Refusal of application for a European Union trade mark

(Article 7 and Article 42(2) EUTMR)

Alicante, 22/12/2017

LADAS & PARRY LLP

Temple Chambers, 3-7 Temple Avenue

London EC4Y 0DA

REINO UNIDO

Application No:	016860512
Your reference:	1T17694208
Trade mark:	Collateral AutoSelect
Mark type:	Word mark
Applicant:	EUROCLEAR SA/NV 1 Boulevard du Roi Albert II B-1210 Brussels BÉLGICA

The Office raised an objection on 01/08/2017 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 classification has been slightly amended since the abovementioned letter was issued. It should therefore be noted that the Office has taken these changes into consideration before issuing the present communication.

The applicant submitted its observations on 29/09/2017, which may be summarised as follows:

1. The applicant highlights that a sign is descriptive only when it provides immediate and direct information about the goods and services for which registration is sought. The mark could be ‘applicable to loan services or property services or any other goods/services relating to providing or receiving assets as a security for loan repayment’, and an effort would nonetheless be required on the part of the relevant consumers, that is, professionals with a high degree of awareness, to associate the sign with the goods and services for which registration is sought. The applicant states that the mark ‘does not cover loan services and services relating to collection of assets pledged as securities for repayment of loans and is not intended to be used in connection with such services’. Therefore, there is no direct and specific link between the mark and the goods and services, as it does not provide information about any of the characteristics, the quality or the intended purpose of the services.

2. The Office did not provide any evidence to demonstrate that consumers would automatically associate the word ‘collateral’ or ‘autoselect’ with the goods and services for which registration is sought.

3. The sign is inherently distinctive. It is fanciful, unique and unusual (more than the sum of its parts), especially in relation to the goods and services for which registration is sought. It is ‘neither used in common parlance to designate financial security-related services nor is it customary in the trade’. Therefore, the sign is not completely devoid of distinctive character.

4. ‘Collateral AutoSelect’ is not an expression commonly used in English. It has no definition.

5. The mark alludes to the services. The Office regularly accepts suggestive marks for registration. It has accepted and registered marks containing the word ‘collateral’ with other elements that ‘on their own could be non-distinctive or descriptive of the respective services’. The ‘applied-for mark is structurally similar to all the registrations’ listed by the applicant, as each of them contains the word ‘collateral’ together with another English word and they are for goods and services in Classes 9, 35, 36 and 42. Examples, such as EUTM No 015 690 571 ‘ALATERE COLLATERAL DESIGN’ and EUTM No 017 072 299 ‘COLLATERAL COCKPIT’, are provided. The principle of equal treatment and sound administration in relation to the sign in question is therefore not assured.

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.

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 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 Office will now address the applicant’s arguments.

1. The applicant highlights that a sign is descriptive only when it provides immediate and direct information about the goods and services for which registration is sought. The mark could be ‘applicable to loan services or property services or any other goods/services relating to providing or receiving assets as a security for loan repayment’, and an effort would nonetheless be required on the part of the relevant consumers, that is, professionals with a high degree of awareness, to associate the sign with the goods and services for which registration is sought. The applicant states that the mark ‘does not cover loan services and services relating to collection of assets pledged as securities for repayment of loans and is not intended to be used in connection with such services’. Therefore, there is no direct and specific link between the mark and the goods and services, as it does not provide information about any of the characteristics, the quality or the intended purpose of the services.

It should be noted that registration is sought for goods and services relating to financial issues, mainly securities and collaterals (securities as collaterals). The Office based the definition of the meaning of the trade mark given in its letter of 01/08/2017 on the dictionary definitions of its parts, which can be easily found on the internet.

In its abovementioned letter, the Office proved that the goods and services in Classes 9, 35, 36 and 42 ‘are instruments and services aimed at helping and performing selection of collaterals done by a person, company or institution itself. Alternatively, these goods and services select the collaterals for the user automatically or are available for the user to select automatically’.

Moreover, the Office based its objection on the reality of the market for the goods and services for which registration is sought. However, the Office is not required to take into consideration the owner’s economic/business activity. The Office also took into account the relevant consumers’ perception of the sign and whether or not the sign would be considered descriptive by the relevant consumers encountering the sign in relation to the goods and services in question.

In its letter of 01/08/2017, the Office clearly stated and proved the relation between the trade mark, taken as a whole, and the goods and services for which registration is sought:

Taken as a whole the sign immediately informs consumers without further reflection that the goods applied for in class 9 (software and programs related to finance) and services in class 35 (management of financial database information), 36 (banking and financial services; collateral information and management services and other collateral and pooling services; post trade (clearing and settlement) services; management of securities; provision of financial database information) and 42 (providing online, non-downloadable software and database development services in the field of financial information) are instruments and services aimed at helping and performing selection of collaterals done by a person, company or institution itself. Alternatively, these goods and services select the collaterals for the user automatically or are available for the user to select automatically.

In view of this, and in relation to the goods and services for which registration is sought, the target public, who will be well informed and circumspect and will have knowledge of the pertinent market, will understand without hesitation the kind and intended purpose of the goods and services in question. Consequently, the Office maintains its view that the expression ‘Collateral AutoSelect’ is directly descriptive of the goods and services for which registration is sought.

2. The Office did not provide any evidence to demonstrate that consumers would automatically associate the word ‘collateral’ or ‘autoselect’ with the goods and services for which registration is sought.

As regards this argument, the Court has confirmed that:

where the Board of Appeal finds that the trade mark sought is devoid of intrinsic distinctive character, it may base its analysis on facts arising from practical experience generally acquired from the marketing of general consumer goods which are likely to be known by anyone and are in particular known by the consumers of those goods… In such a case, the Board of Appeal is not obliged to give examples of such practical experience.

(15/03/2006, T‑129/04, Plastikflaschenform, EU:T:2006:84, § 19).

Mutatis mutandis, the Office is not obliged to provide examples to demonstrate or otherwise to prove that consumers would automatically associate the word ‘collateral’ or ‘autoselect’ with the goods and services for which registration is sought. In addition, it should be noted that the Office not only examines the elements that make up the trade mark applied for, but also takes into consideration the mark as a whole.

3. The sign is inherently distinctive. It is fanciful, unique and unusual (more than the sum of its parts), especially in relation to the goods and services for which registration is sought. It is ‘neither used in common parlance to designate financial security-related services nor is it customary in the trade’. Therefore, the sign is not completely devoid of distinctive character.

Since the trade mark at issue is made up of several components (a compound mark), for the purposes of assessing its distinctive character it must be considered as a whole. However, this is not incompatible with an examination of each of the mark’s individual components in turn (19/09/2001, T‑118/00, Tabs (3D), EU:T:2001:226, § 59).

For a trade mark that consists of a neologism or a word produced by a combination of elements to be regarded as descriptive within the meaning of Article 7(1)(c) EUTMR, ‘it is not sufficient that each of its components may be found to be descriptive. The word or neologism itself must be found to be so’ (12/01/2005, T‑367/02 - T‑369/02, SnTEM, SnPUR & SnMIX, EU:T:2005:3, § 31).

For a trade mark to be refused registration under Article 7(1)(c) EUTMR,

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.

(23/10/2003, C‑191/01 P, Doublemint, EU:C:2003:579, § 32, emphasis added.)

The objection under Articles 7(1)(b) and (c) of the EUTMR is applicable even when the lexical structure of the sign in question is not entirely correct from a grammatical point of view. Having no space or hyphen between the elements that make up a sign can be considered a common marketing practice in a commercial context.

Consequently, it should be emphasised that the precisely grammatical use of the elements of a trade mark is not decisive in determining whether or not a mark is descriptive. Writing two words together without a space, or adding or removing a hyphen, does not make a substantive difference, and the mark remains non-distinctive.

The meaning of the expression ‘Collateral AutoSelect’ is clear to the relevant English-speaking public, which will immediately and without any difficulty establish a direct and specific link between the trade mark and the goods and services for which registration is sought. Therefore, in the Office’s view, ‘Collateral AutoSelect’ is intelligible to the relevant consumer in connection with the services for which registration is sought.

As regards the applicant’s argument that no other competitors make use of the same combination, ‘the distinctive character of a trade mark is determined on the basis of the fact that that mark can be immediately perceived by the relevant public as designating the commercial origin of the goods or service in question … The lack of prior use cannot automatically indicate such a perception.’ (15/09/2005, T‑320/03, Live richly, EU:T:2005:325, § 88).

In view of the above, as no claim regarding the acquired distinctiveness of the sign has been submitted or even suggested, the Office is not in a position to further analyse this aspect.

The argument is rejected. The sign applied for is not distinctive in relation to the goods and services for which registration is sought.

4. ‘Collateral AutoSelect’ is not an expression commonly used in English. It has no definition.

For a trade mark to be refused registration under Article 7(1)(c) EUTMR,

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.

(23/10/2003, C‑191/01 P, Doublemint, EU:C:2003:579, § 32).

Many expressions are used in English that cannot be found in dictionaries but whose meanings are clear and unambiguous, as in the present case. The novelty of a particular expression is not a factor that can, per se, overcome the objections on absolute grounds raised.

English dictionaries do not generally provide definitions of combinations of words; rather, they define single words and common expressions and proverbs. One cannot expect to find every possible combination of words resulting in a grammatically correct expression in the dictionary. Thus, it is not necessary for the Office to prove that an expression is the subject of a dictionary entry to refuse to register a sign consisting of that expression. What matters is the ordinary and plain meaning of the expression, properly explained in the Office’s letter of 01/08/2017.

Furthermore, the fact that that the combination of words used is not usual does not mean that such a juxtaposition is a violation of English grammar rules or that an expression thus created will not be understood by the relevant public. It must be held that an objection under Article 7(1)(b) and (c) EUTMR also applies in those cases where the lexical structure employed, although not correct from a grammatical point of view, can be considered common in the commercial context at issue. This is the case with regard to the combination of words ‘Collateral AutoSelect’.

5. The mark alludes to the services. The Office regularly accepts suggestive marks for registration. It has accepted and registered marks containing the word ‘collateral’ with other elements that ‘on their own could be non-distinctive or descriptive of the respective services’. The ‘applied-for mark is structurally similar to all the registrations’ listed by the applicant, as each of them contains the word ‘collateral’ together with another English word and they are for goods and services in Classes 9, 35, 36 and 42. Examples, such as EUTM No 015 690 571 ‘ALATERE COLLATERAL DESIGN’ and EUTM No 017 072 299 ‘COLLATERAL COCKPIT’, are provided. The principle of equal treatment and sound administration in relation to the sign in question is therefore not assured.

As already stated, the Office considers that the sign applied for is directly descriptive of the services for which registration is sought; therefore, it cannot be considered to merely allude to them.

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).

Finally, in the present case, the trade mark ‘Collateral AutoSelect’ has different verbal elements and is different as a whole from, for example, ‘Collateral Cockpit’, which is registered for goods and services in Classes 9, 35 and 36, that are different from those for which registration is sought in the present case, but is not registered for services in Class 42; therefore, these marks are not comparable.

In the same way, it is pointless to compare figurative marks such as ‘ALATERE COLLATERAL DESIGN’ with word marks such as the mark at issue, as the figurative element may result in a sufficient degree of distinctiveness, even where the verbal element may be weak. In addition, the abovementioned trade mark has been registered only for services in Class 42 other than those in question in the present case. The principle of equal treatment cannot be applied to the comparison of different types of mark.

Consequently, the Office is convinced that the principle of sound administration has been applied in the present case. The argument cannot be accepted.

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 016 860 512, ‘Collateral AutoSelect’, is hereby rejected for the following goods and services:

Class 9 Software and programs for electronic data processing relating to the buying, selling, trading, lending, borrowing, safekeeping, custody, administration, management, settlement of securities and to the usage of securities as collateral in financial transactions; software and programs for the electronic transmission of funds, data and documents relating to financial services.

Class 35 Management of financial database information for the buying, selling, trading, lending, borrowing, safekeeping, custody, administration, management, settlement of securities and for the usage of securities as collateral in financial transactions.

Class 36 Banking and financial services assisting others with the completion of financial transactions for securities, stocks, bonds and equities; financial services, namely collateral information services, collateral management services and other collateral and pooling services; post trade (clearing and settlement) services; management of securities; provision of financial database information - for the buying, selling, trading, lending, borrowing, safekeeping, custody, administration, management and settlement of securities and for the usage of securities as collateral in financial transactions.

Class 42 Providing online non-downloadable software; providing online, non-downloadable software to facilitate access to electronic data and reports related to the processing of buying, selling, trading, lending, borrowing, safekeeping, custody, administration, management settlement and usage as collateral of securities and other financial instruments, other financial assets and related transactions; providing online, non-downloadable software to facilitate the electronic transmission of funds and other financial assets, data and documents relating to financial services; database development services in the field of financial information for the buying, selling, trading, lending, borrowing, safekeeping, custody, administration, management and settlement of securities and for the usage of securities as collateral in financial transactions.

The application may proceed for the remaining goods and services:

Class 38 Electronic transmission of financial data and documents via a global computer network.

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.

Monika TOMCZYNSKA