Brands Update: quick read

EU developments

EU General Court confirms that reputation is generally acquired - and lost - progressively: Kneipp v EUIPO

The General Court has upheld a decision that the use of the EUTM 'joyful by nature' for cosmetics, perfumed candles, and marketing services would take unfair advantage of the reputation of an earlier EUTM registration for JOY covering perfumes and the like owned by Patou.

Patou had submitted evidence of the reputation of the JOY mark dating back to the 1990s, with a substantial amount of evidence relating to the period 2013 to 2017. However, turnover was low and decreasing year-on-year from 2016 up to the date the later mark was filed in 2019. Further, no market share data was provided by Patou for JOY-branded goods.

Despite this, the General Court ruled that the high degree of reputation of the JOY mark (evidenced by Patou) survived at the date of filing of the later mark under attack. It was unlikely that such reputation would be drastically lost over the course of a few years – and it would be for the other party to prove such loss of reputation, in any event. Reputation of a trade mark is, in general, acquired progressively – and the same is true for the loss of reputation. While market share data is usually key, the evidence submitted by Patou was sufficient to support the claim of reputation.

The decision will be welcome news to the owners of well-known marks for which there has been a down-turn in sales or which are no longer used (or used only sporadically), illustrating that reputation can linger for some time.

EU General Court upholds ruling that registration of Pablo Escobar name would be contrary to public policy and accepted principles of morality: Escobar v EUIPO

The General Court has upheld previous rulings that the name Pablo Escobar is not registrable as an EUTM as it is contrary to public policy and accepted principles of morality.

It agreed with the EUIPO that the average Spanish consumer would associate the name with drug trafficking and narco-terrorism and with the crimes and suffering resulting therefrom, rather than with Escobar's possible good deeds in favour of the poor in Colombia.

Arguments that Escobar had never been convicted of an offence (and that the refusal would therefore breach the fundamental right to the presumption of innocence) were quickly dismissed as Escobar is publicly perceived in Spain as a symbol of organised crime and as responsible for numerous crimes. Likewise, arguments that the names of figures such as Che Guevara have been accepted for registration as EUTMs were dismissed since the EUIPO is not bound by previous acceptances.

The General Court's decision aligns with the CP14 Common Practice guidance that the EUIPO and many national IP offices recently agreed (as to which, see further below). For more on marks contrary to public policy and accepted principles of morality, see our recent quick guide.

EU General Court decision illustrates importance of citing correct grounds

The recent HACKER SPACE General Court decision is another important reminder that a notice of opposition cannot be corrected or supplemented after the end of the opposition period (including on appeal).

In this case, an unrepresented party opposed an EUTM application for HACKER SPACE on the basis of various HACKER-formative trade marks, but no identical earlier right. The only ground of opposition cited in the notice of opposition was identity of marks and identity of goods/services (Article 8(1)(a) EUTMR). The opponent argued that, if identity wasn't found, the EUIPO should automatically go on to compare the marks for a likelihood of confusion (Article 8(1)(b) EUTMR). The Opposition Division originally agreed and upheld the opposition under Article 8(1)(b), a decision overturned by the Board of Appeal.

The General Court has now agreed with the Board of Appeal, holding that each of the grounds within Article 8(1) is distinct and must be claimed separately. The EUIPO will not (and should not) consider any grounds that are not raised in the notice of opposition. For more on the EUIPO opposition procedure, see our quick guide.

EUIPO Board of Appeal confirms that jingle for Berlin transport system not inherently distinctive

The Board of Appeal has confirmed an earlier ruling that a short (2-second and 4-note) jingle used by the Berlin transport system is not sufficiently inherently distinctive for registration as an EUTM for services such as transportation, passenger transport, the packaging and storage of goods, and the organisation of trips.

While the General Court has previously said that the criterion for the registrability of 3D shape marks ("differs from the norms and customs of the sector") does not apply to sound marks, the Board nonetheless held that sound marks must have a certain resonance which allows them to be perceived as trade marks in order to be accepted for registration. The fact that jingles are common on public transport was relevant, as was the fact that jingles are used to get customers' attention (as opposed to indicate trade origin).

EU Packaging & Packaging Waste Regulation nears adoption

The proposed new EU Packaging & Packaging Waste Regulation could restrict the ability of brand owners to use distinctive and fanciful product packaging in the EU. Now that the Regulation is nearing adoption (with the EU Parliament already adopting it and the Council expected to do so shortly), brand owners should consider applying to register key packaging designs as trade marks and/or designs in the EU. Only fanciful packaging designs that are protected at the time the Regulation comes into force (expected, this autumn) will be exempted from the packaging minimisation requirements in the Regulation. Read more on this in our feature article here.

EU Council formally adopts revised regulation on geographical indication protection for wines, spirit drinks and agricultural products

This Regulation has now progressed and been formally adopted by the EU Council. It was published on 23 April 2024 and will enter into force on 13 May 2024. Some provisions apply from 1 January 2025. More on what it means in our feature article here.

EU Design reforms near formal adoption

The proposed new EU Design Regulation and Directive are expected to be formally adopted by the EU Council (having already been adopted by the EU Parliament) and published shortly. In our feature article we consider what changes are introduced and what they mean for designers.

EU Commission adopts recommendation to combat counterfeiting

The EU Commission has adopted a Recommendation to combat counterfeiting, both offline and online, and enhance the enforcement of IPRs. The recommendation builds on the existing anti- counterfeiting toolbox.

CP14 (marks contrary to public policy and morality) published 

The CP14 Common Practice which covers trade marks contrary to public policy or to accepted principles of morality has been published. It provides common understandings of these and related concepts, as well as common criteria (and examples) for their assessment by the EUIPO and EU member states. Member states have until 19 July 2024 to implement CP14.

Ambush marketing: what brand owners need to know ahead of the European summer of sport

There are several ways event organisers, participants, regulators and authorities can try to stop ambush marketing – the act of trying to "piggy back" on an event such as the Olympics to gain a marketing advantage. Read our feature article on what issues brand owners should consider before undertaking any marketing around the Olympics in Paris and the football Euros in Germany this summer.

UK developments

Supreme Court widens the door for directors to argue no accessory liability for trade mark infringement: Lifestyle Equities v Ahmed

This is an important Supreme Court ruling that will impact the liability of directors for trade mark infringements committed by their companies. The key issue was whether, when the tort is one of strict liability (as is the case with trade mark infringement), liability as an accessory is also strict, or whether proof of knowledge or any other mental element is required.

Until now, the law has provided that liability as an accessory is strict where the tort is one of strict liability. This has meant that directors have often been held liable for trade mark infringements committed by their companies absent any knowledge or mental element and where they have fulfilled their duties in good faith. All that is required for liability is that the director has procured the infringement or engaged in a common design to infringe – these elements often being fulfilled by virtue of them being directors. Effectively, a director is liable as an accessory unless they do no more than carry out their constitutional role in the governance of the company eg by voting at board meetings.

While the Supreme Court held that "there is no principle of English law which exempts a director, acting in that capacity, from ordinary principles of liability for wrongful acts", it went on to hold that, it would be "unjust" to hold an individual liable as an accessory if that individual was acting without "knowledge of the essential facts which make the act done wrongful".

The court also held that a person who is held jointly liable for a tort can only be required to pay over any profits which they themselves have made from the tort – and not the profits that any other party with whom they are jointly liable has made. To find otherwise, would "amount to a penalty or fine which is not the purpose of the remedy". It also applied a strict approach as to what counts as "profit", with a loan (on normal commercial terms) and salaries (constituting normal remuneration) both being held not to constitute profit in this particular case.

The case applies to all strict liability torts (not just trade mark infringement) and all persons who are potentially liable as accessories (not just directors).

More on this next month, including what "knowledge of the essential facts" means, how this will impact claims for trade mark infringement (including as regards potential counter claims for threats against directors) and implications for other strict liability torts.

High Court of England & Wales rules that Merck Sharp & Dohme in breach of 2020 Court Order: Merck KGaA v Merck Sharp & Dohme

This is another iteration of a dispute that began more than a decade ago between Merck (USA) and Merck (rest of the world). The High Court has held that the defendant, Merck (USA), has breached a 2020 High Court order prohibiting certain of the defendants from using the name Merck in the UK.

The decision contains a useful discussion and application of the law relating to targeting online. It illustrates the importance of carefully drafting co-existence and separation agreements particularly as regards online use.

High Court of England & Wales rules on preliminary issue in comparative advertising claim: Gibraltar v Viovet

The High Court has ruled on a preliminary issue in a (rare) case concerning comparative advertising. In an earlier ruling, a Master had ordered that the question of what message was conveyed by the comparative adverts in question should be decided as a preliminary issue.

The Court held that the message being conveyed to the average consumer by the advertising in question was that the company's own-brand products were comparable in nature, composition and/or specification to the third-party products the subject of the comparison, including in relation to their efficacy and quality.

The determination of the extent to which any of the comparisons in the adverts in issue were objective, as opposed to misleading, will be for the main trial.

The Advertising Standards Authority (ASA) also rules on comparative adverts – a complaint to the ASA can be an alternative to (the threat of) court action, depending on what the complainant wishes to achieve.

UKIPO says no likelihood of confusion when earlier mark entirely incorporated into later mark: PIN FINDS v PIN

In an interesting case from last year, the UKIPO found that there is no likelihood of confusion between two marks where the later mark (PIN FINDS) incorporates the entirety of the earlier mark (PIN). This was despite the fact that some of the items covered by the marks were identical or 'Meric' identical (belonging to the same broad category) and the marks were conceptually highly similar.

Pinterest, the owner of the earlier mark, PIN, did not have to prove use, and did not submit any evidence of enhanced distinctiveness through use of its PIN mark. The UKIPO held that the PIN mark had an average level of inherent distinctiveness for services in Class 35 (being slightly allusive of those services relating to the finding or pinning of things online) and a slightly higher level of distinctiveness for services in class 45.

Overall, the UKIPO considered that the visual and aural differences between the marks were sufficient to overcome the high degree of conceptual similarity between them. The fact that the average consumer would display a medium (or medium to high) level of attention also mitigated against confusion.

There was no indirect confusion as the word ‘Pin’ was deemed not to play an independent role within the later mark such that it would be considered a brand extension of the Pin mark.

ASA rules that speculative trade mark invoice was misleading

A recent Advertising Standards Authority (ASA) ruling illustrates another potential avenue of redress for those who receive speculative letters requesting fees to "publish" and watch their trade marks.

In this case, a direct mailing by Worldwide Trademarks in October 2023 offered to publish a trade mark and monitor for conflicting marks. The sender was not the named representative - or otherwise involved in the filing of the application – for the mark in question.

The complainant challenged whether the ad was obviously identifiable as a marketing communication and misleading because it had the overall appearance of an invoice. The ASA upheld the complaint on both grounds. In particular:

• The CAP Code required that marketing communications were obviously identifiable as such, meaning that recipients should be able to tell from the envelope itself that it was a marketing communication. While the front of the envelope included corporate branding and an address in Budapest, the ASA considered that this was not sufficient to ensure that the envelope was obviously identifiable as a marketing communication. 

• The communication was misleading because it had the overall appearance of an invoice, including typical elements such as a header with company information, a reference number, the recipient’s information including their trade mark details, a payment amount and payment instructions. Those elements were presented in a layout typically seen in an invoice. Referring to it as an “offer” and stating in bold font that the letter was “NOT AN INVOICE” was not sufficient to counteract the initial impression that the letter was an invoice rather than a marketing communication.

The ASA ruled that the advert should not appear in that form again. 

UKIPO publishes reports on IP and the metaverse

The UKIPO has published two reports on IP and the metaverse. The first report looks at trends in IP filings relating to the metaverse. The second (a government-commissioned independent report) looks at potential IP issues relating to the metaverse. It sets out potential solutions to current IP issues raised by the metaverse and ways in which IP legislation could be amended to tackle those issues. More on this next time. For more on the metaverse generally, see our hub.

Taylor Wessing chat to Guy Parker of the ASA and Jason Freeman of the CMA at its annual Advertising Forum event

Those wanting an update on the issues of focus for the Advertising Standards Authority and the Competition and Markets Authority from an advertising and consumer law perspective should read our summary of the fireside chat at Taylor Wessing's Advertising Forum.

This article was co-authored by Hope Riseley.