Two applications (0-451-13 and 0-450-13) by Tesco in 2011 in an attempt to register the words ‘Clubcard’ for goods and services in Classes 9, 16, 35, 36, 39, 41 and 42 as Trade Marks have been rejected by the UK Intellectual Property Office (IPO) as being devoid of any distinctive character (s.3(1)(b) Trade Marks Act 1994 – TMA 1994). This is identically reflected in European Community trade mark law; in Council Regulation (EC) No 40/941 of 20 December 1993 (as amended) Article 7(1)(b) states that trade marks which are devoid of any distinctive character shall not be registered and as the term ‘Clubcard’ is commonly used by third parties within the same classes that Tesco sought to monopolise, it is unregistrable.
The Court of Justice of the European Union (CJEU) has always maintained its view on absolute grounds for refusal when regarding s.3(1)(b) TMA 1994 and held in the case SAT.1 SatellitenFernsehen GmbH v OHIM, C-329/02P, that “.. the public interest is, manifestly, in dissociable from the essential function of a Trade Mark.” The function is to ensure without confusion by the public to distinguish the product/service from another product/service.
This is the whole reason Article 3(1)(c) of the Council Directive No. 89/104/EEC (EU Trade Mark Directive) exists in order to reflect the public interest allowing descriptive signs or indications to be used freely by all, paragraph 30, Windsurfing Chiemsee v Attenberger  ECR 1-279, I-2824.
When assessing the distinctiveness of a mark it goes without saying the IPO will need to consider how the average consumer’s perception would interpret a mark. Taking Tesco’s applications for the term ‘Clubcard’ breaking apart each word into its ordinary meaning and applying their separate meanings, then rejoining the two, it suggests a loyalty club identified through a card! Not something associated with Tesco or another origin which provides goods or services.
As cited in the judgement by IPO of the case 0-451-13, “It is clear from Internet research that the term ‘club card’ is capable of application to services provided by others…. therefore granting Tesco a monopoly in the words ‘Clubcard’ would prevent others from using a common term to describe own loyalty schemes.”
Tesco’s main argument pointed to the fact that the term ‘Clubcard’ had been used extensively since 1995 with over 16 million users which should suffice as having acquired distinctiveness, the fact that others using the mark should not prevent the mark being distinctive to Tesco. However the mark was refused by the IPO giving Tesco few but alternative options should they decide to pursue this further.
They may either apply to the High Court for a ruling or challenge the IPO’s decision by appeal (albeit this would be a final appeal). Tesco will need to gather more evidence by way of survey to demonstrate and highlight distinctiveness through acquired use and advertisements, thus strengthening the association of the term ‘clubcard’ with Tesco. Either way, Tesco can still rely under Common Law rights to protect their mark through passing off and infringement.
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