Magnetic attraction and the power of 4: seeking the right equation for comparison of trade marks

What happens when the General Court of the European Union -- to which Community trade mark (CTM) appeals are brought -- fails to carry out an assessment of the likelihood of confusion between two marks, considering them in their entirety, and then does not sufficiently substantiate its reasoning? The answer is clear from C-182/14 P MEGA Brands International v OHIM (the 'MAGNEXT' case), in which the Court of Justice of the European Union (CJEU) set aside the General Court's decision and remitted the action for further consideration.

As already reported by the IPKat here, the story began when the Luxembourg company MEGA Brands applied for two CTMs for MAGNEXT. One was a figurative mark (as represented on the right), the other being a word mark.  Both covered the same goods in class 28: ‘Toys and playthings, in particular multi-part construction toys, its parts, its accessories and its fittings’. 

Spanish company Diset opposed both applications on the basis of the likelihood that they would be confused with its earlier national word mark MAGNET 4, also registered for goods in class 28: 'games, toys, gymnastic and sports articles not included in other classes; decorations for Christmas trees'.  The opposition was also based on a figurative mark containing the words 'Diset Magnetics' (left). Diset's oppositions were upheld by the Opposition Division, whose decision was upheld by the Board of Appeal.  Mega Brands then lodged appeals to the General Court (T-604/11 and 292/12), which joined the cases for the sake of a unitary judgment.

Before the General Court MEGA Brands agreed that the relevant public was the average Spanish consumer and that the goods were partially identical, in so far as toys and playthings were concerned. That Court excluded the possibility that there existed a likelihood of confusion between the figurative MAGNEXT mark and Diset's MAGNET 4 mark, annulling the Board of Appeal's decision in Case T-604/11, without giving a final judgment on the basis that the Board of Appeal had not assessed the likelihood of confusion in relation to the figurative Diset Magnetics mark.

In the comparison between the figurative MAGNEXT mark and the earlier MAGNET 4 word mark, the General Court held that, both from a visual and a aural point of view, they were weakly similar, in that the mark applied for was clearly composed of two parts MAG and NEXT: these would be seen and pronounced separately. Indeed, the stylization and the capital size of the X letter helped perceive the sign as composed of the separate element NEXT, giving an impression that was not produced by the MAGNET 4 mark, the dominant component of which was the single word 'MAGNET' complemented by the presence of the numeral 4, which did not feature in the applicant's mark. Conceptually, the marks were found to be different, although bothneither the Board of Appeal nor the Court totally excluded the possibility that they could be understood as referring to magnetic articles by the relevant public, given that in Spanish the word 'magnético' means 'having magnetic properties'.

These circumstances were paramount in the Court's reasoning that, considering the weak distinctive character of the earlier MAGNET 4 mark, the word MAGNET could be descriptive of the characteristics of the goods protected by the Spanish mark, in particular games and toys: it was common ground that magnets had been used for a long time in toys and that there was even a Commission Decision 2008/329 of 21 April 2008 which required Member States to impose the display of health and safety risk warnings in connection with the magnetic components of toys.

In contrast, the General Court drew different conclusions regarding the respective word marks. Since they only differed in respect of the capital X letter, there was a medium degree of similarity between the signs. Consequently, given the identity of the goods and the weak distinctive character of MAGNET 4, the Court dismissed MEGA Brand's appeal in Case T-292/12.

MEGA Brands then appealed General Court's judgment in Case T-292/12 to the CJEU.  The appeal was based on one plea in law, divided in four parts in relation to the infringement of Article 8(1)(b) of Regulation 207/2009.

The first part of the appeal was rejected as the CJEU remarked that, although one of a mark's components (the earlier mark's MAGNET component) had a descriptive character, it could still be accorded a dominant character within the comparison of the signs.

As regards the second part, the CJEU agreed with MEGA Brands that the General Court erred in not assessing the likelihood of confusion between the marks by considering them in their entirety. Indeed, the General Court failed to analyse the impact of the number 4, both in terms of its visual impression and with regard to its pronunciation ("cuatro") by the relevant public, and relegating it to a negligible element. On this basis the General Court concluded that MAGNET was the dominant character of the MAGNET 4 mark, the sole difference between it and MAGNEXT being the letter X.

The third part of the plea in law was rejected in that MEGA Brands failed to provide legal arguments in support of any alleged distortion of facts on the part of the General Court, which would lead to an unjustifiable conclusion concerning the figurative and word MAGNEXT marks in the assessment of the likelihood of confusion with the earlier MAGNET 4 mark.

Finally, the CJEU concluded that the General Court's findings of visual and aural similarity between the marks was based on the dominant character of MAGNET and without considering the relevance of the 4 number. However no reasoning in support of this comparison was either explicit or implied, so that the existence of a likelihood of confusion was not sufficiently substantiated. The CJEU accordingly set aside the corresponding part of the General Court's judgment and remit the action to it --  so let's wait and see what the Court's final assessment will be, especially in regard to its appreciation of the dominant MAGNET element.