• ALICANTE ABSTRACT

    ON DISTINCTIVENESS, Two Wrongs Don’t Make a Right

    Golf store franchiser Golf USA Inc. landed in the rough recently, when the Court of First Instance upheld OHIM’s refusal to register GOLF USA as a CTM for clothing, sporting equipment and related retail services. The appeal probed the nature and degree of notice OHIM must take of E.U. national acceptances, as well as what, and how much, evidence amounts to proof of acquired distinctiveness in the E.U.

     

    TEEING OFF

    Oklahoma-based Golf USA Inc. filed its CTM in February 2003.

    OHIM refused it, however, finding that GOLF USA merely denoted golf-related goods and services emanating from the U.S. and was therefore non-distinctive under Article 7 (1) (b) CTMR. The Board of Appeal upheld the refusal, adding that the mark was also descriptive under Article 7 (1) (c). Evidence of use had failed to impress the examiner and the Board of Appeal similarly regarded it as insufficient to prove acquired distinctiveness in the E.U.

    Undeterred, Golf USA Inc. appealed again. Before the CFI, it argued that the mark was merely allusive and posed little risk to competitors who wished to use the terms making up the mark in a different order.

    Golf USA pointed to 5 earlier E.U. national registrations for the mark, including in the Benelux, as evidence that OHIM could legitimately register it, and that indeed it must, failing which it would breach Article 14 of the European Convention on Human Rights, prohibiting discrimination and unequal treatment.

    The CFI gave this argument short shrift. In its view, GOLF USA could be understood as denoting golf-related clothing, equipment and retail services emanating from, or otherwise connected to, the U.S. That was enough to create a public interest in keeping the mark free for use by all. If the mark were registered, at least some competitors would hesitate to use the common words comprising it in any order, given that CTM rights may be asserted against similar, as well as identical, marks.

     

    JUST SHORT OF THE PIN

    The more compelling argument by far was that based on Article 14 ECHR.

    The point was not entirely new. Applicants have commonly argued that OHIM’s refusal to register marks already accepted by E.U. national authorities (and indeed marks on all fours with prior OHIM acceptances) amounted to discrimination. However, framing the argument in terms of the ECHR was unusual and raised novel issues, especially on how it differed from previous challenges based on inequality of treatment without reference to the ECHR.

    In the event, the CFI skimmed over the issue, simply stating that objections based on breach of Article 14 ECHR and those based on inequality of treatment were effectively the same. This allowed it to tap into case-law in a more familiar area of OHIM practice, drawing on the prior decisions in STREAMSERVE (T-106/00), SAT.1 (C-329/02 P) and CARGO PARTNER (T-123/04).

    Taking these cases into account, the CFI affirmed that OHIM should consider comparable national and, by extension, OHIM acceptances drawn to its attention, and that such acceptances could be of persuasive value. Where prior acceptances were correct, failure to reach the same result would breach the principle of equality of treatment (and possibly, therefore, Article 14 ECHR, although the CFI was not explicit on this).

    Where OHIM considered a prior acceptance incorrect, however, two wrongs would not make a right. In such a case, OHIM would itself breach the principle of legality if it did not treat the later application differently. “Observance of the principle of equal treatment,” the CFI held, “must be reconciled with observance of the principle of legality, according to which no person may rely, in support of his claim, on unlawful acts committed in favour of another.”

    As OHIM had regarded the prior acceptances as wrong, its decision had not breached the principle of equality of treatment. This ground of appeal was also rejected.

     

    THE 18TH HOLE

    Golf USA made a half-hearted attempt to save its application by filing proof of acquired distinctiveness in Belgium, Portugal, Spain and Sweden.

    Its evidence, however, was meagre and much was undated. Copy invoices did not allow conclusions as to market share to be drawn, and sample advertisements fell short of proving the scale and frequency of promotion in the E.U. Golf USA Inc. made no effort to prove that members of the golf-playing public perceived GOLF USA as a trade mark, either through opinion polls or statements from the trade.

    Moreover, Golf USA’s evidence did not address the markets in the E.U. where English is most widely spoken. The Board of Appeal’s finding that the mark could be understood throughout the E.U. would probably have made geographically broad evidence necessary. However, the rejection of this ground by the CFI was almost a foregone conclusion given that no evidence relating to the U.K. and Ireland, in particular, was shown.

     

    COMMENT

    Golf USA’s experience underscores the importance of filing proof of acquired distinctiveness that addresses all relevant markets comprehensively. It is instructive to note how much higher the burden is likely to be in the case of a very simple English-language mark, which may be understood throughout the E.U.

    The most interesting aspect of this case, however, is the CFI’s continued support for the principle that two wrong acceptances do not make a right. The CFI staunchly defended OHIM’s right to disregard prior national acceptances, and even OHIM’s own prior acceptances, where an examiner considers the earlier decisions to be in error. Such remarks cut across the statutory presumption of validity and it will be interesting to see how they are treated when they one day come before a national court or before OHIM in invalidity proceedings.

    The scope for such references may be great, judging by the frequency with which OHIM disregards prior acceptances pleaded in support of new applications. Normally its language is uncontroversial, but where cases are on all fours, a later rejection implicitly condemns the prior acceptance, regardless how it is phrased.

    No doubt two wrongs do not make a right. However, registration authorities across the E.U., including OHIM, could usefully work towards greater uniformity of standards and increased predictability in decision-making, both on an inter-office and intra-office basis. Reducing the scope for pitting one E.U. registration authority against another, or indeed itself, must be an aim worth achieving.