Gold bear wars reloaded

Author: Birgit Clark (Venner Shipley LLP, London)

Higher Regional Court of Cologne (Oberlandesgericht Köln), Case ref: 6 U 230/12, 11 April 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu128, first published online: July 16, 2014

Disagreeing with the first instance court, the Higher Regional Court of Cologne held that sweetmaker Lindt's three-dimensional gold-foiled chocolate bears did not infringe Haribo's well-known GOLDBÄREN gummy bear (word) trade marks.

Legal context

In accordance with Article 5(2) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.

Facts

German confectioner Haribo had sold its multi-coloured gummy bears wrapped in gold-coloured packaging since the 1960s and owned various registered trade mark rights in these, inter alia, covering confectionery: GOLDBÄR (in English: gold bear) and its plural form GOLDBÄREN as well as its ‘Goldbär device’; a yellow-gold coloured bear device wearing a red ribbon bow. Haribo's competitor, Swiss confectioner Lindt, producer of the well-known chocolate Gold Bunnies, had made and sold gold-foil wrapped chocolate bears (the ‘Lindt Teddy’, wearing a red ribbon bow) since 2011. Haribo took objection and brought a claim against the distribution of Lindt's chocolate bears in Germany based on its trade mark rights, asking for information, damages and the destruction of Lindt's products. In essence, Haribo argued that Lindt's bears amounted to a three-dimensional representation of Haribo's gummy bear trade marks. Lindt denied infringement and argued that gold foil and red ribbon as used on its chocolate Lindt Teddies were the same as those used on its well-known Easter chocolate Gold Bunnies. Lindt also stressed that it had intentionally refrained from using brand names such as ‘Goldbär’ or ‘Gold Teddy’ and that gold was a traditional Christmas colour. The Swiss chocolate maker thus invited the court to find that the competing products did not look in any way similar so that consumers would not be confused.

Analysis

The first instance court, the Regional Court of Cologne (Landgericht Köln, 33 O 803/11, 18 December 2012) agreed with Haribo and held that Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word mark under Article 14(2) No 3 MarkenG. In view of the Landgericht, the appearance of the shape of Lindt's chocolate bears inevitably produced connotations with Haribo's bears.

Bearing in mind that there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design, the first instance judges emphasized that that there could be similarity between different ‘categories of trade marks’.

The Landgericht therefore applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783—Zwilling/Zweibrüder) and according to which there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers.

On Lindt's appeal to the Higher Regional Court of Cologne, the appeal judges agreed with Lindt and confirmed the lower court's view that—in theory—a word trade mark, such as ‘Goldbär’, could be infringed by a three dimensional shape, such as the defendant's chocolate teddy. However, the appeal court did not agree with the Landgericht's application of the Bundesgerichtshof's precedents in the Oldtimer and Zwilling/Zweibrüder cases on a potential similarity between different ‘categories of trade marks’. The appeal judges agreed with both parties that Lindt's teddy shape was a complex sign but did not believe that the allegedly infringed sign (here: Haribo's gold bear) was the obvious, unforced, self-contained and distinctive title and thus the closest and most fitting description of the Lindt teddy shape. The judges explained that there were several additional levels of abstraction that separated the chocolate teddy shape from the Goldbär word mark.

Further, the overall impression conveyed by Lindt's teddy was not only based on its shape and gold colour wrapping, red ribbon and the imprint of ears, face and paws but also affected by the fact that Lindt's name and logo and the words ‘Lindt Teddy’ were prominently displayed on the teddy's stomach. In this context the court also referred to the Higher Regional Court of Frankfurt's precedent in the Gold Bunnies dispute cases between Lindt and its competitor Riegelein (GRUR-RR 2012, 255), in which the Frankfurt court had found that that the shape and colour of the Gold Bunnies were of a lower level of distinctiveness than the respective word elements (‘Lindt’ versus ‘Riegelein’) displayed on the bunnies. Applying this guidance to the case at hand, the Cologne judges concluded that that consumers would regard the word element ‘Lindt-Teddy’ in particular as an indication of origin, bearing in mind that the ‘Lindt-Teddy’ was a seamless addition to Lindt's established Gold Bunny product line. The court thus disagreed with Haribo's view that Lindt had taken unfair advantage of Haribo's Goldbär by ‘approximating’ its Lindt teddy to Haribo's gold bears in order to exploit the expectations of quality that consumers associate with Haribo's bears. The judges further explained this by pointing out that Lindt was a well-known confectionery manufacturer and the allegedly infringing Lindt Teddy product an obvious addition to Lindt's product line of gold-foiled chocolate shapes.

Practical significance

Whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) may equally be applied to conflicts between word marks and three-dimensional shapes is a crucial one, bearing in mind the impact this can have on search strategies and advice when it comes to clearing any category of (shape) trade mark (or designs) for use and registration in Germany. In its closing remarks the Higher Regional Court of Cologne stated that the question of such a ‘cross collision’ (Überkreuzkollision) of trade marks was indeed of a ‘fundamental nature’. It is now expected that Haribo will appeal the matter to the Bundesgerichtshof, which may in turn even refer the question to the Court of Justice of the European Union for pan-European guidance.

Community trade mark for Lego brick is knocked down

Authors: Jeremy Drew and Tamar Shafran (Reynolds Porter Chamberlain)

Journal of Intellectual Property Law & Practice, first published online 11 January 2011

Lego Juris A/S v Office for Harmonisation in the Internal Market, Mega Brands Inc. Case C 48/09 P, 14 September 2010

The Court of Justice of the European Union held that the iconic Lego brick shape cannot be registered as a Community trade mark since that shape is necessary to obtain a technical result.

Legal context

For as long as Community trade marks have existed it has been possible to register shapes as Community trade marks (Article 4 of Community Trade Mark Regulation 40/94, re-enacted in the consolidating Regulation 207/2009). Article 7(1) of the same Regulation sets out absolute grounds for refusal to register a trade mark. These grounds include signs which consist exclusively of the shape of goods which is necessary to obtain a technical result (Article 7(1)(e)(ii)). A shape mark which is barred from registration Article 7(1)(e)(ii) cannot become registrable by acquiring distinctiveness through use because it is not listed in Article 7(3) in the categories of marks which are capable of acquiring distinctiveness.

Facts

In 1996 Danish toy manufacturer Lego filed a Community trade mark application for the shape of its toy brick. OHIM registered the trade mark on 19 October 1999. Two days later Mega Brands, a competitor of Lego, applied to invalidate the trade mark which, it argued, should not have been registered since it was absolutely barred from registration. Among other things, Mega Brands argued that the Lego brick shape consisted exclusively of a shape which was necessary to obtain a technical result (Article 7(1)(e)(ii)).

During the subsequent 10 years the ECJ provided some clarification as to the registrability of shape marks (Case C-299/99 Philips [2002] ECR I-5475) by stating that a sign consisting exclusively of the shape of a product would be unregistrable where the essential functional features of that shape were attributable only to the technical result.

In 2004 Lego's brick shape was declared invalid by the Cancellation Division on the basis that the mark consisted exclusively of the shape of goods which was necessary to obtain a technical result (Article 7(1)(e)(ii)). Lego unsuccessfully appealed to the Grand Board of Appeal and the Court of First Instance (now the General Court) which in 2008 held that the addition of non-essential characteristics having no technical function was not sufficient to remove a shape mark from the ambit of Article 7(1)(e)(ii) where all the essential characteristics of that shape performed a technical function. Article 7(1)(e)(ii) also applied where there was more than one shape to achieve the same technical result.

Lego appealed to the Court of Justice (CJ), arguing that the General Court had:

* misinterpreted the scope of Article 7(1)(e)(ii) and departed from guidance set out in Philips;

* used the wrong criteria to ascertain the essential characteristics of three-dimensional shapes in failing to take into account the target consumer; and

* used incorrect criteria to determine the functionality of the characteristics of the shape.

The analysis below focuses on Lego's first argument which concerned the scope of Article 7(1)(e)(ii).

Analysis

The CJ considered Lego's argument that Article 7(1)(e)(ii) did not preclude the registration of any shapes which performed a technical function, but precluded only those shapes which created a monopoly on technical solutions or functional considerations. It also looked at Lego's submission that guidance given in Philips was disregarded when the General Court held that the availability of alternative shapes to perform the same technical function was irrelevant.

The CJ considered the balance between competition in the European Union and monopoly rights granted under intellectual property law: the purpose of Article 7(1)(e)(ii) was to prevent shape marks being used to create a monopoly on technical solutions or functional characteristics of a product. There were similar provisions in Community Design Regulation 6/2002. The condition of the shape ‘exclusively’ performing a technical function was satisfied where all essential characteristics of the sign performed a technical function. The fact that a shape may have additional non-essential characteristics would not take it outside the scope of Article 7(1)(e)(ii) if all the essential characteristics performed a technical function.

Rejecting Lego's argument that, where several shapes could achieve the same technical result there was no risk of creating a monopoly on technical solutions or functional considerations, the CJ followed Philips and confirmed that the expression ‘necessary to obtain a technical result’ did not mean that Article 7(1)(e)(ii) applied only if the shape was the only one which could achieve the intended technical effect. Since trade mark law prevents competitors using both identical and similar shapes, the registration of functional product shapes performing a technical function would make it difficult for competitors to market dissimilar shapes that were still functional.

Practical significance

This judgment supports the reasoning in Philips and illustrates the practical difficulty of registering shape marks that do not incorporate a major non-functional element, such as the brand name.

In following Philips, this judgment makes clear that the existence of other shapes which could achieve the same technical result does not preclude the application of Article 7(1)(e)(ii). It does however leave open the question of what amounts to the ‘essential characteristics’ of a sign and when those characteristics will be functional. This question may well be the subject of future litigation before the CJ.

It may seem unfair that an innovative, distinctive and ubiquitous toy shape (it was estimated that there were 62 Lego bricks for every one of the world's 6 billion inhabitants) cannot be protected. However, Lego had previously enjoyed patent protection for the brick shape.

At first sight the judgment might appear to offer a glimmer of hope to Lego in dealing with competitors who market ‘slavish copies’ of the Lego brick shape, suggesting that the company may be able to rely on unfair competition rules. In the authors' view this suggestion is hollow, since unfair competition rules are outside the CJ's remit.