Last month in Europe, the General Court ruled on case T398/16 Starbucks Corp. vs. EUIPO and Hasmik Nersesyan (Darts-ip Ref: darts-708-556-E-en) ), that the decision of the Board of Appeal of EUIPO must be annulled and the EUIPO must reconsider the opposition of Starbucks based on the elements set out in Article 8(5) of Regulation No.207/2009.
In 2013, Ms. Hasmik submitted the registration for the trademark “Coffee Rocks” for her services. Starbucks filed the opposition later next year based on their mermaid marks.
The board of appeal rejected the opposition solely on the ground that the trademarks are dissimilar considering the dominant elements, namely the word “Starbucks” and the mermaid figure in the center. However, Starbucks argued that the board should also consider the fact that there is similarity in the services and the reputation of Starbucks trademark.
Likelihood of confusion
First, in the issue of the likelihood of confusion, stipulated in Article 8(1)(b) of the Regulation No. 207/2009, the courts disagree with the assessment of the EUIPO and stated that there are “some degrees of similarity between the marks” since the comparison between the two marks must be assessed by comparing all elements as a whole, not only by dominant element. Furthermore, the court found that the two marks are partially similar based on their “general appearances”, including the striking circular device and the word “coffee” depicted in the same style of font. Consequently, EUIPO must consider further “ the recognition of the trademark on the market”, “ the association which can be made with the registered sign” and the similarity between the services.
Taking unfair advantage of the reputation of trademark
Another main issue considered by the court is whether the mark “Coffee Rocks” takes unfair advantage of the reputation of Starbucks’ trademark. Regarding this issue, the court referred to the three conditions provided by Article 8(5) of Regulation No.207/2009, namely – the similarity between the signs, the reputation of the earlier mark and the risk of taking unfair advantage in respect of the registration. In addition, the court emphasized it is sufficient if the sign is capable of establishing “a link between them”. The court concluded that the Board of Appeal “should not have refused to assess the grounds set out in Article 8(5) because the marks at issue were dissimilar”.
While in Singapore last year, Starbucks failed to stop trademark application from “Morinaga” Japanese company in the case of “Starbucks Corporation v Morinaga Nyugyo Kabushiki Kaisha  SGIPOS 18”
Starbucks relied on eight different “earlier trademarks” on numerous ground of opposition in order to stop this trademark application.
Conflict between trademark (Sections 8(2)(b) of Trademark act)
The comparison was done between the following two earlier trademarks and the Application mark.
In assessing likelihood of confusion, the IP adjudicator confirmed that the step-by-step approach must be adopted rather than a global appreciation approach. Under the former , the IP adjudicator emphasized that according to the precedence, the first two elements should be assessed individually and if the answer of any step is negative, this inquiry ends and this ground of opposition fails. While under the latter approach, the elements in similarity between marks and goods/services are elided with either factors going forward the main question of whether there is a likelihood of confusion.
As part of the assessment, the mere fact that overall layout and colour scheme alone do not render the marks similar. The key textual component rendered clearly aurally dissimilar. The marks are more dissimilar from conceptual standpoint. Hence, it was concluded that based on the three-steps analysis, the Application Mark are clearly dissimilar from the Opponent’s marks.
Conflict with earlier Well-known trademark (Section 8(4) of Trademark act))
Starbucks argued that the mark similarity in Article 8(4) is written with different wordings (“the whole or an essential part of the trade mark is identical with or similar to an earlier trade mark”), the test ought to be different. It should be either global assessment or at least a lower threshold than step-by-step approach. Ihe IP adjudicator opined that according to legislative history, the assessment on mark similarity should be the same as the one adopted under Article 8(2). Hence since the marks are clearly dissimilar. It is not necessary to proceed with the rest of the test.
Passing-off (Section 8(7)(a)of Trademark act))
Goodwill, misrepresentation and goodwill which are required to be met when examining passing off. After considering the evidence, Starbucks secured their goodwill.
In relation to misrepresentation, the key element in this step is distinctiveness in the Opponents and that element resides in its depiction as a whole including the verbal (“STARBUCKS”) element and the device (mermaid). It was found that common indicia like specific color scheme and layout could not amount to misrepresentation.
The likelihood of deception in misrepresentation which differed from the likelihood of confusion. The former allows consideration of all circumstances of the case such as price, packaging, trade channel and even the competition. Yet, the IP adjudicator ruled out this point by stating that “ On balance, however, the point remains that where the marks in question are clearly dissimilar, there cannot be any deception or likelihood of deception under the law of passing off.”
Bad faith and deceptive mark (Section 7(6) and (Sections 7(4)(b))
Bad faith provision is meant to protect commercially unacceptable behavior. Cultural inspiration was not one of those behaviors. While “Mt. Rainier” is considered as fanciful term rather than geographical origin and relevant consumer would not expect that the product bearing “Mt. Rainier” trademark does not have direct reference to Seattle.
Conclusion and Comment
As the court ruled in favor for Starbucks and the decision of the Board of Appeal are annulled, it shall be noted that the Board of Appeal must reconsider the opposition according to the grounds laid down in this decision.
While Singaporean court applied each criteria step-by-step, the General Court opted for global assessment approach which might provide more opportunities for both applicants and the EUIPO to consider other grounds.
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