Total refusal of an application for a Community trade mark under Articles 7 and 37 of the Community Trade Mark Regulation (CTMR) no. 207/2009 and Rule 11(3) of the Implementing Regulation (IR) no. 2868/1995

Alicante, 02/12/2015

Curell Suñol S.L.P.

Via Augusta 21

08006 Barcelona

Application No	14347819
Your reference	CTM/S-4606
Trade mark	INNOVATE
Applicant	3Pillar Global, Inc. 3975 Fair Ridge Drive, Suite 200 South Fairfax, Virginia VA 22033 USA

• Procedure

The Office raised an objection on 23 July 2015, pursuant to article 7(1)(b) and (c) and 7(2) CTMR, because it was found that this sign is devoid of any distinctive character and descriptive for the reasons set out in the attached letter.

On 23 September 2015 the applicant replied with the following counter-arguments:

1. Applicant claims lack of motivation in the objection.

2. The Office has not produced any evidence of descriptive use of the sign INNOVATE in the relevant market.

3. INNOVATE does not directly designate essential characteristics.

4. This word is not the normal way to refer to the services.

5. There is no direct connection between the sign and the services.

6. Knowledgeable trade circles tend to see trade marks in descriptive signs.

7. A minimum degree of distinctiveness should be sufficient.

8. The same sign has already been accepted by the USPTO and an identical sign by a different applicant was accepted by OHIM.

• Decision

Pursuant to article 75 CTMR, it is up to the Office to make a decision based on reasons or evidence on which the applicant has had an opportunity to present its comments.

After giving due and careful consideration to the applicant’s arguments, the Office has decided to maintain the objection and refuse the application totally:

42

Computer software development; consultancy in the field of software design.

• Refutal of counterarguments

The Office comments on this refusal and the applicant’s arguments hereunder:

1. Applicant claims lack of motivation in the objection.

This claim is unfounded. The Office examined the sign, - which is not a very complicated exercise, because it is only a single word - by looking up its meaning in the leading dictionary of the English language, the Oxford Dictionary.

Then it applied this meaning to the services in class 42 and it concluded that the sign INNOVATE is descriptive of a software company that innovates and therefore INNOVATE is a laudatory notion, descriptive of the quality of the services (and goods, namely the software) and therefore falling under article 7(1)(c) CTMR.

2. The Office has not produced any evidence of descriptive use of the sign INNOVATE in the relevant market.

According to established case law the Office is under no obligation to produce evidence of descriptive use. The Regulation is clear on this point:

Article 7

Absolute grounds for refusal

1. The following shall not be registered:

…..

(c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical

origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service.

“which may serve” means therefore that actual descriptive use does not have to be demonstrated.

See also:

“In order for OHIM to refuse to register a trade mark under Article 7(1)(c) of Regulation No 40/94, it is not necessary that the signs and indications composing the mark that are referred to in that article actually be in use at the time of the application for registration in a way that is descriptive of goods or services such as those in relation to which the application is filed, or of characteristics of those goods or services. It is sufficient, as the wording of that provision itself indicates, that such signs and indications could be used for such purposes. A sign must therefore be refused registration under that provision if at least one of its possible meanings designates a characteristic of the goods or services concerned.”

(Judgment of the Court of Justice of 23 October 2003 in the case C-191/01P OHIM ./. Wrigley [DOUBLEMINT], par. 32)

3. INNOVATE does not directly designate essential characteristics.

The notion that only descriptive words must be refused that refer to essential characteristics, is based on a misinterpretation of Luxembourg case law which leaves no room for doubt:

“It is also irrelevant whether the characteristics of the goods or services which may be the subject of the description are commercially essential or merely ancillary. The wording of Article 3(1)(c) of the Directive does not draw any distinction by reference to the characteristics which may be designated by the signs or indications of which the mark consists. In fact, in the light of the public interest underlying the provision, any undertaking must be able freely to use such signs and indications to describe any characteristic whatsoever of its own goods, irrespective of how significant the characteristic may be commercially.”

(Judgment of the Court of Justice dated 12 February 2004 in the case C-363/99 Benelux-Merkenbureau ./. Koninklijke KPN Nederland N.V. [POSTKANTOOR], par. 100)

4. This word is not the normal way to refer to the services.

Applicant refers indirectly to the BABY-DRY judgment¹, where the notion of “common parlance” was introduced: every sign that was not used in common parlance was acceptable as a trade mark.

The Court appeared to accept an unusually low standard of distinctiveness and upheld the registrability of trade marks that were not manifestly inadmissible. But this permissive approach was absolutely exceptional, since it was held only in the BABY-DRY judgment and was abandoned by the later case law that assumed a stricter approach, taking into account that the various grounds for refusing registration set out in Article 7 CTMR must be interpreted in the light of the public interest underlying each of them, following the earlier line marked by judgment of the Court of 4 May 1999 in Joined Cases C-108/97 and C-109/97 Windsurfing Chiemsee Produktions- und Vertriebs GmbH (WSC) v Boots- und Segelzubehör Walter Huber and Franz Attenberger (‘Chiemsee’), at paragraph 25.

The strict approach with CHIEMSEE was ignored by the BABY-DRY judgment that did not even cite the earlier CHIEMSEE judgment. But this omission has been fully corrected by the later case law by always citing CHIEMSEE without any mention of BABY-DRY.

Nowadays the notion of the “perceptible difference” is what counts. If a sign consists of one or of various words, a perceptible difference must exist between the sign as applied for and the descriptive meaning of the word(s).²

So, a (string of) word(s) that is uncommon to the industry can only become a trade mark, either by acquired distinctiveness through use or by showing an unusual and striking aspect (perceptible difference). There is nothing about INNOVATE that could be considered unusual or striking.

5. There is no direct connection between the sign and the services.

Contrary to applicant’s claim the connection between INNOVATE and the design of software is direct: A software company that innovates is better and has a market advantage as opposed to software companies that are still stuck in the past and fail to see new and promising developments. The word INNOVATE brings about an association with novelty and update as a possible feature or purpose of computer software.

6. Knowledgeable trade circles tend to see trade marks in descriptive signs.

It is rather the not knowledgeable, average consumer whose level of awareness and attention in certain circumstances tends to be superficial, who could see a trade mark in a descriptive sign. The better informed and more attentive consumer will immediately grasp any relevant meaning in a descriptive sign.

7. A minimum degree of distinctiveness should be sufficient.

There is no mention in the Regulation of a “minimal distinctiveness”, nor has the Court accepted this principle. In the COMPANYLNE-judgment³ the difference between „no distinctiveness“ and „minimal distinctiveness“ was rejected.

In general, since the POSTKANTOOR-⁴ and BIOMILD-judgments⁵ a sign can only be registered as a CTM, when there is a noticeable difference between the expression used in the sign and the common parlance of the relevant market place (see under 4.)

8. The same sign has already been accepted by the USPTO and an identical sign by a different applicant was accepted by OHIM.

The fact that the applicant managed to get INNOVATE registered in other jurisdictions will not induce the Office to follow the example of these jurisdictions, which have a different way of examining trade marks anyway, especially when they lie, as in this case, outside EU-territory.

It is furthermore consistent with case law from Luxembourg that earlier registrations of the same or of a very similar sign may only be attributed indicative value and may never serve as the only argument to accept a CTM. See the following judgment:

“Finally, as to the applicant's arguments on national applications and earlier decisions of the Office, it must be borne in mind that it is settled case-law, first of all, that the Community trade mark system is autonomous and, secondly, that the legality of decisions of the Boards of Appeal is to be assessed purely by reference to Regulation No 40/94, and not the Office's practice in earlier decisions (see judgments in Cases T-122/99 Procter & Gamble v OHIM (soap bar shape) [2000] ECR II-265, paragraphs 60 and 61; T-32/00 Messe München v OHIM (electronica) [2000] ECR II-3829, paragraph 47; and T-106/00 Streamserve v OHIM (STREAMSERVE) [2002] ECR II-723, paragraph 66). Accordingly, the Office is bound neither by national registrations nor by its own previous decisions. Furthermore, as the Office rightly argued, neither the reference to a national registration that postdates the examiner's refusal of the application for registration, nor the reference to registrations by the Office that are open to subsequent challenge before the bodies responsible for reviewing their legality, may be accepted as relevant.”

(Judgment of the Court of First Instance dated 5 December 2002 in the case T-130/01 REAL PEOPLE, REAL SOLUTIONS, par. 31)

Just for the sake of completeness the Office investigated applicant’s claim that INNOVATE-trade marks tend to be accepted by the Office.

The tendency is however the other way around: INNOVATE-signs are usually refused and the occasional acceptance is an exception. The Boards have confirmed recently and also in the past various refusals of signs consisting of or containing the word INNOVATE:

R0277/2015-4 WE INNOVATE!, dated 2 July 2015, i.a. for classes 9 and 42, “software” and “design of software”, par. 21-23;

R2488/2014-2 GLOBAL.INNOVATE.TRUSTED, dated 15 April 2015, i.a. for “designing software” (42), especially par. 29-30;

R1102/2004-1 INVENT INTEGRATE INNOVATE, dated 20 June 2005, especially par. 20

R0411/2003-1 INNOVATE, dated 1 March 2004, i.a. for “software” (9), especially par. 8:

“The Board considers that the mark applied for is descriptive as it may serve as an indication of the characteristics or purpose of the goods. In the English language the term ‘innovate’ means to invent or introduce novelties. In the Board’s view, this verb brings about an association with novelty and update as a possible feature or purpose of computer software. It is often the case that the purpose of computer-related products is to ‘innovate’, i.e. to offer novel features or to supply innovative solutions to the consumers. The relevant consumers are persons with good knowledge of Information Technology and who are involved in business. For them, this verb may serve, in the Board’s estimation, to designate the purpose of the computer simulation software.”

• Conclusion:

• The expression INNOVATE is an understandable English dictionary word which tells the relevant consumer that the company that develops and produces the software, is characterized by (constant) innovation.

• Ergo, INNOVATE is a laudatory notion that highlights applicant’s superiority in relation to other software companies and therefore lacks distinctive character.

• The fact that this word remains “vague” in the sense that it is general and does not go into detail, does not alter this finding of descriptiveness and lack of distinctiveness.

• The sign shall therefore be refused for all services.

• How to appeal this decision

Under Article 59 of the Community Trade Mark Regulation no. 207/2009 you have a right to appeal against this decision. Under Article 60 of the Regulation a notice of appeal must be filed in writing at the Office within two months from the date of receipt of this notification and within four months from the same date a written statement of the grounds of appeal must be filed. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 800,00 has been paid.

Robert KLIJN BRINKEMA