Each year, the German Federal Supreme Court (BGH) seems to be addressing a new colour. In the preceding years, your blogger already reported on Langenscheidt's yellow colour mark, and on Nivea blue. In 2016, red is the colour in the judges' palette. On 21 July, the BGH gave its verdict in a line of decisions, including an ECJ referral, on the validity of an abstract red colour mark of the umbrella organization of German savings banks ("Sparkassen"). The Sparkassen use the red colour in various forms for their business, e.g. on signs outside their branches, for their red savings books and in marketing material.

The trademark had been filed in Germany as early as in 2002, but was at first rejected. In the ensuing appeal proceedings, the Sparkassen restricted the specification to certain financial services in class 36 and submitted survey evidence on the acquired distinctiveness of the red colour for these services. The mark was then registered in 2007. The PTO found that the survey showed 67,9 % public awareness of the red colour being associated with the Sparkassen.

In 2008 and 2009, several other banks applied for cancellation of the mark for lack of inherent and acquired distinctiveness. Upon appeal, the German Federal Patent Court (BPatG) thought that at least 70 % recognition among the relevant public were necessary for acquired distinctiveness, given that the mark was an abstract colour mark and given that the Sparkassen's marketing evidence was not conclusive on the question whether the colour per se had been used as a trademark and had become recognized as such by the public. Before taking its decision, the BPatG referred several questions to the ECJ. On 19 June 2014, the ECJ (C-217/13 and C-218/13) held that:

• It is not in line with the interpretation of the Trademark Directive 2008/95/EC if national law requires certain fixed minimum degrees of recognition for acquired distinctiveness of abstract colour marks; 

• If a member state has not made use of the option provided in Art. 3 III s.2 of the Trademark Directive, then a mark must have acquired distinctiveness before the application is filed. It is not sufficient if distinctiveness is acquired subsequent to the application, even if prior to registration. Art. 3 III s.2 reads:

  "A trade mark shall not be refused registration or be declared invalid in accordance with paragraph 1(b), (c) or (d) if, before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character. Any Member State may in addition provide that this provision shall also apply where the distinctive character was acquired after the date of application for registration or after the date of registration."

• The burden of proof is on the applicant to show acquired distinctiveness at the relevant point in time of the application.

  On this basis, the German Federal Patent Court ordered the cancellation of the red colour mark, inter alia finding fault with the standard wording for surveys recommended in the guidelines of the German PTO. The BPatG thought that this wording was inappropriately suggestive of qualifying the sign in question as a trademark and thus resulted in overly favorable recognition values.

  The Sparkassen appealed the cancellation to the German Supreme Court. The BGH has now ordered the reversal of the BPatG decision. So far, only a press release is available and the full reasons have not yet been published. Apparently the BGH concluded that the trademark had not acquired distinctiveness at the first relevant date, the application date back then in 2002. However, the invalidation claim was dismissed because in the opinion of the BGH the mark had acquired distinctiveness 13 years later at the date of the last oral hearing before the Federal Patent Court. This second date follows from § 50 II s.1 of the German Trademark Act, which provides that if a trademark has been registered contrary to the rules on absolute grounds of refusal, it may only be cancelled if the ground of refusal is still in existence at the time of the cancellation decision.

  The BGH decision came as quite a surprise – the standard procedure under German law would have been for the court to provide guidance to the previous instance, here the BPatG, and to refer the case back to that court for a decision. The full decision, once published, will be an interesting read.

  Case Reference: BGH, I ZB 52/15 – Sparkassen Rot, decision of 21 July 2016

  Previous instances: BPatG, 33 W (pat) 33/12, decision of 19 March 2013; ECJ, C-217 and 218/13, judgment of 19 June 2014; BPatG, 25 W (pat) 13/14, decision nof 8 July 2015).

  The BGH's German language press release is available here.