The European Court of Justice (ECJ) made the ruling in a dispute between G-Star and Italian fashion label Benetton over sales of jeans in the Netherlands.

G-Star had successfully applied for two trade marks at the Benelux IP Office relating to the shape, stitching and cuts of some of its jeans. In 2000, the Dutch-headquartered clothing company accused Benetton of selling jeans that infringed its marks. When Benetton refused to stop, G-Star sued.

Benetton subsequently counter-claimed and asked the courts to cancel the marks.

The Amsterdam District Court dismissed G-Star’s claims based on an infringement of its trade mark rights and Benetton’s counterclaim. Both parties appealed. The Amsterdam Regional Court of Appeal allowed G-Star’s appeal and dismissed Benetton’s application for annulment. Benetton then took the case to the Dutch Supreme Court.

The Court asked the ECJ to clarify the rules. In particular, it asked the Court whether the third indent of Article 3(1)(e) of the Community trade mark directive is to be interpreted as meaning that "the shape of a product which gives substantial value to that product can nevertheless constitute a trade mark under Article 3(3) of that Directive where, prior to the application for registration, it acquired attractiveness as a result of recognition of it as a distinctive sign following advertising campaigns presenting the specific characteristics of the product in question".

On September 20, the ECJ said that it could not, referring to a 2002 ruling involving Royal Philips Electronics. In that case, the ECJ had denied Philips the right to claim a trade mark on the design of its three-headed shaver.

The dispute will now return to the Dutch Supreme Court.

Niels Mulder, a partner with DLA Piper, who advised Benetton, said: "Shapes which give substantial value to a product cannot constitute a trade mark. This is no different if the shape has become a popular, trendy or cool symbol through advertising or otherwise. Investing money in the marketing of an attractive shape will thus not enable companies to claim a trade mark for this shape at a later stage."

The ruling is particularly important for companies with trade marks granted by the Benelux IP office, because previous case law had suggested that these kinds of marks were eligible for trade mark protection.

Mulder says that companies such as G-Star that believed they could protect their designs through trade marks will now need to rely instead on copyright and design protection.

However, these do not offer the same advantages as trade mark rights. Copyright law is not harmonized across Europe to the same extent as trade mark law, and registered Community designs have a maximum duration of 25 years.

Houthoff Buruma advised G-Star in the litigation.