Refusal of application for a European Union trade mark

(Article 7 and Article 42(2) EUTMR)

Alicante, 06/05/2020

MITSCHERLICH, PATENT- UND RECHTSANWÄLTE, PARTMBB

Sonnenstraße 33

D-80331 München

ALEMANIA

Application No:	17 375 403
Your reference:	M36402/EU/Wi1
Trade mark:	SYSTEM1
Mark type:	Word mark
Applicant:	SYSTEM1, LLC 10400 NE 4th Street, Suite 500 Bellevue Washington 98004 ESTADOS UNIDOS (DE AMÉRICA)

The Office raised a partial objection on 01/10/2019 pursuant to Article 7(1)(b)

EUTMR because it found that the trade mark applied for is

devoid of any distinctive character, for the reasons set out in the attached letter.

Upon request by the applicant of 22/11/2019, the Office extended on 27/11/2019 the time limit to submit observations in reply by two/2 months till 01/02/2020¹.

The applicant submitted its observations on 03/02/2020 which may all be

summarised as follows:

1. Distinctive character (no laudatory meaning/no link to covered goods/ goods and services at issue do not constitute a sufficiently homogeneous category)

2. Similar marks previously registered by the Office

Pursuant to Article 94 EUTMR, it is up to the Office to take a decision based on

reasons or evidence on which the applicant has had an opportunity to present its

comments.

After giving due consideration to the applicant’s arguments, the Office has decided to maintain the objection.

1. Distinctive character (no laudatory meaning/no link to covered goods/ goods and services at issue do not constitute a sufficiently homogeneous category)

General remarks

Under Article 7(1)(b) EUTMR, ‘trade marks which are devoid of any distinctive character’ are not to be registered.

It is settled case-law that each of the grounds for refusal to register listed in Article 7(1) EUTMR is independent and requires separate examination. Moreover, it is appropriate to interpret those grounds for refusal in the light of the general interest underlying each of them. The general interest to be taken into consideration must reflect different considerations according to the ground for refusal in question (16/09/2004, C‑329/02 P, SAT/2, EU:C:2004:532, § 25).

The marks referred to in Article 7(1)(b) EUTMR are, in particular, those that do not enable the relevant public ‘to repeat the experience of a purchase, if it proves to be positive, or to avoid it, if it proves to be negative, on the occasion of a subsequent acquisition of the goods or services concerned’ (27/02/2002, T‑79/00, Lite, EU:T:2002:42, § 26). This is the case for, inter alia, signs commonly used in connection with the marketing of the goods or services concerned (15/09/2005, T‑320/03, Live richly, EU:T:2005:325, § 65).

Registration ‘of a trade mark which consists of signs or indications that are also used as advertising slogans, indications of quality or incitements to purchase the goods or services covered by that mark is not excluded as such by virtue of such use’ (04/10/2001, C‑517/99, Bravo, EU:C:2001:510, § 40). ‘Furthermore, it is not appropriate to apply to slogans criteria which are stricter than those applicable to other types of sign’ (11/12/2001, T‑138/00, Das Prinzip der Bequemlichkeit, EU:T:2001:286, § 44).

Although the criteria for assessing distinctiveness are the same for the various categories of marks, it may become apparent, in applying those criteria, that the relevant public’s perception is not necessarily the same for each of those categories and that, therefore, it may prove more difficult to establish distinctiveness for some categories of mark than for others (29/04/2004, C‑456/01 P & C‑457/01 P, Tabs, EU:C:2004:258, § 38).

Moreover, it is also settled case-law that the way in which the relevant public perceives a trade mark is influenced by its level of attention, which is likely to vary according to the category of goods or services in question (05/03/2003, T‑194/01, Soap device, EU:T:2003:53, §  42; and 03/12/2003, T‑305/02, Bottle, EU:T:2003:328, § 34).

A sign, such as a slogan, that fulfils functions other than that of a trade mark in the traditional sense of the term ‘is only distinctive for the purposes of Article 7(1)(b) EUTMR if it may be perceived immediately as an indication of the commercial origin of the goods or services in question, so as to enable the relevant public to distinguish, without any possibility of confusion, the goods or services of the owner of the mark from those of a different commercial origin’ (05/12/2002, T‑130/01, Real People, Real Solutions, EU:T:2002:301, § 20 ; and 03/07/2003, T‑122/01, Best Buy, EU:T:2003:183, § 21).

Applicant’s remarks

Software versions are normally indicated in a different manner, namely, for instance, by the scheme: 2.1/2.2./2.3, etc. In addition, the first version is regularly a prototype and during the creation of the final product, the version number will increase. As a result, the number “1” will not be perceived as number of a potential version.

Even if it was the case, the number “1” would not convey a promotional information in the field of the goods and services for which registration is sought since the first version is normally not the best but the version with the highest number. Consequently, the relevant public will not believe

that the numerical element “1” shall indicate the version, since no one would assume the trademark owner would like to refer to a preliminary version. Hence, for finding a meaning of the numerical element “1”, further mental steps would be necessary. Therefore, the minimum degree of distinctiveness for the registration of the contested trademark exists.

The goods and services for which registration is sought do not refer to hardware but focus on different kinds of software and services. Consequently, also the verbal element “system” is distinctive for the products at issue.

Only goods and services which are interlinked in a sufficiently direct and specific way may form a sufficiently homogeneous category or group of goods or services. The products at issue are not homogenous. Class 9 concerns

goods whereas Class 42 concerns services, for which reason there can be per se no homogenous group. For example software relating to advertising and marketing is different to the very specific technological services covered by the sign. Therefore, the Office´s notice [of grounds for refusal] does not contain a sufficient differentiation between the goods and services at

issue.

Office´s comments

The distinctive character of a trade mark must be assessed, first, by reference to the goods or services in respect of which registration of the sign is sought and, second, by reference to the perception of the section of the public targeted, which is composed of the consumers of those goods or services (judgment of 27/11/2003, T-348/02, ‘Quick’, §29).

Therefore, the sign ’SYSTEM1’ is to be assessed in relation to the goods and services at issue which for the sake of good order are the following:

Class 9 Computer software and software applications for the purposes of web optimization and the provision of personalized internet content based on an individual's internet use; computer software to enable the creation, managing, targeting, tracking, analyzing, and servicing of advertising and marketing content and campaigns via mobile, web sites, online and interactive media and computer networks.

Class 42 Software as a service (SaaS) featuring software for the purposes of web optimization and the provision of personalized internet content based on an individual's internet use; providing computer software to enable the creation, managing, targeting, tracking, analyzing, and servicing of advertising and marketing content and campaigns via mobile, web sites, online and interactive media and computer networks; application service provider (ASP) featuring software to upload, store, manage, track, analyze, and prepare reports on data about marketing and promotional efforts, sales, customers, information related to customer relationship management in the nature of information about purchases and returns by individual customers, customer support initiatives and e-commerce transactions; technological services, namely, the research, design and provision of non-downloadable software applications in the fields of website optimization and the provision of personalized internet content based on an individual's internet use; technical advisory and consultancy

services for all of the aforesaid services.

In the present case, the goods and services concerned are primarily intended for the professional consumers within the web marketing and web advertising field. When confronted with the sign ‘SYSTEM1’ in connection with computer and software applications in class 9/Software as a System/SaaS in class 42 for the purposes of web optimization and computer software for the management of advertising and marketing content and campaigns via online digital networks, including [technological services, namely] the research, design and provision of such non-downloadable software applications, the relevant public will only perceive it as an informational statement that these software application products are intended for operating systems/software suites for the purpose of update/enhancement/software compatibility and that they are version number one as version 1 of an operating or software system, the first of its’ kind, and/or alternatively as a laudatory term for the best of its’ kind.

As the applicant points out, it is correct that version numbers for computer operating systems usually consist of more numbers separated by dots. For example: 1.2. 3 However, the leftmost number (1) is called the major version. It is common to give operating systems and software systems version numbers. As an example, over time Microsoft adopted incremental numbers in the title with version numbers such as Windows 1.0, Windows 7, Windows 8, Windows 10 being a series of operating systems produced by Microsoft.

The applicant also asserts that the goods and services for which registration is sought do not refer to hardware but focus on different kinds of software and services. The Office does agree with the applicant that the goods and services at issue concern software/software services, namely computer and software applications in class 9/Software as a Service/SaaS in class 42 for the purposes of web optimization and the provision of personalized internet and computer software for the management of advertising and marketing content and campaigns via online digital networks, including [technological services, namely] the research, design and provision of such non-downloadable software applications with the purpose of being used for operating systems, software systems of software suites.

However, the Office disagrees with the applicant that these goods and services do not form a sufficiently homogeneous category or group of goods or services. The Office is of the position that in line with the Office´s reasoning given above to the lack of distinctiveness of the sign, these goods and services constitute a sufficiently homogenous category or group of goods that it allows general reasoning to be applied. In that context, reference can be made to case law from the Boards of Appeal (decision of 25/10/2018, R1155/2018-2, (fig.) CLEARSOUND, §40 and 41):

‘40 However, in respect of that latter requirement, the Court of Justice has held that the competent authority may confine itself to general reasoning for all of the goods or services concerned in the case where the same ground of refusal is given for a category or group of goods or services (23/09/2015, T-633/13, Infosecurity, EU:T:2015:674, § 46 and the case-law cited therein and 22/11/2011, T-275/10, Mpay24, EU:T:2011:683, § 53, and the case-law cited therein).

41 According to the cited case-law, an option of this nature can extend only to goods or services which have a sufficiently direct and specific link to each other to the extent that they form such a sufficiently homogenous category or group of goods or services that it allows general reasoning to be applied (03/03/2015, T-492/13 and T-493/13, Darstellung eines Spielbretts, EU:T:2015:128, § 40). Moreover for that purpose the mere fact that the goods or services in question are in the same class under the Nice Agreement is not sufficient since those classes often contain a wide variety of goods or services which do not necessarily have a sufficiently direct and specific link to each other (03/09/2014, T-686/13, Deux lignes et quatre étoiles, EU:T:2014:737, § 15, and the case-law cited therein; 15/12/2016, T-529/15, START UP INITIATIVE, EU:T:2016:747, § 17)’.

Therefore, the Office maintains its’ position that the sign in question is devoid of any distinctive character within the meaning of Article 7(1)(b) EUTMR.

2. Similar marks previously registered by the Office

Applicant´s remarks

The principle of equal treatment requires the Office to take into

account of its own motion decisions already taken in respect of similar applications and to consider with special care whether it should decide in the same way or not.

Examples hereof are:

EUTM no REPRESENTATION

- 00 308 940 SYSTEM 21

- 04 901 963 SYSTEM I

- 16 147 282 system ONe

Office´s comments

As regards the applicant’s argument that similar registrations have been accepted by the EUIPO, according to settled case- law, ‘decisions concerning registration of a sign as a European Union trade mark are adopted in the exercise of circumscribed powers and are not a matter of discretion’. Accordingly, the registrability of a sign as a European Union trade mark must be assessed solely on the basis of the EUTMR, as interpreted by the Union judicature, and not on the basis of previous Office practice (15/09/2005, C-37/03 P, BioID, EU:C:2005:547, § 47; and 09/10/2002, T-36/01, Glass pattern, EU:T:2002:245, § 35).

In addition it is clear that the market, the perception of the consumers and, moreover, the practice of the Office could have changed during that period. The Court of Justice is also aware of this market and practice evolution and have stated that observance of the principle of equal treatment must be reconciled with observance of the principle of legality according to which no person may rely, in support of his claim, on unlawful acts committed in favour of another’ (27/02/2002, T-106/00, Streamserve, EU:T:2002:43, § 67).

For the abovementioned reasons, and pursuant to Article 7(1)(b) EUTMR, the application for European Union trade mark No 17 375 403 is hereby rejected in part for the following goods and services, namely:

Class 9 Computer software and software applications for the purposes of web

optimization and the provision of personalized internet content based

on an individual's internet use; computer software to enable the

creation, managing, targeting, tracking, analyzing, and servicing of

advertising and marketing content and campaigns via mobile, web

sites, online and interactive media and computer networks.

Class 42 Software as a service (SaaS) featuring software for the purposes of

web optimization and the provision of personalized internet content

based on an individual's internet use; providing computer software to

enable the creation, managing, targeting, tracking, analyzing, and

servicing of advertising and marketing content and campaigns via

mobile, web sites, online and interactive media and computer

networks; application service provider (ASP) featuring software to

upload, store, manage, track, analyze, and prepare reports on data

about marketing and promotional efforts, sales, customers,

information related to customer relationship management in the nature

of information about purchases and returns by individual customers,

customer support initiatives and e-commerce transactions;

technological services, namely, the research, design and provision of

non-downloadable software applications in the fields of website

optimization and the provision of personalized internet content based

on an individual's internet use; technical advisory and consultancy

services for all of the aforesaid services.

The application may proceed for the remaining services, namely:

Class 35 Marketing services; mobile and digital advertising and marketing

services, namely, creation of marketing tools designed to increase a

client company's knowledge of customer segments, advertising

strategy and sales strategy; preparation and realization of advertising

plans and concepts; development of digital marketing strategies and

concepts; digital statistical evaluations of marketing data; data

processing in the fields of website optimization and the provision of

personalized internet content based on an individual's internet use;

provision of business information and data in the fields of website

optimization and the provision of personalized internet content based

on an individual's internet use; consumer strategy business consulting

in the fields of marketing, sales, operation, and product design

particularly specializing in the use of analytic models for the

understanding and predicting of consumer, business, and retail

market trends and actions; advertising, promotion and marketing

services in the nature of e-mail blast campaigns for others.

Class 42 Electronic data storage; Internet search engine services to consumers

and businesses.

According to Article 67 EUTMR, you have a right to appeal against this decision.

According to Article 68 EUTMR, notice of appeal must be filed in writing at the Office

within two months of the date of notification of this decision. It must be filed in the

language of the proceedings in which the decision subject to appeal was taken.

Furthermore, a written statement of the grounds of appeal must be filed within four

months of the same date. The notice of appeal will be deemed to be filed only when

the appeal fee of EUR 720 has been paid.

Finn PEDERSEN