On Tuesday 19 May, the General Court of the European Union issued another interesting decision which appears to suggest a growing inclination to place particular importance on the degree of proximity between the conflicting goods and/or services in question, when assessing whether a trade mark takes unfair advantage of, or is detrimental to, the distinctive character or repute of an earlier mark with a reputation under Article 8(5) of the Community Trade Mark Regulation (CTMR).
By way of background, the appeal relates to an opposition which was filed in 2008 by Swatch AG against the registration of Community Application No. 6543524 SWATCHBALL in Classes 9, 35, 41 and 42, in the name of Panavision Europe Limited. The applicant sought to register their mark in relation to, amongst other things, a range of goods and services that encompass computer software relating to the creation and selection of lighting, optical and other visual effects in cinematographic, television, and other visual and performing arts.
Swatch AG based the opposition on earlier registrations of the word mark SWATCH together with earlier registrations of their famous stylised “swatch” mark. Between them, the earlier marks covered Class 14 goods relating to the movements for clocks and watches, precious metals and goods coated therewith, jewellery, precious stones, horological and chronometric instruments. The opposition was based on Articles 8(1)(b) and 8(5) CTMR.
The Opposition Division rejected the opposition in its entirety and Swatch AG filed an appeal. The Second Board of Appeal dismissed the appeal and found that there was no likelihood of confusion to support a claim under Art 8(1)(b) because the goods and/or services covered by the respective marks were too dissimilar. Although it is of little surprise that the Art 8(1)(b) ground failed, the Board of Appeal also dismissed Art 8(5), as they were of the opinion that the relevant public would not establish a link between the marks because of the lack of proximity between the conflicting goods and services in question.
On further appeal, the General Court acknowledged that the Swatch marks had a ‘particularly strong’ reputation and that there was an average degree of similarity between the marks. However, it found that the Board of Appeal did not err in its assessment in finding that the relevant public will not establish a link between the marks at issue, “since it is highly unlikely that the public will encounter the goods covered by those marks in the same shops or think of the goods covered by one mark when presented with the goods covered by the other mark”.
This decision is consistent with a number of recent decisions in which the Art 8(5) basis has been rejected because of a lack of proximity between the relevant goods and/or services, despite the existence of a substantial reputation and an average to high degree of similarity between the marks. The recent chain of decisions appears to indicate that particular weight is being given to the degree of closeness between the goods and/or services in question when assessing whether or not the relevant public will make an association between the earlier mark and the later mark. Such an approach completely undermines the rationale behind Article 8(5) and unduly narrows the scope of the provision. To reiterate, Adidas-Solomon AG and Adidas Benelux BV v Fitnessworld provides that, for the purpose of Art 8(5), “it is sufficient for the degree of similarity between the mark with a reputation and the sign to have the effect that the relevant section of the public establishes ’a link’ between the sign and the mark”. Intel Corporation v CPM UK Ltd states that it is sufficient that the later mark “brings to mind” the earlier mark even if the average consumer would not necessarily believe that there was a trade connection.
A “link” is a much lower threshold than a likelihood of confusion and reflects the rationale behind Art 8(5) insofar as a mark with a substantial reputation should enjoy a broader degree of protection because of the significant amount of time, effort and money that has been invested in developing the distinctive character and goodwill of the mark.
As enunciated in Sigla SA v OHIM, “[A] mark also acts as a means of conveying other messages concerning… for example, luxury, lifestyle, exclusivity, adventure, youth. To that effect the mark has an inherent economic value which is independent of and separate from that of the goods and services for which it is registered. The messages in question which are conveyed inter alia by a mark with a reputation or which are associated with it confer on that mark a significant value which deserves protection, particularly because, in most cases, the reputation of a mark is the result of considerable effort and investment on the part of the proprietor.”
When assessing whether or not the average consumer would ‘link’ the marks, the courts must apply a cumulative multifactor approach, taking into consideration factors such as the degree of similarity between the marks, the similarity of the goods or services, the strength of the earlier mark’s reputation and its inherent or acquired distinctive character (Intel).
Although the similarity of the goods and/or services is a significant factor, it should not outweigh the importance attached to the reputation and the degree of similarity between the earlier and later marks as this would not reflect the nature of consumer behaviour or the economic reality of dilution, tarnishment or unfair advantage in the market place. It is contrary to common sense to suggest that a consumer would not make a “link” if a close variation of a famous mark was used in relation to unrelated goods, and that such use would not be liable to take unfair advantage of, or be detrimental to the distinctive character or repute of the earlier right holder.
If recent decisions are anything to go by, it appears that it will be extremely difficult to bring a successful claim under Art 8(5) unless a close degree of proximity between the goods and/or services in question can be established, even though marks with a strong reputation will undoubtedly come to the mind of the average consumer when close variations are used in relation to dissimilar goods.