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BGW – Three not so little letters?

The CJEU has looked at the tricky question of three-letter acronyms and the distinctiveness of such marks in the context of opposition disputes.Legal ContextArticle 3(1)(b) and (c) of the Trade Marks The CJEU has looked at the tricky question of three-letter acronyms and the distinctiveness of such marks in the context of opposition disputes.

Legal Context

Article 3(1)(b) and (c) of the Trade Marks Directive (2008/95/EC) provides that "The following shall not be registered or, if registered, shall be liable to be declared invalid:………(b) trade marks which are devoid of any distinctive character; (c)  trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering of the service, or other characteristics of the goods or services;….."

Article 4(1)(b) provides that "A trade mark shall not be registered or, if registered, shall be liable to be declared invalid:……. if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association with the earlier trade mark".

History of the Dispute

The reference arises after the German Patent and Trade Mark Office was presented with an application from the German Federal Association for Businesses in the Healthcare Sector ("GFABH") in 2006 for the word mark "BGW Bundesverband der deutschen Gesundheitwirdtschaft" (BGW being an acronym for Bundesverband der deutschen Gesundheitwirdtschaft ) meaning "BGW National Federation of German Health Companies". The registration was opposed by the then named BGW Marketing- & Management- Service GmbH, now BGW Beratungs-Gesellschaft Wirtschaft mbH ("BGW BG"), on likelihood of confusion grounds based on their earlier word and figurative mark "BGW" in classes 16, 35 and 41. The application of GFABH covered the same classes.

The German Patent and Trade Mark Office initially upheld the opposition of BGW BG finding a likelihood of confusion because of the independent role of "BGW" within "BGW National Federation of German Health Companies". This was overturned in 2012 primarily because of BGW BG's evidence of use.

On further appeal the Federal Court took the view that both marks are dominated by the sequence of letters "BGW"; the phrase 'National Federation of German Health Companies' serving only as a description of the fact that the products and services in question are provided by a group of health sector companies rather than a precise identification of commercial origin; the figurative element of "BGW" serving only to emphasise the letters "BGW". Following Medion (C-120/04) the sequence of letters has to be acknowledged as having at least an independent distinctive role in "BGW National Federation of German Health Companies" irrespective of how the word combination is assessed. Therefore, 'when the relevant public is faced with[ the mark], it will recognise the earlier mark ["BGW"], the only difference being that the acronym ‘BGW’ — which is in itself meaningless — will now be clarified by the (descriptive) explanatory indication…..'. Consequently, citing AMS V OHIM (T-425/03) the Federal Court took the view there was no doubt that likelihood of confusion would exist with respect to the aforementioned goods.

On the other hand the Federal Court noted that in the cases of Strgil and Securvita (C-90/11 and C-91/11) the Court of Justice had held that a mark would unregistrable 'which consists of the juxtaposition of a descriptive word combination and a letter sequence which is non-descriptive in itself, if the relevant public perceives that sequence as being an abbreviation of that word combination … and the mark in question, considered as a whole, can thus be understood as a combination of descriptive indications or abbreviations which is therefore devoid of distinctive character…'. The Federal Court was therefore reluctant to find that 'a component of a composite mark, in this case the sequence of letters ‘BGW’, understood as an acronym in the later mark, has a dominant or at least independent distinctive role if such a component occupies only an ancillary position'.  The perceived conflict between the case law of Medion (C-120/04) and AMS V OHIM (T-425/03)  and Strgil and Securvita (C-90/11 and C-91/11) left the Federal Court unable to decide the case.

This is why the following question was referred to the CJEU last year:  "Must Article 4(1)(b) of Directive 2008/95/EC be interpreted as meaning that, in the case of identical and similar goods and services, there may be taken to be a likelihood of confusion for the public if a distinctive sequence of letters which dominates the earlier word/figurative trade mark of average distinctiveness is made use of in a third party’s later mark in such a way that the sequence of letters is supplemented by a descriptive combination of words relating to it which explains the sequence of letters as an abbreviation of the descriptive words?"

Judgment of the Court of Justice

The full judgment can be found here.  To summarise, the Court has found that the finding in Strgil and Securvita (C-90/11 and C-91/11) is not 'a general rule for assessing the ancillary nature of a sequence of letters which reproduces the first letter of each of the words in the word combination with which it is juxtaposed'.  The Court found that it was not applicable on the facts of this case, emphasising that the angle from which the relevant public's perception of a sign is assessed varies according to whether you are evaluating the descriptiveness of a sign or the existence of a likelihood of confusion.

When assessing descriptiveness, the focus is the mental processes which lead to relationships being established between the sign or its components and goods and/or services concerned. When assessing likelihood of confusion the focus is the processes by means of which the sign is '….remembered, recognised and recalled and to associative mechanisms'.  The Court then reviewed the case law on likelihood of confusion before concluding that 'the mere fact that the later mark consists of a sign reproducing the letter sequence that constitutes the only word element of the earlier mark and of a combination of words the initial letters of which correspond to that sequence cannot, on its own, preclude a likelihood of confusion with that earlier mark'.

It's now for the national court to apply the ruling.  However, it appears that the Federal Court will have good grounds for preferring the reasoning in the Medion case over that in the Strgil and Securvita cases.

What does this mean?

The judgment affirms the position of brand owners.  Although the bar for registration in the European Union is high, once a mark has been registered, the Court of Justice is generally reluctant to allow its protection to be chipped away by means of arguments contesting the distinctiveness of various elements.  What matters when assessing likelihood of confusion is the consumer's ability to recognise and recall the registered mark.  This is a slightly more flexible approach to distinctiveness than the approach taken when assessing registrability.  At that point, any sufficiently direct connection between a proposed mark and the goods and services covered is, as in Strgil and Securvita, liable to render the mark unregistrable.  In the event that the overall registrability of a given trade mark may be contestable, then the correct forum for testing that registrability is an application for invalidity.  Practitioners should be wary of seeking to overly limit the distinctiveness of earlier marks in the context of opposition proceedings.   As can be seen in the present case, it is not a reliable strategy.


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