The commercial retailer Lidl Stiftung & co. KG (‘Lidl’) unsuccessfully tried to invalidate Crocs, Inc.’s (Crocs) three dimensional Community Trade Mark (CTM) No. 6543516 (the ‘contested mark’) which was registered for  ‘Orthopaedic footwear’ in class 10 and ‘Footwear; shoes; sandals; athletic shoes; boat shoes; beach shoes; clogs’ in class 25.

Click here to view image.

Lidl sought invalidation in 2013 on the basis of Article 52(1)(a) of the Community Trade Mark Regulation (‘CTMR’) and argued that the contested mark was registered in breach of Articles 7(1)(b) and (7(1)(e) CTMR for the following reasons: Article 7(1)(b):

  • The contested mark is merely the shape of the goods themselves, i.e. a shoe with “several holes on the upper side and a heel strap on the rear side”.
  • The registered shape lacks distinctiveness since it is a variation of a shape used for centuries and the features of the contested mark are common for, in particular, sandals, beach shoes and clogs.

Article 7(1)(e):

  • The holes on the upper side of the shoe have a technical function which allows air to circulate around the food and increases comfort and is a common technical feature for plastic sandals and beach shoes.
  • The wide rounded front of the shoe is a typical feature of clogs and has  a technical function since it “reflects the anatomical shape of the foot”.

Crocs argued that the three dimensional mark is validly registered because the shape of the contested mark ‘departs significantly from the norm or customs of the sector and thereby fulfils its essential function of indicating origin’. This satisfies the threshold for distinctiveness for three-dimensional marks as established in the 2007 Case Bang & Olufsen A/S v OHIM.

Crocs argued that the following five unusual features contributed to overall distinctiveness of the contested mark:

  1. the open back
  2. the strap which is adjustable and attached with a flat rivet
  3. the unusually rounded front part of the shoe
  4. the holes in the upper part of the shoe
  5. the Crocs Logo which features on the rivet of the strap

Crocs, also argued that the contested mark was already perceived as inherently distinctive before it was filed and submitted UK newspapers articles in support.

Crocs argued that Article 7(1)(e), does not apply since the contested mark also contained the Crocs Logo and did not consist exclusively of a shape. Further, Crocs, argued that the contested mark does not consist of the ‘natural shape of a shoe but is a ‘result of creative decisions by the designer’.

Following previous case law, (in particular T-28/08, ‘shape of a chocolate bar’ para 32) the Cancellation Division considered whether the contested mark permits the average consumer to distinguish the goods from those of other undertakings without conducting an analytical examination or paying particular attention. This can be achieved by a combination of features and the overall impression should be considered. Consequently, it was held that although any one of the five design features identified by Crocs may not in isolation be enough to depart ‘significantly from the norm or customs of the sector’, the combination of the features resulted in an independent character which is ‘distinct’ from typical shoes, sandals and beach footwear.

Further, it was held that Lidl had not proved that the shape of the contested mark was similar to existing footwear shapes at the time Crocs applied for registration of the contested mark. The newspaper articles were also held to give a ‘strong indication’ that the shape and design of the footwear was regarding by the public, at least in the UK, as distinctive and a departure from the norm. Therefore the Cancellation Division rejected the ground based on Article 7(1)(a).

Although Lidl did not cite a specific provision in relation to Article 7(1)(e), the OHIM inferred that the arguments submitted appeared to fall under Article 7(1)(e)(ii). This ground was rejected on the basis that the contested mark does not consist exclusively of a shape which is necessary to obtain a technical result. The Crocs logo was found to be a non-functional element which ‘plays an important role’.  Costs were awarded against Lidl. However, Lidl has appealed the decision and will, no doubt, provide further detailed arguments in relation to a specific provision under Article 7(1)(e).

Shortly afterwards, the General Court issued a decision rejecting an application to invalidate the Rubiks’ cube three-dimensional CTM registration no. 162784 in the name of Seven Towns Ltd which covers ‘three-dimensional puzzles’ in class 28 (the contested mark).

Click here to view image.

Simba Toys GmbH & Co (Simba) tried to invalidate this registration in 2006 on the basis of Article 51(1)(a), relying on Articles 7(1)(a) to (c) and (e) of Regulation No. 40/94) (replaced by Articles 52(1)(a), 7(1)(a) to (c) and (e) of Regulation No. 207/2009 (CTMR))  The application for invalidation was rejected by the Cancellation Division and Simba’s subsequent appeal to the Second Board of  Appeal was also dismissed.

Simba appealed the decision to the General Court on the basis that OHIM had breached the Regulations as identified below:

  1. Article 76(1) of Regulation 207/2009: The Office shall examine the facts of its own motion, but should be restricted in proceedings for refusal of registration on relative grounds to examination of the facts, evidence and arguments provided by the parties and the relief sought.

Contrary to Simba’s allegations, the General Court found that the evidence and arguments submitted had been considered exhaustively by the Board of Appeal. Furthermore, it was reiterated following Fürstlich Castell’sches Domänenamt v OHIM (2013) that the Boards of Appeal are not required to examine the facts of its own motion in invalidity proceedings, but may consider this necessary where it is relevant to the proceedings.

  1. Article 7(1)(e)(ii) of Regulation 40/94:  Signs which consist exclusively of  the shape of goods which is necessary to obtain a technical result shall not be registered.

The General Court, following the 2008 and 2010 case of Lego Juris v OHIM, agreed with the Board’s assessment that the essential characteristics of the contested mark comprise the cube per se and the grid structure. The General Court considered ‘whether the shape of the goods is technically causal of and sufficient to obtain the intended technical result’ and held that the internal rotating mechanisms of the Rubik’s cube are not apparent from the essential characteristics.

  1. Article 7(1)(e)(i) of Regulation 40/94: Signs which consist exclusively of the shape which results from the nature of the goods themselves shall not be registered

This ground was rejected since it was held that there is no requirement for three-dimensional puzzles to have the shape of a cube with surfaces that have a grid structure. Examples of alternative shapes had been submitted in the proceedings including three-dimensional puzzles that have a rotating capability.

  1. Article 7(1)(e)(iii) of Regulation 40/94: Signs which consist exclusively of a shape which gives substantial value to the goods shall not be registered

Simba attributed the substantial value gained by the goods to certain technical features rather than the ‘aesthetic aspect’ of the shape and therefore this claim was rejected as unfounded.

  1. Article 7(1)(b) of Regulation 40/94: Trade marks which are devoid of distinctive character shall not be registered

The burden fell to Simba to prove that the mark is devoid of distinctive character and is incapable of identifying the goods as originating from a particular undertaking. Although Simba had found a similar shaped puzzle on the market, the Soma cube, the General Court confirmed that one example does not prove that the shape is common for the goods in that sector. It was held that the contested mark would be perceived by the relevant consumer as the Rubik’s Cube rather than a generic sub-section of three- dimensional puzzles.

  1. Article 7(1)(c) of Regulation 40/94: Trade marks which consist exclusively of signs or indications which may serve to designate kind etc or a characteristic of the goods shall not be registered

This ground failed since it was held that there is no sufficiently direct and specific link between the contested mark and 3D puzzles generally and that without prior knowledge of the product, the relevant average consumer, would not consider that the contested mark ‘resembles or hints at’ a 3D puzzle.

  1. Article 7(3) of Regulation 40/94: A mark will not be barred from registration on the basis of Articles 7(1)(b) – (d) if it has acquired distinctiveness through use in relation to the goods covered

Since the contested mark was held to be distinctive per se, no determination on this ground was required.

  1. Article 75 of Regulation 207/2009: OHIM decisions must state the reasons on which they are based

Simba claimed the Board of Appeal had failed to give reasoning in relation to the assessment of whether the contested mark breached Article 7(1)(c) of Regulation 40/94. The General Court affirmed that although the reasoning of the Boards of Appeal may be implicit (following Anheuser- Busch v OHIM 2009), in this instance, the reasoning provided was sufficient.  

There is a strict prohibition of trade mark protection for rights which relate exclusively to technical solutions. Such rights are typically protectable by other forms of intellectual property such as patents or designs but those rights have a limited duration.  The reported cases are encouraging for owners seeking to obtain a trade mark right of unlimited duration in the shape of their goods but there is a fine line between obtaining trade mark protection for a three- dimensional mark that adequately protects the right concerned and falling foul of the provisions. What we have seen from these cases is that trade mark protection can be obtained for a shape mark which incorporates a technical function, provided that the shape of the goods does not deliver the technical function.  

In the case of the Rubik’s cube, the technical function is achieved by an internal mechanism which is neither seen by the consumer nor disclosed by the representation of the mark. Therefore, owners of rights should try to carefully select the shape of their goods in seeking protection as a three-dimensional trade mark, avoiding a shape which will be clearly barred from registration under these provisions.  

Finally, it does seem questionable as to whether the addition of a two-dimensional element, such as a brand or the brand logo, on a three dimensional mark should be sufficient to overcome an objection based on Article 7(1)(e)(ii). However, the decision on appeal in the Crocs v Lidl case should provide some further clarification on this issue.