Following a ruling from the ECJ (as it was), the EU General Court has dismissed an opposition based on dilution and free-riding in Environmental Manufacturing LLP v OHIM, Case T-570/10 RENV, 5
Following a ruling from the ECJ (as it was), the EU General Court has dismissed an opposition based on dilution and free-riding in Environmental Manufacturing LLP v OHIM, Case T-570/10 RENV, 5 February 2015. Re-affirming to the guidelines set out in Intel Corporation Inc v CPM UK Ltd (Case C-252/07), the court has held that in order to succeed with an opposition under Article 8(5) of the Community Trade Mark Regulation (207/2009/EC) ("the Regulation"), the opponent must be able to evidence a change in the economic behaviour of the average consumer as a result of the applicant's mark.
Background
The opponent owned a number of figurative marks depicting a wolf's head, which were registered as both national and international marks for gardening products.
The party opposed registration by the applicant of a mark depicting a similar image, which was intended to be used as a CTM for professional wood and green waste processing machines.
The case was initially dismissed by OHIM Opposition Division on the grounds that the opponent had failed to adduce any evidence which detailed the damage caused to the reputation of its earlier marks; however this decision was annulled by the OHIM Board of Appeal on the basis that the earlier marks were highly reputed in three member states. Accordingly the OHIM Board of Appeal found that the applicant's mark could dilute the distinctive character of the opponent's marks and take unfair advantage of their reputation.
In the first instance, the EU General Court upheld this decision and held that the opponent was not required to prove a change in the economic behaviour of the average consumer of the goods or services of the mark due to the use of the applicant's mark. Instead, the EU General Court found that it was sufficient for the purposes of Article 8(5) of the Regulation to show that the applicant's marks would weaken the ability of the earlier marks to identify the source of the goods and services provided.
This decision was referred to the ECJ, who set it aside and referred the case back to the court. The ECJ held that the EU General Court had strayed from the strict ruling in Intel and that in doing so, the court had erred in its application of the law. The ECJ restated that in order to succeed under Article 8(5) of the Regulation, the applicant's mark would have to be detrimental to the earlier mark and such detriment would have to be evidenced by:
Such evidence could include logical deductions; however these deductions could not be the result of mere suppositions but must instead be founded on "an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case".
EU General Court… take two
Following the ruling of the ECJ, the EU General Court re-evaluated their ruling of the case and considered both the risk of dilution of the opponent's marks and the risk of the applicant's mark "free-riding" on the reputation of the earlier marks.
The risk of dilution
The EU General Court found that there was no risk of dilution. The court held that no evidence had been put forward to establish the existence of a risk of the consumer of goods protected by the earlier marks changing his economic behaviour as a result of the applicant's marks and indeed that no argument to this effect had even been mentioned before OHIM.
The risk of free-riding
The EU General Court discussed the concept of free-riding and stated that it encompassed instances where there was a clear exploitation and free-riding on the coat-tails of a famous mark, or an attempt to trade upon its reputation. The court held that in order to determine whether the applicant's mark would take unfair advantage of the reputation of the earlier mark, it must be first shown that there was a link in the mind of the relevant public which connected the signs at issue and the goods concerned. This link must then be evaluated through a global assessment, which should consider all the factors relevant to the circumstances of the case. These factors should include the strength of the earlier mark's reputation and the degree of the earlier mark's distinctive character, the degree of similarity between the marks in issue and the nature and degree of closeness of the goods and services offered.
The mere existence of such a link would not be adequate to establish a risk of free-riding. Instead, evidence would have to be provided, which would show that there was an association of the opponent's mark which could give rise to a manifest exploitation or free-riding of the applicant's mark. At the same time, the court did acknowledge that it was possible for an opposition based on a mark with an exceptionally high reputation to show that the probability of a future, non-hypothetical risk of detriment to the opponent's mark, or unfair advantage being taken of it, was so obvious that the opposing party would not have to put forward any other fact to show it. However, the court held that this criterion did not apply to the case at hand.
Instead, the court considered the relevant public and held that although the Board of Appeal had ruled that the opponent's mark possessed a long-standing reputation and highly distinctive character, this did not mean that the earlier marks were associated with any particular quality which was also capable of being transferred to the goods covered by the applicant's marks. Similarly, it did not follow that there was a high likelihood of such transfer happening in the commercial sector concerned. Finally, the court held that it did not necessarily follow that the attraction, reputation or prestige attributed to the earlier marks would be useful to the applicant in marketing his goods. Taking all these factors into account, the EU General Court held that the contested decision should be annulled.
Comment
This decision was unsurprising, considering the strict guidance issued in Intel and it's re-affirmation by the ECJ earlier in the course of these proceedings. The requirement of an "objective condition" as part of the concept of a "change in the economic behaviour of the average consumer" is necessary to ensure that trade mark owners cannot improperly appropriate particular marks and distort competitive practices. In addition, this case provides useful guidance to trade mark owners, as it is clear that in order to succeed with an Article 8(5) opposition it is crucial that the opponent puts forward the argument that there is a risk that the consumer of the goods protected by the earlier marks will change his economic behaviour as a result of the applicant's marks and that the opponent provide compelling evidence to this effect.
Background
The opponent owned a number of figurative marks depicting a wolf's head, which were registered as both national and international marks for gardening products.
The party opposed registration by the applicant of a mark depicting a similar image, which was intended to be used as a CTM for professional wood and green waste processing machines.
The case was initially dismissed by OHIM Opposition Division on the grounds that the opponent had failed to adduce any evidence which detailed the damage caused to the reputation of its earlier marks; however this decision was annulled by the OHIM Board of Appeal on the basis that the earlier marks were highly reputed in three member states. Accordingly the OHIM Board of Appeal found that the applicant's mark could dilute the distinctive character of the opponent's marks and take unfair advantage of their reputation.
In the first instance, the EU General Court upheld this decision and held that the opponent was not required to prove a change in the economic behaviour of the average consumer of the goods or services of the mark due to the use of the applicant's mark. Instead, the EU General Court found that it was sufficient for the purposes of Article 8(5) of the Regulation to show that the applicant's marks would weaken the ability of the earlier marks to identify the source of the goods and services provided.
This decision was referred to the ECJ, who set it aside and referred the case back to the court. The ECJ held that the EU General Court had strayed from the strict ruling in Intel and that in doing so, the court had erred in its application of the law. The ECJ restated that in order to succeed under Article 8(5) of the Regulation, the applicant's mark would have to be detrimental to the earlier mark and such detriment would have to be evidenced by:
- a change in the economic behaviour of an average consumer of the goods or services for which the opponent's mark was registered; or
- evidence that there was a serious likelihood that such a change would occur in the future.
Such evidence could include logical deductions; however these deductions could not be the result of mere suppositions but must instead be founded on "an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case".
EU General Court… take two
Following the ruling of the ECJ, the EU General Court re-evaluated their ruling of the case and considered both the risk of dilution of the opponent's marks and the risk of the applicant's mark "free-riding" on the reputation of the earlier marks.
The risk of dilution
The EU General Court found that there was no risk of dilution. The court held that no evidence had been put forward to establish the existence of a risk of the consumer of goods protected by the earlier marks changing his economic behaviour as a result of the applicant's marks and indeed that no argument to this effect had even been mentioned before OHIM.
The risk of free-riding
The EU General Court discussed the concept of free-riding and stated that it encompassed instances where there was a clear exploitation and free-riding on the coat-tails of a famous mark, or an attempt to trade upon its reputation. The court held that in order to determine whether the applicant's mark would take unfair advantage of the reputation of the earlier mark, it must be first shown that there was a link in the mind of the relevant public which connected the signs at issue and the goods concerned. This link must then be evaluated through a global assessment, which should consider all the factors relevant to the circumstances of the case. These factors should include the strength of the earlier mark's reputation and the degree of the earlier mark's distinctive character, the degree of similarity between the marks in issue and the nature and degree of closeness of the goods and services offered.
The mere existence of such a link would not be adequate to establish a risk of free-riding. Instead, evidence would have to be provided, which would show that there was an association of the opponent's mark which could give rise to a manifest exploitation or free-riding of the applicant's mark. At the same time, the court did acknowledge that it was possible for an opposition based on a mark with an exceptionally high reputation to show that the probability of a future, non-hypothetical risk of detriment to the opponent's mark, or unfair advantage being taken of it, was so obvious that the opposing party would not have to put forward any other fact to show it. However, the court held that this criterion did not apply to the case at hand.
Instead, the court considered the relevant public and held that although the Board of Appeal had ruled that the opponent's mark possessed a long-standing reputation and highly distinctive character, this did not mean that the earlier marks were associated with any particular quality which was also capable of being transferred to the goods covered by the applicant's marks. Similarly, it did not follow that there was a high likelihood of such transfer happening in the commercial sector concerned. Finally, the court held that it did not necessarily follow that the attraction, reputation or prestige attributed to the earlier marks would be useful to the applicant in marketing his goods. Taking all these factors into account, the EU General Court held that the contested decision should be annulled.
Comment
This decision was unsurprising, considering the strict guidance issued in Intel and it's re-affirmation by the ECJ earlier in the course of these proceedings. The requirement of an "objective condition" as part of the concept of a "change in the economic behaviour of the average consumer" is necessary to ensure that trade mark owners cannot improperly appropriate particular marks and distort competitive practices. In addition, this case provides useful guidance to trade mark owners, as it is clear that in order to succeed with an Article 8(5) opposition it is crucial that the opponent puts forward the argument that there is a risk that the consumer of the goods protected by the earlier marks will change his economic behaviour as a result of the applicant's marks and that the opponent provide compelling evidence to this effect.