• Comparing Retail Services and Goods

    Retail services relating to specific goods are similar to those goods, confirmed the CFI recently in Oakley, Inc. v OHIM (Case T-116/06). This finding is instinctively right, but the aggressive arguments of the parties show that it was hardly a foregone conclusion. The CFI’s reasoning is instructive to retailers seeking to craft appropriate specifications for retail services applications, and for brand owners generally in weighing the merits of possible conflicts with retail services marks.

    The O Stores

    The trouble began when Oakley, Inc., the well-known American manufacturer of sunglass manufacturer, registered its O STORE trade mark as a CTM for on-line retail services generally, and for retail services relating to a variety of identified goods, including eyewear, jewelry, watches, clothing, footwear, headgear, athletic bags, backpacks, knapsacks and wallets, all in Class 35.

    A French company, Venticinque Ltd., applied for cancellation based on its earlier French registration for THE O STORE covering inter alia bags, wallets, clothing, headwear and footwear in Classes 18 and 25.

    OHIM and its Board of Appeal found that the marks were similar and that Oakley’s unrestricted on-line retail services must be taken to include the retailing of all goods, including those for which Venticinque’s mark was protected. OHIM further found that retail services relating to clothing, footwear, headgear, athletic bags, backpacks, knapsacks and wallets were similar to those goods as protected by Venticinque, as they were similar in nature and purpose and identical in method of use and distribution channels, and were moreover complementary.

    Oakley Appeals

    On appeal to the CFI, Oakley argued that retail services were a separate and distinct set of services, clearly distinguishable from the mere act of sale of goods. Equating them was likely, it submitted, to lead to overbroad protection of retail services marks.

    It argued moreover that retail services could not be said to share the same nature as the goods in any event, as the goods were tangible but the service of making them conveniently available to the public for viewing, selection and purchase was not. Furthermore, the intended purpose of retail services—facilitating selection and purchase of goods—was not the same as that of the goods themselves, which were used for protection from the elements and as articles of fashion. The mere fact that goods were sold in the same place where retail services were provided did not render them similar.

    In its support, Oakley quoted the President of the Office’s observation in Communication No. 3/01 that “risk of confusion is unlikely between retail services on the one hand and…goods on the other except in very particular circumstances, such as when the respective trade marks are identical or almost so and well established in the market.”

    Not Buying That Argument

    The CFI accepted some of Oakley’s offerings, but wasn’t buying the rest.

    In the Court’s view, OHIM had indeed made an error in too easily accepting that retail services for specific goods were similar to the goods themselves in nature and purpose. Any careful examination revealed that the complex interplay of services making up retailing had a different nature and objective to that of mere goods, regardless whether those goods were the subject of the services.

    Nonetheless, retail services and the goods to which they related were clearly complementary. Retail services were indispensable for the use of the goods by enabling them to be acquired. It was moreover relevant that retail services and the goods to which they related would inevitably be offered in the same outlets. Taking these factors into account, retail services and the goods to which they expressly related were clearly similar.

    The Court went on to uphold OHIM’s finding that O STORE and THE O STORE were similar marks, and that there was a likelihood of confusion between them in respect of on-line retail services generally, and in respect of retail services relating to the goods for which THE O STORE was protected.

    The Court declined Venticinque’s invitation to find that retail services relating to eyewear, jewelry and watches were also similar to bags and clothing. Although “the search for a certain aesthetic harmony” was a feature of the fashion and clothing sector, the relationship between bags and clothing on the one hand and eyewear, jewelry and watches on the other was too indirect and general to suggest similarity or complementarity.

    Comment

    Retail services have been registrable before OHIM since 2001, and applicants enjoy considerable freedom in how they draft specifications. Unlike before the UK-IPO, there is no requirement for applicants to specify the goods or field in which the retail services will be provided. General claims to “retail services” are accepted.

    The decision in Oakley highlights the potential pitfalls in taking advantage of such general protection, however. Oakley’s claim to on-line retail services generally was held to cover the retailing of all goods, and as such a cancellation claim based on an earlier mark for any goods could potentially succeed.

    Notwithstanding this, the attractiveness of broad retail services claims for retailers is unlikely to diminish. For many, especially supermarkets and department stores, their range is simply too vast to list, and tends to change with time in any event. For most retailers, therefore, the practical relevance of Oakley is as a reminder of the need to take potential conflicts with goods marks seriously and to actively employ restrictions away from goods for which earlier marks are known to be protected, where necessary to avoid conflict.

    In that regard, Oakley is a salient reminder of the importance of searching for retailers and other brand owners alike. For retailers, searches should extend to the goods classes of greatest interest to them. For other brand owners, they should always cover Class 35.

    At a time when retailers are struggling to achieve profitability, keeping unnecessary branding conflicts and related expenses to a minimum is critical. Bearing the Oakley lessons in mind may help to achieve this.