General Court gives green light to national railway company’s action

European Union

In Deutsche Bahn AG v Office for Harmonisation in the Internal Market (OHIM) (Case T-274/09, September 9 2011), the General Court has overturned a decision of the First Board of Appeal of OHIM, finding that there was a likelihood of confusion between the word mark IC4 and Deutsche Bahn AG's earlier Community word mark ICE.

In January 2005 Danish railway company DSB filed a Community trademark application for the word mark IC4 in respect of services in Class 39 of the Nice Classification, including “railway transport”. Deutsche Bahn opposed the application in November 2005 on the basis of the earlier German figurative mark IC and the earlier Community word mark ICE, which both designated identical or highly similar services in Class 39.

The Opposition Division of OHIM rejected the opposition, arguing mainly that there were limited visual and phonetic similarities between IC4 and ICE, and that the marks were conceptually different. Comparing IC4 and the earlier German figurative mark, the Opposition Division found that they were visually different, that there was an average degree of phonetic similarity and that they were conceptually dissimilar. Turning to the overall assessment of the marks, the Opposition Division concluded that they could not be regarded as similar, which ruled out any likelihood of confusion within the meaning of Article 8(1)(b) of the Community Trademark Regulation (40/94) (now the Community Trademark Regulation (207/2009)).
    
Upon appeal by Deutsche Bahn, the First Board of Appeal of OHIM rejected the opposition. It endorsed the reasons of the Opposition Division and also held that all three marks were descriptive of the services covered and that they had a weak distinctive character. Therefore, the marks were unlikely to be identified as trademarks, which excluded any likelihood of confusion between them.

Deutsche Bahn appealed to the General Court, claiming that the court should annul the decision of the board and that of the Opposition Division.

With regard to the admissibility of the action, the General Court referred to Article 64 of the regulation and pointed out that Deutsche Bahn’s claim for annulment of the Opposition Division's decision was admissible, as the Board of Appeal had the power to annul the Opposition Division's decision if it considered the appeal to be well founded.

Concerning the substance, the General Court agreed with Deutsche Bahn that the board had violated Article 8(1)(b) through various errors of law and an “autonomous empirical method” in the assessment of the likelihood of confusion between the marks. In particular, the board's examination of the absolute grounds for refusal was of no relevance to the analysis of the likelihood of confusion under Article 8. Moreover, the finding that an earlier trademark has a weak distinctive character does not in itself prevent a finding of a likelihood of confusion.

However, these errors of law did not as such lead to the annulment of the contested decision, as the Board of Appeal had expressly adopted the Opposition Division’s analysis of the likelihood of confusion. Nevertheless, the General Court considered that the board had erred in finding that there was no likelihood of confusion between IC4 and the earlier ICE mark.

Unlike the board, the General Court concluded that the degree of attention of the relevant public in relation to the services at issue was not limited, but average. The services in question can be purchased by end users in travel agencies and via the internet, which might lead to the purchase being carried out after a detailed personal discussion in which the services offered are described and compared.

Although this was not contested by the parties, the General Court stated that the board had failed to determine the degree of similarity between the services other than transport and, therefore, had failed to provide an adequate statement of reasons for its decision.

In addition, the court held that IC4 and ICE had an average degree of visual similarity due to the letters 'I' and 'C' being common to both and appearing in the same position and order. Unlike the Opposition Division, which ruled out any conceptual similarity between the marks, the General Court held that the signs at issue also had an average degree of conceptual similarity, as the characters 'E' and '4' would be perceived as amplifying the nature of the services designated by the marks - namely 'express' and 'fourth generation', respectively.

Most importantly, the General Court underlined that there was a certain interdependence between the public’s recognition of a mark and its distinctive character, in that the more the mark is recognised by the target public, the more the distinctive character of the mark is strengthened. The evidence adduced by Deutsche Bahn during the opposition proceedings showed that the ICE mark has a highly distinctive character in Germany as a result of its reputation and due to Deutsche Bahn’s virtual monopoly over the interregional rail transport sector in that country. Therefore, the court concluded that the board's decision should be annulled, as well as the decision of the Opposition Division.

The case is a strong reminder that the Board of Appeal must assess the likelihood of confusion without confusing it with an examination of the absolute grounds for refusal. Moreover, the distinctive character of an earlier mark - being one factor for the assessment of the likelihood of confusion - might result from its reputation.

Florian Schwab, Boehmert & Boehmert, Munich

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