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CJEU rules that F1 mark is distinctive

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CJEU rules that F1 mark is distinctive

snIPpets – June 2012

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Formula 1 finds the clean air again

The decision of the Court of Justice of the European Union (CJEU) handed down its decision in Formula One Licensing BV v OHIM (Case C-196/11P) on 24 May 2012.  The decision overturned the previous judgment from the General Court which had fixed a dangerous precedent. 

The history

Formula One Licensing had been left in a very difficult place by the General Court judgment which essentially held that third parties could register, and by implication use, trade marks which contained the element F1 where it might be perceived as referring descriptively to Formula 1 racing.  Essentially, the F1 marks were declared generic by the backdoor, rather than in the context of proper cancellation proceedings. 

Given that Formula 1 Licensing has very extensive rights in F1 both as a word mark and in the F1 logo, the judgment of the General Court, by putting an end-run around those rights, raised worrying questions about the reliability of registered rights and undermined the legislative provision that a registered right in enforcement proceedings must be considered valid unless challenged by way of a cancellation action or counterclaim. 

The ruling

The CJEU overturned the earlier decision and found that the General Court had overstepped the mark when making its analysis.    While the Court of Justice acknowledged that the OHIM and General Court must make a global assessment and factor in consumer perception while comparing marks, their freedom in doing so is not unlimited.  In particular, these tribunals must presume -- particularly when considering prior national trade marks -- that registered marks are valid and will be perceived as distinctive.  They are not free to treat an earlier registered mark as entirely non-distinctive in the analysis.

Comments

This judgment does not lower the bar for the assessment of distinctive character in the EU and the OHIM and national registries will still carry out the same examination when deciding to register a mark.  However, the decision does reassure businesses that once they have achieved registration for a trade mark it should perform as expected.  This will be particularly important for businesses who have developed brand equity and trade mark rights through a long history of use and acquired distinctiveness.  Under the GC judgment such businesses potentially faced an invidious situation of needing to reaffirm the acquired distinctiveness of their marks each time they sought to enforce them so it will be a relief to see this vulnerability closed off. 

The underlying principle behind registered rights is to allow the acquisition and recordal of an enforceable right that can be relied upon without the need to repeatedly investigate the existence and scope of the right on each occasion that it is enforced, with great benefits in terms of costs and legal certainty.  The CJEU ruling reaffirms this principle and is good news for trade mark owners and trade mark practitioners alike.

Hastings Guise, senior associate, IP Protection and IP Enforcement and Litigation at Fieldfisher

NOTE: The above article expands upon comments provided by Hastings Guise to World Trade Mark Review on 24 May 2012.

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