Neuschwansteiner – When a fairy-tale castle casts its spell on trade mark law
Marcel Pemsel
Neuschwansteiner – When a fairy-tale castle casts its spell on trade mark law
Can the mystique of a world-famous castle prevent its name from functioning as a trade mark? In its Neuschwansteiner
decision (case 26 W (pat) 34/17), the German Patent Court ("GPC")
grappled with the case law of the Court of Justice of the EU ("CJEU") on
geographical indications and arrived at a different conclusion than the
Board of Appeal ("BoA") of the European Union Intellectual Property
Office ("EUIPO").
Background
On 16 August 2005,
the word mark "Neuschwansteiner" was registered at the German Patent
and Trade Mark Office ("GPTO") for "coffee; tea; beers; non-alcoholic
beverages, to the extent included in this class".
On 11 August
2015, a third party filed an invalidity application, arguing that the
trade mark lacks distinctiveness and is descriptive.
The trade
mark owner objected, arguing inter alia that the EU courts had upheld
the EU trade mark "NEUSCHWANSTEIN" for similar goods (see IPKat here).
The GPTO declared the mark invalid. The trade mark owner appealed to the GPC.
The German Patent Court's decision
The GPC dismissed the appeal.
1. Descriptiveness
The
judges held that the determination whether a geographical indication of
origin is descriptive requires an assessment of whether it can
reasonably be expected that businesses may be established in the
geographical area for the production of the relevant goods and whether
the relevant public immediately and without further reflection
establishes a direct link between the sign in question and the goods
concerned. The overall objective circumstances must be considered,
especially the economic significance of the location and the
infrastructure of the surrounding region.
a. "Neuschwansteiner" as a geographical indication
The
GPC confirmed that "Neuschwansteiner" is the German adjectival form of
"Neuschwanstein", which designates the famous castle in southern
Germany, built in the 19th century under King Ludwig II of Bavaria. As
such, it describes linguistically someone or something that originates
from or belongs to the castle. The judges noted that it is common
practice for beers to be named after places in adjectival form (e.g.
Flensburger, Bitburger, Erdinger) and that breweries are frequently
located in castles.
b. Castle Neuschwanstein not a realistic manufacturing site
In
a notable departure from its own preliminary view expressed in 2018,
the GPC found that the castle itself is an unlikely manufacturing site
for beverages. The castle has been used exclusively for tourism since
Ludwig II’s death. It receives over one million visitors per year, is
accessible only via a single restricted road and its inclusion in the
UNESCO World Heritage list makes commercial use even more implausible.
Further, the castle is owned by the State of Bavaria. Under a
reality-based prognosis, it was unrealistic that a beverage manufacturer
would ever be permitted to set up a business on the castle grounds.
The fact that beverages were sold inside the castle was deemed irrelevant. By reference to the CJEU’s Bundesverband Souvenir - Geschenke - Ehrenpreise v EUIPO
concerning the trade mark “Neuschwanstein” judgment, the judges held
that the place of sale of goods, as such, is not capable of designating
inherent characteristics, qualities or particular features which - like a
craft, a tradition or a climate characteristic of a given place - are
linked to their geographical origin.
c. A "favourable response" variant of geographical indications?
At the heart of the decision lies the interpretation of the following paragraph (26) from the CJEU’s Windsurfing Chiemsee decision (emphasis added):
"As
regards, more particularly, signs or indications which may serve to
designate the geographical origin of the categories of goods in relation
to which registration of the mark is applied for, especially
geographical names, it is in the public interest that they remain
available, not least because they may be an indication of the quality
and other characteristics of the categories of goods concerned, and may
also, in various ways, influence consumer tastes by, for instance, associating the goods with a place that may give rise to a favourable response."
The
GPC found that Castle Neuschwanstein is associated by the public with
an extraordinary image: it is described as a fairy-tale castle, the
model for the Walt Disney logo and the Cinderella Castle, a place of
"romantic flair", "royal flair" and "mystical flair", surrounded by
legends relating to King Ludwig II, the "fairy-tale king". The
adjectival form "Neuschwansteiner" linguistically transfers these
qualities onto the goods, suggesting that the beverages embody or carry
within them something of the castle’s special aura.
The trade
mark owner argued that there was no specific connection between the
general fairy-tale image and the down-to-earth product beer. The GPC
disagreed. The registered goods are beverages, i.e. consumables that are
also meant to provide pleasure. In marketing such goods, conveying a
mood or feeling is common. Allusions to the royal are popular and the
GPC cited several advertising slogans (e.g. "The Queen of Table Waters",
"Ein königlicher Genuss" [meaning "a royal delight"], "Heute ein
König!" [meaning: "A king for a day!"). Moreover, beer is strongly
associated with Bavaria, just as King Ludwig II and his castle are.
Crucially, the GPC rejected the view of the EUIPO’s 4th and 5th Board of Appeal in Manhatten (at para. 26) and Neuschwanstein
(also at para. 26) that this variant of geographical indication
requires that the goods are or could reasonably be manufactured at the
place in question.
The GPC relied on the CJEU’s Windsurfing Chiemsee
decision, which mentioned other links between the place and the goods
as an alternative to the place of manufacture, for example the design of
the goods at the relevant location. An ideational relationship between
the place and the goods is sufficient, particularly where the aura of a
famous place is being exploited for commercial purposes.
The
BoA’s position would result in the variant of "favourable response" as
established by the CJEU being a mere annex to geographical indications
based on the place of manufacture.
2. Lack of distinctiveness
The
judges found that the descriptiveness of "Neuschwansteiner" also
resulted in a lack of distinctiveness. The mark merely transfers the
castle’s image onto the goods and is therefore not perceived as an
indication of commercial origin.
3. No referral to the CJEU but leave to appeal
The
GPC saw no need for a preliminary reference to the CJEU. Although the
CJEU upheld the EU trade mark "NEUSCHWANSTEIN" for similar goods, the
divergence was based on different factual findings by the respective
lower instances, not on different legal standards.
However, the
GPC granted leave to appeal to the German Supreme Court to further
develop the law on the scope and requirements of the "favourable
response" variant of geographical indications.
Comment
1. On Descriptiveness
It
seems counterintuitive to find on the one hand that consumers do not
perceive "Neuschwansteiner" as the geographical origin of the goods and
apply the case law on geographical indications on the other. Art.
7(1)(c) EU Trade Mark Regulation ("EUTMR") and Art. 4(1)(c) EU Trade Mark Directive ("EUTMD") provide that
"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"
may not be registered as trade marks (emphasis added).
In
a literal sense "geographical origin" means that the goods are produced
at the place designated by the mark. Going beyond the wording, the CJEU
also accepted other connections between the mark and the goods, e.g.
that the goods are designed at the designated place (Bundesverband Souvenir - Geschenke - Ehrenpreise v EUIPO
at para. 48). Nevertheless, it seems a stretch to argue that an
ideational relationship is sufficient because it does not actually
constitute a link between the sign and the goods. As argued by the trade
mark owner and essentially confirmed by the GPC, beverages have no
connection with the castle Neuschwanstein - assuming that the public
does not expect them to be produced there.
Further, an "aura" of
a product or a consumer’s "favourable response" does not appear to be
an "other characteristic" in the meaning of Art. 7(1)(c) EUTMR and Art.
4(1)(c) EUTMD. In the Neuschwanstein and Manhattan
decisions, the BoA found that invoking vague and abstract feelings in
consumers is not sufficient to constitute a characteristic of the goods.
Rather, characteristics must be sufficiently precise. This is in line
with the case law of the General Court, which required that the
characteristics may not be vague or abstract but must be sufficiently
specific (case T-470/23 at para. 43). Further, the CJEU found in para. 44 of Bundesverband Souvenir - Geschenke - Ehrenpreise v EUIPO
that "other characteristics" are objective characteristics inherent to
the nature of the product. It seems difficult to argue that an "aura" or
a consumer’s "favourable response" constitute an objective
characteristic and is sufficiently specific.
The General Court considered in Chung-Yuan Chang v EUIPO - BSH Hausgeräte (AROMA) that
“the
fact that an undertaking wishes to give its goods a positive image,
indirectly and in an abstract manner, yet without directly and
immediately informing the consumer of one of the qualities or specific
characteristics of the goods, is a case of evocation and not designation
for the purposes of Article 7(1)(c) [EUTMR].”
This also
speaks against the GPC’s finding that "Neuschwansteiner" is descriptive
because it bestows a positive image on the goods to which it is affixed.
2. On Distinctiveness
It is furthermore
debatable whether "Neuschwansteiner" is non-distinctive. The fact that
the sign bestows an "aura" on the goods or triggers a "favourable
response" of consumers does not mean that consumers do not perceive it
as an indication of the commercial origin. If you file for registration
of "Gucci" for beverages (Please don't!), the trade mark is hardly
non-distinctive because it profits from the "aura" of the "Gucci" trade
mark for clothing, bags etc. A trade mark can do both: it can indicate
the commercial origin and bestow an aura on the goods.