CJEU confirms differential treatment of what amounts to unfair advantage for well-known trade marks in its KENZO ESTATE/KENZO judgment

FashionKat

In 2008 Kenzo Tsujimoto filed two separate trade mark applications with the EUIPO. 

The word sign in respect of which registration was sought was Kenzo Estate. The first application was for goods and services in Class 33 (wine, alcoholic beverages of fruit, western liquors). The second application was for goods and services in Classes 29 (olive oils), 30 (confectionaries), 31 (grapes), 35 (market research on wine), 41 (educational and instruction services relating to general knowledge of wine), and 43 (providing foods and beverages).

Following publication of the application, well-known fashion house Kenzo filed a notice of opposition based on its earlier EU word mark KENZO, which is registered in respect of goods in, inter alia, Classes 3, 18 and 25. Kenzo invoked the relative ground for refusal within Article of 8(5) of Regulation 207/2009 [now Article 8(5) of Regulation 2017/1001, the EUTMR].

Article 8(5) EUTMR provides that: “the trade mark applied for shall not be registered where it is identical with, or similar to, an earlier trade mark, irrespective of whether the goods or services for which it is applied are identical with, similar to or not similar to those for which the earlier trade mark is registered, where, in the case of an earlier EU trade mark, the trade mark has a reputation in the Union or, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned, and where the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.” 

The Opposition Division rejected the opposition and Kenzo filed a notice of appeal. 

Subsequent developments

In 2013 the EUIPO Second Board of Appeal upheld the appeal in part. According to the Board, in relation to the first application the three cumulative conditions, ie (1) similarity of the signs, (2) repute of the earlier mark, and (3) unfair advantage/blurring/tarnishment, for the application of Article 8(5) of the EU Trade Mark Regulation were satisfied, with the exclusion of goods in Classes 29 to 31 covered by the registration applied for.

First, the Board observed that the marks were highly similar for a “non-negligible” part of the relevant public. Regarding the second condition, the Board found that Kenzo had established that its earlier trade mark had a reputation. In relation to the final condition, it seemed highly likely that the mark in respect of which registration was sought, for the use of which no due cause had been demonstrated, would ride on the coat-tails of the earlier mark with a reputation in order to benefit from the power of reputation and prestige, and exploit it without any financial compensation. 

The same reasoning applied to the second application with the difference that the Board found that the goods in Classes 29 to 31 of the Nice Agreement were not regarded as luxury goods and that they were not invariably associated with the world of glamour or fashion. According to the Board, Kenzo had failed to justify why the registration applied for would take unfair advantage of, or be detrimental to, the distinctive character or reputation of the earlier Kenzo mark.

Following an unsuccessful appeal to the General Court, Kenzo Tsujimoto appealed to the Court of Justice of the European Union (CJEU), which issued its judgment on 30 May last.

The CJEU decision

Tsujimoto relied on two grounds of appeal, namely the infringement of Article 76(2) (that the opposition may disregard facts or evidence which are not submitted in due time by the parties concerned), and 8(5) (relative grounds for refusal) EUTMR.

In particular Tsujimoto claimed that an opposition based on Article 8(5) must be rejected if the opponent fails to prove the reputation of the earlier trade mark within the period specified by the EUIPO to prove the existence and validity of the earlier rights.

Since the appellant also alleged infringement of Article 8(5) EUTMR, the ground of appeal could be divided into four parts and concerned the assessment of: the similarity of the conflicting marks; the reputation of the earlier mark; the absence of unfair advantage; and whether there was due cause for the use of the mark in respect of which registration was sought. For the purpose of this post the discussion will focus on the issue of the absence of unfair advantage.

Unfair advantage

The appellant submitted that the General Court had erred in law in finding that the use of the mark Kenzo Estate took unfair advantage of the reputation of the earlier KENZO mark, in that it did not undertake a global assessment of the signs at issue. According to Tsujimoto, the General Court did not take into account all the relevant factors, including the nature of the goods or services for which those marks would be registered, and the degree of closeness or dissimilarity of those goods or services. Furthermore, although by taking into account the different nature of the commercial sectors at issue, it is highly unlikely that the image of exclusivity and luxury attached to Kenzo’s clothing, perfumers or cosmetics could be transferred to one of the products covered by the mark in respect of which registration was sought, which would cover everyday goods available in supermarkets.

According to the CJEU, the existence of a link between the earlier mark and the mark in respect of which registration is sought must be assessed globally. Account should be taken of all factors relevant to the circumstances of the case, including the degree of distinctiveness of the earlier mark and the degree of similarity between the marks at issue which requires the existence of elements such as visual, aural or conceptual similarity (C-408/01, Adidas-Salomon and Adidas Benelux).

The fact that the appellant submitted that the General Court had failed to carry out a global assessment of all relevant facts was, according to the CJEU, based on a misreading of the judgments under appeal.

Instead, the CJEU stated that the General Court confirmed in each of the judgments that an existence of a link could be established in respect of the goods covered by the earlier mark and the goods and services designated by the mark in respect of which registration was sought, namely being part of the luxury sector. The General Court also upheld the Board of Appeal’s assessment that it was highly likely that that mark could take unfair advantage of the reputation of the earlier mark. This was based on the existence of a link between the goods and services covered by the marks at issue, the substantial reputation of the earlier mark, the high degree of similarity between those marks and the sophisticated and iconic image conveyed by the earlier mark.

Hence, the General Court could not be criticized for failing to undertake a global assessment of all the relevant factors in order to assess whether the mark in respect of which registration was sought, would take unfair advantage of the reputation of the earlier mark or for failing adequately to state reasons for that assessment.

The CJEU thus concluded that Tsujimoto’s appeal should be dismissed in its entirety, and confirmed the view that, while registration could not be prevented for mass-consumed foodstuffs that are bought in any local shop (the goods falling within Classes 29 to 31), the same would not be true for the other specifications, in that use of the word ‘KENZO’ would be tantamount to riding on the coat-tails of KENZO’s prestige and repute.