The Deutscher Sparkassen- und Giroverband (German Savings and Current Accounts Association = DSGV), the association of German S & L institutions owned by German communities, is proprietor of a German single-colour trademark (a collective mark) of a shade of red, usually referred to as “Sparkassen-Rot”. The mark was registered in Germany in 2007 with proof of acquired distinctiveness. When the mark was applied for in 2002, it was rejected. However, DSGV was able to show acquired distinctiveness, albeit with proof submitted in 2006. An infringement action brought against the Spanish Banco Santander and its German subsidiary, and claims asserted against Austrian Oberbank AG, both of which also used red in their commercial presence in Germany, were countered by invalidity actions. Invalidity actions based on absolute grounds must be brought before the German Patent and Trademark Office (GPTO) in Germany. These invalidity actions were rejected by the GPTO which ruled that the colour trademark was properly registered. The Federal Patent Court, the court competent for reviewing patent office decisions, considered that the degree of customer recognition proved by DSGV, above 65% subsequent to the time of filing, and also still at the time the case was to be decided, was not sufficient, and considered instead that at least 70% would be required. As the Court thought that the issue of the necessary degree of distinctiveness acquired through use was still an open question, it referred the following questions to the Court of Justice:

  1. Does Article 3 (1) and (3) Trademarks Directive 2008/95 preclude an interpretation of national law according to which, for an abstract colour mark (in this case: red HKS 13) which is claimed for services in the financial affairs sector, a consumer survey must indicate an adjusted degree of association of at least 70% in order to form a basis for the assumption that the trademark has acquired a distinctive character following the use which has been made of it?
  2. Is Sentence 1 of Article 3 (3) Trademarks Directive 2008/95 to be interpreted to the effect that the time at which the application for the trademark was filed – and not the time at which it was registered – is relevant in the case where the trademark proprietor claims, in his defence against an application for a declaration invalidating the trademark, that the trademark acquired a distinctive character, following the use made of it, in any event more than three years after the application, but prior to registration?
  3. In the event that, under the abovementioned conditions, the time at which the application was filed is also relevant:

Is the trademark to be declared invalid if it is not clarified, and can no longer be clarified, whether it had acquired a distinctive character, following the use made of it, at the time when the application was filed? Or does the declaration of invalidity require the applicant seeking that declaration to prove that the trademark had not acquired a distinctive character, following the use made of it, at the time when the application was filed?

The Court – judging without an opinion by the Advocate General – gave the following answers:

  1. Article 3 (1) and (3) Trademarks Directive must be interpreted as precluding an interpretation of national law according to which, in the context of proceedings raising the question whether a contourless colour mark has acquired a distinctive character through use, it is necessary in every case that a consumer survey indicates a degree of recognition of at least 70%.
  2. Where a Member State has not exercised the power laid down in Sentence 2 of Article 3 (3) Trademarks Directive, Sentence 1 of Article 3 (3) of that directive must be interpreted as meaning that, in the context of invalidity proceedings in respect of a mark which is intrinsically devoid of distinctive character, in order to assess whether that mark has acquired a distinctive character through use, it is necessary to examine whether such character was acquired before the date of filing of the application for registration of that mark. It is irrelevant in that regard that the proprietor of the mark at issue maintains that the mark has, in any event, acquired a distinctive character through use after the date of filing of the application for registration, but before the date of registration of that mark.
  3. Where a Member State does not exercise the power laid down in Sentence 2 of Article 3 (3) Trademarks Directive, Sentence 1 of Article 3 (3) of that directive must be interpreted to the effect that it does not preclude, in the context of invalidity proceedings, the mark at issue from being declared invalid where it is intrinsically devoid of distinctive character and the proprietor of that mark has failed to show that it has acquired a distinctive character following the use which has been made of it before the date of filing of the application for registration.

Remarks
Proof of acquired distinctiveness was the central issue in the Chiemsee cases decided by the Court in 1999 (Joined Cases C-108 and 109/97). The Court there established the well-known “all circumstances” rule as regards the evidence to be taken into account in order to show that a sign was recognised by the relevant public, or at least a significant portion of that public, as a trademark. Thus, it is not at all surprising that the Court rejects the German court’s notion that a public opinion survey must show that at least 70% of the public recognises the sign as a mark.

In the course of its analysis of the question the ECJ rejects the notion, apparently also underlying the referring court’s reference, that for colour marks a higher degree of recognition is required than for other marks. The ECJ also confirms that public opinion surveys, widely used in Germany, may be called upon if necessary:

43 It should also be stated that Union law does not preclude the competent authority, where it has particular difficulty in assessing the distinctive character acquired though use of the mark in respect of which registration or a declaration of invalidity is sought, from having recourse, under the conditions laid down by its own national law, to an opinion poll as guidance for its judgment. If the competent authority finds it necessary to resort to such a survey, it must determine the percentage of consumers that would be sufficiently significant.
The most interesting part of that passage is that the national authority “must determine the percentage of consumers that would be sufficiently significant”.

The Court goes on to explain the relevance of such surveys:

48 It follows from the foregoing that it is not possible to state in general terms, for example by referring to predetermined percentages relating to the degree of recognition attained by the mark within the relevant section of the public, when a mark has acquired a distinctive character through use and that, even with regard to contourless colour marks, such as the mark at issue in the main proceedings, and even if a consumer survey may be one of the factors to be taken into account when assessing whether such a mark has acquired a distinctive character through use, the results of a consumer survey cannot be the only decisive criterion to support the conclusion that a distinctive character has been acquired through use.

The lessons to be drawn from this judgment seem to be the following:

  • The all-circumstances rule must be applied;
  • Colour marks must be treated no different from other non-distinctive marks; thus, no higher degree of consumer recognition may be demanded;
  • Recourse to an opinion survey may be had if – and only if – the authority has “particular difficulties” is assessing distinctive character;
  • The authority must determine the required percentage;
  • A refusal or recognition of acquired distinctiveness may not be based on the results of a consumer survey alone.

The surprising part is that the ECJ allows national authorities to “determine the percentages” – this seems to conflict with the all circumstances rule. In any event, this being the latest pronouncement of the ECJ on the issue, national authorities, such as the German courts and the GPTO, may feel encouraged to go forward with their percentage limits. The German Federal Supreme Court in its judgment of October 17, 2013, I ZB 65/12 – “test” recently considered at least 50% as necessary, and added that the percentage must be higher when the mark is “clearly descriptive” (“glatt beschreibend”).

However, the German court’s almost exclusive reliance on survey results is not in line with the ECJ’s approach to consumer surveys. The minimum-percentage rule of the German Supreme Court also seems to be no longer valid, since the ECJ explicitly rejects the notion that a fixed percentage may be applied (paragraph 48 cited above). Also the requirement of even higher percentages for certain kinds of marks is not permitted. Rather, authorities must always apply the “all circumstances” rule and may, or perhaps must, accept acquired distinctiveness even if the percentages established for consumer surveys are not reached.

No surprises as regards the second answer: The filing date is decisive.

As regards the answer to the third question, the straightforward approach of the ECJ to the issue of burden of proof and the placing of that burden on the trademark proprietor is surprising, given the fact that a mark with acquired distinctiveness was accepted upon proof of distinctiveness submitted by the applicant to the respective trademark authority. Why should the proprietor be put to the proof again, merely because a third party is challenging the validity? This would appear not to be the “final word”, even though the principle “Roma locuta, causa finita” may be invoked.