Treatment of two and three-colour marks in Australia, New Zealand and the EU – some recent cases – Part 1 – the 7-Eleven stripes
We have all read with interest case law relating to single colour marks.
Three recent decisions have considered the registrability of colour marks of a slightly different variety, namely signs said to comprise a combination, depiction or arrangement of a number of colours.
|7-Eleven – NZ||Discount Drugstores – AU||August Storck – EU|
These cases can raise definitional issues (what is the sign?), and difficult evaluative judgments as to whether the mark itself has achieved a sufficient level of acquired distinctiveness. The difficulties are compounded by the fact that these types of marks are generally used together with other marks.
We will begin with consideration of the 7-Eleven stripe mark in New Zealand.
The well-known convenience store 7-Eleven applied to register its orange-green-red stripe pattern, in the form shown below**, as a trade mark in New Zealand in respect of various services in classes 35 and 44, including “retail convenience store services featuring the sale of convenience store items”.
The application received an examination objection under section 18(1)(b) of the New Zealand Trade Marks Act, namely that the mark was insufficiently distinctive on the face of it. Evidence filed during examination did not satisfy the examiner that the mark had acquired distinctiveness under section 18(2).
Assessed against a consumer base of traders and average consumers of retail convenience store services (among others), it was considered on balance that the mark had insufficient inherent distinctiveness. This was because other traders are likely in the ordinary course of their business and without improper motives to use the applied-for mark (or some mark nearly resembling it):
- there is nothing inherent in the stripes that mark it out as being indicative of a particular trader;
- the mark was not memorable to the extent that its essence would be recalled by the ordinary customer;
- the mark would not be seen as indicative of trade-origin, and would rather be seen as performing a decorative function;
- the act of entering a convenience store to purchase “low value items is not a high involvement decision”, and so attention paid to this branding would be at the lower end of the scale;
- as regards the needs of other traders:
(i) the mark consists of “elementary lines in common colours”;
(ii) coloured stripes are a common decorative technique for like businesses;
(iii) consideration had to be given not only to the mark applied for but the desire of other traders to use marks “nearly resembling” it.
The proviso in section 18(2) allows for registration of a trade mark that has insufficient inherent distinctiveness if it is demonstrated that as at the date of application for registration, as a result of use made of it or any other circumstances, the trade mark has acquired a distinctive character.
7-Eleven could not rely on a “bricks and mortar” retail presence in New Zealand. Rather, 7-Eleven’s case was built on evidence of:
- its existing NZ registration for a composite mark containing the stripes together with 7-ELEVEN:
- a global portfolio of trade mark registrations;
- consistent use of the mark internationally on a continuous and extensive basis, and spill-over of that reputation into New Zealand;
- use of the mark in internationally-distributed motion pictures that had considerable box office success in New Zealand.
It was noted that section 18(2) allows for acceptance on the basis of acquired distinctiveness as a result of use or “any other circumstances”. Reference was made to the well-established principle that a mark may acquire a reputation in New Zealand through overseas use. The question that had not been considered was whether distinctiveness could be acquired in New Zealand on the same basis. The Assistant Commissioner accepted in principle that overseas use might be relied on:
“… the manner in which the relevant mark has acquired the requisite distinctiveness is immaterial. I see no reason why distinctiveness cannot be acquired through use of the mark overseas, provided it results in the relevant mark being regarded as an indication of trade origin by at least a significant proportion of the relevant class of persons in the New Zealand market”.
However, the Assistant Commissioner clarified that exposure to the mark or recognition of it when used in combination with distinctive elements (eg. 7-ELEVEN), was not sufficient. 7-Eleven had to demonstrate that the relevant consumers would perceive the standalone mark as a badge of origin.
Given the view that the mark had only a low level of inherent distinctiveness, convincing evidence was needed. It was considered that the evidence was insufficient to establish the required degree of acquired distinctiveness.
In Australia, the same mark was registered in respect of class 35 services over a decade ago, based on our “middle ground” distinctiveness provision, section 41(5) (now section 41(4)). Section 41(5) requires consideration of whether the mark is capable of distinguishing based on a combined consideration of use, intended use and any other circumstances (that is, sections 41(5) and 18(2) would appear to have a number of elements in common). Of course, Australia has a proliferation of 7-Eleven stores so the factual matrix differs considerably. Rumour has it that each store can be seen from the moon …
Whilst there are some aspects of the reasoning that will trouble 7-Eleven, with time and direct use within New Zealand, 7-Eleven should develop the required level of acquired distinctiveness or secondary meaning to meet section 18(2).
Applicants relying on the section 18(2) proviso in New Zealand will doubtless be heartened by the in principle ability to rely on any use resulting in acquired distinctiveness in New Zealand, regardless of where the use took place.
What is notable from a comparative law perspective is the heavy reliance on UK and EU authorities, including:
- the decision of Geoffrey Hobbs QC as Appointed Person in Cycling Is … under section 18(1)(b) (frequently cited in section 18 decisions in New Zealand);
- the list of factors relevant to the assessment of acquired distinctiveness is from the New Zealand Court of Appeal case Fredco, albeit that it is based on the CJEU’s test for acquired distinctiveness in Windsurfing Chiemsee.
This is not surprising given that the language of section 18(1)(b) of the NZ Act (“the Commissioner must not register … a trade mark that has no distinctive character”) is largely the same as sections 3(1)(b) of the UK Act and article 7(1)(b) of the EUTM Regulation (each of which provides: “the following shall not be registered … trade marks which are devoid of any distinctive character”).
On the other hand, it merits comment that there was no reference to the more recent decision of Wylie J in Coca-Cola v Pepsi (see our earlier note here) in which it was accepted that the shape of Pepsi’s Carolina bottle was used in its own right as a trade mark (the same finding was made in the Australian infringement proceedings reported here).
**The application initially comprised a series of marks, including the mark above and a black & white representation of that mark. 7-Eleven deleted the black & white mark during examination.
Case citation: 7-Eleven Inc  NZIPOTM 9 (27 May 2016)