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A Tale of Two Icelands: Inside the dispute

Wedlake Bell head of IP and commercial Michael Gardner takes us through the frosty depths of the ongoing trademark dispute between frozen food giant Iceland Foods and Nordic island nation the Republic of Iceland.

Antony McAulay

Iceland Foods are a well-known supermarket retailer who are best known for operating a chain of stores selling mainly frozen food. 

Iceland is a well-known country situated in the North Atlantic with a reputation for cold winters. 

For many years, the parties appear to have co-existed happily enough.  But a distinct chill has recently come over their relationship as a result of Iceland (the country) launching legal proceedings against Iceland Foods over the use of the name "Iceland" as a trade mark.  These "cancellation" proceedings were brought in the European Intellectual Property Office situated in the warmer climes of Alicante, Spain because they concern an EU-wide trade mark registration known as a "European Union Trade Mark" (EUTM).  The EUTM gives Iceland Foods a near monopoly on using "Iceland" as a trade mark in relation to the provision of various goods and services.  These include various types of foodstuffs, kitchen appliances and retailing services.

The EUTM

The story began back in 2002 when Iceland Foods decided to protect its brand name across the whole of the EU by applying to register an EUTM.  This turned out to be quite a struggle.  These days it can take as little as a few months from filing an application for an EUTM to achieving registration of a protected mark.  But in the case of Iceland Foods' EUTM, it took 12 years to overcome various oppositions from competitors and to obtain the registration in 2014.

Iceland Foods already have a battery of UK trade marks and a registration for their name and logo as an EUTM.  The registration of the word "Iceland" is the subject of Iceland's attack.

Such trade marks are important instruments of brand protection.  The basic idea behind registering a trade mark is primarily to prevent anyone else from being able to use the same or a similar sign to the registered mark in relation to the types of goods or services for which it is registered.  An EUTM is especially potent since it has effect throughout the 27 countries of the EU.

Also, not only can an EUTM be used to stop competitors trading using the same or a similar name, but such marks can be used as a basis to block others from registering marks of their own which could clash with the registered mark.  Iceland Foods have thus been able to use their word EUTM for "Iceland" to try and block other traders from registering marks incorporating the word "Iceland" or variations of that word.  It was apparently the blocking moves made against Icelandic businesses that may have provoked Iceland into action.

So, what is the cancellation claim based upon?

Iceland's complaint

Once a trade mark (including an EUTM) has been registered, it is still possible to invalidate it and clear it off the register if a party can show that the mark ought not to have been registered in the first place.  In order to do that, it must be shown that the mark was originally registered in breach of one or more requirements of the relevant EU legislation governing such trade marks (in this case Council Regulation 207/2009 as amended).

In pursuit of its cancellation case, Iceland is relying upon a host of rather technical points of trade mark law. 

These principally revolve around the fact that Iceland is the name of a geographic location (i.e. in this case a well-known country).  Generally, the use of geographical locations as trade marks is prohibited by the legislation.  But Iceland have sought to develop this basic objection in a number of different ways.  They have variously claimed that Iceland is a mark that has no distinctive character of its own, that the use made of it by Iceland Foods is "descriptive" of the characteristics of the goods covered by the mark and even that the use of the mark is misleading because Iceland Foods' products do not come from Iceland and consumers would be deceived into thinking that they do.

Some of the arguments put forward on behalf of Iceland appear to be weaker than others.  For example, the argument that Iceland is descriptive of the characteristics of the goods and services covered by the Iceland Foods EUTM is somewhat unconvincing.  But when it comes to European trade mark law, stranger things have happened in Alicante.  Moreover, it is only necessary for Iceland to succeed on one ground of its case in order to win. 

The bad news however, is that just as it took more than a decade for Iceland Foods to register its EUTM in the first place, if the result of Iceland's action is taken on to appeal and beyond, that process could easily take every bit as long to go through all the various stages up to the Court of Justice of the EU.

Iceland's EUTM could therefore be stuck in the deep freeze for many years to come.  Also, by the time the case is eventually resolved, who knows how many (or how few) countries an EUTM will cover.

Michael Gardner is head of the IP and Commercial Team at Wedlake Bell LLP

Posted by:

Michael
Gardner

08 December 2016

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