Crushing Consumer Awareness Burden Sinks Bounty Shape

The struggle to wrest CTM protection for shapes is not getting easier. This is the unwelcome news following the CFI's ruling on Mars Inc.'s long-running battle to defend its CTM for the shape of the BOUNTY chocolate bar (Mars Inc. v OHIM, Case T-28/08). There are few signs of a more practical approach to proof of acquired distinctiveness, and the need for such proof to extend to every EU member state is likely to cause more than just Bounty to founder on the rocks. 

Wide Proof, Tall Order

Mars filed its three-dimensional shape CTM in 1998. Shortly after registration in 2003, Ludwig Schokolade GmbH & Co. KG applied to invalidate it on grounds of nondistinctiveness. Mars won at first instance, lost on appeal, and brought a further appeal to the CFI.

The CFI spurned Mars' claim that the shape was inherently distinctive, but the meat of the decision was in its decisive rejection of the evidence of acquired distinctiveness. At the time the CTM was filed there were 15 member states, but Mars filed substantial proof of use relating to only 6 of them, with only more limited evidence for the remaining 9. Following Glaverbel v OHIM (Case T-141/06), the CFI held that acquired distinctiveness must be shown in all member states as of the date of filing, not just in some.

Mars battled back, arguing that the states for which it had shown substantial use (the UK, Belgium, France, Germany, Italy and the Netherlands) represented around 85% of the total EU market. It argued that this was sufficient to show that the shape had acquired distinctiveness in the EU as a whole, and that it should not be necessary to submit evidence on a country-by-country basis, without regard to the size and commercial importance of the markets.

Mars also argued that the results of its consumer survey evidence for the 6 countries should be extrapolated to the remaining 9 member states in existence on filing, on the basis that the mark had been in use for similarly long periods, and had enjoyed similar market shares, in the 9 countries as in the 6.

Unfortunately for Mars, the limited sales, advertising and market share figures provided for the 9 countries were not sufficient to persuade the CFI to make that extrapolation. In the CFI's view, the market share figures were not as uniform as claimed; even in similarly sized markets such as France, Sweden, Finland and Denmark, it thought the figures varied significantly. The surveys showed moreover that rates of consumer recognition of the shape could also vary significantly in the 6 member states covered. It was not, therefore, possible to draw conclusions about consumer awareness in the other 9 countries without actual survey evidence there.

In the absence of proof that the average consumer in all 15 EU countries perceived the shape as an indicator of origin, the CFI struck down the CTM as invalid.

Comment

Mars advanced some strong and creative arguments for a more practical approach to acquired distinctiveness in the EU. The CFI's entrenched reaction is bad news for others who need to protect shape marks as CTMs.

Requiring proof to extend to every single EU member state in existence at the time of filing sounds a virtual death knell for acquired distinctiveness as a way of securing CTM protection for marks that are judged inherently non-distinctive across the EU, such as shapes, non-word marks and, potentially, certain English-language word marks. With some 27 EU member states, it will be rare indeed for a brand owner to show that a shape has become recognised as an indicator of origin in each one. Such an exercise would moreover be prohibitively expensive. With only 15 member states in play, the burden on Mars was comparatively light-and that is saying something.

The current approach takes little account of the low commercial importance of some member states for certain goods and services, and, indeed, the tiny size of some of the markets. Requiring equal efforts and expenditure to prove acquired distinctiveness in every one of them seems disproportionate and undermines the ability of businesses to protect their investment in intellectual property in the EU.

Arguably the result in Bounty was right, given the evidence that others had long been using similarly-shaped chocolate bars across the EU. Still, this decision and Glaverbel make for gloomy reading for those who need to rely on proof of acquired distinctiveness to protect shapes, in particular, as CTMs.

One can at least glean some useful pointers, in particular the importance of augmenting advertising expenditure with data on the nature and volume of advertising. Remembering that the evidence is not mere proof of use can help: the more one shows that a brand has actually come to the consumer's attention, the better.

Nonetheless, the fact remains that Bounty makes life harder for shape mark applicants, for whom it seems that quantity of evidence now has to matter as much as quality. Hopefully future cases will give the Courts the opportunity to put this right.