Caffè Nero styles itself as a European coffee house brand. It is one of the leading coffee shops in the UK - the striking blue and black sign graces high streets throughout the country and yet the registration of this well-recognized sign as a trade mark was refused by the EU Intellectual Property Office (“EUIPO”) under Article 7 (1) (b) and (c) on grounds of non-distinctiveness and descriptiveness for various food and drink products and ingredients, including coffee and beverages made from coffee/incorporating coffee essences/extracts and for various business, franchising, retail, loyalty and incentive scheme services, information and advisory services relating to inter alia coffee and coffee shops and food and drink, restaurant and catering services in Classes 30, 35 and 43. The EUIPO raised a further objection under Article 7 (1) (g) that the mark was deceptive for tea, cocoa, coffee substitutes and other drinks and preparations for drinks not being coffee or made from coffee in Class 30.
The Examiner interpreted the Italian words “caffè nero” literally as “black coffee” and held that the Caffè Nero (stylised) mark was objectionable taking into account this particular meaning to Italian-speaking consumers in the EU.
It appears that the applicant filed minimal evidence of use which was insufficient to prove acquired distinctiveness and thereby overcome the Article 7 (1) (b) and (c) objections. Acquired distinctiveness is not a basis for overcoming a deceptiveness objection under Article 7 (1) (g). The EUTM (formerly CTM) application was refused and the applicant appealed. The Board of Appeal confirmed the decision of the Examiner refusing the application (R954/2015-1).
The Board dismissed the applicant’s arguments, including a submission that black coffee refers to a prepared drink without milk, not dry goods and it is not the normal way of ordering coffee of this sort by Italians. The applicant submitted that coffee is ordered by reference to drink names rather than colour, for example, an Americano, a Cappuccino. It is interesting that these Italian names have entered the English language and are used by English-speaking consumers to order coffee in coffee shops, whereas Nero or Caffè Nero is not used to refer to a type of coffee here. Caffè Nero most likely means only the well-known coffee shop to the British public and to other EU consumers who are now familiar with the coffee shop chain.
The Office applied the Doublemint principle in this case – the fact that a mark might be understood in other ways was irrelevant, so the fact that the word caffè also means cafeteria and is a synonym for a European coffee shop was not helpful to the applicant.
Furthermore, the elements of colour and stylisation within the mark were not considered to add any distinctiveness to the words. For some time now, the EUIPO has been rejecting stylised lettering and coloured backgrounds as distinguishing features of marks. Applicants can no longer rely on the addition of these elements of stylisation to get an objectionable word mark through to registration.
It is, perhaps, surprising that the applicant did not file substantial evidence of use and reputation to overcome the objections under Article 7 (1) (b) and (c). However, Caffè Nero may not be as well-known a brand in Italy as it is in other parts of Europe, including the UK, and since it was held that the mark is inherently non-distinctive and descriptive to Italian-speaking consumers, it would have been necessary to demonstrate that the mark had acquired a secondary meaning to these consumers as a consequence of the use made of the sign in Italy.
What is more, even if the applicant had overcome this hurdle by demonstrating acquired distinctiveness, it would still have been faced with the deceptiveness objection which cannot be overcome by demonstrating acquired distinctiveness. A mark is considered by the EUIPO to be deceptive if it is found that there is actual deceit or a sufficiently serious risk that the consumer will be deceived. In this case, the Office seems to have gone further and rejected the application on this ground on the basis that “it is impossible to make the assumption of non-deceptive use of the mark”. In our view, the Office has really stretched the deceptiveness ground for refusal. It concluded that the non coffee-related goods may be sold in packaging very similar to that used for coffee, and because the goods may be bought in a hurry, the consumer may be deceived into believing they are coffee.
Had it been possible to demonstrate that Caffè Nero is a high street brand of repute in Italy and, as a result, the sign can be applied to packets of tea bags and jars of cocoa without risk of deception, the Article 7 (1) (g) objection might have been overcome. The reality is that high street coffee shop brands are branching out into the supermarkets - they have been able to rely on their reputation as leading coffee shops to slot in between well-known coffee brands such as Nescafé, Lavazza and Kenco on the supermarket shelves – Starbucks Fairtrade Espresso Coffee Beans and Costa Espresso Ground Coffee are both available at the supermarket chain, Tesco, for example.
The reality may be different in Italy, but, if Italy is not a core market for the British brand, Caffè Nero, the applicant could still have converted the EU trade mark application into national applications in all other countries of the EU. National filing/conversion into national applications goes against the concept of a single EU market, but with the EUIPO toughening up on registrability and raising objections that apply at a stretch to a very small minority of EU consumers, it may be the way to go. Alternatively, brand owners may need to consider creating more heavily stylised logos.
It will, of course, come as no surprise to regular readers of Make Your Mark, or to those who assume that consistency in EUIPO (OHIM) decision making is still a distant prospect, to discover that Caffè Nero (words) is already registered by the EUIPO for a wide range of Class 35 and 43 services, including coffee bar services. The mark is also registered, in a slightly stylised form, for the Class 30 goods that were objected to as deceptive in the above appeal.
That being the case, it might have been strategically more sensible for the company to have simply accepted the Examiner’s rather odd objections in the above case (as well as in an associated case (CTM 13238019) for the Caffè Nero word mark which was also objected to and unsuccessfully appealed) and quietly withdrawn their two new applications. These adverse appeal decisions now cast a shadow over the remainder of Caffè Nero’s EUTM protection for its house mark. When you are in a hole, particularly a hole that you don’t need to be in, it is generally best to stop digging.