Background
The Court of Justice of the European Union (the "CJEU") has overturned an earlier decision of the General Court (the EU's first instance court), that held that a graphical representation of the shape of the RUBIKS cube was eligible for protection as a trade mark.

This is the final judgment in a dispute that has spanned 10 years. The decision will have wide ranging implications for holders of a trade mark that protects the shape of a product or packaging.

The facts
Seven Towns, who own the rights to the RUBIKS cube held an EU trade mark for the graphical representation of the shape of the well-known cube puzzle. In 2006, Simba Toys, a German company, sought to have that trade mark declared as invalid on the basis that Seven Town's trade mark for the RUBIKS cube was a sign that consisted of the shape of the goods, and that shape is necessary to obtain a technical result, and as such, is not registrable as a trade mark under the Community Trade Mark Regulation (the "CTMR").

The General Court's approach
The General Court held that Simba Toys' invalidity action was unfounded in November 2014. This decision was appealed by Simba Toys to the CJEU, and was overturned in a judgement issued last week.

The appeal
Simba Toys' key argument was that the General Court had erroneously held that a technical result, for the purposes of the CTMR must be "inferred with sufficient certainty" from the mark concerned. Simba Toys argue that there is no provision in the case law or the CTMR which requires such an inference.

The CJEU's judgement reiterates that the basis for the refusal to register a trade mark which is a shape that results from the technical function of the goods is to prevent trade mark law from granting a monopoly right on a technical solution or a functional characteristic of a product. Rather, the CJEU makes clear that the proper purpose of a trade mark granted under the CTMR is to allow an undertaking to monopolise a sign which distinguishes their products from those of other undertakings.

The CJEU accepted the General Court's assessment of the essential characteristics of the RUBIKS cube trade mark, finding them to be a cube with a grid structure on each surface. However, the CJEU disagreed with the General Court's view on the key question of whether the RUBIKS cube trade mark was invalid under the CTMR.

The General Court had rejected Simba Toys' argument that the capability of the cube to rotate was illustrated by the criss-crossed lines on the surface of the cube. The General Court made this decision on the basis that the rotating mechanism was not a result of the lattice of lines on the surface, but rather an internal mechanism in the cube itself.

The CJEU, however, indicated that this conclusion was incorrect as the characteristics of the shape must be assessed in light of the technical function of the goods concerned. The CJEU considered it was incorrect to assess the functionality of the RUBIKS cube only with reference to what is shown in the graphical representation of the mark, without consideration of the technical functionality in a broader sense, and with consideration to the non-visible elements of the functionality of the mark. On that basis, the CJEU set aside the earlier decision, holding that the graphical representation of the RUBIKS cube was not registrable as a trade mark, because the shape is a result of the technical function of the product.

Next steps for your business
In light of this judgment, businesses which have EU trade marks which reflect the physical appearance of their products or packaging should review these to ensure they do not, in fact, simply represent a technical solution or a functional characteristic that of the product.

In its RUBIKS cube judgment, the CJEU has clearly indicated that such trade marks may be subject to a successful invalidity action; and that a broad approach will be taken when considering whether a particular trade mark falls foul of the necessary for functionality rule.