Case No. IP-2015-000146

27.Art.7(3) provides:“3. Paragraph 1(b), (c) and (d) shall not apply if the trade mark has become distinctive in relation to the goods or services for which registration is requested in consequence of the use which has been made of it.”28.In Windsurfing (cited above) the ECJ considered whether a trade mark consisting of the name of a lake in Bavaria had acquired distinctiveness:“[47] It follows that a geographical name may be registered as a trade mark if, following the use which has been made of it, it has come to identify the product in respect of which registration is applied for as originating from a particular undertaking and thus to distinguish that product from goods of other undertakings. Where that is the case, the geographical designation has gained a new significance and its connotation, no longer purely descriptive, justifies its registration as a trade mark.[48] Windsurfing Chiemsee and the Commission are therefore right to assert that Article 3(3) does not permit any differentiation as regards distinctiveness by reference to the perceived importance of keeping the geographical name available for use by other undertakings.[49] In determining whether a mark has acquired distinctive character following the use made of it, the competent authority must make an overall assessment of the evidence that the mark has come to identify the product concerned as originating from a particular undertaking, and thus to distinguish that product from goods of other undertakings.[50] In that connection, regard must be had in particular to the specific nature of the geographical name in question. Indeed, where a geographical name is very well known, it can acquire distinctive character under Article 3(3) of the Directive only if there has been long-standing and intensive use of the mark by the undertaking applying for registration. A fortiori, where a name is already familiar as an indication of geographical origin in relation to a certain category of goods, an undertaking applying for registration of the name in respect of goods in that category must show that the use of the mark - both long-standing and intensive - is particularly well established.[51] In assessing the distinctive character of a mark in respect of which registration has been applied for, the following may also be taken into account: the market share held by the mark; how intensive, geographically widespread and long-standing use of the mark has been; the amount invested by the undertaking in promoting the mark; the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking; and statements from chambers of commerce and industry or other trade and professional associations.[52] If, on the basis of those factors, the competent authority finds that the relevant class of persons, or at least a significant proportion thereof, identify goods as originating from a particular undertaking because of the trade mark, it must hold that the requirement for registering the mark laid down in Article 3(3) of the Directive is satisfied. However, the circumstances in which that requirement may be regarded as satisfied cannot be shown to exist solely by reference to general, abstract data such as predetermined percentages.[53] As regards the method to be used to assess the distinctive character of a mark in respect of which registration is applied for, Community law does not preclude the competent authority, where it has particular difficulty in that connection, from having recourse, under the conditions laid down by its own national law, to an opinion poll as guidance for its judgment (see, to that effect, Case C-210/96 Gut Springenheide and Tusky [1998] ECR I-4657, paragraph 37).”29.Broadly, therefore, having made an overall assessment taking into account the matters referred to in paragraphs 50 and 51, the tribunal must assess whether at least a significant proportion of the relevant class of persons identifies goods (or services) as originating from a particular undertaking because of the trade mark. If so, that trade mark will have acquired distinctiveness within the meaning of art.3(3) (or art.7(3) of the Regulation, as the case may be). As a matter of EU law the tribunal may have recourse to a public survey, though only if it has particular difficulty in assessing whether a mark has distinctive character and subject to national law.30.The ECJ returned to art.3(3) in Koninklijke Philips Electronics NV v Remington Consumer Products Ltd, C-299/99, EU:C:2005:432. The Court first reiterated its ruling in Windsurfing. It continued:“[63] Second, the distinctive character of a sign consisting in the shape of a product, even that acquired by the use made of it, must be assessed in the light of the presumed expectations of an average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect (see, to that effect, the judgment in Case C-210/96 Gut Springenheide and Tusky [1998] ECR I-4657, paragraph 31).[64] Finally, the identification, by the relevant class of persons, of the product as originating from a given undertaking must be as a result of the use of the mark as a trade mark and thus as a result of the nature and effect of it, which make it capable of distinguishing the product concerned from those of other undertakings.”31.Thus, the presumed expectations of the average consumer and the perception of (at least a significant proportion of) the relevant class of persons are two sides of the same coin. They are alternative approaches to the same test for acquired distinctiveness: whether, according to those expectations and that perception, as a result of the use of the trade mark in issue as a trade mark, it is capable of distinguishing relevant products from those of other undertakings. See also Mag Instrument Inc v OHIM, C-136/02 P, EU:C:2004:592; [2005] ETMR 46, at [19].32.The test for acquired distinctiveness set out in Philips was repeated by the Court of Justice of the European Union (“CJEU”) in Société des Produits Nestlé SA v Mars UK Ltd, C-353/03, EU:C:2005:432, at [26]. The CJEU explained what was meant in paragraph 34 of Philips by the requirement that the identification of the product as originating from a particular undertaking must be as a result of the use of the trade mark in question as a trade mark:“[29] The expression ‘use of the mark as a trade mark’ must therefore be understood as referring solely to use of the mark for the purposes of the identification, by the relevant class of persons, of the product or service as originating from a given undertaking.”33.The law on acquired distinctiveness was reviewed recently by the Court of Appeal in Société des Produits Nestlé v Cadbury UK Ltd [2017] EWCA Civ 358. Nestlé had applied to the UK Intellectual Property Office to register the shape of a four-finger chocolate product – the shape of a Kit Kat – as a trade mark. The Hearing Officer held in a decision dated 20 June 2013 that the trade mark was devoid of inherent distinctive character save for cakes and pastries and that it had not acquired distinctive character in relation to any of the other goods in respect of which registration was sought, most relevantly chocolate goods. An appeal was heard by Arnold J ([2014] EWHC 16 (Ch); [2014] FSR 28) who held that the Trade Mark was not inherently distinctive for any of the goods but he sought a preliminary ruling from the CJEU with regard to acquired distinctiveness. The CJEU delivered its judgment on the reference on 16 September 2015 (C-215/14, EU:C:2015:604). The case was then restored before Arnold J who gave a second judgment on 13 January 2016 ([2016] EWHC 50 (Ch); [2016] FSR 19) in which he found that the trade mark had not acquired distinctiveness and so dismissed the appeal from the Hearing Officer. Nestlé appealed further to the Court of Appeal.34.As I have indicated, the appeal raised the question whether a three-dimensional mark consisting of an inherently non-distinctive shape of a Kit Kat had acquired distinctive character. There was a significant complication in that product itself had always been sold in packaging bearing a ‘Kit Kat’ logo, which served as a distinctive badge of origin for the goods. The question was whether the shape of the product, by itself, had also come to serve as a trade mark for the goods and could therefore be registered. The focus of the appeal was thus on matters which do not arise in the present case. However, the Court of Appeal considered more generally what is required to show that a trade mark has acquired distinctiveness through use.35.Before turning to the judgment of the Court of Appeal, I will refer first to certain passages in the judgment of the CJEU. The CJEU confirmed that distinctive character, whether intrinsic or acquired, will be assessed by reference to the perception of the relevant class of persons, which will equate with the view of the average consumer:“[61] That distinctive character must be assessed in relation, on the one hand, to the goods or services covered by that mark and, on the other, to the presumed expectations of the relevant class of persons, that is to say, an average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect (see, to that effect, judgments in Koninklijke KPN Nederland, C-363/99, EU:C:2004:86, paragraph 34 and the case-law cited therein; Nestlé, C-353/03, EU:C:2005:432, paragraph 25, and Oberbank, C-217/13 and C-218/13, EU:C:2014:2012, paragraph 39).[62] A sign’s distinctive character, which thus constitutes one of the general conditions to be met before that sign can be registered as a trade mark, may be intrinsic, as provided for in Article 3(1)(b) of Directive 2008/95, or may have been acquired by the use made of that sign, as provided for in Article 3(3) of that directive.”36.The CJEU had interpreted (at [58]) the first question referred by Arnold J as asking whether it was sufficient for the applicant for a trade mark to prove that a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant’s goods, or whether the applicant had to go further and prove that the relevant class of persons perceive the goods or services designated exclusively by that mark (i.e. as opposed to any other mark that might be present) as originating from a particular company. The CJEU answered:“[67] Having regard to those considerations, the answer to the first question is that, in order to obtain registration of a trade mark which has acquired a distinctive character following the use which has been made of it within the meaning of Article 3(3) of Directive 2008/95, regardless of whether that use is as part of another registered trade mark or in conjunction with such a mark, the trade mark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company.”37.If the CJEU’s answer is shorn of the complication of the presence of another trade mark on the goods in question, it was a reiteration of its ruling in Windsurfing and Philips: the relevant class of persons must take the trade mark in suit to mean that the goods or services in respect of which the trade mark is used originate from a single entity. Added, however, was an implied distinction: it is not sufficient if the relevant class of persons recognise the mark and merely associate it with the applicant’s goods.38.In the Court of Appeal Kitchin LJ, Floyd LJ and the Chancellor of the High Court all discussed this distinction, largely in the context of the facts of that case.39.One issue of general application which arose in argument is whether, in order to satisfy the test for distinctiveness set out by the CJEU, it was necessary to show that consumers had relied on the mark in selecting or purchasing the goods or services in question, or that they have used the mark after purchase to verify that they have chosen the right goods or services. In other words, was it necessary to show that the mark had played a part in consumers’ purchasing or alternatively in their post-transactional behaviour? Kitchen LJ (with whom Floyd LJ and the Chancellor agreed) said this (at [84]):“… it is legitimate for a tribunal, when assessing whether the applicant has proved that a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question, to consider whether such persons would rely upon the sign as denoting the origin of the goods or services if it were used on its own. Further, if in any case it is shown that consumers have come to rely upon the mark as an indication of origin then this will establish that the mark has acquired distinctiveness.”40.Thus, reliance on a mark as an indication of origin among a significant proportion of the relevant class of persons will establish that the mark has acquired distinctiveness. However, although reliance is relevant, it is not a precondition to establishing distinctiveness:“[98] … I accept that it is not necessary to show the public have relied upon the Trade Mark. Such is clear from the decision of the CJEU. But that does not mean to say that evidence of reliance has no part to play. If an applicant for registration of an inherently non-distinctive mark establishes that, as a result of the use which has been made of it, consumers have come to rely upon it as denoting the origin of the goods to which is has been applied, that will show it has become distinctive.” 41.On the facts the Hearing Officer had been justified in finding that the trade mark had not acquired distinctiveness:“[89] … The high point for Nestlé is his finding that at least half the people surveyed thought that the picture shown to them was a Kit Kat. But in giving their responses they might have had in mind a product coming from the same source as Kit Kat or a product of the Kit Kat type or a product which looked like a Kit Kat. The hearing officer was therefore entitled and indeed bound to consider the results in light of all of the other evidence before him. I am also satisfied he was entitled to conclude as he did that Nestlé had shown recognition and association of the shape with Kit Kat but had failed to prove that the shape (and hence the Trade Mark) had acquired a distinctive character in light of the use which had been made of it.”42.Floyd LJ said this:“[108] If it is the case that consumers have in fact come to rely on the shape as an indicator or trade origin, that would certainly be sufficient for acquired distinctiveness. It is, however, not a necessary precondition that consumers should have in fact so relied, and regarding it as such a precondition could conceivably lead to error. The ultimate question is whether the mark, used on its own, has acquired the ability to demonstrate exclusive origin. It would be unwise to attempt a list of the ways in which this can be demonstrated.”43.The Chancellor agreed with Kitchin and Floyd LJJ, and emphasised that the criterion for establishing the distinctiveness of a trade mark – proving a perception that a trade mark signifies that the goods or services come from a single undertaking – had to be understood in the light of earlier dicta of the CJEU, namely that this perception must arise as a consequence of the use of the mark as a trade mark:“[117] Thus, the perception required by the simple test extracted from paragraph 67 of the CJEU’s decision is a qualified kind of perception. The test in paragraph 67 is that the applicant must prove that the relevant class of persons perceive the goods designated exclusively by the mark applied for as originating from a particular company. The perception that is required is perception that arises in consequence of the use of the mark as a trade mark and thus as a result of the nature and effect of it, which make it capable of distinguishing the product concerned from those of other undertakings. I have used the words transported from the Philips case, through the Mars case and into the CJEU’s decision.” (original emphasis)44.The Chancellor indicated that a mark would be taken to have been used as a trade mark by the public if consumers have come to rely on it as indicating the origin of the goods. He referred, with apparent approval, to paragraph 90 of Richard Arnold QC’s decision in Vibe Technologies Limited’s Application [2009] ETMR 12:“[119] … In that passage, Mr Arnold had said that he did not think it was essential for the applicant to have explicitly promoted the sign as a trade mark. It was sufficient for the applicant to have used the sign in such a way that consumers have come to rely on it as indicating the origin of the goods. Mr Arnold concluded, correctly I think, that ‘On the other hand, if the applicant has explicitly promoted the sign as a trade mark, it is more likely that consumers will have come to rely upon it as indicating the origin of the goods’.”45.Since the Chancellor expressly agreed with Kitchin and Floyd LJJ, I do not understand that passage to mean that it is necessary for the average consumer to have relied on the sign as indicating the origin of the goods for it to have been used as a trade mark. Something other may suffice. The necessary territorial extent of acquired distinctive character 46.In Powerserv Personalservice GmbH v OHIM, C-553/08 P, EU:C:2009:745, the CJEU held (at [60]) that acquired distinctive character is established under art.7(3): “… only if evidence is provided that it has acquired, through the use which has been made of it, distinctive character in the part of the Community in which it initially had descriptive character for the purposes of Article 7(1)(c) (see, to that effect, Case C-25/05 P Storck v OHIM, paragraph 83).” Summary of the law 47.I will attempt to draw together the principles arising from the foregoing authorities on acquired distinctiveness under art.7(3) which are relevant to this case:(1)The overall criterion which governs whether a trade mark has acquired distinctive character is whether the average consumer perceived that trade mark identified the relevant goods or services as originating from a single undertaking. (The average consumer, as ever, is reasonably well-informed, reasonably observant and circumspect.)(2)This perception is to be assessed as of the date of filing the application for registration of the trade mark.(3)The perception of the average consumer in (1) is to be distinguished from the circumstance in which the average consumer recognised the mark and associated it with the applicant’s goods; such recognition and association is not of itself sufficient to confer distinctive character on a trade mark.(4)The average consumer will be taken to have perceived that the trade mark identified the goods or services as originating from a single undertaking if at least a significant proportion of the relevant class of persons had that perception.(5)Such a perception must have arisen in consequence of the use of the mark as a trade mark. That will be more easily established if the proprietor explicitly promoted it as a trade mark.(6)When making its assessment of the distinctive character of a trade mark, the tribunal may take the following into account: (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.(7)If the tribunal is in difficulty in making that assessment, as a matter EU law it may have recourse to a public survey, subject to national rules.(8)It is legitimate for a tribunal to 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.(9)In relation to a trade mark consisting of a geographical name, regard must be given to the specific nature of the name. Where the name was very well known, it could have acquired distinctive character only if there had been long-standing and intensive use of the mark by the proprietor. A fortiori, where a name was already familiar as an indication of geographical origin in relation to the relevant category of goods, the proprietor must show that the use of the mark – both long-standing and intensive – was particularly well established.(10)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 significant proportion of the relevant class of persons 48.So far as I am aware, the CJEU has never expressly stated either who qualifies as the ‘relevant class of persons’ in the context of art.7(3) or what will amount to significant proportion of such persons, beyond saying that the tribunal must not rely on predetermined percentages (see Windsurfing at [52]). As will become apparent, it matters in the present case.49.In The Sofa Workshop Ltd v Sofaworks Ltd [2015] EWHC 1773 (IPEC); [2016] FSR 3, having reviewed the case law, I said this in the context of infringement of a trade mark pursuant to art.9(1)(b) of the Regulation:“[109] Thus, in relation to whether there is a likelihood of confusion and therefore infringement of a trade mark under art.9(1)(b), the view of the average consumer provides the benchmark. The average consumer’s view can be taken to be consistent with the view of a significant proportion of relevant actual consumers. Relevant actual consumers are those to whom the mark is an indication of origin of the relevant goods or services and who are in addition reasonably well-informed, reasonably circumspect and observant.”50.It seems to me that if what I described there as ‘relevant actual consumers’ are taken to be the ‘relevant class of persons’, an analogy can be drawn. The relevant class of persons consists of actual consumers who have the characteristics of the average consumer in a particular case. They will be always reasonably well-informed, reasonably circumspect and observant. In addition they will have the further characteristics of the average consumer arising from the particular facts of the case. I consider the attributes of the average consumer in these proceedings below.51.The CJEU has held that a trade mark has distinctive character if a significant proportion of the relevant class of persons perceives goods designated by the mark as originating from a single undertaking (Windsurfing at [52]). On the other hand, the size of the proportion with that perception is one of the factors the tribunal may take into account when reaching a conclusion on acquired distinctiveness (Windsurfing at [51]). This implies that the smallest proportion which still qualifies as a significant proportion is markedly greater than de minimis.52.In the context of infringement, a significant proportion of relevant consumers may be less than half, see Interflora Inc v Marks & Spencer (Interflora II) [2014] EWCA Civ 1403; [2015] FSR 10, at [103].53.Maintaining the analogy with infringement, I infer that a significant proportion of relevant persons in the context of art.7(3) means a proportion markedly above de minimis but not necessarily over half. Acquired distinctiveness under art.52(2) 54.Art.52(1) so far as is relevant and art.52(2) provide as follows: “ 1. An EU trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings: (a) where the EU trade mark has been registered contrary to the provisions of Article 7; … 2. Where the EU trade mark has been registered in breach of the provisions of Article 7(1)(b), (c) or (d), it may nevertheless not be declared invalid if, in consequence of the use which has been made of it, it has after registration acquired a distinctive character in relation to the goods or services for which it is registered. ” 55.There is no reason to doubt that ‘distinctive character’ in art.52(2) has the same meaning as in art.7(3), so the law will be the same for both. The difference is that art.52(2) also takes into account use of the mark after registration. The question raised by art.52(2) is whether by a relevant date after registration the trade mark has acquired distinctiveness through use, namely the date on which the party seeking a declaration of invalidity filed its application, see Mondelez UK Holdings & Services Ltd v European Union Intellectual Property Office, T-112/13, EU:T:2016:735, at [76] and the cases there stated. In the present instance that means the date of the counterclaim, see The Sofa Workshop at [61] and London Taxi Corp Ltd v Fraser-Nash Research Ltd [2016] EWHC 52 (Ch); [2016] FSR 20, at [179].56.The date of the counterclaim is 7 March 2016. The average consumer in the present case 57.The question whether ‘Sivec’ designated a geographical origin of marble at the two relevant dates is to be assessed through the eyes of the average consumer. It was agreed that here the average consumer was 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. Miss Himsworth emphasised that the average consumer came from within the EU, so this excluded Macedonia. Inherent character of the Trade Mark under art.7(1)(c) 58.In my judgment, the flaw in Fox’s argument with regard to the inherent character of the Trade Mark under art.7(1)(c) was that it took into account use of the Trade Mark to support the argument. For the reasons discussed above, I think that the use made of the Trade Mark, both before and after registration, was irrelevant to whether art.7(1)(c) applied. Fox had to show that the Trade Mark inherently denoted a geographical origin to the average consumer.59.I accept that Sivec is a real place not far from either Mermeren’s or Fox’s quarry. But it is a very obscure place. In evidence it emerged that no one will have heard of Sivec except, presumably, those who lived somewhere near the Sivec mountain pass. These are not relevant persons or even people in the EU. Jonathan Mitchell, an employee of Fox, accepted that those who purchase marble would not have known of Sivec the place. Mr Hicks did not subsequently suggest that the average consumer would have heard of it.60.This was fatal to Fox’s case under this head. If the average consumer has never heard of a place the name of that place cannot inherently designate a geographical origin in the mind of the average consumer. The only possible way such a designation could have arisen for the average consumer was by use of the name in the EU, which must be disregarded. This is consistent with what the CJEU said in Peek & Cloppenburg at [38], quoted above. I therefore reject Fox’s argument in relation to art.7(1)(c) taken alone. Acquired distinctive character under art.7(3) 61.I turn to the effect of use of the Trade Mark on the average consumer’s perception – firstly up to the date of filing the application for the Trade Mark, 9 August 2013.62.Mr Hicks argued that one had to begin by looking at the position in the years between 1950 when Mermeren was founded and 2011. During this time, as had been the case for many years previously, it was commonplace for marble to be named by reference to the locality from which it is quarried. He referred to Carrara marble by way of a well-known example: a generic name used for marble quarried near Carrara in northern Tuscany. Sivec is a real place near to Mermeren’s quarry. It would have been reasonable for the average consumer to have assumed that denoted the geographical origin of marble of that name.63.Mr Hicks continued that this would have been the state of affairs all the way up to 2011 because, he said, up until then no effort was taken by Mermeren to suggest to the public that the Sivec name was attached to one supplier of marble. The only documents available were invoices recording marble being sold as ‘Sivec’ marble, or ‘Bianco Sivec’ or various grades of ‘Sivec’ marble. These were consistent with and likely to reinforce the idea that Sivec was a type of marble. He also relied on the evidence of Mr Charles and Mr Russell, which I will come back to.64.In April 2009 NGBI Private Equity purchased Mermeren from its previous owner. In 2011 Mermeren recruited Ilias Rigopoulos as Chief Operating Officer. He was promoted to Chief Executive Officer in April 2012, a post he held until April 2015. Mr Hicks said that it was Mr Rigopoulos who saw that the Sivec name should be tied to Mermeren. He organised the production of a corporate branding manual that was first published by Mermeren in 2011. It was only from 2011 that there appears any document in which ‘Sivec’ is used as a brand name for Mermeren, thus suggesting that it designates a single commercial source of marble. But, Mr Hicks argued, in the short period from 2011 until 9 August 2013 the perception of the average consumer could not have been dislodged. It would take longer than two years to overcome the inertia of presumption among the relevant class of persons that types of marble are identified by the place from which they come and that this was true of Sivec marble. Three assumptions 65.There were three assumptions smuggled into this argument.