European General Court confirms EUIPO appeal decision in Rolex trade-mark case

In a recent judgment (case T‑726/21), the European General Court dismissed the appeal filed by Rolex SA and confirmed the decision of the Board of Appeal of the EU Intellectual Property Office (EUIPO) that there was no likelihood of confusion between the compared “crown” marks and, above all, that no potential damage to the reputation of the Rolex crown trade mark was found.

Background

In this case, the trade-mark applicant, a Danish fashion company PWT A/S, had sought to obtain an international registration in the EU for the following figurative trade mark of a crown:

The goods for which the registration was sought included Class 25 goods (i.e. clothing, footwear, headgear) and other goods and services in Class 3, 9, 18 and 35.

On 3 June 2016, Rolex filed a notice of opposition to the registration of the crown mark for all the goods and services of the international registration and based this action on its earlier crown trade marks:

and

Rolex and its well-known marks prevailed in the first instance proceedings in which the EUIPO ruled that the application would constitute unfair exploitation of the reputation of the Rolex mark. The Board of Appeal of the EUIPO, however, assessed the case differently, rejecting both grounds of the opposition (i.e. the likelihood of confusion between the compared marks and the risk of damage to Rolex's reputation).

Judgment of the General Court

Unsurprisingly, Rolex sought the annulment of the Board of Appeal decision and criticised the EUIPO Board of Appeal for failing to consider the similarities between the goods being compared and the usual market practices of consumers who might draw conclusions about Rolex as a result of the purchased products through the principle of "aesthetic complementarity".

In its judgment, the General Court ruled the following:

• consumer confusion between the two crown marks is not likely since clothing, footwear and headgear are dissimilar to jewellery and watches;
• the principle of "aesthetic complementarity", the possibility that the products will be considered objects of luxury like Rolex or the fact that the compared goods may be sold in the same commercial establishments as Rolex products, is irrelevant in determining the similarity between the goods in question;
• the use of the mark in question would not represent unfair advantage or be detrimental to the distinctive character or reputation of Rolex based on its earlier trade marks;
• Rolex has not sufficiently demonstrated reputational risk.

As a result, the General Court confirmed the findings of the EUIPO Board of Appeal that no injuries to reputation could be established and that there is no likelihood of confusion between the compared marks.

Comment

This decision highlights the fact that reputation-based actions are not always a clear win for luxury brands. Established brands should always consider attacks on new applications with great caution. Most importantly, the collated evidence for the purposes of a reputational action should be sufficient and the owner of an earlier reputable trade mark should present pertinent arguments for the risk of unfair advantage or damage to the distinctive character and reputation of the reputable trade mark.

As seen in the above judgment of the General Court and the decision of the EUIPO Board of Appeal, it is not sufficient to simply refer to the evidence submitted that the mark is well known or luxurious, and state that a risk of loss of reputation is possible in general. The owner of the reputed mark should present strong evidence and argumentation about the general reputation of the earlier mark and adduce proof either that the use of the mark in question would take unfair advantage of the distinctive character or the reputation of the earlier mark or that it would be detrimental to that distinctive character or that reputation.

A similar approach on the issue of demonstrating the existence of damage to reputation and the high threshold for showing that there is a serious risk of future damage can be drawn from earlier case-law (e.g. Puma v. EUIPO-Gemma Group in the judgment of the General Court of 19 May 2021, T-510/19), in which the sports brand Puma lost its action for failing to present coherent arguments showing a serious risk of harm to the distinctive character of its earlier marks.

For more information on how this decision could affect your EU-based business, contact your CMS client partner or these CMS experts: Agata Stachowiak and Alicja Zalewska-Orabona of the CMS IP Team.