• EUROPEAN PERSPECTIVES

    “Yes Sir, No Zirh” What Happens When CFI and National Courts Disagree?


    Navigating the maze of national and Community rules governing the enforcement of Community Trade Marks has long been a challenge. No single act of legislation contains all the relevant rules, and a single action may require reference to numerous substantive and procedural sources.

    With national courts pulled in so many directions, deference to the ECJ’s and Court of First Instance’s interpretation of Community law underpins the entire system. What happens, then, when national courts head the other way?

     

    Muehlens GmbH & Co. KG v OHIM (Case C-206/04 P)

    This point was explored by the Advocate-General in the above case, concerning the trade mark ZIRH.

    In Make Your Mark (Spring, 2005), we reported that the Court of First Instance had upheld OHIM’s finding that visual and conceptual differences counteracted the phonetic similarities between the trade marks ZIRH and the earlier CTM for SIR Logo of Muehlens GmbH, for perfumes and cosmetics.

    Muehlens appealed, arguing that the CFI had been wrong to consider the impact of conceptual differences once it had established aural similarity, relying on the dicta in Lloyd Schuhfabrik which did not rule out “that mere aural similarity…may create a likelihood of confusion.” Muehlens further assailed what it regarded as the CFI’s failure to give due regard to the importance of aural perception in non-traditional trade channels, such as telephone sales.

    Meanwhile, Muehlens had launched trade mark infringement proceedings in Germany against the use of ZIRH, based on the SIR Logo. Although judgment was handed down after the CFI’s ruling was known, the Landgericht Hamburg nonetheless found that there was a likelihood of confusion, relying on German case-law on phonetic similarities.

     

    The Advocate-General’s Opinion

    In November, the Advocate-General handed down his opinion. In it, he addressed the substantive issues raised by Muehlens first.

    On the question of aural similarity, the Advocate-General noted that although Lloyd Schuhfabrik recognized the possibility that mere aural similarity might give rise to a likelihood of confusion, it did so in language that pointed to the exception, rather than the rule. Neither Lloyd Schuhfabrik nor other Court of Justice case-law went so far as to suggest that the analysis should stop once similarity from the point of view of one of the senses was established. On the contrary, the comparison of marks under Article 8 (1) (b) CTMR required an overall assessment of all relevant factors. The CFI had undertaken this, and its views on the impact of visual and conceptual differences was, therefore, entirely proper. The Advocate-General recommended affirming that conceptual differences, in particular, can counteract other similarities (and indeed the ECJ has recently affirmed this in PICASSO, Case C-361/04 P).

    On the remaining plea, the Advocate-General trampled Muehlens’ allegations that the CFI had accorded insufficient weight to the importance of aural perception in certain trade channels. The CFI, he opined, had seen no evidence to support Muehlens’ contentions. It was entitled, therefore, to reach this conclusion on the facts. The onus had been on Muehlens to prove its case. On the part of the CFI, no error had been made.

     

    The Maverick Germans

    Measured opinion gave way to unfettered consternation, however, at the German court’s decision to strike out on its own, on what were (to appearances) the same facts.

    “Community and national courts,” the Advocate-General observed, “do not co-exist in watertight compartments…they are certainly interrelated.” He outlined the complex and, he acknowledged, sometimes confusing tangle of Community and national law on infringement issues. Community law recognized that in such circumstances there was an inevitable risk that conflicting judgments might arise, and had therefore introduced safeguards allowing for, and even requiring, the suspension of pending proceedings or the declining of jurisdiction by a Community Trade Mark court or by a national court, where another such court was already seised of a related matter (Articles 100 and 105 CTMR).

    No such provisions appeared to apply, however, to infringement actions and co-pending appeals against OHIM opposition decisions.

    The Advocate-General considered, however, that the general principles of judicial co-operation between national courts and the ECJ were still capable of ensuring, as intended, the uniform application of Community law. In a case where a national court proposed to rule in a manner openly conflicting with the case-law of the CFI or ECJ, those principles required the national court to refer to the ECJ for guidance under Article 234. Failure to do so would give rise, as in this case, to deepening legal uncertainty.

     

    Comment

    One can perhaps sympathise with the German court. No provision of national or Community law on the enforcement of CTMs required them to decline jurisdiction. No express provision appeared to require an Article 234 reference. In the thicket of relevant procedure and law, they may have thought they were doing the right thing.