The European Court (CFI) has ruled in an interesting trade mark dispute concerning cloud computing terms. The EU trade mark KAAS KEYS AS A SERVICE is not descriptive of electronic opening and locking systems. Also, this case was on examination of the descriptive character of a composite mark.
In the contested decision, the Board of Appeal had dismissed the invalidity action against the EU word mark KAAS KEYS AS A SERVICE in February 2020. In its view, neither the expression ‘keys as a service’ nor the element ‘kaas’ were to be regarded as descriptive in relation to the goods claimed, which was what the applicant had claimed.
The applicant, Talleres de Escoriaza, SA (Spain), argued that the Board of Appeal should have given more precise reasons for its decision precisely with regard to the connection, which in its opinion was not direct, between the claimed goods and digital keys for electronic locking systems – and that it had not fulfilled its duty to state reasons.
The fact is that the goods claimed by the disputed mark were electronic opening and locking systems, computer applications and software in Nice Class 9.
And “Knowledge as a Service” or “KaaS” are terms from cloud computing, in this context also generally known. In several decisions of the EUIPO it has already been stated that the term “as a service” describes in particular services that are provided via the internet instead of on site.
However, this interesting trade mark dispute also has another facet: because the trade mark in dispute is also a trade mark composed of words. In the action against the Board of Appeal’s decision, which the applicant Talleres brought before the European Court of First Instance (CFI), several pleas in law were therefore put forward, relating to the Board of Appeal’s reasoning in various respects.
“Keys as a service” and “kaas”: connection with digital locking system?
The Board of Appeal had held that the connection with the goods in question was not so direct that the relevant public would perceive the expression “keys as a service” as an description of their characteristics. In the Board of Appeal’s view, moreover, the possibility that a service could be descriptive of goods was not very plausible. Therefore, it had denied that there could be a descriptive character.
The CFI confirmed these findings. The relevant public would not make a direct and immediate connection between the word “key” and goods such as “electronic padlocks” and “electronic locking systems”. Even if these products are activated or operated with electronic “keys”, the term “keys as a service” does not describe with sufficient precision a relevant characteristic of these products, the CFI ruled. None of these goods is a key as such.
Moreover, the Board of Appeal had rightly found that the relevant public was a specialised public, such as professionals in the field of locksmithing or electronic programming, and also the general public, but that in any event a high degree of attention was to be assumed.
The term “as a service” does have a connection with the concept of cloud computing for such a public, as it is used in that context, the CFI acknowledged. However, the term “keys as a service” does not describe “electronically downloadable computer applications” and “software”. These goods are not keys, even if the term “as a service” itself refers to the concept of cloud computing.
The term “keys” was in any case too vague and general a term that did not provide clear and relevant information about the goods in question, the court added. Most applications require a user identification code in order to be used or downloaded. Therefore, the fact that this access or use code [or “key”] could or had to be obtained via a global computer network could not describe the goods in question with sufficient precision.
Nor would the element “kaas” be perceived as an acronym with a specific meaning, the CFI found, at most in the Netherlands, where it is the word for cheese (please read also our article: ECJ on the taste of Heksenkaas).
But even KaaS would be perceived with a meaning, the acronym “KaaS” would stand for “Knowledge as a Service” in the context of cloud computing. And even such an acronym had no reference to the goods in question, according to CFI.
Descriptive character in mark composed of words
Moreover, a descriptive character of a compound trade mark must in principle be examined for each term, but in any case also for the whole formed by the components, the CFI explained. Even if the individual words of which a mark is composed are directly descriptive of the goods and services concerned, the combination of all the elements may not be descriptive, according to previous case-law.
Nevertheless, the fact that the Board of Appeal had made it a point to examine one part of the sign in question and to elaborate on it in its reasoning (“Keys as a service” and “kaas”) was not a contradiction or erroneous action, the CFI ruled. Indeed, the EUIPO does have a duty to state reasons under Article 94(1) of Regulation 2017/1001, which also follows from Article 296 TFEU, according to which the statement of reasons must clearly and unambiguously indicate the reasoning behind a decision.
However, this does not mean, the court said, that a statement of all the points of view put forward or requested by the parties concerned is always required. Rather, a decision must always be read in conjunction with the preceding paragraphs of that decision. And, as is apparent from preceding paragraphs 10 to 13, the Board of Appeal had there undertaken a detailed analysis of the connection between the meaning of the expression referred to and the goods in question.
KaaS or “Keys as a Service” – common parlance?
For another plea, the applicant had to prove that the sign KaaS Keys as a Service had become customary in common parlance at the relevant time to designate the goods claimed by the contested mark. However, such proof had not been provided, the CFI found. The court emphasised that the decisions of the EUIPO on the expression “as a service”, which the applicant Talleres had submitted as evidence, only were made after the application for registration of the disputed mark KAAS KEYS AS A Service. However, only evidence relating to the date of filing of the application for the disputed mark is relevant.
Therefore, a survey according to which 38% of the respondents had answered that the expression “kaas keys as a service” could be associated with electronic keys was not accepted. Because this survey was conducted after the relevant date (June 2019, but the trade mark application was filed in 2015), too.
Finally, the CFI dismissed the action against the contested decision in its entirety (T-294/20). “KaaS Keys as a Service” therefore continues to be a protected trade name for electronic opening and locking systems, computer applications and software.
Legal protection of programme code, software or AI?
Do you have questions about the legal protection of programme code, software, AI or industrial robots? We are a German law firm for patent and trademark protection with many years of expertise in the entire field of intellectual property.