Cheddar luck next time for Cyprus as it loses appeal against GRILLOUMI

What did the cheese say to itself in the mirror? Hallou-mi! 

This classic cheese joke featuring the world's favourite squeaky cheese (author's own view) did not feature in the recent decision (T-415/22) of the General Court of the European Union (the Court), which highlights the importance of properly defining the grounds of one's opposition, as the Republic of Cyprus' latest appeal against the registration of GRILLOUMI in class 43 was dismissed.

Background

Fontana Food AB is a Swedish food company which manufactures and sells a number of predominantly Greek-oriented products, including the cheese Grilloumi, a cheese akin to Halloumi which Fontana say is made in accordance with a family recipe, is available in Swedish and Greek varieties, and "holds together a little better on the grill": 

Photo: Fontana's website

Fontana successfully registered the word mark GRILLOUMI as an EU trade mark in 2009, in classes 29 and 30; however in October 2016, Fontana filed an application (the Application) seeking to also register GRILLOUMI for goods and services in class 43, namely: ‘Services for providing food and drink; coffee-shop services; restaurants’.

The Application was opposed by the Republic of Cyprus in early 2017, based on (amongst other marks/rights) two earlier Cypriot certification marks registered in 1992 for XAΛΛOYMI HALLOUMI,  for goods in Class 29: ‘Dairy product and specifically folded cheese known as [...] halloumi’.

The Opposition was grounded on Article 8(1)(b) of the EU Trade Mark Regulation 2017/0001 (EUTMR) - i.e. that identical or similar marks should not be registered for identical or similar goods and services where there exists a likelihood of confusion. 

Since the Opposition was filed in 2017, the proceedings have followed a somewhat tumultuous course. Summarily:

• The Opposition was rejected at first instance on the grounds that there was no identity or similarity with the goods and services applied for. This finding was upheld by the EUIPO's Fourth Board of Appeal in 2019. 
• Following an application by the Republic of Cyprus to the Court, the Court in December 2021 annulled the Fourth Board of Appeal's decision, finding that (as established by the Court's case-law) goods in class 29, including cheese, are necessarily used in the serving of food and drink, with the result that such services are complementary. This is because not only can cheese be incorporated as ingredient in dishes served at restaurants, but can also be sold individually with a view to be consumed at home. Such goods are consequently closely connected with those services. 
• The Court also observed that, even where the similarity between the relevant goods and services is weak, a likelihood of confusion cannot be excluded from the outset, without properly being examined. The case was therefore remitted to the Second Board of Appeal. 
• In April 2022, the Second Board of Appeal nevertheless found that there was no likelihood of confusion within the meaning of Article 8(1)(b) EUTMR, since the marks at issue, considered as a whole, were similar only to a below-average degree, and the relevant public would at best establish a link to halloumi cheese. 

A further appeal from the Republic of Cyprus led to this decision from the Court.  

The Court's decision

The Republic of Cyprus' appeal centred around three main limbs:  

1. Firstly, that the Board of Appeal incorrectly applied case-law relating to individual marks when assessing likelihood of confusion in respect of certification marks; 
2. Secondly, that the Board of Appeal assessed the distinctive character of the earlier marks as though they were individual marks; and 
3. Thirdly, that the Board of Appeal incorrectly categorised the degree of similarity between the relevant goods and services as low whereas, when dealing with certification marks, it should have carried out a specific comparison.

Note: a certification mark is defined in Article 83(1) EUTMR as a trade mark which is capable of distinguishing goods or services which are certified by the proprietor of the mark in respect of material, mode of manufacture of goods or performance of services, quality, accuracy or other characteristics, with the exception of geographical origin, from goods and services which are not so certified. 

First limb - Likelihood of confusion

In respect of the first limb, the Republic of Cyprus argued that the Board of Appeal had examined whether consumers could be misled as to the commercial origin of the goods and services at issue, whereas that criterion can apply only to individual marks or collective marks, the essential function of which is different from that of certification marks.

The Court however disagreed, finding that the Board of Appeal had in fact applied the principles set out in the Court's own judgment of 8 December 2021, namely that if the relevant public believes that the goods covered by the mark applied for are certified by the proprietor of the earlier certification mark, there is a likelihood of confusion within the meaning of Article 8(1)(b). 

Whilst the Board of Appeal had referred elsewhere in its decision to confusion as to commercial origin, the Court considered that this unfortunate statement did not affect the accuracy of the Board's overall assessment. 

Second limb - Distinctive character

As for the second limb, the crux of the Republic of Cyprus' argument was that certification marks refer to a guarantee of quality, with the result that the commercial origin of the goods and the identity of the trader are secondary for consumers, and that many certification marks would be descriptive if the criteria specific to individual marks were to be applied. The earlier marks had been registered for over 20 years and it was not for the Board of Appeal to rule on the Cypriot public's perception in the absence of any evidence to the contrary. 

The Court observed that, where an opposition is based on earlier national marks, the assessment of distinctiveness of such marks cannot lead to a finding that one of the absolute grounds for refusal under Article 7 EUTMR (i.e. lack of distinctive character) could apply, as the marks would not have been registered in the first place.

That being said, and although the earlier marks must be accorded a minimum degree of distinctiveness on account of their registration, the EU trade mark regime which stems from the EUTMR (including the assessment of the inherent distinctive character) is an autonomous regime which must be applied independently, on the basis of EU law alone.

In that regard, the Court has already ruled on several occasions that the word ‘halloumi’ is perceived by the general public, in particular the Cypriot public, as referring to a speciality cheese from Cyprus. Given its descriptive nature, the Court found that the Board of Appeal had not erred in finding that the inherent distinctive character of the earlier marks had to be regarded as weak.

Further, the Court considered that the evidence adduced by the Republic of Cyprus to show enhanced distinctiveness (including sales volumes and promotional efforts) merely showed generic use to refer to a type of cheese, and had in any event already been before the Court when it issued its decision of December 2021. 

Finally, and importantly, the Court agreed with the Board of Appeal that the Republic of Cyprus' application in 2014 for a protected designation of origin (PDO) in respect of halloumi cheese was not relevant since the Opposition was not based on Article 8(6) EUTMR.  

All this talk of cheese making Kat hungry...

Third limb - Similarity

As for the degree of similarity, the Court observed that the finding of low similarity between the relevant goods and services was one made by the Court itself in its judgment of December 2021, and that the Board of Appeal could not be criticised for having endorsed the relevant part of the Court's decision, which had the force of res judicata. 

Comment

Those in the IP space may well wonder how the outcome of this dispute may have been different had the Republic of Cyprus included its PDO (which only registered in 2021, but can still be relied upon whilst pending pursuant to Article 8(6)(i) EUTMR) in its Opposition. 

Regardless of whether or not the law as it stands was properly applied, the result does feel somewhat unsatisfactory to this Kat; given that the word GRILLOUMI is effectively just HALLOUMI combined with one of its most common attributes (that it is often cooked on the grill), a consumer visiting a GRILLOUMI restaurant might be forgiven for thinking that they are consuming Halloumi cheese when they are not.