Rubik’s cube vs. Welding pins – (technical) functionlity in design and trade mark law Annette Kur EUIPO 12 June 2017

Background: Some admittedly academic considerations Reasons accounting for exclusion of (technically) functional shapes (and other characteristics from trade mark and design law: Separating the realms of different types of IP rights (Patents and utility models/designs/copyright/trade marks) Safeguarding overarching principles of undistorted competition Thesis: the first-mentioned rationale is not a reason for exclusion per se, but only where and if it is appropriate/mandatory under the second Considering that trade marks, contrary to designs, are only meant to provide a means for identifying and retrieving the commercial source of goods, and not to create an exclusive market position with regard to products (or their appearance) as such, and, not least because of their assumed “competition-neutrality“ in regards of the product market are not subject to a finite term, the misgivings resulting from protection of (functional) product shapes as marks are stronger than in regards of design. Does that justify A different interpretation of technical functionality as enshrined in Art. 8(1) CDR and Art. 7(1)(e)(ii) EUTMR respectively? Complementing technical functionality (Art. 7(1)(e)(ii) EUTMR) by subparas (i) and (iii)?

Origins Trade Marks Designs Originally design protection was only granted for the aesthetic appeal of products, thereby excluding (by definition or explicitly) entirely functional shapes However, following the motto that “forms follows function“ more modern design concepts tended to include functional designs During the negotiations preceding European design legislation it seemed to be accepted that functionality should not easily lead to exclusion from protection, but should only apply if the relevant design feature was indispensable (mandatory approach). Trade Marks Even before harmonisation, most trade mark acts contained the principle – enshrined in the written law or developed by jurisprudence – that 3D marks (if they could be protected at all) were barred from protection if they were technically functional or conceptually inseparable from the product as such The three-pronged test set forth in Art. 7(1)(e) EUTMR (including aesthetical functionality) is obviously modelled on the 1975 Benelux TM Act, which may have been inspired by US case law

German practice re (technical) functionality Designs As summarized in the DOCERAM referral by OLG (appeal court) Düsseldorf, until now German practice regularly applies the “mandatory“ approach – i.e., protection is possible if design alternatives exist Trade Marks Also in trade mark law, German practice tends to be relatively generous (pro-registrability) While a “mandatory approach“ does not apply in case of (ii), shapes are regularly (only) barred from protection if they were claimed in prior patent documents More importantly, the other grounds for exclusion (i), (iii) hardly played a role in previous practice Exclusion resulting from the nature of goods (i) was only held to apply to indispensable shapes (“banana for bananas“) The Federal Supreme Court (BGH) has declared that shapes are only excluded under (iii) if they are solely bought for their aesthetic value (pure design objects) As we have learned from CJEU Case C-205/13 – Hauck/Stokke, both positions are critically flawed…

The game changer: Hauck, not Rubik Simba Toys (Rubik‘s Cube, C-30/15) doesn‘t change much – the GCEU should have known better… In Pi Design (C-337/12 P) it was already stated that functionality of products must be assessed in “real life“, not just based on graphic representation In LEGO (C-48/09) it had already become clear that technical functionality does depend on whether a product has been registered in a wide product category such as “toys“ (or, in case of Rubik “three-dimensional puzzles“) By contrast, in Hauck (C-205/13) the rules of the game previously held to be governing (not only) in Germany were substantially changed Inter alia this triggers the question whether technical functionality with its inherent restrictions will become largely meaningless in view of the fact that shapes (or other characteristics) are already barred from protection if they conform to general consumer expectations in regards of such products

Impact of Hauck/Stokke– will Art Impact of Hauck/Stokke– will Art. 7(1)(e)(i) prevail over restrictions inherent in technical functionality (ii)? Two decisions of the Fed. Patent Court (BPatG) herald a change in judicial practice – if confirmed by the BGH In BPatG 4.11.2016, 25 W (pat) 78/14 – Schlauchverpackung and BPatG 27.12.2016 - 25 W (pat) 59/14 – Traubenzuckertäfelchen, shape marks were found to be inherant in the function of goods and thus ivalid, though the hurdle of technical functionality had been cleared due to the shapes showing “arbitrary“ elements If the decisions stand, a wave of invalidation claims regarding shapes that are largely functional, though not “necessary“ for technical reasons might follow

Other examples/questions If Hauck/Stokke is taken seriously, the holding in Nestlé/Cadbury (KitKat) that the way of manufacturing the gooves between the chocolate fingers is irrelevant for technical functionality may become meaningless, as the shape is anyhow inherent in the generic functions of a chocolate bar that is meant to be eaten in portions Regarding registrations of LEGO-figurines, the claimant had argued inter alia that the shape resulted from the nature of the goods. He was told by the BoA that he had “misread“ the provision which only applies to indispensable shapes. Technical functionality was denied (with approval by GCEU, T-395/14 and CJEUC-451/15 P) After Hauck, it seems that it was rather the BoA who has misread the law. So what would have resulted if the law had been applied correctly, i.e., according to the criteria established by the CJEU?

Thank you for your attention – looking forward to the discussion Thank you for your attention – looking forward to the discussion! annette.kur@ip.mpg.de