COYOTE UGLY rejected for cocktail lounge and nightclub services

European Union

In Group Lottuss Corp v Office for Harmonization in the Internal Market (OHIM) (Case T-161/07, November 4 2008), the Court of First Instance (CFI) has upheld a decision of the Board of Appeal of OHIM in which the latter had held that a figurative mark - applied for in relation to goods and services in Classes 9, 41 and 42 of the Nice Classification and containing the entirety of the opponent’s earlier mark - should be refused for the Class 42 services ("cocktail lounge services") and some of the Class 41 services ("services for discos and nightclubs"), but not for goods in Class 9 and services relating to cultural activities in Class 41. 

In October 2001 Group Lottuss Corp applied for the registration of the figurative mark COYOTE UGLY for goods and services in Class 9 ("magnetic data carriers and phonograph records"), Class 41 ("entertainment services, services for discos, nightclubs and cultural activities") and Class 42 ("cocktail lounge services").
In August 2002 Ugly Inc opposed the application in relation to all goods and services based on various registered and unregistered trademarks, including the Community trademark COYOTE UGLY for various goods in Class 32, including beer (only this mark was considered by the CFI).
In November 2005 the Opposition Division rejected Lottuss's application for services in Class 42 (cocktail lounge services) on the grounds that there was a likelihood of confusion between these services and the Class 32 goods for which the earlier mark was registered (in particular, beer). The Opposition Division rejected the opposition in relation to goods and services in Classes 9 and 41, taking the view that there was no likelihood of confusion in relation to those.
Both parties appealed against the decision. In March 2007 the Board of Appeal held that the likelihood of confusion was also present in relation to some of the Class 41 services (namely, entertainment services, services for discos and nightclubs) and that Lottuss's mark should be registered only in relation to magnetic data carriers and phonograph records in Class 9, and services for cultural activities in Class 41. This decision was based on a reasoning that the very high degree of similarity between the marks compensated for the low degree of similarity between beer in Class 32 and “entertainment services, services for discos, nightclubs” in Class 41.
Lottuss appealed, requesting that the mark should also be registered in relation to “entertainment services, services for discos, nightclubs” in Class 41 and “cocktail lounge services” in Class 42. Ugly appealed, arguing that the application should also be refused in relation to “services for cultural activities” in Class 41. The CFI, building on its previous decisions relating to complementarity and interdependence between the similarity of marks and the similarity of goods/services, rejected the arguments of both parties.
Lottuss argued that there was no likelihood of confusion between beer in Class 32 on the one hand, and "entertainment services, services for discos and nightclubs and cultural activities" in Class 41 and "cocktail lounge services" in Class 42 on the other. Lottuss also highlighted the difference between goods and services: the sale of goods implies a transfer of title in relation to a tangible item, while services are the provision of an intangible activity.
The CFI noted that the Board of Appeal had considered this point. It endorsed the board's decision that the very high degree of similarity between the earlier mark and the mark applied for compensated for the low degree of similarity between the relevant goods and services, the overall result being a likelihood of confusion as to the commercial origin of the goods and services in question.
Lottuss also argued that beer and “cocktail lounge services” target different consumers, “cocktail lounge services” being designed to appeal to an older group of consumers, with a certain amount of disposable income, who want to spend a relaxed evening listening to quiet music and enjoying a sophisticated drink, whereas beer is a mass product mostly purchased, in the context of sporting events and public celebrations, in bars or pubs. Among other things, Lottuss also alleged that:
  • beer may have nothing to do with disco and nightclub services in Class 41, which appeal to a public interested in music and cocktails; and
  • companies which sell beer are different from and do not compete with those providing cocktail services (Class 42), as the latter buy stronger alcoholic drinks made by others and which they then mix to clients’ tastes.
The CFI was not convinced. It stated that the similarity between the goods and services in question had to be assessed in light of all relevant factors, including their nature, use and whether they competed with each other or were complementary.
The CFI found that consumers go to discos and nightclubs for a drink and that this drink may well be a beer, as most discos and nightclubs in Europe sell beer. The CFI also noted that “cocktail lounge” was also sometimes used to call what is in essence a bar or a pub, as it makes it sound more “chic”. The CFI did not find any reason in Lottuss's arguments to deviate from the assessment that beer and the services applied for were complementary, particularly as they targeted the same consumers and were often sold/provided in the same commercial environment.
Ugly argued that the board should have refused registration in relation to “services for cultural activities” in Class 41 because it is usual for alcoholic drinks to be served to people who attend a cultural event, such as a rock concert, the opening of an art exhibition or the premiere of a theatre play. Again, the CFI was not convinced and endorsed the reasoning of the board that, although alcoholic drinks and beer may be served in the context of some cultural activities, persons who attend such events do not do so in the same state of mind of “going for a drink” as those going to a bar, disco or nightclub. The CFI agreed with the board’s overall assessment that there was thus no likelihood of confusion between the goods and services in question. 
Interestingly, although Lottuss started revocation proceedings in relation to the earlier mark for lack of genuine use (OHIM decided to revoke the registration on July 11 2008), the CFI held that this was irrelevant because the appealed decision related to an earlier mark that was valid at the date of that decision.
Further, as regards assessing the likelihood of confusion, it appears from this case that the uncertainty still surrounding the CFI’s case law on aesthetic complementarity and genuine aesthetic necessity - developed in cases such as Sergio Rossi SpA v OHIM (Case T-169/03) and the Mülhens Cases (Cases T-150/04, T-263/03 and T-28/04) - does not extend to cases where related products and services are generally offered to the same consumers in the same commercial setting.
Chris McLeod, Hammonds LLP, London

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