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22 September 2020
The Benelux Court of Justice (BCJ) recently assessed whether the Benelux Office for Intellectual Property (BOIP) rightly refused the Benelux trademark PET'S BUDGET for being descriptive.
The central question in this case was the criterion to assess whether a sign is descriptive. The implications of the case are groundbreaking since it will likely lead to:
The trademark applicant ANISERCO submitted an application for the Benelux wordmark PET'S BUDGET for goods regarding animals in Classes 3, 5, 18, 20, 21 and 31. In summary, the mark related to goods typically sold in pet stores (ranging from animal shampoos, collars, pet clothing and cages to live animals).
The BOIP refused the entire application. It argued that consumers would understand PET'S BUDGET to mean a budget for pets rather than a description of goods for animals. In addition, another meaning of 'budget' in English is cheap or advantageous, which means that the sign could be perceived by some as referring to cheap and advantageous products for pets.
ANISERCO failed to convince the BOIP that the sign was not descriptive and also failed to demonstrate its acquired distinctiveness by use. In this regard, the applicant could provide evidence only as to use in Belgium. Since acquired distinctiveness should be demonstrated throughout the Benelux, the BOIP could easily reject the argument as to acquired distinctiveness.
ANISERCO appealed against the BOIP's decision. Due to a recent legislative change, appeals of BOIP decisions are no longer designated to the Courts of Appeals in the Netherlands, Belgium or Luxembourg (for the Netherlands this was The Hague Court of Appeal), but rather the BCJ.
On appeal, the central question concerned the criterion to assess descriptiveness.
ANISERCO stated that PET's BUDGET was not descriptive of the goods for which it was registered and did not lack distinctiveness. ANISERCO relied on General Court of the European Union (EGC) case law which uses the criterion that a sign is descriptive only where it "shows a direct and specific relationship that it would enable the public concerned to perceive therein, without further thought, a description of the goods in question or one of their characteristics" (EGC, 12 July 2017, T-150/16, Ecolab USA).
The BOIP, on the other hand, argues that the criterion used in the above EGC judgment is incorrect. Rather, the correct criterion for refusal on the basis of descriptiveness is that the sign "in at least one of its potential meanings refers to a characteristic of the concerned goods or services". In this regard, the BOIP draws on interpretations of the European Court of Justice (ECJ) decisions (eg, Doublemint and Biomild).
The BCJ concluded that the BOIP had rightly refused the application and confirmed the criterion that the BOIP had used. The BCJ stated that signs and indications may serve to identify for the relevant public (either directly or by indicating one of the essential characteristics thereof) the goods or services for which registration is sought.
Further, the BCJ considered that in order for the BOIP to refuse an application, the signs and designations of an intended trademark need not be used for the description of goods and services (eg, those for which the application is made or the characteristics of the goods and services at the time of application for registration). Rather, it is sufficient that those signs may serve that purpose. The BCJ stated that the registration of a word sign must therefore be refused under said provision if it describes in at least one of its potential meanings a characteristic of the goods or services concerned.
The BCJ explicitly noted that a "direct and immediate link" between a sign and the relevant goods and services is not required, as claimed by ANISERCO, in order that the relevant public is able to recognise "immediately and without further thought" a description of any of the characteristics of those goods and services.
The BCJ's judgment is groundbreaking as it validates the criterion for descriptiveness as used by the BOIP and explicitly rejects the criterion that there must be an immediate link between signs and goods and services. The criterion advocated by ANISERCO, but rejected by the BCJ, is also used by the EU Intellectual Property Office (EUIPO) and various judicial authorities. According to the EUIPO Trademark Guidelines (version 2020):
a sign must be refused as descriptive if it has a meaning that is immediately perceived by the relevant public as providing information about the goods and services applied for. This is the case where the sign provides information about, inter alia, the quantity, quality, characteristics, purpose, kind and/or size of the goods and services.
The guidelines continue by stating that the relationship between signs and goods and services "must be sufficiently direct and specific, as well as concrete, direct and understood without further reflection".(1) It is unlikely that ANISERCO's application would have been refused if it had applied to register PET'S BUDGET at the EUIPO level.
Just recently, in December 2019 the EGC confirmed the application of this criterion. In its judgment, the EGC stated that in order for a sign to be descriptive:
there must be a sufficiently direct and specific relationship between the sign and the goods and services in question to enable the public concerned immediately to perceive, without further thought, a description of the goods and services in question or on of their characteristics.(2)
On a national level, The Hague District Court in an infringement case also confirmed the application of this criterion, by stating that the "relationship must be sufficiently direct and concrete". The court deemed that the trademark IMPOSSIBLE BURGER (registered for meat substitutes) was not descriptive or devoid of distinctiveness and could therefore be enforced.(3)
The BOIP will view the BCJ's judgment as a significant victory. In 2014 a member of the BOIP's legal department wrote an article about what he viewed as the widespread misconception of ECJ case law on descriptiveness resulting in the use of the (in his perception incorrect) "direct link" criterion.(4)
The BOIP has used stricter criterion regarding descriptiveness in recent years. However, when confronted with a preliminary refusal by the BOIP, it was helpful in practice to refer to case law in which the more lenient direct link criterion was used to overcome the refusal. Following the BCJ's recent decision, it will be harder to register Benelux trademarks which can be regarded as descriptive. This could make it worth applying for an EU trademark instead. The judgment not only has important implications for future trademark applications. Use of a criterion, which result in quicker findings of a sign or trademark being descriptive (and as such being devoid of any distinctive character):
However, it remains to be seen whether the EUIPO, the national courts and the judicial authorities in EU member states will also adapt this criterion.
For further information on this topic please contact Jurriaan Dane or Bram Woltering at AKD by telephone (+31 88 253 50 00) or email (email@example.com or firstname.lastname@example.org). The AKD website can be accessed at www.akd.nl.
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