Fashion Energy v EUIPO - Retail Royalty (1st AMERICAN) (EU trade mark - Judgment) [2019] EUECJ T-54/18 (12 July 2019)

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(EU trade mark — Opposition proceedings — Application for EU figurative mark 1st AMERICAN — Earlier EU figurative mark representing an eagle — Relative ground for refusal — Likelihood of confusion — Article 8(1)(b) of Regulation (EU) 2017/1001 — Audi alteram partem rule — Article 95(1) of Regulation 2017/1001 — Cross-claim)

Fashion Energy Srl, established in Milan (Italy), represented by T. Müller and F. Togo, lawyers,

European Union Intellectual Property Office (EUIPO), represented by L. Rampini and H. O’Neill, acting as Agents,

the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being

Retail Royalty Co., established in Las Vegas, Nevada (USA), represented by M. Dick, Solicitor, and J. Bogatz, lawyer,

ACTION brought against the decision of the Second Board of Appeal of EUIPO of 15 November 2017 (Case R 693/2017‑2), relating to opposition proceedings between Retail Royalty and Fashion Energy,

composed of D. Gratsias, President, I. Labucka (Rapporteur) and I. Ulloa Rubio, Judges,

having regard to the application lodged at the Court Registry on 31 January 2018,

having regard to the response of EUIPO lodged at the Court Registry on 30 April 2018,

having regard to the response of the intervener lodged at the Court Registry on 23 April 2018,

having regard to the cross-claim of the intervener lodged at the Court Registry on 23 April 2018,

having regard to the response of the applicant to the cross-claim lodged at the Court Registry on 26 July 2018,

having regard to the response of EUIPO to the cross-claim lodged at the Court Registry on 30 July 2018,

having regard to the reassignment of the case to the Fifth Chamber and to a new Judge-Rapporteur,

having regard to the decision of 26 September 2018 rejecting the applicant’s request for a stay of the proceedings,

1 On 16 October 2009, the applicant, Fashion Energy Srl, filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1), as amended (replaced by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (OJ 2017 L 154, p. 1)).

3 The goods in respect of which registration was sought are in Classes 9, 24 and 25 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond, for each of those classes, to the following description:

4 The trade mark application was published in Community Trade Marks Bulletin No 4/2010 of 11 January 2010.

5 On 1 April 2010, the intervener, Retail Royalty Co., filed a notice of opposition pursuant to Article 41 of Regulation No 207/2009 (now Article 46 of Regulation 2017/1001) to registration of the mark applied for in respect of the goods referred to in paragraph 3 above.

6 The opposition was based on the EU figurative mark reproduced below, filed on 9 May 2006 and registered on 10 June 2010 under No 5066113, designating goods and services in Classes 3, 18, 25 and 35 and corresponding, for certain products and services, to ‘blazers, robes, shoes, hats’ in Class 25 and to ‘retail store services, all for a wide range of sunglasses’ in Class 35:

7 The grounds relied on in support of the opposition were those set out in Article 8(1)(b) of Regulation No 207/2009 (now Article 8(1)(b) of Regulation 2017/1001).

8 By decision of 10 February 2017, the Opposition Division upheld the opposition in its entirety.

9 On 6 April 2017 the applicant filed an appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009 (now Articles 66 to 71 of Regulation 2017/1001), against the decision of the Opposition Division.

10 By decision of 15 November 2017 (‘contested decision’), the Second Board of Appeal of EUIPO dismissed the appeal. It held, as was found by the Opposition Division, that, in the present case, there was a likelihood of confusion within the meaning of Article 8(1)(b) of Regulation 2017/1001.

11 In particular, first, the Board of Appeal held that the relevant public was composed of ‘average consumers’ who were reasonably well informed and reasonably observant and circumspect.

12 Second, with regard to the comparison of the goods and services, it found the ‘household textiles and linen’ covered by the mark applied for and the ‘robes’ covered by the earlier mark to be at least similar since they had the same purpose and nature and could coincide in producer, relevant public and distribution channels. It added that there was an average degree of similarity between the ‘spectacles’ covered by the mark applied for and the ‘retail store services, all for a wide range of sunglasses’ covered by the earlier mark because ‘spectacles’ was a broad term and included ‘sunglasses’. Furthermore, the Board of Appeal found that the ‘clothing, footwear, headgear’ covered by the mark applied for include, respectively, as broader categories, the ‘blazers, shoes and hats’ covered by the earlier mark and that they were therefore identical.

13 Third, with regard to the comparison of the signs, it held that the verbal element of the mark applied for had a weak distinctive character since it was composed of an element describing the origin of the goods, namely ‘AMERICAN’, and of a laudatory element, ‘1st’, suggesting that the goods covered were the best on the market in terms of quality. It held that the pictorial representation of the bird of prey or of the eagle in the earlier mark was, on the other hand, distinctive and that this element had an independent distinctive role in the mark applied for. Consequently, the Board of Appeal held that there was a high degree of visual and conceptual similarity, adding that in the present case it was not possible to compare the signs aurally.

– uphold the contested decision with respect to the likelihood of confusion between the marks at issue;

– modify the contested decision as regards the goods for which there is a risk of confusion;

19 In its notice of opposition filed with EUIPO on 1 April 2010, the intervener stated that its opposition was based on the earlier EU figurative mark, reproduced in paragraph 6 above, and applied for on 9 May 2006. However, the opposition form did not include the date of registration of that mark. As to the date of registration of the mark, it is clear from paragraph 5 of the contested decision that it was registered on 10 June 2010 as EUIPO confirmed at the hearing on 28 February 2019.

20 In that regard, it must be observed that the earlier mark on which the opposition was based was wrongly classified as an EU mark by the Board of Appeal. At the time when the notice of opposition was filed, namely 1 April 2010, EU Trade Mark No 5066133 had not yet been registered, since it was registered on 10 June 2010. Consequently, the earlier right on which the opposition was based should have been classified as an application for registration.

21 However, it remains the case that, under Article 8(2)(b) of Regulation 2017/1001, for the purposes of paragraph 1 of that article, ‘earlier trade mark’ means EU trade marks with a date of application for registration which is earlier than the date of application for registration of the EU trade mark, subject to their registration.

22 As is clear from paragraph 6 above, the application for registration of the EU trade mark was filed on 9 May 2006, namely before the application for registration of the mark applied for, which was filed on 16 October 2009. It follows that the opposition could be legitimately based on the application for registration of the earlier trade mark.

23 Furthermore, in accordance with settled case-law, if, in the particular circumstances of the case, an error could not have had a decisive effect on the outcome of the proceedings, it cannot suffice to justify annulling the contested decision (see, to that effect, judgment of 16 October 2013, El Corte Inglés v OHIM — Sohawon (fRee YOUR STYLe.), T‑282/12, not published, EU:T:2013:533, paragraph 22 and the case-law cited).

24 That is the case here since, as stated in paragraph 22 above, the opposition was lawfully based on the application for registration of the EU trade mark. In addition, that fact in no way modifies the facts and points of law relied upon by the Board of Appeal in its assessment in the present case.

25 In support of its cross-claim, the intervener raises a single plea in law, alleging infringement of Article 8(1)(b) of Regulation 2017/1001. It claims that there are additional bases of similarity between the goods and services at issue to those relied upon in the contested decision.

27 As provided in Article 67 of Regulation 2017/1001, any party to proceedings adversely affected by a decision may appeal.

28 It follows that, according to the case-law, in so far as a decision of the Board of Appeal upholds in their entirety the claims of the party concerned, that party does not have standing to bring an action before the Court (order of 14 July 2009, Hoo Hing v OHIM — Tresplain Investments (Golden Elephant Brand), T‑300/08, not published, EU:T:2009:275, paragraph 27).

29 In that regard, it has been held that a decision of a Board of Appeal must be regarded as having upheld the claims of one of the parties before that Board, when it grants the application of that party on the basis of one of the grounds for refusal of registration or for invalidity of a mark or, more generally, of only part of the arguments put forward by that party, even where it does not examine or where it dismisses the other grounds or arguments raised by that party (see judgment of 14 June 2017, Aydin v EUIPO — Kaporal Groupe (ROYAL & CAPORAL), T‑95/16, not published, EU:T:2017:388, paragraph 32 and the case-law cited).

30 In the present case, it must be observed that the Board of Appeal dismissed the applicant’s appeal against the Opposition Division’s decision upholding the notice of opposition filed by the intervener in respect of all the contested goods in Classes 9, 24 and 25 of the mark applied for. Therefore, the Board of Appeal confirmed the Opposition Division’s decision upholding the notice of opposition filed against the registration of the mark applied for in respect of all the goods at issue because there was a likelihood of confusion.

31 Thus, the notice of opposition filed by the intervener against the registration of the mark applied for and based on Article 8(1)(b) of Regulation 2017/1001 was upheld in its entirety by the Opposition Division and then confirmed by the Board of Appeal in respect of all the contested goods covered by the mark applied for.

32 It follows that, in light of the principles set out in paragraphs 28 and 29 above, the intervener cannot file a cross-claim against the contested decision with the result that the cross-claim should be dismissed as being inadmissible.

33 In support of its action, the applicant puts forward two pleas in law alleging, first, infringement of Article 95(1) of Regulation 2017/1001 and, second, infringement of Article 8(1)(b) of that regulation.

34 The applicant submits that the Board of Appeal breached Article 95(1) of Regulation 2017/1001 in deducing on its own motion that the figurative element of an eagle has ‘an imaginative content in relation to retail services of “sunglasses”’ without having the chance to comment on this specific argument.

35 EUIPO and the intervener submit that the Board of Appeal has jurisdiction to consider the essential factors permitting the assessment of the distinctive character of the earlier mark and therefore the likelihood of confusion within the meaning of Article 8(1)(b) of Regulation 2017/1001, including the absence of opinions expressed by the parties. The intervener adds that the applicant had an opportunity during the course of the administrative proceedings to put forward its submissions on the existence of imaginative elements in the earlier mark.

36 It must be borne in mind that, under Article 95(1) of Regulation 2017/1001, in proceedings before it EUIPO is to examine the facts of its own motion. However, in proceedings relating to relative grounds for refusal of registration, that examination is to be restricted to the facts, evidence and arguments provided by the parties and the relief sought.

37 In addition, it is settled case-law that Article 94 of Regulation 2017/1001 lays down, in EU trade mark law, the general principle of the protection of rights of the defence. In so far as Article 70(2) of Regulation 2017/1001 lays down the right of parties to be heard on the observations, facts and evidence adduced before the Board of Appeal, that article also enshrines, in EU trade mark law, the general principle of protection of rights of the defence (see judgment of 1 February 2017, Gómez Echevarría v EUIPO — M and M Direct (wax by Yuli’s), T‑19/15, not published, EU:T:2017:46, paragraph 26 and the case-law cited).

38 In accordance with that general principle of EU law, which is also enshrined in Article 41(2)(a) of the Charter of Fundamental Rights of the European Union, a person whose interests are appreciably affected by a decision taken by a public authority must be given an opportunity to make his point of view known (see judgment of 1 February 2017, wax by Yuli’s, T‑19/15, not published, EU:T:2017:46, paragraph 27 and the case-law cited).

39 In the present case, it should be noted, as the intervener claims, that the observation regarding the stylised character and the degree of distinctiveness of the representation of the eagle was put forward by the Opposition Division in its decision. The Opposition Division essentially stated that the mark applied for could be described in the same way as the earlier mark, namely the image of a stylised bird, most likely an eagle. It added that the figurative element of the mark applied for, representing a bird, had an average distinctive character.

40 It must be held that the applicant was aware of and therefore in fact had the opportunity of submitting its observations regarding both the distinctive character and the stylised character of the pictorial representation of the eagle before the Board of Appeal.

41 It follows that the Board of Appeal did not breach the principle of audi alteram partem since the applicant was not deprived of the opportunity of effectively submitting its observations on the arguments put forward by the Opposition Division. Therefore the first plea must be rejected.

42 The applicant submits that, contrary to the findings of the Board of Appeal, there is no likelihood of confusion in the present case. It essentially contests the analysis of the Board of Appeal in so far as the Board of Appeal did not specify which degree of attention on the part of the relevant public it applied, adjudged that the inherent distinctive character of the figurative element of the earlier mark was normal and found that the goods and services at issue were similar. Finally, it criticises the Board of Appeal for having found that the signs were similar by carrying out an ‘analytical dissection’ of the mark applied for and by ignoring the visual, aural and verbal differences.

44 Under Article 8(1)(b) of Regulation 2017/1001, upon opposition by the proprietor of an earlier trade mark, the trade mark applied for is not to be registered if, because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected. The likelihood of confusion includes the likelihood of association with the earlier trade mark.

45 According to the case-law, the risk that the public might believe that the goods or services in question come from the same undertaking or from economically linked undertakings constitutes a likelihood of confusion. According to the same case-law, the likelihood of confusion must be assessed globally, according to the relevant public’s perception of the signs and goods or services in question and taking into account all factors relevant to the circumstances of the case, in particular the interdependence between the similarity of the signs and that of the goods or services covered (see judgment of 9 July 2003, Laboratorios RTB v OHIM — Giorgio Beverly Hills (GIORGIO BEVERLY HILLS), T‑162/01, EU:T:2003:199, paragraphs 30 to 33 and the case-law cited).

46 For the purposes of applying Article 8(1)(b) of Regulation No 207/2009, a likelihood of confusion presupposes both that the marks at issue are identical or similar and that the goods or services which they cover are identical or similar. Those conditions are cumulative (see judgment of 22 January 2009, Commercy v OHIM — easyGroup IP Licensing (easyHotel), T‑316/07, EU:T:2009:14, paragraph 42 and the case-law cited).

47 According to settled case-law, in the global assessment of the likelihood of confusion, account should be taken of the average consumer of the category of goods concerned, who is reasonably well informed and reasonably observant and circumspect. It should also be borne in mind that the average consumer’s level of attention is likely to vary according to the category of goods or services in question (see judgment of 13 February 2007, Mundipharma v OHIM — Altana Pharma (RESPICUR), T‑256/04, EU:T:2007:46, paragraph 42 and the case-law cited).

48 Where the protection of the earlier trade mark extends to the entirety of the European Union, it is necessary to take into account the perception of the marks at issue by the consumer of the goods and services in question in that territory. However, it must be borne in mind that, for an EU trade mark to be refused registration, it is sufficient that a relative ground for refusal for the purposes of Article 8(1)(b) of Regulation 2017/1001 exists in part of the European Union (see, to that effect, judgment of 14 December 2006, Mast-Jägermeister v OHIM — Licorera Zacapaneca (VENADO with frame and Others), T‑81/03, T‑82/03 and T‑103/03, EU:T:2006:397, paragraph 76 and the case-law cited).

49 Accordingly, where there is a likelihood of confusion between two EU marks in a Member State, this is sufficient reason to refuse registration of the later mark (see, to that effect, order of 16 September 2010, Dominio de la Vega v OHIM, C‑459/09 P, not published, EU:C:2010:533, paragraph 31).

50 The applicant acknowledges that the average consumer is reasonably well informed and reasonably observant and circumspect. However, it submits that the consumers’ degree of attention, which was not specified by the Board of Appeal, is high. In particular, it underlines the high level of attention of consumers who buy spectacles that are glasses used to correct defective eyesight.

51 In the present case, first, as was held by the Opposition Division, the Board of Appeal found it appropriate to assess the likelihood of confusion from the perspective of the part of the relevant EU public that speaks English.

52 Second, according to the Board of Appeal, the public to whom the goods at issue is addressed was composed of average consumers, who were reasonably well informed and reasonably observant and circumspect, since the goods and services at issue were intended for all consumers.

53 According to case-law, if the Board of Appeal neither expressly defines the public’s level of attention, nor contests the Opposition Division’s assessment, which the Opposition Division included in its contested decision, the Board of Appeal’s silence on that point can be explained by the fact that the applicant did not raise any objections in that regard in its appeal. Therefore, it must be held that the Board of Appeal agreed with the Opposition Division’s assessment concerning the level of attention of the relevant public and implicitly included it in its examination (see, to that effect, judgment of 13 October 2011, NEC Display Solutions Europe v OHIM — Nokia (NaViKey), T‑393/09, not published, EU:T:2011:593, paragraph 23 and the case-law cited).

54 In should be noted that this is the case here since the Board of Appeal neither specified the relevant public’s level of attention nor did it contest the Opposition Division’s assessment. As is clear from paragraph 6 of the contested decision, the Opposition Division essentially found that the goods and services covered by the mark applied for are directed at the public at large, whose level of attention is expected to be ‘normal’. It should also be noted that the applicant did not raise any objections in that regard in its appeal before the Board of Appeal against the decision of the Opposition Division. The applicant cannot therefore criticise the Board of Appeal for not having defined the level of attention on the part of the relevant public in the present case.

55 As regards the argument that the relevant public’s level of attention is high, it must be held, as is apparent from the case-law, that, as regards the assessment of the likelihood of confusion, when a type of goods designated by a mark at issue covers several kinds of goods, none of which is insignificant, for which the level of attention of the relevant public varies, the section of the public which has the lowest level of attention must be taken into consideration in order to evaluate the likelihood of confusion (judgment of 30 January 2018, Arctic Cat v EUIPO — Slazengers (figurative mark representing a member of the cat family jumping to the right), T‑113/16, not published, EU:T:2018:43, paragraph 25).

56 In the present case, the applicant itself acknowledges that the public’s level of attention varies according to the category of goods involved and attributes a high level of attention only to consumers who buy spectacles.

57 Consequently, even though the level of attention for corrective spectacles is high, the term ‘spectacles’ also includes spectacles that do not benefit from optical processing and that give rise to an average level of attention, as was correctly held by the Board of Appeal. It is necessary to find that the relevant public have an average level of attention.

58 As regards the applicant’s submission that consumers who buy fashion articles pay particular attention to trade marks, it must be observed that this argument is not substantiated in any way. First of all, as is clear from the settled case-law, in order to call into question the Board of Appeal’s assessment, it is not enough for the applicant to assert that, in a given sector, consumers are particularly attentive to marks, but it must support that claim with evidence (see, to that effect, judgment of 5 October 2011, La Sonrisa de Carmen and Bloom Clothes v OHIM — Heldmann (BLOOMCLOTHES), T‑118/09, not published, EU:T:2011:563, paragraph 21 and the case-law cited).

59 In addition, it should be noted that no element in the headings of the goods and services covered by the marks indicates that they are luxury products. As the Board of Appeal rightly notes, those goods are directed at the public at large.

60 In that regard, the General Court has already held that, where the clothing and footwear in Class 25 are mass consumption goods, frequently purchased and used by the average consumer, the degree of attention at the time of purchase of those goods is no higher than average (see, to that effect, judgment of 12 February 2015, Compagnie des montres Longines, Francillon v OHIM — Cheng (B), T‑505/12, EU:T:2015:95, paragraph 35 and the case-law cited).

61 In light of the foregoing, as has been held above, the level of attention on the part of the relevant public is average.

62 According to settled case-law, in assessing the similarity of the goods or services at issue, all the relevant factors relating to those goods or services should be taken into account. Those factors include, inter alia, their nature, their intended purpose and their method of use and whether they are in competition with each other or are complementary. Other factors may also be taken into account, such as the distribution channels of the goods concerned (see judgment of 11 July 2007, El Corte Inglés v OHIM — Bolaños Sabri (PiraÑAM diseño Original Juan Bolaños), T‑443/05, EU:T:2007:219, paragraph 37 and the case-law cited).

63 In the present case, it should be recalled that the principles applicable to the comparison of goods also apply to the comparison between goods and services. It is true that, by their very nature, goods are generally different from services, but it nevertheless remains the case that they can be complementary or that the services may have the same purpose or use as the goods, and thus be in competition with them. It follows that, in certain circumstances, goods and services may be found to be similar. In particular, it is apparent from the case-law that there is a certain degree of similarity between retail services in respect of certain goods and those goods themselves (see judgment of 15 February 2017, Morgese and Others. v EUIPO — All Star (2 STAR), T‑568/15, not published, EU:T:2017:78, paragraph 36 and the case-law cited).

64 In the present case, first, the Board of Appeal concluded in paragraph 23 of the contested decision that the ‘spectacles’ in Class 9 and the ‘retail store services, all for a wide range of sunglasses’ in Class 35 were similar because ‘spectacles’ was a broad term that includes sunglasses, a complementary product that targets the same public and uses the same distribution channels.

65 Second, the Board of Appeal held in paragraph 26 of the contested decision that the ‘household textiles and linen’ in Class 24 were similar to the ‘robes’ in Class 25. It essentially found that the towels in Class 24 and the robes in Class 25 had the same purpose and nature in that they were substitutable. It also found that they can coincide in producer, relevant public and distribution channels and that they are competing goods.

66 Third, in paragraph 29 of the contested decision the Board of Appeal agrees with the conclusion in the Opposition Board’s decision by confirming the identity of the ‘clothing, footwear, headgear’ covered by the earlier mark, which include the ‘blazers, shoes and hats’ covered by the mark applied for.

67 The applicant contests the similarity of the goods and services at issue since the ‘sunglasses’ covered by ‘retail store services, all for a wide range of sunglasses’ are not identical to ‘spectacles’ and have a different function to that of those goods. Therefore, ‘retail store services, all for a wide range of sunglasses’ are not identical to ‘spectacles’. The applicant adds that ‘robes’ and ‘household textiles and linen’ are directed at different consumers, have different functions and use different distribution channels.

69 First, as regards the comparison of ‘spectacles’ covered by the mark applied for and the ‘retail store services for sunglasses’ covered by the earlier mark, it should be noted that the Board of Appeal was right to find in paragraph 25 of the contested decision that ‘spectacles’ was a broad term and included ‘sunglasses’ both with and without corrective lenses, such that they were therefore identical.

70 Thus, the General Court has already ruled that ‘spectacle frames’, ‘sunglasses frames’ and ‘spectacle and sunglasses cases’ are not ‘similar’ but identical to ‘optical frames and accessories therefor, eyewear cases and accessories’ (judgment of 15 February 2017, 2 STAR, T‑568/15, not published, EU:T:2017:78, paragraph 42).

71 Where the services covered by the earlier mark apply to goods that are included in the goods covered by the mark applied for, the Board of Appeal did not err in finding that, according to the case-law cited in paragraph 63 above, ‘spectacles’ and ‘retail store services for sunglasses’ had an average degree of similarity.

72 Second, as regards ‘robes’ and ‘household textiles and linen’, it should be noted that, in paragraph 23 of the contested decision, the Board of Appeal correctly analysed the purpose and nature of those goods in its assessment of their similarity. Thus, as was found, inter alia, by the Board of Appeal, the main function of towels, which are included in the ‘household textiles and linen’ category, is to absorb moisture from wet skin; and robes also include bathrobes, which are loose, often absorbent robes worn before or after bathing as a dressing gown. In addition, it noted that those goods coincide in producer, relevant public and distribution channels and that they are in competition. The applicant is therefore wrong to rely on the purpose and different uses of those goods.

73 Therefore, it is necessary to confirm the Board of Appeal’s assessment that those goods have an average degree of similarity.

74 Third, it must be held that the ‘clothing, footwear, headgear’ covered by the mark applied for and the ‘blazers, shoes and hats’ covered by the earlier mark are identical inasmuch as the former include the latter.

75 Therefore, the Board of Appeal’s decision must be upheld on this point, which has not been contested by the parties.

76 In light of the foregoing, the Board of Appeal was fully entitled to find the goods and services at issue are similar or identical.

77 The global assessment of the likelihood of confusion, in relation to the visual, phonetic or conceptual similarity of the signs at issue, must be based on the overall impression given by the signs, account being taken, in particular, of their distinctive and dominant components. The perception of the marks by the average consumer of the goods or services in question plays a decisive role in the global assessment of that likelihood of confusion. In this regard, the average consumer normally perceives a mark as a whole and does not engage in an analysis of its various details (see judgment of 12 June 2007, OHIM v Shaker, C‑334/05 P, EU:C:2007:333, paragraph 35 and the case-law cited).

78 The assessment of the similarity between two marks means more than taking just one component of a composite trade mark and comparing it with another mark. On the contrary, the comparison must be made by examining each of the marks in question as a whole, which does not mean that the overall impression conveyed to the relevant public by a composite trade mark may not, in certain circumstances, be dominated by one or more of its components (see judgment of 12 June 2007, OHIM v Shaker, C‑334/05 P, EU:C:2007:333, paragraph 41 and the case-law cited). It is only if all the other components of the mark are negligible that the assessment of the similarity can be carried out solely on the basis of the dominant element (judgments of 12 June 2007, OHIM v Shaker, C‑334/05 P, EU:C:2007:333, paragraph 42, and of 20 September 2007, Nestlé v OHIM, C‑193/06 P, not published, EU:C:2007:539, paragraph 42). That could be the case, in particular, where that component is capable on its own of dominating the image of that mark which members of the relevant public retain, with the result that all the other components are negligible in the overall impression created by that mark (judgment of 20 September 2007, Nestlé v OHIM, C‑193/06 P, not published, EU:C:2007:539, paragraph 43).

79 In the present case, it should be noted that the earlier mark is a figurative mark consisting of a pictorial representation of a bird, probably intended to be an eagle, spreading its wings upwards and with the beak and claws open. The mark applied for is a figurative element representing a bird, which can be described in the same way as the earlier mark, and the verbal element ‘1st AMERICAN’ on a black rectangle above the representation of the bird.

80 In the present case, the Board of Appeal held that the pictorial representation of an eagle in the earlier mark was distinctive and that the figurative element had an independent distinctive role within the mark applied for. On the other hand, it held that the verbal element of the mark applied for had a weak distinctive character since it was composed of an element describing the origin of the goods, ‘AMERICAN’, and of a laudatory element, ‘1st’.

81 In that regard, with regard to the assessment of the dominant character of one or more given components of a composite trade mark, account must be taken, inter alia, of the intrinsic qualities of each of those components by comparing them with those of other components. In addition and accessorily, account may be taken of the relative position of the various components within the arrangement of the composite mark. It follows that the determination of the dominant character of an element within a composite trade mark depends on a fact-based assessment of the various elements that go to make up the sign and is therefore not dependent on the nature of the sign in question, that is to say, on whether it is a figurative sign or a word sign (judgment of 20 May 2014, Argo Group International Holdings v OHIM — Arisa Assurances (ARIS), T‑247/12, EU:T:2014:258, paragraphs 35 and 36).

82 Likewise, it should be borne in mind that, according to settled case-law, where a trade mark is composed both of verbal and figurative elements, the former are, in principle, more distinctive than the latter, because the average consumer will more readily refer to the goods in question by quoting their name than by describing the figurative element of the trade mark (judgments of 9 September 2008, Honda Motor Europe v OHIM — Seat (MAGIC SEAT), T‑363/06, EU:T:2008:319, paragraph 30, and of 11 December 2014, Coca-Cola v OHIM — Mitico (Master), T‑480/12, EU:T:2014:1062, paragraph 49).

83 First, the applicant submits that the distinctive character of the figurative element representing an eagle or a bird of prey is weak since this kind of figurative element is very common in the sector of fashion and textile. Accordingly, that representation has a general meaning in the business sector of clothing and cannot constitute the dominant element of the mark applied for.

84 Second, the applicant submits that the Board of Appeal erred in its overall assessment in attributing the verbal elements of the mark applied for a merely descriptive and laudatory function. In particular, it criticises the Board of Appeal for having carried out an ‘analytical dissection’ in analysing the elements ‘1st’ and ‘AMERICAN’ taken each on its own without examining the verbal element as a whole and without correctly assessing the overall impression of the mark applied for. Accordingly, it neglected the dominant and distinctive character of the verbal element and based its comparison solely on a visual element that is distinctive to a low degree.

85 EUIPO and the intervenor confirm the analysis of the Board of Appeal, to the extent that it concluded that the representation of an eagle was distinctive. Accordingly, they also consider that the most distinctive element of the mark applied is the representation of the eagle.

86 EUIPO and the intervener also consider that the Board of Appeal took into account all the elements constituting the mark applied for and did not ignore the verbal elements. They endorse the analysis of the Board of Appeal which held that the verbal element had a weak distinctive character because of the descriptive character of the term ‘AMERICAN’ and the laudatory character of the element ‘1st’.

87 As regards the figurative element of the mark applied for, first, it should be noted that the Board of Appeal held that the pictorial representation of an eagle had a distinctive character in respect of the goods and services at issue.

88 In this regard, it should be noted that the General Court has already ruled that the representation of an eagle had a very distinctive character for designating coffee and coffee-based beverages because such a representation cannot be regarded as suggestive of the goods in question (judgment of 25 March 2010, Nestlé v OHIM — Master Beverage Industries (Golden Eagle and Golden Eagle Deluxe), T‑5/08 to T‑7/08, EU:T:2010:123, paragraph 43). That case-law also applies to this case, since it has not been demonstrated that the representation of an eagle can be regarded as suggestive of the goods and services at issue.

89 Second, it should be borne in mind that the relevant factor for the purposes of disputing the distinctive character of an element is its actual presence on the market concerned and not its having been entered in registers or databases (see judgment of 30 January 2018, Figurative mark representing a member of the cat family jumping to the right, T‑113/16, not published, EU:T:2018:43, paragraph 55 and the case-law cited).

90 It should be noted that the applicant lists a certain number of registrations of EU trade marks. Nevertheless, that list of registrations does not allow for the actual and frequent use on the market of the eagle in the clothing sector to be established.

91 It follows, as was held by the Board of Appeal, that the applicant has not proven that the distinctive character of the figurative element is affected by actual common usage with the result that the distinctive character of that element must be regarded as average.

92 In addition, third, it should be borne in mind that, according to settled case-law, even if an element common to the signs at issue cannot be regarded as dominating the overall impression, it must be taken into account in the assessment of the similarity of those signs, to the extent that it constitutes in itself the earlier mark and retains an independent distinctive role in the trade mark consisting, inter alia, of that element, for which registration is sought (judgment of 6 October 2005, Medion, C‑120/04, EU:C:2005:594; see also, to that effect, judgment of 20 September 2017, Jordi Nogues v EUIPO — Grupo Osborne (BADTORO), T‑350/13, EU:T:2017:633, paragraph 32).

93 It should also be borne in mind that, in the event that the earlier mark is not reproduced identically in the later mark, it is still possible that the signs at issue are similar on account of the similarity between the earlier mark and one element of the later mark which has an independent distinctive role (see judgment of 24 May 2012, Grupo Osborne v OHIM — Industria Licorera Quezalteca (TORO XL), T‑169/10, not published, EU:T:2012:261, paragraph 27 and the case-law cited).

94 In that regard, first, it should be noted, as was found by the Board of Appeal, that the earlier mark and the figurative element of the mark applied for can be described in the same way inasmuch as they are very similar visually. The two birds are represented in very similar positions with their wings spread upwards and their beaks and claws open.

95 Consequently, the analysis of the Board of Appeal, which concluded that the pictorial representation has an independent distinctive role, must be confirmed and must therefore be taken into consideration in the assessment of the similarity of the marks at issue.

96 Accordingly, even if the pictorial representation of the eagle in the earlier mark is not identically reproduced in the mark applied for, the strong visual similarity between the two pictorial representations comprising the earlier mark and the distinctive element in the mark applied for cannot be disputed.

97 Second, as regards the assessment of the distinctive character of the verbal element, the applicant criticises the Board of Appeal for having carried out an analysis of the different components of the mark applied for taken each on its own, namely the element ‘1st’ and the element ‘AMERICAN’, without carrying out an overall assessment.

98 It should be noted that, in the present case, the Board of Appeal carried out a two-step analysis of the verbal element in considering the element ‘1st’ of the goods covered by the mark applied for as being laudatory and in considering the element ‘AMERICAN’ as being descriptive of the origin. That analysis of those two elements was carried out independently and led the Board of Appeal to find that each of those elements had a weak distinctive character for all the goods at issue.

99 In that regard, it must be recalled that as regards a composite mark any distinctive character may be assessed, in part, in respect of each of the terms or elements, taken separately, but must, in any event, be based on the overall perception of that trade mark by the relevant public and not on a presumption that elements individually devoid of distinctive character cannot, on being combined, present such character. The mere fact that each of those elements, considered separately, is devoid of any distinctive character does not mean that their combination cannot present such character (see, by analogy, judgment of 28 January 2014, Progust v OHIM — Sopralex & Vosmarques (IMPERIA), T‑216/11, not published, EU:T:2014:34, paragraph 45 and the case-law cited).

100 It follows that, since it did not seek to determine the distinctive character of the element ‘1st AMERICAN’ as a whole, the Board of Appeal did not undertake a global analysis of the verbal element of the mark applied for. As is clear from the case-law cited in paragraph 99 above, it should have based its assessment on the overall perception of that trade mark by the relevant public and not solely on the basis of an assessment of the elements which, taken individually, are devoid of distinctive character. The fact that the elements ‘1st’ and ‘AMERICAN’ may each have a weak distinctive character does not prejudge in any way their possible distinctive character or their meaning when they are combined.

101 Moreover, it should be noted that, in the present case, the verbal element constitutes a whole in the mark applied for since the elements ‘1st’ and ‘AMERICAN’ are written side-by-side on a black rectangle placed above the representation of the eagle.

102 Asked at the hearing whether the Board of Appeal had assessed the distinctive character of the verbal element contained in the mark applied for as a whole, EUIPO stated that this was the case and referred to paragraph 41 of the contested decision in which the number and the verbal element forming the element ‘1st AMERICAN’ were considered as having a ‘weak’ distinctive character or were ‘not particularly distinctive’.

103 However, even if, in paragraph 41 of the contested decision, the Board of Appeal had referred to the fact that the element ‘1st AMERICAN’ had a weak distinctive character as a whole, the fact remains that it did not undertake an assessment of the distinctive character of that element as a whole. It did not determine the meaning of the ‘1st AMERICAN’ element as a whole with the result that its conclusion regarding the weak distinctive character of that element is not substantiated in any way.

104 Consequently, it cannot be argued that the Board of Appeal assessed the distinctive character of the ‘1st AMERICAN’ element as a whole. That same conclusion applies to the finding in paragraph 43 of the contested decision in which the Board of Appeal stated that the verbal elements of the sign applied for were deemed to be weak or not particularly distinctive.

105 It must be held that the error committed by the Board of Appeal is liable to vitiate its entire assessment contained in its decision.

106 Accordingly, the second plea must be upheld and the contested decision must be annulled, and there is no need to examine the other pleas put forward by the applicant.

107 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

108 Since EUIPO and the intervener have been unsuccessful in the main appeal in the present case, they must, in accordance with the form of order sought by the applicant, be ordered to bear their own costs and to pay the costs incurred by the applicant.

109 Since the intervener has been unsuccessful in the cross-claim, it must, in accordance with the form of order sought by the applicant and EUIPO, be ordered to bear its own costs and to pay the costs incurred by the applicant and EUIPO.

1. Annuls the decision of the Second Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 15 November 2017 (Case R 693/2017-2);

3. In the main appeal, EUIPO and Retail Royalty Co. are ordered to bear their own costs and to each bear half of the costs incurred by Fashion Energy Srl.

4. In the cross-claim, Retail Royalty is ordered to bear its own costs and those incurred by Fashion Energy and EUIPO.

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Fashion Energy v EUIPO - Retail Royalty (1st AMERICAN) (EU trade mark - Judgment) [2019] EUECJ T-54/18 (12 July 2019) URL: http://www.bailii.org/eu/cases/EUECJ/2019/T5418.html Cite as: [2019] EUECJ T-54/18, EU:T:2019:518, ECLI:EU:T:2019:518

Court of Justice of the European Communities (including Court of First Instance Decisions)