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    Trademarks in the United States and European Union: Neutralization and Use

    Ceren Aytekin, Pieter Flier, Annemarie Malkmes, and Luiza Araripe

    Jul 31, 2023

    6 min read

    Intellectual Property Practice Areas Practice Areas & Settings

    Summary

    • This article explains the significance of trademarks for businesses and their various types, including word marks, design marks, shape marks, color marks, sound marks, smell marks, and motion marks.
    • The authors highlight the principle of neutralization, where the visual and phonetic similarity between trademarks can be offset by conceptual differences, leading to no likelihood of confusion.
    • Additionally, the authors emphasize the importance of using trademarks to maintain their protection, particularly in the EU system, which has a five-year grace period for non-use before potential revocation. 
    Trademarks in the United States and European Union: Neutralization and Use
    DKosig via iStock

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    A trademark is a legal unicorn that bestows upon a business the magical powers of brand ownership and protection. It’s a superhero cape that allows businesses to distinguish their goods and services from competitors. It can be a word, phrase, design, or even a color, motion, or smell—or a combination of these things—allowing businesses to cast a spell of exclusivity over their brand identity.

    The Magical Guide to Trademarks

    There are several types of trademarks available, each with its own charmed powers.

    A word mark, a classic, and widely used option, is a simple word or phrase that a business uses to distinguish itself from competitors. Like Nike’s famous “Just Do It” slogan, word marks are the incantations that give a business its distinct voice and personality.

    Design marks are mystical emblems that represent businesses through unique designs, logos, or symbols. They harness the power of visual cues to evoke an emotional and indelible connection with customers, which is why they are often the face of a brand’s visual presence. These marks possess an almost otherworldly power to capture our attention and stir our emotions—like the iconic golden arches of McDonald’s.

    Shape marks are trademarks that feature a specific shape or design. Iconic shape marks include the Coca-Cola bottle, Toblerone’s chocolate bar, and the Volkswagen Beetle, each like a magical sigil that imparts a unique charm and visual appeal, setting a brand apart.

    Color marks are trademarks that feature a specific color or combination of colors that can be used to conjure a distinct aura of recognition around their brand. They add a distinct visual element to a brand that cannot be replicated easily. See Tiffany & Co.’s legendary Tiffany blue and Cadbury’s delicious purple.

    Sound marks cast a spell over the listener and instantly invoke a brand’s identity. These can be anything from a catchy jingle to a memorable sound effect, like the roar of the MGM lion.

    Smell marks enchant the senses, leaving an alluring trail that lingers with customers, elevating the brand experience. Due to the technical challenges of identifying and reproducing scents, these marks are rare and difficult to register. Some businesses, however, have managed to register smell marks, such as Wimbledon’s fresh-cut grass, the scent of CHANEL No5 perfume, and the smell of Play-Doh.

    Motion marks capture the essence of a brand’s identity through movement. They can be in the form of animation, video, or any other dynamic element that sets a brand apart from its competitors. Think of the animated Pixar lamp that springs to life at the beginning of every Pixar movie.

    With these enchanted talismans, businesses become knights in shining armor, ready to defend their brand against copycats and imposters. In short, whether you’re a small start-up or a massive corporation, trademark registration is the ultimate spell for protecting your brand and establishing your identity in the world of commerce.

    —Ceren Aytekin

    Registering Your Trademark: The Principle of Neutralisation

    In the European Union, the most common opposition to trademark registration is the likelihood of confusion based on the identity or similarity of the trademark, sign, and the identity or similarity of the goods or services concerned. In short, the likelihood of confusion must be assessed globally, taking into account the visual, aural, or conceptual similarity of the signs based on the overall impression evoked by the trademarks and, amongst other considerations, with reference to their distinctive and dominating components.

    It is settled case law that the visual and phonetic similarity of conflicting signs can be neutralized by a conceptual difference between the signs if at least one of those signs has a clear and specific meaning, such that the public is likely to grasp it. The impact of this principle of “neutralisation” is considered when making the overall assessment of similarity between the signs. Therefore, once established, it must be concluded that there is no likelihood of confusion, even if the signs have a high degree of visual and aural similarity and the goods are identical.

    Recently, I represented the defendant in a Benelux opposition in which the office decided that the mark applied for, “VAPE,” had a clear and semantic content for the relevant public given that it refers to “vaporizer” or “to vaporize,” whereas the earlier mark, “VAPONA” had no particular semantic meaning. Conclusion: no likelihood of confusion.

    Similarly, the identical goods and the high degree of visual and phonetic similarity between the word mark “MASSI” and the figurative sign “MESSI” were neutralised because the younger sign is associated with the name of the world’s most famous football player. Even fictional characters, such as “Rocky,” perceived by the public as a nickname and as a well-known American sports film about a struggling boxer, Rocky Balboa, may prevent a finding of the likelihood of confusion for a trademark using a similar name. Just keep in mind: the principle of neutralisation can work in favor of a younger sign but also limits that sign’s scope of protection.

    —Pieter Flier

    Use Requirements

    Once registered, trademarks give exclusive rights against use or registration by third parties. This is only justified if the trademark owner commercially exploits it by genuinely using it in the marketplace. Therefore, the “use requirement” is a crucial principle in trademark law.

    Comparing the EU and US systems, the legal framework differs mainly in one respect: whether use is already a prerequisite for acquiring or maintaining trademark protection. The United States is a classical first-to-use system, where use is an essential condition—but also in itself sufficient—for obtaining trademark protection. The EU is a first-to-file system: use is not needed for a trademark to be registered.

    Under EU law, use only becomes relevant once a trademark has been registered for five years. During this grace period, the trademark is protected from any negative consequences due to non-use. For this reason, registering trademarks in the EU is easier. However, a trademark not used in the grace period cannot be enforced against other trademarks in opposition, invalidity, or infringement proceedings. In addition, it can be revoked at the (simple) request of any third party, and the onus of proof of use is on the trademark owner.

    While the negative effects of non-use in the EU occur later, there are important aspects to bear in mind before filing your trademark.

    • Proof of use evidence must show the trademark was used in the EU to a commercially relevant extent over the relevant five years: evidence must be dated and clearly refer to the relevant place. The time and effort for collecting evidence of use cannot be underestimated. “The more [evidence] the better,” so it is advisable to ensure an ongoing collection of documents from day one, such as invoices, sales numbers, advertisements, packaging samples, or catalogues.
    • The European Trademark Office (EUIPO) may cancel a registration on the grounds of bad faith. The most relevant cases are “re-filings” (i.e., registrations of identical trademarks to circumvent the use requirement). EUIPO canceled re-filings of Hasbro’s famous MONOPOLY trademark, finding they were registered only to avoid having to provide proof of use in proceedings. Appeals in European courts were unsuccessful.
    • Should a trademark clearance reveal similar or identical marks, there are always two things you need to consider: Was the earlier trademark registered more than five years ago? Has it been used over the past five years? If the answer to the first question is “yes” and to the second “no,” the earlier mark is not enforceable against your trademark and does not give rise to worries.

    The upside of the EU system is that the owner can easily include goods and services that may only be of interest in the future or register broader terms to obtain a broader scope of protection.

    —Annemarie Malkmes

    Recent High-Profile Trademark Cases

    Nike v. MSCHF. This is an interesting case in which Nike filed a lawsuit against the company that created a limited-edition line of Nike satanic-inspired shoes. The “Satan Shoes,” with its imagery and a drop of human blood in the sole, quickly sold out. Settled out of court, MSCHF agreed to buy back the shoes sold in collaboration with rapper Lil Nas X and issued a voluntary recall.

    Apple. In Brazil, Apple risks losing the trademark iPhone, as it was already registered here by a phone company named Gradiente. Although the 10-year dispute is not yet finalized, awaiting a Brazilian Supreme Court judgment set for June, all decisions until now have found in favor of Apple.

    Muriel Cosméticos and Unilever. In this well-known Brazilian infringement case, Muriel decided to produce cosmetic goods called Alisena, imitating the trade dress of a famous cornstarch called Maizena manufactured by Unilever. From the obvious confusion, Muriel Cosméticos was ordered to pay 20 percent of the product sales to Unilever.

    —Luiza Araripe