Trade mark case sets test for assessing morality of brands

Out-Law News | 03 Mar 2020 | 3:49 pm | 3 min. read

Guidance to help determine whether controversial words or phrases should be registered as trade marks has been set out by the EU's highest court.

EU trade mark laws contain a number of absolute grounds for the refusal of trade mark registration, including in cases where the trade mark is contrary to accepted principles of morality. The absolute grounds of refusal apply even if the grounds of non-registrability only apply in part of the EU, and not across the entire trading bloc.

The CJEU considered the question of when signs can be considered to be contrary to accepted principles of morality in a recent case.

The court said just because a sign is regarded as being in "bad taste" does not mean necessarily that it should be deemed contrary to accepted principles of morality under trade mark law. Instead, the court said "an examination of all the elements specific to the case" must take place "to determine how the relevant public would perceive such a sign if it were used as a trade mark for the goods or services claimed".

This assessment must be carried out through the eyes of "the relevant public" and consider "the fundamental moral values and standards of society as they exist" at the time the application is made for trade mark protection, it said.

"The examination is to be based on the perception of a reasonable person with average thresholds of sensitivity and tolerance, taking into account the context in which the mark may be encountered and, where appropriate, the particular circumstances of the part of the Union concerned," the CJEU said. "To that end, elements such as legislation and administrative practices, public opinion and, where appropriate, the way in which the relevant public has reacted in the past to that sign or similar signs, as well as any other factor which may make it possible to assess the perception of that public, are relevant."

"The examination to be carried out cannot be confined to an abstract assessment of the mark applied for, or even of certain components of it, but it must be established, in particular where an applicant has relied on factors that are liable to cast doubt on the fact that that mark is perceived by the relevant public as contrary to accepted principles of morality, that the use of that mark in the concrete and current social context would indeed be perceived by that public as being contrary to the fundamental moral values and standards of society," it said.

The CJEU also confirmed that the assessment of whether signs are contrary to accepted principles of morality must factor in freedom of expression rights, as enshrined in the EU's Charter of Fundamental Rights.

Intellectual property law expert Dr Nils Rauer of Pinsent Masons, the law firm behind Out-Law, said: "The court rightly points out that one cannot confine oneself to a purely abstract assessment of a trade mark when judging whether such mark is perceived as contrary to accepted principles of morality. Rather, a comprehensive approach and perspective are to be taken including the consideration of contextual elements. It is equally important to note that trade mark law must not be applied in isolated manner. Fundamental rights such as the freedom of expression are also to be taken into account in the course of the overall assessment."

The CJEU considered the issue in a case involving German film production company, Constantin Film Produktion. Constantin previously had its application to register the phrase 'Fack Ju Göhte’ as an EU trade mark rejected by the EU Intellectual Property Office (EUIPO) on the grounds that the term was deemed contrary to accepted principles of morality.

'Fack Ju Göhte' was the title of a German-language film Constantin produced which, together with its sequels, proved popular in cinemas in Germany and Austria. The English translation of the phrase is 'Fuck You, Goethe'.

Constantin raised appeals against the EUIPO's decision before the EUIPO Board of Appeal and then the EU's General Court but those were rejected.

However, the CJEU has now ruled that the General Court's ruling should be set aside after determining that its judgment had been "vitiated by errors of law". The CJEU decided Constantin's case was so well founded that it went on to annul the EUIPO's original decision too. The EUIPO will now have to reconsider Constantin's application in light of the guidance issued in the CJEU's ruling.

Iain Connor of Pinsent Masons said: "It is good see the CJEU take the evidential moral high ground and make clear that concrete evidence must be put forward to explain why the German-speaking public at large will perceive ‘Fack Ju Göhte’ as going against the fundamental moral values and standards of society when it is used as a trade mark. While in English it alludes to the well‑known Anglo-Saxon expletive, the EUIPO failed to put forward evidence which showed the relevant public found it offensive."

The success of 'Fack Ju Göhte' and its sequels in cinemas in Germany and Austria was a further factor in the court's ruling, as was the fact the films have been used for educational purposes in German schools by the Goethe Institute, a cultural body which promotes German language around the world.