Acquired distinctiveness in the European Union: When nontraditional marks meet a (fragmented) single market

This article examines the emergence of a territoriality-centered approach to acquired distinctiveness of European Union ("EU") trademarks, which devolves into a formalistic exercise of assessing market conditions of all Member States individually. In so doing, it challenges the conventional wisdom that nontraditional marks (e.g., shapes and colors) are best kept away from the EU register. The issue of acquired distinctiveness cannot be framed as a binary choice between keeping such marks freely available for use by everyone or their complete removal from the European single market; coexisting national rights and unfair competition laws make a patchwork that most companies find difficult to navigate. This legal patchwork raises a set of considerations that the current approach, recently upheld in Nestlé v. Mondelez, fails to address. Rather, the all-or-nothing rationale prevailing at registration has little reason to survive in light of recent CJEU jurisprudence on the scope of protection of EU trademarks. A better solution may be attained through application of the functions theory, by allowing national courts to derogate from the equal effect norm at the infringement stage.