Refusal of application for a European Union trade mark

(Article 7 and Article 42(2) EUTMR)]

Alicante, 19/12/2018

Securechain ApS

Osterbrogade 226, st. tv., Office 160

DK-2100 Copenhagen O

DINAMARCA

Application No:	017927811
Your reference:	1129865
Trade mark:	SECURECOIN
Mark type:	Word mark
Applicant:	Securechain ApS Osterbrogade 226, st. tv., Office 160 DK-2100 Copenhagen O DINAMARCA

The Office raised an objection on 03/08/2018 pursuant to Article 7(1)(b) and (c) and Article 7(2) EUTMR because it found that the trade mark applied for is descriptive and devoid of any distinctive character, for the reasons set out in the attached letter.

The applicant submitted its observations on 03/10/2018, which may be summarised as follows.

1. SECURECOIN does not contain any obvious or direct information on the intended purpose or subject-matter of all of the services applied for. There is no clear connection between the word mark and any of the services applied for in class 36. Consequently, the word mark is to be considered as sufficiently distinctive in relation to the goods applied for. The word mark could be at most considered to suggestive or allusive whenever it makes reference in an indirect way to certain characteristics of the services.

2. All currently known cryptocurrencies are digital assets. They do not exist as physical objects, for example coins. For this no reason there is no logical link between the word mark and a cryptocurrency per se. The specification of the word mark does not include the term cryptocurrency at all. Thus, even if we assume that the reasoning behind the expert’s decision is logical, then still there is no connection between the understanding of the word mark provided by the expert and the word mark’s specification.

3. The services for which the mark will be used, are no longer associated with coins nowadays, because financial and monetary services are mostly proceeding electronically. For this reason, there is currently basically no longer any common link between the word ‘COIN’ and financial services. The practical role of coins is significantly reduces, as cashless payments are becoming more and more common. As a result coins are increasingly obsolete and perceived rather in a historical context. Given the fact that currently used coins possess very little value, it would be even ridiculous to consider the word mark to be a description of any particular service.

4. The expert has failed to demonstrate any connection between a cryptocurrency and services like ‘Fundraising and financial sponsorship’ or ‘ Provision of prepaid cards and tokens’. Consequently, even if we falsely assume that the word mark is descriptive in relation to a cryptocurrency, there is still no lexical, factual or logical connection between the meaning of the word mark and the services mentioned in its specification.

5. The very basic understanding of economy allows to determine that there is currently no currency, which could be regarded as 100% safe and secure. This is mostly, because of phenomena like inflation, recessions or various speculation bubbles. Consequently, it will be in fact quite easy for the potential consumers to identify the commercial origin of the products labelled by it, because there is no answer to or description of what is covered by SECURECOIN. The idea is imaginary and there is no definition of the concept.

6. The literal meaning of the word mark would be rather a discouraging slogan, because hardly anyone in the European Union would find the idea of protecting his/her savings in a form of a coin or coins, particularly appealing.

7. The examiner wrongly disregarded the notion of general interest which pursuant Article 7(1)(b) EUTMR is indissociable from the essential function of a trade mark, which is to guarantee the identity of the origin of the marked product or service to the consumer or the end user by enabling him or her, without any possibility of confusion, to distinguish the product or service from others which have another origin. This ground for refusal relates to the complete lack of distinctiveness and does not apply to trade marks with only a limited degree of distinctiveness.

8. SECURECOIN has been filed not only in the EU, but also in the USA, and the USPTO has not expressed any objections related to the distinctiveness of the word mark.

9. The same word mark was filed and registered in the EUIPO for classes 9 and 42.

10. Other similar marks have been registered by the EUIPO.

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.

Under Article 7(1)(c) EUTMR, ‘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’ 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).

By prohibiting the registration as European Union trade marks of the signs and indications to which it refers, Article 7(1)(c) EUTMR pursues an aim which is in the public interest, namely that descriptive signs or indications relating to the characteristics of goods or services in respect of which registration is sought may be freely used by all. That provision accordingly prevents such signs and indications from being reserved to one undertaking alone because they have been registered as trade marks (23/10/2003, C‑191/01 P, Doublemint, EU:C:2003:579, § 31).

The applicant argues that there is no clear connection between the word mark and any of the services applied for in class 36. However, as was stated in the notification of the objection of 03/08/2018, and as will be made even clearer in this document, there are clear connections between the word mark and the services applied for in class 36.

As stated in the notification of the objection, SECURECOIN, will be understood as a descriptive term by two different relevant consumers, each understanding the meaning of the mark differently. For the general consumer, the term ‘secure’ means ‘free from danger or damage’. And the term ‘coin’ means ‘money in the form of coins’ (https://en.oxforddictionaries.com/definition/coin on 05/12/2018 ). As such, the general consumer will understand SECURECOIN to mean ‘money in the form of coins which is free from danger or damage and which can be relied on’. Therefore, when general English-speaking consumers are confronted with the applied for mark in combination with services such as: Provision of prepaid cards and tokens; Safe deposit services; Fundraising and financial sponsorship; Financial and monetary services, and banking, they will not see an indication of trade origin, but rather a description of the kind, quality and intended purpose of the services.

‘The signs and indications referred to in Article 7(1)(c) [EUTMR] are those which may serve in normal usage from the point of view of the target public to designate, either directly or by reference to one of their essential characteristics, the goods or service in respect of which registration is sought’ (26/11/2003, T‑222/02, Robotunits, EU:T:2003:315, § 34).

The applicant states that the services for which the mark will be used, are no longer associated with coins nowadays, because financial and monetary services are mostly proceeding electronically, and that as a result, coins are increasingly obsolete and perceived rather in a historical context, and that it would be even ridiculous to consider the word mark to be a description of any particular service. However, as stated above the word ‘coin’ will not just be associated as a metal disk, but as money in the form of coins. The fact that financial and monetary services are mostly proceeding electronically, does not affect the fact that ‘coins’ are still in use today and are often used for paying for prepaid cards or tokens, for carrying out numerous financial, monetary or banking services, and are kept secure and safe through the use of safety deposit services, especially if the coins have a value greater than normal due to them being collectibles, rare coins, etc.

Moreover, It is … 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 7(1)(c) EUTMR] 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 (12/02/2004, C‑363/99, Postkantoor, EU:C:2004:86, § 102).

The applicant also argues that there is no logical link between the word mark and a cryptocurrency per se, and that even if we assume that the reasoning behind the expert’s decision is logical, then still there is no connection between the understanding of the word mark provided by the expert and the word mark’s specification.

As also stated in the notification of the objection, SECURECOIN will be understood by a professional English-speaking public as a descriptive term meaning ‘cryptocurrency which is free from danger or damage, and which can be relied on’. As understood by professionals working in the finance, banking and monetary sectors, the word ‘coin’ will also be understood as “a unit of cryptocurrency” (https://www.merriam-webster.com/dictionary/coin on 06/12/2018), or “a unit of digital value” (https://decryptionary.com/dictionary/coin/ on 06/12/2018). Therefore, when these relevant consumers see or hear the applied for mark, SECURECOIN, in combination with services such as Provision of prepaid cards and tokens; Safe deposit services; Fundraising and financial sponsorship; Financial and monetary services, and banking, they will not see it as an indication of trade origin, but rather as a description of the kind, quality and intended purpose of the services.

Furthermore, the applicant’s own webpage states very clearly that “Secure Coin is a crypto currency based on the X11 Algorithm and is both proof of stake work. The coin has a large premise of 200,000 000 of the total supply of 208,000,000 -25% is distributed - 50 million is reserved for staisybit, 99 million reserved for inhouse staking...and 1 million reserved for the development team.”. In the phrase “The coin has a large premise of…”, the applicant equates cryptocurrency with ‘coin’ (http://www.securecoinexchange.net/ on 06/12/018).

The applicant further claims there is still no lexical, factual or logical connection between the meaning of the word mark and the services, Provision of prepaid cards and tokens; Fundraising and financial sponsorship, mentioned in its specification The use of prepaid cards or tokens is already common with normal currency, with the common definition of coin, it is easy to understand why a secure coin would be understood in relation to these goods. However, prepaid cards are also used with cryptocurrencies, and the relation with a cryptocurrency is very similar in that instead of these items containing a value in euros, for example, they will contain a value in the alternative coin of choice. With regards to fund raising, one need only to look at the definition of ICO (initial coin offering) which is defined as “the first sale of a cryptocurrency to the public conducted for the purpose of raising funds (as to support a start-up)” (https://www.merriam-webster.com/dictionary/initial%20coin%20offering on 07/12/2018).

A trade mark consisting of a neologism or a word composed of elements each of which is descriptive of characteristics of the goods or services in respect of which registration is sought is itself descriptive of the characteristics of those goods or services for the purposes of Article 7(1)(c) [EUTMR], unless there is a perceptible difference between the neologism or the word and the mere sum of its parts: that assumes that, because of the unusual nature of the combination in relation to the goods or services, the neologism or word creates an impression which is sufficiently far removed from that produced by the mere combination of meanings lent by the elements of which it is composed, with the result that the word is more than the sum of its parts …(12/01/2005, T‑367/02 - T‑369/02, SnTEM, SnPUR & SnMIX, EU:T:2005:3, § 32). This is not the case with the applied for mark which still retains the same meaning as the two words suggest, a “secure coin”.

As regards the applicant’s argument that third parties, and more particularly its competitors, do not need to use the sign at issue to designate the services to which the application relates, it must be observed that … the application of Article 3(1)(c) of Directive 89/104, which corresponds to Article 7(1)(c) [EUTMR], does not depend on there being a real, current or serious need to leave a sign or indication free (27/02/2002, T 106/00, Streamserve, EU:T:2002:43, § 39).

Therefore, the mark conveys obvious and direct information regarding the kind, quality, and intended purpose of the services in question. It follows that the link between the words ‘SECURECOIN’ and the services referred to in the application for registration are sufficiently close for the sign to fall within the scope of the prohibition laid down by Article 7(1)(c) EUTMR and Article 7(2) EUTMR.

Moreover, it is settled case-law that a mark which is descriptive of characteristics of goods or services for the purposes of Article 7(1)(c) EUTMR is, on that account, necessarily devoid of any distinctive character in relation to those goods or services within the meaning of Article 7(1)(b) CTMR (12/02/2004, C-265/00, Biomild, EU:C:2004:87, § 19 and 12/02/2004, C-363/99, Postkantoor, EU:C:2004:86, § 86).

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).

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).

As stated in the previous notification, SECURECOIN, would simply be perceived by the relevant public as a promotional laudatory slogan, the function of which is to communicate a customer service statement. Moreover, in the present case, the relevant public will not tend to perceive any particular indication of commercial origin in the sign beyond the promotional information conveyed, which merely serves to highlight positive aspects of the services in question, namely that the metal currency or cryptocurrency provided or used by the consumer will be safe or secure through the use of the services offered by the applicant.

Moreover, the ‘absence of distinctive character cannot arise merely from the finding that the sign in question lacks an additional element of imagination or does not look unusual or striking’ (05/04/2001, T 87/00, Easybank, EU:T:2001:119, § 39).

Also, it must be held that the fact that the relevant public is a specialist one cannot have a decisive influence on the legal criteria used to assess the distinctive character of a sign. Although it is true that the degree of attention of the relevant specialist public is, by definition, higher than that of the average consumer, it does not necessarily follow that a weaker distinctive character of a sign is sufficient where the relevant public is specialist (12/07/2012, C‑311/11 P, Wir machen das Besondere einfach, EU:C:2012:460, § 48).

As regards the USPTO decision referred to by the applicant, according to case-law: the European Union trade mark regime is an autonomous system with its own set of objectives and rules peculiar to it; it is self-sufficient and applies independently of any national system … Consequently, the registrability of a sign as a European Union trade mark must be assessed by reference only to the relevant Union rules. Accordingly, the Office and, if appropriate, the Union judicature are not bound by a decision given in a Member State, or indeed a third country, that the sign in question is registrable as a national mark. That is so even if such a decision was adopted under national legislation harmonised with Directive 89/104 or in a country belonging to the linguistic area in which the word sign in question originated (27/02/2002, T‑106/00, Streamserve, EU:T:2002:43, § 47).

As regards the applicant’s argument that a number of 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).

‘It is clear from the case-law of the Court of Justice 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).

Consequently, taken as a whole, the mark applied for – ‘SECURECOIN’ – is considered laudatory and devoid of any distinctive character and is not capable of distinguishing the goods for which registration is sought within the meaning of Article 7(1)(b) EUTMR and Article 7(2) EUTMR.

For the abovementioned reasons, and pursuant to Article 7(1)(b) and (c) and Article 7(2) EUTMR, the application for European Union trade mark No 017927811 is hereby rejected for all the services claimed.

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.

Herbert JOHNSTON