On 23 April 2020, the Court of Justice of the European Union (CJEU) handed down a particularly enlightening decision on the notions of “shape of the product necessary to obtain the technical result” and “shape which gives substantial value to the product” (1). These are grounds for refusal or invalidity of a three-dimensional trade mark, the contours of which the CJEU has been seeking to clarify for some years.
In its Philips (2), Lego (3) and Rubik’s Cube (4) judgments, the European judge examined the question of the functionality of the shape and concluded that the three-dimensional trademarks claimed by the owners were invalid. In its Hauck judgment (5), the court examined the concept of the shape conferring substantial value on the product. Following his analysis, the judge rejected the application for a three-dimensional trade mark for the Tripp Trapp chair model. The CJEU used the interpretation of EU law in the above decisions as a guideline for the present Gömböc judgment.
In this case, Gömböc Kft. filed an application for registration of a three-dimensional sign as a trade mark. The trade mark application was filed in class 14 for decorative articles, class 21 for crystal decorative articles and class 28 for toys. The Hungarian Intellectual Property Office rejected the trade mark application on the grounds that the shape is dictated by the technical function of the object, and that the shape gives substantial value to the product within the meaning of national trade mark law. Gömböc Kft. challenged this refusal twice and was rejected at first and second instance.
The Hungarian Supreme Court stayed the proceedings in order to refer three questions to the CJEU for a preliminary ruling. These questions concern the interpretation of Article 3 of Directive 2008/95 to approximate the laws of the Member States relating to trade marks.
The first question is whether the examination of the functionality of a shape should be assessed solely on the basis of the graphic representation of the sign, or whether the perception of the relevant public can also be taken into account. The second question is whether the ground relating to the shape conferring substantial value on the product should be applied by taking into account the perception or knowledge of the buyer. The final question is whether the ground of refusal relating to the shape conferring substantial value on the product can be applied if the appearance of the product has an individual character and is protected as such under design law. In the context of the latter question, the national court also wished to know whether the mere aesthetic appearance of the product gives it any value, which would justify the application of the ground of invalidity relating to the shape giving substantial value to the product.
With this decision, the Court of Justice confirms its restrictive view of the protection of three-dimensional signs. This protection is delicate, since it is subject to multiple grounds for refusal of registration or invalidity (I). The answers given by the European judge to the Hungarian court provide clarification on the articulation between the different regimes of intellectual property law. In particular, the Court is giving increasing autonomy to the different legal systems. This explains the strict distinction made between the trade mark and design right regimes (II).
I. A delicate protection of three-dimensional trade marks: between technical function and substantial value
The CJEU has held that the information required to establish the functionality of the product must be based on objective and reliable sources, which excludes the perception of the relevant public. However, these elements may include other sources than just the graphic representation of the sign (A).
The judge also considered that the ground for refusal relating to the form giving substantial value to the product may apply if the relevant public’s perception or knowledge of the sign in question objectively caused the act of purchasing the marked product. This amounts to proceeding by resorting to a bundle of indicators in order to assess the substantial value of the product (B).
A) The surpassing horizon of the graphic representation for the assessment of the product’s functionality
As early as the eighteenth century, Adam Smith recognised that the proportion of things necessary and convenient for life is ‘determined in particular by the skill, dexterity, and intelligence generally brought to bear in the application of labour’ (6). This conception of the right to property as a natural right is at the origin of modern liberalism. Indeed, each person makes his property of any thing which he has brought out of the state of nature and to which he has mixed his labour, insofar as no other person can legitimately possess a right on the raw thing, which has become the work of Man (7). However, in an international environment that has become ultra-competitive, regulation of the behaviour of economic operators has proved necessary. The widespread use of the intellectual property system to protect the various aspects of intellectual property calls for a clear definition of the framework concepts. Hence the increasing number of preliminary questions on interpretation addressed to the European Court, including those issued by the Hungarian Supreme Court in the Gömböc case.
In its decision, the Court of Justice began by recalling the purpose of the ground for refusal relating to the form of the product necessary to obtain the technical result. The purpose of this ground is to prevent the protection conferred by the trade mark system from being unduly extended beyond the signs identifying the origin of the marked goods and services in relation to those of competitors, so as to constitute an obstacle to the free supply of goods incorporating the reserved utility features.
As early as its Philips judgment, the CJEU explained that the registration of an exclusively functional shape as a trade mark could enable the proprietor to prohibit other undertakings from using that same shape, but also from using similar shapes (8). The objective is therefore to prevent the trade mark right from leading to the granting of a monopoly to an undertaking on technical solutions or utilitarian characteristics of a product, which would be likely to be sought by the user in competing products.
The European judge considered that this analysis was valid for the case in question, insofar as it took into account the examination carried out by the Hungarian Office. The latter had considered that the solution incorporated in the product form is the one that is technically preferable for the category of products concerned. Indeed, the famous Gömböc represents “a homogeneous object designed according to two planes of symmetry perpendicular to each other and consisting of seven smooth faces and edges separating these faces”, “a convex mono-monostatic object made of a homogeneous material, which has a single stable and a single unstable point of equilibrium, i.e. two points of equilibrium in total, and the shape of which guarantees that the said object will always return to its position of equilibrium” (9).
The Office considered that due to its external design and the homogeneous material used, the object will always return to its equilibrium position. According to the Office, the shape of the object serves, in its entirety, to achieve the technical objective of the object always returning to its equilibrium.
With reference to its Lego decision, the CJEU stated that the presumed perception of the sign by the relevant public is not a decisive factor in the application of the ground for refusal relating to the functionality of the product. However, this element of assessment can be qualified as useful when identifying the essential characteristics of the sign (10).
In the judgment under review, the court stated that information relating to the relevant public’s knowledge of the technical functions will necessarily include subjective elements. This subjectivity may give rise to uncertainties as to the extent and accuracy of the relevant public’s knowledge. These flaws would be likely to undermine the objective pursued by the prohibition of the registration, as a trade mark, of the shape of the product necessary to obtain a technical result.
This position of the judge is relevant insofar as the assessment of the functionality of the product is different from the assessment of distinctiveness. Distinctiveness acquired through use can be established by the perception of the average consumer. However, the ground for refusal or invalidity relating to the form necessary to achieve a technical result (or the form giving substantial value to the product) cannot be overcome by demonstrating the acquisition of distinctiveness through use of the sign (11).
According to the established case law of the Court of Justice (in particular the Hauck judgment cited above), the assessment of the functionality of shape signs is an abstract assessment by the court. Where such grounds for refusal are likely to be alleged, it is necessary to carry out a prior examination of the sign in the light of the relevant provisions (i.e. Article 7(1)(e) of the EUMR). The results of this analysis determine whether distinctiveness has been acquired through use (12). As the EUIPO points out, the provisions on acquisition of distinctiveness through use do not apply to shape signs, irrespective of whether or not that shape or other particular feature may actually be distinctive in the market (13).
In the Gömböc judgment, the CJEU stated that information elements, other than the mere graphic representation of the sign, may be used for the purpose of identifying the essential characteristics of that sign. However, such information which does not come from the graphic representation must still be derived from objective and reliable sources. It is therefore consistent, in the light of the Court’s previous case law, that the judge considered that these elements of information cannot include the perception of the relevant public.
B) The use of a bundle of indicators to assess the substantial value of the product
The Court of Justice subsequently explained that the ground for refusal relating to the form giving substantial value to the product must be based on an objective analysis. This analysis is intended to show that the shape in question has, by virtue of its particular characteristics, such an important influence on the attractiveness of the product that reserving this benefit to a single undertaking would have the effect of distorting the conditions of competition on the relevant market. For the application of this ground for refusal, there must be objective and reliable evidence that consumers’ choice of purchase is determined by one or more characteristics of the shape in question.
The Court also clarified that characteristics which are not related to the shape of the product, such as its reputation or technical qualities, are not relevant and therefore do not constitute such objective and reliable elements. It is interesting to note that the judge referred to his previous Hauck judgment, in order to determine to what extent the perception of the sign by the relevant public should be taken into account in the above analysis (14).
In the present case, the Hungarian Office had found that the sign applied for consisted exclusively of a shape which represents a tangible symbol resulting from a mathematical discovery. This particular circumstance made the shape in question special and striking, which is why the Office qualified it as an essential feature. It was therefore necessary to examine whether the shape in question, because of this circumstance, confers substantial value on the product.
In the next point, the Court states that the application of this ground for refusal is not precluded by the fact that the characteristic does not directly concern the aesthetic merits of the shape. It follows from the established case law of the CJEU that this ground is not limited to the shape of products with exclusively artistic or ornamental value. Indeed, such a limitation would risk excluding certain products with essential functional characteristics, in addition to important aesthetic elements (15).
Consequently, the CJEU considered that this ground for refusal must be supported by a plurality of objective and reliable elements. The perception or knowledge of the marked product by the relevant public may be taken into account, but only for the purpose of identifying the essential features of the shape. In order to apply the actual ground for refusal, it is necessary to proceed by means of a cluster of evidence. This would prove that the consumers’ choice to buy the marked product is determined by the characteristic in question.
II. The impact on the cumulation of rights: towards an autonomy of the design right and trademark right regimes
With this Gömböc decision, the Court of Justice confirmed that the European system of intellectual property law allows proprietors to use the technique of cumulating rights in a single intellectual asset.
However, the Court considered that the condition of individual character, in design law, does not merge with the assessment of the ground for refusal relating to the form giving substantial value to the product, in trade mark law (A). This consideration has led the judge to delimit more clearly the perimeter of protection between the different intellectual property rights (B).
A) No confusion between the criterion of the individual character of the design and the assessment of the substantial value of the sign
The third question referred to the CJEU for a preliminary ruling concerns the relationship between trade mark law and design law. The Hungarian Supreme Court asked whether the ground for refusal relating to the shape of the product, which gives it substantial value, must systematically be applied when the appearance of the product is already protected by a design right.
First, the Court recalled that the purpose of this ground for refusal is to prevent the trade mark right, which is exclusive and potentially permanent, from serving to perpetuate other rights which the legislature intended to subject to limitation periods. Such an explanation had already been given by the European Court in its Hauck decision, to which the Court expressly refers in the present judgment (16).
It is therefore a question of preventing any abuse of rights, perpetrated by holders through the technique of cumulation of rights. This theory of abuse of rights, systematised by the doctrine and in particular by Josserand, consists in the use of a right for a purpose that is not its own (17). Each intellectual property right was instituted for a specific purpose and in order to fulfil a specific social function. Consequently, the use of one right to serve the purpose of another causes a misuse of the intellectual property law system (18). Raymond Aron has explained that the spirit of calculation is useful to industrial civilisation, insofar as it is joined by the spirit of science and the spirit of innovation (19). Economic actors have grasped this logic. The generalisation of the use of the technique of cumulation of rights by the owners can lead to the trademark right becoming the “vehicle of an abuse of rights” (20).
However, the judge specified in the following point that this objective of preventing abuse of rights does not exclude that several titles of legal protection can coexist on the same intellectual property object. Superimposition of rights is possible, provided that the conditions specific to each regime are met.
In the Cofemel judgment, the Court had already shed light on the relationship between copyright and design law. In that judgment, the Court held that cumulative protection on the basis of both rights could only be envisaged in certain situations, precisely to avoid undermining the purposes and effectiveness of both types of protection (21).
This solution can be applied to the present judgment, and thus to the relationship between trade mark law and design law. Indeed, the Court clarified that the assessment of the individual character of a design and the analysis of whether the shape in question confers substantial value on the product are different.
The judge also explained that this ground for refusal may result from elements other than the shape of the product having artistic or ornamental value. These elements may relate to the method of manufacture of the product, its design, its materials, or the identity of the designer. According to the Court, substantial value can potentially include the appearance of the product. However, substantial value extends beyond this appearance alone, and its assessment must take into account other elements. Consequently, the judge considered that this ground for refusal, which is specific to trade mark law, should not systematically apply in the event that the object in question enjoys protection under design law. By distinguishing between the two regimes within industrial property, the judge contributes to conferring autonomy and identity on each intellectual property right.
B) An incentive to clearly delimit the scope of protection of rights
The Court of Justice has recognised that the same object may constitute both the appearance of a product, protectable by design law, and a distinctive sign constituted by the shape of that product, protectable by trademark law. However, the European legislator has not provided for any linkage between the two systems of rights, nor has the court established one.
On the contrary, in the judgment under review, the Court deliberately maintains this lack of articulation. Indeed, the Court explained that the rules relating to trade mark law and those relating to design law “are independent, without it being possible to consider that there is any hierarchy between those rules” (22).
This circumstance has not prevented the judge from referring to Article 16 of Directive 98/71 to justify the recourse of proprietors to the cumulation of rights. These provisions provide that the design right regime is without prejudice to the trade mark regime. However, the Court makes a clear distinction between the two regimes a little further on. This distinction is made by recalling the definition of the individual character of the design, which is different from the analysis to be carried out for the assessment of the form giving the product substantial value.
This line of reasoning by the judge is reminiscent, once again, of the argument developed by the Court in the Cofemel case. In that decision, the judge first noted the provisions of Article 17§2 of the Charter of Fundamental Rights of the European Union, which state that intellectual property is protected. However, the judge explained in the following point that, while the objects constituting intellectual property enjoy protection under Union law, not all of these objects should enjoy identical protection (23).
Indeed, secondary Union law has provided for various regimes aimed at ensuring the protection of intellectual property. This protection is achieved through different conditions, purposes and objects. Just as works protected under copyright law on the basis of Directive 2001/29 are distinguished from product designs protected by design law under Directive 98/71, (24) so the latter are distinguished from distinctive signs protected by trade mark law under Directive 2008/95 (and subsequent amending directives and regulations).
This explains why the Court of Justice has held that the ground for refusal relating to the shape giving substantial value to the product must not be systematically applied to a sign protected by design law. With this Gömböc decision, the Court is further encouraging a stricter delimitation of the scope of each legal system. This movement, initiated by the Court of Justice, aims to prevent certain arrangements by proprietors which could give rise to abuse.
In 1958, Hannah Arendt explained that works (understood in the sense of “works”) are objects of use whose use does not cause their disappearance. In this sense, the use to which works lend themselves gives human artifice the stability and solidity that alone allow it to house this unstable and mortal creature, man (25). Subsequently, the legislator and then the European courts have endeavoured to distinguish between the various categories of works, according to the intellectual property right that can cover the aesthetic creation.
In this respect, the Gömböc judgment is part of a line of CJEU decisions aimed at defining the contours of each intellectual property right in relation to the others. It is therefore logical that the Court should interpret the grounds for refusal specific to trade mark law. This makes it possible to better understand the scope of the protection offered by this right. But it is also interesting that the Court has been led to interpret the relationship between trade mark law and design law, when the grounds for refusal of registration of one right come up against the assessment of the conditions of validity of the other.
The Gömböc decision will undoubtedly give rise to other cases involving such a confrontation between rights regimes. The Brompton Bicycle case, which involved a link between the patent (and design) law and copyright regimes, is worth mentioning (26). In his Opinion, the Advocate General had drawn a connection between patent law and design law, calling for an autonomy of protection regimes between industrial property and copyright (27). However, the Court of Justice decided not to follow its Advocate General. First, the Court held that the examination of the condition of originality excludes the assessment of factors external to and subsequent to the creation of the product (28). Furthermore, the Court also considered that an aesthetic creation with a strong functional dimension, which has benefited from a patent right that has now expired, may also be protected by a copyright, subject to compliance with the said condition of originality (29). This amounts to systematising the use of multiple rights, with the possible abuses that such a systematisation of this technique may engender. And this despite the distinction made between the different criteria for access to protection.
Clara Grudler
Lawyer and student at the Sorbonne Law School
1) CJEU, 23 April 2020, C-237/19, Gömböc Kutato, Szolgáltato és Kereskedelmi Kft. (“Gömböc Kft.”) v Szellemi Tulajdon Nemzeti Hivatala
2) CJEU, 18 June 2002, Philips, C-299/99
3) CJEU, 14 September 2010, Lego Juris v OHIM, C-48/09 P
4) TEU, 24 October 2019, T-601/17, Rubik’s Brand Ltd/EUIPO
5) CJEU, 18 September 2014, Hauck, C-205/13
6) Adam Smith, “Introduction”, in Recherches sur la nature et les causes de la richesse des nations, Flammarion, p. 5
7) John Locke, “On Property”, in Second Treatise on Civil Government, II, §27, p. 22
8) CJEU, 18 June 2002, Philips, C-299/99, pt 56
9) CJEU, 23 April 2020, Gömböc, aforementioned, pt 12
10) CJEU, 14 September 2010, Lego Juris v OHIM, C-48/09 P, pt 76
11) EUIPO, Trademark Practice, Guidelines for the examination of trademarks in the European Union, Section 4, Chapter 6, General remarks, 1 February 2020
12) TUE, T-508/08, Bang & Olufsen A/S / OHIM, 6 October 2011, pt 44
13) EUIPO, Trade Mark Practice, Guidelines for the examination of EU trade marks, Section 4, Chapter 6, General remarks, supra.
14) CJEU, 18 September 2014, Hauck, supra, pts 33-35
15) CJEU, 18 September 2014, Hauck, supra, pt 32
16) CJEU, 18 September 2014, Hauck, aforementioned, pt 19
17) Louis Josserand, “De l’esprit des droits et de leur relativité. Théorie dite de l’abus de droit”, Dalloz, collection bibliothèque Dalloz, March 2006, reprinted from 1939
18) Ibidem
19) Raymond Aron, “Les facteurs de la croissance”, in Dix-huit leçons sur la société industrielle, Gallimard, Idées, 1962, p. 203
20) Albert Chavanne and Jean-Jacques Burst, “Droit de la propriété industrielle”, Dalloz, 5th ed. 1998, n° 944
21) CJEU, 12 September 2019, C-683/17, Cofemel – Sociedade de Vestuario SA/G-Star Raw CV, pts 51-52
22) CJEU, 23 April 2020, Gömböc, supra, pt 54
23) CJEU, 12 September 2019, C-683/17, Cofemel, pt 38
24) Ibid, pt 39
25) Hannah Arendt, “The Work”, in The Condition of Modern Man, Pocket, Agora, 2002 reprint, p. 187
26) CJEU, 11 June 2020, C-833/18, SI, Brompton Bicycle Ltd/Chedech and Get2Get
27) Opinion of Advocate General Manuel Campos Sanchez-Bordona, C-833/18, 6 February 2020, Brompton Bicycle Ltd/Chedech/Get2Get, pts 46-56
28) CJEU, Brompton Bicycle, supra, pt 37
29) Ibid, pt 38
The opinions expressed in this article are those of the authors and do not reflect the position of the Institute.