Trade mark law, case II GSK 691/09

October 5th, 2010, Tomasz Rychlicki

On 14 October 2002, the Polish company BWS Polska Sp. z o.o. based in Zaczernie applied for the right of protection for VARNA Z-256235 trademark for goods in Class 33 such as wines. The Polish Patent Office informed the applicant that it cannot be granted a right of protection because VARNA is also a geographical name of the Bulgarian city of Varna, which is located in the eastern Black Sea region famous for producing high quality white wines. Due to the fact that the seat of the applicant is located on Polish territory, the sign may lead the potential buyers to confusion as to the origin of goods. In response, BWS noted that the sign does not contain any false information, while simultaneously indicating that it is an importer and distributor of wines from south-eastern Europe, including Bulgaria.

The PPO received also comments issued by BSG Poland Sp. z o. o. in which the company raised objection of lack of statutory requirements for the protection of the questioned trade mark. Comments were sent to BWS but the company has not agreed to these statements.

The Polish Patent Office refused to grant a right of protection. The PPO ruled that VARNA sign is information on the place of the origin of wine – the site of a wine-growing and processing, without informing the consumer about anything else. According to the PPO, the importer has the right to register its trade mark, but the choice that violates the rights of manufacturers who conduct business in the region of Varna – infringes on the principles of merchant’s honesty. A situation in which the Bulgarian wine producers could not provide the Polish consumer that the wine has been produced by them is not fair, because they were outrun by an entity whose relationship with Bulgaria is at least questionable.

BWS requested the retrial of its case. The company reduced the original list of goods to wines from Bulgaria. It argued also that, under a contract with the Bulgarian multi-vendor, which is located in Varna, it has exclusive rights to sell original bottled VARNA wine. BWS indicated that the packaging of imported wine, includes bottle shape and color and shape, color, composition and location of the graphic label and it is its own creation. The company pointed out that the Trade Mark Register includs other signs being the name of national and international cities, towns, and in its opinion, the registration of VARNA trade mark will not be the monopolization of the word, because the Varna city remains a geographical name, the name of the appellation of origin or possibly the name of the seat of the suppliers of wine.

After reconsidering the matter, the Polish Patent Office upheld the contested decision. The PPO withdrew from contesting the trade as contrary to good merchant’s practice and public policy, pointing out also that the limited list of goods also been removed as an obstacle to the misleading nature of the sign. However, the PPO ruled that VARNA is the word trade mark, with no graphics, and indicates the origin of goods, therefore, it cannot be registered. The average consumer will read the sign as the Bulgarian city or geographic region on the Black Sea, famous for making wines. BWS filed a complaint against this decision.

The Voivodeship Administrative Court in its judgment of 18 March 2009 case file VI SA/Wa 2098/08 held that the contested decision is the right. According to the Court the basic prerequisite for the grant of the right of protection is the distinctive character of a sign. The legal doctrine distinguishes between the so-called abstract distinctive ability and the concrete distinctive ability. The mark is characterized by the abstract distinctive ability, where a sign is examined abstractly (in isolation from the specific goods or services) capable of distinguishing the goods of one undertaking from those of another. The mark has concrete distinctive character when it is capable of distinguishing goods or services specified in the application to the Patent Office of goods or services of another company.

BWS filed a cassation complaint. The Supreme Administrative Court in its judgment of 13 July 2010 case file II GSK 691/09 reversed the contested judgment and refered the case back for reconsideration. The SAC held that the VAC overlooked in its deliberations, the fact that the disputed word mark VARNA is not present in the Polish language as the name of the city in Bulgaria. This spelling of the city name does not occur in Bulgarian either (it’s Варна). However, in Polish language the city is known as Warna. Meanwhile the VAC in assessing the facts of the case stated that it was undisputed that the sign is the name of the VARNA city in Bulgaria and that by placing it on the goods (wines originating from Bulgaria) it will indicate the relevant public without difficulty and without no additional actions the origin goods. The Court had the duty to assess the legality of the contested decision of the Polish Patent Office even if the allegation was not raised in the complaint. The law requires that the assessment whether the mark is sufficiently distinctive has to be made individually for each sign. The VAC should also examine the issue whether a questioned sign due to the use of the first letter “V” and not “W” (as is correctly spelled in Polish) has sufficient distinctiveness, although phonetically the “V” and “W” letters sound the same in the Polish language. Of those grounds the SAC held that the VAC has not made an overall assessment of distinctive character of the sign in question, taking into account its visual, aural or conceptual elements, and therefore the VAC infringed on Article 113 §1 and Article 145 §1 point 1 C of the Polish Act on Proceedings before Administrative Courts, since it dismissed the case without adequate explanation of the matter. The SAC noted also that the BWS claimed that, under the earlier decisions of the PPO, it acquired rights of protection for trademarks, even though they were the names of cities (Melnik – a city in Bulgaria), Calama (a city in Chile), or Beverly Hills (a city in California), however, the VAC did not respond to such arguments. In light of the settled case-law of the Supreme Administrative Court, the administration body can change its opinion on the content of the right conclusion, which should be issued in a specific type of cases, but it must carefully justify such a change, especially when changing the view of decisions taken in relation to the same applicant. The case-law of the administration may therefore be subject to change, if the authority demonstrates that there are reasonable grounds.