The EU General Court rules on the protection of McCain's "smile" as a 3d trademark

A recent ruling by the EU General Court (Case T-553/21) has ruled on the issue of trademark revocation and clarified what elements a trademark owner must provide to prove genuine use.
Here is the background to the case: on August 9, 2000, leading frozen potato manufacturer McCain GmbH ("McCain") had filed with the EUIPO an application for a trademark registration reproducing a smiley face, as shown below:

The registration had been obtained for goods in Class 29 ("Pre-cooked potato croquettes and frozen mashed potato products").

In 2018, the German company Agrarfrost GmbH & Co. KG Inc ("Agrarfrost") had filed an application for the revocation of the mark with the EUIPO pursuant to Article 58(1)(a) of Regulation 2017/1001 (EUTMR), noting that it had not been in genuine use for the goods in question for an uninterrupted period of five years.
In 2020, the the EUIPO's Cancellation Division rejected the forfeiture application. This decision was later upheld by the EUIPO Fifth Board of Appeal (the "Commission"). The Commission, in particular, held that, based on the evidence attached by McCain, there was proof of actual use of the mark in accordance with the registration during the relevant period.

Against this decision, Agrarfrost brought an appeal before the General Court of the European Union ("the General Court") seeking an annulment of the EUIPO Board of Appeal’s decision.
The General Court, in its decision on December 14, 2022, first of all premised that, in order to avoid the revocation of a trademark, the proprietor bears the burden of proving its actual use by providing all the facts and circumstances that can prove the actuality of its commercial exploitation. Specifically, in assessing the actual use of the mark, the General Court held that it is necessary to take into consideration the nature of the goods and/or services as well as the extent and frequency that the mark was used. The General Court  also clarified that the rationale for such a process is not to assess the commercial success or economic strategy of an undertaking but to verify that the mark fulfils its essential function, namely, "that of guaranteeing the identity of the origin of the goods or services for which it is registered, in order to find or maintain an outlet for them in the market."

 
The General Court found that the Commission had correctly ascertained the actual use of the three-dimensional mark in question for the goods in Class 29 based on the declarations provided by McCain. In this regard, the Commission had found that the smiley face was reproduced both in numerous advertising campaigns as well as on frozen food packaging. In addition, in refuting  Agrarfrost's claim that the representative form from the contested mark is widely used in the food industry and therefore unsuitable to serve as a commercial indication of origin, the Commission had clarified that frozen potato products are generally found on the market in other forms (sticks, discs, wedges) and, in any case, a market study conducted by McCain showed that there were no frozen products made in the same or similar ways during the relevant period.

The General Court then examined whether the challenged trademark was being reproduced in a form other than the registered form, as claimed by Agrarfrost. On this point, the latter first pointed out that the registration had been made in black and white, while the product packaging and advertising campaigns depicted the smiley face in a golden yellow colour, resulting in an alteration of the distinctive character of the mark. Not only that, but Agrarfrost argued that the smiley face appeared on the packaging, together with the word element "smiles," merely as a reinforcing detail.

The General Court rejected both of Agrarfrost's arguments, clarifying that the mere addition of a colour does not alter the distinctive character of the mark since the shape of the smiley face remains the same as in the registration. Moreover, according to the General Court, the addition of the verbal component "smiles" did not prevent the relevant public from perceiving the shape of the contested mark, which remained identical, as an indication of the origin of the goods concerned.

For the above reasons, the General Court dismissed the appeal and ordered Agrarfrost to pay the costs in the case.