Argument of invalidity cannot be raised in opposition proceedings, says ECJ

In L&D SA v Office for Harmonization in the Internal Market (OHIM) (C-488/06 P, July 17 2008), against the opinion of the attorney general, the European Court of Justice (ECJ) has confirmed that it is impossible to raise arguments based on Article 7 of the Community Trademark Regulation (40/94) in opposition proceedings against earlier registrations.

 

In her opinion of March 13 2008, AG Sharpston held that it may be possible to raise arguments based on Article 7 of the regulation in such proceedings. She also suggested that it was wrong to rely on general abstract data in order to establish whether a mark had acquired a particularly distinctive character by reason of its reputation.

 

In 1996 L&D SA applied to register a figurative mark consisting of a fir tree with the words 'aire limpio' as a Community trademark for goods and services in Classes 3, 5 and 35 of the Nice Classification. Julius Samann Limited opposed the application under Article 8(1)(b) of the regulation on the grounds that there was a likelihood of confusion with:

The examiner rejected the opposition. The Board of Appeal upheld Samann’s appeal in respect of the goods in Classes 3 and 5, but rejected it in relation to Class 35. The board relied on Samann's earlier Community trademark, noting that this mark was well known in part of the European Union (ie, in Italy) and concluding that the conceptual similarity of the marks could (at least in Italy) create a likelihood of confusion on the part of the public concerned. The board considered that L&D's mark could be perceived as a variant of the earlier Community trademark, given the similarity between the products. The Court of First Instance (CFI) upheld the board's decision. L&D appealed to the ECJ on the grounds that Samann’s mark lacked distinctiveness and should not have been registered, as the shape of the goods was necessary to obtain the technical result sought by the product, in accordance with Article 7(1)(e) of the regulation.

 

The ECJ agreed with the CFI's decision to infer the distinctive character of Samann's Community trademark from data relating to the ARBRE MAGIQUE mark. The ECJ confirmed the principles set forth in Société des Produits Nestlé SA v Mars UK Ltd (Case C-353/03) - namely, that a mark may acquire distinctive character through use as part of another registered mark. It is sufficient that in consequence of such use, the relevant public actually perceives the product or service designated by the mark as originating from a given undertaking. Consequently, the CFI had been justified in finding that:

The ECJ further found that the CFI had not erred in law in holding that the UK Intellectual Property Office guidelines (which confirm that the silhouette of a fir tree is descriptive of the goods in question) were irrelevant in this case. The Community trademark regime is an autonomous system with its own set of rules. The legality of the board's decisions was to be evaluated solely on the basis of the regulation.

 

L&D had also argued that Samann’s Community trademark was insufficiently distinctive because it consisted only of the shape of the product which was marketed under that mark. According to L&D, the shape of the silhouette of a fir tree was necessary to obtain the technical result sought by an air freshener. L&D submitted that the CFI erred in refusing this argument on the basis that it related to an absolute ground of refusal under Article 7 of the regulation and, therefore, fell outside the scope of opposition proceedings under Article 8.

 

The ECJ rejected this argument. It agreed with the CFI that:

The ECJ also upheld the CFI's finding that evidence of Samann's use which was subsequent to the date of L&D's application was acceptable if it enabled the court to draw conclusions on the situation at the time of the trademark application. The ECJ agreed with the CFI's explanation that the 50% market share of the ARBRE MAGIQUE mark in 1997 and 1998 could have been acquired only progressively, which suggested that the market share would not have been appreciably different in 1996. The ECJ also confirmed the CFI and the board's findings that in order to establish whether the ARBRE MAGIQUE mark was well known, the prolonged use of that trademark had to be taken into account, in addition to indications concerning sales figures and the volume of advertising.

 

The CFI's assessment that the graphic element of L&D's mark was clearly dominant in the overall impression of the mark could not be reviewed by the ECJ on appeal. Contrary to what L&D maintained, there was no rule to the effect that the name used in a trademark had to be regarded as distinctive and fanciful if it was devoid of any specific meaning. Case law did not show that the word element of a complex mark was systematically dominant in the overall impression given by that mark.

 

Regarding the evidence, L&D claimed that it was unable to defend itself sufficiently because the Opposition Division and the board had discounted the ARBRE MAGIQUE mark from the assessment of confusion. The ECJ held that although the CFI decision did not specifically mention the mark to which that evidence related, the fact remained that L&D complained in its application before the CFI that the figures relating to sales and advertising costs used by the board did not concern Samann’s Community trademark, but goods bearing the words 'arbre magique'. Samann's opposition was also based on the ARBRE MAGIQUE mark and it had already submitted the evidence in question at the stage of the proceedings before the Opposition Division. Therefore, L&D could not claim that it did not have an opportunity to present its comments on the evidence taken into consideration by the CFI and the board.

 

The decision confirms that counterclaims for invalidity cannot be raised in opposition proceedings. As a result, there remains a need to commence separate invalidity proceedings, which is costly and time consuming. The decision also provides trademark owners with reassurance that evidence of use relied on in opposition proceedings to support a claim that a mark is well known may be used even if it post-dates the date of the opposed trademark application.