The judgment of the CFI issued on 10 October 2007 (Case T-460/05) looked liked a victory for Bang & Olufsen.

The Danish audio equipment manufacturer had sought protection of the shape of a loudspeaker through community trade mark apllication n°003354371 (pictured here) for ‘Electric and electronic apparatus and appliances for analogue, digital or optical reception, processing, reproduction, regulation or distribution of sound signals, loudspeakers’ in class 9 and ‘Music furniture’ in class 20.

A refusal was first issued based on the provisions article 7(1)(b) CTMR as the trade mark consisting exclusively in the representation of a loudspeaker, was considered devoid of any distinctive character. The First Board of Appeal was of the same opinion, but the aforementioned CFI judgment annuled its decision. This shape can fulfill a trade mark function according to the Court as it "departs significantly from the customs of the sector. It has characteristics which are sufficiently specific and arbitrary to retain the attention of average consumers and enable them to be made aware of the shape of the applicant’s goods".

Further to the judgment, the examination process therefore resumed, only for B&O to find another rock on the road toward registration. This time the objection was based on the provisions of article 7(1)(e)(iii) CTMR: such a sophisticated shape for a loudspeaker would give substantial value to the product.

B&O was irritated by what it called "salami tactics", but did not overcome the objection: a decision of the First Board of Appeal of 10 September 2008 (Case R 497/2005-1) rejects the three dimensional trademark application.

The First Board of Appeal (in its second decision on this case) underlines that examination process for trade mark applications implies that all absolute grounds for refusal must be examined ex officio (§15) and that the CFI judgment was silent on absolute grounds other than 7(1)(b). Further examination could therefore raise the question of substantial value given by the shape to the products which the mark was applied for.

The Board explains its approach in determining the circumstances under which a shape gives substantial value to a product: this is when such shape "has the potential to determinate to a large extent the consumer's behaviour to buy the product" (§23).

For this assesment, applicant's marketing methods must be set aside (§27, last sentence), which is why the non esthetic qualities of the product sold by the applicant under the mark are not considered relevant. However, we note that the motivation of the Board's decision largely rely on the marketing of the applicant (§29) and even marketing arguments from third parties: examples of retailers and second-hand sellers arguments taken from various web sites and quoted by the Board of Appeal decision show that both the sound quality and the design of the loudspeaker actually sold are put forth (§33).

The Board concludes that "initial overall impression is dominated by the particularities of the shape and the shape is not only perceived as an additional element. It is irrelevant that further value may come from the sound quality of the loud speaker or the reputation of the applicant's brand" (§34).

Therefore, the Board of Appeal:

"Rejects the application for registration of the sign at issue, consisting exclusively of the shape of the goods giving substantial value to the goods in the sense of Article 7(1)(e)(iii) CTMR".