General Court annuls EUIPO Board of Appeal decision on invalidity of Louis Vuitton chequerboard pattern

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When it comes to decorative patterns, registration as a trade mark may, in some instances, serve as an ideal form of IP protection - free from the originality conditions of copyright as well as the novelty and individual character requirements of design protection. Nonetheless, trade mark protection poses evidentiary challenges of its own, as many patterns which are ab initio devoid of distinctive character across the EU as a whole will inevitably face the difficult challenge of demonstrating acquired distinctiveness.

Long-time readers may remember back in 2015 - when Louis Vuitton found itself battling invalidity proceedings in relation to their brown and beige, and light and dark grey chequerboard pattern marks respectively (T-359/12 and T-360/12, see IPKat here) - the General Court (GC) found in both cases that not enough evidence had been produced to demonstrate that the marks had acquired distinctive character in all of the EU Member States.

However, the same outcome was not reached last week in relation to another of Louis Vuitton’s beige and blue chequerboard patterns (’Damier Azur’), when the GC annulled the decision of the Second Board of Appeal (R-274/2017-2) which had found the mark to be invalid. The Court reached its conclusion on the basis that the Board of Appeal had not carried out an overall assessment of the mark when considering distinctive character acquired through use in the EU.

Louis Vuitton's 'Damier Azur'

Background

In 2008, Louis Vuitton Malletier obtained an international registration for the pictured mark in relation to Class 18 goods, with the mark being recognised as having the same protection as an EU trade mark in 2009.

In 2015, Mr Norbert Wisniewski filed an application for a declaration of invalidity of the EU trade mark, pursuant to what is now Article 59(1)(a) and Article 7(1)(b), (c) and (e) of Regulation 2017/1001 (EUTMR). 

The Cancellation Division upheld the application for a declaration of invalidity in respect of all of the goods covered by the international registration in December 2016, stating there was no need to examine the absolute grounds under Article 7(1)(c) and (e), and that Article 52(2) of Regulation 207/2009 (now Article 59(2) EUTMR) was not applicable. Louis Vuitton’s appeal was dismissed by the EUIPO Second Board of Appeal .

Before the GC, Louis Vuitton argued that:

• First, there had been an incorrect assessment by the Board of Appeal of the inherent distinctive character of the mark at issue, since the Board had relied on alleged ‘well-known facts’ to supplement the arguments presented by the applicant for a declaration of invalidity; and 
• Secondly, the Board of Appeal had erred in its assessment of distinctive character acquired through use of the mark at issue, as it had failed to carry out an overall assessment of the mark.

The Board’s reference to well-known facts

The GC began by considering whether the Board was entitled to base its assessment regarding lack of distinctive character of the mark at issue on well-known facts.

In invalidity proceedings, EU trade marks enjoy a presumption of validity. As such, it would be for the person who filed the application for a declaration of invalidity to produce evidence that would call into question the validity of the mark at hand. The EUIPO would in turn have to limit its examination to those arguments submitted by the parties, so as not to carry out the examination conducted at the time of the registration of the mark afresh. However, as the GC pointed out, this would not preclude the Board from relying on well-known facts observed by the EUIPO in the context of the invalidity proceedings. As such, the Board would be seen as merely examining the arguments invoked by the applicant for a declaration of invalidity and finding these to be substantiated by well-known facts. It would not be contrary to the rules on the burden of proof for the EUIPO to take them into account.

Then, the GC considered whether the fact that the mark at issue was a basic and commonplace pattern that did not depart significantly from the norm or customs of the sector would be a well-known fact.

The GC recounted that well-known facts are facts likely to be known by anyone or that may be learnt from generally accessible sources. The Board is not required to establish the accuracy of such facts. However an applicant would be entitled to produce documents proving the accuracy or inaccuracy of a matter of common knowledge. 

The GC found that the Board had stated a number of correct facts in its decision, including how the chequerboard pattern was a basic and commonplace figurative pattern since it was composed of a regular succession of squares of the same size, without notable variations in relation to the conventional chequerboard pattern, and how the weft and warp pattern corresponded with the desired visual effect of interlacing two different fabrics. A lack of evidence contesting the accuracy of these well-known facts thus led to the GC’s conclusion that the Board had been correct in finding that the circumstance that the mark at issue was a basic and commonplace pattern that did not depart significantly from the norms and customs of the sector concerned was indeed a well-known fact within the meaning of case law, with the first plea rejected in its entirety.

~ No checkmate here ~
Credit: me

Error of assessment regarding acquired distinctive character through use

In its decision, the Board had divided the EU Member States into 3 groups. Louis Vuitton argued that the Board had wrongly limited its analysis to a restricted set of evidence specifically concerning the Member States in group 3 (including Bulgaria, Estonia, Latvia, Lithuania, Malta, Slovenia and Slovakia), excluding other evidence submitted. The Board thus came to the conclusion on the basis of that evidence that it, individually and as a whole, had not shown the necessary acquired distinctive character.

Recalling the CJEU decision in Nestlé (C-84/17 P, C-85/17 P and C-95/17 P, see IPKat here), the GC restated that it would be necessary (in the context of this particular mark) for the evidence submitted to establish acquisition of distinctive character in all of the Member States of the EU where the mark was ab initio devoid of distinctive character. This evidence could be produced globally for all of the Member States concerned, or separately for different Member States or groups of Member States. It is nonetheless imperative that the evidence produced covers all parts of the EU. 

The GC inferred that the Board of Appeal had selected and examined pieces of evidence which expressly referred to Member States in group 3 only and had excluded other evidence without any further assessment. Since the evidence excluded did pertain to factors important to the consideration of acquired distinctiveness (e.g. the geographically widespread use of the mark, the market share held by the mark, etc.) which could have related global to all the Member States (including those in group 3), it further corroborated the need for the Board to have carried out an overall assessment of the evidence presented by Louis Vuitton. Therefore, the Board failed to comply with Article 59(2) EUMTR and its decision was annulled.

Comment

This outcome acts as a useful reaffirmation of the rigorous position of the EU courts regarding the unitary character of the EU trade mark, and how a sign must have distinctive character (either inherent or acquired) throughout the territory of the EU in order to be protected.

On another note, this is not necessarily the end of the road for this Louis Vuitton mark. The GC came to the conclusion that the Board had erred in law, since it had excluded evidence which could potentially prove acquired distinctiveness for the Member States in group 3, but it made no comment on whether that evidence was enough to demonstrate that all important acquired distinctive character through use.

Not a checkmate, but not a clear win either...

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