The Authors' Take - Louboutin v Van Haren

AG Szpunar’s position on Louboutin’s red sole mark: 

a shoo-in for a shape mark

by Luxmi (“Lux”) Rajanayagam

Queen Mary, University of London

Is Louboutin’s red sole mark (shown below) a position mark, a colour mark or a shape mark?

That was the starting point for Advocate General (AG) Szpunar in his Opinion in Case C-163/16 Christian Louboutin, Christian Louboutin SAS v Van Haren Schoenen BV EU:C:2017:495 (22 June 2017).

Louboutin sued Dutch footwear retailer, Van Haren, for infringing the Benelux registration of its red sole mark by selling high-heeled women’s shoes with red soles.  In response, Van Haren contended the red sole mark was invalid since it was a 2D mark in which the colour red, when applied to the soles of shoes, conformed to the shape of the shoes, thereby giving them substantial value.     

The District Court of The Hague, Netherlands is now seeking guidance from the Court of Justice of the European Union (CJEU) on whether the notion of ‘shape’ pursuant to the absolute ground for refusal or invalidity under Article 3(1)(e)(iii) of the Trade Mark Directive (2008/95/EC), which concerns signs consisting exclusively of the shape which gives substantial value to the goods, includes non-3D properties of the goods such as their colour.

According to the AG, Louboutin’s red sole mark is neither a position mark nor a colour mark but a shape mark, specifically “a mark consisting of the shape of the goods and seeking protection for a colour in relation to that shape.”  Accordingly, Louboutin’s red sole mark potentially falls within the prohibition under Article 3(1)(e)(iii).  However, as the AG pointed out, the concept of shape which “gives substantial value” relates only to the intrinsic value of the shape and not to the reputation of the mark or its owner.

To overcome the prohibition under Article 3(1)(e)(iii), Louboutin will need to prove that the attractiveness of its red-soled high heels arises from the reputation of its red sole mark or as the owner of that mark and not from the intrinsic value of the shape.  On the face of it, that should not be too difficult since it is because consumers are head over heels for Louboutin’s red-soled high heels that competitors have created their own copycat versions.

Let’s however wait to hear what the CJEU says.

[This is an Authors' Take post, which provides readers with an insight into current IP scholarship, featuring preliminary comments and thoughts from authors of articles accepted for publication in forthcoming issues of the Journal of Intellectual Property Law & Practice (OUP).]

The Rubik’s Cube to lose its shape mark protection

In our latest issue, Joel Smith and Sarah Burke (Herbert Smith Freehills LLP) discuss the recent decision of the CJEU in Case C-30/15 P Simba Toys GmbH & Co. KG v EUIPO, concerning invalidity challenges brought against the registration of the Rubik's cube as Community trade mark (now EU TM) no. 000162784. The General Court, in Case T-450/09, had upheld the EUIPO's decisions (Cancellation Division here and Board of Appeal here) to dismiss the application for a declaration of invalidity. The CJEU, however, decided to set aside the judgment of the General Court, ruling that the application of Article 7(1)(e)(ii) of Regulation 40/94 (applicable here due to the timeframe of the facts in question) requires an assessment of the essential characteristics of a shape in light of the technical function of the actual goods concerned.

The Rubik’s Cube to lose its shape mark protection 

Joel Smith and Sarah Burke
Herbert Smith Freehills LLP
Emails: joel.smith@hsf.com and sarah.burke@hsf.com

In its decision on 10 November 2016, the Court of Justice of the European Union set aside the judgment of the General Court and annulled the European Union Intellectual Property Office’s (EUIPO) decision allowing registration of the 3D shape of a Rubik’s Cube as a trade mark; non-visible functional elements such as the Cube’s rotating ability should have been taken into account by the EUIPO and the General Court in deciding whether registration should be allowed.

Legal context 

Simba Toys sought to invalidate the Rubik’s Cube shape mark under various grounds within Council Regulation 40/94 (the Regulation) and the Community Trade Mark Regulation 207/2009: OJ 1994 L 11, p.1 (CTMR). Whilst the Regulation was replaced by the CTMR, the invalidity action started before it came into effect so Regulation 40/94: OJ 2009 L 78, p.1 is the relevant Regulation for the purposes of this case. 

Article 7 of the Regulation contains the absolute grounds for refusal of registration of marks. There are three specific exclusions in relation to shape marks as set out in Article 7(i)(e)(i) to 7(i)(e)(iii) of the Regulation. Article 7(i)(e)(ii) of the Regulation sets out that shape marks may be refused if the sign consists exclusively of the shape which is necessary to obtain a technical result. 

As the Court of Justice of the European Union (CJEU) upheld Simba Toy’s first ground of appeal in relation to Article 7(i)(e)(ii) of the Regulation, it did not consider the other grounds of appeal as advanced by Simba Toys, so the CJEU only considered arguments relating to the technical result of a shape. 

Facts 

The Rubik’s Cube is one of the best-selling toys of all time. In 1999, Seven Towns Ltd registered the following depiction of the Rubik’s Cube as a European Union Trade Mark (EUTM) in class 26 for ‘three-dimensional puzzles’: 

In 2006, Simba Toys filed a declaration of invalidity with the European Union Intellectual Property Office (EUIPO) (formerly Office for Harmonization in the Internal Market, OHIM), which was rejected by the cancellation division in 2008. An appeal was lodged by Simba Toys in 2008, but this was dismissed by the Second Board of Appeal in 2009. Simba Toys appealed to the General Court seeking annulment of the Board of Appeal’s decision. The General Court dismissed the cancellation action in November 2014, ruling that the Rubik’s Cube can be validly registered as a shape mark as the way in which the mark is graphically represented does not involve a technical solution. Simba Toys appealed. In May 2016, Advocate General Szpunar provided his Opinion (Simba Toys GmbH & Co. KG v EUIPO, C-30/15 P, EU:C:2016:350) and, finally, in November 2016 the CJEU handed down its judgment. 

Analysis 

Trade mark law constitutes an essential element in the system of competition in the EU and part of that system is that: (1) undertakings must be able to register trade marks in order to attract customers, and (2) trade marks shall enable consumers to distinguish the relevant undertaking’s goods and services from others which have a different origin. However, the purpose of Article 7(1)(e)(ii) of the Regulation is to prevent trade mark law from granting anyone a monopoly on technical solutions or functional characteristics of a product. 

Citing its previous judgment in Lego Juris A/S v OHIM and Mega Brands, Inc (C-48/09 P, EU:C:2010:516), the CJEU stated that ‘correct application of that provision requires that the essential characteristics of the three-dimensional sign at issue be properly identified’ (para 40). The General Court had previously found that the grid structure on each surface of the Cube at issue did not perform any technical function since the fact that the structure had the effect of visually dividing each surface of the cube into nine equal squares could not constitute a technical function for the purposes of the relevant case law. 

The CJEU disagreed with this finding. In order to analyse the functionality of a sign for the purposes of Article 7(i)(e)(ii) of the Regulation (which concerns only signs which consist of the shape of the actual goods), the essential characteristics of the shape must be assessed in the light of the technical function of the actual goods concerned (citing Lego Juris v OHIM). The General Court should have defined the technical function of the actual goods (ie a 3D puzzle) and should have taken this into account when assessing functionality of the essential characteristics of that sign. Accordingly, the General Court had interpreted the criteria for assessing Article 7(1)(e)(ii) too narrowly. The competent authority must carry out a detailed examination that takes into account material relevant to defining the essential characteristics of a sign in addition to the graphic representation and any descriptions filed at the time of the trade mark application. 

Contrary to what the General Court had found, the CJEU held that ‘the essential characteristics of a shape must be assessed in the light of the technical function of the actual goods concerned’ (para. 46). As such, the General Court should have taken non-visible elements of the graphic representation of the Rubik’s Cube into consideration, including the rotating capability of the individual elements in the Rubik’s Cube 3D puzzle. It was irrelevant that the trade mark application as filed did not mention rotating capability. The court was still entitled to take these functions into account. As the General Court had erred in law, the CJEU annulled its decision on the ground of infringement of Article 7(1)(e)(ii) of the Regulation. 

Whilst the EUIPO will have to re-assess its decision on the validity of the trade mark in due course, it seems highly unlikely that it will allow the mark to remain on the trade marks register in light of the CJEU’s judgment on technical result. 

Practical significance 

Following this decision, life will not be any easier for brand owners wishing to protect shapes as trade marks: this case follows a line of case law (including the ‘KitKat’ decision in Société des Produits Nestlé SAv Cadbury UK Ltd, C-215/14, EU:C:2015:604, in 2016), which makes it clear that shape marks are very difficult to obtain and keep. 

In this case, the CJEU looked beyond the graphic representation of the trade mark and considered the Cube’s invisible technical qualities. It does not matter if the graphical representation of a trade mark does not specifically show a technical function—a competent authority is still entitled to consider how the mark as depicted might function as a shape in real life and this makes it more likely to fall within the Article 7(1)(e) exclusions to registration for shape marks. This decision may well make registry proceedings involving shape marks more complicated as it is clear that invisible features of the sign and/or evidence of how the shape is used in practice may come into play in deciding whether to allow registration of the sign at hand. 

Public policy considerations will always be paramount with shape marks. This is so because a shape mark is a very powerful right which can offer a perpetual monopoly. From this perspective, the decision is perhaps not altogether surprising. The Rubik’s Cube was previously protected by a patent and although this was not taken into consideration by the CJEU, it is of course possible to draw analogies with the Lego Juris vOHIM case, where the Lego brick was refused protection as a shape mark with one of the reasons being that it had previously enjoyed patent protection. 

Whilst third parties will now be able to manufacture and sell puzzles in this same shape, the decision does not mean that third parties can now freely copy the Rubik’s Cube: other forms of IP protection might be available. Indeed, in a statement following the judgment, the owners of the Rubik’s Cube have stated that ‘the Rubik Brand is fortunate in having other trademarks, copyright, passing off and unfair competition protection to rely on which will continue to ensure its exclusivity’ (The Guardian, 10 November 2016).   

© The Author(s) 2017. Published by Oxford University Press. All rights reserved. 

Hauck v Stokke: CJEU clarifies ‘nature of goods’ and ‘substantial value’ exceptions in relation to shape marks

Author: Jonty Warner (King & Wood Mallesons)

Hauck GmbH & Co KG v Stokke A/S and others, Case C-205/13, EU:C:2014:2233, Court of Justice of the European Union, 18 September 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu226, first published online: December 23, 2014

The Court of Justice of the European Union has provided clarification regarding the interpretation of the grounds in Articles 3(1)(e)(i) and (iii) of the Trade Marks Directive which preclude the registration as trade marks of signs which consist exclusively of the shape which ‘results from the nature of the goods themselves’ or the shape which ‘gives substantial value to the goods’.

Legal context

Article 3(1)(e) of Council Directive 89/104 on Trade Marks (subsequently repealed and re-enacted) provides:

The following shall not be registered or if registered shall be liable to be declared invalid: …

(e) signs which consist exclusively of:

the shape which results from the nature of the goods themselves, or

the shape of goods which is necessary to obtain a technical result, or

the shape which gives substantial value to the goods.

Facts

Stokke sold its famous ‘Tripp Trapp’ children's chair, in particular, in the Scandinavian and Dutch markets for several decades. The chair comprises sloping uprights and sliding plates, which can be adjusted so that the chair continues to fit a child as it grows older. In 1998, Stokke obtained a Benelux trade mark registration for the following shape resembling the ‘Tripp Trapp’ chair:

Hauck made and sold two children's chairs named ‘Alpha’ and ‘Beta’. Stokke brought an action against Hauck before the District Court of The Hague for infringement of copyright in the ‘Tripp Trapp’ chair and infringement of its Benelux trade mark registration. Hauck counterclaimed for a declaration that the mark was invalid. The court decided that Hauck had infringed Stokke's copyright, but upheld Hauck's counterclaim that the trade mark was invalid on the grounds that the sign consisted exclusively of a shape corresponding to the grounds for invalidity set out in Articles 3(1)(e)(i) and (iii) of the Trade Marks Directive in that the shape of the ‘Tripp Trapp’ chair resulted from the nature of the product itself and the appearance of the ‘Tripp Trapp’ chair gave the product substantial value. The Court of Appeal of The Hague upheld the decision in relation to the findings of both copyright infringement and invalidity of the mark. In relation to the grounds for invalidity under Article 3(1)(e), the Court of Appeal considered that the attractive appearance of the chair gave it substantial value and its shape was determined by the very nature of the product, it being a safe, comfortable, reliable children's chair.

On further appeal, the Netherlands Supreme Court referred three questions to the Court of Justice of the European Union (CJEU), summarized as follows:

1. Does the ground for refusal in Article 3(1)(e)(i) refer to a shape which is indispensable to the function of the goods, or can it also refer to the presence of one or more substantial functional characteristics of goods which consumers may possibly look for in the goods of competitors?

2. Does the ground for refusal in Article 3(1)(e)(iii) refer to consumers' motive for purchasing the goods? Further, does the ground only apply if the shape is the main or predominant value of the goods, or does it also apply if other substantial values of the goods (such as safety, comfort and reliability) exist? When assessing whether the value is ‘substantial’, is the opinion of the majority of the relevant public decisive, or can the opinion of a portion of the public suffice (if so, what size must the portion of the relevant public be?)

3. Can the grounds for refusal in Article 3(1)(e)(i) and (iii) be applied in combination?

Analysis

Nature of the goods

The CJEU has consistently held that the various grounds for refusal of registration in Article 3 must be interpreted in the context of the public interest underlying them. In relation to the shape objections in Article 3(1)(e), the court followed the Opinion of Advocate General Szpunar that each of the provisions of Article 3(1)(e) pursued the same objective and, accordingly had to be interpreted in a consistent manner.

In Philips (Case C-299/99, EU:C:2002:377) the CJEU had decided that the rationale underlying Article 3(1)(e)(ii) (shape of goods necessary to obtain a technical result) was to prevent trade mark owners gaining a monopoly on technical solutions or functional characteristics of a product which a user was likely to seek in the products of competitors. Meanwhile, in Lego Juris v Office for Harmonization in the Internal Market (OHIM) (Case C-48/09 P, EU:C:2010:516), the court had identified that the aim of Articles 3(1)(e)(ii) and (iii) was to prevent trade mark protection, effectively extending indefinitely the life of rights which the EU legislature intended to be subject to limited periods (ie, predominantly registered designs but also patents).

Taking these objectives into account, the CJEU emphasized that, in accordance with its decision in Lego Juris, the ground for refusal in Article 3(1)(e)(i) would not apply if another element of the shape of the goods, such as a decorative or imaginative element which was not inherent to the generic function of the goods, played an important or essential role. The CJEU rejected the interpretation that Article 3(1)(e)(i) would only apply to signs consisting exclusively of a shape which was indispensable to the function of the goods in question. Such a restrictive interpretation would not, the court said, allow producers of goods scope to make a ‘personal essential contribution’ to the product and would effectively limit the provision to refusal of protection for products whose shape was prescribed by legal standards or ‘natural’ products, which had no substitute.

Accordingly, the court concluded, the ground for refusal in Article 3(1)(e)(i) extends to signs which consist exclusively of the shape of a product with one or more essential characteristics which are inherent to the generic function or functions of that product and which consumers may be looking for in the products of competitors.

Substantial value

The second question concerned Article 3(1)(e)(iii), ie, shapes which give substantial value to the goods. The Dutch Court of Appeal had decided that, although the shape of the ‘Tripp Trapp’ chair gave it significant aesthetic value, it also had other characteristics (such as safety, comfort and reliability) which gave it essential functional value. The CJEU held that Article 3(1)(e)(iii) could apply to the shape of products where, in addition to its aesthetic function, the shape also performs essential functions. Otherwise, it noted, products which have essential functional characteristics in addition to a significant aesthetic element would not be covered, and the objectives of Article 3(1)(e) would not be fulfilled.

Further, the presumed perception of the sign by the average consumer was not decisive in considering this ground, but was one of a number of factors which had to be considered. As indicated by the Advocate General, other criteria could include the category of goods concerned, the artistic value of the shape in question, its dissimilarity from other shapes in common use on the market, a substantial price difference in relation to similar products, and the development of a promotion strategy focusing on the aesthetic characteristics of the product.

Grounds to be applied independently

The third issue was whether the provisions of Articles 3(1)(e)(i) and (iii) could be applied in combination. Noting that the three provisions of Article 3(1)(e) were set out successively, and that the word ‘exclusively’ was used, the CJEU concluded that they should be applied independently of each other. Accordingly, even if only one of the three provisions fully applied to a sign, the court stated that a sign consisting exclusively of the shape of a product could not be registered.

Practical significance

The case will now return to the national court for it to apply the CJEU's ruling. Given, in particular, the finding in the Dutch proceedings that the shape of the Tripp Trapp chair gives it significant aesthetic value in addition to those characteristics that give it essential functional value (such as safety, comfort and reliability), it appears likely that the finding of invalidity will be upheld. The CJEU's decision is likely to mean that applicants will continue to face significant obstacles in registering shape marks, especially when such marks are for the shape of the product, even when such shapes have acquired distinctive character through use. In many cases, of course, it will be possible for design protection to be obtained, albeit for a limited period, provided this is applied for before, or shortly after, public disclosure.

In the meantime, the CJEU will hear argument in due course on a reference from the High Court, England and Wales, in Société des Produits Nestlé SA v Cadbury UK Ltd [2014] EWHC 16 (Ch) (C-215/14) concerning Nestlé's application to register the shape of the Kit Kat chocolate bar as a UK trade mark. The main focus of the reference is on the issue of acquired distinctiveness but Arnold J has also sought clarification in respect of Article 3(1)(e).