Hauck v Stokke et al (Case C-205/13, September 18, 2014)
A recent Court of Justice of the European Union (“ECJ”) ruling provides clarity on when to register three-dimensional product shapes as trademarks in the EU. Hauck v Stokkeet al (Case C-205/13, September 18, 2014) (“Tripp Trapp”). Tripp Trapp concerns the interpretation of Article 3(1)(e) of First Council Directive 89/104/EEC to approximate the laws of the Member States relating to trademarks (“the Trademarks Directive”), which provides grounds for refusal or invalidation of signs which consist exclusively of:
- the shape which results from the nature of the goods themselves, or
- the shape of goods which is necessary to obtain a technical result, or
- the shape which gives substantial value to the goods.
The purpose of Article 3(1)(e) is to prevent registration of trademarks consisting exclusively of a shape which is inherent to the functionality of a product or which gives the product substantial value, since allowing otherwise would grant one entity a monopoly over the essential characteristics of such product.
The three-dimensional trademark at issue is a Benelux trademark registration of a sign in the shape of a children’s high chair, called “Tripp Trapp,” registered for “chairs, especially high chairs for children” in 1998 by Stokke A/S, a Netherlands company, and designed by Peter Opsvik of Peter Opsvik A/S (collectively “Stokke”), pictured below:
Stokke brought an action against a German company, Hauck GmbH & Co.KG, which manufactures and distributes two children’s chairs, “Alpha” and “Beta,” claiming that the Alpha and Beta chairs infringed Stokke’s copyright and trademark registration in the Tripp Trapp chair.
Stokke Tripp Trapp Chair vs. Hauck Alpha Chair
Hauck brought a counterclaim seeking invalidation of the Tripp Trapp trademark registration. The District Court, The Hague, Netherlands ruled in favor of Stokke with respect to the copyright claim, concluding that the chair had a high level of originality and that Hauck’s Alpha and Beta chairs infringed Stokke’s copyright. The court also granted Hauck’s counterclaim, invalidating the Tripp Trapp trademark registration. Hauck appealed the decision to the Court of Appeal, The Hague, Netherlands, which upheld both the copyright infringement ruling and the invalidation of Stokke’s trademark. The Court of Appeal found that the aesthetic appearance of the Tripp Trapp chair gave it substantial value and that its shape was determined by the very nature of the product itself (a safe, comfortable children’s chair), thereby invalidating the trademark.
Hauck then brought a cassation appeal against the copyright infringement claim before the Dutch Supreme Court, and Stokke filed a cross-appeal with respect to the trademark invalidation. The Court rejected Hauck’s cassation appeal, but referred the following three questions to the ECJ with respect to the interpretation of Article 3(1)(e) in the context of the trademark invalidation claim:
- Does the ground for refusal or invalidity set out in the first indent of Article 3(1)(e) (three-dimensional trademarks may not consist exclusively of a shape which results from the nature of the goods themselves), refer to a shape that is indispensable to the function of the product in question, or can it also refer to a shape that features one or more substantial functional characteristics of the product?
In response to the first question, the ECJ concluded that the latter interpretation is correct, namely, that the grounds of refusal should not be interpreted narrowly and may apply to a sign that consists exclusively of the shape of a product with one or more essential characteristics that are inherent to the function of the product and which consumers look for in competing products. The first interpretation, applying only to signs that consist exclusively of shapes that are indispensable to the function of the product, would leave producers of those goods “no leeway to make a personal essential contribution.” Under that reasoning, the ground of refusal could only apply to shapes such as “natural products” which have no substitute, or “regulated products” the shape of which is prescribed by legal standards, both of which must be refused registration because they lack distinctive character anyway.
2. Does the ground for refusal or invalidity in the third indent of Article 3(1)(e) (three-dimensional trademarks may not consist exclusively of a shape which gives substantial value to the goods), refer to the motives underlying the relevant public’s decision to purchase? Further, must the shape be considered the main or dominant value of the product, or can the shape be considered to give substantial value to the product if there are also other elements of the product that give it substantial value? Lastly, in determining whether the value is “substantial,” is the opinion of the majority of the public decisive, or is an opinion of a portion of the public sufficient?
With respect to the second question, the ECJ stated that this ground of refusal may apply to a sign consisting of a product shape having several characteristics, each of which give the product substantial value, and should not be limited solely to the shape of products having only artistic or ornamental value. The court noted that while the shape of the Tripp Trapp chair gives it significant aesthetic value, the shape also has other characteristics that give it essential functional value (safety, comfort, and reliability). The fact that the shape of a product gives it substantial value does not mean that other characteristics of the product may not also give it substantial value. Otherwise, there is a risk that products that have essential functional characteristics as well as significant aesthetic elements would not be covered by this ground.
With respect to the public’s perception of the sign, the ECJ stated that while the perception of the relevant public is a relevant consideration in determining the essential characteristics of that sign, it is not a decisive factor. Further, other criteria may also be taken into account such as the category of goods, the artistic value of the shape, its dissimilarity from other shapes commonly used in the market, a substantial price difference in relation to similar products, and a promotional strategy focused on accentuating the aesthetic characteristics of the product in question.
3. May the first and third indents of Article (3)(1)(e) be applied in combination, such that a sign may be refused registration where the shape consists of elements in part resulting from the nature of the goods, and with respect to other elements, give substantial value to the goods?
The ECJ held that the first and third grounds for refusal in Article (3)(1)(e) are independent and may not be applied in combination. To refuse a trademark or declare one invalid, any of the grounds must be fully met. While the ECJ provides some clarity on the interpretation of Article 3(1)(e), the decision still leaves several questions unanswered and its teaching may be difficult to apply in practice. For example, the ECJ provided little guidance on how to determine the substantial value of the product, and whether a consumer survey, for example, would be appropriate. Though companies may find the longevity of trademark protection for three-dimensional designs attractive compared to that offered under copyright and industrial design protection, this case serves as a reminder that companies should opt for a comprehensive protection strategy that includes a combination of trademark, copyright, and design protection.