When a brand owner seeking a CTM argues that a prima facie descriptive mark has become distinctive by prior use, will use across a few EU states be enough? Hamish Colley reports on Golf USA, Inc’s efforts to register ‘Golf USA’.
Who: Golf USA Inc.
Where: The European Court of First Instance
When: 6 March 2007
Golf USA Inc. applied to register GOLF USA3 as a Community Trade Mark ("CTM") in respect of clothing, footwear and headgear in class 25; sports articles, including golf clubs and golf balls, in class 28; and commercial retailing services of golf equipment in class 35.
The Office for Harmonisation in the Internal Market ("OHIM") rejected the application. The OHIM Board of Appeal subsequently upheld this decision, citing Article 7(1) (c) of the CTM Regulation in relation to the goods or services in classes 28 and 35, and Article 7(1) (b) in relation to all the classes applied for. In summary, Article 7 (1) (c) prohibits the registration of a mark which is merely descriptive of the essential characteristics of the goods or services for which registration is sought. Article 7 (1) (b), on the other hand, prohibits the registration of a mark which lacks distinctive character.
The applicant appealed to the Court of First Instance of the European Court of Justice ("CFI"). It argued that the OHM had erred in applying Articles 7 (1) (b) and 7 (1) (c) and by ignoring Article 7 (3) of the CTM Regulation. In brief, Article 7 (3) allows a mark to be registered if the mark has been used in such a manner as to become distinctive in relation to the goods or services to which the mark relates. In support of its appeal, the applicant provided evidence of advertisements, copies of sales reports and various invoices from several Member States.
The CFI rejected the applicant's appeal on the following grounds:
The CFI found that the registration of the mark would affect the use of the terms "golf" and "USA." The exclusive rights granted by a CTM allow the owner of the mark to prevent third parties from using a combination of terms likely to result in confusion with the mark. The CFI argued that, should the mark be registered, the use of the separate terms "golf" and "USA" by third parties would be affected.
The CFI also found that the term "golf" was sufficiently direct in describing the goods or services in relation to class 28 and 35 when bearing in mind that the relevant consumers would be golfers. The CFI also argued that the mark was descriptive in relation to geographical origin to the extent that consumers might consider that the goods or services in question originated from the United States.
Lack of Distinctive Character
The CFI held that, to the extent that the mark was descriptive of goods and services applied for in class 28 and class 35, it must also be lacking distinctive character in relation to the same goods or services.
In relation to the goods applied for in class 25, the CFI found that the mark again lacked distinctive character to the extent that GOLF USA described both the possible use and origin of the goods in question. Furthermore, the combination of the words "golf" and "USA", while linguistically incorrect, nevertheless was very similar to other combinations of the two words which are commonly used e.g. "golf (USA)". In other words, the mark was "distinctive" only in terms of the way in which the words used were juxtaposed and that, as such, it would be unlikely to influence any perception created by the two words.
Failure to Achieve Distinctiveness through Use
The CFI also rejected the argument that the mark had acquired distinctiveness through use. In summary, it highlighted the need to demonstrate that a mark to which an application relates is considered distinctive of the applicant by the average consumer across a substantial part of the EU. In the view of the CFI, the evidence provided only related to a small number of Member States. In particular, the invoices and sales reports used did not demonstrate the applicant's share of the market held. Furthermore, the documents relating to the applicant's stores in several Member States related to too short periods, thus preventing a conclusion being drawn as to the proportion of the public which could identify the goods and services in question as being distinctive to the applicant. The applicant's argument was further rejected by the CFI due to the applicant's failure to demonstrate the extent and impact of the advertising used, in addition to its failure to provide evidence (such as opinion polls) of the proportion of the relevant market which could identify the goods and services as being those provided by the applicant.
Why this matters:
In relation to applications to register goods in class 25, the ruling demonstrated that the CFI is to apply a high standard when considering a mark's distinctiveness. A mark which merely uses an unusual juxtaposition of words will not be registrable if the words themselves are merely descriptive of the goods to which the mark relates.
Moreover, the case is significant in demonstrating the factors which may be considered by the CFI when deciding whether a mark has acquired distinctiveness through use in accordance with Article 7 (3) of the CTM regulation – namely, the geographical extent to which a mark is known throughout the EU, the duration of use, the nature and impact of advertising of a mark, and the quality of evidence provided.