T-61/16 – The Coca-Cola Company v. EUIPO / Modern Industrial & Trading Investment Co. Ltd (Mitico))

The General Court confirms that actual commercial use of an EUTM application can demonstrate unfair advantage for the purposes of Article 8(5) EUTMR, even if such commercial use only occurred outside of the EU. Use in non-EU countries may be a basis for a logical deduction relating to the likely use of the sign in the EU and may constitute prima facie evidence of risk of unfair advantage. We take a look at what this important development means for trademark owners.

Background

This Coca-Cola saga started back in 2010 and reached the General Court (GC) twice, ending with a fully-fledged victory for Coca-Cola.

Coca-Cola filed an opposition against Mitico’s EUTM application for the “Master” logo shown below, which sought protection for beverages (including cola) and food products in classes 29, 30 and 32. The opposition was based on the earlier marks shown below. The EUIPO refused the opposition in all instances due to lack of similarity between the signs. Coca-Cola then brought the case before the GC claiming breach of Article 8(5) EUTMR.

The first time Coca-Cola succeeded before the GC (see judgment of 11 December 2014 in Case T-480/12 and our blog post), the GC held that not only were the first four marks similar to the application (albeit to a low degree), but there was also a link between the signs. In particular, it acknowledged certain degree of visual similarity due to presence of the ‘long tail’ and the same unusual cursive script used. The GC also held that the Board erred in refusing to take into account the below evidence of actual commercial use which shows how Mitico’s product mimics the image of Coca-Cola’s getup for soft drinks.

In spite of this decision, the Board still refused Coca-Cola’s opposition, this time on the basis that the above evidence of commercial use did not come from the EU, but came from Syria and the Middle East (see R 1251/2015-4 of 2 December 2015). This led Coca-Cola to file a second action before the GC.

General Court’s (second) decision

In its second decision, the GC held that the actual use of the EUTM application outside of the EU is relevant, as – in absence of any evidence to the contrary – it may lead to a logical inference that there is a serious risk that the mark applied for will be used in the same way in the EU as it is used in third countries. Since registration of the mark was sought in the EU, it can be inferred that the proprietor intends to market its goods in the EU. Moreover, it can be inferred that the proprietor’s intention is to do so in the same manner as outside of the EU, which results in a risk of commercial free-riding in the EU. This also applies where the evidence of actual use shows a permissible variation of the mark applied for, such as was the case here.

Finally, there should not be any third GC decision as the GC also confirmed that Coca-Cola has shown which specific image would be transferred to the mark applied for. As a result, the EUIPO has no other option than to finally refuse the Master application in its entirety.

Comment

Overall, this case is good news for owners of well-known brands and a useful precedent for enforcement purposes in cases that may be seen as borderline, but are supported with strong evidence of unfair advantage, even if such evidence comes from outside of the EU, which is often the case.

The first Coca-Cola case favourably dealt with the issue of similarity of signs with different word elements using the same stylization, which are notoriously difficult to win. It also confirmed that actual commercial use of the application might show free-riding. The second Coca-Cola case went even further by expressly confirming that even evidence of free-riding from outside of the EU is relevant for the assessment of unfair advantage and must be taken into account by the EUIPO.