General Court upholds appeal on procedural issue

In XXXLutz Marken GmbH v Office for Harmonisation in the Internal Market (OHIM) (Case T-542/10, June 13 2012), the General Court has upheld XXXLutz Marken GmbH’s appeal against a decision of the First Board of Appeal of OHIM in which the latter had upheld an opposition by Meyer Manufacturing Co Limited.

In February 2005 XXXLutz applied to register the word mark CIRCON as a Community trademark (CTM) for goods and services in Classes 6 to 9, 11, 16, 18 to 21, 24 to 28 and 35 of the Nice classification. On publication, Meyer filed an opposition based on a CTM registration for the word mark CIRCULON, as well as on the basis of the unregistered trademark CIRCULON used in the course of trade in the United Kingdom for “cookware, milk pans, saucepans, frypans, covered sauté pans, skillets, casseroles, stockpots, Chinese woks and griddles” in Class 21. The grounds for opposition were those laid down in Articles 8(1)(b), (4) and (5) of the Community Trademark Regulation (40/94), now the Community Trademark Regulation (207/2009).

XXXLutz limited the application to certain goods in Classes 7, 11 and 21, including:

• Class 7: "small and large electric household and/or kitchen machines and kitchen implements of all kinds included in Class 7";
• Class 11: "apparatus for cooking purposes"; and
• Class 21: "household or kitchen utensils and containers (not of stainless steel or coated therewith); glassware, porcelain and earthenware (included in Class 21)".

In October 2009 the Opposition Division of OHIM upheld Meyer’s opposition on the basis that there was a likelihood of confusion in respect of all the above goods in Classes 7, 11 and 21. XXXLutz appealed. 

The First Board of Appeal rejected the appeal, agreeing that there was a likelihood of confusion between the marks. In arriving at this decision, the board held that:

• the conflicting marks were visually and aurally similar;
• the conflicting goods were similar; and
• Meyer’s mark enjoyed a reputation for cookware in the United Kingdom.

In further appealing to the General Court, XXXLutz raised three arguments, namely:

• infringement of Article 8(1)(b);
• infringement of OHIM’s restriction in its examination to the facts, evidence and arguments provided by the parties pursuant to Article 76(1); and
• infringement of a party’s rights of defence under the second sentence of Article 75.

The General Court considered that the goods applied for were identical or similar to the goods in Meyer’s registration. Turning to the usual considerations of visual, phonetic and conceptual similarity, the court held that the fact that both marks shared the letters 'C', 'I', 'R', 'O' and 'N' in the same order and had six letters in common, meant that the differences arising from the letters which the marks did not share - 'U' and 'L' - were insufficient to affect their visual similarity. It further held that, phonetically, the marks were similar due to the same sequence of letters, and the syllables 'CIRC' and 'ON' having the same pronunciation. Finally, turning to the conceptual comparison, the court held that the marks were unable to be compared conceptually since they were invented words. The court did not accept XXXLutz’s argument that CIRCULON would be understood as meaning 'circleon' (ie, a combination of the English word 'circle' and the suffix 'on').

The court did not further assess the question of a likelihood of confusion, but considered the pleas raised by XXXLutz on procedural points.

As to the plea raised under Article 76(1), the court dismissed XXXLutz's argument that OHIM examined relevant facts of its own motion. Meyer claimed a reputation of its mark in the United Kingdom and, by taking this claim into consideration, OHIM had correctly restricted its assessment of a likelihood of confusion to the facts, evidence and arguments provided by the parties.

Turning to the plea raised under Article 75, the court pointed out, at the outset, that, pursuant to the second sentence of Article 75, decisions of OHIM are to be based only on reasons on which the parties concerned have had an opportunity to present their comments. This follows the general principle of Community law that a party whose interests are appreciably affected by a decision taken by a public authority must be given the opportunity to make its point of view known. 

In the contested decision, the First Board of Appeal had held that Meyer’s mark enjoyed a reputation in the United Kingdom and took the mark’s reputation into account when reaching its conclusion that there was a likelihood of confusion between the marks. The board’s assumption of the mark’s reputation was based on three pieces of evidence - namely a brochure from 2004, copies of invoices and a witness statement including information as to the revenue generated by Meyer in the United Kingdom. The court considered the latter to be insufficient to prove reputation alone, so the contested decision heavily relied on the first two pieces of evidence (ie, the brochure and copies of invoices).

XXXLutz claimed that it had never received a copy of the 2004 brochure and that the invoices submitted by Meyer Manufacturing were illegible. As to the brochure, OHIM was unable to prove that it had duly sent it to XXXLutz. With respect to the invoices, the court reviewed the copies originally sent to XXXLutz and agreed that they were in fact illegible. Hence, since OHIM reached its decision by relying on evidence on which XXXLutz had not had an opportunity to comment, the court annulled the board’s decision and as a consequence, upheld XXXLutz’s appeal.

The judgment of the General Court will be a welcome success for XXXLutz, but it may still turn out to be a pyrrhic victory. The court followed OHIM’s assessment regarding the similarity of goods and the similarity of the marks. It therefore remains to be seen whether another Board of Appeal of OHIM, once the case is referred back to Alicante, will come to a different conclusion as to the likelihood of confusion under Article 8(1)(b).

Florian Traub, Squire Sanders (UK) LLP, London