Concept of 'neutralization' rejected

In a case involving the marks XXERO and ZERO, the German Federal Patent Court has held that the European concept of 'neutralization' does not apply in Germany (Case 24 W (pat) 37/08, April 21 2009, only recently released). Relying on established case law, the court ruled that, where the goods are identical, the existence of phonetic, visual or conceptual similarities between two marks is sufficient to result in a likelihood of confusion.
In the present case, the owner of the earlier Community trademark ZERO (registered for, among other things, “cosmetic soaps, perfumery, essential oils, cosmetics”) opposed an application for the registration of the mark XXERO LUXURY COSMETICS in Germany for “cosmetics, hair lotions, essential oils, soaps, deodorising preparations for personal use”. The Federal Patent Court overturned the decision of the Patent and Trademark Office and ordered the cancellation of the trademark XXERO LUXURY COSMETICS.
As the court had found that the ZERO mark was of average distinctive character and that the goods at issue were identical, it focused on the similarities between the marks. Because the words 'luxury cosmetics' were clearly descriptive, the court compared only the components 'xxero' and 'zero'.
The court found that 'xxero' could be pronounced by the relevant public as either 'iksksero' or 'ksero', and that the mark ZERO was likely to be pronounced as 'tsero'. Moreover, the court held that the phonetic similarities between 'xxero' and 'zero' were sufficient to conclude that there was a likelihood of confusion.
While the decision is in line with formerly established German case law, it rejects the concept of neutralization established by the General Court and the Court of Justice of the European Union, under which visual and conceptual differences between two marks may counteract the phonetic similarities (and vice versa).
In order to obtain further clarification on the issue, the Federal Patent Court allowed an appeal to the Federal Supreme Court. However, no appeal was filed and the decision became final. Nevertheless, because the decision conflicts with EU case law, it is unlikely that the court’s view will become established German practice. This assumption is supported by a decision of the Federal Supreme Court in a case involving the marks AIDA and AIDU (Case I ZR 102/07, July 29 2009), in which it was held that a lack of conceptual similarity between two marks may counteract their phonetic or visual similarity.
Verena Wintergerst, Bardehle Pagenberg Dost Altenburg Geissler, Munich

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