Best-case scenario for Puma?

A Kat with her kat-sized Puma outfits.

As part of an opposition dispute between Puma (applicant) and CMS Costruzione macchine speciali SpA (proprietor of the contested sign), the Sixth Chamber of the EU General Court (Court) ruled on 22 October that the Board of Appeal (BoA) had erred in law when assessing Puma’s reputation. 

Background

Bouncing between the BoA and the General Court for almost 8 years, Puma has been trying to invalidate the contested sign based on Article 8(5) of EU Trade Mark Regulation (EUTMR). According to Puma, the broad protection that its figurative mark enjoys means that the EUIPO should deny registration of the sign shown below.

Although the contested sign was filed in Classes 7, 11, and 37 – mainly in relation to industrial machine tools, as opposed to clothing and footwear in Classes 18, 25, and 28 – Puma’s reputation may confer it a wide protection so as to prevent the registration of a similar sign for dissimilar goods and services. Accordingly, Puma claimed that its figurative mark enjoys a very high degree of reputation, which would thus facilitate establishing a link between the signs, and a consequent finding of a risk of blurring, tarnishment, or free riding.

The Court, having previously accepted the adequacy of Puma’s evidence and its reputation, stated that the BoA had erred in law in deciding the appropriate degree of that reputation, and annulled its latest decision in its entirety.

Court’s decision

Puma contested that, by merely holding that its figurative mark has “at least an average degree of reputation”, the BoA failed to determine the degree of its reputation. According to the applicant, the BoA should have clearly identified the exact degree of reputation, rather than providing an approximation.

EUIPO countered that there is no requirement to establish a precise degree of reputation and that it is acceptable to define either the lowest or highest possible degree. The Court disagreed. It held that the BoA had failed to act in accordance with the settled case law by basing its decision on a “vague hypothesis”, and that it either needed to ascertain the precise degree of reputation enjoyed by the mark, or to “expressly take into account the best-case scenario for the losing party” (i.e., the party whose arguments in relation to establishing reputation has been rejected) when using ‘at least/at most’ language [see paras 30-33]. Since the BoA had not considered the best-case scenario for Puma, the Court held that it had erred in law.

Puma's figurative marks

Comment 

In some trade mark disputes, where neither party has a significant advantage over the other, it may be argued that the best-case scenario for the losing party should be upheld to ensure fairness or an equal opportunity to make a case. However, especially in cases where the losing party already enjoys an advantage, such as some level of reputation, this approach risks artificially inflating that advantage. Therefore, giving Puma – who already enjoys reputation and thus broader protection under Article 8(5) EUTMR – an additional boost by assuming it has the highest level of reputation begins to look less like ensuring fairness and more like steering the outcome to make Article 8(5) apply.

Like distinctive character, reputation must be established through objective factors, such as the features of the sign at hand, the brand’s market share, consumers’ perception of the sign, and the investments made in the brand’s advertisements. If, upon examining all relevant factors, a decision-maker concludes that the mark enjoys ‘at least an average degree of reputation/distinctiveness’, there should be nothing wrong or improper about proceeding on that basis.

The proceedings have not yet reached the stage of assessing whether Puma suffered or is likely to suffer harm as a result of the use of the contested sign. Nonetheless, it is difficult to see how the use of a jumping puma on industrial machine tools could harm Puma’s reputation or take unfair advantage of it. The markets and commercial contexts seem to be very far apart, leaving little room, if any, for consumers to establish a link between the two signs and/or undertakings, and thus a meaningful free riding.

Likewise, it is hard to come to a conclusion that the use of a highly similar jumping puma on industrial machine tools would damage the reputation of Puma. The integrity or the prestige associated with the mark should not be held to be diminished by merely using a similar sign on heating and air conditioning machines, as it is hard to reconcile the use of a similar sign on such machines with impairing Puma’s repute.

The strongest ground that may allow Puma to rely on Article 8(5) EUTMR seems to be dilution. It may be held by BoA that, as a result of the widespread use of the jumping puma icon in relation to numerous goods and services, the distinctiveness of Puma’s figurative mark may be weakened. Yet it seems unlikely to this Kat that Puma can persuasively establish that the use of a similar jumping puma on some heating tools is capable of rendering Puma’s figurative mark generic in relation to sportswear. It may thus be time for Puma to accept that its reputation may not be able to prevent each use of a jumping puma image.






Image credit: Gemini