I may have driven a BEETLE motor car: but I won't be using a BEATLE wheelchair!

Author: Sally Cooper (Trade Mark Attorney)

You-Q BV v OHIM with Apple Corps Ltd intervening, Case T-369/10, General Court (Eighth Court), 29 March 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps076, first published online: May 15, 2012

Does your mark have an enormous reputation (emphasis supplied) stretching over more than 40 years? And would the relevant public (emphasis supplied) be attracted by the very positive image of freedom, youth, and mobility associated with your mark? If so, your mark is THE BEATLES (or just BEATLES) and you have, in the General Court of the European Union, succeeded against a company attempting to register the mark BEATLE by relying on the reputation of your marks.

Legal context

A business seeking to oppose a trade mark application filed at OHIM has a number of grounds on which it can rely, particularly those set out in Article 8 of the Community Trade Mark Regulation 207/2009 under ‘Relative grounds’ which invoke the circumstances where ‘earlier marks’ prevail. For marks with a reputation, Article 8(5) protects against marks on goods identical or similar where (third part of Article 8(5)) ‘… the use without due cause of the [opposed] trade mark would take unfair advantage of, or be detrimental to, the distinctive character or repute of the [opponent's] earlier trade mark’. This judgment is exclusively concerned with the application of Article 8(5).

Facts

Apple Corps Ltd (‘Apple’) was incorporated in 1963 as (according to Wikipedia) a sensible diversion of income arising to the band that came from Liverpool and took the name THE BEATLES. Apple has extensive protection for BEATLES and THE BEATLES as word marks and stylized marks both at OHIM and on Registers of Member States. But none of these registered rights extends to goods in Class 12 (eg ‘Vehicles; apparatus for locomotion by land, air or water; wheelchairs’). So the attempt by a Dutch company to register BEATLE (in the form of a word in a particular font with no additional graphic material) for a list of goods in Class 12 being ‘[wheelchairs/scooters] specially made for [sick and] disabled and other persons requiring assistance’ presented a challenge. Apple went ahead with opposition proceedings, providing details of Registrations (and evidence of use) and also relied on its reputation in BEATLES and in THE BEATLES. The Opposition Division found against Apple: the goods for which the Dutch company wanted to register BEATLE were ‘different’ to the goods of Apple's registrations. The Second Board of Appeal went straight to Article 8(5): it accepted that the goods were different but found for Apple. The court confirms the Decision of the Second Board of Appeal.

Analysis

The court's preliminary observations note the primary function of a trade mark is that of an ‘indication of origin’, adding that a mark acts as a means of conveying messages concerning ‘images and feelings … such as luxury, lifestyle, exclusivity, adventure, youth’. The context of these remarks is the court observing that the parts of Article 8(5) are cumulative (failure to satisfy any one part renders the provision inapplicable) and expanding on the last part (the risk that use of a mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier mark). We find ‘image’ returning later in the judgment (see Unfair advantage, below). The court's preliminary observations also emphasize that Article 8(5) protects a mark with a reputation even if the goods of the mark applied for are not similar. The court then analyses Article 8(5).

Reputation

Crucial to the case is previous case law deciding that the reputation of a trade mark must be assessed in relation to the relevant section of the public—which may be either the public at large or a more specialized public (emphasis supplied). The Board of Appeal had found Apple's marks BEATLES and THE BEATLES to have an ‘enormous reputation’ for ‘sound records, video films, films’ and had found the marks enjoying a significant reputation for merchandising products such as toys and games. Moreover (importantly), the Board of Appeal had decided (in this context of ‘existence of reputation’) that the relevant public was the public at large (rather than any more specialised public). Once the court accepts (as it does) the Board's finding that the relevant public is the public at large then it can move on (as it does) to observing that the relevant public overlaps (and encompasses) the more specialized public which is the public concerned with the goods of the mark applied for. The court's conclusion is that the Board of Appeal was entitled to infer that Apple's marks BEATLES and THE BEATLES have a (very substantial) reputation.

Similarity of signs

The court has no difficulty with the Board's finding of the marks being highly similar (visually, phonetically and conceptually). Note is taken of the consumer generally paying greater attention to the beginning of a mark (the ‘s’ at the end of BEATLES and THE BEATLES is not material) and of registration of a word mark protecting the word mentioned (the fact the mark applied for is the word BEATLE in a particular font is not material).

A link between signs at issue

Again, the court refers to previous case law and sets out the need for a certain degree of similarity between the marks (meaning the mark applied for and the earlier marks) by virtue of which the public makes a connection between them, even though it does not confuse them. The court then reviews five factors relevant to such a link:

First, it finds the mark applied for and the earlier marks are highly similar (see above).

Secondly, it accepts the goods are dissimilar but it brings in (see above) that the public at large overlaps (and encompasses) the more specialist public which is the public concerned with the mark applied for.

Thirdly, it finds (see above) that the earlier marks have an enormous reputation.

Fourthly, it finds that the earlier marks have distinctive character.

Fifthly, it sets out that a likelihood of confusion must be taken into consideration (as it satisfies the requirement of a link) but that Article 8(5) does not require the existence of a likelihood of confusion.

The court's conclusion is that there is a link between the marks because the mark applied for and the earlier marks since the mark applied for [BEATLE] will call to mind the earlier marks with a reputation [BEATLES and THE BEATLES] on the part of the relevant public.

Unfair advantage

The court does not upset the Board of Appeal's finding that it had sufficient evidence to demonstrate a serious risk that the mark applied for would take unfair advantage of the repute of Apple's marks (‘free-riding’). This was the basis of the decision of the Board of Appeal. The Board did not examine the separate complaint of detriment to distinctive character (‘dilution’) or repute (‘tarnishment’). The court was clearly impressed by ‘the very positive image’ of Apple's marks (an image of ‘freedom, youth, and mobility’) and it is approval of there being a risk of ‘image transfer’ that underpins the court confirming the Board of Appeal's decision that—while the goods are quite different—the risk of unfair advantage is established.

Existence of due cause

As the Applicant did not succeed in placing before OHIM evidence on due cause, the court confirmed the finding of the Board of Appeal that there was no due cause.

Practical significance

 The court was clearly impressed by the evidence of Apple and the case underscores the importance of preparation and presentation of evidence. Otherwise, it is a case ‘on the edge’ and raises more questions than it provides answers. For example, (a) do we now add to the functions of a trade mark an ‘image function’? (b) The court refers to ‘average consumers’ being the relevant public on the context of determining ‘unfair advantage’—but did it apply this? (c) Will practitioners ever consider ditching evidence on ‘likelihood of confusion’ simply because (as the court observes) it is not a requirement set out in Article 8(5)?