London Taxi case - The role of consumer perception in assessing the inherent distinctiveness of shape marks
A discussion of the recent Court of Appeal judgment in The London Taxi Corporation Ltd (t/a the London Taxi Company) v Frazer-Nash Research Ltd & Anor [2017] EWCA Civ 1729: Part I – inherent distinctiveness
When assessing whether a shape mark is inherently distinctive, it has been treated as an axiom of EU trade mark law, that average consumers are not generally accustomed to making assumptions about the origin of products based on their shape. This principle has been re-iterated time and again by the CJEU, notably in the cases of Deutsche SiSi Werke v OHIM, Freixenet SA v OHIM, Mag Instrument, Inc v OHIM and August Storck KG v OHIM. The finding in all these cases was that whilst the criteria for assessing distinctive character should be applied uniformly across all types of trade marks, because of the way that the average consumer reacts to shapes, it is in practice more difficult to establish the distinctiveness of a shape mark.
Given this unfortunate tendency on the part of the average consumer, it has become necessary for a trade mark owner, when establishing distinctive character in its shape mark, to demonstrate that the mark departs significantly from the norm or customs of the sector. If it can be so shown then it is presumed that the mark is capable of fulfilling its essential origin function and is therefore distinctive.
In his recent judgment in the appeal of the London Taxi case (with which Kitchin LJ agreed), Floyd LJ helpfully summarised the CJEU case law position on determining whether a mark has departed significantly from the norms of the sector. Boiled down, the test comprises the following three questions:
- What is the sector?
- What are the common norms and customs (if any) of the identified sector?
- Does the shape mark in question depart significantly from those norms and customs?
Applying this three stage test in the London Taxi case, Floyd LJ found the relevant sector to be that of the automotive sector generally, rather than taxis specifically, or indeed (as the Appellant argued), the London licensed taxi cab sector. He went on, without difficulty to identify the common norms and customs of the car sector to include, amongst other things, a superstructure carried on four wheels, a bonnet, headlamps, sidelights and parking lights and front grille. In light of his findings in relation to steps 1 and 2, he unsurprisingly concluded, in agreement with the finding of the trial judge (Arnold J), that the marks in question did not have inherent distinctive character.
It is difficult to criticize Floyd LJ's findings at any stage of the three limbs of the inherent distinctiveness test. But the overall conclusion nevertheless still feels slightly off, particularly when considered in light of the automotive sector. Why is that?
Is this "habit" or "custom" of the average consumer not to make assumptions about the origin of products based on their shape an axiom of EU trade mark law, as has been assumed, or is it actually a presumption? If it is a presumption, presumably it is capable of rebuttal? It seems to us to that the view expressed in the leading CJEU case law on shape marks: that consumers are not in the habit of making assumptions about the origin of products based on their shape, is actually a presumption as to consumer behaviour. Importantly, this presumption does not take into account the nature of the goods and services at issue, which clearly is not the same across different sectors.
If this is the case, then it follows that the three stage test summarized by Floyd LJ requires some tweaking. In particular, the test may require an additional limb after the first and before the second. This missing limb asks: is there any evidence to suggest that the average consumer of the relevant sector is more or less likely than those in other sectors to make assumptions about the origin of the product based on its shape? Without this additional question, the characterisation of consumer perception of shape marks has a blanket effect which ignores the differences that exist amongst consumers from one sector to the next. This would be contrary to the long-established CJEU position that distinctiveness must be assessed in light of the goods and services at issue.
Turning to the specifics of the automotive sector, we consider that this sector is one in which the average consumer probably does make assumptions about the origins of a car based on its shape. In instances where other graphic or word elements are not easily visible, for example, when driving on public roads, very many consumers will readily identify brands of car on the basis of shape alone. Does this identification affect the origin function of a trade mark? Yes, potentially it does. A motorist arrives home and comments on social media that they "saw a Porsche broken down on the hard shoulder". A negative message that cuts to the heart of Porsche's brand is mediated exclusively by that consumer's recognition of the distinctive shape of one of its cars. Clearly the shape is having a trade mark function. It is likely that you could tell a similar story in relation to the majority of automotive brands, most of which feature many models that can be readily recognised by shape alone. This would suggest that, in the context of the automotive sector that presumption that consumers are not generally accustomed to making assumptions about origin of products based on their shape may not actually apply.
Had this additional limb been considered, and had suitable evidence been adduced in response to it, might the outcome for London Taxi have been different? It is possible, in the context of a market where shape is understood to be a key indicator of commercial origin, London Taxi would have had greater success in showing the distinctiveness and enforceability of its registrations.
Note: While Fieldfisher LLP did not act in the litigation under discussion, our firm did act for The London Taxi Corporation previously on IP matters and we originally represented the company in successfully registering the contested shape marks on the basis of acquired distinctiveness.