Assessment of trademark distinctiveness uses the concept of an “average consumer”. This is defined by the Court of Justice of the European Union as someone who is considered to be reasonably well-informed, observant, and circumspect. In the recent case of Oatly AB v European Union Intellectual Property Office (EUIPO), the General Court of the European Union (GC) applied this test to Oatly’s appeal against EUIPO’s refusal to register the trademark “IT’S LIKE MILK BUT MADE FOR HUMANS”.
EUIPO had originally refused the application in 2019 on the basis that the mark was devoid of distinctive character, as defined under Article 7(1)(b) of the European Union Trade Mark Regulation 2017/1001. On 20 January 2021, the GC overturned the decision of EUIPO, stating that:
“distinctive character of a mark must be assessed, first, by reference to the goods or services in respect of which registration has been applied for and, secondly, by reference to the relevant public’s perception of the mark".
The Court dismantled the notion that an advertising slogan required “imaginativeness” or “conceptual tension” in order to overcome the requirement for distinctiveness in the eyes of an average consumer. Finally, the GC highlighted that Oatly’s mark, due to its unusual statement suggesting that “normal” milk is not appropriate for human consumption, “is capable of setting off a cognitive process in the minds of the relevant public making it easy to remember and which is consequently capable of distinguishing the applicant’s goods from goods which have another commercial origin”.
The GC’s ruling has ramifications for the concept of the average consumer going forward, as the courts have usually been careful when defining the average consumer’s role in a trademark assessment. Sophie Corke proposes that in this case, the GC has construed distinctiveness as “essentially about whether a cognitive process is sparked in the average consumer’s mind, by which [one] can consistently identify goods marked with the same sign as having a common commercial origin”. Therefore, the ruling by the GC has widened the scope of what may be considered distinctive. The test’s threshold has been lowered to the basic trademark principle of a sign causing a link in the consumer’s mind to a commercial entity.
Arguably, the GC’s low threshold of distinctiveness in Oatly AB gives proprietors scope to deploy anything as a sign. To be a trademark, the GC now only requires brands to jump over the small hurdle of causing a cognitive process in the mind of the average consumer. Before the focus on “cognitive” capacities as a test, European courts have construed the consumer as a perceptive individual. Rosella Incardona and Cristina Poncibò explain in their work that the average consumer is “no more than the final step in an ECJ process which has developed a judicial portrayal of the consumer as sensible, attentive, and cautious, as well as able to analyse, critically and discerningly, the messages behind advertising and commercial practices in general”.
However, standards for trademarks may better serve the courts if they are not reduced to such structured tests. Andreas Wiebe suggests that the courts too often rely entirely on a normative average consumer without empirical factors being considered. The courts should consider how real-life consumers interact with products and services. In a shopping experience, multiple factors influence consumers. Incardona and Poncibò emphasise that even the most rational and intelligent of consumers “often base their decisions on custom and feelings rather than on an analytical process”. An individual is likely to buy a product out of utility, or based on aesthetic preference. Therefore, consumer recognition of a mark is significant. In this way, the cumulative input of time, money, and creativity builds effective trademarks that continually resonate with the public.
The Court itself perceives that there is something unique about trademarks. In Oatly AB, the Court explained that a slogan could be distinctive if it went beyond its “mere promotional formula”. Instead, such a mark should be “perceived immediately by the relevant public as an indication of the commercial origin of the goods and services concerned”. This suggests that there are distinctions between branding and marks. However, the GC’s ruling contradicts this, as many elements of branding could cause a cognitive spark in a consumer, but would not be considered as trademarks. Furthermore, the Court does not provide clarity as to when or how this spark should occur.
In light of this case, the European courts may need to caveat the lowering of the threshold of the “average consumer” by applying a test of an “informed user”. The courts could assess public engagement with a mark to see whether the “cognitive spark” is permanent and unique to the brand. This test may see whether or not a mark is distinctive enough to be recognised in multiple settings by an “informed consumer”. A mark that goes beyond the initial cognitive process would show that it has gained distinctiveness. This places limitations on the test and brings it within notions of a global assessment, a core element of European trademark law. An “informed consumer” test acknowledges the effort taken by a proprietor to form an effective mark that is truly recognised by the average shopper.