[Guest post] Milan loses derby against Inter… in Court

Katfriend Federica Combariati discusses a recent decision relating to AC Milan’s attempt to extend its international trade mark registration for its club logo to the territory of the European Union.

The General Court rejected an appeal brought by AC Milan (nicknamed also Rossoneri) and considered that the brand characterizing Rossoneri’s emblem could not be registered as an EU trade mark (EUTM) since it would give rise to a likelihood of confusion with the earlier German trade mark ‘Milan’ held by the company InterES.

Here’s what Federica writes:

A bitter end in Europe for the Italian football club AC Milan, and this time not for the quite unsatisfactory results on the pitch and a rather low-profile journey in Champions League so far.

The game lost by the club was played in a different field: a trade mark courtroom following a brand and merchandising issue. The popular brand and emblem of the Rossoneri club cannot be registered beyond the Italian Alps for the manufacturing and marketing of official gadgets and, as a matter of fact, anything else relating to office stationery material. A German based company, very prolific in such business area, has already registered the name "Milan". And - joke´s on AC Milan - guess the company´s name? InterES… (Yet nothing to do with Inter Milan FC… at least this time!)

The very basic ground on which the opposition by InterSE was based is the similarity of the brands and the likelihood of confusion that consumers may face when purchasing the products. The judges did indeed believe that the AC Milan brand, due to the phonetic assonance, could create confusion and ultimately harm the German company.

Background

InterES Handels-und Dienstleistungs Gesellschaft GmbH & Co KG, a German company very active in the office supply industry, began its battle for protecting its brand back in 2017, when AC Milan filed an international registration designating the European Union before the European Union Intellectual Property Office (EUIPO). Registration was sought for the following figurative sign concerning, inter alia, goods in Class 16 (stationery and office supplies) of the Nice Classification:

InterES promptly challenged the above application by filing an opposition based on its earlier trade mark “Milan” dating back to 1988, designating, inter alia, goods identical/highly similar to those referred to in the aforementioned application by AC Milan. The German company argued that, because of the similarity between the two marks, there was a risk of a likelihood of confusion by the German public, pursuant to Article 8(1) of the EU Trade Mark Regulation (EUTMR).

The EUIPO Second Board of Appeal (the Board) upheld the opposition and AC Milan subsequently brought an action against the Board’s decision before the General Court. It attempted to put emphasis on InterES´s additional figurative character (as used on the market), representing the head of a bird, similar to a bird of prey:

The General Court’s decision

In November 2021, the General Court dismissed the appeal in its entirety. In particular, it considered that:

• As regards AC Milan's argument that the mark applied for enjoyed notoriety in Germany due to the reputation of the football club only the reputation of the earlier mark, and not that of the mark applied for, had to be taken into consideration to assess whether the similarity of the goods designated by two marks was sufficient to give rise to a likelihood of confusion. InterES trademark was, in fact, put extensively in use within the German territory;
• The stylized bird was not considered a dominant element in the trade mark and thus distinctive with respect to the "Milan" brand, despite not being insignificant either. The name "AC Milan", despite referring to the football team of the city of Milan, did not eliminate the similarity from the phonetic point of view between the two brands;
• The public's attention would be attracted by the verbal element consisting of the letters "AC" and the word "Milan", since they are reproduced in capital letters and with stylized characters, thus rendering "AC Milan" the dominant component of the mark applied for. In this context, the General Court found that, although a part of the relevant public would perceive "AC Milan" as a reference to the football club, the conflicting signs, which had a high degree of phonetic similarity, both referred to the city Milan.

Consequently, the General Court held that the similarities between the two marks were, when taken together, sufficient to give rise to a likelihood of confusion on part of the German public.

Comment

Likelihood of confusion and the different weights of relevant elements

The global assessment of the likelihood of confusion must, so far as concerns the visual, phonetic or conceptual similarity of the signs at issue, be based on the overall impression given by the signs, bearing in mind, in particular, their distinctive and dominant elements. When objectively performing this assessment, the visual, phonetic or conceptual aspects of the signs do not always have the same weight and it is necessary to examine the conditions under which the marks can be positioned on the market.

In this case, the General Court found that there was a high degree of phonetic similarity between the signs at issue for those consumers who were able to read the word “Milan” in the earlier figurative mark. However, it is hardly arguable that the signs at stake do have significant differences in their visual and conceptual meanings. Thus, the phonetic similarity was considered so strong to prevail on other distinctive elements and apt to induce the consumer into a state of confusion as for the products origin.

Relying on brand reputation is not enough

Along the lines of a football metaphor, being the “big guy” on the trade mark pitch really does not matter. When playing the brand protection game, bringing the most popular brand on the table loses its significance without a proper defensive scheme. A good trade mark strategy should not merely rely on the existence of a brand that resonates with consumers and is easy to market and disseminate, but it must also aim at making sure that the trade mark is duly protected. This is even more true when a company operating in a certain predominant sector (in this case football) is extending and considerably relying on the commercial value of the brand through merchandising (commercial revenues for AC Milan in 2020 amount to 53,9 million Euros). Implementing an effective trademark strategy contributes to brand awareness and company strength.