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Europe: A sweet victory for Cactus – CJEU confirms principles of legitimate expectations and genuine use

(Judgment of 11 October 2017 in Case C-501/15 P – EUIPO v Cactus)

The CJEU confirms that two cases which fundamentally changed the EUIPO approach to construing the scope of protection of EUTMs do not have retroactive effects. The judgment also confirms that where there is a semantic equivalence between the verbal and figurative parts of a mark the mark can be genuinely used, even if its entire verbal element is omitted.

What was the case about?

Cactus SA brought an opposition against an EUTM application for the figurative marks incorporating the words “Cactus of Peace” and “Cactus de la Paz”. The opposition was based on a word mark for CACTUS, registered in 2002, and a figurative mark for CACTUS registered in 2001.

The marks covered a variety of goods and services including the class heading for services in class 35, namely “Advertising, business management, … business administration, office functions…

The case turned on the issue of whether the earlier marks relied upon actually covered retail services in class 35, and whether Cactus SA had shown genuine use of these marks.

The question on the scope of protection of the earlier marks arose as a consequence of two landmark CJEU decisions (importantly both issued after Cactus SA registered its earlier marks), which led to significant changes of EUIPO practice in construing such marks. The Praktiker judgment back in 2005 established that trade mark applicants claiming “retail services” must specify the goods to which such retail services related. To implement this judgment, the EUIPO started routinely objecting to applications listing “retail services” and the scope of protection on enforcement was deemed vague. The IP Translator judgment established that applicants for trade marks listing class headings must clarify whether their registration is intended to cover all the goods and services in the alphabetical list of the particular class or only some of those goods and services. To implement the rationale of this judgment the EUIPO issued a new practice clarifying that marks applied for before 21 June 2012 and claiming class headings would be deemed to cover all goods or services in the alphabetical list of that particular class. This marked a fundamental change in EUIPO practice, since before the IP Translator judgment these marks were deemed to cover all goods and services potentially falling in that class (regardless of whether they were also included in the alphabetical list).

The issue of genuine use arose because the Board of Appeal held that Cactus SA filed insufficient evidence of genuine use of the earlier marks. Some examples of such “use” showed the figurative mark in “abbreviated form” only showing its figurative element, and entirely omitting its verbal part:

What did the CJEU say?

The CJEU first confirmed that neither Praktiker nor IP Translator could apply retrospectively and therefore could not alter the scope of protection of Cactus SA’s earlier marks. The CJEU held that this was so regardless of the EUIPO communication announcing a change of practice to implement IP Translator. The Court agreed with the Advocate General’s opinion that to hold otherwise would undermine principles of legal certainty and protection of legitimate expectations of trade mark owners.

In relation to genuine use, perhaps rather surprisingly, the CJEU agreed with the General Court’s finding that the use of the visual of a cactus without the verbal element constituted genuine use of the figurative mark because both signs conveyed the same semantic content.

What is the impact?

Given that the new EU Trade Mark Regulation has since come into force, it is questionable whether Cactus can be relied on to restore protection of pre-IP Translator marks listing class headings. This is because the clear wording of Article 33(8) EUTMR states that such marks will be deemed to only cover goods and services falling into the alphabetical list of the particular class (unless declared otherwise by the owners during the now expired grace period). However, Cactus should certainly be seen as a landmark decision given its approach to Praktiker and its very staunch defence of the legitimate expectations of trade mark owners. The judgment serves as an important reminder that trade mark owners’ rights cannot be reduced retrospectively. Such a reminder comes at an opportune time – shortly after the EUIPO published its revised Guidelines. While the Guidelines strive to align EUIPO practices with the recent EU trade mark reform, they are silent as to the position of trade marks registered before the EU reform came into force. Trade mark owners might find part of the answer in Cactus.

The case is also interesting for the precedent it sets in relation to genuine use. While many practitioners would have thought that omitting the verbal element of a figurative mark (usually seen as the dominant element) would automatically change the distinctive character of the mark, the CJEU made clear that this does not apply to all cases. The judgment will be of particular interest to those trade mark owners who use marks where the verbal element and figurative element of their marks carry the same meaning.