The Elusive Distinctivenes of Trade Dress in Eu Trademark Law

• Publication year: 2020

The Elusive Distinctivenes of Trade Dress in EU Trademark Law

César J. Ramírez-Montes

THE ELUSIVE DISTINCTIVENESS OF TRADE DRESS IN EU TRADEMARK LAW

Dr. César J Ramírez-Montes^*

Introduction

EU law explicitly allows for the permanent registration of the shape of goods or of the packaging of goods as EU trademarks provided that they are capable of enabling consumers to distinguish the branded goods from others of different origin (inherent source "distinctiveness") and are not considered utilitarian (nonfunctional) but without defining these significant requirements.¹ This is allowed even without prior market use as evidence of consumer association ("acquired distinctiveness" or "secondary meaning"). Although there is growing academic interest in the nonfunctionality requirements,² comparatively less attention is paid to source distinctiveness notwithstanding the fact that international law mandates the use of distinctiveness "as the sole substantive condition and prerequisite for the protection of a trademark."³ This Article provides a systematic analysis of the case law in which the Court of Justice of the European Union (CJEU) has attempted to craft rational limits around registration of product shapes ("3D marks," "shape marks," or "product trade dress") using the distinctiveness requirement as a control device. In its case law, the CJEU consistently applies specific distinctiveness rules for predicting consumer associations and reactions in its modified analytical framework

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underpinning the "departs significantly" criterion. Courts and commentators explicitly acknowledge the dearth of clarity around this pivotal criterion, but hitherto have not attempted to engage more meaningfully with this effectively "forgotten" aspect of EU trademark law. This Article's central claim is that the criterion's analytical framework has been fundamentally misunderstood, partly owing to a lack of judicial articulation of its theoretical basis and partly owing to a lack of meaningful academic engagement with its evolution and contextual application in the case law.⁴ By focusing on inherent distinctiveness as the main obstacle to registering otherwise nonfunctional trade dress that has yet to test consumer reaction in the market, this Article throws much needed light upon the departs significantly criterion which is an important but often neglected aspect of existing distinctiveness debates.

As this discussion demonstrates, trade dress law is a useful way of revisiting source distinctiveness and its contextual application. The 2015 elimination of the "graphical" representation requirement in the definition of a European trademark reflects a legislative attempt to provide more flexibility around the technological means of representing unconventional trade dress marks such as colors and sounds.⁵ This is also likely to ease the registration path for scent, taste, tactile, and motion marks. Academic commentary has so far focused on these nontraditional, "product trade dress marks."⁶ However, the existing debates fail to appreciate that eliminating the graphical representation requirement still leaves the more fundamental question of the relevant circumstances for assuming that any (nonfunctional) trade dress may be source-identifying under the departs significantly criterion. Unlike previous academic assessments into this criterion,⁷ this Article adopts a different methodology that combines a more exhaustive doctrinal exploration of the historical and factual situations that galvanized the EU tribunals into crafting specific distinctiveness rules and a re-appraisal of unarticulated sociological considerations that

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overlooked scholarship came to identify as specifically affecting shape-of-product marks.⁸

In undertaking this unique exploration, I contest deep-seated misconceptions about the meaning and purposes of the departs significantly criterion, confront the widely held view that its appropriate threshold remains unclear and challenge the increasingly popular criticism about the alleged arbitrariness underpinning the CJEU's normative presumption of consumer visual habits. There is strong evidence suggesting this research is timely and highly relevant. Global litigation concerning Nestlé's attempts to register (or defend registration of) the shape of its popular Kit-Kat four-finger chocolate bar not only in the UK,⁹ and Europe,¹⁰ but also across several jurisdictions highlights that a current issue in international trademark law is the conditions under which product shapes should be entitled to permanent registration as source-identifying brands.¹¹ One of the general conditions is distinctiveness, which according to settled EU case law can only be met if there is some basis for assuming that the proposed product trade dress will function as a source-identifier because it shows a significant departure from what consumers expect in the sector.¹² More than a decade ago, the CJEU's Henkel ruling outlined the departs significantly criterion as the sole analytical framework for establishing whether product packaging and product shapes may overcome the non-inherent distinctiveness barrier to be eligible for registration.¹³ Under this criterion, "a trademark which significantly departs from the norm or customs of the sector and thereby fulfils its essential ... function is not devoid of any distinctive character."¹⁴

The test appears closely related to the question of whether, without prior use, any sign is capable of being indicative of source (or inherently distinctive) in the sense of aiding consumers immediately to distinguish the commercial origin of

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the applicant's goods or services from those of other traders.¹⁵ It has expanded to include also any sign that is indistinguishable from the appearance of the designated goods themselves or represents only part of the product, including a nonessential feature that the public immediately perceives as a particularly interesting or attractive detail of that product.¹⁶ More recently, the departs significantly criterion has been extended far beyond shape-of-product marks into the distinctiveness evaluation of retail service marks representing a 3D retail environment or store design.¹⁷ As I have argued elsewhere, this novel expansion of EU law effectively provides protection for the look and feel of a wide range of business environments, bringing European law ever closer to the U.S. concept of trade dress law.¹⁸

Since Henkel Perwoll Bottle, a substantive body of CJEU and European General Court's (EGC) case law has emerged around multiple attempts to register product shapes but most have been unsuccessful for failing to depart significantly from the norms of the sector and incapable of being acknowledged by consumers as source-identifiers without prior education.¹⁹ Thus, the primary

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basis for accepting or refusing an increasingly large number of unconventional signs, whether for mass products or luxury goods, turns on the under-explored meaning and unarticulated policies underpinning this "departs significantly" criterion.²⁰ National courts in Germany and France have interpreted the criterion without apparent difficulty but in questionable ways that have eluded proper academic scrutiny.²¹ English courts however have struggled to make proper sense of the principles and confused guidance in the CJEU's case-law.²² These competing national views of the test suggests a lack of clarity that has yet to be properly addressed. For instance, in 2017, the English Court of Appeal was yet again confronted with the unsettled question of whether, as a matter of principle, a significant departure from existing shapes on the market is both a necessary and sufficient condition for assuming the inherent distinctiveness of shape marks representing car designs.²³ In London Taxi Co. v. Frazer-Nash Research,²⁴ Lord Justice (LJ) Floyd accepted appellant London Taxi Co.'s (LTC) argument that the language used in some European case law strongly suggests this is the correct interpretation but was reluctant to endorse this assumption unreservedly as he felt something else was needed. Indeed, in Bongrain, a differently composed Court of Appeal had already rejected that interpretation as a matter of principle.²⁵

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Having reviewed only two European cases (Freixenet²⁶ and Jaguar²⁷ ), LJ Floyd took the same view as Justice Arnold in the High Court that the position is simply not so straightforward as to be acte claire.²⁸ Unfortunately, none of them sought clarification from the CJEU. Indeed, Floyd LJ found it unnecessary to do so to dismiss LTC's appeal against the conclusion that its Community Trademark (now "EUTM") and national registrations over the shape of the iconic London taxi cab were invalid as the registered car shape was a mere variant on the standard design features of a car and was neither inherently distinctive nor had it acquired sufficient secondary meaning.²⁹ In reaching this conclusion, LJ Floyd applied the departs significantly criterion as resolving itself into a single question about the extent to which the car shape might significantly differ from existing motor car shapes without reference to the probable way in which average consumers respond to the design features of a car.³⁰ It is puzzling however that LJ Floyd did not turn to academic commentary to explore alternative interpretations beyond the two EU cases LTC cited to the court.

The international importance of the departs significantly criterion as the European analytical framework for gauging potential consumer reaction transcends product shape marks and the physical origins of IP law.³¹ For instance, by lowering the representation barrier under the 2015 reforms, the EU legislature has potentially opened the door for a much wider range of "digital trade dress marks" that have hitherto been under-examined and under-utilized, namely trade dress marks for the distinct look and feel of web...