Existence of 'fluid transition' between categories of goods does not mean that goods are similar

In BH Stores BV v Office for Harmonisation in the Internal Market (OHIM) (Case T-657/13, July 2 2015), the General Court has upheld a decision of the Second Board of Appeal of OHIM in opposition proceedings.

BH Stores BV opposed a Community trademark application for ALEX filed by Alex Toys LLC for goods in Classes 16, 20 and 28 of the Nice Classification on the basis of the two earlier German marks ALEX in Classes 24 and 28, and the following figurative mark in Classes 12, 18 and 28:

The Second Board of Appeal of OHIM confirmed the decision of the Opposition Division, rejecting the opposition in its entirety. The board stated that BH Stores did not dispute that the earlier trademarks had been put to use only on "sporting articles" in Class 28, and that the opposition was restricted to "children’s bath toys" and "children’s educational and developmental activity toys" in Class 28. The Board of Appeal considered that the relevant public comprised members of the general public in Germany. It stated that there was no dispute that, with respect to the earlier word marks, the parties' marks were identical, and that with respect to the earlier figurative mark, the parties' marks were similar. The Board of Appeal held that "sporting articles" and "children’s bath toys; children’s educational and developmental activity toys" were dissimilar and, accordingly, there could be no likelihood of confusion.

The General Court rejected BH Stores' appeal.

Before the court, Alex Toys submitted that the appeal brought before the Board of Appeal was inadmissible because of the failure to observe the time-limit of four months from the date of notification of the decision for submitting the statement of the grounds of the appeal. However, the statement of grounds of February 7 2013 was lodged within the required time-limit and the Board of Appeal was right to declare BH Stores’ appeal admissible in view of Article 7(4) of Decision No EX-11-3 of the President of OHIM of April 18 2011 concerning electronic communication with and by OHIM. According to that decision, notification shall be deemed to have taken place on the fifth calendar day following the day on which the document was created by OHIM’s systems. The date of the decision of the Opposition Division was October 3 2012 and, in the present case, the time-limit for lodging a statement of grounds of appeal accordingly expired on February 8 2013 at the earliest.

With regard to the substance of the case, the Board of Appeal had found that the relevant public comprised members of the general public in Germany, the member state where the earlier marks are protected, a fact not contested by the parties. Similarly, there was no dispute that, with respect to the earlier word marks, the marks at issue were identical and that, with respect to the earlier figurative mark, the marks at issue were similar.

According to settled case-law, in order to assess the similarity of the goods or services concerned, all of the relevant factors relating to those goods or services should be taken into account. Those factors include, in particular, their nature, their intended purpose, their method of use and whether they are in competition with each other or are complementary. Other factors may also be taken into account, such as the distribution channels of the goods concerned. 

BH Stores criticised the Board of Appeal for failing to identify the goods falling within the category of "children’s bath toys" and "children’s [educational and developmental] activity toys". According to the court, it need only be noted that it is clear from the case-law that, since particular marketing strategies for goods covered by the marks can vary over time and depend on the wishes of the proprietors of those marks, the prospective assessment of the likelihood of confusion between two marks cannot be dependent on the marketing intentions, whether given effect or not, and by their very nature subjective, of the proprietors of the marks. The Board of Appeal was therefore not required to identify the specific goods covered by the mark applied for, since they might vary.

The fact that the "sporting articles" covered by the earlier marks and the toys covered by the mark applied for may be composed of the same materials, which are after all extremely varied, was not in itself sufficient to establish that the goods are similar, given the wide variety of goods which can be made of leather, plastic, wood or metal. The same material can be used to manufacture a wide range of totally different goods. In the present case, "children’s educational and developmental activity toys" are aimed at relatively young children and can be distinguished from "sporting articles" (even if they imitate them) by a lower level of technicality, a different appearance (eg, reduced size and light weight), safety appropriate for children in accordance with Directive 2009/48/EC on the safety of toys, and a generally lower price. A mini golf set, to take an example of goods covered by the mark applied for and cited by BH Stores, will be adapted to the size of children, and the clubs will lack the precision of real golf clubs and will be made of light plastic. That reasoning applies a fortiori to "children’s bath toys" which have no "sporting" equivalent.

With regard to the arguments that the goods at issue have the same method of use, using physical power, and share the same physical condition, the court found that such facts were not significant in the present case, since that is the case for many products which have a primary purpose that is entirely separate from a sport (eg, manual tools, and cleaning and construction instruments). In the light of the foregoing, the court found that the toys covered by the mark applied for had a different nature from that of the "sporting articles" covered by the earlier marks.

The court further held that the existence of a "fluid transition", or an area of overlap between two categories of goods with essentially different purposes, did not mean that all the goods concerned by those categories of goods are similar. Furthermore, it was clear from the case-law that the fact that two products may, to a certain extent, satisfy the same need does not prevent the relevant consumers from perceiving them as two distinct products. In the present case, the Board of Appeal was right to consider that the goods in question had in essence a different purpose. The board was right in finding that "sporting articles" are intended to train the body through physical exercise, whereas "children’s educational and developmental activity toys" are intended both to amuse and educate children. The board was also right in finding that "children’s bath toys" are "clearly only intended to amuse small children". The purpose of pure amusement of "children’s bath toys" is even more evident than for "children’s educational and developmental activity toys".

Further, the court held that the goods covered by the marks at issue were not competing. Since the nature and intended purpose of the goods covered by the marks at issue were different, they were not interchangeable and were therefore not competing. In any event, although sometimes, depending on the circumstances, there may be some interchangeability between the goods at issue, this occured only in one sense, that is to say only the consumers of some toys covered by the mark applied for are likely to resort to the corresponding "sporting articles" covered by the earlier marks in the event of an increase in the price of those toys. It was clear that, even if the price of "sporting articles" rose, consumers of "sporting articles" would still not resort to those toys in order to replace genuine "sporting articles". The fact that there may be overlap in the consumers of the goods at issue, namely children, and that in addition, with respect to adults purchasing those goods for their children, the consumers who will ultimately be confused are identical, was not sufficient in itself to establish a similarity between the goods, since all goods which are aimed at the same consumers are not necessarily identical or similar.

Further, the court found that the manufacture and distribution channels of the goods covered by the marks at issue were different. Although it was possible that "sporting articles", on the one hand, and "children’s bath toys" and "children’s educational and developmental activity toys", on the other, are produced by the same undertakings and offered through the same distribution channels, such phenomena are marginal and cannot, without other evidence in support, lead to the conclusion that those two categories of goods share the same distribution channels. Moreover, the court pointed out that the fact that the goods in question may be sold in the same commercial establishments, such as department stores or supermarkets, is not particularly significant, since very different kinds of goods may be found in such shops, without consumers automatically believing that they have the same origin.

Paul Steinhauser, Bloemendaal