In L’Oréal SA v OHIM T-21/07 and L’Oréal SA v OHIM  T-109/07 (unreported), L’Oréal was prevented from registering SPALINE and SPA THERAPY as Community Trade Marks (CTM) for cosmetic products. In both cases, it was the perception of the public in Benelux of the word ”spa” that was decisive.
L’Oreal sought to register SPALINE as a CTM in respect of toiletries. Spa Monopole, compagnie Fermière de Spa SA/NV, a company established in Spa, Belgium, opposed the application on the basis of its earlier registration in Benelux for the mark SPA for mineral waters and other non-alcoholic beverages. Although the goods were dissimilar, Spa Monopole relied upon its reputation, and the position adopted by the Court of First Instance (CFI) in Spa Monopole v OHIM  T- 67/04 ECR II-1825 to base its opposition on Article 8(5) of the Community Trade Mark Regulation (40/94/EC) (taking unfair advantage of the reputation of a well known mark).
Spa Monopole’s opposition succeeded at Office of Harmonization for the Internal Market (OHIM) and L’Oréal appealed to the CFI.
The CFI noted that Article 8(5) of the Regulation is subject to three conditions: that the marks at issue are identical or similar; that the earlier mark has a reputation; and that there is a risk that the use without due cause of the mark applied for would take unfair advantage of, or be detrimental to, the distinctive character of the earlier mark. These conditions are cumulative and failure to meet any one of them would render the provision inapplicable.
The CFI held that the presence of the element SPA at the beginning of both marks gave a degree of similarity. Following Meric v OHIM  T-133/05 ECR II-2737, the consumer pays more attention to the beginning than to the end of a mark. The Court held that the element LINE was so frequently used in the area of cosmetics that the element SPA was the more distinctive. The CFI was unconvinced by L’Oréal’s argument that the word “spa” was descriptive of cosmetic products, finding that it was descriptive only of hydrotherapy centres in which such products were used.
Having found that there was a similarity between the marks, the CFI determined that the relevant public (being average consumers in the relevant Member States) would be liable to establish a link between the marks as mineral waters and mineral salts could be used in the production of cosmetic products; mineral water operators sometimes sell cosmetics containing mineral waters.
Following Sigla v OHIM  T-215/03 ECR II-711, it was not necessary for the owner of the earlier mark to show actual and present harm to the mark, but the owner must show a future non-hypothetical risk of detriment or unfair advantage. The Court noted that the stronger the link between the two marks, the higher the risk of unfair advantage and that there was a risk in the present case. The two marks targeted the same public, the goods covered by the two marks were “not so different” and the image of the earlier mark conveyed a message of health, beauty, purity and mineral richness. The same message could apply to the goods for which L’Oréal sought registration, with the result that L’Oréal could take unfair advantage of the reputation of the earlier mark.
L’Oréal also sought registration of the mark SPA THERAPY in respect of cosmetics. Spa Monopole opposed the mark on the basis of a likelihood of confusion under Article 8(1)(b) of the CTM Regulation, with a number of its earlier Benelux marks, including SPA with respect to cosmetic and laundry uses. It also invoked Article 8(4) and (5), relying on a number of previous registrations. Again, OHIM upheld Spa Monopole’s opposition and L’Oreal appealed to the CFI.
The CFI noted that beyond the usual scenario where the consumer perceives a mark as a whole, it is possible that where an earlier mark forms part of a composite mark, the component that is the same as the earlier mark may have an independent, distinctive role in the composite mark, even if it is not the dominant element. The CFI found this to be true in this case, in which THERAPY had been added to the earlier mark. The CFI held that SPA was averagely distinctive in the context of the goods and services in question. As with the SPALINE case above, the CFI held that the word “spa” was descriptive of hydrotherapy centres and not of cosmetic products themselves.
The CFI held that the word “therapy” was not a widely known commercial name within the context of Medion  C- 120/04 ECR I-8551 and did not have a strong distinctive character with respect to cosmetics, such that it could be understood as referring to the benefits of the goods. Finally, since cosmetics manufacturers frequently market several lines of products under different sub brands, the juxtaposition of the word “spa” with the word “therapy” could lead consumers to believe that it was a line of products marketed by Spa Monopole.
The CFI concluded that differences between the signs as a result of the presence of the word “therapy” in the mark applied for were not such as to outweigh the significant similarities between the signs at issue resulting from the presence of the earlier mark at the beginning of the mark applied for. Furthermore, since the goods covered by the marks at issue were identical, it was concluded that the relevant public would believe that they come, at least, from economically-linked undertakings.
These two cases highlight the fact that confusion between two marks, or the enhanced reputation of a mark, is viewed from the point of view of the “relevant public”, which may be a small sub section of the whole of the Member States’ public. In this case, the earlier mark was registered in Benelux, with the result that the meaning of the word “spa” was determined in respect of perceptions in Benelux of the word “spa” based on the town of Spa, the original home of hydrotherapy, in Belgium. Had the “relevant public” been Community consumers generally, it is possible that awareness of the origin of the word would have been lower and L’Oréal may have argued successfully for a descriptive meaning of the SPA element, such that the LINE and THERAPY elements of its marks were the more distinctive elements.