Appeal dismissed in long-running ARCOL Case

European Union
In Kaul GmbH v Office for Harmonization in the Internal Market (OHIM) (Case T-402/07, March 25 2009), the Court of First Instance (CFI) has rejected an appeal in opposition proceedings that have now been running for 13 years.
 
The case involved an application to register ARCOL as a Community trademark (CTM) for, among other things, goods in Class 1 of the Nice Classification, including "chemical substances for preserving foodstuffs". The application was opposed by Kaul GmbH, the owner of the earlier CTM CAPOL for identical goods in Class 1. The opposition was based on Article 8(1)(b) of the Community Trademark Regulation (40/94).
 
Kaul's opposition was dismissed on the grounds that ARCOL was visually and phonetically different from CAPOL and, accordingly, there could be no likelihood of confusion. Kaul appealed, claiming that CAPOL had a highly distinctive character and relying on a new argument (with new evidence) that CAPOL had become well known through use. The Third Board of Appeal of OHIM dismissed the appeal and held that it could not take into account whether CAPOL was well known, as this argument and the evidence to support it had been introduced for the first time on appeal.
 
Kaul appealed to the CFI, which annulled the board's decision, finding that it had infringed Article 74 of the regulation by refusing to consider Kaul's new factual evidence (for further details please see "Board should have considered distinctiveness evidence, rules CFI"). The European Court of Justice (ECJ) allowed a subsequent appeal by OHIM, but then annulled the Third Board's decision, finding that it had wrongly considered itself to be lacking any discretion as to whether to take account of the new evidence (for further details please see "Continuity between Community trademark instances clarified").
 
Kaul's original appeal was then reallocated to the Second Board of Appeal, which upheld the original opposition decision on the basis that the marks were not similar.  
 
Kaul appealed to the CFI on three grounds. First, Kaul argued that the Second Board had failed to exercise its discretion as to whether to allow the new evidence. However, the CFI found that there had been no such failure. The role of the Second Board was to carry out a fresh examination of Kaul's appeal and reach its own independent opinion as to whether the ARCOL and CAPOL marks were identical or similar. Since the Second Board had found that the marks were not similar, it did not have to make a global assessment of the likelihood of confusion between the marks and the new evidence did not have any relevance to the decision reached on appeal.
 
Second, Kaul argued that it had not been given the opportunity (pursuant to Article 73 of the regulation) to present comments on the interpretation of the ECJ's earlier decision as to discretion. The CFI dismissed this argument. The right to be heard extended only to those matters of fact and law which formed the basis of the decision and the question of whether to permit the new evidence was irrelevant.
 
The CFI also rejected Kaul's argument that the Second Board had infringed Article 8(1)(b) of the regulation. The CFI found that the Second Board's decision as to the similarity of the marks could not be questioned. The fact that the two marks both had five letters and two syllables was not determinative, and although the two marks had the same ending and shared the letter 'A', the start of a word receives more attention than the ending. The Second Board could not be criticized for taking into account the likely pronunciation of the ARCOL mark. This was appropriate as ARCOL was an invented word which did not correspond to any existing word in a European language.
 
Finally, the CFI held that the Second Board had not failed to respond to arguments made by Kaul in the proceedings before the ECJ. The Second Board was required to take into account only the arguments made before OHIM bodies, which did not include arguments made before the EU courts.

The action was thus dismissed.
 
This case is a reminder that the global assessment of the likelihood of confusion will be carried out in oppositions based on Article 8(1)(b) only where the initial threshold of identical or similar marks and goods has been crossed. The case also highlights that where a decision is annulled, the role of the body dealing with the reallocated hearing is to carry out a fresh examination of the case and reach its own independent decision.
 
Jeremy Dickerson and Jennifer Prior, Burges Salmon LLP, Bristol

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