Elon Musk’s X faces copyright lawsuit – Tous wins against an application for declaration of invalidity

Elon Musk's X faces lawsuit by Agence France-Presse for refusing to pay

X, the social media platform once known as Twitter, has been sued on grounds of copyright law by France's international news agency, Agence France-Presse (AFP), with the aim of securing future payment for its news material.

On 2 August, AFP lodged an application with the Paris court requesting Elon Musk's company to supply data that they deem essential "to evaluate the compensation payable to AFP". They argued that they were relying on EU copyright legislation on "neighbouring rights", which allows media and publishers to demand payment from digital platforms for sharing their work.

According to the agency, AFP has been met with a "clear refusal" from X to engage in copyright talks. In a tweet, Elon Musk described the case as “bizarre”, and raised the question: "They want us to pay them for traffic to their site where they make advertising revenue and we don’t!?”.

Let us recall that, in 2021, AFP had reached an agreement with Google on the same issue after two years of negotiations. It is evident that this is not the first time that the agency has confronted the big tech companies. However, they do not always give in easily, a clear example being Meta’s recent blocking of news from Facebook and Instagram feeds in Canada, in response to a new national law requiring digital giants to pay publishers for such content.

There is no doubt that this dispute between AFP and X and Elon Musk is on course to become a landmark case in the field of copyright and the governance of digital platforms and news agencies – along with other cases. Indeed, AFP is not the only one to be suing X to negotiate neighbouring rights. In July this year, three major French media groups (Le Monde, Le Figaro and Les Échos – Le Parisien) have also launched a similar court procedure.

Shape of a teddy bear is sufficiently distinctive for jewellery, says the General Court

On 26 July 2023, the General Court dismissed the appeal brought by Apart against the EUIPO's decision refusing a declaration of invalidity which the applicant had filed against the figurative mark owned by the jewellery company Tous.

Background to the dispute

On 26 February 2009, Tous S.L. (“the intervener”) filed an application for registration of an EU trade mark with EUIPO for the figurative sign available here, designating goods in Class 14 of the Nice Classification (jewellery). The contested mark was registered on 26 January 2010. On 23 May 2017, Apart (“the applicant”) filed with EUIPO an application for a declaration of invalidity of the EU trade mark referred above on the ground that was devoid of any distinctive character. The Cancellation Division of EUIPO rejected the application for a declaration of invalidity in its entirety. On 27 January 2020, the applicant filed a notice of appeal with EUIPO against the decision of Cancellation Division. By the contested decision, the Board of Appeal dismissed the appeal. Apart appealed to the General Court.

The applicant submitted, in essence, that the shape of a teddy bear does not differ from the norms of the jewellery market sector and that this shape does not contain any element capable of distinguishing it from that of goods originating from other undertakings on the market.

The intervener contended that ‘the contested [mark] was not a shape mark, since it was not a three-dimensional mark’, but consisted of the representation of its emblematic bear.

The decision of the General Court

Firstly, the General Court stated that the goods at issue, namely items of jewellery, may take the shape of the contested mark. In particular, the Court argued that the criteria for assessing the distinctive character of three-dimensional marks consisting of the shape of the product itself are no different from those applicable to other categories of trade mark. However, it pointed out that average consumers are not in the habit of making assumptions about the origin of products based on their shape or the shape of their packaging in the absence of any graphic or word element and it could therefore prove more difficult to establish distinctiveness in relation to such a three-dimensional mark than in relation to a word or figurative mark.

The General Court argued that the more closely the shape registered as a mark resembles the shape most likely to be taken by the product in question, the greater the likelihood of the registered shape being devoid of any distinctive character. Only a mark which departs significantly from the norm or customs of the sector has distinctive character and thus fulfils its essential function of indicating origin.

In particular, the General Court stated that that the fact that items of jewellery may take the shape of a teddy bear is not in itself sufficient to establish that the contested mark consists of a two-dimensional representation of the shape of the goods at issue. Such an assessment would be such as to preclude any other use of the sign as a figurative mark, which might not be the case here.

Consequently, the General Court held that the Board of Appeal's finding that the mark at issue was a figurative mark consisting of a two-dimensional representation of the goods in question, which gave rise to the application of the case-law relating to three-dimensional marks, was incorrect. In the present case, however, the error could not have had a decisive influence on the outcome and is therefore not sufficient to justify annulment of the contested decision.

1. The applicant complained that the Board of Appeal incorrectly analysed the relevant public’s perception of the contested mark. It submitted that the contested mark would immediately by perceived by the relevant public as representing the shape of a teddy bear.

The General Court noted that the mark at issue was represented by the thin outline of a figure recognisable by its specific rounded and prominent shapes, which could be interpreted as representing the silhouette of a teddy bear, but also as a fanciful figure. It also observed that that the sign was merely evocative of the silhouette of a teddy bear and that it would not necessarily be perceived as such by all consumers. Furthermore, the General court pointed out that, irrespective of whether the shape at issue is immediately perceived as a teddy bear, it has no connection with the goods in question, namely items of jewellery.

2. In the second place, as regards the relationship between the contested mark and the goods in respect of which that mark was registered, the applicant claimed that the shape of a bear is a common and ‘expected’ shape on the jewellery market. The applicant submitted that that shape is nothing extraordinary and that it has been used in the jewellery sector for centuries and it is therefore difficult for consumers to distinguish the commercial origin of goods bearing this sign.

The contested mark was registered for items of jewellery, which generally include goods such as rings, earrings, necklaces or bracelets, and that those goods represent the result of a creative process. The General Court stated that, even though it is true that items of jewellery may take a variety of shapes, including that of animals, it cannot be established that the relevant public will associate the motif of a bear with items such as those cited above. It added that the shape of a teddy bear, in so far as it rather relates to a different category of goods, namely toys for children, cannot be associated by consumers with jewellery.

3. The applicant claimed, in essence, that the contested mark essentially served an aesthetic function, without indicating the origin of the goods. It submitted that the shape of the teddy bear significantly increases the value of the goods and that that shape plays a decisive role in the decision of consumers to purchase jewellery, considering its meaning.

The General Court stated that the contested mark does not represent a sign which consists exclusively of the shape or another characteristic of the goods. The goods covered by the mark at issue represent articles of jewellery which generally take the form of rings, necklaces or earrings. And, although they may bear the sign of which that mark consists, the court stated that they do not take the shape of that mark. Accordingly, the General Court found that the mark at issue consisted of a sign which is unrelated to the appearance of the goods to which it applies and not a sign consisting exclusively of the shape of those goods. Hence and based on all the above, the court found Tous’ bear to be distinctive enough for jewellery.

The General Court therefore dismissed the appeal in its entirety.