Case C-12/12, Colloseum Holding – red flagging jeans, use and composite marks in trade mark law [judgment 2013, ECLI:EU:C:2013:253]

When Colloseum Holding stitches a red rectangular cloth flag or tag bearing the word ‘SM Jeans’ into the right-outer seam of the back right pocket of the jeans it is selling, does Colloseum Holding infringe the trade marks owned by a rival fashion house that stitches a little red flag into the left seam of the rear trouser pocket with the word ‘LEVI’s’ emblazoned upon it?

Facts
Levi Strauss & Co. holds the figurative Community Trade Mark on a mark depicting the back-pocket on a pair of jeans (CTM no. 112 862, which in this litigation is known as contested mark 1). Levi Strauss & Co. also holds the German figurative mark on the same form (contested mark 2).

Besides these two marks, Levi Strauss also holds six others which are relevant to this litigation:

• a German word/image mark of a red squared part on the upper left side containing the word element ‘LEVI’S’ (contested mark 3);
• a ‘tab’ with the text ‘LEVI’s’ (contested mark 4);
• a sketch of a piece of cloth depicting a stitched ‘tab’ consisting of the same word (contested mark 5);
• a registered CTM for jeans with a colour indication of red and blue, a position mark, consisting of a red rectangular label, made of textile, sewn into and protruding from the upper part of the left-hand seam of the rear pocket of trousers, shorts or skirts (contested mark 6);
• a rectangular cloth label which protrudes from the pocket and is stitched into the left seam of the rear pocket of trousers, shorts or skirts (contested mark 7);
• and, a figurative mark in a fixed position consisting of a red rectangular label, made of textile, sewn into and protruding from the upper part of the left-hand seam of the rear pocket of trousers, shorts or skirts – together with the disclaimer that the trade mark applied for ‘shall give no exclusive right to the shape and colour of the pocket per se’ (contested mark 8).

Colloseum Holding is a Swiss company. It sells fashionable upper-body clothes. From 2002, it put various jeans onto the market. On the back right pocket, it had sewn a red rectangular cloth flag or tag into the right outer-seam. The flag was located in the top third of the pocket. The tag was emblazoned with words that corresponded to the model of jeans being sold, namely, ‘SM JEANS’, ‘COLLOSEUM’, ‘S.MALIK’, and ‘EURGIULIO’.

Levi Strauss brought an action against Colloseum Holding for trade mark infringement. It claimed that through years of intensive use, its red cloth flag would be understood by a national public as an indication that the jeans originated from Levi Strauss. Furthermore, the claimant had acquired trade mark protection for its ‘Red Tab’, as a use mark (contested mark 9). In light of this, Levi Strauss submitted that the clothing sold by Colloseum Holding used the red cloth tab as a mark, and this infringed Levi Strauss’ trade mark rights.

In its defence, Colloseum Holding submitted that the contested forms had a purely decorative function. A little red flag that was sewn on to the back right pocket was common to a great number of the models of jeans made by other manufacturers. And in so far as the the claimant’s registered figurative mark and the position mark were concerned, the scope of those marks was restricted. Moreover, Colloseum Holding expressly relied on the exception in trade mark law for ‘non-use’ of the contested mark.

The German Supreme Court noted that there was a risk of confusion between contested mark 6 and the models of jeans produced by Colloseum Holding. However, the success of the case turned on whether contested mark 6 could be said to have been used. The relevant provision here was Article 15 of the Community Trade Mark Regulation 40/94, which provides:

Use of Community trade marks

1. If, within a period of five years following registration, the proprietor has not put the Community trade mark to genuine use in the Community in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the Community trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use.

2. The following shall also constitute use within the meaning of paragraph 1:
(a) use of the Community trade mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered;
(b) affixing of the Community trade mark to goods or to the packaging thereof in the Community solely for export purposes.

This provision was relevant because the facts arose before Regulation 207/09 came into force.

The German Supreme Court noted that the appeal court had held that Levi Strauss was only using contested mark 6 in the equally registered form of the German mark with the word ‘LEVI’s’ on it (mark 3). Thus, the question arose as to whether the registered mark (mark 1) which formed a part of another mark (mark 2), and through the use of that other mark (mark 2) could acquire distinctiveness within the meaning of Article 7(3) of the CTM Regulation in such a way as to preserve the rights (Question 1). It was unclear whether that was the case.

In Case C-234/06P, Il Ponte Finanziaria v. OHIM (Bainbridge), the CJEU had held:

82 Under Article 15(2)(a) of that regulation, use of the Community trade mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered also constitutes use within the meaning of Article 15(1).

83 Those provision are essentially the same as those in Article 10(1) and (2)(a) of Directive 89/104 to approximate the laws of the Member State relating to trade marks.

84 In that regard, it must be held that the Court of First Instance did not commit any error of law in disregarding the appellant’s argument that use of the trade mark Bridge (No 370836) during the reference period was established by evidence adduced for the purpose of demonstrating use of the trade mark THE BRIDGE (No 642952).

85 Without it being necessary to examine whether the trade mark THE BRIDGE (No 642952) may be regarded as being different solely by reason of elements which do not alter the distinctive character of the trade mark Bridge (No 370836), it must be stated that use of the former mark has not been established and cannot therefore in any way serve as evidence of use of the latter.

86 In any event, while it is possible, as a result of the provisions referred to in paragraphs 81 and 82 of the present judgment, to consider a registered trade mark as used where proof is provided of use of that mark in a slightly different form from that in which it was registered, it is not possible to extend, by means of proof of use, the protection enjoyed by a registered trade mark to another registered mark, the use of which has not been established, on the ground that the latter is merely a slight variation on the former.

The German Supreme Court understood this to mean that on the basis of the provisions concerning use preserving rights, the protection afforded to one mark through demonstrable use could not be extended to another registered mark whose use cannot be established, by the right holder reasoning that the latter mark was only merely a slight variation on the former. In that context, the German Supreme Court had asked prejudicial questions of the CJEU about the conditions for use preserving rights in ‘Rintisch’ (Case C-553/11, Bernhard Rintisch v Klaus Eder (PROTI)). The current case involving Colloseum Holding differs from Rintisch in so far as the facts are distinct: namely, the contested marks 3 and 6 do not merely differ from each other in elements which do not alter the distinctive character of the mark. Therefore, the German Supreme Court noted that the criterion laid down in Article 15(2)(a) of the CTM Regulation had not been satisfied by Levi Strauss.

In support of the claim that the contested mark 6 has been maintained through use in combination with contested mark 3′s corresponding form, it could be submitted that a mark can acquire distinctiveness within the meaning of Article 3(3) of Directive 89/104, through use of part of a registered mark without the mark whose registration has been applied for, being used independently.

In this context, the German Supreme Court observed that in Case C-353/03, Société des produits Nestlé SA v. Mars (HAVE A BREAK … HAVE A KITKAT), the CJEU had held:

27 In order for the latter condition, which is at issue in the dispute in the main proceedings, to be satisfied, the mark in respect of which registration is sought need not necessarily have been used independently.
…
30 Yet, such identification, and thus acquisition of distinctive character, may be as a result both of the use, as part of a registered trade mark, of a component thereof and of the use of a separate mark in conjunction with a registered trade mark. In both cases it is sufficient that, in consequence of such use, the relevant class of persons actually perceive the product or service, designated exclusively by the mark applied for, as originating from a given undertaking.

The German Supreme Court also recalled the CJEU’s judgment in the Case C-488/06 P L & D SA v OHIM (Aire Limpio/Arbre Magique), where the CJEU had held:

51 In particular, the fact that Nestlé concerned the acquisition of distinctive character by a mark which it was sought to register, whereas the present case concerns establishing whether an earlier mark has a particularly distinctive character in order to ascertain whether there is a likelihood of confusion within the meaning of Article 8(1)(b) of Regulation No 40/94, does not, as the Advocate General pointed out in point 51 of her Opinion, justify any difference of approach.

In the present case of Colloseum Holding, therefore, it should be borne in mind that the contested mark 6 has acquired distinctiveness through use in a form which corresponds to the contested mark 3, or the contested marks 1 and 2.

In light of these circumstances, what should also be taken into account, according to the German Supreme Court, was that particular importance should be attached to the trade mark holder having effective legal protection in infringement proceedings. Judicial protection would be undermined if the trade mark holder’s use of the contested mark 3 could not also preserve the contested mark 6 through use. Where a trade mark holder uses a mark composed of multiple parts but who has only registered the composite mark, they run the risk of losing infringement proceedings because the signs restrict or do not correspond in those cases where the conflicting sign is comprised of a lifted element of a composite mark and does not characterise the composite mark. Where, on the other hand, the trade mark holder possesses discrete trade mark law protection for a part of a composite mark, the correspondence between the signs and the degree of confusion is greater where that element appears in the conflicting sign in a form that is identical or similar to it (Case T-103/03, Mast-Jägermeister v OHIM, paras 80, 92 and 96).

The German Supreme Court also remarked that the finding that the contested mark 6 had been used as a part of contested mark 3 to preserve the right, and this was in accordance with the scope and aim of the obligation to use marks. Namely, the obligation had as its aim the reduction of the total numbers of registered and protected marks in the Community, and thereby a reduction in the number of possible disputes (see Recital 9 of Directive 2008/95). Therefore, given that the contested mark 6 only formed a part of the registered contested mark 3 which was actually used, there was no danger that the recognition of rights preserving use would, in the current case and comparible situations, dramatically increase the numbers of registered marks and fetter the register with unused marks.

The final points of the German Supreme Court’s reasoning in this reference gave rise to the second Question. That is to say, the starting point should be that the relevant public, through Levi Strauss’ extensive use of the red tag in this model of jeans, sees an autonomous indentification of the sign indicating separate origin. This could justify the finding that the public which was accustomed to the existence of the second mark, perceives the red flag corresponding to contested mark 6 and the emblazoned word ‘LEVI’s’, as two marks. In that situation, account should also be taken of the fact that through the use of the red rectangular cloth flag with the word ‘LEVI’S’, rights are preserved in both the contested mark 6, and the word mark ‘LEVI’s’ – even though both marks are also registered in their composite form as contested mark 3. The German Supreme Court therefore wondered whether a trade mark was being used in such a way as to preserve the rights attached to it if it was used only together with another mark, and both marks were registered together as a trade mark? (Question 2).

Questions Referred
According to the Curia website, the German Supreme Court has asked:

Is Article 15(1) of Regulation (EC) No 40/94 to be interpreted as meaning that:

1. a trade mark which is part of a composite mark and has become distinctive only as a result of the use of the composite mark can be used in such a way as to preserve the rights attached to it if the composite mark alone is used?

2. a trade mark is being used in such a way as to preserve the rights attached to it if it is used only together with another mark, the public sees independent signs in the two marks and, in addition, both marks are registered together as a trade mark?

Update
The judgment of the Fifth Chamber is scheduled for 18 April 2013.