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This is another one in the line of cases relating to what have become known as “fig leaf” trade marks. These are marks where the word element(s) alone would be refused by reason of being descriptive of the goods or services in question but which manage to achieve registration because of a logo or stylisation being added.
Here, the earlier mark was the stylised EASY CREDIT sign shown above right, which had achieved registration (in Bulgaria) for financial services.
Subsequently the registrant in this case managed to obtain an EUTM registration (as a designation under an International mark) for the EASY CREDIT sign depicted above left, again for financial services.
The owner of the earlier mark filed an application with the EUIPO for the later EASY CREDIT registration to be declared invalid.
The Cancellation Division rejected the invalidity application. It discounted the word elements which the two marks had in common, on the basis that these were clearly descriptive for financial services. The only distinctive elements were the figurative elements, and it was these on which a comparison of the two marks should correctly be based. Since these elements were different, the conclusion was that there was no likelihood of confusion.
On appeal, the Board of Appeal disagreed. It found that the words EASY CREDIT in the two marks were not only a distinctive element of the marks as a whole, but were the dominant element. Having adopted that reasoning, the obvious conclusion then followed, namely that there was a likelihood of confusion and the EUTM should be declared invalid.
The EU General Court had to decide which of these two, diametrically opposed sets of reasoning was correct. It came down firmly in support of the Board of Appeal. So, subject to a further appeal to the CJEU, the registrant will have lost its registration.
Is this the correct outcome? Many trade mark practitioners would say No. If the word element of a mark would not be registrable by itself, it does seem illogical that it should be given weight when it comes to blocking a later application. The better approach would be for the scope of protection of a mark combining a descriptive term with a figurative element to be limited to the figurative form. In other words, such a mark should only be able to block a later one if the later one comprises not only the same (or similar) word element but also a sufficiently similar figurative element. This was the approach taken by the Cancellation Division, but which was later overturned.
If decisions of this type (and there have been a number) are permitted to stand as authority, the unsatisfactory outcome is that businesses can obtain by the back door a monopoly over a descriptive term, by simply dressing up that term with stylisation and/or a logo.
Practitioners are likely to be in favour of either such a combination mark being denied registration in the first place; or, perhaps better, the scope of protection being limited to the particular figurative form of the mark. The clearest solution of all would be for the EUTM system to adopt the disclaimer process operated by the USPTO (and previously by the UKIPO) whereby combination marks of this type would only be permitted registration if the descriptive word element is expressly disclaimed.