Vorsprung durch Technik? Audi scores victory in trade mark appeal before the EU General Court


On 12 July 2019, the EU General Court (GC) dismissed
an appeal
(Audimas v EUIPO – Audi
(AUDIMAS)
) from a Lithuanian sportswear company, whose trade mark was successfully
opposed by the German automobile manufacturer Audi.
In October 2014, the applicant, Audimas AB, obtained through
the World Intellectual Property Organisation (WIPO) an international
registration
for the mark displayed below, designating the European Union
(EU) as one of the protection territories.

The mark above represents the applicant company’s name in
black font, with stylised open and closing brackets right above the word
element. Registration was sought for classes 18, 25 and 35 of the Nice
Agreement, covering a wide variety of leather goods, clothing, footwear and
headgear as well as advertising and business management services. In June 2015,
the international registration designating the EU was notified to the EU
Intellectual Property Office (EUIPO), pursuant to the provisions of the Council
Regulation 207/2009
on the Community Trade Mark (now replaced with Regulation
2017/1001
on the EU Trade Mark).
In August 2015, the German automotive company AUDI AG
opposed the mark applied for on the basis of its previously registered
EU word mark ‘AUDI’ for goods and services falling in classes 18, 25 and 35 of
the Nice Agreement as well as class 12, which covers vehicles and vehicle
components. Audi claimed, in particular, infringement of Article 8(1)(b) of the
2009 Regulation, i.e. invalidity based on ‘relative grounds’ which relate to
conflicts with earlier trade mark rights that belong to third parties (these
provisions are preserved under the new 2017 Regulation). The Opposition
Division of the EUIPO upheld the opposition two years later. Audimas appealed
the decision in November 2017 but the Office’s Second Board of Appeal rejected
the appeal in May 2018 (‘the contested decision’).
Specifically, the Board of Appeal found that the relevant
public in this case consisted of ‘professional customers’ and ‘end consumers’,
whose level of attention varied from medium to high. In addition, the signs at
issue were broadly similar at least to the extent that Audi’s earlier mark was
reproduced in full in the dominant element of the applied-for mark. The Board
also considered that a Spanish-speaking consumer would break down the mark
applied for in two verbal parts, i.e. ‘audi’ and ‘mas’, because the latter
element alluded a meaning to them, namely ‘more’ or ‘plus’. Moreover, the
figurative element of the brackets was found to be ‘purely ornamental’ and its
combination with the term ‘mas’ meant that the mark in question was at best
only weakly distinctive. The Board of Appeal ultimately concluded that there
was a likelihood of confusion for the Spanish-speaking part of the relevant public
within the meaning of Articles 8(1)(b) of the 2009 and 2017 Regulations.
The legal framework
and applicable principles
Under both Regulations 2009 and 2017, an opposition must be
based on rights held by the opponent in an earlier trade mark (or other form of
trade sign). The grounds on which an opposition can be based are called
‘relative grounds for refusal’, the relevant provisions of which are found in
Article 8 the Regulation. By contrast to ‘absolute grounds for refusal’, which
are examined ex officio by the EUIPO, relative grounds for refusal are inter
partes proceedings based on the likely conflict with earlier rights. This means
that the burden falls on the owner of earlier rights who needs to be vigilant in
checking the filing of potentially conflicting EUTM applications and oppose the
registration of marks when necessary.
More specifically, under Article 8(1)(b):
upon opposition by the proprietor
of an earlier trade mark, the trade mark applied for shall not to be registered
if, because of its identity with or similarity to the earlier trade mark and
the identity or similarity of the goods or services covered by the trade marks,
there exists a likelihood of confusion on the part of the public in the
territory in which the earlier trade mark is protected. The likelihood of
confusion includes the likelihood of association with the earlier trade mark.
Audimas contested the Board of Appeal’s
findings in relation to the comparison of the signs and the existence of a
likelihood of confusion. According to the established case law of the Court of
Justice on the interpretation of Article 8(1)(b), the risk that the public
might believe that the goods or services in question come from the same
undertaking or from economically-linked undertakings, constitutes a likelihood
of confusion (see Canon [1998]
EUECJ C-39/97).
The likelihood of confusion on the part of the public must be appreciated
globally, according to the perception of the marks in the mind of the average
consumer of the goods or services concerned. It is also settled case law that the
average consumer normally perceives a mark as a whole and does not proceed to examine
its various details (see Sabel [1997]
EUECJ C-251/95).
Consequently, the visual, aural and conceptual similarities of the marks must
be assessed with reference to the overall impression created by the marks
bearing in mind their distinctive and dominant components. Account must be
taken of all factors relevant to the circumstances of the case and, in particular,
the similarity between the marks and the goods or services. A lesser degree of
similarity between those goods or services may be offset by a greater degree of
similarity between the marks, and vice versa (see Lloyd Schuhfabrik Meyer [1999] EUECJ C-342/97). Where
the earlier trade mark has a highly distinctive character, such as Audi’s mark
in the present case, either because of its intrinsic qualities or because of
the use that has been made of it, the likelihood of confusion is greater.
The level of
attention of the relevant public
The GC disagreed with the applicant’s claim that buyers of
Audi cars would demonstrate an increased level of attention, which would in
turn decrease the likelihood of confusion between the marks at issue. Indeed,
the prospect of an expensive purchase, e.g. in the case of luxury products, is
a good reason for the average consumer to be more circumspect in relation to
the origin and the quality of the articles concerned. A high degree of
attention is likely to be displayed during the purchasing process of a specific
product which is generally regarded as reflecting its owner’s social status.
Nevertheless, both Audi’s earlier mark and Audimas’ applied-for mark extended
to clothing and footwear as well. These are mass consumption goods, which are
frequently purchased and used by the average consumer who nevertheless still
pays a fair degree of attention in choosing them, albeit not above average (see
Esprit International v OHMI-Marc O’Polo
International
[2011] EUECJ T-22/10). Thus,
the Board of Appeal was not wrong in assessing the relevant public’s attention in
the present case as varying from medium to high.
The goods and
services concerned
The goods and services covered by Audimas’ mark were deemed at
least in part identical or similar to those covered by Audi’s earlier mark.
This conclusion was not disputed by the applicant and was approved by the GC.
The comparison of the
signs and the likelihood of confusion
The GC agreed with the Board’s ruling that the dominant
element of the applied-for mark was the fanciful term ‘audi’, since the second
verbal element of the applied-for mark, i.e. ‘mas’, was already well-known to
Spanish speakers and had a lower distinctive character. Moreover, the
figurative element of the brackets was not, in the GC’s view, ‘particularly original
or elaborate’. As such, it did not add anything ‘striking’ to the overall
impression created by it in the perception of the relevant public.
The visual similarity between the marks was reinforced by
the fact that both shared the ‘audi’ element which constitutes the earlier mark
and is found at the beginning of the applied-for mark. This is consistent with
previous case law, according to which the fact that a mark consists exclusively
of the earlier mark to which another word is attached is an indication of the
similarity between those two marks (see Fon
Wireless v EUIPO-Henniger
[2016] EUECJ T-777/14). On
the phonetic level, the degree of similarity between the marks was found to be essentially
‘greater than average’, notwithstanding the different pronunciation given to
the contested mark by the syllable ‘mas’. It is also a settled principle that
both verbally and phonetically the average consumer generally pays more
attention to the beginning of the mark than its ending, since the first part of
a trade mark normally has a greater impact than the final part (see L’Oréal v OHMI-SPA Monopole [2009] EUECJ
T-109/07
and Gappol Marzena Porczynska v EUIPO-Gap
[2017] EUECJ T-411/15).
Finally, the GC noted that the absence of conceptual similarities between the
two signs should not deflect attention from their substantial visual and
phonetic similarities and concluded that they were ‘broadly similar’.
In the GC’s view, the Board’s conclusion that the
Spanish-speaking part of the relevant public would eventually establish a link
between the contested mark and Audi could not be called into question. The
Board of Appeal had held, and the GC agreed, that it could not be ruled out
that the applied-for mark, with its element ‘mas’ attached to the word ‘audi’,
could be taken to identify an exclusive series of goods or services of the Audi
family of brands. The relevant public could perceive the ‘Audimas’ mark as a
‘particular variant’ of the earlier mark for a specific type of goods with a
positive quality. In light of the foregoing, the GC dismissed the applicant’s
action.
In sum, the GC upheld the original EUIPO decision, ruling
that the applied-for mark by Audimas would likely be confused with Audi’s
earlier trademark. The upheld contested decision is undoubtedly a victory for
Audi, one of the world leaders in the automotive sector. On the other hand, Audimas
has become, since its incorporation in 1931, one of the market leaders in the
design and manufacture of sports and active lifestyle apparel in the Baltic
States. The brand has been cooperating with the Lithuanian National Olympic
Committee as an official supplier of sportswear for the Lithuanian Olympic
family for more than 15 years. In 2013, Audimas also began sponsorship of the
Belarus National Olympic Committee. This is certainly a displeasing for them
outcome, which might be appealed to the Court of Justice of the EU.
Despite Audi’s weak connection to the clothing industry, the
GC’s ruling can hardly be a surprise. It is grounded in some well-established
principles relating to the comparison of signs in trade mark disputes. When
assessing their similarity, the marks in question will be considered as a
whole. Although it is not possible to isolate and focus exclusively on one
component of a complex mark and compare it with another mark, the assessment of
similarity may be made solely on the basis of the dominant component of a
complex mark where all the remaining components of the mark – like the brackets
and the element ‘mas’ in this case – add very little to, or are negligible in,
the overall impression produced by it.
In addition, where a complex mark comprises word and
figurative elements, the former would in principle be considered more
distinctive than the latter, because the average consumer tends to refer to the
goods or services in question by quoting the name of the mark in question,
rather than by describing its figurative element (see Coca-Cola v OHMI-Mitico [2014] EUECJ T-480/12).
The shared ‘audi’ element was incapable in this instance of lending the
applied-for mark a distinctive character and accentuated the likelihood of
confusion. Also, the presence of a few different syllables is not always enough
to exclude the existence of a phonetic similarity between two signs. In the
present case, the phonetic difference between the signs at issue, resulting
from the addition of a second syllable ‘mas’ in the applied-for mark, was not
sufficient to overcome and preclude the phonetic similarity between ‘Audi’ and
‘Audimas’ taken as a whole.
These opposition proceedings also confirm that, if a
likelihood of confusion between two conflicting rights relating to the EU is
established in a specific linguistic area, this is enough for the registration
of the later mark to be refused. When an opposition is filed pursuant to
Article 8(1)(b) and a likelihood of confusion can indeed be found on a
substantial part of the public, the reasoning of the decision typically
concentrates on that part of the public that is most prone to confusion, making
the examination of the perception of the marks in several languages redundant. In
addition, where the relevant public consists of both professional and general
consumers, the finding of a likelihood of confusion in relation to just one
part of the public is enough to uphold an opposition.
Finally, the outcome serves as a useful reminder of the need
to conduct comprehensive trademark searches prior to filing a trade mark
application, which needs to be carefully tailored to in order to maximise the
chances of a successful registration. Opposition hearings can be very costly to
defend. If unsuccessful, an applicant will have to pay not only their legal
costs but some of the costs of the other party too – and will still not be able
to achieve registration of their mark.



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