General Court exercises some pest control

In Ertner v Office for Harmonisation in the Internal Market (OHIM) (Case T-566/10, September 12 2012), the General Court has considered whether the Community trademark ERKAT (CTM Registration No 2787117) in Classes 7 and 42 of the Nice Classification was invalid under Articles 53(1)(a) and (b) of the Community Trademark Regulation (207/2009), in view of earlier European trademark registrations for CAT and the figurative mark pictured below in the name of Caterpillar Inc, also covering goods and services in Classes 7 and 42.

In particular, the General Court emphasised:

• the importance of considering the overall impression of marks when undertaking a comparison; and
• the relevance of the type of consumer at whom the goods and service in question are aimed when assessing whether there is a likelihood of consumer confusion between the marks at issue. 

It is clear from this case that, where the marks are sufficiently distinct and the consumers of the goods and services to which the marks are applied are sufficiently specialised, a likelihood of confusion between the marks will not be found, even where the earlier marks have a reputation.

The Cancellation Division of OHIM had earlier ruled that the ERKAT registration was not invalid, as:

• the mark itself was not similar enough to Caterpillar’s earlier trademark registrations to create a likelihood of confusion between the marks; and
• it would not cause detriment to the repute of Caterpillar’s earlier trademark registrations. 

On appeal, the Board of Appeal of OHIM decided that this mark was invalid on the basis that the marks were similar, leading to a likelihood of consumer confusion between goods and services bearing the marks in question.  It further found that the ERKAT registration would cause detriment to the repute of Caterpillar’s earlier registrations, through demonstrating that a consumer would establish a link between the marks.

The owner of the ERKAT mark appealed the Board of Appeal’s decision to the General Court on the following three grounds:

1. the Board of Appeal did not provide proper reasons to support its decision;
2. infringement of Article 8(1)(b) of the regulation; and
3. errors of law and the fact that the Board of Appeal did not provide proper reasons to support the finding of infringement of Article 8(5) of the regulation.

The General Court examined grounds 2 and 3 and, on finding in favour of the owner of the ERKAT mark on both grounds, did not rule on ground 1.

With regard to the application of Article 8(1)(b), the General Court found that the Board of Appeal had erred in finding that the marks were similar, and that there was therefore a risk of consumer confusion. The reasons were as follows.

With regard to the comparison of the marks, the General Court emphasised the importance of an overall appreciation of all of the constituent elements of the ERKAT mark. Whilst this did not exclude analysis of each of the elements of a complex mark, it warned against over-analysis of each element leading to an artificial deconstruction of the mark. The General Court rejected the reasoning of the Cancellation Division that the marks were phonetically and visually similar because, whilst there were differences between the marks (ie, the 'er' prefix of ERKAT, and the use of 'K' instead of 'C'), this was not enough to affect the marks’ deemed similarity because ERKAT included the verbal elements of the earlier marks in their entirety ('KAT' was deemed visually and aurally identical to 'CAT'), and the marks were quite short. 

The Cancellation Division had stated that the average consumer separates a sign into verbal elements which he or she understands, and would therefore read the ERKAT mark as 'ER' and 'KAT', thus increasing the deemed similarity between the marks in question. The General Court rejected these arguments, as they resulted in an artificial deconstruction of the mark. Instead, the General Court emphasised that ERKAT would be perceived by consumers as a short single word, which was not composed of verbal elements with specific meanings. 

Assessing the visual similarity of the marks, the General Court found that the Board of Appeal had erred in finding that 'K' and 'C' were visually identical. It found that the identity between the marks extended only to the two final letters of the marks ('AT'). Considering this in light of the importance of the initial part of a mark to the consumer, ERKAT and CAT would be considered visually different. These differences were found to be even more pronounced with regard to Caterpillar Inc's earlier stylised marks.

With regard to phonetic similarity, the court noted that, whilst in many languages CAT and KAT would be pronounced identically, the marks as a whole were still phonetically distinct, as they had different numbers of syllables, and the first syllable of the contested mark was different to that of the earlier marks in question.

Turning to the overall impression of the marks, the court found that there were differences in length, the initial elements of the marks and graphic presentation of the marks (due to stylisation), but that there was identity between the last two letters of the marks. The General Court emphasised that each element of a mark does not always have equal weight when assessing the overall impression of a mark, and that this must be done with reference to how the mark is presented to the market and consumers.

Assessing the relevance of the goods and services, the General Court emphasised the importance of whether the goods and services designated by the ERKAT mark were aimed at specialist consumers, and if this was the case, a certain degree of similarity between the marks would not cause a likelihood of consumer confusion between the goods and services bearing the marks. Being aimed at construction and engineering specialists, the goods and services bearing these particular marks would be subject to scrupulous consumer consideration upon purchase (see Ruiz-Picasso v OHIM (Case T-185/02) paragraph 59) and the likelihood of consumer confusion between the marks at issue would not arise.

The General Court rejected Caterpillar Inc's argument that the specialist consumer would have a lower degree of attention because they would order such machines orally on a building site, as this relied on an alleged risk of error in ordering the wrong product and did not go so far as to demonstrate that there would be a likelihood of consumer confusion between the goods and services provided under the marks at issue.

Turning to the relevance of the distinctive character of the earlier marks, the court held that, even where the earlier marks had a distinctive character, increasing the likelihood of consumer confusion, the visual and phonetic differences between the marks were sufficient for there not to be a likelihood of consumer confusion between the marks. The particularly attentive consumer in this case would not believe the goods and services offered under these marks originated from economically linked undertakings.

The court then considered the application of Article 8(5) of the regulation. Citing Intel (C-252/07, Paragraph 30), the General Court emphasised the cumulative nature of this article, and the importance of demonstrating that the later mark would take unfair advantage, or cause detriment to the distinctive character or reputation of, the earlier mark(s) at issue. Whilst ostensibly, the Board of Appeal appeared to have found that the ERKAT mark fulfilled all of these cumulative conditions, and therefore was invalid, the General Court found that the conditions set out under Art 8(5) were not fulfilled. The Board of Appeal had not taken into account any of the concrete evidence submitted by Caterpillar Inc demonstrating the reputation it enjoyed in its earlier marks, and that the ERKAT registration took unfair advantage of the reputation Caterpillar Inc enjoyed in its earlier marks at issue.

The General Court felt that the acceptance of this ground of appeal was not sufficiently reasoned by the Board of Appeal. The court emphasised the importance of lower courts taking into account all evidence provided, as they were only able to consider the decision of the Board of Appeal. As such, whilst the evidence provided by Caterpillar Inc may have been enough to establish that there was a likelihood that the ERKAT mark would take advantage of the distinctive character or repute of the CAT marks, the General Court could not take this into account.

This case emphasises the importance of giving full consideration to each cumulative element of both Article 8(1)(b) and Article 8(5) of the regulation, and the need for full consideration of any evidence provided.

Amanda McDowall and Chris McLeod, Squire Sanders (UK) LLP, London