In the case of Smart Technologies ULC v Office for Harmonisation in the Internal Market (OHIM) the Court of Justice of the European Union (CJEU) summarised the approach to be taken when assessing the distinctiveness of trade marks - particularly, advertising slogans. It re-confirmed that promotional formulas can indicate trade origin and are not subject to any more stringent legal test for distinctiveness than other marks. However, it did acknowledge that factually it may be more difficult to prove distinctiveness in relation to some types of marks, such as advertising slogans or shape marks.
Smart Technologies filed a Community Trade Mark (CTM) application for WIR MACHEN DAS BESONDERE EINFACH (which translates as "we make special (things) simple") in relation to goods in class 9 including "computerised systems for capturing coordinate inputs, namely graphics, script, drawings and gestures, for interaction with a computer generated display utilising a pen, stylus, finger or hand". The application was rejected on the basis that it lacked distinctive character as required by Article 7(1) of the CTM Regulations.
Smart Technologies appealed the decision to the General Court. The General Court, in dismissing the appeal, concluded that a mark which consists of an advertising slogan must be treated as devoid of distinctive character if it is likely to serve purely as a "promotional formula" and not serve as an indication of origin.
The standard nature of the German words, lack of word play or variation of syntax or grammar did not confer a distinctive character on the mark. The fact that the mark contained the word WIR (we) did not render it an indication of the commercial origin of the goods or services applied for. Smart Technologies appealed to the CJEU.
The appeal was based on the following grounds:
- the General Court wrongly applied the CJEU's criteria for assessing the distinctive character of an advertising slogan, as set out in Audi v OHIM, by restricting itself to an evaluation of whether the mark would be perceived as a mere promotional formula;
- the General Court wrongly found that it is more difficult legally to establish distinctiveness in relation to advertising slogans;
- a lower level of distinctiveness should be applied to the mark because the relevant public in question is specialised and has a "level of attention and knowledge [which] is higher than that of the average consumer"; and
- the General Court was wrong to agree with the Board of Appeal that consumers do not place trade mark value on advertising claims.
The CJEU's findings
The Court began by reiterating the evaluation which must be made in relation to distinctiveness. The mark must be capable of identifying the product, in relation to which registration is sought, as originating from a particular undertaking. The assessment of distinctiveness must be made by reference to the goods and or services for which registration is sought and by the relevant public's perception of the mark.
The Court noted that marks which are also used as "advertising slogans, indications of quality or incitements to purchase" are not excluded from registration and are not subject to harsher criteria for distinctiveness than other signs (Audi v OHIM and OHIM v Erpo Möbelwerk). The Court acknowledged that the relevant public's potentially differing perception of such marks may make distinctiveness more difficult to establish. Yet, at the same time, it stated that the fact a mark may be perceived as a promotional formula, or have a laudatory connotation, does not in itself render it devoid of distinctive character.
Against these observations, the CJEU concluded that the General Court had not misapplied the criteria set out in Audi v OHIM. In its view, the Court had correctly considered whether the relevant public perceived the mark as an indication of the commercial origin of the goods to which the mark was to be applied and not simply as a promotional formula.
The CJEU did not accept Smart Technologies' argument that the General Court had treated slogans as a subcategory or a separate category from word marks. The General Court had rightly concluded that it would be inappropriate to apply stricter criteria for distinctiveness to slogans than to more straightforward word marks.
With regard to the relevant public, the General Court held that this was made up of "German speakers who are specialists in the computer field and whose level of knowledge in the area is greater than that of the general public". However, the CJEU found that the specialist nature of the relevant public did not allow for a different assessment of distinctive character.
In any event, the perception and approach of the relevant public concerns appraisals of fact for which the General Court has exclusive jurisdiction to assess the evidence. The CJEU may only interfere with that assessment if there is a distortion of the facts or evidence. As there was no evidence that any distortion had taken place, those elements of the appeal which related to the General Court's finding of facts were rejected. The appeal was dismissed.
The decision rightly confirms that a mark can function both as a promotional formula and as an indication of origin. The mark in question was rejected because of its failure to meet the latter requirement rather than an ability to function as the former. The factual challenge of the relevant public's perception of slogan marks in satisfying distinctiveness remains. In light of the earlier "Have a break" case however, it is arguable that distinctiveness is more likely to be achieved where use of the slogan has been in conjunction with a registered trade mark.