Trade marks: Directions from the Courts 2005

In 2005, a large number of appeals from the OHIM Board of Appeal to the Court of First Instance (CFI) and the ECJ gave further guidance to would-be applicants for staying on course.

To navigate a successful route to registration, whether at UK or European level, an applicant must avoid objections based upon the inherent characteristics of the mark itself (absolute grounds for rejection), as well as objections from other rights holders who may have conflicting trade mark registrations or common law rights (relative grounds).

Absolute guidance

Article 7(1) of the Community Trade Marks Regulation (and its Trade Marks Act 1994 equivalent, section 5) preclude the registration of marks across several criteria, including where marks may lack distinctive character (Art.7(1)(b)), or are descriptive of the kind, quality and characteristics etc. of the goods/services in question (Art.7(1)(c)). A key decision of the ECJ on absolute grounds concerned an appeal from the CFI which upheld a refusal of an application to register the device mark BioID for computer software, hardware and telecoms concerned with “Biometrical Identification”.

A global assessment
The ECJ considered that the approach of the CFI had been correct in its assessment of the distinctiveness of the mark by analysing the composite elements (Bio and ID) as well as the mark as a whole. Composite marks can be assessed by their individual elements, but must also be viewed as a whole – there is no presumption that individual elements lacking distinctiveness cannot in totality have such character.

Independent grounds
However, the CFI had been incorrect in relying upon the fact that the mark was
in their opinion common to the trade in assessing distinctiveness under Art.7(1)(b); that assessment is relevant only to Art.7(1)(c). The ECJ emphasised that each of the grounds of Art.7(1) is independent from the others and calls for a separate assessment. In this case, objections under Art.7(1)(b) were “indissociable” from the essential function of a mark of guaranteeing origin, and do not apply to the descriptive considerations of Art.7(1)(c). In light of this, applicants would be well advised to ensure that separate arguments and considerations are deployed to counter potential objections under the various absolute objections, rather than dealing with these grounds as a whole.

Unfortunately for the applicant in BioID, despite a technically successful appeal, the ECJ substituted its own opinion and came to much the same conclusion as the CFI. Its assessment was that at the time of the application, the average consumer would view the mark as an abbreviation for “biometrical identification”, and as such was incapable of guaranteeing origin – the mark was virtually indistinguishable from the goods/services supplied under it. In addition, the figurative and decorative aspects of the mark were minimal and insufficient to endow distinctiveness.

Immediate and unambiguous?
An interesting comparison to BioID can be found in the CFI’s assessment of the mark CELLTECH (for products and equipment related to cell technology). Although from an initial assessment this might appear little different to the shortcomings of BioID as far as the essential function is concerned, in CELLTECH the mark was accepted – the CFI considered that even taken as meaning cell technology, it would not be “immediately and unambiguously” perceived as designating activities in the field of cell technology and associated products. If this approach is correct, it might suggest that the threshold for acceptance under lack of distinctiveness may in fact be lower than previously thought.

Lacking distinctiveness
Other marks rejected by the CFI for lack of distinctiveness in 2005 included CARGO PARTNER (for transport, packaging and storage of goods) and LIVE RICHLY (for financial services). The former was held to consist of generic words not capable of distinguishing the services, where the combination did not present any additional element to distinguish. The latter was dismissed as a simple laudatory formula, and added nothing beyond its obvious promotional meaning to suggest distinctive character.

Wholly descriptive
In terms of marks considered under the descriptive criteria of Art.7(1)(c), three cases before the CFI demonstrate the application of such objections to registrability. A mark which illustrates the policy considerations under these criteria, MUNICHFINANCIALSERVICES (for financial services) was rejected by the CFI as being solely an indication of the services to be performed under the mark, at a particular geographical location. The marks DigiFilm and DigiFilmMaker (for data carriers and transfer of data services) were similarly rejected, although the CFI did make it clear that for such “neologisms” (ie. novel words) the rejection must be not only of the individual elements combined, but also of the neologism as a whole. Finally, the CFI accepted the mark CLOPPENBURG (for retail services), which although being a defined geographical area (a small town in Germany) had no particular reputation for the services applied for. As such, the relevant public would be at most moderately familiar with the town, and would make no particular association with retail services. It is only if the area has, or may have, a particular reputation in relation to the specification sought that a rejection on the grounds of a geographical designation is warranted.

Relatively objectionable

As in previous years, conflicts between prior rights and marks applied for created a large number of oppositions, appeals and ultimately guidance from the Courts. It has been interesting to note that following a number of key decisions in 2004 that considered when two marks might be considered identical under the relevant legislation, in 2005 the Courts provided further guidance on when two marks may be considered similar, and result in a likelihood of confusion. In our last Brands Review we reported on the guidance on identicality from the ECJ concerning the marks ARTHUR and ARTHUR ET FELICIE, which were not identical (see LTJ Diffusion v Sadas Vertbaudet). In 2005, the CFI considered that these marks, being similar, would create a likelihood of confusion when used in relation to identical goods.

In terms of new cases, a key decision of the ECJ on conflicts between marks arose from a reference by the German national courts to the ECJ in relation to an infringement case.

In Medion AG v Thomson Multimedia Sales Germany & Austria GmbH a dispute arose between the proprietor of a German national trade mark “LIFE” (for leisure electronic devices), and the major electronics manufacturer Thomson, for distribution and sale of goods bearing the mark THOMSON LIFE. The German regional Court had considered there was no likelihood of confusion, but on appeal the higher regional Court made a referral to the ECJ.

The basis of the referral was whether there was infringement of Art.5(1)(b) of the Trade Marks Directive for identical goods, where a sign consisting of a word mark of “normal distinctiveness” was reproduced in a composite mark of a competitor, and where such elements did not alone determine the overall impression given by the mark, but had an independent distinctive role within the composite mark.

In essence, the question was whether the presence of the competitor’s (dominant) company name in the composite mark would dispel the possibility of a likelihood of confusion. Indeed, given Thomson’s level of sales and goodwill, it was inevitable that the dominant element in the mark would be THOMSON, rather than LIFE. This concept of a mark with a smaller reputation being subsumed by a larger mark with a stronger reputation is often described as “swamping”.

The ECJ held that in those circumstances there might be a likelihood of confusion, because the public might perceive that the proprietors of the two marks were linked economically. Moreover, this confusion might arise even if the earlier mark is not the dominant element in the composite mark, instead having some independent role. Although no clear guidance was provided as to what “some independent role” might entail, it would certainly be consistent with the essential function of a trade mark to conclude that the ability of the earlier mark to guarantee the origin of the proprietor’s goods would be compromised if where the goods were identical, the average consumer would not disregard the earlier mark in the composite sign.

Can an element be too dominant?
Although an assessment of the dominant and distinctive elements of a mark is an important part of the global assessment carried out through the eyes of the average consumer, there has been a perception that perhaps the dominant element, if given too much emphasis, can lead to contrary results. Certainly the decision of the CFI in BIKER MILES would indicate some of the difficulties where a dominant element is considered to the exclusion of other distinguishing factors. In that decision, the CFI overturned the finding of the OHIM Board of Appeal that there was no likelihood of confusion between the word mark MILES and a figurative mark for BIKER MILES in respect of articles of clothing in class 25.

The OHIM Board of Appeal had considered that in terms of the overall impression created by the mark, the graphical representation and the verbal element “Biker” were significant in reducing the likelihood of confusion. The CFI considered this was incorrect, and held that the verbal element “Miles” was the dominant element, and as such was identical to the earlier mark. Further, as the intended specification was clothing, it was not uncommon in the fashion retail sector to use sub-brands to distinguish various lines. Since the dominant element in both marks was identical, there was a risk that the BIKER MILES mark might be perceived as a MILES sub-brand. In focusing solely on the dominant element, the CFI considered there to be a likelihood of confusion. However, one might question whether the average consumer would have considered that the additional figurative and conceptual elements might nonetheless have had some independent distinctive role?

Another decision which illustrates the various influences upon the global assessment of conflicting marks is the finding in LINDERHOF/LINDENHOF, where the CFI considered that the key differences between the respective uses and consumers of alcoholic and non-alcoholic drinks were sufficient to negate a likelihood of confusion as far as those goods were concerned.

A question of language
A particular focus in 2005 has been on conceptual similarities between various marks, particularly those based upon meanings conveyed in different languages across the various Member States. An applicant for a device mark incorporating the word and image SHARK for energy drinks found their application opposed by the proprietor of the mark HAI (also for energy drinks), which is roughly translated as “Shark” in Finnish, Dutch, Danish and Swedish. In that case, conceptual similarity alone was not sufficient to give rise to a likelihood of confusion, but all applicants (and their advisors) would be wise to consider the “hidden meaning” in any mark. This approach was endorsed by Advocate General Jacobs in his opinion in MATRATZEN, in which he considered that registration of a trade mark in circumstances where a significant proportion of traders in and consumers of the product concerned can reasonably be expected to understand the meaning of the word used would contravene Art.3(1)(c).

A conceptual shortcoming
Finally, and also in terms of conceptual similarity, a CFI decision suggested that marks with a particular conceptual meaning may in fact receive less protection outside the core area associated with that concept than more ambiguous marks. The CFI considered an opposition to the registration of the mark MOBILIX (telecoms related classes) brought by the proprietor of the prior mark OBELIX (media and entertainment). Although the CFI considered there was some oral/aural similarity, and a slight visual similarity, the earlier mark had a very specific conceptual meaning to the average consumer, being that associated with the well-known comic book characters. Since there was no real crossover in the specification of the two marks, there would be no likelihood of confusion. Consumers would simply not associate the famous Gaul with telecommunication goods and services, so in effect the particular reputation of the mark counted against it. A similarly reasoned decision was handed down by the ECJ in early 2006 in Claude Ruiz Picasso and others v OHIM, which considered the conceptual meaning (among others) of the mark PICASSO in relation to motor vehicles.

This article first appeared in our UK Brands Review March 2006. To view this publication, please click here to open it as a pdf in a new window.