This edition of Make Your Mark concentrates on the continuing development of OHIM practice before the ECJ, at the CTM Appeal Board and Opposition Division levels and also within the CTM Cancellation Division.
EUROPEAN COURT OF JUSTICE
The third appeal to be heard by the ECJ (Court of First Instance) on an application for a word mark rejected by OHIM involved the trade mark Options for "insurance, warranty, financing, hire-purchase and lease purchase services" in Class 36 (Ford Motor Company v. OHIM). The application was refused by the Examiner under Articles 7(1)(b) and (c) of the Regulation in view of the non-distinctive character of the mark Options, in both English and French, in relation to the claimed services. An appeal to OHIM’s Second Board of Appeal also failed despite Ford’s evidence showing use of the mark for the supply of relevant services in Belgium, Denmark, Holland, Portugal, Sweden and the UK. The absence of any use in France was, in the Board of Appeal’s view, fatal to the applicant’s case.
Ford therefore appealed to the ECJ. Before the Court, Ford argued that, under Article 7(3) of the Regulation, a mark could be accepted for registration on the basis of distinctiveness acquired through use. In Ford’s view, in order to proceed under Article 7(3), it was not necessary to establish acquired distinctiveness throughout the Community. In fact, if such acquired distinctiveness could be shown in a substantial part of the Community, the application should be allowed to proceed. Since, according to Ford’s argument, distinctiveness had been established in the UK and in certain other EU countries, the objections raised under Articles 7(1)(b) and (c) should be waived. The existence of a UK trade mark registration for Options covering Class 36 services, that had been obtained on the basis of evidence of use in the UK, was said by Ford to reinforce their position.
The ECJ rejected Ford’s appeal and maintained the objections raised by the CTM Office. According to the Court, a CTM must have a unitary character and equal effect throughout the Community. It followed that, in order to be accepted for registration, a sign must also possess a distinctive character throughout the EU. That requirement, which enabled consumers to distinguish the goods or services of one undertaking from those of others is essential if the sign is to exercise the proper function of a CTM. Since, in the present case, Ford had neither disputed the lack of distinctiveness of Options in the French language nor claimed that the mark had acquired a distinctive character in France, the appeal must be dismissed.
This decision confirms that a mark that is viewed as non-distinctive by OHIM can only be registered if the mark has acquired an acceptable level of distinctiveness through use in a substantial part of the Community. It now seems clear that, if a word mark is viewed by OHIM as non-distinctive in English and French, then use of the mark in the UK and France will be necessary in order to overcome the objection. Use in one or the other of these countries will not be enough. It is also unlikely that use in Ireland (predominantly English speaking) and Belgium (in part French speaking) will be adequate to overcome a non-distinctiveness objection based on, respectively, the English and the French language, given the relatively small size of these populations compared with the UK and France.
Further, it will be interesting to see how OHIM’s practice develops in relation to non-distinctive device, colour and shape marks. In such cases, it should be necessary to prove acquired distinctiveness throughout the EU. Whether a device mark that qualifies as distinctive through use in Benelux, France, Germany, Italy, Spain and the UK (about 85% of the EU population) will still be rejected because of no relevant use in the remaining seven EU countries, remains to be seen. In the case of word marks, non-distinctiveness in, for example, Portuguese results in rejection of the mark, even though Portugal accounts for only about 3% of the EU population. It is believed that such a high standard will not be set for non-word trade marks. What the precise standard will be for such marks, however, has yet to be resolved.
The first appeal to the ECJ involving the registrability of a shape mark, (The Procter & Gamble Company v. OHIM) has been reported. In this case, P&G applied in April 1996 for a figurative trade mark in respect of soaps. In February 1997, the applicant was informed that the application contained no representation of the mark. They immediately filed the necessary reproduction describing the mark as a figurative 3D trade mark. The Office granted the April 1996 filing date. In November 1997, the Examiner objected to the mark under Article 7(1)(e)(i) of the Regulation on the basis that the shape resulted from the nature of the goods themselves. The applicant did not respond to the Examiner’s objection and the application was therefore rejected. P&G appealed arguing that the shape was distinctive, as well as being registered in a number of EU countries.
The Third Board of Appeal rejected the appeal both on the ground raised by the Examiner and on the following additional grounds,
The application form did not expressly state that the mark applied for was three dimensional. Since the correction made by the applicant substantially changes the trade mark, the application was inadmissible (Article 44(2)).
The shape was devoid of distinctive character (Article 7(1)(b)) given that the indentation along the length of the soap is not so pronounced that an average consumer would recognise the product as that of P&G.
The shape was necessary to obtain a technical result (Article 7(1)(e)(ii)), since the purpose of the indentation is to allow a better grip of the soap.
The applicant was given no opportunity to contest the additional objections raised by the Appeal Board.
P&G appealed again, this time to the ECJ (Court of First Instance). The Court allowed the appeal on the following basis,
A formal irregularity that had not been raised by the Examiner could not be raised a posteriori by the Appeal Board. By raising such an irregularity of its own motion, the Appeal Board was depriving the applicant of both the right of appeal (to the Appeal Board) and, more importantly, the chance to file a fresh application at an early opportunity. The application was therefore deemed admissible.
A Board of Appeal may raise new absolute grounds for the rejection of a mark but must give an applicant the chance to submit its observations against such new objections. In the present case, P&G had not been given such an opportunity and therefore the Appeal Board had infringed their rights of defence both under the Regulation (Article 73) and under Community law (1974 ECR 1063). It followed that the appeal was upheld in relation to the Article 7(1)(b) and Article 7(1)(e)(ii) objections.
Since the shape of P&G’s soap had features (inward bend and grooves) which do not come about as a result of the nature of the product itself, the objection raised under Article 7(1)(e)(i) was ill founded and thereby set aside.
This is an important case that clarifies the rights and obligations of CTM Appeal Boards. The fact that an Appeal Board can raise new grounds of rejection under appropriate absolute grounds (provided they give the applicant an opportunity to reply) must be weighed as a factor in deciding whether or not to appeal in a case where some goods (or services) have been accepted by the Examiner whilst others have been rejected. In such a case, taking the accepted goods (or services) to publication and, at the same time, filing a new CTM application for the goods and services objected to by the Examiner must be considered as a serious option. In these circumstances, assuming that the new application is again rejected, the Appeal Board will be unable to raise new grounds of objection against the goods (or services) that have already been accepted by the Examiner.
In addition to the above, it is also now clear that an objection raised under Article 7(1)(e)(i) should not be sustainable if a shape mark concerned contains any elements that take it away from the accepted, generic shape of the product. In the case under discussion, given the bone shaped nature of the soap, it is clear that the proper objection should have been raised under Article 7(1)(e)(ii), a shape necessary to obtain a technical result, rather than Article 7(1)(e)(i), since the soap’s shape would appear to assist its retention in the hand.
Finally, as far as the outcome of this comedy of trade mark errors is concerned, for P&G it confirms the wisdom of Napoleon’s comments when choosing his generals. He said "Don’t tell me if they are good, tell me if they are lucky".
Under the CTM system, it is not possible to oppose an application on the ground of bad faith. However, once the application has been granted, it is possible, under Article 51(1)(b) of the Regulation, to seek to invalidate the registration on the basis that "the applicant was acting in bad faith when he filed the application…". This ground can be raised before OHIM or as a counterclaim in infringement proceedings.
In the first reported case involving such a challenge to a CTM registration (Harte Hanks Data Technologies v. Trillium Digital Systems, Inc.), the mark at issue was Trillium which was registered for "computer software and communications software". The applicant to cancel (Harte-Hanks) sought to restrict the goods registered to "telecommunications switching software" on the basis that
At the filing date, the applicant had no intention to use the trade mark Trillium on any products other than "telecommunications switching software", and
Insofar as the application was filed for goods other than the specific software for which there was a genuine intention to use the mark, the application was filed in bad faith.
The First Cancellation Division rejected the application to cancel. They believed that the request was unfounded because, under European trade mark law, there is no intention to use requirement. In this regard, the UK and CTM systems differ fundamentally. Under the CTM system, according to the Cancellation Division, unjustifiably broad specifications of goods would usually be dealt with once the five year grace period for non- use has passed. They believed that bad faith was a narrow legal concept under the CTM system, being the opposite of good faith. Only if a CTM applicant had filed his application with a dishonest intention could he be said to have filed the application in bad faith.
The Cancellation Division did, however, offer future applicants to cancel CTM registrations at least a modicum of hope when they commented that "There may be cases where an applicant files a list of goods and services where all or part of it does not have the slightest connection with his actual economic activity and where it might even appear unimaginable that said applicant would ever be able to expand. If in such a case the CTM owner immediately took action, based on the "remote" goods or services, against third parties, it might be worth considering Article 51(1)(b). But this can be left undecided because it is not the case in the present proceedings…".
A CTM application can be filed in three classes for a single filing fee. Further, class headings are accepted for registration by the Office in all forty-two International classes. This has led to the absurd situation where significant numbers of CTM applicants not only claim broadly in the class of commercial interest to them but also in one or two other classes which are only remotely connected to their business activities. It is common, for example, to find pharmaceutical companies claiming both pharmaceutical products in Class 5 and computer software in Class 9. The fact that the Class 9 goods will become vulnerable to revocation on the ground of non-use in five years time is of little consolation to a computer games manufacturer who wants to register and use a confusingly similar mark for computer software now. The Trillium case offers the owners of later trade mark rights a little, though not much, comfort.
Until recently, the UK Trade Marks Office took the issue of unjustifiably wide specifications of goods quite seriously and they would, in many cases, raise an objection under Section 3(6) of the 1994 Trade Marks Act (the bad faith section) against such broad claims. The pressure to harmonise with the CTM system has proved too great, however, and the UK has recently changed its practice in this area to the extent that they (the UK Office) will now only raise objections to very broad claims in Classes 7, 9 and 42.
In the author’s view, the practice of the US Patent and Trade Mark Office, which continues to insist on narrow specifications of goods reflecting the use, actual or intended, of the mark in the US, is far superior to that of OHIM and the UK Office in this area. The US system allows a much greater range of identical or similar marks to be registered. It is submitted that, in most cases, this serves the true commercial interests of companies because it improves their chances of finding a registrable and usable trade mark without the need to seek consent.
Further, it does not appear to affect the public interest adversely since, in the majority of cases, it is not necessary to put a vast distance between two types of product for them to coexist quite happily in the market even with similar marks. The US practice reflects this commercial reality. OHIM (and UK) practice, on the other hand, encourages unjustifiably broad claims that have no connection whatsoever with commercial reality.
Similarity of Pharmaceutical Trade Marks
This case involved an application to invalidate a CTM registration for Optinate covering "pharmaceutical and sanitary preparations and substances" in Class 5 (Octapharma AG v. Procter & Gamble Pharmaceuticals, Inc.). The invalidity action was based on the prior mark Octate which was registered for certain types of pharmaceutical products in every EU country except Ireland.
The First Cancellation Division rejected the invalidity action. In doing so, however, they commented as follows on OHIM’s present practice in the pharmaceutical area as well as on the Cancellation Division’s obligations when reaching a decision. They suggested that the present practice being followed by the Office was heavily influenced by the care assumed to be exercised by consumers, pharmacists and doctors in relation to pharmaceutical products. In view of this (assumed) care, the Office had set a "relatively high threshold before confusion can be established in relation to comparison of this (pharmaceutical) kind of mark." However, the Cancellation Division expressed some doubts as to "whether in fact the average consumer is that circumspect when it comes to this category of goods". In fact, they suggested that "One may even have reasons to assume that, because there is professional assistance, the average consumer might tend to rely on the expert instead of paying heed himself. Given the fact that there are some tens of thousands of pharmaceutical products available, one might also have some grounds for assuming that even the medical and pharmaceutical profession will find it difficult to maintain perspective". Having expressed these reservations, however, they felt unable to stray from the present practice because "the approach to marks used in the pharmaceutical trade is established in the Office".
In the author’s view, the trade marks Optinate and Octate are not confusingly similar and therefore this invalidity action was decided correctly. The interesting aspect of the decision is the comments set out above. It is clear that the First Cancellation Division had serious reservations about the Office’s practice in the pharmaceutical area. They were right to do so. As we argued in the Spring 2000 edition of Make Your Mark, the CTM Opposition Division’s practice in the Class 5 area is seriously flawed and should be reviewed as a matter of urgency. If anything, given the public safety issues involved, the comparison between marks in the Class 5 area should be more severe than in other commercial areas. It should certainly not be less stringent. Drugs are poisons, not sweets. Confusion between products may therefore be life threatening, not merely inconvenient. The death of just one patient because of an avoidable instance of trade mark confusion, is one too many.
Turning to the Cancellation Division’s view that it cannot stray from OHIM’s established practice, this is an important statement and should be contrasted with the somewhat different approach of the Examination Division. In recent Appeal Board cases, it has been decided that
Specific retail services may be registrable (Giacomelli Sport & Device), and
"The smell of fresh cut grass" is a sufficiently clear and precise graphical description to satisfy Article 4 of the Regulation (Aromatic Marketing).
Whilst the Examination Division have accepted these Appeal Board decisions for the specific (appealed) cases, they have so far refused to accept that the more general principles underlying the decisions should affect examination practice. Thus objections are still being raised to claims to "retail services" and also to abstract marks such as "the sound of a lion roaring" . In the latter case, OHIM continues to insist that an adequate graphical representation requires some type of diagram. It seems therefore that the Examination Division believes that it can cherry pick Appeal Board decisions and that it is only compelled to follow ECJ decisions. This is an extremely unsatisfactory situation that is leading to considerable uncertainty.
CTM APPEAL BOARDS
Trade Mark Dilution
In a recent case (Ferrero oHGmbH v. Duplo Corporation), the First Board of Appeal has commented on the criteria for success in a CTM opposition based on the ground of trade mark dilution (Article 8(5)).
The CTM application was for the mark Duplo in relation to goods in Classes 2, 7, 9 and 16. The opponent owned a prior German trade mark registration for Duplo covering chocolate products. The opposition was based principally on Article 8(5) and on the opponent’s reputation in the mark in Germany. The Opposition Division accepted that the opponent had established a reputation in the relevant market, but rejected the opposition because they (the opponent) had failed to show that the applicant’s use of the mark would take unfair advantage of or be detrimental to the distinctive character or repute of the opponent’s mark. The opponent therefore appealed.
The First Board of Appeal rejected the appeal and confirmed the acceptance of the application. In the Board’s view,
"…protection in respect of dissimilar goods or services constitutes an exception to one of the fundamental principles of European trade mark law. The relevant provisions must therefore be interpreted strictly and in the light of their purpose". That purpose is
To protect marks with a reputation against "dilution", that is to say, having their distinctive character weakened by use on different markets,
To prevent the reputation of such marks from being "tarnished" by association with an inappropriate product or service (e.g. detergents when the mark is a well known alcoholic beverage), and
To prevent other traders from unfairly taking advantage of the goodwill attached to marks with a reputation.
Whilst accepting that the opponent had established the reputation required under Article 8(5), they rejected their contention that, in view of that strong reputation, detriment to the distinctive character of their mark would be a necessary consequence flowing automatically from the use of an identical trade mark in relation to the goods claimed in the CTM.
According to the Board, this amounted to saying that "any trade mark which has a reputation, in the sense that a high percentage of consumers recognise it, is entitled to blanket protection against the use of an identical or very similar trade mark in relation to virtually any kind of product". In the Board’s view, "reputation, instead of being one of several conditions which define when a trade mark enjoys protection in respect of dissimilar goods, would become the sole condition. Such an interpretation would be inconsistent with the wording of Article 8(5)…". The Board continued "The opponent must at least put forward a coherent line of argument which leads to the prima facie conclusion that the link which the opponent’s trade mark establishes with the opponent’s goods, in the mind of a typical consumer of those goods, will be weakened if an identical or similar trade mark is registered and used in respect of dissimilar goods".
On the basis that "the stronger the earlier mark’s distinctive character and reputation, the easier it will be to accept that detriment has been caused to it", the Board decided that the inherent distinctiveness of the trade mark Duplo was not particularly strong and that the opponent had not succeeded in showing that its trade mark will be diminished in any way if the applicant is allowed to use the trade mark applied for in connection with the goods claimed. A typical consumer of Duplo chocolate bars was unlikely to think of those products when he sees the same mark on goods such as printing inks, staplers, hole punchers and photocopiers. Further, they were unlikely to lose their enthusiasm for such chocolate bars just because they see a range of Duplo office equipment.
This case illustrates the difficulties of running a successful dilution argument before OHIM. In order to have any chance of success it is crucial either to establish some kind of link between the earlier goods and the goods applied for or to show the possibility of tarnishment. It is also extremely beneficial to a CTM opponent’s case, if he can point to an earlier successful opposition (or similar) involving the same marks and goods in an EU national court or trade mark office (see the Cosmopolitan opposition below).
Enotria Holdings applied to register Arcadia for alcoholic beverages in Class 33. The Examiner objected under Articles 7(1)(c) and (g) of the Regulation on the basis that Arcadia is a Greek department with an established wine growing industry. The applicant appealed.
According to the Appeal Board "there is a public interest in keeping such (geographical) indications available for general use by traders established in the area in question". In the Board’s view, the geographical location of production is especially relevant in the wine sector, where reputation attaches as much to the zone of production as to the name or trade mark of the producer.
Dealing with the argument raised by the applicant that, in Greece, the word Arcadia would be written in Greek rather than Roman characters, the Board maintained that OHIM must not confine itself to appraising a mark from the perspective of consumers in a specific Member State. On the contrary, it must consider the matter from the point of view of all EU consumers. It followed that the writing of Arcadia in Roman, rather than Greek, lettering did not affect the appraisal of the mark.
It followed from the above that the mark was contrary to both Article 7(1)(c) and, since it would be misleading if used in relation to wine produced outside the Greek department, Article 7(1)(g).
Although OHIM’s policy is to accept most place names as inherently distinctive, as the above case illustrates, it does not accept all such names without evidence of use.
In addition to the trade mark Arcadia, the Appeal Boards have also rejected Ascot for ties, Isle of Skye for alcoholic beverages and Frankfurt Motor Show for the organisation of exhibitions. Further, OHIM Examiners have refused the following marks, Articwear (Class 25), Arte Portugal (Classes 8, 20, 21, 27), Cambridge Energy Research (Classes 35, 41, 42), Deutschland Radio (Classes 38, 41, 42), Hollywood Online (Classes 35 and 42), Iceland (Class 25), Morocco (Class 33) and US News and World Report (Classes 16, 41, 42).
Given the geographical indications that have been accepted, for example, Cambridge (Class 16), Macao (Class 30), Gibraltar (Class 5), Ibiza (Class 33), Trinidad (Class 28) and Scotland Online (Classes 9, 16, 35, 37, 38, 41, 42), it is difficult to discern OHIM’s policy in this area.
It is possibly that claims to marks that consist of (or nearly consist of) large countries and to places that have a close association with the goods or services will be rejected. However, given the marks that have been accepted, even a narrow policy such as this is not being consistently applied.
Evidence of Acquired Distinctiveness
Under Article 7(3) of the Regulation, it is possible to overcome objections raised against a mark under Articles 7(1)(b),(c) or (d) by providing evidence of use of the mark in the relevant part of the EU.
In a recent appeal, the proprietor of a 3D mark was able to overcome the objection initially raised by the Examiner.
The application (CTM618546) was for a 3-D mark, the so-called Vara bow, affixed primarily to footwear. The application was rejected as non-distinctive by the Examiner and the applicant appealed (R254/1999). The applicant put forward the following evidence,
Evidence of use of the bow for over 20 years throughout the European Union,
High turnover and advertising figures,
Evidence of publicity from newspaper and magazine articles and even a book which described the bow as a "status symbol", and
Sworn statements from some of Europe’s leading fashion houses (the applicant’s competitors) attesting to the reputation of the bow.
The Appeal Board allowed the appeal. The bow would not be perceived as a badge of origin, unless the applicant set out to educate the public that it was an indication of source. The evidence put forward, especially the persuasive testimony of the applicant’s competitors, suggested that the applicant had successfully achieved the sort of recognition that enables the bow to function as a badge of commercial origin.
In the Board’s view, it was unrealistic to expect a luxury (high price) product to achieve a significant share of the total market and therefore to suggest that, for such a product, acquired distinctiveness could only be shown on the basis of a large market penetration.
There have now been a number of CTM appeals dealing with the question of acquired distinctiveness of inherently non-distinctive marks. The standard that is being set by OHIM in this area is generally high. As in the case of evidence of use in oppositions (see CTM OPPOSITION DIVISIONS below), the best way to proceed is to produce independent evidence of acquired distinctiveness in the EU. It appears that independent declarations produced by either competitors or relevant trade organisations are by far the most persuasive form of evidence in ex-parte proceedings before the Office. If all you can produce is evidence of sales set out in a declaration executed by the applicant, you have little chance of overcoming an Article 7(1)(b), (c) or (d) objection.
Proof of Genuine Use
In the Spring 2000 edition of Make Your Mark, we commented on a CTM opposition (Berri Hosenmodelle v. R.G. Barry) in which OHIM imposed an extremely high threshold in relation to the evidence required to prove use of a mark in an EU country. This high level is being maintained. In essence, an opponent must establish the place, time, extent and nature of his use. If the opponent does produce certain key documentation, however, such use can be substantiated, as the following case illustrates.
In the opposition (285/2000), a CTM application for the mark Alfe in Classes 5 and 32 was opposed by the owner of a Greek and a UK registration for Alfare in Class 5. Both registrations were over five years old and the applicant therefore requested proof of use of the mark in Greece and the UK. In relation to the Greek registration, the opponent produced
Dated invoices proving sales of Alfare in Greece during the relevant period,
Greek labels which featured the trade mark alfaré in close combination with the trade mark Nestlé, and
A sworn statement (from the opponent) attesting to the use of the registered mark in Greece.
In relation to the UK registration, the opponent put forward
Dated invoices showing sales of Alfare in the UK after the relevant period,
UK labels in similar form to the Greek labels,
An English leaflet featuring a picture of an Alfare product (Whether this leaflet was produced during the relevant period was, however, unclear), and
A sworn statement (from the opponent) attesting to the use of the registered mark in the UK.
The Opposition Division found that genuine use of the Greek trade mark registration had been established, but that such use of the UK registration had not been shown. In the Division’s view, the word alfaré was the dominant feature of both the Greek and UK labels. Further, the presence of the acute accent on the letter "e" did not alter the distinctive character of the mark as registered. According to the Opposition Division, the use of an earlier mark in a form that was similar to, but not identical with, the mark as registered could constitute use of the registered mark provided the mark as used only differed "in elements which do not alter the distinctive character of the registered mark". Thus, for the purposes of establishing use, the sale of alfaré was equivalent to the sale of Alfare. It followed that the nature of the use of the mark was established in both Greece and the UK.
Turning to the question of place, time and extent of use, the Opposition Division found that the Greek invoices established a certain level of sales of Alfare products in Greece during the relevant period. They were therefore adequate to show the place, time and extent of use. By contrast, the UK invoices, English labels and English leaflet neither categorically established use of the mark in the UK during the relevant period nor the extent of the use. Since the sworn statement had been made by the Opponent, rather than by an independent body, its contents could be given little weight. For these reasons, the UK evidence, unlike the Greek evidence, failed to establish the necessary use.
In the author’s view, the level of evidence to establish genuine use that is being set by OHIM is unreasonably high. However, we have to live in the world as it is, rather than as it should be.
If an opponent wishes to establish use in a CTM opposition, he should concentrate on obtaining evidence from independent sources and dated invoices which feature both the registered mark (or a very similar mark) and the place of sale. If the registered mark is a combination of word and device, it is also important to provide labels featuring that combination mark, together with dates of use of the label in the relevant EU country.
Trade Mark Dilution
In the CTM Appeal Decision involving the trade mark Duplo discussed above, the difficulties associated with opposing a CTM application on the basis of trade mark dilution (Article 8(5)) were clearly illustrated. The case reported below (Hearst Corporation v. Mühlens GmbH) shows that, although running a dilution argument can be difficult, it is not impossible.
The CTM application was for the mark Cosmopolitan Cosmetics covering goods in Class 3. The application was opposed by the Hearst Corporation on the basis of their French trade mark registration for Cosmopolitan in Class 16 and their reputation in relation to Cosmopolitan magazine in France.
The evidence showed that
In a related French Court case, the Court had accepted that the CTM opponent had a considerable reputation in France in relation to printed matter and that (in France) the distinctive power of the trade mark Cosmopolitan extended beyond printed matter and, in particular, into the field of clothing, shoes and accessories.
The French version of Cosmopolitan magazine regularly contained a large number of advertisements for perfumery and cosmetics.
The monthly sales of Cosmopolitan magazine in France were about 240,000 copies. (This was an independent survey).
On this basis, the Opposition Division accepted that Hearst had established the necessary reputation in France. They also found, not surprisingly, that the two marks were similar. The Opposition Division then proceeded to consider the questions of unfair advantage/detriment and due cause. They ruled as follows,
The use of Cosmopolitan Cosmetics on Class 3 goods was likely to damage the distinctiveness of the earlier mark Cosmopolitan by weakening its distinctive and attractive power as a reputed mark for a magazine.
The use of Cosmopolitan Cosmetics on Class 3 goods was likely to take unfair advantage of the magazine’s reputation, since the general reader would be led to associate the new mark with the earlier mark, given the regular appearance of cosmetic/perfumery advertisements in the magazine.
The burden of proving that a CTM applicant could use his later mark with due cause fell upon the CTM applicant. In the present case, Mühlens had provided no such evidence.
The opposition succeeded and the CTM application should be refused in its entirety.
The opponent in this case was successful because they met all three criteria that are crucial to winning an opposition based on Article 8(5). They could establish their reputation in the mark through independent sources (a company that monitored magazine sales in France). They could reinforce this independent evidence by pointing to an earlier EU Court case in which their mark’s reputation was accepted. Finally, they could show a link between their goods (the goods associated with the earlier mark with a reputation) and the later (CTM) goods. In this case, the link was through the cosmetics/perfumery advertisements that regularly appear in Cosmopolitan magazine.
In the author’s view, unless an opponent can rely on at least two and preferably all three of these criteria in a CTM opposition raised under Article 8(5), he has very little chance of success.