Suzuki’s GTi application drives through Volkswagen’s opposition

European Union

In Volkswagen AG v Office for Harmonisation in the Internal Market (OHIM) (Case T-63/09, March 21 2012), the General Court has upheld a decision of the Second Board of Appeal which had rejected an opposition to a Community trademark (CTM) application for the mark SWIFT GTi.

In October 2003 Suzuki Motor Corp applied to register SWIFT GTi as a CTM for the following goods in Class 12:

"Motor vehicles and component parts, land vehicles and engines and parts, vehicle accessories in Class 12, covers for steering wheels, seats, tyre pumps, sunroofs, roof racks, luggage carriers, bike racks, windsurfing racks, ski racks and snow chains, in each case, for motor vehicles."

In November 2004 Volkswagen AG opposed the application for all goods on the basis of Article 8(1)(b) of the Community Trademark Regulation (40/94), now the Community Trademark Regulation (207/2009).

Volkswagen is the owner of:

  • a 1995 German registration for the word mark GTI for automobiles and their parts and engines in Class 12; and
  • an international registration of the word mark GTI covering the same goods designating Austria, the Benelux, the Czech Republic, Estonia, France, Italy, Latvia, Lithuania, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden. 

In 2005, pursuant to a request from Suzuki, Volkswagen sought to demonstrate genuine use of its earlier marks and, pursuant to a further request from Suzuki, the mark applied for was altered from SWIFT GTI to SWIFT GTi (as had been requested by Suzuki at the outset).

In March 2007, notwithstanding the alteration to the application, the Opposition Division rejected the opposition due to lack of evidence of genuine use of the earlier marks. Volkswagen appealed.

In December 2008 the Second Board of Appeal rejected the opposition for the following reasons:

  • The opposition based on the Czech Republic, Estonian, Latvian, Lithuanian, Polish, Slovakian and Slovenian designations was rejected because the application had been filed six months prior to the accession of those member states to the Madrid Agreement.
  • The opposition based on the Spanish and Portuguese designations was rejected because Spain and Portugal had refused to protect the mark prior to the date of the opposition.
  • The opposition based on the Swedish designation was rejected since there was no likelihood of confusion between the marks in the minds of the relevant public, as the common combination of the letters ‘GTI’ would be largely, if not entirely, negated by the word 'swift' appearing in the initial part of the applicant’s mark.
  • The opposition based on the German registration was rejected along similar lines.
  • The opposition based on the designations in Austria, the Benelux territories, France and Italy was rejected on the same basis as the Swedish designation and the German mark.

Volkswagen appealed to the General Court on the basis of a violation of Article 8(1)(b) of the regulation, and also emphasised the relevance of Paragraphs 2 (a)(ii) and (iii) of the same in its appeal.

Unsurprisingly, it was not challenged by either party that the goods in the application were identical or, in certain cases, similar to the goods covered by the registrations.

The General Court noted the general principle that the level of attention of an average consumer depends on the type of goods and services. In the case in point, the Board of Appeal had confirmed, and the General Court did not challenge, that the goods, being motor vehicles and related accessories, were used by professionals in the automobile industry (ie, dealers, garages and car part sellers) and the average consumer (being the end user of the goods).

The board had also confirmed that the average consumer would have a comparable level of knowledge to that of professionals in relation to cars, since the purchase of a car is not an everyday purchase and, due to its high cost, requires a great deal of consideration. There are individuals who have a specific interest in cars and are selective in their choice of car and certain individuals would intentionally invest in a 'GTI' car.

The General Court then acknowledged that the appeal did not cover the Spanish and Portuguese designations or the Czech, Estonian, Latvian, Lithuanian, Polish, Slovakian and Slovenian designations and, therefore, these territories were omitted from its analysis.

In respect of the other designations and the national German mark, Volkswagen considered that there would have to be a separate review on the basis of the law of the relevant marks for each geographical zone. The General Court stated that the board had considered Sweden initially, but had then considered each of the other member states in which the earlier international mark had effect in addition to Germany (where the earlier German national mark had effect) as a result of its analysis of the widespread use of the mark.

With regard to the comparison of the marks, it was confirmed that all of the marks had the letters 'GTI' in common. In line with the board, the court then considered the perception of professionals in the automobile industry and the average consumer (specifically, those with an interest in cars) with respect to the distinctiveness of the 'GTI' element of the application.

In respect of professionals, the court was persuaded by evidence produced by Suzuki (and relied on by the board) which included:

  • excerpts from dictionaries illustrating widespread use of 'GT' and 'GTI' to mean 'gran turismo';
  • a German Wikipedia webpage citing “other manufacturers of GTI models” such as Rover, Nissan, Peugeot, Suzuki and Toyota, and a Swedish car dealer site confirming the same; and
  • the rules of the International Automobile Association (IAA), which define a GT vehicle as “an open or closed car with more than one door on each side and at least two seats in the centre of the car” which can be used “on the road or be adapted for racing circuits or inside”. 

Accordingly, the court agreed with the board that 'GTI' was descriptive. It was also persuasive that there was widespread use of 'GT'I in the European car industry to indicate technical qualities and, hence, there were other marks comprising a model name followed by 'GTI' (eg, French and international registrations for PEUGEOT GTI and a French registration for CITROEN GTI).

In respect of the average consumer, the court emphasised that the term 'GTI' was published in dictionaries and in German, English, Dutch and Swedish encyclopaedias, which indicated, to an extent, that 'GTI' could be understood by anyone, not just professionals. Moreover, the board anticipated, and the court did not challenge, that the average consumer would, at least intuitively, understand that 'GTI' referred to a car or the technical qualities of its engine.

The court therefore endorsed the board’s analysis that the letters 'GTI' had an extremely low degree of inherent distinctiveness for the general public throughout Europe, including Sweden.

Volkswagen raised a series of points in support of its opposition, each of which were rejected by the court.

First, Volkswagen claimed that the board should have taken foreign factors into account in other jurisdictions when considering the Swedish designation. The court confirmed that the board had reviewed a Swedish car dealer website, Swedish encyclopaedias, the rules of the IAA and, in particular, the widespread use of indications ending in 'I' on motor vehicles. The court noted that the board had stressed that each of the factors relied on could apply to any EU consumer and, in support of this assumption, noted that a previous decision involving the TDI mark for cars had acknowledged that vehicles were often sold within the European Union under the same trademarks.

Second, Volkswagen claimed that the decision of the board contradicted national decisions, which had held that GTI was distinctive. In this regard, the court clarified that OHIM was not required to base its decision on a national decision.

Third, Volkswagen argued that the fact that the term 'GTI' had been registered within trademarks for other businesses showed that it merited protection. In this regard, the court clarified that the board had found only that the widespread use of 'GTI' supported the conclusion that professionals would perceive the mark as being known and that consumers would consider it to refer to a technical aspect of a car.

Fourth, Volkswagen claimed that OHIM had wrongly concluded that GTI should be available to other businesses. The court held that this argument alone was insufficient to contradict the board’s decision.

Fifth, Volkswagen claimed that the board had wrongly concluded that 'GTI' was always descriptive; the court clarified that the board had held only that those letters might be perceived as descriptive, which did not amount to claiming that any mark containing those letters was excluded from protection.

Sixth, Volkswagen claimed that the board had failed to take in account the manner in which Volkswagen had promoted 'GTI' within the European Union for years. The court disagreed and highlighted evidence of the registration and use of other marks incorporating the GTI part. It clarified that Volkswagen should instead have shown that it had historically had substantial success in preventing other car manufacturers from using the term. The court also emphasised that the GTI and GTi marks could coexist easily.

The General Court then agreed with the board that the ‘swift’ element was the most distinctive and dominant part of the mark applied for (comprising five out of the eight letters in the mark and occupying first position) and would be perceived as fanciful by the relevant public.

The court acknowledged that 'swift' means ‘fast’, ‘quick’ or ‘speedy’ in English, but is not generally used by non-native English speakers in relation to cars and, even though the standard of English was relatively high in certain countries, including Sweden, English was nonetheless a foreign language. However, even in countries where English was widely spoken, the court considered that the average consumer could consider ‘swift’ to be a fanciful word when used in relation to cars.

With regard to the comparison of the marks, the court conceded that they were visually and phonetically similar, as the earlier marks were contained within the applicant’s mark and the lower case ‘i’ did not significantly change this. However, in the court’s view, any similarity between the marks was largely, if not entirely, counterbalanced by the distinctiveness of the ‘swift’ part.

The court further agreed that any similarity between the marks from a conceptual angle resulting from the overlap of the 'GTI' element would also be largely, if not entirely, counterbalanced by the fanciful ‘swift’ model name, which consumers would customarily use to distinguish between a Suzuki car and cars of other manufacturers. Moreover, due to the widespread use of ‘GTI’, consumers were likely to perceive the sign as a reference to the technical qualities of the car, rather than as a badge of origin.

With regard to the likelihood of confusion, the court agreed with the board that it was unlikely that the use of the GTI mark on a Suzuki car would make a professional think that the car would be made by the same manufacturer as a Volkswagen car.

The court also agreed that the general public would be unlikely to be confused by the use of the marks due to:

  • the greater level of attention paid to car purchases;
  • the widespread use of the 'GTI' term in the automobile industry;
  • the numerous other factors involved in considering which car to purchase (eg, brand, logo and model name); and
  • the addition of the word ‘swift’ to denote the model of the car.

Volkswagen raised an argument in relation to a series of earlier marks, but the court considered that two conditions had to be fulfilled for this argument to be successful, neither of which was satisfied in this case. The first condition was that the owner of a series of earlier registrations must prove use of each of the marks, or at least of a sufficient number of marks to constitutes a ‘series’; the second was that the applicant’s mark must not only be similar, but have characteristics which would indicate that it was part of a series of marks.

The court then agreed with the board that Volkswagen had not demonstrated that the inherent perception of the 'GTI' term would be materially different in Austria, Benelux, France and Italy than in Sweden. Certain evidence had been produced by the applicant that showed that there were general trends across Europe indicating the use of 'GTI' in relation to cars, and established case law stating that vehicles are generally marketed under the same names across the European Union.

With regard to the German national mark, the court agreed that Volkswagen had not adequately proved its allegations that the German public would have a different perception of the marks to other EU consumers nor that, prior to the application, the earlier marks had a greater degree of distinctiveness and fame in Germany such that “the public would know that GTI cars were manufactured by Volkswagen”, nor that it had substantial historical success in preventing others from using the mark. It was noted that the definition of 'GTI' appeared in a German dictionary which was illustrative of the general public understanding of the term.

Accordingly, as a consumer would not automatically assume that all vehicles bearing the GTi mark would come from the same manufacturer, there was no likelihood of confusion between the marks in respect of any of the international designations or the German mark itself. 

This case illustrates that no opposition is guaranteed to succeed, even where an earlier registered mark is contained within a later trademark application and the application is for identical or substantially similar goods. The decision opens the way for other car manufacturers to register GTi/GTI marks alongside a model name without the realistic prospect of a successful challenge on the basis of Article 8(1)(b). 

Ellie Forrest-Charde and Chris McLeod, Squire Sanders (UK) LLP, London

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