• EUROPEAN PERSPECTIVES

    ECJ Decides Medion, But Miles Still to Go

    In last autumn’s Make Your Mark, we reported the Advocate-General’s decision in Medion AG v Thomson Multimedia Sales Germany & Austria GmbH (Case C-120/04). The ECJ’s awaited guidance was expected to settle whether the mere “dominance” of an element identical to an earlier mark in a later composite mark is enough, on its own, to give rise to a likelihood of confusion. It was hoped that the ruling would steer OHIM and E.U. national courts away from excessive reliance on the “dominance” of shared components, and back to a true global assessment of likelihood of confusion.

    The ECJ did not disappoint. In a clear and precise judgment handed down in October, it ruled that the mere dominance, or lack of it, of a shared component is not the key to whether a likelihood of confusion exists, where a later composite mark includes an earlier mark for identical goods. There may still be a likelihood of confusion where the shared element is not dominant in the later mark, but nonetheless has an “independent distinctive role” in it.

    At the fringes of this welcome clarity, new uncertainties may lurk around the meaning of “independent distinctive role.” Nevertheless, the affirmation that all relevant factors must be considered, and that a case must not turn purely on whether a shared element is “dominant,” doubtless marks an important step forward.

     

    A Brief Recap

    Medion, owner of a German trade mark registration for LIFE, sought to prevent the use of THOMSON LIFE for identical electronic leisure products.

    Under German practice on later marks that incorporate earlier ones, a likelihood of confusion was deemed to exist where the shared element characterized the later composite mark to such an extent that the remaining components were secondary to the overall impression of the later mark. Where the shared element merely contributed to the overall impression of the later mark, there would be no likelihood of confusion, even if the shared element had an “independent distinctive role” in the later mark. This was known as Prägetheorie.

    The German court hesitated over Prägetheorie’s compatibility with E.U. law. It asked the ECJ to give guidance on 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.”

    The Advocate-General’s apparent approval of Prägetheorie led to speculation that Prägetheorie might be endorsed by the Court (see Make Your Mark, Autumn 2005).

     

    The ECJ’s Decision

    In the event, although the ECJ leveled no direct criticism, it rejected the Prägetheorie doctrine.

    The Court ruled that the assessment of similarity was not a simple case of extracting one element from a composite mark and comparing it with another mark. Marks must, it affirmed, be considered as a whole. The ECJ acknowledged that in some cases the overall impression of a composite mark may be dominated by one element. In other cases, however, an element may not dominate, but may still have “an independent distinctive role.” Declining to find a likelihood of confusion simply because a shared element was not dominant was inappropriate in such circumstances.

     

    An “Independent Distinctive Role”

    The ECJ’s dismissal of “dominance” as the key issue where a later mark incorporates the whole of an earlier one is welcome. Just when an element plays “an independent distinctive role,” however, is somewhat less clear.

    There are doubtless cases where a later mark might incorporate the whole of an earlier mark in a manner which is not dominant, but nonetheless is perceived, for other reasons, as part of the origin message by the average consumer. It may, for example, be perceived as a main brand preceding a sub-brand, or vice versa, and thus suggest a trade connection. The ECJ appears to have recognized this and to have gathered in those different circumstances under the blanket term, “independent distinctive role.” To adapt to the various circumstances of each case, the phrase will have to be interpreted with flexibility. Whether it will instead evolve its own specific, and restrictive, meaning will emerge as the courts begin to apply it.

     

    Comment

    A category of cases remains, however, where a shared element may well dominate a later composite mark visually or phonetically, in particular, but where confusion is nonetheless unlikely.

    Medion is clear that the absence of dominance does not determine that there is no likelihood of confusion. What is less clear is how much weight the presence of dominance should bear. There are some cases where marks may be clearly similar, where the later mark incorporates the whole of an earlier mark and adds, for example, non-distinctive matter. However, what about cases where the later mark incorporates the earlier mark in a visually dominant way, but the resulting whole conveys a different visual impression and meaning?

    This was the case in Miles Handelsgesellschaft International mbH v OHIM (Court of First Instance, 7 July 2005, Case T-385/03). In that case, the owner of a CTM for MILES opposed a later CTM for a BIKER MILES Logo, with the words set against the backdrop of a road, for identical Class 25 goods. The opposition succeeded at first instance and was overturned by the Board of Appeal, on the grounds that the marks were visually, phonetically and conceptually distinguishable.

    The CFI overturned the BoA, finding that the BIKER MILES Logo was similar to MILES. It concluded that the road device and the word BIKER were descriptive in respect of clothing for motorcyclists, and that MILES was therefore likely to be perceived as the dominant element. Despite the CFI’s recitation of case law warning against the dangers of extracting and comparing only one element from a composite mark, it nonetheless effectively did so in this case, comparing MILES to MILES, instead of BIKER MILES Logo to MILES. The rejection of the application was at that point inevitable.

    This decision is a clear example of what can go wrong when a tribunal hunts for the “dominant” component of a later composite mark. Decisions made by reference to that element are almost certain to exclude other matter in a manner far removed from the way in which an actual consumer would perceive it. The BIKER MILES Logo contained a combination of words which were relevant to each other and which combined to create a mark with a different look, sound and overall “feel” to MILES on its own. Whilst educated people may differ on the outcome of this case, nonetheless the method employed by the CFI suggests that far too much emphasis is being placed on dominance of shared components, rather than on overall impressions.

    The judgment in Medion may help to dislodge the primacy of the “dominant components” test and return it to its rightful place as one part of an overall assessment. We may still see judgments such as that in BIKER MILES; but they will be more welcomed where the tribunals are satisfied that the average consumer, perceiving the whole mark, would come to the same view.