Dear Readers,
In this issue, we have once again compiled interesting decisions from recent months. Of particular interest are: the CJEU decision on international territorial jurisdiction for AdWords ads and meta tags; the German Federal Patent Court decision on the immorality of the "Narayana" application; and the German Federal Court of Justice decisions on trade mark infringement by detailed model reproductions and on the submission of a cease-and-desist declaration in PDF. In addition, as always, we will report on current case law on likelihood of confusion and distinctiveness.
In our Country Focus section, we continue to take a look at developments in trademark law in another country. We are pleased to present the Country Focus - Spain in this issue and would like to thank our colleagues Dr. Constanze Schulte and Pablo de Luque for their valuable contributions on the new cancellation proceedings before the Spanish Office, on the relevant area for the proof of rights-preserving use in opposition proceedings, and on the impact of foreign-language descriptive terms on their use and protectability in Spain.
We welcome your feedback and suggestions by e-mail to trademark.insight@hoganlovells.com.
We wish you helpful reading.
Thorsten Klinger and Dr. Andreas Renck
Index
Main part - Trademark law in the European Union and Germany
Written by Thorsten Klinger, Christine Stoeber, Robert Taeger and Sophia Siegling
Written by Thorsten Klinger, Christine Stoeber, Robert Taeger and Sophia Siegling
Country Focus – Spain:
Written by Dr. Constanze Schulte and Pablo de Luque
Preliminary ruling on international territorial jurisdiction in AdWords ads and meta tags (CJEU)
This preliminary ruling is based on a dispute between the Finnish proprietor of the EU word mark "Watermaster" and two German companies belonging to the same group. The Finnish trade mark proprietor took action against the group companies before the Finnish EUTM Court based on two different alleged acts of infringement.
The Finnish court then questioned whether it had any territorial jurisdiction, and asked the CJEU for a preliminary ruling on the interpretation of Art. 125(5) EUTMR. This provision establishes the territorial jurisdiction of the national EU trade mark courts of the Member State in which the act of infringement has been committed or threatened. The relevant question was whether the two different potentially infringing acts make it possible to establish a sufficient connection with Finland.
Group company A had set up a paid search engine reference (Google AdWords advertisement) for the keyword "Watermaster". Consumers and traders who entered the search term "Watermaster" under the national domain www.google.fi were shown the product advertisement of group company A as the first search result. In contrast, group company B used an organic search engine reference by adding the keyword "Watermaster" (meta tag), among others, to images of its products on the photo-sharing website www.flickr.com. Such a keyword makes it easier for search engines to identify linked results for corresponding search entries.
The CJEU first clarified that, in order to establish an infringing act in a third country different from the infringer's Member State of domicile, the trader must aim its business activities towards the consumer's Member State of domicile. The Court explained that active conduct is required for infringement, which is particularly the case if the infringer pays the operator of a search engine under a foreign top-level domain to display its results and offers (as was done here by group company A).
With regard to the creation of meta tags (group company B), there was no such sufficient connection to Finland, since a meta tag under a generic top-level domain (e.g. ".com"), on the one hand, did not address the audience of a specific Member State (i.e. Finland) and, on the other hand, only increased the accessibility of the linked images.
(CJEU, judgment from 27.4.2023, C-104/22)
Violation of the principles of morality of the trade mark application "Narayana" (BPatG)
The German Federal Patent Court (BPatG) recently dealt with the question whether the application for the word mark "Narayana" was contrary to morality. The German Patent and Trademark Office (DPMA) had previously assumed that this was the case and rejected the application in its entirety, since the term claimed was the designation of an Indian god ("Narayana" literally means "the one coming out of the water" or "eternal man"). The commercialization of this term by granting a trade mark contradicts the religious and ethical values of the relevant public and is perceived as offensive.
The BPatG largely upheld the appeal against this decision. The sign was only devoid of distinctive character with regard to printed matter, teaching and instruction materials (Class 16) and education (Class 41). For these design-related goods and services,, "Narayana" constituted a descriptive indication, since they could be thematically related to the claimed term. For the remaining goods and services, the sign was held to be distinctive.
The ground for refusal of protection based on morality claimed by the DPMA only applied to meat products and meat extracts (class 29). After all, the veneration of the cow as a sacred and inviolable animal is a general principle of Hinduism which is also known here. In view of this prohibition of any harm to cows, which is so important for Hindu believers, the term "Narayana" as the name of a deity to designate the meat intended for consumption (including that of cows) was to be regarded as offensive. For the other goods and services claimed, on the other hand, the sign did not constitute an infringement of morality.
The decision of the Office was therefore annulled in its entirety, except for the above mentioned goods and services. However, due to the legal questions on religious terms underlying this decision, which were relevant to the decision, the BPatG allowed an appeal on points of law to the Federal Court of Justice.
(BPatG, decision of 8.3.2023, 29 W (pat) 548/20)
No trade mark infringement through use of logo on detailed model replicas (BGH)
In the recently published judgment, the German Federal Court of Justice (BGH) ruled on the question of whether detailed miniature replicas of vehicles and buildings constitute an infringement of trade mark rights if the detailed models (in accordance with reality) also display trade marks.
Dachser SE’s trade marks include two German word/figurative marks shown below on the left, used on trucks and warehouses as a logistics company. Dachser used these trade marks to take legal action against a company specializing in the production and sale of model cars and buildings, which, among other things, also marketed the two models shown below on the right. While the Cologne Regional Court upheld Dachser's action, the Cologne Higher Regional Court (OLG), upon appeal by the model goods manufacturer (judgment of 29 April 2022, 6 U 178/21), dismissed the action. Dachser appealed against this decision to the BGH.
In line with the Cologne Higher Regional Court, the BGH now denied both trade mark and unfair competition claims. According to the BGH, double identity and likelihood of confusion are ruled out, as the trade marks claim goods and services in the logistics sector and the use by the defendant only concerns model cars and buildings, meaning there is no similarity of goods. However, according to the Senate, such claims would be ruled out even if the trade marks were protected for model toys, since the target public does not understand the signs to be used for toys but rather as a representation of reality. Therefore no trademark function is impaired.
A claim based on exploitation or detriment to reputation was also ruled out. It was true that the use of identical or highly similar signs on the model goods constituted an exploitation of the reputation of the trade marks without the consent of the trade mark proprietor. However, this did not exceed the threshold of unfairness. This would only be the case if, beyond the mere imitation, there were other attempts to use the reputation of the well-known trade mark for advertising purposes.
As infringement had previously only been recognised by the Federal Court of Justice for vehicle trademarks (Federal Court of Justice, judgment of 14 January 2010, I ZR 88/08 - Opel Blitz II), the Federal Court of Justice now stated that the same had to apply to service marks. The fact that - as argued by the trade mark proprietor - service marks (unlike vehicle trade marks) are not an essential component of the replicated vehicle was irrelevant. After all, in view of decades of practice and the public's expectations of model replicas, the defendant had a legitimate interest in replicating a real-world vehicle with vehicle brands, and others used on such vehicles in reality for the purpose of advertising services. The truck model in question represented such a realistic replica.
Nothing else applied to replicas of buildings. In this case, the public would in any case clearly recognise a reference to original Dachser warehouses.
As a result, trade mark owners would have to accept the degree of likelihood of confusion associated with the replica. With its judgment, the BGH confirms the "Opel Blitz II" decision and extends it to such trade marks which are applied to replicas as an indication of services. The ruling of the OLG Hamburg (Hamburg Higher Regional Court, judgment of 26.1.2023, 5 U 61/21, summarised in Trademark Insight 03|2023) (there an infringement was assumed on the basis of a 3D trade mark for model cars, as the impression was given to the public that the goods were authorised) was left open by the BGH ruling.
(BGH, judgment of 12.1.2023, I ZR 86/22)
Likelihood of confusion between "SPREEBRUNNEN" and "SPREEQUELL" (BPatG)
In a recently published decision, the German Federal Patent Court (BPatG) dealt with the likelihood of confusion between the signs "SPREEBRUNNEN" (Application) and "SPREEQUELL" (earlier trade mark), each claiming protection for mineral waters and other non-alcoholic beverages in Class 32. The Opposition Division of the German Patent and Trademark Office (DPMA) previously found a likelihood of confusion.
Upon the applicant's special motion (“Erinnerung”), the opposition was rejected. According to the office, the term “SPREEQUELL” has a descriptive character due to its inherent reference to the origin of the goods claimed. Due to its resulting limited distinctiveness, the Application maintained a sufficient distance between the signs to ensure that they could be reliably distinguished.
The opponent’s appeal against this decision was unsuccessful. The DPMA was right to deny the existence likelihood of confusion and to reject the protection of reputation. Even taking into account the identity of the opposing goods, the Application was sufficiently different from the opposing trade mark (also due to the very limited scope of protection of the opposing trade mark). Thus, the divergent, strongly differing elements "BRUNNEN" and "QUELL" lead to an overall only slight visual and phonetic similarity. Conceptually, too, the signs are only slightly similar, due to their descriptive character. Any conceptual similarity between "Brunnen" and "Quelle" was limited to their descriptiveness in relation to mineral water. This could not give rise to a likelihood of confusion, because otherwise protection of descriptive indications would arise.
The BPatG also ruled out an indirect likelihood of confusion and the assumption of protection of reputation.
(BPatG, decision of 17.4.2023, 26 W (pat) 13/19)
Registrability of "Ultimate Speed" (EUIPO)
In this decision, the First Board of Appeal dealt with the question whether the EU word mark "Ultimate Speed" is registrable for various goods in classes 7, 9 and 11 (including generators, emergency power units, power distribution boxes and dehumidifiers). The application was previously refused by the examiner in part for descriptiveness and lack of inherent distinctiveness.
The First Board of Appeal now largely dismissed the appeal and thus confirmed a descriptive character of the sign for most of the goods at issue. The word combination "Ultimate Speed", which is immediately understandable to the relevant public, means, "maximum speed" and is, according to the First Board of Appeal, similar to the terms "Full Speed", "High Speed", "Top Speed", "Super Speed", "Hyper Speed" and "Mega Speed", which were also technical and found to be devoid of distinctive character in previous decisions.
In relation to goods in Class 7, such as generators, 'Ultimate Speed' could refer to the characteristic of how quickly a generator regains its full capacity after a power failure. For goods in class 9 such as electronic control devices, charging systems for electric vehicles, alarm devices and software, the descriptive character would result from the fact that speed/quickness is a particular quality characteristic of such goods. With regard to goods in class 11 such as dehumidifiers, the term describes high processing speed among other qualities.
Contrary to the Examination Division, the Board of Appeal held that Application was non-descriptive and distinctive for part of the goods in question in class 9, such as sockets, electric locks and power distribution boxes. In relation to these goods, speed or rapidity was not an essential quality that played a role in the purchase decision, but at most a positive side effect.
(EUIPO BoA decision of 11.4.2023, R 2018/2022-1)
Descriptive character of "near-to-prime" (GC)
The GC recently dealt with the descriptive character of the EU word mark "Near-to-Prime" for goods in class 1 (including for chemical products for industrial purposes). Previously, the Cancellation Division and the Board of Appeal had granted the application for invalidity filed against the sign. The EUTM proprietor challenged this with an application to the GC.
The GC now dismissed the application as the action clearly lacked any legal basis. The court confirmed the descriptive character of the term "near-to-prime" for the protected goods in class 1. Despite the two hyphens and the preposition "to", the relevant English-speaking consumer could easily understand the neologism "near-to-prime" as "near prime". The expressions "near prime" and "near to prime" are used in the relevant chemical industry sector as a specific quality parameter. The sign was therefore directly and specifically linked to the goods in question in Class 1.
The fact that the Board of Appeal referred at one point in its reasons of the decision to the sign 'next-to-prime' (instead of: near-to-prime) was a mere clerical error. As a result, the decision was not issued on an incorrect factual basis.
(GC Order of 31.3.2023, T-472/22)
Submission of a declaration to cease and desist in PDF (BGH)
The BGH ruled on the formal requirement of a cease-and-desist declaration. The decision follows the recent case law of the German Federal Court of Justice on discontinuation of the risk of repetition (judgment of 1 December 2022, I ZR 144/21, summarized here). In the present case, the creditor sent a warning to the debtor after receiving repeated and unsolicited advertising emails and requested it to submit a cease-and-desist declaration. For this purpose, a declaration by fax or email was held sufficient by the creditor, provided the original was submitted within the deadline.
After the debtor sent the declaration in PDF format in due time, but not the original, the creditor filed a lawsuit. While the cease-and-desist creditor prevailed at first instance, and the cease-and-desist debtor won on appeal. The German Federal Court of Justice now ruled that the Court of Appeal erred in law in assuming that the danger of repetition had already been eliminated by sending the signed PDF version of the cease-and-desist declaration. It was true that a cease-and-desist declaration in PDF format was in principle capable of eliminating the danger of repetition. The requirement of the written form, which in principle applies to cease-and-desist declarations as abstract acknowledgements of guilt, did not apply here due to § 343 (1), § 350 German Commercial Code.
Furthermore, the debtor had not shown any lack of seriousness, even if he did not send an original, but only a PDF. The fact that the appeal was nevertheless successful was due to the changed case law of the Federal Court of Justice in the matter of the “discontinuation of the risk of repetition III” (Wegfall der Wiederholungsgefahr III). According to this case law, if the cease-and-desist creditor rejects a cease-and-desist declaration with a penalty clause, there is no threat of a contractual penalty to control behaviour and deter the debtor from future infringements.
The cease-and-desist declaration sent by e-mail was also not an acceptance of an offer to conclude a cease-and-desist agreement with a penalty clause previously made by the creditor with the warning notice. After all, the creditor had demanded a special declaration of submission through the voluntary written form. The debtor's submission of a declaration that did not comply with the written form rather constituted a new offer instead of an acceptance.
The decision has two practical implications: From now on, it is sufficient to request the submission of a signed cease-and-desist declaration as a PDF file, provided the defendant is a professional and the overall circumstances do not suggest a lack of seriousness. However, if the cease-and-desist creditor demands that the original declaration be sent, this demand should be complied with without fail. Otherwise, refusal of the insufficient cease-and-desist declaration may prevent the conclusion of a cease-and-desist agreement.
(BGH, judgment of 12.1.2023, I ZR 49/22)
Likelihood of confusion and protection of reputation in the case of identical coats of arms (BPatG)
The German Federal Patent Court (BPatG) recently dealt with the likelihood of confusion between the trade mark application shown below and an identical earlier business identifier. Previously, the German Patent and Trademark Office had rejected the oppositions directed against the application.
The BPatG now confirmed that there was no likelihood of confusion. It was true that the family coat of arms of the Kraichgau noble family of the knights Göler von Ravensburg was a suitable business identifier with an inherent distinctive character, as it had a name function. Nevertheless, even if the opponent uses the company sign nationwide, no likelihood of confusion with the trade mark application can be found, as the signs seek protection for different activities. The trade mark application claims protection for alcoholic beverages, whereas the business identifier is (exclusively) used for legal services. Furthermore, the opponent could not rely on the enhanced protection of particularly well-known signs, as it had not proven that the business identifier was sufficiently well-known.
The opposition filed against another trade mark application containing the additional lettering "Freiherr von Göler" was also unsuccessful on appeal, as the opposition in these parallel proceedings was based exclusively on rights to a name, which are not included in the grounds for opposition exhaustively listed in Sec. 42 (2) Nos. 1 - 4 German Trade Mark Act, old version.
(BPatG, decision of 17.4.2023, 26 W (pat) 26/18)
Distinctiveness of the sign "mein Getränkemobil" (BPatG)
The German Federal Patent Court (BPatG) dealt with the distinctiveness of the word mark for "mein Getränkemobil" (german for “my drinkmobile”). The German Patent and Trademark Office had previously rejected the application due to lack of distinctive character, as it merely conveyed the idea of a beverage delivery vehicle. Since the goods claimed could belong to the range of such a delivery vehicle for drinks, the sign was descriptive and devoid of distinctive character.
The appeal against this decision was successful. It is true that the sign designates a mobile sales outlet for beverage products and that the possessive pronoun "mein" merely indicates that the range of goods is tailored to the individual wishes and needs of the customers. However, since the goods applied for are not typically transported and offered alongside beverages or by means of a mobile beverage dispenser, the necessary close connection to the goods is missing.
Descriptive character was only found for beverages in Classes 32 and 33 originally applied for, which were, however, abandoned in the appeal proceedings. Due to the disclaimer "all the above-mentioned goods not for equipping vehicles, in particular mobile beverage units", it was irrelevant whether the sign indicated that cooking and kitchen utensils as well as computers were intended for equipping a mobile beverage unit.
In principle, a restriction of the list by so-called "exclusion" is inadmissible if a feature explicitly designated by the sign is excluded in this way, since the public could otherwise be misled into thinking that the goods in question possess precisely that excluded feature. In the present case, however, the limitation was admissible, as the goods still claimed had no connection to a "mobile beverage unit", and the legally secure determination of the scope of protection was not jeopardised. For the remaining goods, the sign was distinctive.
(BPatG, decision of 27.10.2022, 30 W (pat) 42/21)
Likelihood of confusion in case of a combination of basic geometric shapes (EUIPO)
In this decision, the EUIPO Board of Appeal dealt with the likelihood of confusion between two EU figurative marks, each consisting of a combination of basic geometric shapes.
The Application, shown below on the left, shows, from the point of view of the relevant public, a parallelogram with an arrow-shaped element below it. Both elements are coloured grey and shaded black. In contrast, the earlier mark shown below on the right consists of a black parallelogram with a small beak-shaped point on the left side and an arrow-shaped black element placed below it with a point oriented to the right side.
The relevant public would not associate the Application with the letter ‘F’ nor the earlier mark with the number '7'. Nor would consumers associate either sign with a 'lightning bolt', because such a link would require several steps of thought. According to the Board of Appeal, the degree of visual similarity of the signs is low. Although the signs coincide in a parallelogram rotated to the left, there are clear differences with regard to the arrow-shaped element of the Application and the beak-like element of the earlier mark. An aural and conceptual comparison is not possible.
In the context of the overall assessment, the Board of Appeal emphasised that the distinctive character of the earlier figurative mark was per se low due to the combination of basic geometric shapes. Due to the only slight visual similarity of the signs, there would be no overall likelihood of confusion even if the goods were identical.
(EUIPO-BoA decision of 11.4.2023, R 1807/2022-1)
Lack of distinctiveness of "FUCKING AWESOME" (GC)
In this decision, the GC confirmed Board of Appeal’s decision that the term "FUCKING AWESOME" is not distinctive for goods in classes 9, 18, 25 and 28 (inter alia sunglasses, bags, clothing and skateboards).
The relevant English-speaking consumers would understand the term "FUCKING AWESOME" only as a slightly vulgar message, advertising the high quality of the goods as a whole. The word element "FUCKING" reinforces the meaning of the word "AWESOME" in a somewhat vulgar way. However, it neither contradicted the word element "AWESOME" nor gave the overall term a new meaning going beyond the word elements.
The fact that the word combination was not contained in dictionaries was irrelevant. The advertising message conveyed by the sign did not require any further interpretation. The target group in the fashion and skateboarding sector would include younger and middle-aged persons, and informal or vulgar language was not unusual for this group.
(GC judgment of 15.3.2023, T-178/22)
Distinctiveness of the sign "DALÍ MUSEUM BERLIN" (BPatG)
The German Federal Patent Court (BPatG) recently dealt with the distinctiveness of the word/figurative mark "DALÍ MUSEUM BERLIN" shown below, protected for a variety of goods and services in classes 16, 21, 25 and 41, in the context of invalidity proceedings. The invalidity action filed against this mark on the grounds of lack of distinctiveness was dismissed by the German Patent and Trademark Office, as the graphic design was considered distinctive.
The applicant appealed this decision, arguing that the sign was descriptive and that the name of Salvador Dalí, whose rights to his name and personality were administered by the applicant, should not be monopolised. The appeal before the BPatG was unsuccessful. The BPatG clarified that names (including of famous historical persons) generally are inherently distinctive and are therefore suitable as an indication of origin. However, this did not apply if the names were understood exclusively as a factual or advertising statement. This is the case if the proper name is used to designate goods and services that are closely connected with the person designated or their works.
Although in the case at hand, a directly descriptive connection is recognisable, the concrete combination of the figurative and verbal elements at least renders the sign distinctive and eligible for protection. There was also no need to keep the overall sign free.
(BPatG, decision of 8.2.2023, 29 W (pat) 24/20)
New trademark cancellation proceedings at the Spanish PTO – a success story
The launch of administrative cancellation proceedings marked a milestone in Spanish trademark law and practice on 14 January 2023: the Spanish Patent and Trademark Office (PTO) is now competent for trademark invalidation and revocation proceedings (referred to collectively in the following as “cancellation proceedings”).
The cancellation of Spanish trademark and commercial name registrations (as well as of IR marks designating Spain) previously required a full-fledged court action at the commercial courts, but PTO cancellation proceedings have meanwhile been established as part of the implementation of the European Union Trademark Harmonization Directive (Directive (EU) 2015/2436), which required member states to provide for “an efficient and expeditious administrative procedure before their offices” for the revocation or declaration of invalidity of a trademark by 14 January 2023.
As opposed to other EU member states which introduced such PTO proceedings as an additional option at the choice of the plaintiff and not as the exclusive forum for main trademark cancellation actions, Spain went down the path of establishing an exclusive competence of the Spanish PTO for main trademark cancellation proceedings. As a result, it is no longer possible to initiate main cancellation proceedings at the commercial courts but only at the Spanish Patent and Trademark Office. The commercial courts, however, remain competent for counterclaims for a cancellation brought by the defendant in trademark infringement proceedings.
The experience to date shows that these new proceedings are living up to the expectation of being a fast, efficient and cost effective way to attack third party trademarks. Whereas in the past, potential plaintiffs may have shied away from the significant efforts connected with a commercial court action, the first half year of the Spanish PTO cancellation proceedings saw a regular influx of new actions and even the issuance of many decisions both on substance and procedural grounds.
By the end of July 2023, i.e. only a little more than half a year after the PTO cancellation proceedings have come into existence, 135 applications for revocation and a similar number of applications for declaration of invalidity have been filed.
Whilst the law currently provides for a maximum time period of 20 months for the Spanish PTO to deliver its decisions in this type of proceedings, fortunately that is not the time frame that we see so far in practice. According to the data published in the Spanish PTO’s IP Bulletin, between 26 May and 31 July 2023 alone, when the first proceedings had gone through the full phase of written adversarial proceedings, the Spanish PTO decided to cancel 35 registrations (25 revocations based on non-use – only in part in one case - and 10 invalidations based on other grounds) and rejected on substance 8 requests for the declaration of invalidity. The Spanish PTO also rejected a range of revocation and invalidity applications as inadmissible and took note of the withdrawal of various cancellation applications. In comparison, in the full year 2022, the Spanish PTO published revocations for non-use as a result of court proceedings for only 23 registrations, many of which related to judgments issued before 2022 and following years of litigation.
The new procedures have enabled cancellation applicants to receive decisions on the cancellation of Spanish trademark registrations, commercial names and IR marks designating Spain in less than half a year from filing the actions, whereas this previously often required years of litigation (out of the 35 PTO cancellation decisions issued on substance published up to 31 July, the fastest was adopted in less than three months from the initiation of action and in the slowest case, the decision came down six months and one week from the initiation of the action). This quick turnover is particularly noteworthy taking into account that 40% of the revocation actions decided on substance and published up to 31 July concerned cases in which the registered trademark owner had filed evidence of use.
Both trademark owners and cancellation applicants need to be mindful, though, that rather tight timings operate in Spanish PTO cancellation proceedings. Trademarks owners will be given a two-month time period from the publication of the notification of the actions for responding to the actions. In practice, this time frame can be rather tight particularly in non-use cancellation proceedings where the trademark owner bears the full burden of proof, and where gathering evidence of use may be complex. In invalidity proceedings, cancellation applicants should be mindful of the proof of use defense where they base such actions on prior marks subject to the use requirement and be aware that they may be required to prove the use of the opposing marks on quite short notice (one month from the publication of the proof of use request). Depending on the circumstances of the case, the requirement to prove use may also relate to two different time periods (five years prior to the priority or filing date of the mark under attack and five years prior to the initiation of the invalidity action). Applicants for invalidity should weigh this up prior to initiating the action. Similarly, despite the lower threshold involved in initiating invalidity proceedings in terms of efforts and costs, parties interested in initiating invalidity actions should also be mindful about factors such as grounds of preclusion and make sure to adopt a comprehensive strategy taking all potential implications about initiating such actions in mind.
Relevant territory for proof of use in oppositions based on EUTMs at the Spanish PTO
As of 2019 and as a result of the implementation of the EU Trademarks Harmonization Directive (Directive (EU) 2015/2436) in Spain, applicants for Spanish trademarks can request proof of use of opposing marks registered for at least five years at the date of priority or filing of the opposed sign.
This defense was implemented into Spanish law via modification of Article 21 of the Spanish Trademarks Act. Art. 21.3 establishes the proof of use defense and refers to Art. 39 (which regulates further details on the use requirement for Spanish trademarks). Art. 21.6 specifically relates to opposing EU trademarks and provides that the evaluation of genuine use of EU trademarks is to be made in accordance with Art. 18 of the EU Trademark Regulation (Regulation (EU) 2017/1001). The standard according to that provision is “genuine use in the European Union”.
Recent case law of the Superior Court of Justice of Madrid (Tribunal Superior de Justicia de Madrid, Contentious-Administrative Chamber, Second Section) has led to some controversy about the relevant territory for proof of use of EU trademarks in trademark opposition proceedings in Spain.
Initially, a judgment of 28 June 2022 (appeal 224/2021) caused some debate last year. In that judgment, the Superior Court of Justice surprisingly took the position that the opponent, which had opposed based on a prior EUTM, had been required to prove use in respect of Spain (rather than elsewhere in the EU). The court relied only on Art. 21.3 of the Spanish Trademarks Act without mentioning the special (and critical) provision for an opposition based on an EUTM, Art. 21.6. Since the submitted proof of use related to other EU countries and not Spain, the court concluded that no sufficient use had been proven and allowed the registration of the opposed application, which is now registered.
Interestingly, just one month later (28 July 2022, appeal 258/2021), the same court and section (with a different reporting judge) took a contrary position and differentiated in respect of the relevant territory for which use had to be shown between opposing Spanish marks, on the one hand, and opposing EUTMs, on the other. The critical provision of Art. 21.6 was expressly referenced for the latter, which suggested that the 28 June 2022 judgment might remain an isolated decision which was corrected by the 28 July 2022 judgment.
Some confusion remains, however, as earlier this year, two further decisions were issued by the same section which mirrored both of the contrary positions taken in the judgments of 28 June and 28 July 2022, respectively. The first one (16 January 2023, appeal 584/2021) repeated the position that it was necessary to show use of an opposing EUTM in Spain (a condition which the court considered met in that case, based on which the question of the relevant territory was not actually decisive), again without mentioning the special provision for opposing EUTMs, Art. 21.6. However, the second judgment (9 March 2023, appeal 78/2022) again differentiated in respect of the relevant territory between Spanish marks and EUTMs in line with the 28 July 2022 judgment.
Again, the critical provision for the evaluation of an opposition based on a prior EUTM is Article 21.6 Spanish Trademarks Act, which refers to the standard of “genuine use in the European Union”. The judgments of 28 June 2022 and 16 January 2023 appear to be at odds with that critical provision, which they do not even mention, whereas the judgments of 28 July 2022 and 9 March 2023 do rely on it. Hopefully further case law will clarify beyond doubt that the standard for the proof of use is Article 18 EUTMR, i.e. “genuine use in the European Union” (and not necessarily Spain).
It should be noted that the court that had issued the reported decisions will no longer be in charge of new cases of appeals against Spanish PTO decisions as the competences for such appeals recently changed. Meanwhile, in light of the case law indicated above, it cannot be excluded that the relevant territory for showing use may become an issue in Spanish trademark opposition proceedings based on prior EUTMs. In light of this, inclusion of evidence relating to Spain (where available) should be considered to exclude any potential issues.
Terms descriptive in foreign languages (including English) may – or may not – be considered distinctive in Spain
Can terms that are descriptive in English be freely used as part of trademarks or packaging in Spain? It depends – not necessarily. Business owners need to be mindful that it cannot be taken for granted that terms that are descriptive in foreign languages (even in the case of English) are freely available for use in Spain – depending on the perception of the term at issue in Spain, such terms may well be qualified as distinctive terms and be subject to trademark protection. This should be kept in mind for plans for registering and using trademarks in Spain as well as for the use of language intended as descriptive on packaging.
In fact, the traditional Spanish jurisprudence considers foreign language terms as fantasy terms unless their meaning is understandable for the public. The Court of Justice of the European Union (judgment of 9 March 2006, C-421/04) clarified in this respect that EU trademark law (then Directive 89/104/EEC) does not preclude the registration in a Member State, as a national trade mark, of a term borrowed from the language of another Member State in which it is devoid of distinctive character or descriptive of the goods or services in respect of which registration is sought, unless the relevant parties in the Member State are capable of identifying the meaning of the term.
The examination guidelines on absolute grounds of refusal of the Spanish Patent and Trademark Office point out that the general rule is that foreign terms are not descriptive unless, due to their similarity to Spanish, common and intense use or the lack of a precise equivalent in Spanish, they have become widespread or even prevailing over a Spanish term in daily use, based on which they can be easily recognizable and identifiable by a broad sector of the population or the consumers as indicative of the nature, characteristics or intended purpose of the goods or services.
The Spanish PTO also indicates in these guidelines that the understanding of the target public is to be taken into account and refers to case law of the General Court of the European Union on a basic proficiency in English of a big part of the European consumers and professionals and on the knowledge of English in certain sectors. The guidelines mention as examples of signs that were refused as descriptive the expressions SUPER SUNGLASSES (in class 9), ECO FOOD (in class 29), IDEAL HOMES (in class 36) and SELECTED HOMES (in class 36).
In light of the above, the Spanish trademark register contains registrations containing foreign terms which may elsewhere be considered descriptive or non-distinctive. Trademark owners may be able to enforce trademarks with such elements even in circumstances where in other countries (e.g. English speaking countries) the overlap in a certain element which is descriptive in the language at stake may not lead to issues. On the other hand, one also regularly finds examples where the Spanish PTO objects to and refuses terms/expressions with arguably descriptive terms in foreign languages such as English.
All in all, the descriptive character and extent of distinctiveness of foreign language terms needs to be examined on a case by case basis from the perspective of the local public. Recent case law illustrates some of the issues that may arise in practice in the evaluation of the distinctive character of foreign language terms both in the context of registration and enforcement:
- In a judgment of the Court of Appeal (Audiencia Provincial) of Madrid (judgment of 7 October 2022, 733/2022), the court held that the use of the sign BODYTONE EVOLUTION was an infringement of the prior mark BODYTONE. Whilst it considered that the public would understand the meaning of BODY and TONE, it considered that the combination of these terms in the mark BODYTONE was sufficiently distinctive.
- The Superior Court of Justice of Galicia (judgment of 24 February 2021, 71/2021) allowed for the registration of the trademark “Red Car Oil Gasolineras Lowcost” in spite of the opposition based on the prior mark “Red Ahorro 24” (“ahorro” means “saving” based on which the opponent had alleged a conceptual similarity). The court stated that the terms “Car Oil” and “Lowcost” had to be considered distinctive based on their character as foreign language terms alone without looking at the perception of those concrete terms. This raises issues with the compatibility with the Supreme Court jurisprudence according to which the perception of the concrete terms at issue had to be looked at.
- On the other hand, the Superior Court of Justice of Madrid (judgment of 8 November 2021, 628/2021) allowed the registration of the mark “SWIPE RIGHT” in class 45 for inter alia dating services, which had been refused by the Spanish PTO Appeal Unit due to a third party opposition based on lack of distinctiveness, descriptiveness and genericness. Contrary to the Appeal Unit’s assessment, the court considered that based on the evidence before it, it could not conclude that the foreign language expression “SWIPE RIGHT” was recognizable for the average consumer of the services and that it may be descriptive or devoid of distinctiveness. It relied in this context on a market study filed by the applicant in the court proceedings about the perception of this term according to which the majority did not know this expression.
These are just some examples of the issues that the use of trademarks consisting of or containing foreign language terms may trigger. International businesses should therefore be mindful of the possible issues arising from the use and registration of signs containing foreign language terms in Spain.
Disclaimer: Please note that the decisions included in this newsletter are a subjective selection of relevant trademark decisions made by the authors without any claim to completeness.
