From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Monday, 9 December 2013

When Volvo met Solvo: a lesson in EU trade mark law

Case T‑394/10, Elena Grebenshikova v OHIM, Volvo Trademark Holding AB intervening, is a fascinating decision of the General Court of the European Union (Third Chamber) on 5 December.  If any readers have a feeling that they know this case already, it's probably because it has been shuffling around for rather a while now, having been through OHIM's Opposition Division once, the Board of Appeal and now the General Court twice too -- and there's no reason to suspect that it won't soon be heading off for an ultimate appeal to the Court of Justice of the European Union (CJEU) too, since appeals to Europe's highest court on Community trade mark matters are not expensive to run, the CJEU doesn't have much chance of refusing to hear them -- and a small but sufficient number of them appear to have been decided at random to make it seem worthwhile to have a go anyway ...

This case has virtually nothing to do with the thing for which Volvo is most famous: boringly reliable, safe and well-manufactured cars.  What is it about, then?

In November 2003 [that's 10 years ago, notes Merpel: this is of course a trade mark case, and 10 years is nothing in the life of a trade mark -- but it's half the life of a full-term patent and more than three times longer than an unregistered Community design] the applicant -- let's call her Elena since her surname is a bit of a mouthful for a small feline-- sought to register as a Community trade mark a figurative sign (see illlustration, left, for what the Kat thinks is the right logo: the version in the judgment on the Curia website states "Image not found") which clearly and undeniably contained the word ‘solvo’. The goods in respect of which registration was sought were, following a restriction made during the proceedings before OHIM, ‘computer programs for warehouse management systems and computer programs for container terminal systems’ in Class 9.

In February 2005 Volvo opposed this application, relying based upon its earlier Community word mark VOLVO which was registered for, among other things, ‘computer software’ in Class 9 and ‘vehicles’ in Class 12. This opposition was based on two grounds, first that on account of the similarity of the respective marks and the identical nature of their respective goods, there was a likelihood of confusion of the relevant consumers under Article 8(1)(b) of the Community Trade Mark Regulation and secondly that, on account of the reputation of the earlier mark, the use of a similar mark by Elena, without due cause, would take unfair advantage of the reputation of that earlier mark under Article 8(5) of the same Regulation.

In August 2006 the Opposition Division rejected the opposition on the ground that the signs at issue were not similar. That decision was upheld in August 2007 by the Second Board of Appeal. Like the Opposition Division, the Board examined the merits of the opposition by taking into account only the earlier mark. As regards Article 8(1)(b), it found that the marks at issue were not similar and that, consequently, one of the conditions referred to by that provision was not satisfied. As regards Article 8(5), in addition to there being no similarity between the marks at issue, there was no ‘factor common’ to both signs which might lead to the belief that there was an economic link between them [this is the last we hear of Article 8(5) at this juncture].

On 2 December 2009 [just one short day after it was rebranded, having previously been known as the Court of First Instance] the General Court annulled the Board of Appeal's decision: the existence of a certain degree of phonetic similarity between the signs at issue [the fact that they rhymed: "-olvo" and "-olvo"] precluded the conclusion that one of the essential conditions for the application of Article 8(1)(b), this being the similarity of the signs, was lacking. In those circumstances, the Board of Appeal was ‘required to carry out a global assessment of the likelihood of confusion, in order to determine whether, in view of the degree of phonetic similarity found between the signs at issue, of the identity of the goods covered and of the reputation of the earlier sign, the public at which the goods in question was aimed might believe that those goods came from the same undertaking or from economically-linked undertakings.

Like all good undergraduates, Binkie soon
learned how to look attentive even when
his thoughts were far, far away ...
The opposition was accordingly remitted to the First Board of Appeal which, in June 2010, this time annulled the Opposition Division’s decision, upheld the opposition and rejected the application for the disputed trade mark. It found that the relevant public in the European Union consisted of professionals with a high degree of attention [and there aren't so many of them around these days, Merpel thinks] and that the goods covered by the marks at issue were identical. Next, it based its examination of the likelihood of confusion on the Court’s finding that the signs at issue had a certain degree of global similarity based, in particular, on their similar pronunciation. Further, even though VOLVO did not have a reputation as regards ‘computer software’, its reputation in the field of cars meant that it had a higher degree of distinctive character in the field of information technology goods such as software, particularly as most vehicles use computer software. The Board of Appeal added that the visual perception of the marks at issue did not outweigh their phonetic aspect, given that the choice of software could be made visually or by an order orally, and that the visual perception of the marks at issue did not always occur before purchase because it was the content, rather than the visual aspect of the software, which was the decisive factor in the act of purchase. Accordingly the visual differences could not outweigh the phonetic similarities in such a manner as to exclude a likelihood of confusion.

Elena then applied to the General Court for the decision of the Board of Appeal to be annulled, which it duly did.

The General Court first asked who indeed was the relevant consumer? It was not disputed, the Court recited, that the goods covered by the Solvo mark must be regarded as being aimed solely at professionals such as managers of warehouse complexes or managers of container terminals in seaports. Accordingly the relevant public consisted only of that specialist public [Merpel, who has never seen any Solvo software in her favourite games shops, thinks this must be right]. While the Board of Appeal found that this professional public displays a relatively high degree of attention, they didn't appreciate quite how high this degree of attention might be: account must also be taken of the fact that the software covered by Elena's mark was aimed at undertakings rather than at mere mortals, was not purchased on a daily basis [but that can be said about pretty well all software, can't it?], might involve significant investments and constituted an essential work tool for at least some employees, all these factors having the effect that the staff responsible for the choice of software would display a particularly high degree of attention when comparing goods from different producers operating on the market. Having regard to those factors, the relevant public’s degree of attention must be held to be particularly high.

Phonetic similarities can actually be fun ...
Turning now to the likelihood of confusion, the General Court asked whether this relevant public with its particularly high level of attention would experience a likelihood of confusion on the basis of the identity of the goods and the high level of distinctiveness of the earlier mark as regards computer software and on the basis of its finding that the visual dissimilarities between the signs at issue could not outweigh their phonetic similarities, with the result that those signs were globally similar [ie would people who buy warehouse management software be confused into thinking that Solvo warehouse management software was something to do with Volvo computer software on the basis that they would not be more influenced by (i)  the fact that Solvo was a picture containing a word beginning with S, while Volvo was a word beginning with V than they would be influenced by (ii) the fact that both Solvo and Volvo end in "-olvo"?  And who on planet Earth would ever think up a question like this, if it wasn't for the persistent attempts of the CJEU and Europe's finest IP lawyers to categorise confusion as a state of law rather than as a state of fact?]. However, while the distinctive character of the earlier mark must be taken into account in the global assessment of the likelihood of confusion, it is only one factor among others to be included in that assessment. It was also necessary to examine Elena's argument that the method of marketing the software in question meant that the relevant professional public would inevitably be faced with the image of the sign applied for before making its choice.

... which is more than can be said for the
legal reasoning generated by EU TM law
At this point, fortified by the fact that it had cited a good deal of law, the General Court took a trip to the real world in which ordinary professional folk like warehouse managers make their decisions.  Said the Court, in the global assessment of the likelihood of confusion, the visual, phonetic or conceptual aspects of the signs at issue do not always have the same weight [it's because this statement is undeniably true that the attempts of the EU courts to come up with an almost infinite number of legal formulas for establishing whether there is a likelihood of confusion have made the European trade mark system more confusing and less predictable than it was before it started] and that it was appropriate to take account of the nature of the goods at issue and to examine the objective conditions under which the marks may be present on the market. Having regard to all the circumstances, the staff responsible for the choice and purchase of ‘computer programs for warehouse management systems and computer programs for container terminal systems’ would inevitably be faced with the image of the sign applied for before making that choice. This purchase would constitute a significant investment on the part of specialist undertakings. The introduction of new logistics software, being an important component of an undertaking’s computer system, requires that software to be installed on specialised hardware designed for the management of warehouses and container terminals and also involves the training of the staff using it. Further, the importance of that choice is heightened by the impact of the software on the logistical effectiveness of the undertaking  [All of this looks like an enhancement of the position taken by the CJEU itself Case C-361/04 P Picasso/Picaro, particularly around para 59: if you are spending large sums of money on a product, whether a software package or a car, you are unlikely to be duped by any similarity between the marks, particularly when one is well-known or highly recognisable and the other isn't, into thinking they come from the same source or from a related undertaking].

Lucky CJEU stagiaires get to play
with the forklift ...
Consequently, said the Court, even if the initial information regarding the software is received orally, the fact remains that employees of the undertaking who are responsible for its acquisition would scrupulously examine the characteristics and the content of that software on account of the importance of their choice. For those employees, such an examination may consist of studying the written presentation of the software or a trial version of it as well as of visiting the provider’s website or of meetings with the provider’s employees. During that examination, which may be carried out in several stages following a call for tenders, the employees of the customer undertaking will inevitably see the image of the sign applied for, given that it is on the producer’s promotional documents and appears on its website. Moreover, in the course of that elaborate selection process, the users would be aware not only of the characteristics of the goods, but also of the identity of the producers and the marks on the market and would therefore be most attentive to even slight differences between those marks [Given their familiarity with this topic, the Kat wonders if the judges in the General Court had all previously worked in warehouse management].

The argument that the software in question might be ordered orally was irrelevant, the Court added, since consumers would inevitably be faced with the image of the sign applied for during the selection process, with the result that the doubts which the phonetic similarities may have given rise to regarding the commercial origin of the goods will be dispelled by the readily perceptible visual differences which distinguish the signs at issue. In any event, the phonetic aspect of the comparison of the signs retains its importance only if the consumer is not usually able to compare the signs visually during the process of selecting the product.

On this basis, the Court concluded, the visual dissimilarities outweighed the phonetic similarities between the signs at issue. Thus, in spite of the identity of the goods and the high level of distinctiveness of the earlier mark, there was no likelihood that the consumers, who were particularly attentive and wished to ascertain the identity of the producer, might think that the goods covered by the signs at issue came from the same undertaking or from an economically-linked undertaking [ie they wouldn't think that anything with the Solvo logo on it had anything to do with Volvo].

This Kat is aware that he will face a barrage of criticism from trade mark scholars and Volvo enthusiasts everywhere, but he thinks that, so far as likelihood of confusion is concerned, this is the right result now, it was the right result 10 years ago and a small but well-aimed dose of common sense should have told Volvo that this was so.  In his opinion, if there was any chance of success it would have been on the Article 8(5) opposition -- and even that would be pretty tenuous.
Solvo herehere and here
Bolvo here; Colvo here; Dolvo here; Folvo here; Golvo here; Holvo here; Kolvo here; Molvo here; Nolvo here; Polvo here; Rolvo hereTolvo here; Wolvo here; Xolvo here


Kharol said...

This is quite entertaining, and I agree with the cat, only "diligently" wondering over the court decision that considered similarity a possibility.
Looking at the case from another perspective I am not so sure whether Volvo are at all entitled to the full class 9 scope of the mark, as I'm quite sure they didn't produce "computer programs for warehouse management systems and computer programs for container terminal systems" in the last 5 years and thus such region should be carved out of their trade mark coverage. And given they had to resort to the (in my eyes quite weak) argument that nowadays automobiles inevitably have software, I assume that Volvo neither sells nor separately advertises computer software products of any kind. Thus - strictly speaking - someone could make a case that - in view of non-use - their trade mark may be invalid for class 9 and the coverage of class 9 should be disputed (or simply cancelled by the office).
In view of their argument that "cars have software" they could as well argue coverage for bolts, gears, rubber parts, seats and sofas, light emission devices, radios, wireless transmission devices.. i.e. with some creativity they could cover all trademark classes, which I'm sure is not how the trademark class system is meant to work.
Without a narrow view at where trademarks were actually used in the past 5 plus years I believe many "similarity" cases would dissolve to thin air, but currently it looks like a trademark owner with deep pockets can (nearly) successfully argue anything and keep a competitor or non-competitor in trouble for at least a decade. Not good advertising for our legal system.

Anonymous said...

Sound right, for the same reasons as the old Neola/Pianola case - buying specialised software, like the purchase of a piano, is not a "casual daily transaction", the way buying washing detergent in a supermarket is. Indeed, the reputation of Volvo in other fields would seem to accentuate the unlikelihood of there being any confusion.

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