ALICANTE ABSTRACTS

When It Is, and Isn’t, Confusing to Add Matter to Another’s Mark

Recent rulings on similarity of marks by the Court of First Instance suggest that there are new principles at work. Where a later mark includes the whole of an earlier one, the CFI is attaching increased importance to whether the common element is dominant within the composite mark.

In a recent opinion concerning LIFE and THOMSON LIFE, the Advocate-General found nothing new or wrong in regarding the dominance of a shared element as key to whether a likelihood of confusion exists. All the same, the emerging “dominant component” approach is making it difficult to tell when it is, and is not, confusing to add matter to someone else’s mark.

 

The Principles

In its guidance on assessing likelihood of confusion, the ECJ has, in the past, emphasised the interdependence of the various factors to be considered. The interplay of the degree of distinctiveness of the earlier mark, the identity or degree of similarity of the goods or services, the nature of those goods or services, and the normal circumstances of the trade determines how the average consumer is likely to perceive the later mark. A greater degree of similarity of goods might offset a lesser degree of similarity between marks, and vice versa, for example.

The ECJ’s approach requires great care because it is more intuitive than mechanical. It would be easier if a likelihood of confusion could be determined by the use of a notional formula: similar mark + identical goods = likelihood of confusion. However, such a notional checklist or algorithm would run counter to the ECJ’s approach because it would disregard the interplay of factors which actually determines how the consumer perceives a mark. Nevertheless, the temptation to short-circuit the global assessment is clear from some recent cases at CFI and Advocate-General level.

 

Adding Matter to Someone Else’s Mark

Where someone has “borrowed” the whole of someone else’s mark, may a likelihood of confusion be presumed?

This issue arose recently in Reemark Gesellschaft für Markenkooperation mbH v OHIM (Case T-22/04). In this case, OHIM had found that a CTM application for WESTLIFE was not likely to be confused with an earlier German registration for WEST in respect of identical and similar goods and services in Classes 9, 16, 25 and 41. The CFI annulled this decision on appeal.

The CFI found that WESTLIFE was visually and aurally similar to WEST because of the presence of the earlier mark as the first element of the later one. On the overall assessment, the CFI determined that the marks should be regarded as similar if one of the word elements of the later mark was visually and aurally identical to the earlier word mark and had no conceptual meaning for the relevant public in respect of the goods and services.

As WEST- was an identical component and had no relevant meaning, the CFI concluded that the marks were similar. There was at least a theoretical possibility that WESTLIFE might be perceived as a variant of the existing WEST mark, if the “existence” of that earlier mark had given rise to an association between it and products marketed by its proprietor.

The goods and services were identical or similar. The finding on the marks led inexorably, therefore, to a ruling that there was a likelihood of confusion.

 

The “Dominant Component” Approach

Reemark suggests that when a later composite mark “borrows” an element from an earlier mark, the test for whether confusion is likely will focus on the shared element and whether or not it is “dominant.” Hints are emerging from other cases as to the dangers of this approach when taken to its extreme.

Increasingly when considering later marks that include borrowed elements, the CFI has relied on its judgment in Matratzen Concord v OHIM (Case T-6/01, [2002] ECR II-4335, para. 30), in which it held that marks are similar when the relevant public would perceive them to be at least partially identical in one or more relevant aspects. Some cases suggest that the CFI construes this, however, supplanting the global assessment, since a mere shared element becomes enough on its own to make the marks similar. In the process, whether or not a borrowed element is “dominant” appears to wield unusual influence.

 

Comparing Word and Figurative Marks

In Faber Chimica Srl v OHIM (Case T-211/03), the CFI overturned OHIM’s ruling that there was a likelihood of confusion between a CTM for a stylised FABER logo and an earlier Spanish word mark registration for NABER for identical goods in Classes 1, 2 and 3. The CFI ruled that when later figurative marks are compared with earlier word marks, the figurative element of the later mark should only be considered if there is a finding that the word elements are similar. The CFI determined that FABER and NABER were distinguishable taking into account the specialised and attentive nature of the relevant public. The figurative element of the earlier mark played no part in the analysis.

Although the result in Faber seems right, extracting only one element of an earlier mark for the purposes of comparison can lead to more questionable results. In CM Capital Markets Holding SA v OHIM (Case T-390/03), the CFI compared a CTM for a stylised CM logo with an earlier Spanish mark, CAPITAL MARKETS CM Logo, both for inter alia financial services. The Matratzen approach led the CFI to focus on the specific shared elements, marginalising, almost to the point of exclusion, the overall impression created by the marks as a whole.

In CM Capital Markets, the CFI construed Matrazten as meaning that “a complex trade mark cannot be regarded as being similar to another trade mark which is identical or similar to one of the components of the complex mark unless that component forms the dominant element within the overall impression created by the complex mark. That is the case where that component is likely to dominate, by itself, the image of that mark which the relevant public keeps in mind, with the result that all the other components of the mark are negligible…”

The CFI applied this test and found that the prominent words CAPITAL MARKETS in the earlier mark were not distinctive in respect of financial services. It therefore disregarded them for the purposes of the assessing aural similarity. The CFI determined that there was aural similarity on the basis of the presence in each mark of the letters CM, despite the irrefutable fact that if the earlier mark was identified in speech by reference to its most prominent elements, the words CAPITAL MARKETS could not be ignored. The combination CM was regarded as the distinctive and dominant component of the earlier mark, despite its comparatively minor visual role.

 

The Problem with the “Dominant Component” Approach

Although a likelihood of confusion was ultimately rejected in CM Capital Markets, the CFI’s approach seems at odds with the requirement to make a global assessment of the marks as a whole.

If marks are to be globally assessed, then it seems a nonsense to conduct separate tests of visual, aural and conceptual similarity which are free to ignore components that are not only undeniably there, but also prominent.

ECJ jurisprudence requires account to be taken of distinctive and dominant components. However, that is not the same as allowing other prominent elements to be disregarded.

An artificial emphasis on dominant components may sow further seeds of uncertainty in a system in which consistency is already at a premium. If a likelihood of confusion may turn on whether or not a dominant component of an earlier mark features in a later one, then the absence of consistency in identifying what is a dominant component will make it even harder to predict outcomes in cases of conflict.

This inherent unpredictability is highlighted by the more recent decision of the CFI in Shaker di L. Laudato & C. Sas v OHIM (Case T-7/04), involving comparison of the earlier Spanish trade mark LIMONCHELO and the later figurative CTM for a logo featuring the prominent word LIMONCELLO, underneath of which appeared in smaller print, “della Costiera Amalfitana” and a large emblem of a bordered plate with decorative lemons around the edge. The goods in question were lemon liqueurs.

Applying Matratzen, the CFI determined that the image of the dish, which was visually larger than anything else on the label, was the dominant component of the later mark. The earlier mark was a pure word mark. No such emblem appeared in it. Despite the clear similarities between the words LIMONCHELO and LIMONCELLO, the CFI considered that there was no need to examine the phonetic or conceptual features of the term because it was not the dominant element of the later mark.

Hence, the CFI found that there was no likelihood of confusion.

The approach in this case is concerning. Although the CFI noted the need to conduct an overall assessment, it is hard to read this as anything other than lip service in the light of the mechanical and disjointed test that it actually applied. The result seems both wrong and wrongly reached. Yet it reflects more and more the kind of approach the CFI is adopting.

The Advocate-General Wades In

The test for likelihood of confusion is once more before the ECJ, this time in Medion AG v Thomson Multimedia Sales Germany & Austria GmbH (Case C-120/04).

Under the microscope will be the German courts’ approach in cases where one mark is incorporated entirely in another mark. The German approach, called “Prägetheorie,” takes particular account of whether the common element characterises the later composite mark to the extent that the other components may be regarded as secondary. Circumstances of the trade may influence this view, such as whether the trade in the goods in question commonly emphasises manufacturers’ names. Where this is the case, then the addition of a manufacturer’s name to an earlier distinctive mark might result in no likelihood of confusion.

In Medion, the earlier German trade mark was LIFE and the later mark was THOMSON LIFE, both for electronic entertainment products. The German court asked the ECJ whether a likelihood of confusion could exist “where a composite word or word/figurative sign comprises a company name followed by an earlier mark which consists of a single word with ‘normal distinctiveness’ and which, although it does not shape or mould the overall impression conveyed by the composite sign, has an independent distinctive role therein.”

Advocate-General Jacobs furnished his opinion in June. In it, he replied that national courts must consider the overall impression of the marks, bearing in mind their distinctive and dominant components, the nature

of the relevant goods or services and the average consumer of them, and the circumstances in which the goods or services are marketed.

Notably, however, he likened Prägetheorie to the approach already endorsed by the ECJ. The Advocate-General referred to the similar approach adopted by the CFI in Reemark, in which the component WEST- had been singled out as the dominant component of the later mark, leading to a finding of a likelihood of confusion between WEST and WESTLIFE.

The Advocate-General cautioned that, in contrast to the CFI on appeal from OHIM, the ECJ when ruling on a preliminary reference would not pronounce on or apply the law to questions of fact. The fact that a likelihood of confusion had been found between WEST and WESTLIFE on one set of facts should not, he warned, prejudge whether there was a likelihood of confusion between LIFE and THOMSON LIFE on different facts; that was a question for the national court. Nevertheless, his apparent approval of both Reemark and Prägetheorie is concerning.

Although Prägetheorie’s requirement of an overall assessment seems harmless enough, the weight it places on dominant components may amount to a wolf in sheep’s clothing. The relative importance of a common component in a later mark and its likely perception by customers, taking account of industry norms, are relevant factors in the global assessment of a likelihood of confusion. However, it is clear from the CFI’s recent judgments that there is a strong temptation to decide a case purely on the basis of whether a common component is dominant. Where the dominance of certain features ceases to be a factor and becomes instead the test, the question of a likelihood of confusion becomes secondary or consequential, rather than, as it should be, the heart of the matter.

Moreover, Prägetheorie and the “dominant component” test both encourage a dangerously mechanical assessment of whether marks are likely to be confused. Sometimes taking the whole of an earlier mark and adding one or two other, less prominent, elements will give rise to a likelihood of confusion. Other times, however, the facts taken together may point the other way.

A fixed legal theory or algorithm designed to provide the answer is problematic because it disregards the intuitive nature of confusion; it involves not seeing the wood for the trees, and there will be a dangerous disconnect between the answer the court gives, and the answer that would be given by the man in the street. The courts owe it to trade mark litigants to assess the matter not from the point of view of lawyers or mathematicians, but rather from that of the average customer.

A firm steer back to the global assessment approach, putting likelihood of confusion to the fore, is sorely needed. It is hoped that the ECJ will take Medion as the opportunity to give one.