Wave the chequered flag – Louis Vuitton given partial green light in trade mark appeal
Locations
Louis Vuitton's chequerboard "Damier Azur" trade mark was registered with the European Union Intellectual Property Office ("EUIPO") back in 2008, but was the subject of a successful invalidity action in 2015. After Louis Vuitton's appeal was unsuccessful at the Second Board of Appeal, the General Court has now issued their decision in Louis Vuitton Malletier v EUIPO on further appeal holding that the Second Board of Appeal's decision is annulled, and so the chequerboard trade mark remains registered (for now).
Background
In November 2008, Louis Vuitton Malletier ("Louis Vuitton") obtained a WIPO international registration designating the EU for their Damier Azur trade mark within class 18, which contains goods such as handbags, backpacks and purses. This specific trade mark is for their popular chequerboard pattern in a beige and blue variation:
However, in 2015 an individual named Mr Norbert Wisniewski (the "Applicant") filed an application for the EUTM to be declared invalid under Article 59(1)(a) and Article 7(1)(b), (c) and (e) of the EUTMR.
In December 2016, The Cancellation Division upheld the application for declaration of invalidity in respect of all the goods covered by the international registration, stating that there was no need to examine the absolute grounds for refusal. Louis Vuitton filed an appeal with the EUIPO Second Board of Appeal ("Board of Appeal") and in November 2018 the appeal was dismissed. The case then went to the General Court and the decision has now been issued. It is worth noting that prior to this, the General Court has found on two occasions that Louis Vuitton's chequerboard pattern in different colours had not acquired a distinctive character in all of the EU Member States.
Pleas made by Louis Vuitton
Louis Vuitton made two pleas to the General Court. Firstly, that there was an incorrect assessment of the inherent distinctive character of the trade mark and secondly, that there was an error in the assessment of the distinctive character acquired through use of the trade mark by the Board of Appeal.
First issue – Well known facts when assessing inherent distinctiveness
Louis Vuitton alleged that the Board of Appeal incorrectly assessed inherent distinctive character for two reasons - the decision was contrary to the rules concerning burden of proof in invalidity proceedings and the decision was against the principle of equality of arms, the right to a fair trial and the right of defence.
Louis Vuitton argued that when an EU trade mark is subject to a declaration of invalidity, it enjoys a presumption of validity and therefore the burden of proof lies with the applicant for the declaration to provide strong evidence of invalidity. Therefore, the Board of Appeal would have had to look at the evidence provided by both parties and not carry out a fresh assessment of validity.
Louis Vuitton argued that the Applicant provided sparse and inadequate evidence, and therefore the Board of Appeal compensated for this by basing its decision on allegedly well-known facts, which Louis Vuitton argued were not established facts. The well-known fact in question was that the trade mark was "a basic and commonplace figurative pattern… which did not depart significantly from the norms and customs of the sector".
Firstly, the General Court had to consider whether the Board of Appeal was entitled to rely on well-known facts in their assessment, and secondly whether this was a well-known fact. The General Court found the Board of Appeal did not act contrary to the rules on burden of proof when relying on the well-known fact.
In establishing whether this was a well-known fact, the General Court reiterated that "well-known facts are defined as facts that are likely to be known by anyone or may be learnt from generally accessible sources". The Board of Appeal would not need to look at the accuracy of these facts, however an applicant may provide evidence proving the accuracy or inaccuracy of a matter of common knowledge.
The General Court held that the facts relied on by the Board of Appeal were correct. They stated that the Board of Appeal was right to find that the chequerboard pattern is a basic and commonplace pattern. The Board of Appeal also stated as fact that the weft and warp pattern appearing on the inside of each of the chequerboard squares corresponded with the desired visual effect of interlacing two different fabrics.
Therefore, the Board of Appeal was right to find the trade mark as being a basic and commonplace pattern that did not depart significantly from the norms or customs of the sector, and no evidence had been given by Louis Vuitton to contest the accuracy of this well-known fact. In addition, the Board of Appeal did not infringe the rules on the burden of proof. As a result, the first plea was rejected entirely.
Second issue – Incorrect assessment of the distinctive character acquired through use of the trade mark
With regards to this issue, Louis Vuitton argued that the Board of Appeal was required to conduct an overall assessment of all the evidence submitted to determine whether the trade mark had acquired distinctive character through use throughout the EU, as per the Nestlé decision. Louis Vuitton alleged that while they had submitted substantial evidence of acquired distinctive character covering the whole EU, the Board of Appeal wrongly limited its analysis to a restricted set of the evidence provided, which concerned a specific group of EU Member States. When carrying out its assessment, the Board of Appeal found that the evidence did not show the required level of distinctive character.
Looking at this issue, the General Court held that the assessment of distinctive character must take into account "the actual situation" and referred to the Nestlé decision, which stated that the evidence must show the trade mark has acquired distinctive character in all EU Member States where the trade mark was initially devoid of such distinction. Therefore, if a mark is initially devoid of distinctive character across all Member States, that mark can be registered only if it is proved that it has acquired distinctive character through use, throughout the territory of the EU.
The General Court noted that Louis Vuitton had filed extensive evidence before the Board of Appeal, and the evidence was meant to be taken as a whole to demonstrate acquired distinctiveness throughout the entire EU. Further, the Cancellation Division had made errors in the assessment of the evidence in their original findings. In their assessment, the Board of Appeal divided the Member States into three groups, but limited their assessment to only the third group (including Bulgaria, Estonia, Latvia, Lithuania, Malta, Slovenia and Slovakia) which represents only 4% of the EU population. Additionally, the Board of Appeal limited itself to only assessing certain pieces of evidence relating to this group, without explaining the reasons why it considered all the other evidence irrelevant (the Board of Appeal limited itself to analysing some of the evidence contained in only 8 out of the 68 exhibits). Following this assessment, the Board of appeal concluded that the mark at issue had not acquired distinctive character through use.
By examining only a small part of the evidence, the General Court found the Board of Appeal had erred in law by only making a partial and incomplete assessment of the evidence. The Board of Appeal was required to carry out a global assessment of all the relevant evidence submitted by Louis Vuitton.
The General Court did not comment on whether it thought the evidence submitted was sufficient to show acquired distinctiveness but did say "some of the evidence in the exhibits which the Board of Appeal did not take into account in the contested decision was potentially relevant for the purposes of assessing whether the mark at issue had acquired distinctive character through use… for example, the Board of Appeal did not analyse any of the evidence in the first group of exhibits, which… were intended to demonstrate that it was one of the most well-known luxury goods businesses… It is clear from exhibit No 4, for example, that between the years 2008 and 2014, the applicant was the top seller of bags and travelling bags (goods in class 18) in western Europe and the second top seller in eastern Europe". The General Court also noted some other crucial evidence which was not considered by the Board of Appeal, including evidence which demonstrates the extensive, geographically widespread and long-standing use of the mark at issue in the EU and the substantial investment made in promoting the mark; extracts from catalogues, brochures and advertisements; search engine and website results etc.
As a result, the General Court found that the Board of Appeal failed to comply with Article 59(2) EUTMR.
Decision
Because the second plea was upheld due to the Board of Appeal's incomplete review of the evidence, the General Court annulled the decision of the Board of Appeal.
The registration remains valid for now, and the EUIPO could appeal the decision to the Court of Justice which is the highest court in the EU. If not, the case should be remitted back to the Board of Appeal for further review.
Comment
The decision highlights the challenges facing owners of trade marks which consist of fairly basic or commonplace patterns – there is a high risk that such marks will be considered to lack inherent distinctiveness. It is usually necessary to demonstrate acquired distinctiveness through use in order to achieve (and maintain) a registration of this type.
The decision also serves as a reminder that when considering acquired distinctiveness of an EUTM, an overall assessment of all the evidence, throughout the EU, is required. The Nestlé case set the bar high for trade mark owners proving acquired distinctiveness throughout the EU and despite this being a win for Louis Vuitton, it was based on the Board of Appeal's incomplete review of evidence. It therefore remains to be seen whether, on a correct review of the evidence, it leads to a finding of acquired distinctiveness throughout all Member States.
With special thanks to Minhaal Datoo, trainee solicitor, for his contribution to this article.
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