Wine and wine glasses are not similar, says ECJ

 

In December 1999 Assembled Investments (Proprietary) Ltd applied to register the trademark WATERFORD STELLENBOSCH for "alcoholic beverages, namely wines produced in the Stellenbosch district, South Africa" in Class 33 of the Nice Classification. Waterford Wedgwood opposed the application in October 2000 based on its Community trademark WATERFORD (Registration 397521) for goods in Class 21 ("articles of glassware, earthenware, chinaware and porcelain"), citing grounds for refusal under Articles 8(1)(a) and (b) and Article 8(5) of the Community Trademark Regulation (40/94).
 

The Opposition Division of OHIM rejected Waterford's opposition in full on the basis that:

However, the First Board of Appeal of OHIM reversed the Opposition Division's decision and refused the application, finding that:

The board thus concluded that there was a likelihood of confusion within the meaning of Article 8(1)(b) of the regulation and, therefore, Waterford's opposition should be upheld (for further details please see "Complementary goods sold under similar marks may cause confusion").

In 2005 Assembled Investments appealed this decision. The Court of First Instance (CFI) concluded that the goods in questions were not similar and that there could be no likelihood of confusion between the marks. Even though the mark applied for had a strong similarity to the earlier mark, it was also necessary to establish that the goods covered by the marks were similar for an opposition under Article 8(1)(b) to be successful. The CFI held that there was insufficient evidence to show that this was the case in this instance. While there was undoubtedly a degree of complementarity between wine glasses and wine, this complementarity was not sufficiently pronounced for the goods to be considered as similar under Article 8(1)(b) (for further details please see "Wine and wine glasses not similar under Canon factors, CFI rules").

Waterford appealed, arguing that the CFI had:

With regard to the first claim, Waterford argued that the concept of similarity required under Article 8(1)(b) should be interpreted in relation to the likelihood of confusion being caused. Waterford maintained that the CFI should have asked whether the public would be confused into thinking that the goods originated from the same or linked entities, and, answering this in the affirmative, should have taken this to indicate that the similarity of the goods was sufficient to establish grounds for opposition under Article 8(1)(b). However, Assembled Investments countered this, arguing that the likelihood of confusion test should be applied only where both the similarity of goods and marks have first been established independently - that is, that there is a threshold test for similarity.

The ECJ agreed with Assembled Investments, holding that while there is a requirement to consider the components of Article 8(1)(b) with a degree of interdependence, and while a low degree of similarity of goods can be offset by a strong similarity between marks, nonetheless a complete lack of similarity between the goods cannot be offset by the strong distinctive nature of the mark. As such, however strong the WATERFORD mark, and however great the likelihood of confusion, this could not make up for a total lack of similarity between the goods covered by the existing mark and those covered by the application.

With regard to the second claim, Waterford alleged that the CFI's decision was not based on a correct reading of the evidence. Countering this, Assembled Investments maintained that:

The ECJ found that the CFI had carried out a detailed comparative assessment into the similarity of the goods in question, and had concluded that there was not sufficient complementarity to establish their similarity as required by Article 8(1)(b). In addition, the CFI had taken into account all evidence submitted to it and had not distorted this evidence in any way. As such, the CFI's decision could not be overturned on this basis.

Consequently, the ECJ dismissed both claims. The decision shows that although the interdependence of the criteria under Article 8(1)(b) is such that strength in one area can compensate a weakness in another, this cannot be used to negate the need to establish some degree of similarity between the goods in question. A total absence of similarity will frustrate an opponent seeking to rely on Article 8(1)(b).

On the basis that there is a threshold test for similarity under Article 8(1)(b), Article 8(5) will become increasingly important and proprietors of existing trademarks wishing to oppose new registrations will have to ensure that sufficient evidence is filed to establish both the reputation of the earlier mark - and, ideally, a likelihood of confusion as well as evidence of unfair advantage - to be successful with an opposition under Article 8(5). 

The decision is unclear as to what happened to Waterford's Article 8(5) objection; it seems that the Board of Appeal decided not to deal with this given that it found infringement under Article 8(1)(b).