Secondary nature of logo elements confirmed

European Union
In Esotrade SA v Office for Harmonization in the Internal Market (OHIM) (Case T-103/06, April 13 2010), the General Court has dismissed an appeal against a decision of the Second Board of Appeal of OHIM upholding a decision of the Opposition Division in favour of the opponent, Antonio Segura Sánchez.

In April 2000 Esotrade SA applied to register, for the class headings in Classes 14, 18 and 25 of the Nice Classification, a word and device mark containing the term 'YoKaNa' in a stylized font below a circle, the mark as a whole being in the colour red. On publication, the application was opposed by Sánchez under Article 8(1)(b) of the Community Trademark Regulation (40/94). The opposition was directed against the goods in Classes 18 and 25, and was based on the earlier Community trademark (CTM) YOKONO (with star device) for goods in Classes 18 and 25.

In 2004 the Opposition Division of OHIM upheld the opposition for all goods covered by the earlier registration, apart from bags, sports bags, underwear and belts. Esotrade appealed, at the same time limiting the specification of its application to bags and leather bags (excluding sports bags) in Class 18, and scarves, shawls and saris in Class 25.

In 2006 the Board of Appeal of OHIM rejected the appeal. In particular, it found that there was a likelihood of confusion between the marks due to the identity of the goods and the similarity of the marks. Esotrade appealed to the General Court.

Esotrade’s appeal had three bases:
  • Earlier use of the mark applied for - Esotrade claimed that it had used the distinctive part of its mark for over 12 years in Spain (ie, before the earlier mark was registered);
  • Lack of a likelihood of confusion - the marks were pronounced differently, were graphically distinguishable and were aimed at different consumers; and
  • Lack of a likelihood of actual confusion in the marketplace and of "administrative precedents" - the marks at issue coexisted peacefully in the Spanish market, and the marks YOKANE’S and YOKONO were both registered in Spain.
The court held as follows:
  • The object of the appeal was the annulment of the Board of Appeal's decision and, therefore, the earlier use of the mark applied for could not be considered within this context. If Esotrade wanted to rely on this use to defeat the opposition, it would have to apply for the invalidation of Sánchez's registration.
  • The word elements of the marks did not have a different effect overall on the consumer because the differences in pronunciation were too small. The marks were visually distinguishable and were somewhat similar conceptually because they evoked an Asiatic origin: the combination of the letters 'Y', 'K' and 'N' and the red circle in the opposed mark evoked the Japanese flag, while the star in the earlier mark evoked the Chinese flag.
  • The earlier mark was a CTM and, therefore, the relevant territory was the European Union. Peaceful coexistence in Spain was insufficient to remove the likelihood of confusion in the European Union.
  • Trademark registrations in member states were not determinative and could be taken into consideration only in the context of the registration of a CTM.
The court thus rejected the appeal in its entirety and awarded costs against Esotrade.

This case confirms the secondary nature of logo elements when compared to word elements and the relative isolation within which CTMs are compared. Where the word elements bear this degree of similarity and have no meaning to EU consumers, the marks are generally likely to be held to be similar.

Interestingly, Esotrade has now obtained a CTM registration for a very similar YOKANA (and design) mark for retail services, which demonstrates a creative approach to the problem posed by the opposition.

Chris McLeod, Hammonds LLP, London

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