XOXO mark fails to distinguish, says General Court

(This article appeared on the World Trademark Review website on June 15 2020 here.)

Introduction
On 13 May 2020 the General Court of the European Union issued its decision in Global Brand Holdings LLC v European Union Intellectual Property Office (EUIPO) (Case T-503/19).

The General Court approved the decision of the First Board of Appeal and ruled that XOXO was devoid of distinctive character for goods which are typically offered as gifts. The meaning of the letters ‘XOXO’ in English is ‘hugs and kisses’ and that meaning would be apparent to a nonnegligible part of the relevant public, namely teenagers and very young women. It as unnecessary to examine whether other parts of the relevant public would be aware of the meaning. Furthermore, the Board of Appeal was not required to consider whether the mark had acquired distinctive character through use as the applicant had only described how it used the mark to dispute the examiner’s assessment that the mark was non-distinctive, and not to demonstrate acquired distinctiveness. Given that the applicant had not expressly claimed secondary distinctiveness before the EUIPO or in its statement of appeal, the board was under no obligation to investigate the use further or to give the applicant a time limit within which to clarify its arguments.

The board had also not infringed the principles of equal treatment and sound administration by not following earlier decisions of the EUIPO, nor had it incorrectly disregarded them because it stated that such decisions could have been incorrectly adopted, and had considered whether the earlier registrations could have been granted at a time when the term ‘XOXO’ did not enjoy the same level of recognition.

Background
Global Brand Holdings LLC had filed an EU trademark application for the mark XOXO for goods and services in Classes 3, 9, 14, 18, 25 and 35. The mark was refused by the EUIPO for all of the goods applied for on the round that the mark was devoid of distinctive character under Article 7(1)(b) of Regulation 2017/1001. The applicant filed a notice of appeal, which was dismissed by the First Board of Appeal of the EUIPO and then appealed to the General Court, submitting three pleas in law, alleging infringement of:

– Article 7(1)(b);
– the EU legal principles of equal treatment and sound administration; and
– Article 7(3) regarding acquired distinctiveness through use.

Decision
The General Court first considered the plea that the Board of Appeal should not have found the mark to be devoid of distinctive character under Article 7(1)(b). The court agreed with the board that it was sufficient that the ground of refusal existed in relation to a non-negligible part of the target public, and that it was unnecessary to examine whether other consumers belonging to the relevant public were also aware of the meaning of the mark. Even if the sign XOXO was understood as meaning ‘hugs and kisses’ by only teenagers and very young women, they sill constituted a non-negligible part of the relevant public. Given that the goods applied for were typically offered as gifts on many occasions, the General Court held that the board could validly conclude that the mark would be perceived as a promotional message conveying feelings of love and affection when considered in relation to goods that are capable of being offered as gifts. Consequently, the mark XOXO was not capable of performing one of the main functions of a trademark, namely that of enabling the relevant public to identify the goods of a particular undertaking. Accordingly, the board was right to conclude that the mark applied for had no distinctive character.

Turning to Article 7(3) and acquired distinctiveness, the General Court held that the board was not obliged to investigate the case further regarding acquired distinctiveness through use by issuing a letter and setting the appellant a time limit to clarify the nature of its references to use. The appellant had not pleaded that the mark had acquired distinctive character through use or provided evidence in support of such a claim in response to the EUIPO’s objections regarding registration, or in the statement of grounds for its appeal. Although the statement of grounds contained some reference to its use of the mark, those references were not made for the purpose of establishing distinctive character acquired through use. The board is required to examine whether there is distinctive character acquired through use only if the appellant makes a claim to that effect and provides evidence. Given that the appellant had done neither, the board was not required to investigate the case further.

Furthermore, it was not for the General Court to assess whether such acquired distinctiveness existed in fact; it is only for the General Court to review the legality of decisions of the Boards of Appeal, and its review must be carried out in light of the factual and legal context of the dispute as it was brought before the Board of Appeal. The appellant could not change the subject matter of the proceedings before the Board of Appeal in proceedings before the General Court.

Regarding the alleged breach of the principles of equal treatment and sound administration, the General Court held that the board had properly taken into account earlier decisions relating to similar applications and, in particular, considered whether it had to decide in the same way or not, as it was required to do. The General Court acknowledged that the EUIPO must, when examining an application for registration of an EU trademark, take into account decisions already taken in respect of similar applications. However, examination must be made primarily with reference to the regulation because acceptance for registration depends on specific legal criteria which are uniquely applicable in the particular factual circumstances of the case. These considerations apply even if the applied for mark is identical to a mark already registered by the EUIPO for identical or similar goods. The Board of Appeal did not incorrectly disregard the existence of earlier decisions in which signs identical or similar to the mark XOXO been accepted for registration because it stated that such decisions could have been incorrectly adopted, and also that registration had been granted at a time when, possibly, the term ‘XOXO’ did not have the same meaning as now. The General Court also confirmed that neither the EUIPO nor its Boards of Appeal are bound by earlier decisions of national trademark offices in EU member states as the EU trademark regime is an independent and separate legal system.

Comment
The case highlights the independent nature of the EU trademark system and the fact that acceptance for registration of EU trademarks must always be assessed on the basis of the relevant provisions of the governing regulation. The EUIPO is not bound by its past decisions, even in cases where prior identical trademarks for identical or similar goods may have been accepted. This approach can appear unfair, not to mention unpredictable and inconsistent, to those brand owners from common law jurisdictions where precedent counts for so much more.

Mary Bleahene