On 25 October 2018, the General Court overturned the first instance decision of the EUIPO's Cancellation Division and the subsequent appellate decision of the EUIPO's Board of Appeal, which had both ruled that the European trademark DEVIN – the name of a thermal town in Bulgaria – is descriptive of the geographical origin of the goods covered by this trademark, namely mineral water and other types of beverages.
This judgment, once final, will likely have an impact on future case-law regarding the descriptive character of arguably fairly unknown geographical designations to the European public. This decision is in that sense a welcome clarification for water producers – but also other brand owners – throughout the European Union which have registered, or seek to register as a trademark, the name of a (small) town or village where the concerned goods originate from.
Background of the case
Devin is the name of a town in southern Bulgaria, with a population of approximately 7.000 inhabitants and ranks as such 109th in terms of population. This town possesses a number of hot springs and spa resorts, as well as water reserves.
In 2011, Devin AD obtained the registration of the European word trademark DEVIN for a variety of beverages in class 32, including mineral water.
The dispute aroused in 2014 when the Haskovo Chamber of Commerce and Industry (HCCI, Bulgaria) filed a request of invalidity before the EUIPO against that trademark. By a decision of 29 January 2016, the EUIPO's Cancellation Division declared the trademark indeed invalid on the ground that this mark would be understood by the general public in Bulgaria and a significant part of the public in neighboring countries, such as Greece and Romania, as a description of the geographical origin of the concerned goods.
This decision was subsequently confirmed on 2 December 2016 by the EUIPO's Board of Appeal.
Devin AD, represented before the General Court by a Brussels based team of Bird & Bird LLP led by Benoit Van Asbroeck, Guillaume de Villegas and Domien Op de Beeck, lodged an application to appeal this decision of the EUIPO's Board of Appeal.
According to the EUTM Regulation, when there is a sufficiently direct and specific link between the sign and the goods or services in question to enable a significant part of the relevant public to perceive, without further thought, a description of the goods or services or of one of their characteristics, the sign must be declared invalid.
More particularly, for signs that may serve to designate the geographical origin or destination of the categories of goods, or the place of performance of the categories of services, it is in the public interest that geographical names remain available, not least because they may be an indication of the quality and other characteristics of the categories of goods or services concerned, and may also, in various ways, influence consumer preferences.
This rule does however not preclude the registration of geographical names which are unknown to the relevant public.
Decision of the General Court
In that context, the General Court initially examined the perception of the word DEVIN by the relevant public of the European Union. The General Court made to that end a distinction between (i) the average Bulgarian consumers, (ii) the average consumers of the neighboring countries Greece and Romania, and (iii) the average consumers of the rest of the European Union.
First, the General Court ruled that the average Bulgarian consumer would indeed recognize DEVIN as the name of a Bulgarian town, but that the water brand had at the same time acquired at least a normal distinctive character in Bulgaria, thereby excluding the descriptive character of the trademark from the point of view of the average Bulgarian consumers.
Second, the General Court held that the EUIPO's Board of Appeal wrongly focused on Greek and Romanian tourists, who visited Bulgaria or Devin, to assess the alleged descriptive character of the name DEVIN, instead of taking into consideration the entire relevant public of these countries. The evidence relied on by EUIPO's Board of Appeal indeed mainly concentrated on several sources of data relating to tourism: e.g., number of tourists that visited Bulgaria, the detectable presence of the town of Devin on websites such as Trip Advisor and Booking.com, the tourism infrastructure of the town of Devin, etc.
Thereby, according to the General Court, the EUIPO's Board of Appeal applied a wrong test as it limited itself to a small fraction of the relevant public, which cannot be considered sufficiently representative. This wrong test inevitably led, in the General Court's opinion, to an incorrect factual assessment of the perception of the word DEVIN by the relevant Greek and Romanian public.
Taking into account that the average consumer of mineral water and beverages in the European Union does not have a high degree of specialization in geography or tourism, in combination with the evidence adduced by Devin AD (e.g., omnibus market survey), the General Court concluded that it was not established that the word DEVIN is known as the designation of a geographical origin by a significant part of the relevant public of Greece and Romania.
Third, the General Court considered that the file on record did not prove either that the average consumer in the remaining countries of the European Union (i.e., other than Bulgaria, Greece and Romania) recognizes the word DEVIN as the designation of a geographical origin.
Finally, the General Court stated that the general interest in preserving the availability of geographical names, such as that of the thermal town of Devin, is protected by allowing descriptive uses of such geographical names and by limiting the exclusive right of the trademark owner.
Indeed, even if the word DEVIN is protected as a trademark, a descriptive use of the geographical name DEVIN is still permitted, for instance, to promote the town as a tourist destination. Besides, the name of the town of Devin remains available to third parties also to use as a distinctive sign in cases of due cause and where there is no likelihood of confusion.
Therefore, the General Court concluded that the word DEVIN can be registered as a European trademark for mineral water and other types of beverages. Consequently, the General Court annulled the decision of the EUIPO's Board of Appeal.
Following on the recent Neuschwanstein decision of the Court of Justice, the present decision of the General Court provides further interesting clarifications as the scope of the prohibition to register descriptive trademarks.