Distinctive character acquired through use must be established for every member state

C-84/17 P

Nestlé v Mondelez

Trade marks: Validity

25 Jul 2018

The matter at hand

Nestlé is the proprietor of an EU trade mark for sweets, bakery products, pastries, biscuits, cakes and waffles, for a three-dimensional sign consisting of the ‘4 finger’ shape of its KitKat bar. Mondelez filed for invalidity of the mark before EUIPO, on the basis that the mark is devoid of distinctive character.

EUIPO found that the mark had acquired distinctive character through use. Mondelez filed appeal against this decision before the General Court.

In the proceedings before the General Court, Nestlé relied on evidence of acquired distinctive character through use in ten of the then fifteen Member States, but on no evidence regarding the five other, somewhat smaller Member States: Belgium; Ireland; Luxembourg; Greece; and Portugal.

The General Court annulled the decision of EUIPO on the basis of the finding that – for the purposes of proving distinctive character acquired through use throughout the European Union – it was not sufficient to show that a substantial proportion of the relevant public in the European Union perceived the sign as an indication of the commercial origin, but that it is necessary to prove that distinctive character has been acquired through use in each of the Member States concerned.

Nestlé and EUIPO appealed to the ECJ against the judgment of the General Court, arguing that proof of acquired use of an EU trade mark does not need to be shown for each of the Member States separately, as this would be incompatible with the unitary character of the European trade mark and the single market.

The judgment of the ECJ

The ECJ rejects the appeals of Nestlé and EUIPO.

The ECJ first addresses the reference to the judgments in Leno Merken (C‑149/11) and Colloseum Holding (C‑12/12). In these judgment it was respectively held that, in order to assess the existence of genuine use of a registered mark, it is necessary to disregard the territorial borders of the Member States and that the requirements that apply to verification of the genuine use of a mark are analogous to those concerning the acquisition by a sign of distinctive character through use. The ECJ dismisses these judgments as irrelevant in the present matter, as these judgments pertain to the fundamentally different question of genuine use and that the judgment in Colloseum Holding should not be understood to pertain to the geographic scope of that use (paragraph 71).

With regard to the geographic scope, reference is made first to Storck v OHIM (C‑25/05 P), where it was held that a sign can be registered as an EU trade mark only if evidence is provided that it has acquired, through use, distinctive character in the part of the European Union in which it did not, ab initio, have such character for the purposes of Article 7(1)(b) Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark and that the mark may be rejected if the mark has no distinctive character in a part of the European Union comprising of even, where necessary, a single Member State (paragraph 75).

The ECJ then goes on to balance this with its judgment in Chocoladefabriken Lindt & Sprüngli v OHIM (C‑98/11 P), where it rules that it would be unreasonable to require proof of acquisition of distinctive character for each individual Member State (paragraph 77). In doing so, the ECJ points out that it is necessary “to distinguish between, first, the facts to be proved, namely the acquisition of distinctive character through use by a sign that is devoid of inherent distinctive character, and, second, the means of proving such facts” (paragraph 79). After providing some examples of situations where evidence regarding one Member State may provide an indication of use in another (such as information on similarity of marketing strategies and geographic, cultural or linguistic proximity of Member States), the ECJ concludes that “although it is not necessary […] that evidence be submitted, in respect of each individual Member State, of the acquisition by that mark of distinctive character through use, the evidence submitted must be capable of establishing such acquisition throughout the Member States of the European Union” (paragraph 83).

Commentary

With these findings, the ECJ appears to paddle back from the concept of the unitary character of the internal market, albeit only to a very limited and subtle extend: It has long been established that, for a trade mark to acquire distinctive character, it is sufficient that at least a significant proportion of the relevant class of persons do so (Chiemsee, C-108/97 and 109/97). This finding seems to imply that it is not required to establish that each and every demographic has come to recognize the sign as a identifier of source. So, for example, a trade mark may have acquired distinctive character, even though the part of the public that never watches television and has not access to the internet, may well not be familiar with the sign. The demographic ‘resident of a certain Member State’ now seems to be an exception to this rule, as the ECJ does require that distinctive character must be acquired “throughout the Member States of the European Union”. In other words: the relevant question is not only whether a significant proportion of the relevant public of the unitary internal market recognize the sign as a identifier of source, but also whether this is the case in each Member State.

The findings of the ECJ are likely to also apply to the Benelux, where it is quite common for a not-intrinsically-distinctive sign to have complete fame in one or two of the three countries and be hardly known in another. Such famous signs may as a consequence be unprotectable in the country where they enjoy their fame as, contrary to the EU marks, there is no smaller trade mark jurisdiction to fall back on.

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