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UNITARY PATENT

In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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Has Formula One met its Waterloo?

A recent (European) Court case (T-55/13) led to a somewhat surprising defeat for the owners of the trade mark rights in Formula One motor racing.

In April 2008, Formula One Licensing BV (F1) filed an opposition against the CTM designation of an International Registration for the mark F1H20 filed in Classes 9, 25, 38 & 41 by Idea Marketing SA (IM). F1 owned a number of earlier trade mark rights for the word mark F1 and F1 logo marks (see page 23) and F1 Formula 1 covering identical and very similar goods and services. F1’s grounds for opposition were Articles 8(1)(b) and 8(5) (reputation/detriment) of CTMR 207/2009.

In April 2011, the Opposition Division rejected F1’s opposition and F1 filed an appeal before OHIM’s Fourth Board of Appeal, which dismissed the appeal on the basis that there was no likelihood of confusion between F1’s earlier marks and the mark F1H20 within the meaning of Article 8(1)(b).  The Board also rejected the Article 8(5) ground of opposition.

With regard to F1’s earlier registrations for F1 (word), the Board considered that this mark had only a low degree of visual and phonetic similarity with the mark F1H20, and was conceptually different from the contested mark. It held that the relevant public would not break the opposed mark down into two elements, namely, ‘F1’ and ‘H2O’, but would view the mark as a whole and as referring to a chemical formula.

The Board also held that F1’s earlier word mark was devoid of any inherent distinctive character for the goods and services connected with sporting events or the merchandising thereof. With regard to the remaining goods and services covered by the CTM application for F1H20, the Board considered that the earlier word mark of the opponent had a limited inherent distinctive character, which had not been increased through the use of that mark. In summary, the Board did not believe that F1’s earlier word mark had acquired a high level of distinctive character because the reputation stemmed from the figurative elements of F1’s earlier logo marks and not from the element ‘F1’.

Taking the above into consideration, the Board held that, when examining the marks F1 and F1H20 as a whole, the conceptual differences between them were such that they offset the weak visual and phonetic similarities. So far as concerns F1’s earlier figurative marks, the Board took the view that there was no similarity between these marks and IM’s F1H20 mark and that, consequently, there was no likelihood of confusion.

The Article 8(5) ground for opposition was also rejected by the Board on the basis that there was no evidence that the earlier F1 word mark enjoyed any reputation. Although the Board accepted that the earlier F1 figurative marks enjoyed a reputation in respect of certain goods and services, they dismissed the appeal on the basis that the earlier figurative marks and the mark applied for were not similar.

F1 maintained that both OHIM’s Opposition Division and the Board of Appeal had erred in its decisions and therefore filed a further appeal before the (European) General Court (“the Court”).

The Decision of the Court

The Court first considered the Article 8(1)(b) ground of opposition based on the word mark (F1).

The Court noted that the mark F1H20 does not contain any colour, figurative, typographical or other element which would suggest that the letters and figures contained within that mark should be viewed as different components. Indeed, all the letters/numerals are written without spaces and in uppercase. The earlier word marks only contain the word element F1.

With this in mind, when assessing the similarity of the marks in question, the Court’s view was that the mark F1H20 could not be broken down into several elements composed of the alphanumeric combinations F1 and H20 and therefore the sole element of which that mark was composed was twice as long as the sole element of which the earlier word mark was composed. The Court considered that the relevant public would therefore be perfectly capable of recalling the mark F1H20 in its entirety, since all the characters contained within that mark are short enough and would appear to consumers who are unfamiliar with chemistry as an imaginary or even existing chemical formula. At best, there existed a weak visual similarity between the marks in question, as was the view of the Board of Appeal.

Although the Court acknowledged that the relevant consumer normally attaches more importance to the first part of words, this argument could not be applied in all cases and, furthermore, it was important to remember the overriding principle that when assessing the similarity of marks, it is necessary to take into account the overall impression created by them.

Turning to the phonetic comparison of the marks, in the Court’s view, each letter and numeral contained within the marks in question would be pronounced in all the languages of the relevant public. Although the beginning of the marks would be pronounced in the same way, this would not be sufficient to offset the phonetic differences between the marks. Furthermore, the difference between the lengths of the signs would be more striking phonetically than visually. Consequently, the Board was correct in its finding that there was a weak phonetic similarity between the signs at issue.

Finally, the Court considered the conceptual nature of the marks.  The Court confirmed the Board’s finding that the earlier word marks (F1) were an abbreviation of the term ‘Formula One’, signifying ‘the top class of professional motor racing’. Similarly, for the relevant public in general, ‘F1’ was the term commonly used to designate a type of racing car together with the races in which those racing cars compete. The mark F1H20, on the other hand, has no clear meaning, but will be perceived by the relevant public (lacking a basic knowledge of chemistry) as a sequence of letters and figures or as a chemical or as an imaginary chemical formula. The fact that consumers recognise the chemical formula for water (H20) does not prevent them from perceiving the mark applied for as a chemical formula of which water forms part. Therefore, the Board was correct in concluding that the marks at issue were conceptually different.

Further, the Court confirmed that the Board was legally entitled to conclude that the distinct meanings of the marks at issue counteracted their weak visual and phonetic similarities.

The Court then turned to the distinctive character and reputation of the opponent’s earlier word mark.  The Court referred to the Court of Justice judgment in Formula One Licensing v Global Sports Media (C 196/11 P, paragraph 47) in which it was held that it is necessary for a national mark to be recognised as enjoying a certain degree of distinctiveness in order for it to be successfully invoked in support of a CTM opposition. In the present case, the Court considered that the earlier F1 word mark had a weak intrinsic distinctive character in relation to the goods and services covered by the various registrations, since the ‘F1’ is likely to create a link in the mind of the relevant public between those goods and services and the field of motor racing.

So far as concerns the alleged reputation of the earlier word mark, the Court confirmed that the Board was right in finding that, based on the evidence before them, the reputation was attached to the figurative mark alone and not to the word element F1 (or to the word mark).

All of this led to the inevitable conclusions that the mark applied for (F1H20) and the opponent’s word mark (F1) had, at best, a weak visual and phonetic similarity and that therefore there existed no likelihood of confusion in the minds of the relevant public, even in respect of the identical goods and services.

The Court then turned to the comparison of the earlier figurative marks with the mark F1H20.  The Court held that there were no visual or conceptual similarities between the marks, but merely a weak phonetic similarity. Further, the Court found that the distinctiveness of the earlier figurative marks derived from their figurative elements and not from the ‘F1’ element, which had only a weak distinctive character. Consequently, the Court considered that the Board was right in concluding that the earlier figurative marks and the mark applied for were not similar and that there was again no likelihood of confusion between those marks.

Having dismissed Formula One’s Article 8(1)(b) ground of opposition, they then turned to the Article 8(5) ground based on reputation.  F1 maintained that their evidence had clearly shown the reputation enjoyed by both its word and figurative marks and that IM had intentionally incorporated the F1 element in their mark in order to take unfair advantage of the image and reputation of their earlier word and figurative marks.

In order to rely on Article 8(5) as a ground for opposition, it is necessary to fulfil four requirements, namely:

1)   the earlier mark must be registered;

2)   the earlier mark and the mark applied for must be identical or similar;

3)   the earlier mark must have a reputation in the Community (in the case of an earlier CTM) or in the Member State concerned (in the case of an earlier national trade mark); and

4)   the use without due cause of the mark applied for must lead to the risk that unfair advantage might be taken of the distinctive character or the repute of the earlier trade mark or that it might be detrimental to the distinctive character or the repute of the earlier trade mark.

As these conditions are cumulative, failure to satisfy one of them is sufficient to render that provision inapplicable (Sigla v Elleni Holding (VIPS) and Mülhens v Minoronzoni (TOSCA BLU)).

With regard to the word marks, the Court confirmed that the Board was right to conclude that F1 had failed to prove the reputation of their earlier word mark. It followed that one of the conditions for the application of Article 8(5) had not been met and F1 could therefore not rely on Article 8(5) in relation to their word mark (F1).

So far as concerns the figurative marks, it had already been confirmed by the Court (see above) that the earlier figurative marks had merely a weak phonetic similarity to the mark applied for and that the relevant public would not split the mark applied for into two separate elements. This conclusion remained valid, in the Court’s opinion, even if the common element ‘F1’ enjoyed a certain distinctive character.

In view of the differences between the marks in question, the Court upheld the Board’s finding that the relevant public would not establish a link between the mark applied for and the opponent’s figurative mark.  Consequently, the Article 8(5) ground was also rejected in respect of the F1 figurative mark. This ground (Article 8(5)) also failed in respect of the earlier F1 Formula 1 marks for the same reasons. In this latter case, the additional Formula 1 element in these earlier marks was said to distinguish the earlier marks from the F1H20 mark further.

Comment

In our Autumn 2011 edition of Make Your Mark, we reported on another case (referred to above) involving F1 as the opponent, on this occasion against an application for F1-Live Logo in the name of Global Sports Media. That case also went to the General Court and proved damaging to F1 insofar as the Court held that F1 had consistently promoted its F1 logo rather than the F1 word mark; F1 was said to be seen by the relevant public as a generic term for a particular type of motor racing.  Further, the term F1 was said to be a commonly accepted abbreviation of Formula 1 and therefore as generic as Formula 1.

However, F1 refused to give up the fight and referred the case to the European Court of Justice (CJEU) claiming that the Court of Justice should set aside the decision of the General Court. Indeed, upon reviewing the case, the Court of Justice held that the General Court had called into question the validity of the earlier trade marks in proceedings for registration of a Community trade mark, thereby acting in breach of Article 8(1)(b) of the CTM Regulation. As such, Formula One Licensing was justified in claiming that the judgment of the General Court was vitiated by an error in law.

The General Court had, in their earlier decision, concluded that F1 had become a generic term for a particular type of motor racing. However, if Article 8(1)(b) of the CTM Regulation was not to be infringed, it was necessary to acknowledge that an earlier national mark on which an opposition against the registration of a Community trade mark was based had a certain degree of distinctiveness.

Therefore, it could not be held that the registered F1 mark was generic, descriptive or devoid of any distinctive character without calling into question, in proceedings concerning the registration of a CTM, the validity of the earlier trade mark, which would give rise to an infringement of Article 8(1)(b).

It is clear that F1 have taken to heart the comments made by the various courts concerning the “generic” nature of their F1 word mark. Since May 2012, they have continued to file applications for the F1, F1.COM and F1 GRAND PRIX word marks (all of which have been accepted as inherently distinctive by OHIM) and on their www.formula1.com website, they continue to promote the F1 word mark as a Formula One brand resolutely.

This all makes the F1H20 decision rather odd.  This mark is in fact used (in a stylised form, see page 23) to promote the “F1 Powerboat World Championship” which is reported to be organised by H20 Racing and is said to be the highest class of inshore powerboat racing in the world.  As Wikipedia comments “with it sharing the title F1, it is similar to Formula One car racing”.

Given this background, if would not be a surprise either to see the F1H20 case appealed to the CJEU or, if not, for Formula One Licensing to apply to cancel the resulting CTM registration for F1H20, this time on the back of better evidence including the actual use that is being made of the trade mark F1H20.