General Court, Judgment of 6 October 2011, T-508/08 ("Representation of a Loudspeaker")
The General Court upheld the Board of Appeal's rejection of the loudspeaker shape on the grounds of aesthetic functionality ("shape which gives substantial value to the goods").
Back in September 2003, Bang & Olufsen A/S filed the following shape as a Community trademark application for a range of goods in classes 9 and 20 of the Nice Classification:
click here to view image.
In a first round, the Office for Harmonization in the Internal Market (OHIM)'s examiner and Board of Appeal refused registration on account of lack of distinctiveness. This decision was lifted by the General Court in October 2007. The court considered that the design was so striking that it could not be considered to be non-distinctive. So the case went back to OHIM's Board of Appeal.
In the second round, the Board of Appeal took the remarks of the General Court as meaning that this was a case that justified a refusal based on aesthetic functionality, or, in technical terms, the shape giving substantial value to the goods.
Bang & Olufsen challenged this decision on two grounds, namely, first that the Board could not raise new grounds for refusal upon remittance of the case from the General Court, and second, that the provision prohibiting shapes that gave substantial value to the goods from registration could not be interpreted to prevent good design from obtaining trade mark protection.
Yet, this time, the General Court agreed with OHIM and dismissed the appeal. Firstly, the court said that, upon remittance of a case to the Boards, they had the same competence as initially to examine Community trademarks and raise grounds for refusal. Secondly and more importantly, it emphasized the importance of the design for the goods at issue, which had an impact on the consumer's choices - although, admittedly, the consumer would also take other characteristics of the goods into account. The specific design of Bang & Olufsen's loudspeaker increased the appeal of the product and with that its value.
The case is unusual in that aesthetic functionality has almost never been applied by OHIM as a ground for refusal. There was consensus that the provision should be narrowly construed as good design must not be punished. In fact, the Max Planck Institute's Study on "The Functioning of the European Trademark System" has proposed for the provision to be deleted. If the General Court's findings led to a broad application of the aesthetic functionality rule, three-dimensional marks could hardly escape the traps as they would either be non-distinctive, or, if they are sufficiently "striking" for distinctiveness, they would have to be refused as giving substantial value to the goods.
It remains to be seen if Bang & Olufsen take this matter to the Court of Justice of the European Union.