DR.

ZSÓFIA KLAUBER 1 :

ACQUIRED DISTINCTIVENESS
IN THE HUNGARIAN TRADE MARK LAW

The legal institution of acquired distinctiveness through use was introduced to the Hungarian
trade mark law by the Hungarian Trademark Act i of 1997 in compliance with the EC
Directive of 21 December 1988 on the Harmonization of Trademark Laws of the Member
Countries.

From a trade mark law point of view there is a special relationship between the legal terms

− distinctiveness (including acquired distinctiveness);

− use (non-use) and
− evidence of use.

In the Section below I would like to present some cases in which the above quoted legal terms
played an important role and through which cases we might get acquainted with the legal
practice of the Hungarian Patent Office and the Metropolitan Court with respect to the
interpretation of the cited legal terms.

At first I refer to the respective provisions of the Hungarian Trademark Act being the legal
background in these cases.

According to Section 1(1) of the Hungarian Trademark Act any mark which can be
graphically represented and is suitable for distinguishing goods and services from other
goods and services can be protected by trademark.

According to Section 2 (2) a) of the Hungarian Trademark Act a mark shall be excluded from
trademark protection if it is not suitable for making a distinction, in particular, if it consists
exclusively of signs or information which may serve, in trade, to designate the type, quality,
quantity, intended purpose, value, geographical origin, time of production or fulfilment, or
any other characteristic of the goods or services, or which are permanently and customary
used in colloquial language, or in trade;

However no mark shall be excluded from trademark protection under the above indicated
provision if it has acquired a distinctive character through its use (emphasised by the
author) either before establishment of priority or subsequent to the establishment thereof
(Section 2(3)).

1
Candidate Attorney at Law, Sár and Partners Attorneys at Law, Budapest

1
In the first case I present the applicant wished to have a colour as trade mark registered
among others for telecommunication services.

The Hungarian Patent Office has refused the registration of the cited colour with the
reasoning that the colour per se in question did not have a distinctive character. The Office
has also referred to the circumstance that colours are usually used for decoration aims and the
consumers – without any precognition – do not find any connection between the colour of the
product and its origin. The Office has furthermore established that the applicant did not prove
that its mark had acquired distinctiveness by use.

In its appeal the applicant contested the Office’s argumentation with respect to the lack of the
distinctive character of colours in general and referred to the fact that both in Germany and in
the European Union the said colour was registered as a trade mark without the necessity of
proving its distinctive character.

The Metropolitan Court in its decision ii referred to Section 1(2) e) of the Trademark Act
according to which a colour may stay under trade mark protection but only in case it is
capable to distinguish goods and services of one undertaking from those of another, namely
only if it is capable to serve its function as a trade mark in the trade.

In this respect the Court established that marks consisting of one colour must meet stricter
conditions, so that the exclusive right embodied by the said trademark protection shall not
ensure causeless advantages or it shall not violate unfairly others rights.

A given colour may rather stay under trade mark protection with respect to special goods or
services, since in case of special goods and services only a narrow scope of trade participants
were prohibited from the use of the said mark. The same applies for combination of different
colours since due to the wide range of possibilities of variations, colour combinations can be
more appropriate for distinguish goods and services.

In the case at hand the Court has established that the applicant wished to have its mark
registered for a considerably wide range of goods and services, so he wished to have an
exclusive right for such a wide scope of goods and services which would have caused others
exclusion with respect to the use of a given colour in the course of their business. This means
that in case a colour per se were granted trademark protection others would be prohibited to
use the colour itself by any means, namely as a colour of a product or its packaging, as a
background, in a graphic or as decoration. This situation would – without any doubt – violate
the interests of the competitors.

According to the opinion of the court it does not have relevance that the mark to be registered
in Hungary stays under trade mark protection in other countries.

In the given case the applicant just stated but did not prove that its mark had acquired
distinctiveness by use the proper substantiation of which could have served as a remedy
against the refusal of protection due to the lack of distinctive character.

I would like to mention that the above referred colour in the meantime has acquired
distinctiveness through its extensive use in Hungary. However the applicant did not file a
national trade mark application with respect to the said colour in Hungary – taking into
account that it has a Community Trade Mark for the same colour – in case the applicant

2
applied for acquired distinctiveness now the cited colour could be definitely registered on the
basis of the present Hungarian legal practice.

But how does an applicant need to prove that its mark has acquired distinctiveness through
use?

A trade mark is distinctive in the sense of the above referred provision of the Hungarian
Trademark Act (Section 2 (3)) if it is recognised by a sufficient large part of the relevant
public as mark.

There are some circumstances that shall be taken into account if an applicant wishes to refer
to acquired distinctiveness through use. In this respect I refer to some examples taken from
the OHIM’s practice.

1. The evidence of use is to be assessed in order to judge whether that use has produced a
situation where a mark which would otherwise have to be refused on one or several of the
absolute grounds listed in the Trademark Act has become distinctive. It is not simply whether
and to what extent there has been use.

2. The use must be of the mark applied for and not for a significantly different variation of it.

3. The use must relate to the goods and services the subject of the trade mark application.

4. Establishing acquired distinctiveness will not cure all absolute grounds of refusal. It applies
only to the absolute grounds indicated in Section 2(2) a) of the Trademark Act (non-
distinctive, descriptive, commonplace).

5. The mark must have acquired distinctiveness at the time of the filing date and the
distinctiveness must be still present at the time of decision of registrability.

Evidence which relates to the period after the filing date of the application will be admitted
but probably given less weight than that which relates to the period before filing date.

6. The evidence for acquired distinctiveness must relate to the use of the given mark in
Hungary.

7. The evidence must relate to the (part of the) public to which the mark (i.e. the product or
service itself) is addressed. Unless the goods or services are by their nature addressed to
specialists or a limited public, the goods or services are taken in their ordinary meaning and
will generally be addressed to the public in general.

The evidence must furthermore demonstrate that a sufficiently large part of the public has the
requisite knowledge that the sign constitutes a mark.

8. As far as the nature of the evidence presented is concerned it is the matter of the applicant
to decide on it (e.g. opinion polls, surveys, statements, from the trade and consumer
organisations, Sections, brochures, samples, evidence of turnover and advertising or other
type of promotions, of successful prosecution of infringers, of trade mark registrations
obtained). iii

3
Now I present a case where the applicant could prove with success that its mark has
acquired distinctiveness through its use.

In this case the Hungarian Patent Office refused a trademark application where the mark
consisted of a composition of words of “SWISS FORMULA” The applicant wished to have
its mark for cosmetics registered. According to the reasoning of the refusal of the Hungarian
Patent Office the mark does not have enough distinctive character, as it is a generally used
form to designate the place of production and also the method or recipe of production.

In its appeal filed with the Metropolitan Court the applicant referred that its mark has
acquired distinctiveness by its use. In the case at hand the applicant did not only referred to
the fact of acquired distinctiveness but filed sufficient evidence to support it.

The applicant set forth that the mark has become well known among the Hungarian
consumers as a result of a definite amount of annual commerce, therefore it has acquired
distinctive character by its use. To verify its statements the applicant enclosed invoices
enlisting the products under the mark in question distributed in Hungary in the respective
years. The applicant also submitted photos of the distributed goods, on which the mark itself
was well observable, moreover, daily and weekly newspapers and professional journals
showing the use of the mark.

The Metropolitan Court in its decision iv established that the enclosed invoices verified that
subsequently to the date of priority the applicant had been distributing a large amount of
products bearing the mark to be registered in Hungary. The photos enclosed verified that the
applicant’s products were sold in well frequented places in Hungary thus a wide range of
consumers had known them. Furthermore, the submitted newspapers verified that the
applicant pursued a wide range marketing of the products bearing the mark at hand.

Thus the applicant verified with success such a wide-spread use after the priority date, by
which use the mark has acquired distinctive character according to Section 2(3) of the
Hungarian Trademark Act.

Referring to the above indicated requirement according to which the evidence must
demonstrate the use of a mark in format applied for and all evidence must show the use of
the mark to be registered and not a significantly different variation I present a British and
a Hungarian case which shall be considered similar to each other as far as their
substantive legal problem is concerned.

The case occurred in the UK concerns the chocolate bar Kit Kat, which has been on the
market since 1935 with the famous slogan “Have a Break … Have a Kit Kat”, which has been
used since the mid-1950s to advertise the product. v

In 1995, Nestlé applied to register the mark “Have a Break” in respect of the same class of
goods as its pre-existing registration for “Have a Break … Have a Kit Kat”. In order to
succeed, Nestlé needed to demonstrate either that the words “Have a Break” had a distinctive
character per se or that they had acquired a distinctive character through their use to advertise

4
Nestlé’s products. Following that the application was opposed on the basis that the mark had
no inherent distinctiveness.

Although Nestlé produced evidence to demonstrate that the mark “Have a Break” had
acquired distinctiveness through its use in the course of the trade (claiming that the survey
demonstrated that, due to the use of the wording “Have a Break”, a significant proportion of
the relevant public would identify it as originating from the manufacturer of Kit Kat) the UK
Patent Office rejected the application on the basis that the mark “Have a break” was devoid of
any distinctive character and had not acquired distinctive character through use. According to
the reasoning of the refusal Nestlé had only made a minimal independent use of the mark
“Have a Break” meanwhile Nestlé had mainly used the mark as a part of its registered trade
mark “Have a Break … Have a Kit Kat”. The slogan “Have a Break” could not therefore have
acquired an independent distinctive character.

Nestlé appealed against the above decision in which procedure the Court of Appeal referred
the following question to the ECJ: Whether the distinctive character of a mark may be
acquired following or in consequence of the use of the mark as part of, or in conjunction with,
another mark?

In July 2005 the ECJ answered the above question and decided that the provision of the EC
Trade Mark Directive relating to this issue contains no restriction which requires that the use
of the mark must have been independent use. vi To acquire a distinctive character, the mark
must simply have been used in such a manner that the relevant class of persons identifies the
product or service as originating from a given undertaking. Such identification may be as a
result of using the mark as part of a registered trade mark, or as a component thereof, or by its
use in conjunction with a registered trade mark.

According to the above Nestlé’s application for a UK trade mark for “Have a Break” will now
be re-submitted to the British Trade Mark Registry where the appointed officer will have to
re-consider Nestlé’s evidence relating to its use of the mark “Have a Break”.

A case similar to the “Have a Break” trade mark application case occurred at the
Hungarian Patent Office as far as the merit of the case is concerned.

In compliance with above referred legal practice of the UK Patent Office the Hungarian
Patent Office also rejected a trade mark application in which case the applicant wished to
have a slogan registered on the basis of its acquired distinctiveness through use although the
applicant could prove such a previous use where the slogan in question was always
accompanied with an additional word element.

The Patent Office told that the slogan itself – i.e. the mark to be registered – does not have
any distinctive character since it just refers to the type of the service and not to the
undertaking (namely the applicant) rendering the service. According to the reasoning of the
Hungarian Patent Office this circumstance is also proved by the photos enclosed by the
applicant as evidence since all the photos designate an additional word whish shall be
considered distinctive contrary to the slogan itself. According to the Patent Office the fact
itself that a usual compound of words has been used by an undertaking for a long period of
time shall not be considered as sufficient so that the consumers associate the slogan with the
given undertaking.

5
The applicant appealed the above referred decision refusing the registration of the slogan but
the Metropolitan Court vii confirmed the decision of the Hungarian Patent Office.
*

On the basis of the above referred cases we may come to the conclusion that the practice of
the Hungarian Patent Office is similar to the UK Office’s as far as the question of acquired
distinctiveness is concerned in case the applicant wishes to have a sign registered constituting
only a part of the mark that has been used previously.

At the same time a question arises in this respect as a consequence of the cited “Have a
Break” case which shall be revised by the UK Patent Office on the basis of the issued abstract
affirmative of the European Court of Justice. Does this mean that the legal practice which
seems to be in compliance with each other in the above referred two countries needs to be
changed?

Supposedly the in case the European practice changes it will have effect on the legal practice
of the Hungarian Patent Office as well.

Only the future legal practice will decide how strict requirements shall be met by the evidence
filed in the course of the substantiation of acquired distinctiveness through use in order to
have a mark registered which mark in a simple case would fall under the absolute ground for
refusal set out in Section 2(2) a) of the Hungarian Trademark Act.

The aim of this article was to show the successful and less successful ways of substantiation
with respect to acquired distinctiveness through use by the above legal cases of which there
will be definitely more in the future in Hungary as well.

i
Act XI of 1997 on the Protection of Trademarks and Geographical Product Markings, see Complex
DVD Jogtár, Budapest 2004
ii
Case No 1.Pk.24.972/2001.
iii
www.oami.eu.int
iv
Case No. 3.Pk.26.583/2000.
v
Shirley McCulloch: Mark may acquire distinctiveness as part of a registered mark, ECJ rules
BNA International – World Intellectual Property Report (August 2005)
vi
Case C-353/03, 27 Société des produits Nestlé SA v Mars UK Ltd, January 2005 (para. 46)
vii
Case No 3.PK.633.006/2004.