Trade Mark Dispute – who owns the rights to the colour red?

Sparkassen Group has been using the colour red in connection with financial services, namely retail banking, in Germany since the 1960s. In 2002, it filed a trade mark application for the colour “red” (HSK 13) for financial services, namely retail banking, which was granted in 2007.

Banco Santander and Oberbank, two new entrants to the German retail banking market that also used the colour red in their home markets, filed for invalidity. In 2009, the German IPO (DPMA) dismissed the invalidity actions. This was subsequently appealed to the CJEU, the questions were answered in the joint cases of C-217/13 and C-218/13 in 2014.

The CJEU held that European law precluded an interpretation of national law according to which, in the context of proceedings raising the question whether a contourless colour mark has acquired a distinctive character through use, it is necessary in every case that a consumer survey must indicate a degree of recognition of at least 70%.

Subsequently, the German Federal Patent Court nonetheless sided with Santander and Oberbank and cancelled the registration of the mark at issue because acquired distinctiveness had not been proven, neither at the time of filing (2002) nor at the time of the decision (2015). Acquired distinctiveness at the time of the decision would have been enough because Germany exercised the option under Article 3(3) Directive 2008/95. Under German law, proof of acquired distinctiveness either at the time of filing or at the time of decision leads to validity of the mark (§ 8(3) German Trade Mark Act).

On appeal, the German Federal Court of Justice held that colour marks were generally lacking distinctiveness at the beginning, as consumers would perceive colours primarily as decorative and not as indications of source. However, colour marks – as any other marks – had acquired distinctiveness if a majority (“überwiegender Teil”) of the relevant public recognised the mark as indicating a single source for the goods or services for which protection was sought. According to the Federal Court of Justice, the many surveys submitted by the applicant failed to prove acquired distinctiveness at the time of filing in 2002, but supported a finding of acquired distinctiveness in 2015, at the time of the judgment.

As the time of the judgement the surveys showed a 70% recognition of the colour’s source, this was enough for the trade mark registration to be upheld.

It is very difficult to prove distinctiveness of a colour trade mark and clearly, in this case, public surveys have an important role in the assessment of a colour trade marks recognition as to whether it has acquired distinctiveness.

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