NO TRADE MARK PROTECTION FOR FUNCTIONAL DESIGNS
Lego Juris A/S v OHIM and Mega Brands Inc, Case C-48/09 P, Opinion AG Mengozzi, 26 January 2010
AG Mengozzi observed that the only ECJ case on article 7(1)(ii)(e), Philips – about the shape of the three-headed razor – focussed narrowly on the facts of the case referred to it by the Court of Appeal (England and Wales). Although the ECJ in Philips emphasised the grounds on which it was appropriate to refuse registration of functional shapes it did not give guidelines for when such trade marks could be registered.
Nevertheless, Philips was law and the AG stated the following guiding principles, which he derived from that case. First, the exclusion in article 7(1)(ii)(e) is intended to prevent the monopolisation of functional shapes and to preserve the delineation between the various intellectual property rights. Second, article 7(1)(ii)(e) precludes the registration of shapes whose essential characteristics perform a technical function. Third, the fact that other shapes can perform the same technical function cannot overcome article 7(1)(ii)(e).
The AG proposes a three-stage test for determining the registrability of shapes as trade marks under article 7(1)(ii)(e) (and the corresponding provisions in the harmonised national trade marks laws of Member States):
1. First stage – assess the functionality of the shape
The office or court must identify the most important elements or characteristics of the shape. Each of those characteristics must be compared with the technical result to see if the necessary link is established between them. This is not the same as assessing the distinctive character of a trade mark. At this preliminary stage, the issue is not the overall impression of the shape or its dominant or distinctive features. Further the perception of the average consumer is irrelevant. On the other hand, where the shape has previously enjoyed patent and/or design protection, explanations in the relevant documents may lead to a powerful presumption that features are functional. Expert evidence may be necessary.
If all the defining characteristics of a shape perform a technical function then registration as a trade mark must be refused. That was the case with the Lego RED BRICK, which had been protected by patents and designs: the CTM had correctly been declared invalid.
2. Second stage – where the essential characteristics of the shape are only in part functional
A strict interpretation of Philips indicated that in this situation article 7(1)(ii)(e) would be inapplicable. However AG Mengozzi believes that the anti-competitive purpose of the exclusion could then be avoided because competitors might still need to use the functional features.
In the absence of compulsory disclaimers to exclude such characteristics from trade mark protection, alternative shapes available on the market must be analysed to take account of interoperability and the requirement of availability to competitors.
3. Third stage – distinctiveness
Once those obstacles have been overcome by voluntary disclaimers or because it has been established that the shape does not harm competition, it is necessary to ascertain whether the trade mark has distinctive character. At this stage overall impression is what counts and the distinctiveness of the shape must be assessed in relation to the goods and services for which registration is sought and through the eyes of the relevant consumer. In applying article 7(3) and deciding whether the mark has acquired distinctive character through use, it is important to differentiate recognition of a shape because of its uniqueness on the marketplace, e.g., because it has enjoyed past patent or design protection, which will not suffice.
The ECJ decision is expected in the next six months. If the court follows the AG’s Opinion it will be more difficult to secure trade mark registration for shapes with functional features. Alternatively, provided the design is new, has individual character and other shapes can perform the same function, registration can be sought under the new streamlined EU design system but protection is limited to 25 years.