Wolf fight: "what we say explicitly is what we mean", CJEU tells General Court

The applicant's mark

Now here's a surprise, at least for anyone who believes that all the members of the European Union's General Court can find their way from the lounge to the dining room without the assistance of a global positioning device. The case in question is Case C‑383/12 P Environmental Manufacturing LLP v Office for Harmonisation in the Internal Market, Société Elmar Wolf, a piece of litigation that was kick-started seven and a half years ago when the predecessor of what is now Enviromental Manufacturing (let's just call them EM) applied to register as a Community trade mark a figurative sign representing a wolf’s head for 'machines for professional and industrial processing of wood and green waste; professional and industrial wood chippers and shredders’ in Class 7 of the Nice classification. Elmar Wolf opposed, pointing to a number of earlier French and international word and figurative trade marks. Said Elmar Wolf, the marks applied for were lilikely to cause confusion under Article 8(1)(b) of the CTM Regulation and were a bit of detriment-infliction and/or free-riding on its reputation without due cause under Article 8(5).

In September 2007 EM took an assignment of the application and then asked Elmar Wolf, as it was entitled to do so, to adduce evidence of use of the latter's earlier marks -- which was done.

One of the opposing marks ...

There must have been an awful lot of evidence to read, because it wasn't until January 2010 that the Opposition Division dismissed the Article 8(1)(b) opposition since there was no likelihood of confusion. The Opposition Division dismissed the opposition based on Article 8(5) too, since Elmar Wolf had not adduced evidence of any detriment to the repute of the earlier marks or any unfair advantage gained from them.

... and another one

Elmar Wolf's appeal to the Second Board of Appeal was more successful: the Board found that the earlier marks were highly reputed in three Member States, that there was some similarity between the marks at issue and that the relevant public might establish a link between the signs, having regard to both (i) the distinctiveness and reputation of the earlier marks and (ii) the similarity of the goods covered by the marks at issue. Whats's more, the Board of Appeal concluded, awarding victory to Elmar Wolf under Article 8(5), EM's Wolf for might dilute the unique image of the earlier marks and take unfair advantage of their distinctive character or their reputation.

Now it was EM's turn to appeal, and this was not initially a good deal of fun: the General Court upheld the decision of the Second Board of Appeal, adding that, "so far as the Board of Appeal thus applied Article 8(5) of Regulation No 207/2009 correctly on account of the risk of dilution caused by the mark applied for, it is not necessary to consider the risk [that Environmental Manufacturing takes unfair advantage of the distinctive character or the repute of the earlier marks (free-riding)] on which the contested decision is also based".

Today the CJEU annulled the decision of the General Court and remitted the action to that court for a spot of reconsideration. Said the CJEU:

"34 According to the Court’s case-law, proof that the use of the later mark is, or would be, detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered, consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future (Intel Corporation, paragraphs 77 and 81 [noted here by the IPKat], and also paragraph 6 of the operative part of the judgment [that's the short bit at the very end of the judgment in which the court gives its actual ruling, rather than the long bit that comes before it in which the court says what it thinks the law is, and why]).

35 Admittedly, paragraph 77 of the Intel Corporation judgment, which begins with the words ‘[i]t follows that’, immediately follows the assessment of the weakening of the ability to identify and the dispersion of the identity of the earlier mark; it could thus be considered to be merely an explanation of the previous paragraph. However, the same wording, reproduced in paragraph 81 and in the operative part of that judgment, is autonomous. The fact that it appears in the operative part of the judgment makes its importance clear.

36 The wording of the above case-law is explicit. It follows that, without adducing evidence that that condition is met, the detriment or the risk of detriment to the distinctive character of the earlier mark provided for in Article 8(5) of Regulation No 207/2009 cannot be established [This statement can hardly be clearer. How long will it be, Merpel wants to know, before it is misconstrued, misapplied or mistaken for something completely different -- a football chant, perhaps].

37 The concept of ‘change in the economic behaviour of the average consumer’ lays down an objective condition. That change cannot be deduced solely from subjective elements such as consumers’ perceptions [this is a big, big prove, notes the IPKat: totally objective evidence of change of economic behaviour is jolly difficult to prove before a product or service branded with the disputed sign is actually marketed or launched.  And one cannot help wonder, thinking about L'Oréal v Bellure, how many average consumers' economic behaviour would have been altered by the knowledge that they were faced with a smell-alike version of the real upmarket scent. The CJEU rows back a little from this precipice however,at paras 42 to 43, where probabilities and logic ease the burden of proof]. The mere fact that consumers note the presence of a new sign similar to an earlier sign is not sufficient of itself to establish the existence of a detriment or a risk of detriment to the distinctive character of the earlier mark within the meaning of Article 8(5) of Regulation No 207/2009, in as much as that similarity does not cause any confusion in their minds.

38 The General Court ...dismissed the assessment of the condition laid down by the Intel Corporation judgment, and, consequently, erred in law.

39 The General Court found ... that ‘the fact that competitors use somewhat similar signs for identical or similar goods compromises the immediate connection that the relevant public makes between the signs and the goods at issue, which is likely to undermine the earlier mark’s ability to identify the goods for which it is registered as coming from the proprietor of that mark’.

40 However, in its judgment in Intel Corporation, the Court clearly indicated that it was necessary to demand a higher standard of proof in order to find detriment or the risk of detriment to the distinctive character of the earlier mark, within the meaning of Article 8(5) of Regulation No 207/2009.

41 Accepting the criterion put forward by the General Court could, in addition, lead to a situation in which economic operators improperly appropriate certain signs, which could damage competition [it's not often that the CJEU sounds like Sir Robin Jacob, whose no-nonsense championing of sensible solutions in the real world has made him many friends in that quarter, whatever the judicial inhabitants of any unreal world might say].

42 Admittedly, Regulation No 207/2009 and the Court’s case-law do not require evidence to be adduced of actual detriment, but also admit the serious risk of such detriment, allowing the use of logical deductions.

43 None the less, such deductions must not be the result of mere suppositions but, as the General Court itself noted ...l, in citing an earlier judgment of the General Court, must be founded on ‘an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case’.

44 However, the General Court did not criticise the failure to conduct that analysis, contrary to the case-law cited in its own judgment.

45 With respect to Elmar Wolf’s argument that the criterion identified by the Court in the Intel Corporation judgment concerns goods or services that are not similar to the goods or services covered by a later mark and is not, therefore, applicable in the present case, it is sufficient to note that, having regard to its general wording, the case-law referred to at paragraphs 77 and 81 and also at paragraph 6 of the operative part of that judgment cannot be interpreted as being limited to the factual circumstances involving goods or services that are not similar to the goods or services covered by a later mark. ...".

This Kat is pleased to see this clarification from the CJEU. He feels saddened, though, that this CTM application, lodged in 2006, has been the subject of four lots of proceedings so far, with the sure-fire guarantee of at least a fifth and possibly a sixth.  Let's not lose sight of reality. This case isn't about liability of billions of euros of bad debt following sub-prime lending. It's not about the contested right to thousands of square kilometers of commercially exploitable land or seabed. It's not about the life or death of human beings.  It's about the right to stick a picture of a canine mammal on machines for processing waste.  In a more sensible world we should be able to dispose of these matters in a couple of hours and then get on with the important things in life. This is not one of them.

Keeping the Wolf from the Door here
Wolf Hall here
Big Bad Wolf here, cf a happier world for wolves, here