Coca-Cola successful on appeal in 'signature flourish' case

On December 11 2014 the General Court rendered its judgment in Case T-480/12 between The Coca-Cola Company, the Office for Harmonisation in the Internal Market (OHIM) and Modern Industrial & Trading Investment Co Ltd (Mitico).   

The decision shows that, with respect to Article 8(5) of the Community Trademark Regulation (207/2009), the similarity of the marks is a necessary requisite, and a finding of a risk of free-riding may be established on the basis of logical deductions resulting from an analysis of the probabilities and by taking account of the usual practices in the relevant commercial field. The decision also shows that, as regards the visual comparison of the signs in cases involving food products and drinks, the figurative elements play a role which is as important as that of the word elements.

The dispute in question arose from the application for registration filed by Mitico on May 10 2010 for a figurative sign consisting of the stylised word 'master' with a word in Arabic above it:

The registration was sought in respect of goods in Classes 29, 30 and 32 of the Nice Classification (food products and drinks).  

On October 14 2010 Coca-Cola filed a notice of opposition, pursuant to Article 41 of the regulation, to the registration of the mark applied for with respect to the goods referred to above. The opposition was primarily based on four earlier figurative Community trademarks consisting of the stylised words 'Coca-Cola' and covering  goods and services in Classes 30, 32, 33 and 43, and on an earlier UK figurative trademark consisting of the stylised letter 'C' covering goods in Class 32.

On September 26 2011 the Opposition Division rejected the opposition in its entirety.

On October 17 2011 Coca-Cola filed an appeal with OHIM pursuant to Articles 58 to 64 of the regulation. The Second Board of Appeal dismissed the appeal, concluding, by decision of August 29 2012, that there was no likelihood of confusion between the signs.

Coca-Cola appealed to the General Court, alleging breach of Article 8(5) of the regulation. This time, the complaint was upheld.         

In particular, the court analysed the plea in law raised by Coca-Cola which was divided into two parts, alleging  that:

1. the Board of Appeal had conflated the issue of the similarity of the marks under Article 8(1)(b) with the issue of the link between the marks under Article 8(5); and
2. the board had disregarded evidence relating to the commercial use of the mark applied for, which was relevant for the purposes of demonstrating Mitico’s intention of taking advantage of the earlier marks’ reputation.

As far as the first part of the plea was concerned, the General Court first emphasised that, if the marks at issue were not similar, Article 8(5) would not be enforceable and, therefore, the application should be granted. According to the abovementioned provision, exclusion from registration is subject to three cumulative conditions, namely:

1. the identity or similarity of the marks at issue;
2. the reputation of the earlier mark; and
3. the risk that the use of the opposed mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier mark.

As regards the preconditions at stake, the General Court specified that, on the basis of settled case law, the degree of similarity required by Article 8(5) is different from that required under Article 8(1)(b), to the extent that, under Article 8(5), the existence of a likelihood of confusion between the marks is not needed: it is sufficient for the relevant section of the public to establish a link between the two signs. In addition, according to case law quoted by the court, the existence of such connection must be assessed globally, account being taken of all factors relevant to the circumstances of the case, including the nature of the covered goods, the strength of the earlier mark’s reputation and distinctive character, the existence of a likelihood of confusion on the part of the public, as well as the degree of the similarity between the marks.  

The court upheld Coca-Cola’s argument that the Board of Appeal had erred in concluding that there was no similarity between the marks at issue, holding that the global assessment to determine whether there is a link between the marks must, so far as the visual, aural or conceptual similarity of the marks is concerned, be based on the overall impression given by those marks, account being taken in particular of their distinctive and dominant elements, and considering that the average consumer normally perceives a mark as a whole without analysing its various details. 

Focusing on the visual comparison of the signs, the court, while acknowledging the principle - applied in the board's decision - that where a trademark consists of verbal and figurative elements, the former should be considered more distinctive than the latter from the perspective of the average consumer, highlighted that case law provides some exceptions to that principle. In particular, in the case of food products and drinks, visually the figurative elements play a role which is at least as important as that of the word elements. Therefore, in the case at issue, the presence of a common figurative element consisting of a 'tail' flowing from the first letters of those signs ('C' and 'M', respectively) in a signature flourish was at least as important as the finding that there was no textual overlap between the word elements.   

In addition, contesting the Board of Appeal’s decision with respect to the visual comparison, the court observed that the use of the same font (namely, the 'Spenserian script'), which is not commonly used in business life, was a relevant factor in determining whether there was a visual similarity. Furthermore, it remarked that the board had erred in focusing its analysis on the ‘tail’ element and in divorcing that element from the context of the word ‘Coca-Cola’ in the earlier trademarks, thus failing to carry out a global assessment of the signs at issue.

As far as the second part of the plea was concerned, the General Court highlighted that, according to settled case law, a finding of a risk of free-riding made on the basis of Article 8(5) may be established on the basis of logical deductions resulting from an analysis of the probabilities and by taking account of the usual practices in the relevant commercial sector, as well as all the other circumstances of the case, including the use, by the proprietor of the mark applied for, of packaging similar to that of the goods of the proprietor of the earlier trademarks. The court also pointed out that, during the opposition proceedings, Coca-Cola had filed evidence relating to the commercial use of the mark applied for to establish such a risk of free-riding in the present case (in particular, a witness statement and screen shots of Mitico’s website).

In the light of all the above, the court upheld the complaint, remanding the case to the board to determine whether unfair advantage would be taken of the distinctive character or the repute of the earlier trademarks.      

Margherita Barié and Pietro Pouché, Carnelutti Studio Legale Associato, Milan