Board erred in restricting likelihood of confusion assessment to single premise

European Union
In mPAY24 GmbH v Office for Harmonisation in the Internal Market (OHIM) (T-557/08, July 7 2010), the General Court has annulled a decision of the First Board of Appeal of OHIM in so far as that decision dismissed the opposition brought by mPAY24 GmbH against the registration of the mark MPAY.
This long-running dispute began in 2001. mPAY24 applied to register the mark MPAY24 in Austria and, subsequently, as a Community trademark (CTM), claiming the priority date of the Austrian application (ie, September 6 2001). The application was accepted by the Austrian Patent Office (Registration 200373), but was rejected by the OHIM examiner on the grounds that the mark was descriptive. However, the Board of Appeal of OHIM subsequently allowed the registration of the mark (Registration 2601656) (Case R-0631/2003-2, April 21 2004).
The intervener in the present case, Ultra doo Proizvodnja elektronskih naprav, sought to obtain registration of the word mark MPAY first in its home country in Slovenia, and then with OHIM. At both levels the trademark was rejected on the grounds that it was descriptive. As a result, Ultra sought to register the figurative mark MPAY as a CTM (Application 3587896): 

OHIM accepted the application, but mPAY24 opposed.

The Opposition Division of OHIM allowed the opposition in its entirety (Case B-860504, December 21 2006), but the Board of Appeal dismissed the opposition in respect of certain goods and services considered to be not identical (Case R-221/2007-1, September 30 2008). According to the board, a likelihood of confusion between two marks that have a weak distinctive character can exist only if they are used for goods and services which are identical, or if the marks are identical or very similar. mPAY24 appealed to the General Court.
The court considered whether the Board of Appeal was right in basing its decision on such a premise. The court left the issue of the distinctiveness of the marks open, but held that the board of Appeal had erred in law:

[b]y restricting its assessment of the likelihood of confusion to the premise that a likelihood of confusion of two marks which are of weak distinctive character can exist only if they are used for goods and services which are identical or if the signs are identical or very similar.” 
The matter was complicated by the fact that the marks MPAY24 and MPAY have been held to be confusingly similar by the CTM Court of Hamburg and by the CTM Courts of First Instance and Second Instance of Warsaw. Moreover, two CTM applications for the trademarks MPAY EXPRESS (and design) (Application 6315717) and MPAYXPRESS (Application 6003602) have recently been rejected following an opposition by mPAY24 based on its MPAY24 marks (Case B-1430398, June 15 2010, and Case B-1518227, June 28 2010, respectively).

In addition, the First Board of Appeal recently issued its decision in an invalidity action filed by Ultra against mPAY24, concluding that the MPAY24 mark was not registrable because it was clearly descriptive (Case R-1102/2008-1, March 22 2010). This conclusion was based on the findings that:

  • the letter 'M' stands for the word 'mobile';
  • the word 'pay' is easily understandable by all consumers; and
  • the number 24 refers to the availability of the services 24 hours a day.
However, the board gave no reason why the letter 'M' should be understood as 'mobile' - particularly in light of the fact that mPAY24 initially registered the mark for a multi-payment system - and it remains unclear what the number 24 would mean in connection with the products at issue. mPAY24 has appealed this decision, and the appeal is currently pending before the General Court. Interestingly, it is the same board (ie, the First Board of Appeal) which issued:
  • the September 30 2008 decision (annulled by the General Court in the present case) in which it was found that the marks had a weak distinctive character; and 
  • the March 22 2010 decision in which it was found that MPAY24 was clearly descriptive and thus unregistrable.
In the present case, the General Court confirmed that the MPAY24 mark had a weak distinctive character. The board, in its global assessment of the likelihood of confusion, should have assessed not only the distinctive character of the MPAY24 mark, but also the degree of similarity existing between the goods and services at issue, and the degree of similarity between the marks at issue.
This dispute is thus far from over, and more interesting decisions are expected to be issued in the near future.
Hans Georg Zeiner, Zeiner & Zeiner, Vienna

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