The Grand Board of EUIPO ruled in the ICELAND case: Both contested EUTMs were registered in breach of Article 7(1)(c) EUTMR

Remember the infamous case(s) “ICELAND” for which the EUIPO opened its doors with the first oral hearing before the Grand Board of the EUIPO – back in September 2022? 

We now know the outcome of the decision(s): the invalidity of the word mark “ICELAND” and the related figurative mark (below) was confirmed – concluding that both marks had been registered contrary to provisions of Article 7(1)(c) EUTMR. 

The case is of great importance for the development of trade mark law in the European Union, especially with regard to trade marks containing a geographical name – but for those who are not familiar with it, this Kat will first do a moonwalk dance to return to the beginning of this story and explain some of its background.

Iceland Foods Ltd (the EUTM proprietor) is a supermarket chain, headquartered in Deeside, Wales, founded in 1970. It is one of the UK’s major food retailers – with over 900 shops across the UK and additional shops in Europe, particularly in Ireland, which are owned or franchised. 

In 2002, the company applied to register the EUTM No. 002673374 “ICELAND” (word) for a wide range of goods and services in classes 7, 11, 16, 29, 30, 31, 32 and 35. In 2014, it sought to register the EUTM No. 011565736 “ICELAND” (fig.) for goods and services in classes 29, 30 and 35. 

Both EUTM registrations were granted.

In 2016, the Government of Iceland (the cancellation applicant) – through the Ministry for Foreign Affairs and Business Iceland – filed an application for cancellation of the word mark “ICELAND” under Article 59 (1) (a) EUTMR in conjunction with Article 7(1)(b), (c) and (g) EUTMR. 

The cancellation action was upheld by the Cancellation Division of the EUIPO by decision only on the basis of Article 7(1)(c) EUTMR. The EUIPO considered that the word mark “ICELAND” was descriptive of the geographical origin of the goods and services. The proprietor of the mark claimed acquired distinctiveness and submitted evidence in this regard, but this was not considered sufficient, notably with regard to the territories of Malta, Sweden, Denmark, the Netherlands, and Finland. 

The decision was appealed and observations were filed. In its decision, the First Board of Appeal considered that the case shed light on the issue of the use of names of nations as trade marks and the scope of protection under Article 7(1)(c) EUTMR when a sign is a geographical name. Therefore, the First Board decided to issue an interim decision referring the case to the Grand Board. This was called upon to decide on the scope of the claim raised under Article 7(1)(c) EUTMR where a sign is a geographical name. The Board of Appeal listed a number of issues on which it sought clarification from the Grand Board.

In 2018, the Government of Iceland (through the Icelandic Ministry of Foreign Affairs and Economy) again filed an invalidity action – this time against the figurative mark, on the same grounds as for the word mark. And again, the cancellation action was upheld by the Cancellation Division of the EUIPO on the sole basis of Article 7(1)(c) EUTM, namely that even the figurative mark was descriptive of the geographical origin of the goods and services. Even in this case, acquired distinctiveness was invoked but – again – not considered proven. This decision was appealed and observations were filed – but again the First Board of Appeal issued an interim decision (Second Interim Decision) referring the case to the Grand Board. It reiterated that the Grand Board had to decide on the scope of opposition to the registration of a trade mark arising from Article 7(1)(c) EUTMR where a sign is a geographical name.

In both (similar) cases, the Grand Board in the decisions R 1238/2019-G Iceland and R1613/2019-G, Iceland (fig.) has now confirmed the two decisions of the Cancellation Division of the EUIPO – accepting the arguments and reasoning of the cancellation applicant.

Relying on settled case law in line with the criteria of the test in the Chiemsee case, the Grand Board confirmed that geographical names could in principle be registered. However, this general principle reaches its limits when it comes to Article 7(1)(c) EUTMR and should only apply to trade marks consisting of geographical names which are unknown to the public concerned – or at least unknown as designating a geographical place – or of names where, by reason of the nature of the place which they designate, it is unlikely that that public would believe that the category of goods or services in question originated there (‘Oldenburger’, § 33, ‘Karelia’, § 17, ‘Andorra’, § 21). 

This is not the case with Iceland.

After this general remark, the Grand Board proceeded to assess the case according to all the criteria of the test in Chiemsee.

In assessing the descriptive character of trade marks consisting of geographical names, account should also be taken of the public interest, which requires that any sign or indication which may serve to designate characteristics of the goods or services in respect of which registration is sought should remain freely available to all undertakings so that they may use it to describe the same characteristics of their own goods. The public interest thus consists in the need (express or implied) to keep certain signs free so that other economic operators can use them to compete effectively. This is the main public interest underlying Article 7(1)(c) EUTMR.

As regards, more particularly, signs or indications which may serve to designate the geographical origin of the categories of goods in relation to which registration of the mark is applied for, especially geographical names, it is in the public interest that they remain available, not least because they may be an indication of the quality and other characteristics of the categories of goods concerned, and may also, in various ways, influence consumer tastes by, for instance, associating the goods with a place that may give rise to a favourable response (‘Chiemsee’, § 26, ‘Suedtirol’, § 30, T-806/19, Andorra (fig.), EU:T:2022:87, § 19).

Therefore, pursuant to Article 7(1)(c) EUTMR, geographical names designating certain geographical places which are already well-known or well-known for the category of goods or services concerned and which are therefore linked to it for the relevant class of persons, on the one hand, and geographical names which may be used by undertakings and which must also remain available to them as indications of the geographical origin of the category of goods or services concerned, on the other hand, are excluded from registration as trade marks (‘Oldenburger’, § 31, T-878/16, KARELIA, EU:T:2017:702, § 16; ‘Andorra’, § 20).

The perception of the consumers concerned is one of the most important criteria to be taken into account – especially with regard to the degree of recognition of the geographical indication in question. In the present case, the Grand Board found that the relevant public knows that Iceland is geographically located in Europe and does not refer to a small town or lake such as Devin or Chiemsee, which may be known locally but not beyond; rather, it designates a European country which, as a Member State of the European Economic Area, is an important economic partner of the European Union. In view of the above, the Grand Board found that the degree of familiarity of the geographical name Iceland is very high among the relevant public.

According to the Chiemsee test, another criterion to be assessed is the analysis of the characteristics of the place designated by the name. After analysing the evidence submitted by the proprietor of the EU trade mark and the applicant for cancellation, the Grand Board concluded that the geographical name “Iceland” evokes positive associations of ecological quality and sustainability, which the country has worked hard to achieve over many years and which are capable of adding value to the goods and services marketed abroad by its national companies. Iceland will be perceived as a carefully constructed image of prosperity and environmentally friendly quality.

Moreover, the Grand Board examined whether, in the mind of the relevant consumers, there is a present association with the category of goods or services in question or whether it is reasonable to assume that such a name may, in the future and from the point of view of the same persons, designate the geographical origin of that category of goods or services, taking into account the degree of familiarity of the geographical name and the characteristics of the place. As Iceland tends to describe sustainable and environmentally friendly goods, such an image can easily influence the purchasing decisions of the relevant public.

The contested goods encompass foodstuffs and beverages in classes 29, 30, 31, and 32. The Grand Board explained that it is mandatory to indicate the country of origin or place of provenance on labelling in relation to specific foods. This leads consumers when seeing a name corresponding to that of a country on foodstuffs or agricultural products, are more likely to perceive it as relating to the place of origin and thus perceive it in a descriptive sense. In view of the above, it is reasonable to assume that ‘ICELAND’ is, in the mind of the relevant class of persons, capable of designating the geographical origin of the goods. Due to the degree of familiarity amongst the relevant persons with the country of Iceland, and with that nation’s characteristics, as well as with the goods concerned, it is reasonable to conclude that the sign is liable to be used in the future by undertakings as an indication of the geographical origin of the goods. Consequently, it is plausible, credible to consider the contested mark descriptive of the goods at issue from the perspective of the relevant public.

The contested word mark covered dishwashers in class 7 and apparatus for heating in class 11. Also for these goods, the Grand Board found that it is reasonable to assume that ‘ICELAND’ is, in the mind of the relevant class of persons, capable of designating the geographical origin of the goods at issue, because Iceland is known for the existence of strong fishing and food processing industry that uses freezers and other electrical apparatus has been shown; it is a country with a healthy economy and having a certain economic standing, and is associated with green energy and sustainability.

The contested word marks covered stationery goods in class 16 as well. For those goods, the Grand Board concluded that relevant consumers they will assume that the publications under the mark “ICELAND” are about the country of Iceland – meaning that the mark at issue is capable of describing the geographical origin of the goods at issue.

The same applies to the contested retail services in a form of types of stores – for which, the Grand Board concluded that ‘ICELAND’ is, in the mind of the relevant class of persons, capable of designating their geographical origin.

The Grand Board also rejected the EUTMs owner’s evidence of acquired distinctiveness on the grounds that no sufficient evidence was filed for Denmark, Finland, the Netherlands or Sweden. Instead, it found sufficient evidence of the close bonds that Iceland the country has with the European Union, particularly Denmark, its economic prosperity, industrial capacity and importance, its high standing as a ‘nation brand’ and the positive connotations that the EU public associates with the country as a world-class tourist destination. All of this “makes it reasonably foreseeable that the target public will assume that all the goods and service at stake may originate from Iceland”, the Grand Board concluded.

Finally, the Grand Board did not assess Article 7(1)(b) and (g) since it was sufficient that one of the absolute grounds for refusal applies in order for the sign at issue not to be registrable as a European Union trade mark.

This case shows – in line with the criteria of the test in Chiemsee – that EU trade marks consisting of country names – although they may occasionally function as trade marks (and there are indeed numerous examples) – should always be treated with caution, as the average consumer may be more inclined to make assumptions about the origin of products based on their national origin. Companies wishing to register trade marks consisting of country names may therefore find food for thought in the current decisions – especially with regard to the criteria that EU trade mark law is likely to adhere to in the future – even though this will always follow a case-by-case assessment.