Banking on Tactics from the CITIBANK Cases

In two recent CFI cases, international banking giant Citigroup Inc. appealed decisions of OHIM's Opposition Division [Citigroup Inc. v OHIM (Link Interchange Network Ltd.), Case T-325/04 and Citigroup Inc. and Citibank NA v OHIM (Citi SL), Case T-181/05]. Behind the immediate issues and outcomes lurk important tactical points on filing persuasive evidence on the state of the Register, proving peaceful coexistence and clinching a case based on unfair advantage.

State of the Register Evidence
In Link Interchange, Link successfully opposed Citigroup's CTM application for WORLDLINK, based on a highly stylised LINK Logo featuring an interlocking circles device. Both covered financial services. The opposition was upheld under Article 8 (1) (b), on the basis that the marks were similar, the services were identical, and there was a likelihood of confusion.

The appeal raised a raft of ultimately inconsequential procedural issues, but more substantive points also arose from the CFI's findings.

In particular, Citigroup argued that WORLDLINK and the stylised LINK Logo were not similar because LINK was descriptive for financial services carried out through an internationally "linked" financial network, and therefore enjoyed limited protection. As evidence that LINK was in common descriptive use by multiple companies for financial services, Citigroup filed extracts from trade mark databases highlighting the large number of CTM and national registrations that existed for marks comprising or including LINK in Class 36.

The CFI gave short shrift to Citigroup's print-outs. In its view, merely showing that there were many LINK registrations did not, on its own, prove that the word would be perceived as descriptive by the average consumer. The Court noted, in particular, that the print-outs did not show the specific goods and services for which the LINK marks were registered, but rather only the class numbers. Distinctiveness had to be assessed in respect of specific goods and services, and could vary in respect of different goods or services within a class. Moreover, the print-outs did not indicate whether the marks had been registered on the basis of acquired distinctiveness.

Comment

The CFI had already concluded that LINK was not directly descriptive of financial services, the main purpose of which was to enable consumers to manage their finances, rather than to "create and maintain connections." It distinguished this case from its earlier decision in TRUSTEDLINK (Harbinger v OHIM, Case T-345/99), which concerned IT-related goods and services relating to electronic commerce and communications whose main purpose was to create communication links. This early conclusion may have coloured the Court's approach to Citibank's state of the Register evidence.

In any event, it is well-established that the state of the Register does not necessarily reflect the state of the marketplace, and the Court aptly noted that the core question was not what was registered, but rather how the average consumer would perceive a particular sign.

Nonetheless, evidence that a word appears in multiple third-party registrations can support an inference that the public is used to seeing it in common use and is therefore less likely to regard it as an indicator of origin. State of the Register evidence is often more accessible than actual evidence of how a sign is perceived by consumers, and the Court's specific criticisms of Citibank's evidence is therefore of general usefulness.

Including full specifications of the marks referred to in state of the Register evidence can create more paper and higher translation costs. However, without them, it is clear that OHIM may disregard such evidence on the basis that distinctiveness is dependent on the specific goods and services claimed. If such evidence is important in the case, then including all the relevant information will be vital.

Identifying which if any marks referred to were registered on the basis of acquired distinctiveness may be difficult if that fact is not indicated on the relevant official database entries. National IPOs might be able to provide it, but if the number of marks is very high the cost of obtaining the information may outweigh its importance in the proceedings. If the information is available, though, drawing attention to it through a simple summary, either as a separate page in the exhibit or as part of the accompanying observations, may help to ensure that the point is noted and given due weight.

Proving Peaceful Coexistence

In defence of its WORLDLINK application, Citigroup asserted that its mark had already peacefully coexisted on the Register with the LINK Logo in the United Kingdom.

The CFI, however, was not swayed. In its view, Citigroup had not provided adequate evidence to prove commercial coexistence without conflict. Mere coexistence on the Register with another registered mark was not enough.

Citigroup had, moreover, relied on its U.K. national registration for WORLDLINK, which covered slightly different services to those for which it claimed protection under the opposed CTM. Some of the services covered by the CTM were not protected at all under the U.K. registration, which weakened the impact of the Register coexistence.

Comment

It is difficult to know to what extent adequately proving commercial or Register coexistence would have made any difference in this case.
The CFI echoed OHIM in remarking that "the peaceful coexistence of two marks may result from reasons other than the absence of likelihood of confusion." This seems to suggest that proof of peaceful coexistence in itself proves nothing. Indeed, given the very real difficulty of trying to prove a negative, asking OHIM or an appellate body to infer the absence of a likelihood of confusion from the lack of known instances of it should never form the backbone of a case if other, stronger arguments are available.

Nevertheless, where coexistence is relied upon, the lesson here is that it should ideally be commercial coexistence on the relevant markets. Persuading OHIM that confusion would have come to the relying party's attention if it had arisen may be challenging, though, and the best that can be done may be to file evidence of how the goods were sold and that customer complaints and comments were monitored and noted. This may be harder in the case of goods or services where customer or distributor feedback is rare.

Pure Register coexistence will probably count for little, but where it is relied upon at all it is sensible to ensure that the earlier registration covers at least those goods and services covered by the opposed mark. Without this, OHIM will find it easy to dismiss the point.
Clinching a Case on Unfair Advantage

In Citi SL, Citigroup itself had opposed a CTM for CITI [Stylised] for "customs agencies, property valuers, real estate agents, evaluation and administration of house contents."

The case succeeded at first instance under Article 8 (5), on the basis that the earlier CITIBANK and related CITI marks had a reputation for financial services, and that the use without due cause of CITI [Stylised] would take unfair advantage of or be detrimental to the distinctive character or repute of the Citigroup marks.

Citigroup's success was reversed by the Board of Appeal, however, who found that the only Citigroup mark with a proven reputation was CITIBANK; that there was no evidence the public perceived it as part of a family of marks; and that, in any event, CITIBANK and CITI [Stylised] were not similar such as to lead to a link in the public's mind under Article 8 (5). Oddly, though, the Board considered the marks sufficiently similar that there was a likelihood of confusion under Article 8 (1) (b) in respect of real estate-related services, and it therefore allowed CITI [Stylised] for "customs agencies" only, on the grounds that these were not similar to financial services.

Before the CFI, Citigroup argued that the Board had been wrong to regard CITIBANK and CITI [Stylised] as dissimilar under Article 8 (5). The CFI agreed. In its view, the element -BANK was purely descriptive, as demonstrated by the large number of well-known bank names that included -BANK as a descriptive suffix.

The CFI regarded CITI- as a distinctive invented word that non-English speaking consumers in the E.U. would not necessarily equate with "city." That element occupied the predominant visual and aural position in the earlier CITIBANK mark and was therefore the dominant element in it. The CITI [Stylised] mark incorporated that dominant distinctive element in its entirety, and the marks were therefore similar such as to lead the relevant public to establish a link between them.

The CFI noted that Citigroup was not obliged to prove "actual and present harm" in order to make out a claim to unfair advantage or detriment under Article 8 (5). However, it had to make out a prima facie case for future risk which was more than hypothetical, and which could be based on "logical deductions made from an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector."

Unfair advantage included riding on the coattails of a well-known mark and taking unfair advantage of the mark owner's investment in advertising and promotion. In this regard, the CFI noted that "customs agencies," the only services for which the opposed CTM had been allowed, were intrinsically linked with financial services, since they shared the same customers in the import-export trade. Hence, customers who used one service were bound to use the other, and would be likely, therefore, to presume a link between the marks, from which unfair advantage could arise.

Comment

Relying on an overlap in customer groups in order to found a persuasive argument for unfair advantage is a potentially useful tool in an Article 8 (5) case.

With some ordinary consumer products, such an argument may not hold much water since the average consumer is interested in such a broad range of goods and services. However, where products or services are specialised or less commonplace, the argument is more likely to succeed since the number of potential market players is smaller.

Related transactions are, however, likely to be needed. Citigroup succeeded in part because those involved in the import-export trade and therefore using customs agencies would of necessity also be making financial transactions as part of the same overall process. Identical or similar goods and services are not needed, but proving some consanguinity in the transactions involved can make it easier to infer that the average consumer is likely to connect two marks, and that a later mark may derive unfair advantage from an earlier mark's reputation.