Case C-420/13, Netto Marken Discount – trade mark protection for retailers trading in services? [judgment 2014, ECLI:EU:C:2014:2069]

In Germany, there is a growing sector of the economy specialised in the retail trade of services. For example, a consumer can take their photographs to a chain of chemists, such as ‘Müller’ or ‘DM’, and the chemist will allow the consumer to choose which laboratory is to develop his pictures. A further example is where a shop offers mobile telephone services that originate from various telecoms companies but the consumer concludes the contract with the shop and not the telecoms company. The legal issue at the heart of this reference is whether such a retailer should be able to obtain a trade mark for his services.

Facts
Netto Marken Discount applied to the German patent and trade mark office for a word mark and or image mark (yellow and red) for goods and services in a variety of Classes, including Class 35 (‘Retail store services’).

The German patent and trade mark office partially refused Netto Marken Discount’s application because the office took the view that the application was insufficiently clear and precise about how the services were distinct from other services. Accordingly, it was impossible to categorise the applicant’s services as falling within Class 35.

Netto Marken Discount appealed the patent and trade mark office’s decision up to a chamber of the German Patent Court specialised in hearing the appeals from the trade mark office.

The German Patent Court identified that the success of Netto Marken Discount’s appeal turned on the interpretation which should be given to Directive 2008/95 to approximate the laws of the Member States relating to trade marks.

Article 2 of the Directive covers ‘Signs of which a trade mark may consist’, and provides:

A trade mark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.

The three German judges noted that Article 2 of the Directive, though using the word ‘services’, did not define the term. They decided to interpret the word ‘services’ teleologically in light of the aims of the Directive. Namely, the recitals made plain that the Directive formed a part of ensuring the free movement of goods and the freedom to provide services. Accordingly, the German judges felt it was important to ensure that services of an ‘economic’ nature should be protectable by trade mark law.

The German judges also realised that notwithstanding the fact the CJEU in Case C-418/02, Praktiker had not defined the word ‘services’ in its ruling, that court had taken upon itself the task of supplying a uniform interpretation to the concept of ‘services’. In that context, the CJEU had then restricted itself to saying that the term included services performed in the course of retail trade.

Accordingly, the German judges repeated the CJEU’s reasoning in Praktiker. Thus, the CJEU had noted that the objective of retail trade was the sale of goods to consumers. Trade was taken to mean every activity carried out by the trader for the purpose of encouraging a transaction to be concluded with the trader rather than a rival, and it consisted, inter alia, of selecting an assortment of goods which was offered for sale.

In light of that reasoning, the German judges noted that there was nothing in either the Directive or the general principles of EU law which appeared to prevent a trader from registering his trade mark for the purposes of denoting the origin of the services which he was providing.

As to the further distinction between on the one hand activities that were designed to ensure the conclusion of a transaction and which would not fall within the scope of ‘services’; and on the other, activities which the sole preserve of retailers that could not be found in other sectors of the economy, and which would thus fall within the concept of ‘services’, the German court noted that protectable activities might include acting as an intermediary for credit agreements or insurance policies, or the provision of meals for consumers. In its view, such activities were not the sole preserve of the retailer acting in competition with other retailers, rather they were in competition with banks, insurers, travel agents, restaurants, and the like. Nevertheless, if a retailer wished to protect his services with the aid of trade mark law, then the German court felt it was imperative for the retailer to ensure that the trade mark application referred expressly and clearly to the relevant services. In that context, the German judges referred to academic commentary written by Ströbele, and by Grabrucker (who was also one of the judges sitting in this chamber which made the reference).

Still, the matter was not clear and so the German judges decided to ask the CJEU whether Article 2 of the Directive was to be interpreted as meaning that the reference to ‘service’ in Article 2 also encompassed retail trading in services?

Assuming that it might be possible to register the retail trading in services, the next issue facing the German judges was how precise the trade mark application actually needed to be? The German judges recalled the CJEU’s reasoning in the Praktiker judgment in which it had stipulated ‘that the applicant must be required to specify the goods or types of goods to which those services relate by means, for example, of particulars such as those contained in the application for registration filed in the main proceedings’.

The German judges wondered whether the CJEU would still take that view after its more recent judgment in Case C-307/10, IP TRANSLATOR. In IP Translator, the CJEU had explained that in order to respect the requirements of clarity and precision, an applicant for a national trade mark who used all the general indications of a particular class heading of the Nice Classification to identify the goods or services for which the protection of the trade mark was sought, must specify whether its application for registration was intended to cover all the goods or services included in the alphabetical list of the particular class concerned – or just some of those goods or services. If the application concerned only some of them, the applicant was required to specify which of the goods or services in that class were intended to be covered. The CJEU had added that should it be impossible to establish whether, by using a particular class heading of the Nice Classification, the applicant intended to cover all or only some of the goods in that class, then the application could not be considered to be sufficiently clear and precise.

In light of the CJEU’s ruling in Case C-307/10, IP TRANSLATOR therefore the German court felt that it was still unclear whether a trade mark application would be deemed to be ‘sufficiently clear and precise’ in circumstances in which the application had mentioned only the number of the Class heading for which protection had been sought but where the application was silent as to which particular individual elements of the Class’s list the application was intended to cover. Consequently, the German judges decided to ask the CJEU: did the content of the services offered by the retailer need to be specified in exactly the same way as the goods marketed by a retailer?

The final question asked by the German judges also touched on the implications of the CJEU’s Praktiker judgment. One issue had been raised in academic commentary by Ströbele and Grabrucker but had not yet been dealt with in any German case law; namely, should a retailer be able to expand the scope of trade mark protection to cover not only a third party’s retail services but also his own retail services? The German judges were minded to think that should not be the case since from a functional economic perspective it was important that the supplier of retailer services was making an assortment from the services supplied by third parties, and these third parties were legal entities separate from the retail trader.

Questions Referred
According to the UK Intellectual Property Office’s website, the German Patent Court has asked:

1. Is Article 2 of the directive to be interpreted as meaning that a service within the meaning of this provision also encompasses retail trading in services?
2. If the answer to the first question is in the affirmative:
Is Article 2 of the directive to be interpreted as meaning that the content of the services offered by the retailer must be specified in exactly the same way as the goods that a retailer markets?
(a) Does it suffice for the purposes of specification of the services if
(aa) just the field of services in general or general indications,
(bb) just the class(es) or
(cc) each specific individual service is stated?
(b) Do these details then take part in determining the date of filing or is it possible, where general indications or classes are stated, to make substitutions or additions?
3. If the answer to the first question is in the affirmative:
Is Article 2 of the directive to be interpreted as meaning that the scope of trade mark protection afforded to retail services extends even to services rendered by the retailer himself?