CJEU rules on counteraction by conceptual differences in trade mark law, but leaves much to be resolved

As Europe slowly grinds to a halt and many institutions close down – including the Court of Justice of the European Union (CJEU), which postponed all hearings until further notice – work at the CJEU continues. On 4 March, it issued its decision in C-328/18 P Black Label by Equivalenza on the interesting subject of counteraction of phonetic and visual similarity by conceptual differences in trade mark law. It was the second decision of that day reversing the appealed earlier decision of the General Court (GC) [Katpost on the other decision here] and it is interesting not so much for what it says about counteraction, but rather for what it does not say. 

The CJEU decision

The case concerned an opposition against the figurative mark BLACK LABEL BY EQUIVALENZA on the basis of the earlier figurative mark LABELL. The European Union Intellectual Property Office (EUIPO) Board of Appeal allowed the appeal, finding a visual and phonetic similarity sufficiently strong to outweigh the small conceptual dissimilarity caused by the word "Black" [here, par. 31].

The GC annulled the decision and dismissed the opposition [T-6/17, here]. It held that the signs give a different overall impression visually and that the elements "Black" and "By Equivalenza" render the signs sufficiently conceptually dissimilar to counteract any remaining similarities.



The CJEU came to yet another conclusion and annulled the GC's decision. It found fault with the GC's "contradictory reasoning" for first suggesting that there is at least a low degree of visual similarity between the signs, but then ruling out any visual similarity [par. 26-28].

Much of the rest of the decision is devoted to the correct way to perform the likelihood of confusion test of Art. 8(1)(b) Regulation 207/2009 [now superseded by art. 9(2)(b) Regulation 2017/1001, the EU Trade Mark Regulation]. In particular, the CJEU clarified or reconfirmed that:

• The circumstances under which goods bearing the signs are marketed "are to be taken into account at the stage of the global assessment of the likelihood of confusion and not at that of the assessment of the similarity of the signs at issue" [par. 70];
  
• Counteraction of visual and phonetic similarities can only occur where "at least one of the signs at issue has, from the perspective of the relevant public, a clear and specific meaning which can be grasped immediately by that public" [par. 75]; and
  
• Instances of counteraction are limited to the "exceptional case" [par. 75].

Thus, the CJEU held that the GC should have performed a global assessment of the likelihood of confusion.

The CJEU then decided on the opposition itself, essential siding with the EUIPO's initial decision. Thus, it held that the signs have an average degree of visual and phonetic similarity, and that they are conceptually different [par. 94, 96, 98]. In respect of the conceptual differences, it held that the relevant public would not understand the meaning of the word "label", but that it would understand "Black" as a reference to a colour and "By Equivalenza" as an indication that the goods in question come from Equivalenza.

According to the CJEU, this fell short of the threshold for counteraction, i.e. it held that BLACK BY EQUIVALENZA does not have "a clear and specific meaning which can be grasped immediately by the public" [par. 99]. Thus, a global assessment of the likelihood of confusion was to be performed and, because of the average degree of visual and phonetic similarity and the descriptive nature of "Black" and "By Equivalenza", such a likelihood was deemed to exist. 

Cosimo the cat ponders his conceptual similarity to Cosimo de Medici

Comment

Counteraction of visual and phonetic similarities by conceptual differences is a tricky topic and two recent monographs on the likelihood of confusion in European trade mark law [by Fhima & Gangjee and Muyldermans & Maeyaert] advocate applying it strictly. They are right: assuming counteraction too easily unduly restrict a trade mark's scope of protection. It can be inferred from the decision that the CJEU agrees, stating as it does that application will require an "exceptional case" [par. 75].

Further guidance is lacking, however, which is unfortunate because the decision seems to have been an excellent opportunity for the CJEU to give more precise directions for the doctrine's application. As it stands, several things remain unclear.

Meaning without context?

First, the CJEU found that the comparison must be made on the basis of the "intrinsic qualities of the signs at issue", i.e. without regard to the goods or services for which they are registered and the conditions under which they are marketed [par. 71-72]. It is not clear how this relates to the finding that conceptual counteraction can only occur when the relevant public immediately grasps a clear and specific meaning in one of the signs.

After all, the relevant public and its understanding depends on the goods or services at issue. It is thus possible that a professional public will consider signs conceptually different, but the general public will consider them similar [see e.g. T-256/04, par. 58-59]. What is more, the same sign can have conceptually different meanings depending on context: for instance, BLUE will have a very different meaning in the context of relationship counselling than it has in the context of baby clothes. To paraphrase the linguist and anthropologist Gregory Bateson: words without context have no meaning at all [Mind and Nature (1979), p. 15].

Conceptual dissimilarity or counteraction?

Second, one wonders when (i) signs are conceptually dissimilar; when (ii) no conceptual comparison is possible; and (iii) when there is a case of counteraction. As for the distance between (i) and (ii), the EUIPO's Trade Mark Guidelines provide little clarity and point out diverging GC case law. As for the distance between (iii) and the other two categories, some guidance from the CJEU would have been helpful.

In this case, the CJEU accepted that LABELL has no meaning and BLACK LABEL BY EQUIVALENZA (partially?) has meaning insofar as "Black" and "By Equivalenza" are concerned. Why then is this not a case where it is not possible to make a conceptual comparison [as per T-309/13, par. 63-64] or that the signs are "not conceptually similar" [as per EUIPO's Guidelines]? And if both signs have some meaning, where de we draw the line between "mere" conceptual difference and counteraction? We are unfortunately rather in the dark about the answers to the questions which are quite important in practice.

The perils of emphasizing conceptual (dis)similarity to strongly

Third, the CJEU could have offered a more elaborate explanation of "exceptional". When the GC allowed Lionel Messi to register his MESSI trade mark in spite of an older mark MASSI [here], one could sympathize with the outcome in light of the fact that Messi is a very well known soccer player so that his name immediately invokes the image of the individual.

In this Kat's view, a limitation of the counteraction doctrine to these kinds of cases, where one of the signs refers to iconic persons or concepts, would have made sense. After all, if the sign refers to a concept or person that is universally known, arguably that conceptual link may "trump" other similarities. Even if this creates problems of its own – e.g. it may lead to the counterintuitive result that well-known names end up getting less protection, as happened in C-361/04 Picasso v. Picaro – it would be a reasonable starting point. In all other cases, there is no harm in simply finding conceptual dissimilarity and then applying the global assessment of the likelihood of confusion.

More generally, it must be avoided that conceptual (dis)similarity effectively becomes the most relevant part of the likelihood of confusion test. There is case law in the Netherlands applying something of a "reverse" doctrine of counteraction, whereby mere conceptual similarity was enough for an opposition to succeed: for instance, the Hague Court of Appeal upheld a decision in which EAU CROCO was held confusingly similar to Lacoste's figurative mark of a crocodile because both evoked the concept of a crocodile [here].

Such an approach seems contrary to the idea that trade mark law, as copyright law, does not afford protection to abstract ideas but rather to specific signs. A strong emphasis on conceptual (dis)similarity effectively shifts the determination of the scope of protection to a comparison of abstract concepts, which trade mark law is supposed to leave open. If it happens "defensively", as in PICASSO/PICARO, it may result in the trade mark holder not receiving fair protection against similar signs; if it happens "offensively", as in LACOSTE/EAU CROCO, it may allow the trade mark holder to put undue claims on the public domain. It is therefore hoped that the CJEU's restriction of the counteraction doctrine to exceptional cases will be read as a call for caution.