The most important Community judgment so far is the Libertel Case, decided 6 May last. 1

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Darcy Baldwin
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1 Absolute grounds for refusal Colour marks Arjen W.H. Meij * Introduction I have been invited to say a few words about the way in which the Community courts have to date applied Community trade mark law to colours or combinations of colours per se, that is to colours not spatially defined, without contours. The issue of colours as trade marks has been brilliantly addressed at the previous European Trade Mark Judges Symposiums by Mrs. Fasseur-Van Santen of the Court of Appeal of The Hague and by Judge Erdmann of the German Bundesgerichtshof. Since then, the cases which were mentioned as pending at the two Community courts have been decided and a few more cases are pending now in Luxembourg. I propose to briefly review those cases. In doing so, I may also pay some attention to views expressed by other courts. Libertel The most important Community judgment so far is the Libertel Case, decided 6 May last. 1 The case resulted from a preliminary reference from the Dutch Supreme Court concerning the colour orange as a trade mark for goods and services in the area of telecommunication. In the Benelux, the law does not explicitly deal with the issue of whether colours as such can constitute trade marks. However, in two judgments dating back as far as the nineteenseventies, the Benelux Court of Justice accepted that, in principle, a colour as such may constitute a trade mark within the meaning of the Uniform Benelux Trade Mark Act. 2 And in a decision of 2000, the Belgian Cour de Cassation upheld a lower court's judgment to the effect that turquoise was distinctive for the telecommunications products and services of Belgacom 3. In the Libertel Case, the Court of Appeal of The Hague, back in 1996, had followed a very cautious approach, almost predicting the solution adopted by the Court of Justice. It considered that colours as such are not prevented from being a trade mark, by the Community Directive or The Benelux Trade Mark Act, but are not very suitable to distinguish properly certain goods or services from other as to their origin. It underlined in particular that colours miss additional identifying characteristics and it rejected the claim in the case at hand. On appeal, the Dutch Supreme Court, however, considered it necessary to refer the issue to Luxembourg, as the admission of colour marks by the Benelux Court, which it normally should have followed, was previous to the Community harmonization Directive. The Court of Justice has taken the opportunity of its first judgment on colour marks, in Libertel, to set up an "interpretative framework", for use by national courts, by the Court of First Instance and presumably by the Court of Justice itself in future cases that will no doubt come up. This is borne out by the fact that even though the questions referred only concerned Article 3 of the Directive, the Court considered it necessary to first interpret Article 2 of the Directive. Article 2 of the Directive lays down the basic conditions for trade marks and corresponds to Article 4 of the Regulation. Interpreting the three basic conditions for trade marks following from of Article 2 of the Directive, the Court stated, firstly, that colours as such are capable, in relation to a product or Judge, Court of First Instance 1 Case C-104/01, opinion of Advocate General Léger of 12 November 2002 and judgment of 6 May 2003, not yet reported. 2 Centrafarm/Beecham, A 76/1, Jur , p. 27, and Leefering, A 76/2, Jur , p Cass. RG C N, 22 December 2000, Juristenkrant 2001, 23, 4.

2 service, of constituting a sign, and secondly, that colours may be represented graphically. However, the graphic representation must satisfy the criteria developed in the Sieckmann 4 judgment of last year, that is to say, it must be clear, precise, self-contained, easily accessible, intelligible, durable and objective. That looks like a mouthful of criteria. However the Court suggested that reference to an international colour code may meet the Sieckman criteria 5. On the third condition of Article 2 of the Directive, the capability of the sign to distinguish commercial origin, the Court observed in language similar to that of the Court of Appeal of The Hague that colours "possess little inherent capacity for communicating specific information". But, according to the Court, "the possibility that a colour may in some circumstances serve as a badge of origin of goods or services cannot be ruled out." The Court concluded that a colour is capable of constituting a trade mark within the meaning of Article 2 of the Directive. The Court then turned to the questions of the Dutch Supreme Court. First, it was asked whether and if so, in what circumstances a colour as such may be held to be distinctive for the goods or services to which it relates, as required by Article 3 of the Directive. On this issue, the Court stated that consumers are not used to commercial origin being indicated by a colour as such and that therefore, a colour "is not normally inherently capable of distinguishing the goods of a particular undertaking". The Court even concluded that distinctiveness of a colour for goods or services is "inconceivable" without any prior use "save in exceptional circumstances", and in particular in case of a very restricted number of goods or services and a very specific market. However, even if not initially distinctive, a colour may acquire distinctiveness through the use made of it, by virtue of paragraph 3 of Article 3 of the Directive. 6 It was also asked whether, in assessing the distinctiveness of a given colour, a general interest in keeping that colour available to all should be taken into account. The Court replied in the affirmative, holding that in testing the distinctiveness of a colour for goods or services, regard should be had to "the general interest in not unduly restricting the availability of colours" for competitors. 7 In this connexion, the Court reiterated a line from the Philips Case 8 to the effect that the absolute grounds for refusal must be interpreted in the light of the public interest underlying each of them. By way of interim conclusion, one may probably say that the Court has left little room for a colour as such to constitute a trade mark under the Directive or a Community trade mark under the Regulation, at least without prior use, but that it has not altogether ruled out that possibility. It may added that the Advocate-General Léger in his opinion in the Libertel case had taken the view that a colour as such is not capable of graphic representation and neither apt to distinguish goods or services as to their commercial origin and therefore does not come into the scope of Article 2 of the Directive. Heidelberger Bauchemie In this connexion the Advocate General in Libertel referred to the reference from the German Bundes Patent Gericht for a preliminary ruling in the Heidelberger Bauchemie case which is now pending at the Court. 9 The German court is inquiring whether a colour as such, accompanied by a sample and a colour code, is capable of meeting the conditions of Article 2 I just referred to. One would think that this question has been answered in Libertel, but this reference was made well 4 Judgment of 12 December 2002, Case C-273/00 [2002] ECR I Para. 37 and point 1 of the reply to the questions referred. 6 Paras Paras. 55, 57 and C-299/99 [2002] ECR I-5475, para Case C-49/02, OJ C 131 of 1 June 2002, p. 2.

3 ahead of the Libertel-judgment. Therefore, the Heidelberger Bauchemie reference may well be an opportunity to refine Libertel. One particular feature of references by German courts is that they are usually extensively motivated and venture an opinion on the question submitted to the Court of Justice. The reference in Heidelberger Bauchemie gives a fairly complete picture of the problem and if one would have to summarize what the Bundes Patent Gericht seems to suggest, the message is: "colour marks just do not work". According to the German court, a colour mark is not a single mark, but rather "an option on a plurality of trade marks yet to be devised by the holder of the registration and with only the colour registered in common." The court particularly underlines the lack of precision of a colour as such and doubts whether a colour can be a sign at all and whether it can be graphically represented. Furthermore, it fears for legal certainty in that it foresees difficulties in making the determinations courts will be required to make, f.i. as to the exact scope of protection to be granted to a colour as such as to testing the distinctiveness of colour as such as to the notion of "risk of confusion" relating to colours and as to the concept of prior use as relating to colours. The preliminary reference in Heidelberger Bauchemie also instructively sets out the rather diverging approaches to the colour issue throughout Europe. By contrast with the Libertel reference the Heidelberger Bauchemie reference does not inquire whether and how considerations of general interest, in particular the need to keep colours available for competitors should be taken into account. Interestingly enough the German Bundes Patent Gericht in a recent decision on Green/Yellow ruled that in testing a colour's distinctiveness, the need to keep the colour available for competitors, or Freihaltebeduerfnis, is to be disregarded. The Belgian Cour de Cassation has also taken this view, in a decision which I mentioned earlier and which upheld the distinctiveness of turquoise for the telecommunications products and services of Belgacom 10. The Court of Appeal of The Hague seemed to take a similar position in its Libertel decision. As I mentioned, in Libertel the Court of Justice held that the "general interest in not unduly restricting the availability of colours" for competitors is to be taken into account in assessing a colour's distinctiveness. In the Court's approach considerations of general interest are thus closely linked to the absolute ground for refusal at stake. It remains to be seen what follow-up this issue will be given, not only in "Luxembourg" but also by national courts. Intermezzo: the US Supreme Court Having set out Libertel, establishing the principle of Community colour marks and the doubts of the German Bundes Patent Gericht in Heidelberger Bauchemie in that respect, it may be interesting by way of "intermezzo" to confront with those judgments the way in which the US Supreme Court tackled some of these issues, in its Qualitex judgment of , already mentioned in the reports for our previous conference two years ago. Summarizing too briefly this judgment, written for a unanimous court by Justice Breyer, it considers on the legal certainty issue, also brought up in Heidelberger Bauchemie, that "courts traditionally decide quite difficult [issues of similarity]"; on the Freihaltebeduerfnis argument, the Court stated that that argument "relies on an occasional problem to justify a blanket prohibition". As regards "colour scarcity", the doctrine of "functionality" would be available to prevent anticompetitive consequences. This American doctrine prohibits use of a product's feature as trade mark when doing so would put a competitor at a significant disadvantage, that feature being "essential to the use or purpose of the article" or "affect[ing] its cost or quality"; the Supreme Court also disagreed with the argument that there was no business need for colour marks, as colours could already be used as part of a mark, for instance for large objects that customers normally see from a distance. Here, the various petrol station cases in Europe spring to mind, such as the British Petroleum 10 Cass. RG C N, 22 December 2000, Juristenkrant 2001, 23, Judgment of 28 March 1995, Qualitex Co. v. Jacobson Products Co., Inc., 514 US 159 (1995), p. 169.

4 versus John Kelly decision of the Court of Appeal in Northern Ireland: customers normally make their choice for a petrol station when travelling at high speed and at quite some distance from the station. 12 In that case, the Court of Appeal held, first, that BP's particular shade of green had become distinctive through use and, second, that the shade of green used by the defendant in that case, seen at a distance by a motorist travelling at high speed, might cause him to turn into the station believing it to be a BP station and that he would complete that manoeuvre even though realising it was not a BP station. The Court of Appeal thus concluded that there existed a likelihood of confusion and that BP's trademark had been infringed; Finaly, the Supreme Court rejected the argument that colour marks were not needed because companies could already rely on what is called "trade dress protection". This protection covers the situation where a competitor copies a colour and thereby causes confusion on the overall appearance of the competing products or their packaging. In the Supreme Court's view "trade mark law helps the holder of a mark in many ways that trade dress protection does not". Some of these considerations may help us perceive the relative nature of certain objections. However, the Supreme Court also implicitly held in Qualitex that a colour cannot be inherently distinctive. It may only come to distinguish commercial origin through the use made of it. The Court explicitly confirmed this in its Wal-Mart versus Samara decision of , on the ground that "consumers are aware of the reality that, almost invariably, [colour] is intended not to identify the source, but to render the product itself more useful or more appealing." This view seems slightly more restrictive than Libertel, where the Court of Justice did leave open the door to a colour being inherently distinctive for goods or services, without referring to prior use. The Court of First Instance Turning to the way in which the Court of First Instance has addressed the issue of colour marks I mention Viking-Umwelttechnik 14 and KWS Saat 15, both of autumn last year, and Andreas Stihl 16, of July this year, as well as Glaverbel 17 : The latter case concerned a product design, but the Court approached it in the very same way as the colours in the other three cases. Just as the questions referred to the Court of Justice in Libertel, the pleas submitted in the four cases before the Court of First Instance concerned only the absolute grounds for refusal of trade mark applications, laid down in Article 3 of the Directive and Article 7 of the Regulation. They did not concern the basic conditions for trade marks, laid down in Article 2 of the Directive and Article 4 of the Regulation. This did not prevent the Court of Justice, as I mentioned, from addressing Article 2 of the Directive, but the Court of First Instance did not explicitly address Article 4 of the Regulation. It did, however, start out by observing that colours or colour combinations per se may constitute a Community trade mark, be it conditional upon its distinctive character. In each of its four decisions so far, the Court of First Instance started out by saying that colours are capable of constituting Community trade marks in so far as they are capable of distinguishing commercial origin. However, such capability did not mean that the colour at issue in each of the four cases passed the test that it is not "devoid of any distinctive character" for the goods or services involved, as Article 7 of the Regulation has it. The Court's reasoning in this respect may be summarized as: The public is not used to perceiving a colour as instantly identifying commercial origin. 12 BP Amoco PLC v John Kelly and Glenshane Tourist Services, judgment of 2 February 2001, [2001] NIECA 3 (Carswell LCJ), in particular para Judgment of 22 March 2000, Wal-Mart Stores, Inc. v. Samara Brothers Inc., 529 US 205 (2000). 14 Judgment of 25 September 2002, Case T-316/00 [2002] ECR II Judgment of 9 October 2002, Case T-36/01 [2002] ECR II Judgment of 9 July 2003, Case T-234/01, not yet reported. 17 Judgment of 9 October 2002, Case T-36/01 [2002] ECR II-3887.

5 Colours may not only indicate commercial origin, but also serve technical or decorative functions. In so far as the relevant public recognises the colour as indicating commercial origin, those other functions are immaterial to its distinctiveness. The application of those principles led to different results but, basically, in each of the four decisions the outcome hinged on the question whether it was obvious or not for the public that the colour at issue indicated commercial origin. It was only in KWS Saat that the Court answered that question in the affirmative, be it for only part of the goods and services question; it found that the shade of orange at issue could indeed distinguish the commercial origin of services concerning consultancy in the field of plant cultivation. The Court based its finding on four elements: First, as opposed to products, a colour cannot be attached to a service or confer value on it, so that the public may immediately recognise whether the colour serves to indicate commercial origin. Second, the orange shade in question was easily memorable and did not have any other, more immediate function. Third, the fact that the colour could not communicate information on commercial origin did not matter; it could distinguish commercial origin. Lastly, on the issue of Freihaltebeduerfnis it was considered that many other shades remain available for competitors. Viking-Umwelttechnik and Andreas Stihl both concerned a colour combination, not a single colour as such, as was the case in KWS Saat. In that respect, it is interesting to note that the Court based its conclusion of lack of distinctiveness of the colour combination at issue inter alia on the fact that according to the trade mark application, the colours were not combined in any particular format. This is yet another issue that no doubt will be addressed by the Court of Justice at a later stage. Concluding remarks By way of conclusion I would not dare to suggest that the approaches of the Court's Libertel judgment and the four judgments of the CFI are entirely compatible. However, each of those judgments rests on the principle that colours as such may constitute trade marks, be it only on the conditions applied to all other trade mark applications. Further, one may conclude from the five judgments that trade mark protection for colours is now possible in principle, but will be hard to obtain in practice. Libertel, Viking-Umwelttechnik, KWS Saat and Andreas Stihl are only the first elements of a body of Community jurisprudence that should help companies Europe-wide to figure out the possibilities with respect to colour marks. The next elements will probably be the Court of Justice's ruling in Heidelberger Bauchemie and the decision on appeal in KWS Saat. In my view the present assignment of the "Luxembourg" courts and, for that matter, the European trademark community as a whole, is to invent a new and common tradition in the area of colour marks. The few cases that I have discussed do not allow for very precise conclusions, but vague contours of such a new and common tradition are taking shape. In order to develop it further we need many more cases. The upshot of this brief overview is therefore a paradox, consisting of the limited capacity of courts like the Community Courts as opposed to the need for many more cases in order to develop the new European trade mark law. The perspective is luring of a special judicial panel for Community trade mark cases, in order to keep the case load manageable and the development of Community trade mark law coherent.

JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber) 9 October 2002 *

KWS SAAT v OHIM (SHADE OF ORANGE) JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber) 9 October 2002 * In Case T-173/00, KWS Saat AG, established in Einbeck (Germany), represented by G. Würtenberger,