IP Cases & Articles

Mermeren v Fox: geographical location and origin

A recent decision from the Intellectual Property Enterprise Court (IPEC) concluded that the use of a geographical location did not serve to designate the geographical origin of the goods.

Both companies are involved in the extraction, processing and sale of marble which they obtain from their quarry located in the Prilep region of the Republic of Macedonia, more precisely, from a mountain pass known as ”Sivec” (pronounced SIVETS).

The dispute arose when the defendant, Fox, began selling marble under the mark “SIVEC”. Mermeren, who had been selling marble under the identical mark since the 1950’s issued infringement proceedings before the IPEC claiming infringement of its EU trade mark registration for “SIVEC” covering “marble of all types” and dated August 2013 (the filing date).

Whilst Fox admitted infringement, it sought cancellation of the registration on the basis of Articles 7(1)(b) to (d) and Article 51(1)(b) of Regulation (EC) No 207/2009 (now amended) (Old Regulation). In brief, Fox sought to argue that SIVEC:

  • was devoid of any distinctive character;
  • served to designate the geographical origin from where the goods originate from;
  • had become custom in trade; and
  • had been applied for in bad faith.

Mermeren argued that the mark had acquired distinctiveness through use and was therefore valid pursuant to Article 7(3) of the old regulation. Alternatively, the mark acquired distinctive character in relation to the goods for which it was registered by virtue of its use after registration pursuant to Article 52(2) of the Old Regulation.

Central question

Taking into account Mermeren’s defence, Fox accepted that cancellation of the trade mark would not succeed if the case under Article 7(1)(c) failed. Consequently, the entire dispute essentially boiled down to one question:

Did the mark “SIVEC” serve in trade to designate the geographical origin of a type of marble at the relevant date ie, the filing date?

Inherent character of the trade mark and the average consumer

The courts confirmed that when looking at a mark’s inherent character, all use of the mark should be disregarded; what is being looked at is whether the mark is in itself distinctive. The question therefore was whether, at the filing date, the mark SIVEC inherently denoted a geographical origin to the average consumer; the average consumer having been identified as “a specialist dealer in marble or a person who advises their customers on the choice of materials to be used in a building, such as an architect or designer of interiors...[and] came from within the EU, so this excluded Macedonia”.

Although it was accepted that the mark was the name of a geographical location, the evidence showed that no one will have heard of Sivec except, presumably, those who lived somewhere near the Sivec mountain pass. However, those individuals did not form part of the relevant persons or even people within the EU which, according to the court, was “fatal to Fox’s case under this head”.

If the average consumer had never heard of a place, the name of that place cannot inherently designate a geographical origin in the mind of the average consumer. Consequently, the trade mark was inherently distinctive.

Acquired distinctive character

It was commonplace for marble to be named by reference to the locality from which it is quarried and, up to 2011, Mermeren had made no effort to suggest to the public that the SIVEC name was attached to one supplier of marble. It was not until between 2011 and 2013 that Mermeren began using the SIVEC mark as a brand name, thus suggesting that it designates a single commercial source of marble.

Consequently, Fox argued that the mark had been rendered non-distinctive by virtue of Mermeren’s non-trade mark use of SIVEC up to 2011; it argued that in the short period between 2011 and 2013, the perception of the average consumer, created by Mermeren, could not have been dislodged.

The court rejected this argument, confirming that a trade mark could not lose its inherent distinctiveness through use. Although it accepted that the use of a real place name in association with a type of marble could generate the perception that the name designates a geographical origin, even if the average consumer just assumes that it is somewhere on the map but does not know this to be true.

However, “when it comes to the consequences of the use of a sign, it is the perception of the average consumer generated by that use that counts, not the reality”. It therefore didn’t matter that SIVEC was a geographical location, only how the relevant consumer perceived it. Therefore, although some relevant persons had been led to think that SIVEC meant the place from which the marble was quarried, the court concluded that a significant portion had moved on to think that SIVEC meant marble quarried and/or supplied by Mermeren; a “significant portion” being “markedly above de minimis but not necessarily over half”.

Summary

Whilst the court accepted that Sivec was in fact a real place, it concluded that it did not serve to designate the geographical origin of the marble and that, in any event, the mark had acquired distinctiveness by the filing date and maintained it following registration.

Brand owners should therefore pay close attention to how their marks are used in practice as although it is unlikely for a mark’s distinctive character to be weakened by virtue of the manner in which it is used, such instances may arise. It is therefore a useful reminder to ensure that marks are being used as trade marks. This means ensuring use of the ™ or ® symbols, using the mark as an adjective and not a noun, or ensuring that the mark is used and represented in a consistent manner.

The courts also provided a useful summary of the law related to inherent and acquired distinctiveness which is provided below:

  • What must be assessed is whether at least a significant portion of the relevant class of persons perceive, as of the filing date of the application for registration, the trade mark identifying relevant goods or services as originating from a single undertaking;
  • This perception must rise out of the use of the mark as a trade mark;
  • Circumstance in which the average consumer recognises the mark and associates it with the applicant’s goods is not of itself sufficient to confer distinctive character on a trade mark;
  • The courts may take the following into consideration when assessing the distinctive character of a trade mark: (i) the market share held by the mark; (ii) how intensive, geographically widespread and long-standing use of the mark has been; (iii) the amount invested by the undertaking in promoting the mark; (iv) the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking; and (v) statements from chambers of commerce and industry or other trade and professional associations;
  • Subject to national rules, the courts may have recourse to a public survey;
  • The courts may consider whether a significant proportion of the relevant class of persons would have relied on the sign as denoting the origin of the goods or services. Such reliance is not a precondition for establishing the distinctive character of a trade mark, but if established it is sufficient to show that the mark has distinctive character;
  • Where the name of a geographical location is very well known, it can only acquire distinctive character if there has been long-standing and intensive use of the mark by the proprietor;
  • Distinctive character must be established in the part of the EU in which it initially had descriptive character for the purposes of Article 7(1)(c);
  • A mark cannot lose its inherent distinctive through use;
  • When it comes to the consequences of the use of a sign, it is the perception of the average consumer generated by that use that counts, not the reality;
  • A significant portion of the relevant persons is a portion being markedly above de minimis but not necessarily over half; and
  • Use of a mark should be disregarding for the purposes of Articles 7(1)(b) to (d).

Case details at a glance

Jurisdiction: England & Wales
Decision level: Intellectual Property Enterprise Court (IPEC)
Parties: Mermeren Kombinat AD v Fox Marble Holdings plc
Citation: [2017] EWHC 1408 (IPEC)
Date: 14 June 2017
Full decision: http://dycip.com/ewhc1408

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