Dilution issues dealt with by CFI

In Sigla SA v Office for Harmonization in the Internal Market (OHIM), the European Court of First Instance (CFI) has clarified the law relating to the dilution of well-known marks and has set out guidelines for OHIM Boards of Appeal in situations where a board wishes to annul a decision of the OHIM Opposition Division.

Sigla SA owns the Spanish national mark VIPS, which it asserted was well known for restaurant services and the retail sale of consumable goods sold at these restaurants. Elleni Holding BV applied for registration of an identical Community trademark for goods and services in Classes 9, 35 and 42 of the Nice Classification. Sigla opposed the application for registration. The OHIM Opposition Division upheld the opposition for services in Class 42, but rejected it in relation to Classes 9 and 35. The basis of this split decision was Article 8(5) of the Community Trademark Regulation (regarding marks with a reputation) and the Opposition Division stated that the mark applied for would take unfair advantage of, or be detrimental to, the reputation of the earlier mark. Only the applicant, Elleni, appealed this split decision.

On appeal, OHIM's Third Board of Appeal annulled the Opposition Division decision finding, among other things, that Sigla had not set forth grounds on which the mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier mark. Sigla appealed this decision to the CFI.

Pursuant to Article 8(5) of the regulation, the CFI found that VIPS was a common abbreviation for 'Very Important Persons', and that the detriment to the earlier mark would be limited. The channels of trade were such that a specialist group used the services provided under the later mark, which reduced the risk of dilution.

As regards tarnishment, the CFI found that the services provided under the earlier mark - fast food services - were not particularly prestigious. No evidence of record showed that there was detriment to the reputation of the mark. Further, the CFI held that there was no evidence that the later mark would take unfair advantage of the distinctive character or the repute of the earlier mark.

Thus, the CFI found that the Board of Appeal did not err in its finding that Sigla had not satisfied the elements of Article 8(5). However, the court found that the board had erred in refusing to apply the likelihood of confusion analysis under Article 8(1)(b) simply because Sigla had not appealed the Opposition Division's decision. For that reason the decision of the Board of Appeal was annulled.

This case shows that it is not enough that a mark is famous; its proprietor must still prove that use by another would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trademark.

Peter Gustav Olson, Plesner, Copenhagen