Shape Trade Marks Which Solely Protect Function are not Registrable in Europe

Ruling of the European Court of Justice

The companies Hauck and Stokke, known on the market for children’s accessories, were engaged in a dispute over high chairs. Hauck moved for the invalidation of a trademark registered by Stokke in the Benelux countries. The designation had the form of a high chair for children. The chair was traded on the market under the name Tripp-Trapp.

 In the course of the proceeding in the Netherlands, the case was sent for a preliminary ruling to the European Court of Justice (C-205/13) (Court of Justice). A pre-trial question was posed concerning how Article 3 of the Directive on Trademarks (Directive) should be interpreted, which is key to the invalidation proceeding. This provision establishes causes for a refusal or confirmation of the invalidity of a registration. The Directive puts forward a rule under which marks cannot be registered where they consist solely of a form resulting from goods themselves, a product form essential to obtaining a technical effect, or a form significantly increasing the value of a product.

The pre-trial question concerned, first, whether the above-cited Article 3 can only be applied, in respect of a form resulting from the nature of goods themselves, in a case in which the designation consists:

• solely of a form essential to the functioning of a product, or
• solely of a form showing one or more essential features of use that a customer can look for in competing goods.

The Court of Justice emphasized the existing achievements of EU case-law pertaining to shape marks (incl. the case of Lego Juris vs. OHIM), pointing out that the essence of the prohibition on the registration of functional form as trademarks is to combat an extension of the protection that otherwise (without the registration as a trademark) would expire in accordance with the intention of the legislator.

In respect of the above pre-trial question, the Court of Justice held that a refusal to register the existing form, due to the nature of the goods themselves, can be made when a designation consists of a form of a product showing one or more features of use important, or inseparably related, to the function or functions of that product, which a consumer may look for in products of competitors.

A further issue which the Court of Justice considered was that of the refusal to register a designation that solely consists of a form significantly increasing the value of a product. The question posed on this subject was aimed at resolving whether such a prerequisite for refusal can apply to a mark that consists solely of the form of a product having a number of significant features, which can endow it with various significant values. A further thread in these considerations was the issue of whether, when making such an assessment, consideration must be given to how the form of the product will be perceived by the target consumer group.

In respect of the first issue, the Court of Justice ruled in the affirmative, while in respect of the second, it pointed out that the manner in which a form is perceived by the target consumer group constitutes only one element of the evaluation. The Court of Justice argued that, the meaning of the phrase “form significantly increasing the value of a product”, cannot be limited to a form that has artistic or decorative value. Increasing the value of a product can also derive from its functional features.

In respect of the perceptions of the target consumer group, the Court of Justice emphasized that this is not the only criterion to be assessed. Other elements affecting a final decision, on whether to apply this prerequisite for a refusal to register, include the nature of the relevant category of goods, the artistic value of a given form, and any significant difference in price when comparing similar products.

In the end, the Court of Justice pointed out that both the prerequisite for a refusal to register concerning the form resulting from the goods themselves and the prerequisite concerning a form significantly increasing the value of a product may be applied jointly.

The Court of Justice carefully analyzed the prerequisites of refusing registration of the shape mark, taking into account that registration of a mark cannot artificially extend protection of other IP rights relevant for these types of creations. Summing up, a mark comprising solely of a shape of a good, where the shape derives from the function of the good, cannot be registered as a trademark. Similarly, if a mark consists solely of a shape, which increases the value of the good, it cannot be registered as a trademark. The function of the pre-trial Court of Justice response is to provide guidance to the national court, equipping the latter to finally resolve the matter of invalidation. It is up to the national court to analyze the facts behind the matter and to establish whether, in fact, the Stokke trademark should be invalidated due to not fulfilling the criteria of legally allowable registration of shape marks.