'Wolf's head' decision restricts number of cases in which Article 8(5) may apply

European Union

The General Court has issued a revised decision in Environmental Manufacturing v Office for Harmonisation in the Internal Market (OHIM) (Case T-570/10 RENV, February 5 2015).

In 2006 the predecessor in law of Environmental Manufacturing filed an application for the registration of a figurative Community trademark (CTM) representing a wolf head:

The goods in respect of which registration was sought belonged to Class 7 of the Nice Classification and corresponded to the following description: "Machines for professional and industrial processing of wood and green waste; professional and industrial wood chippers and shredders".

Société Elmar Wolf brought opposition proceedings against the application, based on the following earlier rights:

  • the French figurative trademark No 99786007 covering goods in Classes 1, 5, 7, 8, 12 and 31:
  • the French figurative trademark No 1480873 for goods in Class 7 and 8, the international trademark No 154431 for goods in Classes 7 and 8 with effect in Spain and Portugal, and the international trademark No 352868 for goods in Classes 7, 8, 12 and 21 with effect in Spain:

The opposition was based on both Article 8(1)(b) (existence of a likelihood of confusion) and Article 8(5) (earlier trademark having a reputation) of the Community Trademark Regulation (40/94), now the Community Trademark Regulation (207/2009).

On January 25 2010 the Opposition Division of OHIM dismissed the opposition, judging that there was no likelihood of confusion and that Elmar Wolf had not provided evidence of any detriment to the repute of its earlier marks or any unfair advantage gained from them.

On October 6 2010 the Second Board of Appeal of OHIM annulled the decision of the Opposition Division, considering that the requirements set out in Article 8(5) of the regulation were fulfilled: the earlier marks were reputed in certain member states and the mark applied for could both be detrimental to the distinctive character of the earlier marks (risk of dilution) and take unfair advantage of their highly distinctive character or reputation (risk of free-riding).

Environmental Manufacturing appealed to the General Court, which dismissed the action in its entirety on the grounds that the Board of Appeal was correct to take the view that the use of the mark applied for created a risk of dilution of the earlier marks. For the sake of clarity, it should be mentioned that the General Court did not give a ruling on the risk of free-riding, since the existence of either a risk of dilution or a risk of free-riding is sufficient to apply Article 8(5).

The General Court rejected Environmental Manufacturing’s argument that the mere mention of a risk of dilution does not meet the criteria of application of Article 8(5) and that the proprietor of the earlier mark must specifically plead and prove that use of the later mark will have an effect on the behaviour of the consumers of the goods or that there is a serious risk that such an impact will occur in the future.

On November 14 2013 the Court of Justice of the European Union (ECJ) set aside the judgment of the General Court. The court found that a high standard of proof is needed in order to find detriment or risk of detriment to the distinctive character of an earlier mark; it requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered, consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future.

As a consequence, the case was referred back to the General Court, which issued its judgment on February 5 2015.

Regarding the risk of dilution, the General Court noted that Elmar Wolf had not mentioned, during the proceedings before OHIM, that the behaviour of consumers might change due to the use of the mark applied for. However, the Board of Appeal had found that there was a risk of dilution. Given the interpretation made by the ECJ, the General Court concluded that the Board of Appeal had infringed Article 8(5).

The General Court was therefore obliged to tackle the issue of free-riding. The court judged that two conditions are necessary for free-riding to be established: the relevant public must be likely to make a link between the parties' signs for the goods concerned and the proprietor of the mark applied for is capable of exploiting that link for the marketing of the goods covered by the mark.

In the General Court’s view, the Board of Appeal had correctly found that the earlier marks had a high reputation and that the relevant public could establish a link between the signs at issue. Yet, the General Court noted that the reasoning used by the Board of Appeal to conclude that a risk of free-riding existed was particularly succinct. The Board of Appeal had referred essentially to the long-standing reputation and highly distinctive character of the earlier marks. The General Court criticised the Board of Appeal for not examining whether Environmental Manufacturing was able to exploit that link and was likely to benefit from the transfer of certain qualities associated with Elmar Wolf’s marks.

The General Court added that the decision of the Board of Appeal was not based on the fact that Elmar Wolf’s marks had an exceptionally high reputation from which it might be presumed that the probability of a risk of free-riding was so obvious that it was not necessary to verify the possibility of such a transfer. The General Court thus seemed to distinguish between an exceptionally high reputation and a long-standing reputation, the latter being apparently insufficient to create a presumption of a risk of free-riding.

The General Court thus found that the Board of Appeal had infringed Article 8(5) in finding that there was a risk of free-riding, and annulled the decision of the board.

This judgment, together with the judgment of the ECJ in this case, severely restricts the number of cases in which Article 8(5) may be applicable, since the demonstration of both a risk of dilution and a risk of free-riding requires a very high standard of proof. One may wonder which reputed trademark might effectively benefit from the extended protection of Article 8(5).

The case has now been referred back to the Board of Appeal of OHIM.

Richard Milchior, Granrut Avocats, Paris

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