed by one undertaking if the essential characteristics of it are
included to execute a technical function. These kinds of shapes will be
excluded from registering as marks.

Article 7 of the CTMR also provides preliminary obstacles to threedimensional shapes and accordingly gives the same input regarding the
functionality of the shape. This was first applied in the Philips case but
was later expanded in the subsequent case of Lego Juris A/S v Office for
Harmonisation in the Internal Market (OHIM), Mega Brands, Inc C-48/09
[2010]. While Philips was the primary case thats sparked this
controversial issue regarding trademarking shapes on the basis of
functionality and distinctiveness. This ruling was later applied to the Lego
case. This case was equally important because it was able to develop in
further areas regarding shapes and functionality.

Another condition in section 3 of the Act, states that a mark can be

registered if it has an inherent distinctive character or has acquired
distinctiveness through use. Till this point, the CJEU has placed
importance on all the provisions of the directive regarding smells, shapes
and graphic representation etc. But an exception to this rule is if a mark is
able to acquire some distinctiveness through its use in the market. This
means that if it can be shown that a certain sign has acquired
distinctiveness through its use then its registerable as it has gained a

reputation with its consumers. However, the mere use of a mark does not
necessarily equal distinctiveness, Jacob J (British Sugar v James and sons).
However, this does not apply to shape marks under Article 7(1)(e), as
seen in the Philips case resulting in exclusion from registration. The shaver
had been in the market and had gained a reputation but that was not
sufficient for a successful claim. This was because Philips is a popular
brand available in every household, but the shape of the shaver did not in
any way define the brand itself. Marks are capable of being inherently
distinctive; there is no legal limitation to that effect. But, jurisprudence
frequently specifies that some categories of marks namely unconventional
ones can hardly be qualified as inherently distinctive (Vaver, 2005). A
mark which is devoid of a distinctive character may be registered if it
succeeds in becoming a reputable brand as a result of its use. By applying
the mark to his product, a manufacturer must educate the public as to
their origin. The public have to identify the mark and ascertain its role as a
trademark (Firth, 2001). The perception of the mark by the average
consumer is of important significance when assessing the ability of signs
to serve as trademarks. The context of the use as well as how the mark
has been used must be shown as evidence. In order to register a mark
through acquired distinctiveness, the applicant must, reinforce their
chances by accumulating valuable data, retaining a record of everything,
educating the public regarding the origin of their mark, utilizing it in
advertisements, using clear and coherent branding and marketing
mechanisms (Phillips, 2005). And to prevent other traders from using their
mark. Applicants have to prove that their mark has acquired
distinctiveness by overcoming these obstacles. Corporations also use
customer surveys to determine public estimations and it is an excellent
way of showing evidence of distinction. However, proving acquired
distinctiveness is challenging and expensive and has to be done prior to
the filing date of application (Schulze, 2003)
.

Trademarks which are contrary to public policy or to accepted principles of

morality may not be registered. The guidelines set by the office for
harmonisation in the internal market (OHIM) define public policy as the
body of all legal rules that are necessary principles of morality as those
that are absolutely necessary for the proper functioning of the society.
Thus, this provision advocates against trademarks which go directly
against the basic norms of society. The objective test is applied here; the
mark must have a clear offensive impact on people of normal sensitivity.

Lastly, section 3(6) of the Act states that a trademark shall not be
registered if the application is made in bad faith. This area of the
provision deals with the motives and intentions of the applicant towards
registering a trademark. The most popular example of bad faith is when
applicants register a trademark without having the intention of using it.
While this is the most common way of registering a trademark, neither the
directive nor the regulation has defined the term bad faith. However,
Aldous LJ stated that bad faith is where the applicants actions fall below
the standard of acceptable commercial behaviour perceived by
reasonable and qualified persons in the particular commercial area being
examined (Harrison v Teton Valley Trading Co [2004]). Arnold J held
that a person should be presumed to have acted in good faith until the
contrary is proved. He further stated that bad faith would imply some sort
of design to mislead or deceive or any other sinister motive or dishonest
intention on the part of the applicant for registering the trademark. The
tests adopted by the UK courts for bad faith are combined of both
subjective and objective elements.

The CJEUs approach in the case of Chocoladefabriken Lindt &

Sprungli AG v Fran Hauswirth GmbH C-529/07 [2009] proved to be
exceptionally innovative. The austrian supreme court referred questions to

the CJEU regarding how to determine whether a CTM registration was

invalid on the grounds that it had been made in bad faith. This case was
about chocolate bunnies sold by both the companies. The important
aspect of this case was that both the companies had been manufacturing
the chocolate bunnies for many decades in different member states and
had thus established distinctiveness for their product in the market. Lindt
applied and successfully registered their product as a trademark. But then
further proceeded to restrain the sale of chocolate bunnies sold by
Hauswirth in Austria by issuing infringement proceedings against them
under Article 9(1)(b) of the regulation, which prohibits the use of an
identical or similar mark for identical goods where there is a probability for
confusion. The latter party counterclaimed for Lindts mark under the
Article 51(1) of the regulation, which states that a Community Trade Mark
shall be declared invalid where the applicant was acting in bad faith when
it filed the application.
Both parties maintained different opinions. Lindt argued that if a
tradeamark applicants who are aware of their market competitors and
intends to prevent them from entering the market does not constitute bad
faith. For a successful case of bad faith there must be dishonest conduct
on the part of the applicant. They further stated that because its mark had
been used for over a substantial period of time and had spent a large sum
on advertising. Resulting in building a reputation and distinctiveness
before it applied for a Community trade markas therefore their aim to
register their mark was to protect its commercial value against imitatons.
Hauswirth disputed that a trademark applicant acts in bad faith when they
are aware of a similar or duplicate mark by a competitor who had
obtained a valuable right in that mark as a result and the applicant
applied for a community trade mark with the intention of eliminating all of
its competitors. They further stated that any reputation that the mark had
acquired prior to its registration was irrelevent (Jehoram, et al., 2010).

The CJEU decision regarding this case chose to answer in several parts;
selecting particular questions. They held that if an applicant has
knowledge that a third party has been using an identical or similar
trademark then that does not constitute bad faith. The intention of the
applicant at the time of registering for a trademark is fundamental and is
taken into consideration when assessing the case. This is a subjective
factor which must be determined by reference to the objective scenario of
an individual case. The CJEU further viewed that the applicants intention
to prevent a third party from legitimately marketing a product could in
certain circumstances establish bad faith,especially if the sole objective
for registering the community trademark is to prevent them from entering
the market. Advocate General Sharpston asserted that, 'the applicants
intention at the relevant time is a subjective factor which must be
determined by reference to the objective circumstances of the particular
case (Smith , et al., 2010). In circumstances where a third party has been
using a sign for a prolonged period of time, for an identical or similar
product, which is capable of being confused with the mark applied for, and
which enjoys some degree of legal protection, this might be important in
deciding whether the applicant has represented himself in bad faith. In
such instances, the applicant could have the intention of competing
dishonestly with his competitors. The CJEU have purposefully retained a
broad and flexible approach towards this area. By allowing national courts
to interpret the outcome as they see fit while at the same time laying out
ground rules for them to follow; requiring them to take account of all
relevant factors at the time that the applicant is registering the
trademark. Evaluating whether the applicant had made an application in
bad faith or not. In applying CJEUs judgement to the case, Lindt was able
to win the case and successfully gain an injunction to stop Hemsworth
from manufacturing and distributing their gold bunnies.

This essay followed the structure of the trade mark Act 1994, going
through each of the items registerable for trademark while analysing how

the courts and proprietors have equally been dealing with it. The large
volume of case law that has come forth has helped in influencing the law.
Cases like libertel and sieckmann have narrowed the boundaries of
trademark protection in the European Union by making it a lot more
difficult to register trademarks such as smells, colours and sounds. Since
then, further decisions have helped to draw a clearer picture of what can
and cannot be registered. Many of the cases portray that the judicial
system has painstakingly prevented large corporations from greedily
monopolizing irreplaceable creations of nature from their competitors. But
they have applied a certain degree of flexibility towards registering
unconventional trademarks for manufacturing on products making the
statute less strict as was seen in other successful registeration claims.
This indicates that judges are willing to accept certain marks which in
their opinion have earned a certain degree of distinctiveness or reputation
in the marketThrough many of the rejected applications for trademarks, it
can be construed that English courts have given great consideration
towards enhanced competition in the market; not letting other
manufactureres use balsamic fruity smells or three-headed shavers
would be highly unfair, hence going against the fair competition principle.
As was stated by Mark Twain, there is no such thing as a new idea. It is
impossible. We simply take a lot of old ideas and put them into a sort of
mental kaleidoscope.

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