ODA and RODA Wine Battle Leaves Some with Aching Heads

Vintners throughout Europe are puzzling over the implications of the recent Court of First Instance finding in Castell del Remei SL v OHIM (Case T-101/06). They are not the only ones: brand-owners in general are struggling with an approach that allowed the Court to telescope the composite mark CASTELL DEL REMEI ODA and Castle Device to the mere word ODA, then ruling it similar to RODA.

The outcome highlights the unpredictability of decisions involving the comparison of word and composite marks, and the scant weight the Court may accord to national decisions on similar issues. On a practical level, it also signals the importance of backing up claims to peaceful coexistence with substantive evidence.

Wine Wars

Castell del Remei SL (“Remei”) was a wine producer, who applied to register the below composite mark as a CTM for goods including alcoholic beverages.

A rival producer, Bodegas Roda S.A., opposed on the basis inter alia of an International Registration for RODA for wines and liqueurs, extending to Austria, the Benelux, Denmark, Finland, France, Germany, Italy, Sweden and the U.K.

The Opposition Division upheld the opposition, finding that ODA was dominant in the CTM and that there was a likelihood of confusion due to its visual and phonetic similarity to RODA and the identity of the goods. The Board of Appeal spurned Remei’s appeal.

Remei, however, persevered. Before the CFI, it argued vigorously that OHIM’s decisions were flawed. It pointed to the visual differences between the marks, including the presence in its mark of the prominent words CASTELL DEL REMEI and a castle device. It contended that these visual differences necessarily led to phonetic ones. It pointed to different meanings of ODA and RODA in Italian and German, which distinguished the marks conceptually.

Remei also drew support from its claim that the marks had co-existed peacefully for many years. Further, it highlighted a Spanish court decision rejecting a claim that the marks were confusingly similar. Taking all these factors into account, Remei argued, the CFI should overturn the decision upholding the opposition.

Clear Heads Prevail at CFI?

In its decision, not yet available in English, the CFI roundly rejected Remei’s claims.

In an outcome that surprised many, it upheld the finding that the marks were visually and phonetically similar. The Court reasoned that the words CASTELL DEL REMEI and the castle device were half the size of the word ODA in the CTM, and were separated from ODA by a wide swathe of blank space. CASTELL was likely to be understood, in the context of wine and the image of a castle, as denoting a chateau or castle at which vineyards were cultivated. DEL REMEI was likely to be perceived as merely denoting the geographical area from which the product or producer emanated.

As a result, the Court concluded that the average consumer was likely to accord only secondary importance to CASTELL DEL REMEI and the castle device. Consequently, it held that it was legitimate to compare only the elements ODA and RODA.

Once the comparison was reduced to this level, affirmation of OHIM’s decision had a depressing inevitability. Although there were clear initial visual and phonetic differences between ODA and RODA, the Court considered them outweighed by the remaining similarities in these short marks. Conceptual differences in Germany and Italy did not avoid potential confusion in other member states to which the earlier IR extended. Moreover, the CFI dismissed the decision of the Spanish court on similarity, noting that Spain was not a relevant territory in the opposition.

The CFI gave particular weight to the phonetic similarity between ODA and RODA, noting that in some member states where English was spoken, an initial letter “R” was not strongly emphasised.

The Court appeared indifferent to Remei’s claim that the marks had coexisted peacefully for many years. In its view, Remei had waited too late to file evidence in support of that claim. Relevant evidence had been offered for the first time before the CFI and could not, therefore, be taken into account in line with the ECJ’s decision in OHIM v Kaul GmbH (Case C-29/05 P). Moreover, the Court remarked that, in any event, the mere fact that no objection was raised to actual use did not necessarily mean that there was no likelihood of confusion.

Comment

For many, the finding that these marks were similar simply does not stack up.

Treating Remei’s composite mark as effectively simply ODA was, to say the least, a surprising approach. The words CASTELL DEL REMEI and the castle device were slightly smaller than the word element ODA, but they were still visually quite prominent and appeared above the word ODA, albeit separated by some blank space.

The CFI justified disregarding these elements primarily on the basis that they were non-distinctive in respect of wines. However, even non-distinctive matter can have a visual and phonetic impact. Moreover, elements that are non-distinctive on their own may, when combined in a certain visual presentation, give rise to a distinctive whole, as the CFI itself affirmed recently in Koipe Corporación SL v OHIM (Case T-363/04, para. 85), in which two ostensibly non-distinctive olive oil labels combining agricultural scenes and seated women were held to be distinctive as a whole.

The CFI’s indifference to the Spanish court’s decision on likelihood of confusion is noteworthy. Certainly Spain was not a relevant territory in the appeal, and the letter “R” is enunciated differently, and with greater emphasis, in Spanish than in English and certain other E.U. languages. However, if the issues before the Spanish court had been identical and the visual comparison had been the same, then it is hard to see why its reasoning should not have been considered. Parties in OHIM proceedings who rely on national court decisions should note the importance of explaining the extent to which the issues mirror each other, and should not expect too much.

The most serious practical lesson, however, is that where peaceful co-existence is cited in defence, it is essential to back it up with hard evidence at first instance. Evidence adduced for the first time before the Boards of Appeal may or may not be considered; it is a matter of discretion, not of right. No discretion exists at all if evidence is only introduced before the CFI or later: it will be disregarded.

What is more challenging is the implication that it is not enough to prove mere co-existence without an adversary’s objection. A party must also show, as far as possible, that the peaceful co-existence arose because there was no likelihood of confusion. Proving a negative is a logical impossibility, and one hopes that OHIM will bear this in mind when assessing evidence in support of such claims. However, an applicant can strive to prove the existence of measures, such as good contacts with distributors and vendors, which would allow OHIM to infer that confusion, had it occurred, would have been reported. Lateral thinking is essential, and the best evidence is likely to be highly case-specific.

On the overall issue of similarity, however, the CFI’s ruling reflects how unpredictable the outcome can be when a finding depends on the dominance of certain elements in a composite mark. That the presence of certain elements should blind a tribunal to the presence of others seems misjudged and, to many, not in accordance with the law as developed. In future, clearer thinking will hopefully prevail.