The dispute between soft drinks giant Coca-Cola and rival producer Master Cola finally came before the EU’s General Court last December, with the Court finding in favour of Coca-Cola’s action to annul a previous decision by EUIPO’s Board of Appeal, which originally found against the soft drinks manufacturer.

This opens the way for Coca-Cola to oppose the registration of the sign ‘Master’, which employs the same font (see logo and comparison below). Importantly, this ‘Master’ sign is currently only used in Syria and the Middle East in a form similar to that of Coca-Cola. However, this latest ruling allows the soft drinks manufacturer to ‘prove the risk of commercial free-riding by logical inference’, in that it is likely that the ‘Master’ sign will be used in the future in the EU.

Background to the ruling

An application to register the Master Cola sign in the EU was first submitted by Syrian company Modern Industrial & Trading Investment (Mitico) in 2010, prompting Coca-Cola’s initial opposition on the grounds that such a registration would enable the Master Cola brand to unfairly benefit from Coca-Cola’s brand reputation. EUIPO rejected the opposition, however, finding that the signs were not similar and, therefore, there was no likelihood of confusion between the two brands, despite the similarity of the goods in question.

Coca-Cola challenged this decision before the General Court. In its December 2014 judgment, the Court annulled EUIPO’s decision that there was no likelihood of confusion, finding instead that a degree of similarity did exist between the two signs, namely: “elements of visual similarity relating not only to the ‘tail’ flowing from their first letters ‘c’ and ‘m’ in a signature flourish, but also to their shared use of a font which is not commonly used in contemporary business life, namely Spenserian script”.

That being the case, the General Court held that EUIPO should have considered in its ruling whether the use of the sign ‘Master’ took unfair advantage of, or was detrimental to, the reputation of the earlier Coca-Cola marks. Here, the General Court also held that EUIPO had incorrectly disregarded evidence submitted by Coca-Cola to demonstrate Mitico's intention to take undue advantage of the reputation of its earlier marks.

In particular, Coca-Cola had alleged that Mitico, commercially and on its website, used the ‘Master’ trademark in a form which was reminiscent of the Coca-Cola trademark (see images below):

However, when it reviewed the case on the basis of the Court’s 2014 judgment, EUIPO found again against Coca-Cola's opposition - on this occasion on the basis that the evidence produced by Coca-Cola failed to establish the existence of a risk of commercial free-riding. Unsatisfied with that decision, Coca-Cola again appealed the decision to the General Court. This latest 2017 judgment, finds again in Coca-Cola’s favour, and annuls the EUIPO decision of 2015.

Logical inference

As noted above, the key takeaway from this ruling is that the Court found that EUIPO was required to take into consideration evidence relating to the commercial use of the sign ‘Master’ outside the EU in order to determine whether there was a risk that the future use of the sign in the EU would take unfair advantage of the reputation of Coca-Cola’s trademarks.

In other words, it is logically foreseeable that Mitico, if its application for an EUTM is approved, intends to market its goods under the same ‘Master’ trademark in the EU as is used in its other markets (in this case, Syria and the Middle East). The General Court concluded, therefore, that EUIPO had erred in its assessment of the evidence relating to the commercial use of the ‘Master’ sign outside the EU.

The importance of oppositions

This decision highlights the importance of protecting all aspects of your brand. “This is a good decision from the General Court,” explains Novagraaf’s Claire Jones, “with the inference that, while the ‘Master’ mark was only used in Syria and some other areas of the Middle East, there was a risk that the mark would be used in the same way in the EU in the future, free-riding on the rights of Coca-Cola.

“As there was no evidence submitted to the contrary, the Court was within its right to assume that the applicant’s commercial intentions for the EU would be as per those already in use in the Middle East, concluding that there is a future risk of unfair advantage in the EU.

“A further appeal is possible,” she adds. “Much of the decision was based on the appearance of the marks and the similarity to Coca-Cola’s famous Spencerian script. Given that the word ‘Master’ is very different from ‘Coca-Cola’, this is not surprising, but shows the importance of registering and protecting all important aspects of your brand.”