The General Court held that the relevant consumer for goods in classes 18 and 25 was used to the marketing of different product lines by the same manufacturer under a dominant house brand (here "ANN TAYLOR"), followed by a sub-brand (here "LOFT"). If a mark only coincided in the sub-brand, the consumer would not establish a connection between the different marks, even if the signs shared an identical element which retained an independent and distinctive role in the application ("Thomson Life" doctrine).

Annco, Inc. filed the Community trademark "ANN TAYLOR LOFT" for goods and services in classes 18, 25, and 35. Freche et fils associés (FFA) opposed the application, relying on its French word mark "LOFT," registered for goods in classes 18 and 25.

The Office of Harmonization for the Internal Market's (OHIM's) Opposition Division partially upheld the opposition for goods in classes 18 and 25, stating that there was a likelihood of confusion due to the identical element "LOFT" and the identity of the goods in classes 18 and 25.

OHIM's Second Board of Appeal confirmed the decision, considering the marks similar from a visual and phonetic perspective. As to the conceptual comparison, the French consumer would perceive "LOFT" in Annco's mark "ANN TAYLOR LOFT" as a surname, but would not link it to any meaningful English noun. Since "LOFT" was the dominant element in Annco's mark, the French consumer might either think the products sold under this mark originated from the same company or that "ANN TAYLOR LOFT" was the name of a new line of FFA's "LOFT" products.

The General Court held that the French consumer understood the term "LOFT" as a storage room converted into a living space for private or commercial purposes, but not as a surname. The element "ANN TAYLOR" was much more distinctive than the element "LOFT", given that "LOFT" had a clear meaning in French, whereas "ANN TAYLOR" referred to two first names or to a first name and an English surname. The overall similarity of the signs was, therefore, weak.

The court stated that there was not automatically a likelihood of confusion if the signs shared an identical element which retained an independent, distinctive role in the mark applied for ("Thomson Life" doctrine). In the sector of clothing it was common for a manufacturer to use a dominant house brand together with sub-brands in order to distinguish its various clothing lines from each other. The consumer would, therefore, rather focus on the house brand — in the case at issue "ANN TALYOR" which had nothing in common with the sole element "LOFT" of FFA's mark.

As a result, the General Court considered that there was no likelihood of confusion and annulled the decision of OHIM's Board of Appeal