The Icelandic Government has recently filed (here) an invalidity action against the supermarket chain’s EU Trade Mark No. 2673374 ICELAND. It is understood that the supermarket will vigorously defend its rights.
This matter started a couple of months ago (see here and here), when Icelandic businesses complained that they were prevented from using Iceland in their brand name by the supermarket chain, on the basis of their EU-wide rights in the word ICELAND. The current invalidity action is based on the mark ICELAND being non-distinctive, descriptive and deceptive because consumers would deem ICELAND to be a geographical indicator (GIs) of the country for the goods/services applied for.
The supermarket will need to focus on arguing that the mark is inherently non-descriptive, distinctive, and that consumers would not mistakenly believe that products or services bearing the term ICELAND come from or are somehow connected with the country. A review of the supermarket’s specification shows that this will likely be easier for terms such as “dishwashers” than, say, “meat” which is more conventionally denoted by provenance and closer to the country of Iceland’s significant fish supply.
The supermarket’s longstanding use will not be of assistance in addressing the descriptiveness and non-distinctiveness grounds because they only operate in the UK and ROI, so they will unlikely be able to show that enough customers of the 28 Member States have been educated to think of the supermarket when they see ICELAND used on groceries. Even if they could show acquired distinctiveness, the claim of deceptiveness cannot be overturned via evidence alone because this ground is aimed at protecting consumers from misrepresentation, irrespective of a brand’s size or repute. Essentially, the supermarket will need to win on inherent grounds.
This case serves as a reminder that the use of a geographical place name does not prevent a party from using a mark in the course of trade. However, registration may be refused where either the name designates a specific location which is already famous or known and associated by consumers for the goods and services in question, or where the name is liable to be used by others as an indication of geographical origin for those goods and services in the future (as laid down in Windsurfing Chiemsee). The supermarket’s history of legal actions against Icelandic parties also serves as a cautionary tale to trade mark owners of the delicate balance between generating trade mark rights and actively enforcing these where a third party is using a mark descriptively.
It is now almost 20 years since the ECJ handed down the leading decision on GIs in the case of Chiemsee (re sportswear named after the Chiemsee lake in Bavaria). Since then, registries have inconsistently applied the test, either refusing registration for a very narrow range of goods/services (refusing only the most well-known items coming from the place) for a wide range of goods/services (anything that could conceivably come from a given place). In our opinion, a key driver behind this and the present dispute stems from the fact that Chiemsee concerned a relatively small geographic place of limited utility. This may well have enabled applicants over the years to obtain registrations for a wider range of goods/services than would have otherwise been the case. Put another way, had the Chiemsee case involved a larger geographic area that provided a greater range of goods/services, the ECJ and subsequent registries/courts may have interpreted the geographical indication provisions more strictly and the supermarket may have never been able to generate the very same rights that are now the subject of invalidity proceedings.
It is clear that this is a major issue within EU trade mark law and one that may herald a real sea change in practice. As such, either party would have good reason to pursue this all the way up to the CJEU. Despite the weather getting colder in the UK, it does not quite compare to the icy relationship between these two parties. We will follow the case with keen interest in the months to come.
Stobbs is proud to advise a number of large retailers and geographically famous brands on trade mark-related issues. If you would like advice on any of the issues could here, please feel free to give us a call.