Hard times for cannabis-related trade marks in the EU

In its judgment of 12 December 2019 in Case T-683/18, the European General Court (“EGC”) confirmed the decision of the Second Board of Appeal of the European Union Intellectual Property Office (EUIPO), which had found a figurative sign showing the words “CANNABIS STORE AMSTERDAM” and marijuana leaves to be contrary to public policy and thus not acceptable as a European trade mark (“EUTM”). This judgment can still be appealed before the Court of Justice of the European Union (“CJEU”).

In December 2016, Ms Santa Conte (the “applicant”) filed the following EUTM application for goods and services in classes 30 (such as baked goods, confectionery, chocolate and desserts), 32 (among others soft drinks, beer and brewery products) and 43 (services for providing food and drink). While the examiner rejected the mark as descriptive and non-distinctive, in the (unsuccessful) appeal before the Second Board of Appeal, it was deemed contrary to public policy. This was now endorsed by the EGC.

1. Examination of its own motion

First of all, the Court sided with the applicant when stating that the Board of Appeal had wrongly considered that “the symbol of a marijuana leaf” refers to the psychotropic substance, when in fact marijuana is not a plant but a psychoactive substance obtained not from cannabis leaves but from the dried inflorescences of female cannabis flowers. Consequently, by not taking into account this well-known fact, the decision is vitiated by an error. However, this inaccuracy has no effect on the lawfulness of the decision, which must be read in its entirety. Particularly, the Board of Appeal noted that the particular shape of [the cannabis] leaf is often used as a media symbol for marijuana (not called into question by the applicant), which is also the perception of the relevant public. Further, it clearly differentiated between cannabis that has psychotropic effects (it is only above a certain tetrahydrocannabinol (THC) content, namely 0.2%, that cannabis becomes an illegal substance in many EU countries) from cannabis that does not.

With respect to the Board of Appeal's suggestion that the applicant “could have” added more suitable word elements to the sign to highlight the characteristics of food and drink items not containing THC (for example the word “canapa” or “hemp”) and that she could have omitted the reference to Amsterdam or the media symbol for marijuana, the Court stated that this is only an obiter dictum and cannot therefore render the contested decision unlawful. Finally, the applicant had claimed that the choice of the word “amsterdam” merely refers to the origin of the cannabis which she uses and to the style and atmosphere of that city in the Netherlands. In this regard, the Court agreed with the Board of Appeal's finding that “amsterdam” would be understood by the relevant public as referring to the city in the Netherlands which tolerates the use of drugs and is known for its “coffee shops” (which are authorised to sell marijuana and “space cakes”). In any event, according to the case-law, a sign must be refused registration if at least one of its possible meanings characterises the existence of an absolute ground for refusal.

2. The relevant public

According to the Court, the relevant public is made up not only of English-speaking consumers, but also all the consumers in the European Union who are able to understand the meaning of the word “cannabis” associated with that figurative element. Further, since the trade mark application refers to everyday consumer goods and services, intended for the general public without distinction based on age, there is no valid reason to limit (as claimed by the applicant) the relevant public to only the young public between 20 and 30 years old. In fact, the relevant public is not only the public to which the goods and services for which registration is sought are directly addressed, but also other persons who, without being concerned by those goods and services, will encounter that sign incidentally in their day-to-day lives, overall corresponding to a public made up of reasonable persons with average sensitivity and tolerance thresholds.

Moreover, the Court found that the Board of Appeal had taken into account the development of the cultural and social view, in the European Union, of cannabis and its use for lawful purposes. In this respect, the Court recognized that much thought is currently being given both to the use of products derived from cannabis whose THC content does not make them narcotics, and on their use, where they are narcotics, for therapeutic or even recreational purposes. While the legislation of some Member States has itself already evolved or is in the process of evolving, according to the Court, the fact remains that in many countries of the European Union, products derived from cannabis with a THC content exceeding 0.2% are regarded as illegal narcotics. It noted that there is no unanimously accepted, or even predominant trend in the European Union regarding the lawfulness of the use or consumption of products derived from cannabis with over 0.2% THC.

3. The sign at issue

In the Court's opinion, the Board of Appeal was entitled to conclude that the sign at issue would be perceived in its entirety by the relevant public as referring to an illegal narcotic substance. With a view to the different possible meanings of the word “cannabis”, namely 1) a textile plant with not more than 0.2% THC, 2) a narcotic substance prohibited in a large number of Member States and 3) a substance the possible therapeutic use of which is under discussion, there need to be “further indications” to that effect. Considering the combined presence of the stylised representation of the cannabis leaf (the media symbol for marijuana) and the word “amsterdam” (the city of Amsterdam has many points of sale for the narcotic derived from cannabis, due to the sale of cannabis being tolerated under certain conditions in the Netherlands), the Board of Appeal found that this was the case here. This interpretation was upheld by the Court, according to which the words “store” and “amsterdam” together with the dominant element “cannabis”, coupled with the image of the cannabis leaves, is a clear and unequivocal reference to the narcotic substance which is sold there.

Finally, the sign at issue is contrary to public policy in the eyes of the Court. It noted that in the Member States where the consumption and use of the narcotic substance derived from cannabis remain prohibited, tackling the spread of cannabis is particularly sensitive, which meets a public health objective aimed at combating the harmful effects of that substance. Furthermore, the importance of the protection of that fundamental interest is further emphasised by Article 83 TFEU, according to which illicit drug trafficking is one of the areas of particularly serious crime with a cross-border dimension, in which the EU legislature may intervene, and by the third subparagraph of Article 168(1) TFEU, according to which the Union is to complement the Member States’ action in reducing drugs-related health damage, including information and prevention. In the case at hand, since one of the functions of a trade mark consists of identifying the commercial origin of the goods or services, that sign, in so far as it will be perceived as described above, encourages, implicitly but necessarily, the purchase of such goods and services or, at the very least, trivialises their consumption.

This is certainly an interesting decision, which clearly shows the challenge of finding a balance between the commercial interest in registering cannabis-related trade marks in the European Union and public policy aspects. While such signs are not per se unregistrable, it is advisable to avoid combining several elements like “cannabis”, “amsterdam” and the depiction of marijuana leaves in order to get these signs on the register.