Luận án tiến sĩ luật học: The issue of "functionnality" in trademark law - theory and practices in the United States, in the European Union and in Viet Nam

HANOI UNIVERSITY OF LAW LUND UNIVERSITYLAW FACULTY

VUONG THANH THUY

THE ISSUE OF “FUNCTIONALITY” INTRADEMARK LAW

THEORY AND PRACTICES IN THE UNITED STATES, IN THE EUROPEAN UNIONAND IN VIETNAM

TRUNG TAM THONG TIN THU VIỆN

TRUONG ĐẠI HỌC LUAT HA NỘI

PHÒNG ĐỌC —AD 4G |

Supervisors: 1 Prof Dr Christina Moéll (Sweden)2 Dr Phing Trung Tap (Vietnam)

PrefaceAbbreviationsIntroductionChapter ILi

Chapter II2A

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Table of contents

Overview of trademark historyLegislation regulating trademarksInternational Agreements

The Paris Convention

Madrid Agreement and Madrid ProtocolTRIPS Agreement

National legislation

Trademark legislation in the United StatesTrademark legislation in the European UnionTrademark legislation in Vietnam

Main issues concerning trademarksTrademarks’ functions

Trademark protective requirements

5757596165

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Chapter IH3.1

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Chapter IV

Chapter Vah

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Utility functionality

Rationale for utility functionalityAnalysing utility functionalityAesthetic functionality

Rationale for aesthetic functionalityAnalysing aesthetic functionality

Arguments regarding aesthetic functionality

The issue of the functionality of trademarks in the legislationand practice of the European Union

Overview of trademark legislation and the functionality issueThe issue of the functionality of trademarks

Some general terms

The functionality issue in legislation and in practiceGround for refusal in Article 7(1)(e) (or rationale for thefunctionality issue in the European Union)

The shape is necessary to obtain a technical result (or utilityfunctionality in the European Union)

The shape which give substantial value to the goods (or aestheticfunctionality in the European Union)

The issue of the functionality of trademarks in the legislationand practice of Vietnam

In legislationIn practice

Reasons linked to Vietnamese societyCultural characteristics

Reasons tied to the economic situationReasons from legislation

In the European Union

Different approaches to understanding the functionality issue inthe United States and in the European Union

166166168171

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Table of casesBibliographyAppendix

The type of sign to which the functionality test can be appliedDistinctiveness requirement and its relationship to functionalityFunctionality application

Two functionality issuesFunctionality analysisFunctionality application

Public interest in preserving competition (subject matterprotection)

Competitive need protection rationale

Relationship between the two grounds in the application offunctionality

Distinctive and generic considerations and their relation to thefunctionality issue

Functionality evidence

From the product (sign) itselfFrom official’s implementationProposals for Vietnam

Applying general principles in intellectual property lawFuture proposals

General proposals

Proposals concerning the functionality issue

208219221226

Trademarks always play very important roles In undertakings’ success anddevelopment So to choice distinguish signs to register trademarks is necessaryrequirements for all undertakings Almost successful trademarks are chose fromvalued signs since such signs will be linked to undertakings during their commercial

life However, if registered signs are chose from high value source, for example

utilitarian or aesthetic signs which attract consumers directly from such value, suchsigns are not appropriate for trademark protection In case such signs are accepted astrademarks, fair competition in market will be harm In these cases, we shouldconsider such signs following issue of functionality in trademark law to have the best

Although the issue of functionality has been regulated and settled in many developedcountries as the United States, the European Union, this one is still very vague andunsystematic issue In Vietnam, functionality is almost a novelty definition and paidnot much intention in legislations and in fact By this research, I hope this book willfulfill two purposes, including: first, to draw a whole picture of the issue offunctionality in trademark law, especially in the United States and in the EuropeanUnion; second, to introduce a new legal nomenclature into Vietnamese intellectualproperty law, then, from Vietnamese characteristics in society, economy and lawsystem, to raise some proposals relating the issue of functionality toward purpose ofcompleting Vietnamese legal system.

This book is the main visible result of my PhD studies from the beginning of 2007 tothe end of 2010 at Faculty of Law, Lund University, Sweden and Hanoi University ofLaw, Vietnam It would have been impossible without the help, encouragement andinputs of others.

During all research time, I have been received many precious support, help and advicefrom Prof Christina Moell, my Swedish supervisor From discussions with her, I havestudied not only many necessary knowledge for my research but also unlimitedlessons of the best way to live and to behave between colleagues, friends and withstudents I would like to express my heartfelt gratitude to Prof Christina Moell whohas been and will be always my supervisor.

I would like to thank very much Dr Phung Trung Tap, the Vietnamese supervisorfrom Hanoi University of Law He provided me with insightful comments andfeedbacks on the draft version of this book Without his help, it would be terribly

difficult for me to be able to finish my research, especially when | have implementedmy research in Vietnam.

Be my first supervisor in Lund, from my master thesis, Prof Hans Henrik Lidgard isthe person who suggested me this interesting topic and have given me many preciousadvices, instructions for my research From the bottom of my heart, I would like verymuch to express my sincerely thank to him.

Implementing this research, ] have studied many fruitful knowledge from manycountries in the world I want to thank very much the Hanoi University of Law forsupporting me to take part in this program And I want to thank the SIDA project“Strengthening of Legal Education in Vietnam” for giving me the precious occasionand for financing my research.

I also would like to thank my professors, lecturers and colleagues at the HanoiUniversity of Law in Vietnam and at Faculty of Law, Lund University in Sweden andin the places where I did my research as well as my friends for all their help andsupport I would like to give special thank to Asst Prof Bengt Lundell for allunlimited and warmest support which he gave me during last time.

More than four years of researching is a long way with many not easy experience inmy private life, I would never reach the finish point without supports and sacrificesfrom my family I would like to express my gratitude to my parents, my sister and mydaughter for their unlimited, fullest and warmest support, care and love.

All constructive comments and criticism on this book are welcome I can be reachedat thuyvuong79@yahoo.com.

Hanoi, May 2011.Vương Thanh Thúy

Community Trade Mark DirectiveCommunity Trade Mark RegulationCommunity Trademark

Court of First InstanceEuropean CommunityEuropean Court of JusticeEuropean Union

The subject

Trademarks play an important role in an undertaking, since they can be seen as theundertaking’s ‘face’ in the market The consumers will be aware of the undertaking aswell as its goods mainly through its trade marks The choice and registration of onegood, original and impressive trade mark is always one of the first requirements for anundertaking.

From ‘traditional’ marks like words, letters and numbers, the class of signs which canbe protected as a trademark is becoming more and more broad Trademarks can nowbe shapes, colours, sounds or other more special signs That means that manycharacteristics that can be perceived by the senses of human beings, can be registeredas trade marks While sounds or smells are however not often accepted as registeredtrade marks, shapes are regulated and accepted as legal trade marks in almostcountries in the world The main requirement for such new signs is_ theirdistinctiveness In other words, if such signs are able to show who manufactured theproduct bearing such signs, they will be accepted as trademarks.

It is impossible to accept all signs that undertakings may wish to have registered astrade marks Certain conditions and requirements must be applied to test potentiallyregistrable signs for trademark protection As noted above, the requirements arerelated to distinctiveness For example, a descriptive sign will not protected as atrademark because of its non-distinctiveness That is the reason why, when trademarkinfringement issues are raised, the core problems are related to the distinctive abilityof the signs.

Among the grounds for trademark refusal lies the functionality issue of trade marks.Although similar to the distinctiveness requirement, a non-functional test exists fordifferent purposes and policies Distinctiveness is considered as a compulsorycharacteristic that all trademarks must have Non-functional evidence, however, isused to determin: that signs do not belong within the scope of other intellectualproperty rights’ ard that trademark law can be applied to it.

The functionality ssue is not a traditional issue in trademark law When the only signswere two-dimensonal ones like words, letters and numbers it was unnecessary toapply this doctrin: At the time of allowing such signs as shape marks, its existencehas been wseful in balancing the claims of different intellectual property rights The

intellectual property system covers many different types of rights Each one has itsspecific characteristics demanding different kinds of protection As Cornish says in hisbook: “Patents give temporary protection to technological inventions and design rightsto the appearance of mass — produced goods; copyright gives longer — lasting rights in,for instance, literary, artistic and musical creations; trademarks are protected against

imitation so long at least as they continue to be employed in trade”°.' To protect the

new special subjects, there are potentially several regimes within the intellectualproperty system Conflict occurs in such cases and the functional test appears as onesolution in such circumstances.

My thesis will deal with some issues concerning the theory, legislation and practicerelated to the functionality of trade marks in the United States, the European Unionand Vietnam The doctrine of the functionality of trade marks has developed in trademark law to avoid the otherwise irreconcilable conflict between the different regimesin the intellectual property system So, the need to write law and pay attention tofunctionality case law are obvious requirements of intellectual property law Sinceshapes are regular objects which accepted as trade marks, among the new specialsubjects, in my papers, the issue of functionality in trade mark law will be researchedaround the core which are shape marks.

Previous research

Research into intellectual property law in general and trademark law in particular hasbeen undertaken in many books, articles and other projects In such materials,author(s) cover all aspects of the intellectual property field and the trademark field,from general view to detailed analysis However, in previous work, the functionalityissue is either not raised, or is only covered in very general and abstract terms by wayof introduction rather than concrete analysis.

In these 2ooks, the functionality issue is raised as a refusal issue within trademarkprotectio and analysed on this basis For examples of such books:

- McCarhy, “McCarthy on Trademarks and Unfair Competition””: this can beconsidered as a classic book on trademarks and unfair competition in the UnitedStates All aspects of these laws are expressed and analysed here The functionality

' William Cornish, “Intellectual property”, p 3, Oxford University Press (2004).

? McCarthy “McCarthy on Trademarks and Unfair Competition” §7:63, 4" Edition, LexisNexis.

issue is raised and analysed by way of some judgments from courts However, it is

still a ratther general approach.”

- William S.Boyd, “Understanding Trademark law’: this book draws a picture of

trademarks in the United States It is not very detailed but its contents are expressedclearly aind it 1s easy to understand It should become a required book in universities.The issute of functionality is covered in a few pages as one of the reasons making

marks ineligible for registration on the principal register.”

- Stephem M.McJohn, “Intellectual Property”: in this book, the author seeks to cover

all aspec:t of intellectual property field It is very useful for popularizing intellectualproperty knowledge There is a very brief review of functionality as a matter involvingunprotectable symbols.’

- Graeme B.Dinwoodie, Mark D.Janis, “Trade dress and design law”Š: trade dress is

analysed quite broadly in this book, in relation to trademark and design lawprotection As the focus is on trade dress, the functionality issue is considered in moredetail than in general intellectual property books However, this issue is only coveredby way of judgments from the cases So, it is still not a comprehensive review of

- Belinda Isaac, “Brand Protection Matters”’”: its content is very important and useful

for any undertakings who want to develop a brand but no specific part concerns thefunctionality issue However, the analysis of protecting product appearance and

packaging gives a good basis for discussing functionality.'!

This above list is not exhaustive I only wanted to show that in both general works onintellectual property and trademarks and in more specialised books, the issue of? In Chapter 7: Trademark and tradedress formats, IV Functionality.

* William S.Boyd, “Understanding Trademark law”, Mary LaFrance, LexisNexis (2005).

” In Part IV: Federal Trademark registration, §2.09 Marks Eligible for Federal Registration, [B] Barks

Ineligible for Registration on the Principal register, [5] Descriptive, Misdescriptive, or Functional

Marks, [f] Functional Marks.

° Stephen M.McJohn, “Intellectual Property”, Wolters Kluwer law & Business, Aspen Publishers(2009).

7 In Part III: Trademark, Chapter 11 Sustantive Standards for Protection: “The Source-Distinguishing

Ability of a mark”, Unprotectable Symbols, Functional Matter.

* Graeme B.Dinwoodie, Mark D.Janis, “Trade dress and design law’, Wolters Kluwer law & Business,

Aspen Publishers (2010).

* In Par II: Tradedress, 3 Functionality.

'° Belinda Isaac, “Brand Protection Matters”, London Sweet & Maxwell (2000).

" In Part II]: Essential elements of a trademark conclusion, Chapter 3: Protecting Product Apearance,

Chapter 4: Protecting Product Packaging.

functionality is to be found But we will only find a general introduction, a trademarkprotection bar issue And the matter is far from being considered as a function of thefunctionality of trademarks.

The functionality issue is analysed in articles whose author(s) are intellectual propertyexperts and professors at universities in the United States and in the European Union.In these, this issue is only approached by way of some of its characters orcharacteristics And they often focus on discussing and/or arguing concreteJudgements from the courts on functional cases What follows are some articles

concerning the functionality of trademarks.

- A.Samuel Oddi, “The functions of “Functionality” in trademark law”’?: this articlereceived the Stephen P Ladas Memorial Award which is given for the best article ontrademarks or related matters submitted for the Award or published in 1985 Thefunctionality issue is considered in a very beautiful analysis However, the mainpurpose of the article is raising the importance of the functionality issue in thetrademark system and all information is linked to this goal.

- Jessica Litman, “The problem of functional features: trade dress infringement under

Section 43(a) of the Lanham Act”": this article discusses the functionality issue which

was regulated in the Lanham Act after some time The purpose of the article isanalysing the regulation of trademark law.

- Bradford J Duft: “‘Aesthetic’ functionality”'*: aesthetic functionality is consideredin this article as a “misnomer” of the functionality doctrine This article gives us aclear example of one of the arguments applied to aesthetic functionality.

- Alison Firth, “Shapes as trademark: public policy, functional considerations and

~I5- this article analysed the refusal to trademark shape and

!3 Jessica Litman, “The problem of functional features: tradedress infringement under Section 43(a) of

the Lanham Act”, Columbia Law Review 1982, Volume 82, Number 1.

'* Bradford J Duft: “‘Asthetic’ functionality”, Hein Online — 73 Trademark Report 1983.

'S Alison Firth, “Shapes as trademark: public policy, functional considerations and consumer

perception”, European Intellectual Property Review (2001).

There are many more articles in the United States and the European Union whichanalyse the functionality issue But similar to the issue’s characteristics, articles on itare also highly diversified and take many different approaches I have not discoveredany material covering all aspects of the functionality issue.

Starting my research from knowledge of a few things about the functionality issue andbelieving that it is a novelty issue from the Vietnamese perspective, my thesis pursuestwo aims The first and also the main purpose of my thesis is to analyze the trademark functionality issue while considering the circumstances which can be seen asgiving rise to it These results are based on analysis of the issue in the legal system ofthe United States and the European Union It seeks to find answers to the questions ofwhy and how the functionality doctrine is considered as a very difficult but also a veryimportant issue within the intellectual property system Approaching judgments andcomments on the functionality issue’s implementation in terms of practicalexperiences gives useful knowledge of the issue.

The second aim of my thesis is to analyze the preconditions for the implementation ofthe issue of functionality in Vietnamese intellectual property law and to make aproposal for possible Vietnamese legislation Every legal issue needs to be regulatedin terms of the specific characteristics of each country and the functionality issue alsoneeds such a grounding Understanding this issue is the main goal of my thesis butfinding the way to apply it in Vietnamese law is also a very important goal.Knowledge of an issue is really useful if it is desired to import it into a law systemwhich lacks it.

In short, in my research, I hope to draw a complete picture of the functionality issue soas to estimate its importance and then consider the way to apply this issue into mycountry’s legal system.

The main purposes of this research are, as noted, to answer the question what thefunctionality of trademarks is and to determine how to apply it in the Vietnamese legalsystem The methods used in the thesis are linked to my aims The methods used are acombination of legal dogmatic, legal historical method, comparison, law andeconomics and law and society.

- Legal Dogmatic: legal dogmatic can be considered as the traditional legal method inresearching law as it is used to interpret, clarify and evaluate the content of valid legalnorms It is a very useful way to approach and to analyse any legal issue Tounderstand a new issue like functionality of trademarks, it is essential [ will use thismethod to describe, interpret and systematize the applicable law dealing with the

issue In the United States’ and European Union’s legal systems, the issue of

functionality will be considered in as much detail as possible In the Vietnamese legalsystem, the non-existence of the issue is explained by careful analysis In theconclusion of the thesis, the method is used to draw a picture of the issue and to give adeep discussion of it Throughout the thesis, it is used to study topics in a logical andconnected way.

- Comparison: Researching the issue of functionality in the United States’ andEuropean Union’s legal systems, comparison is used to study the issue in both‘countries’ so as to arrive at a comprehensive conclusion By this method, conclusionsconcerning the pros and cons of the development of the doctrine in US and EU lawcan be drawn Comparison is also used to analyse different aspects of differentregimes in intellectual property law Without this method, proposals for Vietnamwould lead to slavish copying of matter coming from developed countries in adeveloping country-Vietnam.

- Law and economics: Policy grounds for the functionality issue include competitionprotection and an economic legal method is raised whenever competition policy isanalysed This method gives a good way to approach the relationship betweenintellectual property law and competition law by reviewing the short- and long-termbenefits of the two legal systems By using an economic legal method, the importanceof the functionality issue is illustrated However, because the thesis is a piece of legalresearch, the economic method only plays a supporting role, instead of being a basicmethod like the others.

- Legal Historical method: Differences between the United States and the EuropeanUnion about a legal issue stem from differences of social, economic and culturalcharacterstics In the thesis, the lack of coverage of the functionality issue in Vietnamfollows fom the specific characteristics of Vietnamese history up to modern times.The functionality issue, even in the United States and the European Union is still verycomplicated with many different applications The legal historical method is used to

summarize matters from their beginning up to the present All this will help ouranalysis and suggest proposals for importing functionality into Vietnam.

- Law and society: Like history, culture and society play a very important role in anylegal matter To research the functionality of trademarks, this method can givecomprehensive answers on the grounds for this issue and the pros and cons of eachkind of application and its likely development However, it should be said that thelegal historical and legal social methods, like the economic legal one, are only used asa background to analyse the functionality issue.

functionality issue in particular There is little legal literature dealing specifically with

the issue of functionality of trade marks but literature on trade mark law andintellectual property law will serve as important general sources.

The establishment of functionality derives not only from legal theories but also fromcase law It will therefore be necessary to thoroughly study the relevant judgments ofthe US and EU courts Starting from the differences between the two legal systems,cases and judgments are chosen in each country based on its characteristics In theUnited States, despite being a country, State law and Federal law co-exist Althoughthe judgments of the Supreme Court are overriding, State courts also express theirown ideas in their judgments Functionality analysis is in tune with this situation Myresearch is based on judgments of both the Supreme Court and State courts In theEuropean Union, which in contrast to the United States is not a single country,pursuing the aim of uniting the different Member States’ courts when applying anylegal issue is a very important requirement This goal is clearly reflected injudgements of the European Court of Justice That is the reason why, in contrast to theUnited States, in the European Union, the cases used to illustrate my topic issue aretaken from judgments of the European Court of Justice alone.

Although there is no specific book on the functionality issue, in books on intellectualproperty law in general and trademark law in particular, I found useful backgroundknowledge and also some new information on functionality analysis In some articles,especially in the United States, commentators expressed many ideas on the differentaspects of the functionality issue These documents are useful In addition to them,some internet sources are used All of the websites indicated in this book were visitedand checked for the last time in December 2010.

Functionality in trademark law is an issue arising from convergence issues Differentregimes in the intellectual property system may apply to a certain object Avoidingpotential conflicts among these regimes gives rise to the functionality issue Thus, toresearch the functionality issue, the other regimes in intellectual property law, besidetrademarks, should be analysed The regimes considered here are patent, design andsome aspects of copyright law While functionality’s purpose is settling convergenceissues among different regimes, it is based on a competition requirement Applying afunctional test in trademark registration is equal to finding a balance not only betweenthe different regimes in the intellectual property system but also between intellectualproperty protection and the protection of competition So, beside intellectual propertylaw, competition law is also covered to some extent.

However, to understand the functionality issue in terms of trademark criteria, thethesis will focus only on issues concerning the theory, legislation and practice of thefunctionality of trade marks The other intellectual property regimes are only studiedin terms of their relationship to this topic That means the other regimes like patent,design or copyright law, even intellectual property law in general, are only analysed tosupport the main purpose of the thesis, and we do not consider all aspects of eachright Competition law is a very interesting and difficult issue Although it is analysedin my work, this is also based on the main purpose of my thesis and competition law isonly studied to the extent it is affected by the functionality issue.

Moreover, in my research, I found that there are many aspects of other laws which canaffect the functionality issue and the functionality issue can also affect many otherissues in the trademarks field, both in theory and in practice However, in order tounderstand and to try to reach the general issues concerning functionality with the aim

of introducing and applying it in Vietnam, I will focus on the main issues only Suchare the delimitations for my research.

The thesis begins with this Introduction covering some general issues These are thesubject of the thesis which expresses my first view of the functionality issue intrademark law; the purpose of the thesis raising the main goals I am pursuing; the

method and material used in the thesis; the delimitation made and the outline for the

The main issues are expressed in five Chapters, namely: Chapter I - Background;Chapter II — The issue of the functionality of trademarks in the legislation and practiceof the United States; Chapter III - The issue of the functionality of trademarks in thelegislation and practice of the European Union; Chapter IV - The issue of thefunctionality of trademarks in the legislation and practice of Vietnam; and Chapter V -Conclusions.

Chapter I briefly introduces the main legislation regulating trademarks, includingcertain international agreements and some national legislation These documents arequickly reviewed as to their main contents and to confirm the non-existence of anyregulation of the issue of the functionality of trademarks in these documents In thisChapter, the first view of functionality issue appears along with an approach to itsbasis and its importance in the intellectual property system By virtue of theseanalyses, the issue of functionality will need to be considered in detail in later parts ofthe thesis.

Chapter I] and Chapter HI cover the legislation and practice relating to thefunctionality issue in the United States and the European Union As the country wherethe functionality issue was born and where it has been paid much attention, the UnitedStates’ experience gives many precious lessons for the application of functionality.The issue has been analysed in detail in both the Supreme Court and State courts Thefunctionality picture drawn is a diversified whole in which the issue has been dividedinto different kinds, approached from opinions of judges both for and against it,intellectual property experts and commentators At the end, we comprehensivelyunderstand the content, important role and difficulties and twists concerningfunctionality in the United States The European Union’s experience also revealsmany aspects of the functionality issue However, these lessons are more general thanthose arising in the United States The difference is not difficult to understand and islinked to differences in the economic and social situations in the places While

experience in the United States gave rise to a detail examination of functionality oftrademarks in a federal country, the European Union focussed on the functionalityissue as a factor giving rise to the need to provide a united approach to all MemberStates of the Union.

In Vietnam, the functionality of trademarks has not appeared to date Chapter IVexamines Vietnamese Intellectual Property Law and some related legal documents todetermine the non-existence of the issue In Vietnamese intellectual property law,there are some regulations which are similar to the functionality issue These areanalysed in detail to show the differences on the topic as based on my own analysis Inthis Chapter, I also show that in practice, too, the functionality issue has not yetappeared in Vietnam.

Chapter V is a synthetic one Based on the analysis of the issue in the United Statesand in the European Union, a comparison between the two countries is made, mostlyconcerning different aspects of the understanding of functionality Then, functionality

of trademarks is analysed Thanks to the detailed comparative review of experience inthe United States and in the European Union, I try to analyse both the advantages anddisadvantages of the application of functionality in a law system by my own approach.The functionality issue is covered in all its aspects All this is ground for consideringits importance to the intellectual property system in general and to the Vietnameseintellectual property field in particular as well as applying it within the Vietnameselaw system My proposals for how Vietnamese law should incorporate functionalityderive from general principles and detailed review of the issues.

TRUNG TAM THONG TIN THU VIEN

TRƯỜNG ĐẠI HOC LUẬT HA Nội

PHÒNG poc ZEC) 2ŒLENS (27 j Ì

CHAPTER IBACKGROUND

In this Chapter, I expect to take a background for researching issue of functionalityissue of trademarks in next parts of thesis By reviewing main internationalagreements and national legal documents concerning intellectual property field, maincontents of these materials raised with determination of inexistence of functionalityissue in these ones Since the topic issue is functionality of trademarks, instead of thefunctionality of all different regimes in intellectual property system, some mainaspects of trademarks also described to have a specific ground relating trademarks `knowledge All legislations and trademarks’ main aspects are not analyzed in detailas researching objects These ones expressed as introducing and starting my research,with very general information.

The functionality issue of trademarks also raised somewhat in the last part of thisChapter Instead of expressing all main elements of this issue, I only raise it as anintroduction of its appearance in intellectual property system, as an issue oftrademark field Ultimate existence of this issue, thus, is analyzed without anyconclusion Because of its very complicated and diversified characteristics, concreteaspects of this issue should be analyzed in next Chapters to have a correctdetermination of the functionality issue of trademarks.

1.1 Overview of trademark history

From the earliest times, human beings have used marks to designate ownership,whether as property owners or manufacturers It is considered probable that they alsoused marks to indicate the ownership of livestock In caves in which primitive humanswere living around 5000 BC, archaeologists found cave drawings which show bisonwith svmbols on their flanks which they assumed to be ownership marks Similarmarks are also found on pottery.

Later, marks were used to indicate the makers of goods and to serve as a guarantee ofthe quality of their work Evidence from 3500 BC shows that Mesopotamiancommodities are identified with cylindrical seals while stone seals seem to have beenused in Knossos on Crete Archaeologists have also found bricks, pottery, quarrystones and roof tiles from the First Dynasty Egypt of 3000 BC with many marksbelieved to be ownership marks, potters’ seals near Corinth (products dating from2000 BC ) and the stamped ceramics used on locally made Greek pottery (products of

the 6" to the 3" century BC) This use of marks was at its height in the Roman

Empire with documented evidence of the economic use of trade marks For example,even simple bricks were stamped with a mark.

There is very little documentation on how marks were used between the fall of theRoman Empire and the start of the Renaissance The purpose of marks also changedrapidly during this period Marks were initially used to identify the maker and protectthe consumer Their use changed to that of identifying a maker by way of his guildand to protecting guild monopolies: marks were thus gradually recognized as a benefitto the maker During a time when explicit advertising was regarded as unfair, amaker's reputation would be tied to his mark Eventually the value of the mark, asproperty, was recognized, although the laws protecting this were initially rather vague.From the time of the Renaissance, trade marks have been used with their ‘real’meaning as currently understood '

'® The earliest English law on trade marks appeared in 1266; during the 15th and 16th centuries, the

laws become more strict; and in 1618, we have the first reference to infringement (Southern v How): aclothier making inferior cloth was using the mark of a superior clothier (This case is considered a linkbetween the “merchants' marks” of the Middle Ages and modern commercial trademarks) See also: thewebsite of University of Texas Libraries as following: http://www.lib.utexas.edu.

From then on, trade marks became a very popular notion in the field of intellectualproperty; the display formats for trademarks are multiform'’ and the law concerning

trade marks has changed with their growing importance in all aspects of moder life.'*

1.2 Legislation regulating trademarks

In this part, some legislations regulating trademarks are raised These legislations areexpressed very briefly to introduce, instead of analysing Purpose of expressing thesedocuments is only giving a fact that in these ones, there is not any concrete articleswhich regulating the issue of functionality of trademark To have a general view, two

kinds of legislations are expressed, including: international and national legislations.And because trademark law is only one of many different intellectual property laws,some legislations in which all intellectual property laws are regulated also areexpressed, in both international and national level.

1.2.] International agreements

1.2.1.1 The Paris Convention'®

The Paris Convention is the earliest international agreement regulating industrialproperty issues Its wording is quite broad and applies to all kinds of industrialproperty including patents, trade marks, industrial designs, utility models, trade names(designations under which an industrial or commercial activity is carried on) andgeographical indications The substantive provisions of the Convention fall into threemain categories: national treatment, the right of priority and common rules applying tointellectual property issues.”°

Traders who operate their business on more than a local level will want to protect theirmarks on a transnational basis The earliest ‘tool’ for these issues is this Convention Itrequires its members to apply the principle of national treatment That means that, inall member states, foreign nationals of contracting states have to be treated similarly to

the state’s own nationals.”’ This ensures the possibility of protection for foreign trade

marks, waich is further facilitated by other provisions in the Convention.

'” See alsc: the website of University of Texas Libraries as following: http://www.lib.utexas.edu:trademarks are no longer limited to words and flat visuals, but can be three dimensional, a sound or

group of sounds, a color, or a scent.

'# Some main aspects of trademarks will be expressed in next pages, in Part 1.3.

'? The Paris Convention for the Protection of industrial property was signed on 20 March 1883, came

into effect on 7 March 1884 and was revised at Brussels in 1900, at Washington in 1911, at The Haguein 1925, at London in 1934, at Lisbon in 1958 and at Stockholm in 1967 It was last amended in 1979.

?° There are still some administrative regulations for implementing the Convention.*! Paris Corvention, Article 2.

The Convention provides for the right of priority in the case of patents, trade marksand industrial designs A right of priority will be given to registrants or their legal

heirs; the period of priority is relatively short and lasts only 6 months.”

The Paris Convention also lays down a few common rules which all contracting Statesmust follow For trade marks, the most important common rule is the independence ofthe protection of the same mark in different member states But there is no regulationabout the conditions of the filing and registration of marks These issues aredetermined by the domestic law of each contracting State.”

Because the Paris Convention is the earliest international agreement regulatingindustrial property issues and issues are regulated in rather general form, thefunctionality of trade marks is not covered by it.

1.2.1.2 Madrid Agreement and Madrid Protocol”

The Madrid system consists of two treaties, the Madrid Agreement, which has been inexistence since 1891 and the Madrid Protocol, which was only established in 1989.The Madrid Agreement is a special Agreement under the Paris Convention; onlyparties to the Paris Convention may join A country can be a member of both theAgreement and Protocol, or just one of them.”

Under the two documents, system for international registration of marks has been

established.5 The Madrid Agreement provides member states with a means to obtain

a multi-nation trademark registration After a home nation registration is obtained, aninternational application is filed with the World Intellectual Property Organization(WIPO) The Madrid Protocol makes the Madrid system more attractive ininternational registrating trademarks The streamlined process can result in substantialcost savings when compared to filling separate applications in each country.

Main contents of the Madrid system are international registering trademarks In boththe Madnd Agreement and the Madrid Protocol, although two materials play very

”? Paris Convention, Article 4 (C) (1).3 Paris Convention, Article 6.

4 The Madrid Agreement was signed on 14 April 1891 and came into force in 1892 The MadridProtocol was adopted in 1989, entered into force in 1995 and came into operation on April 1* 1996.” For example, the US adhered to the Protocol but not the Madrid Agreement.

© The Madrid system permits simultaneous registration of trademarks and service marks in more than

60 counties using a single, standardized application The Madrid System is administered by WIPO OnJuly 1, 2004, the Council for the EU deposited its articles of accession with the World Intellectual

Property Organization (WIPO), making the EU the newest member of both the Madrid Protocol and the

Madrid System.

important role in international documents for trademarks, the issue of the functionalityof trade mark was once again not treated.

1.2.1.3 TRIPS Agreement”

The extent with which intellectual property rights are protected and enforced varieswidely and, as intellectual property became more important in trade, the different

ways different countries faced intellectual property issues became a source of tension

in international economic relations New internationally-agreed trade rules relating tointellectual property rights were seen as a way to introduce more order andpredictability, and to allow disputes to be settled more systematically The TRIPSagreement was born from these requirements.

TRIPS is an attempt to narrow the gaps in the ways intellectual property rights areprotected and to bring them under common international rules In doing so, it strikes a

balance between the long term benefits and the possible short term costs to society.”®

It establishes minimum levels of protection that each member government has to giveto the intellectual property of fellow World Trade Organization (WTO) members.The agreement covers five broad topics: the basic principles to be applied tointernational intellectual property; adequate protection for intellectual property rights;adequate enforcement by member states of those rights in their own territories;settlements of disputes on intellectual property between members of the WTO; specialtransitional arrangements during the period when the new system is being introduced.The areas of intellectual property that are covered are: copyright; trademarks(including service marks); geographical indications; industrial designs; patents; thelayout-designs of integrated circuits; and undisclosed information.

Regarding trademarks, the agreement defines what types of sign can be protectedunder trademark law together with minimum rights for trademark owners TRIPS alsoregulates the protection of service mark-like trademarks and well-known trademarksalso rece:ve additional protection.

” The World Trade Organization’s (WTO) Agreement on Trade-related Aspects of IntellectualProperty Rights (TRIPS) was negotiated in the 1986-94 Uruguay Round It entered into force on

January 11995.

8 Society benefits in the long term when intellectual property protection encourages creation and

invention, especially when the period of protection expires and they enter the public domain.

Governments are allowed to reduce any short term costs by way of various exceptions, for example to

tackle public health problems When trade disputes over intellectual property rights arise, the WTO's

dispute setlement system is now available.

In conclusion, the TRIPS agreement introduced intellectual property law into theinternational trading system for the first time and remains the most comprehensiveinternational agreement on intellectual property to date The agreement makes a majorchange to the international intellectual property system, though, in general, TRIPSbuild on aspects of the Paris Convention and the other prior international agreements.But, there is still no regulation of the issue of the functionality of a trade mark inTRIPS.

Brief conclusion

As we see, the international legislation which regulates the issues of intellectualproperty in the world includes some major documents In these treaties, the objects ofintellectual property have been regulated in many ways from the time of the earliest ofthem (the Paris Convention) However, the issue of the functionality of trade mark isnot regulated in any of the documents discussed.

1.2.2 National legislation

1.2.2.1 Trade mark legislation in the United States

In the US, there are two basic sources of both trade mark law in particular andintellectual property law in general: Federal law and State law.

Federal law

Under explicit provisions of the US Constitution, Congress enacted the US copyright

and patent laws, dealing generally with writings and inventions.” Other Congressional

legislations have been enacted under the Commerce Clause of the US Constitution.Follow that, “[T]he Congress shall have Power to regulate Commerce with foreign

Nations, and among the several States, and with the Indian Tribes”.*° Under this

Clause, Congress enacted the US trade mark laws There is also a considerable bodyof state law in the field that complements federal trade mark legislation.

The first Trade mark laws of the US were enacted by Congress in 1870 and 1876.”Those statutes were declared unconstitutional by the US Supreme Court in 1879.”

The Court held that Congress had no power to regulate purely state matters such astrade mark rights.

? Article |, Section 8, Clause 8 of the US Constitution authorizes Congress to grant to authors and

inventors for a limited time the exclusive right to their writings and discoveries.

?9 Article 1, Section 8, Clause 3.

31 A.R.Miler and M.H.Davis, “Intellectual property: Patents, Trademarks and Copyright” 2" ed, p 147

West Publishing Company, St.Paul 1990.

* See case United States v Steffens, 100 U.S 82, 25 L.Ed 550 (1879).

In response to such cases, Congress passed statutes in 1881 and 1905 solelyaddressing interstate use of trade marks In 1946 Congress passed the most recent

substantial revision of federal trade mark legislation, the Lanham Act.? Up to now,

this Act has been amended many times and this Act is sill the federal trademarks lawwhich can be applied in the US.

State law

In fifty US states, each state also has their own body of law which deals with theirown matters So, whereas federal law partially occupies the field of trade marks, eachstate owns their law on intellectual property field, including trade marks State law,cannot, however, override or interfere too significantly with Federal law.

Although the laws of the various states do not differ much in the field of intellectualproperty, subtle nuances sometimes exist and may become important if one also has to

settle a threshold issue of “which state law applies” to a given controversy.**

Brief conclusion

The US trade mark legislation system seems quite complete As analyzed in Chapter 2below, a novel notion, namely, the functionality of trade marks made its appearance inthe US law system, including legal documents and cases law Its analysis in detail inthe US is very useful and important to understand this issue.

1.2.2.2 Trade mark legislation in the European Union.

‘The Treaties’ of European Union”

‘The Treaties'” of European Union include two treaties which are the Treaty on

European Union?’ and the treaty on the Functioning of the European Union.** ‘The33 The Lanham Act is the trademark law in effect today Its purpose is to eliminate unfair competition

in marketing goods and services and to provide the owners of marks with protection againstconfusingly similar marks It covers such areas as when owners of marks are entitled to federalprotection for infringement, the types of protection available, and the procedures for registering marks.It allows for the registration of service marks.

* E.W.Kintner and J.L.Lahr, “An intellectual property law primer”, New York, Macmillan Publishing

Company (1975).

*° In the Treaty on the Functioning of the European Union, Part One-Principles, Article 1(2) regulates:

“This Treaty and the Treaty on European Union constitute the Treaties on which the Union is founded.These two Treaties, which have the same legal value, shall be referred to as ‘the Treaties’”.

3 Actually, ‘The Treaties’ of European Union have not main purposes of regulating trademark law orintellectual property law only However, to be considered as the grounds of all regulations in the EU’s

legal system, these documents are expressed in this part to set very important grounds to understand theissue of functionality of trademark in next chapters in my thesis.

3” Treaty on European Union (TEU) was signed on 7" February 1992 and entered into force on 1“January 1993.

*8 The Treaty on the Functioning of the European Union (TFEU) was signed on 25" March 1957 It is

the renamed one of the Treaty on European Community (EC Treaty) from 2009 Based on this fact,

Treaties’ express a new stage in the process of European Integration undertaken withthe establishment of the European Union (EU) All common issues of the Union areregulated in the two legislations One ground which is very important to understandspecific characteristics of the functionality issue in the EU in comparing to the issue in

the US.”” as “to ensure economic and social progress of their State by common actionto eliminate the barriers which divided Europe”.”°

In the Treaty on Functioning of the European Union, the whole intellectual property

field is covered by the term “industrial and commercial property”.’' Industrial and

commercial property is considered in that part of the Treaty concerning freemovement of goods issue One content of this requirement is providing a generalprohibition of quantitative restrictions between Member States Over and above this,competition protection rules might impact on intellectual property, although this doesnot directly regulate intellectual property issues These grounds should be used toanalyzed the issue of functionality of trademark in the EU.

‘The Treaties’ are very general and regulates all common issues affecting the EU,trademark, as just one aspect of intellectual property law are not in any detail by them.Thus, the issue of functionality of trademark is not regulated in these legal documents.And because of their general meaning, trademark issues are rather to be found in thesecondary legislation — Regulations and Directives.

Council Directive 89/104/ EEC”

Trademark protection is, by nature, territorial The EU is formed from many MemberStates and differences between the trade mark laws of Member States are likely.Because of the wide disparity in national trademark laws and their impact on theinternal market in the EU, the necessity of some harmonization at the Communitylevel was clear Council Directive 89/104/EEC was the end result.

The Directive defines trade marks as well as the rights (and limitations) attached totrade mark ownership The Directive also provides common grounds for the refusal ofregistration, invalidity and loss or exhaustion of trade mark rights The main purpose

there are many cases held at equal time of EC Treaty So, in my thesis, | still keep originally text ofthese judgments In these ones, EC Treaty of that time is equal to TFEU now.

*° This content is expressed in part 5.1 in Chapter V.

*° The Treaty on the Functioning the European Union, Preamble.

* The Treaty on the Functioning of the European Union, Chapter 3-Prohibition of Quantitative

Restrictions between Member States, Article 36: “ the protection of industrial and commercial

” First Council Directive 89/104/EEC in December 21" 1988 approximating the laws of the Member

States relating to trade mark See OJ EC No L40/1, 11.2.1989, p1-7.

of the Directive is to harmonize issues relating to the extent of the trade mark field andto ensure that the conditions for obtaining and continuing to hold a registered trademark right are the same in all Member States However, the ECJ has commented thatthe Directive does not change the essential character of national trade mark law, which

remains essentially territorial and independent.”Council Regulation (EC) no 40/94“

In order to provide for harmonization at Community level more effectively than wasdone by Directive 89/104/EEC, Council Regulation 40/94 was passed Comparing it

with the Directive, one sees some similarities*® as well as some differences”” Themost important novelty in the Regulation is the introduction of the Community Trademark (CTM)*”.

The CTM gives EU wide trademark protection with unitary effect Simply by filing asingle application for and registering a CTM, trademark protection is provided in eachof the EU member states Once registered, a Community Trademark is also subject toa single set of uniform rules These rules relate, for example, to the scope of protectionof the mark, to its renewal, the invalidation of the registration and to all possible legalproceedings relating to it The proprietor of the (registered) Community Trademarkshall enjoy exclusive rights to the mark, implying that he can prohibit the use of hismark by third parties throughout the EU.

The Directive and the Regulation are, however, now end of force because belowCouncil Regulation (EC) no 207/2009 Expressing these documents in this part, Iwant to raise its important in guiding trademark revolving practice in the EU Andthere are two reasons for expressing them First, some cases which researched in mythesis took part in the time of these documents*® and these documents were appliedinto judgments Second, as expressing at the below part (about the Council Regulationno 207/2009), even ending of force, contents of these documents are still used inpractice.

“3 See caseC 9/93 IHT Internationale Heiztechnik GmbHv Ideal - Standard GmbH.

“* Council Regulation (EC) No 40/94 in December 20" 1993 on the Community Trade mark Toimplement this Regulation many other acts were adopted, for example: Commission Regulation (EC)

no 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community

Trademark Commission Regulation (EC) No 1041/2005 of 29 June 2005 amending Regulation (EC)no 2868/95 implementing Council Regulation (EC) 40/94 on the Community Trademark.

“> For example, Council Regulation (EC) No 40/94 Article 4, Article 12, Article 13.

“© For example, Council Regulation (EC) No 40/94 Article 17, Article 22 (containing more detail);

Article 5, Article 19 (it is regulated new).

“7 The Conmunity Trademark System (CTM) became fully operation on 1“ April 1996.

“8 In such cases, to respect its original value, these documents are still quoted in these cases in my

thesis.

Council Regulation (EC) no 207/2009'”

The new Council Regulation (EC) no 207/2009 entered into force on 13 April 2009.This Regulation is an official codification and repeal Council Regulation (EC) No40/94 and its successive amendments It replaces them with a single act and contains

no substantive change.” Because of its present competent, in any cases involving

trademarks, its numbering articles will be applied into such cases.Brief conclusion

In EU trade mark legislation, there is no concrete provision regulating the notion ofthe “functionality of the trade mark” However, this issue does appear in analyses of

Ề § Ề š 5

the legislation as well as in cases concerning trade marks.”

1.2.2.3 Trade mark legislation in Vietnam

Intellectual property is a fairly new sector of Vietnamese legislation The legislation inthe field should be studied as falling into two periods: before and after the passage ofthe Vietnamese Civil Code.

Before the Vietnamese Civil Code

In the 1980s, the intellectual property field saw many Decrees of the Vietnamese

Ministers Council (now the Vietnamese Government).” In December 14” 1982,

Decree no 197/HDBT was established to regulate trade marks It was the firstVietnamese legislation on this specific topic.

Based on the character of this period, one of collective planning in the economy, theregulation of trade marks focused on protecting marks belonging to State undertakingsand offices The solutions were purely administrative ones, such as allowingcomplaints to competition offices (for example, police, customs or finance offices) orPeoples Committees It was only in cases involving serious breaches that the problem

could be given to Courts.*? That is the reason why, during this period, trade marks did

“ Council Regulation (EC) no 207/2009 in February 26" 2009 on the Community Trademark.

°° For example, comparing it with Regulation 40/94, one sees no change from Article 1 to Article 36.

The Articles referring to cancellations and appeals have changed as has the numbering of Articles

37-160 The main implication of the change is that care should be taken when reviewing texts referring to

the old Regulation A correlation table has been produced to assist in cross-referencing between thenumbering in the current and earlier Regulations

*! Analyzed in detail in Chapter II] about functionality issue in the EU.

* Decree no 85/HDBT May 13” 1985 about industrial design; Decree no 200/HĐBT December 28"1988 about utility solutions; Decree no 201/HDBT December 28” 1988 about purchasing and selling

the right to use patents, utility solutions, industrial designs, trade marks and technical know-how.

°? Circular no 1258 of State Scientific and Technical Committee guides application of Decree no 197.

not play an important role for manufacturers No one cared about trade marks, goods’designs and the like because there was no competition in the market and all productionwas controlled by the State.

Since 1986, Vietnam has been transformed The economy changed from a collectiveplanned economy to a market economy Thanks to that, the role of trade marks

became more and more important An OrdinanceTM protecting industrial property

rights was established and it transformed all aspects of this field According to it, andfor the first time, the courts rather than the competition office had priority in solvingdisputes in the industrial property field One of the most important principles of theOrdinance is that of equal protection of industrial property rights as between all kinds

of economic actors.”

As a major part of the overall renovation policy, foreign economic activities have beenencouraged and protecting their industrial property rights has become an importantrequirement.

After the Vietnamese Civil Code

The Vietnamese Civil Code®® systematized the Vietnamese law system In Part 6",

there is now a whole Chapter?’ regulating industrial property rights Article 780

“Industrial property rights” states: “Jndustrial property rights are the ownership rightsof individuals and/or legal persons over inventions, utility solutions, industrialdesigns, trade marks; and the rights to use the appellation of origin of goods as wellas ownership rights over other objects as provided for by law”.

In order to concretize the general provisions in the Vietnamese Civil Code, theGovernment further promulgated Decree no 63/CP** This Decree regulates matters in

great detail and covers almost all issues relating to industrial property rights.Provisions on trade marks can also be found in legal documents of other Stateauthorities, such as the Ministry of Science, Technology and Environment and theMinistry of Trade.

*4 Ordinance protecting industrial property right announcing February | 1" 1989 following the Order no.13 LCT/HDNN of State Committee President.

°° Ordinance protecting industrial property right announced February 11" 1989: Article 1.

° The Vietnamese Civil Code was approved by the Vietnamese Parliament in October 281995 and

came into force on July 1° 1996.

°? Part 6 — “Intellectual property rights and transferring technology”, Chapter II — “Industrial property

*® Decree no 61/CP was established in October 24" 1996 by the Government to detail the provisions onthe industrial property field in the Civil Code, and was amended by Decree no 06/2001/NĐ-CP on

February 1Ÿ 2001.

As of 1.1.2006, the Vietnamese Civil Code was reformed Intellectual property issuesare still regulated in Part the sixth covering Intellectual Property rights andTechnology Transfers The part includes three chapters: copyrights and related rights;industrial property rights and plant variety rights; and technology transfers In thereformed Civil Code, intellectual property issues are now regulated in a more generalway The details will be set out in another separate document — the Law on IntellectualProperty In whole the Civil Code, the issue of functionality of trademarks is notregulated yet.

The Vietnamese Intellectual Property Law

Since intellectual property issues were only regulated in one part of the Civil Code,the Vietnamese intellectual property system still faced some difficulties Only certainintellectual property issues were regulated while many important matters likeprocedure, enforcement and, in general, the ways of protecting intellectual rights werenot treated as they are regarded as essentially criminal or administrative matters.Moreover, as intellectual property covers a broad field, including many types ofartwork as well, a few general regulations in the Civil Code are not enough for thewhole arena That is why there are many other documents and decrees regulating thefield The Vietnamese intellectual property system could therefore be seen as unstableand strongly in need of reform.

The new Vietnamese Intellectual Property Law was adopted in 29" November 2005

by the National Assembly of Vietnam and came into force on 1Ÿ July 2006 This law

marks a new period in intellectual property law in Vietnam All intellectual propertyissues are now regulated by national law, not by secondary legislation or decrees Theintellectual property environment should improve and many opportunities have arisenas a result of this change.

The Vietaamese Intellectual Property Law covers copyright, rights akin to copyright,industrial property rights, plant breeder rights and their protection.

Adoption of this law has made the intellectual property situation in Vietnam moresystematic and complete and has thus remedied certain inadequacies The appearanceof the Inellectual Property Law must be seen as the most important event in theintellectual property field in Vietnam The Law will mark a new period in this field:when it :ppears, intellectual property rights will be fully regulated by a high legalvalue dccument Although no great breakthrough or changes are likely, the

appearance of the Intellectual Property Law lays the foundation for futuredevelopments which will doubtless cover all aspects of the Vietnamese intellectualproperty field.

After the Intellectual Property Law came into force, there was some further secondarylegislation which were adopted to aid in the application of the Intellectual Property

Law Some of the most important documents are: Decree 100/2006/NĐ-CP in 21”

September 2006 for implementing some articles in 2005 Civil Code and Intellectual

Property Law about copyrights and related rights, Decree 103/2006/ND-CP in 22"

September 2006 regulating in detail and directing the implementation of some articlesof the Intellectual Property Law concerning industrial property rights, Decree104/2006/NĐ-CP in 22"“ September 2006 regulating in detail and directing the

implementation of some articles of the Intellectual Property Law concerning plant

varieties, Decree 105/2006/NĐ-CP in 22TM September 2006 regulating in detail and

directing the implementation of some articles of the Intellectual Property Law on theprotection of intellectual property rights and State management of intellectual

property, Decree 106/2006/NĐ-CP in 26” September 2006 for handling ofinfringement of industrial property rights with administrative remedies.

The 2005 Civil Code, the Intellectual Property Law and the rest of the legislation formthe background for the protection of creativity in society, and the development ofintellectual property activities in general and will play an important role in theinternational integration of the intellectual property system of Vietnam.

However, there turned out to be a few inappropriate regulations and, to resolve theseproblems, an amended and supplemented Intellectual Property Law was adopted in

19" June 2009 by the X" Vietnamese National Assembly, and was into force on 1"

January 2010.

However, in the whole of the Intellectual Property Law, whether the 2005 or the 2009

version, we do not find anything about trademark functionality.”

1.3 Main issues concerning trade marks1.3.1 Trade marks’ functions

The law of trademarks developed to deal with the problem created when severalbusinesses started using the same mark, a situation that tended to create confusion

among consumers.

°° It will be analyzed in detail in Chapter IV about Vietnamese contents.

Trademark plays a very important part in the market Manufacturers, wholesalers,retailers, agents and consumers use trademarks to identify, order, catalogue, advertise,sell or buy products Thus, a trademark can function in a number of different ways.For example, Jenkins said that:

“A trade mark is a means of identification It has four primary functions The first is

to signify that all goods bearing the trade mark come from a single source The second

is to convey to the buying public a guarantee of quality The consumer should know

that, from purchase to purchase, the favorable characteristics of the goods bearing thetrade mark remain the same The third is to allow one trader to distinguish his goods

from those of his competitors The fourth is to promote the goods”."°

However, the trademark’s functions and uses appear, in practice, to fall into threemain categories: origin, quality and advertising.

Trademarks are used to identify the actual physical origin of goods and services Inmy opinion, this function is the most important one It helps show the source of goods,protects consumers from confusion and helps preserve fair competition Thus, in itsexplanatory memorandum on the creation of the Community trademark, the EC

Commission refers to a trademark’s function: “of providing consumers with a guide to

the particular origin of the product and its particular quality and characteristic,

although these are not legally guaranteed”.5' It then firmly adds: “Both economically

and legally the function of the trademark as an indication of origin is paramount From this basic function of the trademark are derived all the other functions which thetrademark fulfils in economic life” Again, “the registered trademark, the function ofwhich is in particular to guarantee the trademark as an indication of origin”.

The trademarks’ function is also to guarantee the identity of the origin of goods andservices The function of trademarks is to guarantee the identity of the origin of themarked product to the consumer to avoid their confusion As Jeremy Phillipscomments about this function of trademarks:

“addresses the relationship of the trademark owner to his competitors by enabling himto keep his channel of communication to the consumer free from interference byother, unauthorized uses of the same or similar trademarks The relationship that the

59 See in http://www.jenkins-ip.com/serv/t_trad03.htm.®! [1990] 3CMLR 571; [1991] FRS 99.

5 Tbid.

53 Para 10 of the preamble to the Directive 89/104/EEC.

law seeks to protect is one of ‘undistorted competition’ between two or more64

Trade marks are used to guarantee both the source and the quality of themanufacturers’ goods Satisfied customers are reassured, by the presence of trademarks, that subsequent purchases will be from the same source and to the samestandard as the first The consumer seeks an assurance that relates to the quality of thegoods or services to which the trademark testifies: “the true function of a trademark is,then, to identify a product as satisfactory and thereby to stimulate further purchases by

the consuming public”.

If a mark properly identifies the source of the product, the public can know the qualityof the source’s goods and will be able to make decisions based on past purchasingexperience In economic terms, trademarks help to reduce the search costs ofconsumers that would arise if they had to check the quality of every product purchased

each time they purchase it."

Trade marks also serve to distinguish between the goods of many different

manufacturers They can be a powerful commercial weapon in favor of fair

competition Because a trade mark provides protection to the owner of the mark byensuring him the exclusive right to use it to identify goods or to authorize another touse it in return for payment They can also be a powerful, legal weapon against unfair

competition."” The legal protection of trade marks hinders the efforts of unfair

competitors, such as counterfeiters, using similar distinctive signs to market inferior ordifferent products or services The system enables people with skill and enterprise toproduce and market goods in the fairest possible conditions, thereby facilitatinginternational trade.

A well-chosen mark can play a significant role in the success of a promotionalcampaign Some marks are chosen to complement a proposed advertising theme,others are adopted to echo someone else’s effective advertising With the growingneed for investment in advertising and in the quality and distribution of the product itdenotes, a mark becomes an important asset This is reflected in the proprietary natureof a registered mark, which is stated to be personal property, which may be assigned,* Jeremy Phillips , “Trademark law — A practical anatomy”, part 2.31, Oxford University Press 2003.® Frank Schechter, “The rational basis of trademark protection”, Harvard Law Review Volume 40

(1927) (This notion is more popular in American trademark theory than in EU law).

® Daniel C.K.Chow, Edward Lee, “International intellectual property - Problems, cases and materials”,

p474-475, Thomson West, Publisher: Gale Cengage (2006).

*” See in http://www.jenkins-ip.com/serv/t_trad03.htm.

disposed of by will or transmitted by operation of law.® In a larger sense, trade marks

promote initiative and enterprise worldwide by rewarding the owners of trade markswith recognition and profit.

In conclusion, “trademark laws confer on the proprietor the exclusive right to preventall third parties not having the consent of the owner from using in the course of tradeany sign which is identical with the trademark or any sign whose similarity to thetrademark is such that there exist a likelihood of confusion on the part of the public

between the sign and the trademark”.

1.3.2 Trademarks protective requirements

The term “trademark” is used to indicate a legal status To be protected as a lawfultrademark, any sign has to meet some requirements which are often determined byeach country However, there are still some requirements which are often applied totrademark examinations in different countries Thus, to be registered as a trademark, asign must ‘satisfy’ at least these requirements.

In general, there are two ‘groups’ of trademark protection requirements: trademarkfunction related requirements and trademark result requirements They are regulated

in national trademark law in each country."” They are also expressed by the Paris

Convention in regulating a trademark may be denied registration when they are devoidof any distinctive character and when they are contrary to morality or public order

and, in particular, of such a nature as to deceive the public.”

The firs: requirement relates to a trademark’s basic function: distinguish the trademarkowner’s goods from those of others Thus, a trademark has to be distinctive Forexample, in US trademark law, the requirement of distinctiveness is an articulatedpolicy of federal registration Follow that, “[N]o trademark by which the goods of theapplicart may be distinguished from the goods of others shall be refused

The requirement of distinctiveness is roughly analogous to the requirement of noveltyfor patent rights and to the requirement of originality for copyright Without*8 Alison Firth, “Trademarks the new law”, p 11, Jordans Publishing (1995).

® Frederick Abbott, Thomas Cottier, Francis Gurry, “The international intellectual property system:Commentry and Materials”, p.129, Publisher: Kluwer Law Intl (1999).

” Each country can add requirements to trademark protection But, in my view, the two kinds of

trademark protection requirement are usually adequate.

” Paris Cmvention, Article 6quinques, (B) (11) and (iii).” 15 USCA §1052.

distinctiveness, a trademark will fail, and it will not be able to be developed by theowner through marketing ” Fundamentally, a trademark must be distinctive if it is toserve the function of identifying the origin of goods and avoid confusion, deception ormistake If a trademark is to protect purchasers from confusion over what they arepurchasing, then the trademark must be recognizable, identifiable and different fromother marks.

The second requirement relates to trademark use ‘results’ in the market If a signincludes deceptive features, it will not be accepted as a trademark Trademarks whichare contrary to morality or public policy will also be denied registration A deficiencyof this nature is an absolute bar to registration Provisions of this nature can be foundin the law or practice of most countries, though the terminology varies Public policyand morality are concepts which we can all understand, but the standards may be hardto apply to a specific set of facts So, this requirement is often regulated in detail in thetrademark law of each country.

Most countries have further rules prohibiting the registration of trademarks Barsrelating to the form of a trademark may look at whether it constitutes a sign, whetherit can distinguish goods from those of others, whether it is capable of beinggraphically represented Bars relating to the meaning of a trademark may relate towhether the meaning is descriptive or generic, whether it is deceptive, whether it is thesame or similar to a word (or any feature) which has been reserved exclusively for non

trademark use or whether the mark is contrary to morality or public policy.”

A trademark is registrable only if it can satisfy the criteria of registrability which thetrademark law lays down The question of the criteria used in the trademark law ofeach country are based on its characteristic history, culture, society and economy.However, the minimum level or basic requirement can be found in internationaltrademark legislations and most countries tend to follow these standards.

In Article 15 on protect able subject matter, TRIPS says: “Any sign, or anycombination of signs, capable of distinguishing the goods or service of oneundertaking from those of other undertakings shall be capable of constituting a” In some countries and areas like the US or the EU, distinctive ability can be proved by the inherently

distinctive characters of trademark registered articles or it can be gained by use That means that in

some cases, the registered articles have no inherent distinctive characters which fulfil the trademarkrequirement, but through long use of the sign in the market, the article can be distinguished from others.In that case, it has become distinctive by use (the secondary meaning) and can be accepted as atrademark.

TM Jeremy Phillips, “Trademark law - A practical anatomy”, Oxford University Press 2003.

trademark Where signs are not inherently capable of distinguishing the relevantgoods or services, Members may make registrability depend on distinctiveness acquirethrough use.”””[emphasis added.] Because of the purpose of setting the minimumstandards in intellectual property protection, in TRIPS, the heart of a trademark can beviewed as the distinctiveness requirement This is reasonable if one is looking attrademark characteristics In my view, these fact are also reasons for that in countrieswhere the intellectual property system is new, the focus is always on thedistinctiveness requirement and little or no attention is paid to functionality issues.However, the functionality issue is quite separate from the distinctiveness issue Insome developed countries, however, considering functionality may take place before adistinctiveness examination This means that, if the mark in question is considered ashaving functional features, it may be refused as a trademark before even applying thedistinctive test, or, even if it does have a distinctive character, it will be refused

trademark protection on functionality grounds “

1.3.3 Trademarkable signs

The possibilities are almost limitless Still, each geographical area has specificregulations about the kind of marks which can be registered and, in general, there areonly certain signs which can meet the conditions called for by a trade marks’ functionand can thus be registered as trade marks.

About the signs which can be accepted as trademarks, Article 15, TRIPS states: “Anysign, or any combination of signs, capable of distinguishing the goods or service ofone undertaking from those of other undertakings shall be capable of constituting atrademark Such signs, in particular word including personal names, letters, numerals,figurative elements and combination of colors as well as any combination of such

signs, shall be eligible for registration as trademarks.””7[emphasis added.]

In the US, the Lanham Act has, “[n]o trademark by which the goods of the applicantmay be distinguished from the goods of others shall be refused registration on the

principal register””” and the definition of a trademark includes “any word, name,symbol, or device, or any combination thereof” used “to identify and distinguish his orher goods, including a unique product, from those manufactured or sold by others andto indicate the source of the goods”.””

” TRIPS Agreement, Article 15 Protect able subject matter (1)."5 Detailed analysis in the following chapters.

TM TRIPS Agreement, Article 15 Protect able subject matter (1).

” Lamham Act, 15 USC 1052 Trademarks registrable on the principal register; concurrent registration

(Section 2 of the Lanham Act).

” Lamham Act, 15 USC 1127 Construction and definitions; intent of chapter.

In the EU, the Community trademark “may consist of any signs capable of beingrepresented graphically, particular words, including personal names, designs, letters,numerals, the shape of goods or of their packaging, provide that such signs arecapable of distinguishing the goods or services of one undertaking from those of other

undertakings.”*°[emphasis added |

According to each of these systems of legislation, trade marks may be one or acombination of words (for example, Nike, Kodak, Birds Eye, ), letters (for example,MTV, BP., ), or numerals (S01 (Jeans), 4711 (perfumery), ) When words or phrasesare to be used as trademarks, they must differentiate the goods with which they areused from similar goods, as commentators stated that: “Words that the whole world isfree to use to designate a product or service or to describe its character or quality, orits intended use, are not distinctive and the phonetic or foreign equivalent will not

necessarily convert them into a trademark”.®!

Contrary to popular belief, a word or combination of words need not be invented or

coined to be a good trademark and, in fact, most marks are not.®* Numerals and letterswhether standing alone or in groups that do not make up a word, can be successfultrademarks Such marks are usually remembered easily.

Trademark protection is sometimes sought for pictures that are used either alone or inconjunction with words or other symbols If too descriptive in nature, registration willbe refused But, if the picture is distinctive and serves as an indication of origin, itschances of success are considerably improved.

While trademarks usually take the form of words (or word combinations), numbers,letters or even pictures and symbols, the signs which can be registered as trademarksare broader in nature As market development has led to a huge number of productsfrom different manufacturers, new types of signs are becoming more common thantraditional signs.

Trade marks may also consist of drawings or symbols (for example, Tiger, Michelin,Black Horse, ), three-dimensional signs (for example, shape or packaging of goods

*° Council Regulation 40/94, Article 4 “Signs of which a Community trade mark may consist”.

8! Earl W.Kintner, Jack L.Lahr, “An intellectual property law primer”, p 229, New York, Macmillan

Publishing Company (1975).

*? Earl W.Kintner, Jack L.Lahr, “An intellectual property law primer”, p 229, New York, Macmillan

Publishing Company (1975).

like bottle design or chocolate packaging,), audible signs (for example, music or vocalsounds, fragrances or colors) or slogans (for example, Orange — “The future’s Bright,The Future’s Orange”, Coca-Cola — “It’s the Real Thing”, ).

In some countries, color per se, a sound or a slogan can be protected as a trademark Inmost instances, colors perform a decorative and ornamental function and their numberis limited So, a color as such can not normally be appropriated to the exclusive use ofany individual or corporation and used as a mark though this has been known tohappen A color may serve as an integral part of a valid trademark and when used inconnection with a distinctive shape or design may be granted trademark protection.Like colors, audible signs can be registered as trademarks, but only in certaincountries and after strict examinations These special signs still have to meet therequirements of distinctiveness and source indication, like ‘traditional’ trademarks.Nowadays, the signs that can be protected as trademarks are broad in scope and notlimited to the traditional ones This protection is now regulated formally in legalsystems Based on this background, the functionality issue was born.

1.4 The first sight of the functionality issue within trademark law

1.4.1 Grounds for this issue

Today’s customers are faced with having to make their choices from the huge amountof goods on the market High technology products too have to compete in aninternational market, in a ‘flat? world Based on this, for producers, success in themarket no longer rests on technical issues of quality as in the past The role of designin determining a product’s commercial success is becoming more important As oneEnglish judge observed: “Those who wish to purchase an article for use are ofteninfluenced in their choice not only by practical efficiency but by appearance Manysimply choose the article which catches their eye” Design and the management ofdesign is as central to a progressive manufacturer’s strategy as the product itself AsJ.Hall said that: “[N]owhere is the real essence of a brand more powerfully anddefinitively expressed than in its visual presentation”.**

To describe a product’s appearance, there are words which can be used like shape,design, packaging In some countries, these words are also used as legal terms withnot emirely equivalent legal meanings, although they all refer to a product’sappearence Normally, a product’s appearance is a three-dimensional sign or a shape.

*° Whitferd J Interlego AG v Alex Foley (Vic) Ltd [1987] F.S.R 283 at 295.

84 J Hall ‘Brand development: How design can add value”, The Journal of Brand Management Volume

1(2), (1993).

The term “shape”, however, is often divided into two main types, especially intrademark law: shape of product (product’s design) and shape of packaging Forexample, there 1s a quite famous chocolate brand called After Eight In a box of these,there are many thin rectangular chocolate pieces, that is, the design (or shape) of theproduct These chocolate pieces are then packed into a square-faced box, and it is thisdesign which is the shape of the packaging (or packaging) If a manufacturer wishes toprotect a product by intellectual property rights, they can choose the design of thechocolate pieces and/or the design of the packaging (with or without other decorative

factors, like color and words).®> So, although they all refer to a product’s appearance,

these terms, even if not so different in fact, are used with different meanings in thelaw.

While these general notions are current in many countries," in the US, there is a

specific term, “trade dress”, which is used rather broadly and can be applied in manypractical cases.

In the US, trade dress is understood as a trademark concept because it can be protected

under trademark law.®’ The basic of trade dress protection is Section 43(a) of LanhamAct The original Lanham Act as enacted in 1946 did not mention trade dressprotection.** This issue was first developed in the case law To create a federal law ofunfair competition, the courts extended the protection accorded by Section 43(a) totrade dress The amended Section 43(a) now appears at 15 USC § 1125 (a) (False

designations of origin and false descriptions forbidden) of the Lanham Act” In

*° Which kind of design should be protected is often to be determined from the manufacturers’statements However, in case they do not state any, the trademark offices must decide whether the

application is made for the shape of goods or for the packaging This is decided by the kind of shapeand the kind of goods which the intellectual property right is being applied to For example, if the

product is a bottle and the classification of goods is also bottle, it is the shape of goods If theclassification depends on the contents like, for example water or beer, the application concerns theshape of the packaging.

8° In the EU, the term “shape” is also used with a view to discriminating between design and packaging.

However, with respect to this notion in EU trademark law, so as not to interrupt the logical flow of thisChapter, | would like to introduce and explain the term “shape” in Chapter 3 on functionality of

trademarc in the EU.

8” The statement that: the protection scope for trade dress only arises in trademark law is not correct, asapplying other intellectual property rights to trade dress can be appropriate I introduce this notion

within US trademark law to show the original situation of the term in that legal system and to

understard this notion in its developed history To analyze its ability to protect intellectual property, weshould censider it in relation to the meaning of the product’s appearance in general, as discussed later.% The original Lanham Act which was enacted in 1946 prohibited the “false description orrepresentation” of a product by a “person with knowledge of the falsity `”.

* The se:tion provides in relevant part:

(1) any person who, on or in connection with any goods or services, or any container for goods,

ises in commerce any word, term, name, symbol, or device, or any combination thereof, oriny false designation of origin, false or misleading description of fact, or false or misleading‘epresentation of fact, which (A) is likely to cause confusion, or to cause mistake, or to

conclusion, a product’s trade dress is now protected by the Lanham Act, the federalstatute which regulates trademarks and trade dress.

Trade dress may be defined as “the look and feel” of a product or a service.Historically, trade dress “referred only to the manner in which a product was ‘dressedup’ to go to market with a label, package display card and similar package

elements”.°° That means that trade dress was defined as the totality of elements by

which a product or service is packaged or presented The combination of theseelements created a visual image of the product to consumers In case the combinationis capable of satisfying the conditions for trademark registration, principally denotingthe source of the product, it can be protected under trademark law.

But, nowadays, the view of trade dress is much more expansive The moderndefinition of trade dress includes the total assembly of all elements which can be usedto show the sources of a product on the market Thus, trade dress includes not only thepackage or display but also covers the product’s appearance, shape and/orconfiguration, color or color combinations, texture, graphics or even certain sales

Base on this extremely broad definition of trade dress, the concept has been used toprotect a wide assortment of assets Example of trade dress include the shape of a

MOBIL gas pump”, the design of a Sunbeam household blender”, the shape of a

computer like Mac’s new design for Apple, the design of a Vornado fan, the design of

a Ferrari”, a particular scent or smell for a product or service business”, a single color

like the green-gold color of a dry cleaning press pad”, the exterior and interior décor

of a restaurant”’, even written materials like a computer care firm’s sales brochure,

deceive as to the affiliation, connection, or association of such person with another person, or

as to the origin, sponsorship, or approval of his or her goods, services, or commercial activitiesby another person;

(3) Ina civil action for trade dress infringement under this Act for trade dress not registered onthe principal register, the person who asserts trade dress protection has the burden of provingthat the matter sought to be protected is not functional.

(Lanham Act, 15 USC §1125 (a) False designations of origin and false descriptions forbidden).

” Jeffrey Milstein, Inc v Greger, Lawlor, Roth, Inc., 58 F.3d 27, 31 (2 Cir 1992).*! John H Harland Co.v Clarke Checks,Inc., 771 F.2d 966, 980 q 1" Cir 1983).2 Mobil 2il Corp v Auto-Brite Car Wash, Inc., 615 F.Supp 628 (D.Mass 1984).*3 Sunbezm Products Inc v West Bend Co., 44 USPQ 2d 1161 (5" Cir 1997).** Ferrari SpA v McBurie, 11 USPQ 2d 1843 (SDCal 1989).

? In re Clarke, 17 USPQ 2d 1238 (TTAB 1990): registration of “high impact, fresh, floral fragrance

reminiscent of plumier blossoms” applied to sewing thread and yarn.

% Qualitex Co.v.Jacobson Products Co., Inc., 514 U.S 159 (1995).?” Two Pesos, Inc.v.Taco Cabana,Inc 505 US 763, 112 SCt 2753 (1992).

reminder letters and monthly reports used in connection with auto service reminderletter business”” In conclusion the trade dress concept as the courts in the US haveconstrued it is extremely broad Trade dress is “essentially total image and overall

Bearing this in mind, it seems that everything which is the “dress” of a product can beprotected under the trade dress concept But this may put too heavy a burden ontotrademark officials’ shoulders All manufacturers came to rely on this idea and requiretrademark protection for every aspect of the exterior of their products; this wasoverloading the system Eventually, the US Supreme Court applied a stricterrequirement for trade dress protection, based on stricter distinctive conditions.Following that, product packaging can be inherently distinctive but a product designwill never be found to be inherently distinctive So, product design aspects of tradedress are not easy to protect as trademark and can only be so protected if it is proved

that buyers associate the design with a single source (requiring secondary meaning).'°°

The term “trade dress” has not changed its meaning as a result of this decision but ithas put a stop to the arbitrary registration of every aspect of a product.

In conclusion, even be whether called trade dress or shape or three-dimensional mark,these contents are used to describe a product’s appearance, especially, for commercialpurposes But we can suppose that a product’s appearance should be divided into twomain forms, inherent design and packaging Physically, there is nothing which has nodesign However, the term “inherent design” is used to indicate the product has someform of its own in contrast to things like liquid or powder, which have no concretedesign (or no commercial design as a product in the market) In the US, there is adivision between design (inherent design/configuration of product itself) andpackaging (dress or get up of product) In the EU, one talks of shape/design (of theproduct) and packaging (like the container of unshaped products) To divide these twoaspects of a product’s appearance makes matters somewhat more clear whenresearching related issues in the intellectual property laws of the US and the EU andseeking to understand the role of these basically similar notions in the two sets oflaws Moreover, in trademark law, the division plays an important role in trademarkregistration, based on the inherent distinctiveness or secondary meaning factors of

each type.'"! Because of its importance, in many cases law, parties have relied on

8 Computer Care v Service Systems Enterprises, 982 F.2d 1063 (7" Cir 1992).? Blue Bell Bio-Medical v.Cin-Bad, Inc., 864 F.2d 1253, 1256 (5° Cir 1989).

10 Case Wal-Mart Stores, Inc.v Samara Brothers, Inc., Appeal No 99-150, 529 US.

!9! To be protected as a trademark, a trade dress (or a shape mark) has to be distinctive enough to show

its manufacturing source Based on their special and specific characters, three-dimensional marks are

often corsidered more strictly than others The division between design and packaging is needed for