Owners of pattern and three-dimensional marks should take note of the substantial burden of proving acquired distinctiveness of their marks through use throughout the European Union.
On April 21, 2015, Louis Vuitton’s European Community trademark (CTM) registrations for two versions of a checkerboard pattern (known as “Damier”) were cancelled by the General Court of the European Union (EGC). This decision will affect the fashion industry and beyond, raising the bar for trademark protection for a pattern or three-dimensional mark and increasing the threshold of proof of acquired distinctiveness to obtain protection throughout the European Union.
Background of the Case
Louis Vuitton has used its signature Damier print since the early days of its brand in 1889. The French luxury giant filed an application to register it as a European Community Trademark in 1996, securing the registration for various goods in Class 18 (leather and leather imitation goods, suitcases, bags, travel sets, etc.) in 1998 for the brown and beige checkerboard pattern, and in later in 2008 for the dark and grey version.
Click here to view image.
Click here to view image.
In 2009, Nanu-Nana, a German retailer headquartered in Berlin, challenged Louis Vuitton’s trademarks claiming their invalidity on the basis of several absolute grounds of refusal, but mainly on the ground that they lacked distinctive character and that they failed to acquire a distinctive character across all the EU Member States.
Both the Cancellation Division and the Board of Appeal of the Office for Harmonization of the Internal Market (OHIM, also known as the European Union Trademark Office) agreed with Nanu-Nana and held that the trademarks at issue should be cancelled because they were not distinctive. OHIM determined that the marks only consist of a “basic and banal feature” composed of very simple elements and that it is well-known that this feature had been commonly used with a decorative purpose in relation to various goods, including those in Class 18.
Decision of the General Court
The EGC confirmed the earlier decisions, as discussed below:
According to prior case-law, designs that are effectively the appearance of an article can only be regarded as commercial origin identifiers that can be registered as a trademark if they have a distinctive character or if they have acquired distinctiveness in the market.
The EGC applies these principles as follows.
1. Lack of Distinctive Character (Article 7(1)(b) of the Regulation 207/2009)
With regard to the goods in question, the EGC held that the contested mark (in both forms) was presented in the form of a pattern intended either to be placed on part of the goods or to cover the whole of their surface area. Therefore, since the figurative trademark at issue coincides with the appearance of the product, the EGC decided to examine the distinctiveness as it would have done with a three-dimensional trademark Following prior case law, this required considering whether the design departed from the norms and customs of the sector. Unfortunately for Louis Vuitton, the EGC held that was not the case for its checkerboard pattern: indeed, it confirmed that it was a basic and commonplace figurative pattern, and that it did not differ from the norm or customs of the sector inasmuch as goods of Class 18 are generally covered by fabrics of different appearances.
To support this view, the EGC referenced an example dating back to 1070, the Bayeux tapestry, to suggest that the checkerboard pattern has been in use as a decorative element for centuries before Louis Vuitton adopted it.
Click here to view image.
As the pattern did not depart from the norms and customs of the sector, the EGC held that it lacked distinctive character, and that Louis Vuitton could only retain registrations in support of its claim of exclusive rights in the pattern if it had acquired distinctiveness in the European Union.
2. Failure to Prove Acquired Distinctive Character through Use (Article 7(3) of the Regulation 207/2009)
Given the unitary character of the CTM, a mark lacking in inherent distinctiveness must have acquired such distinctiveness in the European Union at the time of filing in order to be registered. However, in the context of an invalidity proceeding, the registration of a mark that did not have inherent distinctiveness and had not acquired such distinctiveness at the time of filing can nonetheless be maintained if the mark is shown to have acquired distinctiveness since it was registered.
Louis Vuitton presented evidence of acquired distinctiveness through use in 11 of the Member States as well as evidence of use in some other Member States, contending based on previous case-law that it was only required to show acquired distinctiveness in a substantial part of the European Union. The EGC determined that much of the evidence was non-specific, uncorroborated, or otherwise insufficient, but it elaborated that even if the evidence showed acquired distinctiveness in some of the Member States, the registrations would be cancelled. Since the marks were considered devoid of inherent distinctive character throughout the European Union, Louis Vuitton could only preserve its registrations if it showed that it had acquired distinctiveness in each of the EU Member States. It explained that the case-law regarding a substantial part of the European Union was related to a different determination as to whether a registered mark “has a reputation” sufficient to stop third-party use of the mark on non-similar goods and services.
The Court explained that
“it would be paradoxical to accept, on the one hand…that a Member State has to refuse to register as a national mark a sign that is devoid of any distinctive character in its territory and, on the other hand, that that same Member State has to respect a Community trade mark relating to that sign for the sole reason that it has acquired distinctive character in the territory of another Member State.”
It further justified its findings regarding the sufficiency of the evidence, stating that it is
“clear from the case-law that the acquisition of distinctive character through use of a mark requires that at least a significant proportion of the relevant section of the public identifies the products or services concerned as originating from a particular undertaking because of the mark…However, the circumstances in which that requirement may be regarded as satisfied cannot be shown to exist solely by reference to general and abstract data.”
As Louis Vuitton did not meet the high burden of proof, the EGC declared the registrations to be null and void.
Impact of the Decision of the General Court
The decision to cancel both registrations was a blow for the world’s most valuable luxury brand ($22.5 billion, according to Interbrand) which is known within the legal and business community for its extensive efforts to protect its intellectual property rights. It may now have to rethink its brand protection strategy for the famous pattern.
In view of the decision, owners of pattern and three-dimensional design marks as well as other marks typically deemed to lack inherent distinctiveness should take caution in the significant burden of proof required to claim acquired distinctiveness throughout the European Union, and perhaps consider national registrations in relevant Member States for these types of marks.
On July 13th, 2015, Louis Vuitton filed an appeal, which is currently pending.
The authors wish to thank Valicha Torrecilla for her contributions to the research and drafting of this article.