Signs Eligible for Trademark Protection in the European Union – Dysfunctional Incentives and a Functionality Dilemma

In the European Union (EU), the criteria for determining a sign’s eligibility for trademark protection are harmonized to a large extent. On the one hand, the trademark legislation and office practices in EU Member States have to keep within the harmonized legal framework set forth in the EU Trade Mark Directive (TMD). On the other hand, the European Union Trade Mark Regulation (EUTMR) provides for a set of eligibility criteria that apply to European Union Trade Marks (EUTM) with equal effect throughout the EU territory. As the rules in the Regulation are in line with those in the Directive, the two legislative instruments constitute a robust body of harmonized norms informing the decision on the registration of a sign as a trademark. The harmonizing effect is enhanced by the fact that national courts have to refer questions relating to the application and interpretation of eligibility criteria to the Court of Justice of the European Union (CJEU). As in other regions of the world, the criteria applied to determine eligibility for trademark protection are quite flexible in the EU. The open-ended definition of protectable subject matter leaves room for the extension of trademark protection to non-traditional types of marks, such as shape, sound and colour marks. Trademark offices applying EU trademark law have also accepted, for instance, abstract colours and colour combinations, motion and multimedia marks, melodies and sounds, taste marks, hologram marks and position marks. The analysis of the trend to register non-traditional marks in the EU outlines the legal framework which the CJEU developed to assess the eligibility of non-traditional types of source identifiers for trademark protection. On this basis, it discusses the objective to safeguard freedom of competition and the legal instruments which the CJEU employs for this purpose: the requirement of providing evidence of the acquisition of distinctive character through use in trade and the categorical exclusion of functional signs from trademark protection. Drawing conclusions, it will become apparent that the basic requirement of distinctive character plays an ambiguous role in the regulation of access to trademark protection for non-traditional marks. It is both an obstacle to trademark protection and an incentive for enhanced investment in non-traditional types of marks