Trademark law normally restrains overzealous traders from posting "keep off the grass" signs on descriptive words. A recent decision of the General Court suggests, however, that monopolies on descriptive language may not be so hard to obtain after all (Olive Line International, SL v OHIM, Case T-273/10). The implications are worrying.
Who Will Buy?
In Olive Line, the Italian applicant (Umbria Olii International) had sought CTM protection for a logo mark (CTM 5715008) whose only verbal element was the stylised word OLIVE, covering cosmetics and beauty care services. A Spanish company opposed, citing inter alia its earlier Spanish registration for OLIVE LINE covering olive oil-based cosmetics. OHIM's Opposition Division ruled that there was no likelihood of confusion, since the only common element was descriptive in relation to olive oil-based cosmetics. The Fourth Board of Appeal upheld that decision.
The Spanish opponent persisted, however, and took its case to the General Court, which overturned the lower rulings.
In its judgment, the General Court accepted that the word OLIVE was descriptive in relation to olive-oil based cosmetics, and that word LINE in the earlier mark was likely to be understood in Spain as denoting a selection or range (in part because of its similarity to the Spanish word, "linea"). However, it noted that the distinctiveness of an earlier mark is only one element to take into account when considering whether marks are similar and whether there is a likelihood of confusion. Where a descriptive element within a complex mark makes an impression on the average consumer because, for example, of its size or position within a mark, then it may in fact be the distinctive and dominant element of the mark despite its descriptiveness.
This was, the Court held, the case with the contested logo mark. It was a complex mark because it consisted of both word and figurative elements. Still, the word itself stood out visually and the Court considered that it was the element that the public would remember. In the Court's view, the colours and graphic features of the mark applied for were minor and merely decorative. They would have no hold on the consumer's attention or memory.
The word element was also "more distinctive" than the figurative elements, in the Court's view, because the mark could only be expressed verbally by reference to the word.
Finally, the word OLIVE within the earlier mark OLIVE LINE was more likely to attract attention, despite its descriptiveness, because of its position within the mark. The second element, LINE, would attract the consumer's attention less because of its subsidiary position and its weak distinctiveness.
Cheap at Half the Price
In the Court's analysis, therefore, all roads led to Spain, and the Rome-based applicant's defeat was no surprise.
Although the Court fully recognised the descriptiveness of the word OLIVE in relation to the cosmetic goods at issue, that fact did not affect its conclusion that the marks were visually, phonetically and conceptually similar, and that the goods and services were identical or similar. When these facts were added up, the inevitable conclusion on the technically separate question of whether, overall, there was a likelihood of confusion was that, in fact, there must be.
Given the similarity of the marks and identity and similarity of the goods, the Court thought it clear that the average consumer "might either not notice the difference constituted by the absence of the term ‘line' or the particular graphic features of that mark compared with the earlier word mark, or think that those goods and services came from the same firm which was marketing them under a similar trade mark...to draw attention to different lines of goods or different types of services also based on olives or olive oil, or take the view that those goods and services at least came from economically linked undertakings."
Defensively, perhaps, the Court added that "to give priority to the weak distinctive character of a trade mark in the assessment of likelihood of confusion would point to the conclusion that, where a mark has only weak distinctive character, there is a likelihood of confusion only where it is reproduced fully..."
Consequently, the Court ruled that there was in fact a likelihood of confusion and annulled the Board of Appeal's finding to the contrary.
For some, this decision is a good example of what is wrong with trademark law at the European level: namely, the tendency to reduce the nuanced, real-world issue of likelihood of confusion to a quasi-mathemetical formula that avoids the need to consider how the average consumer really would behave, based on all the facts.
Even for the less cynical, though, this ruling elicits concern, since it appears to open the door to monopolies in descriptive words by dint of registration in combination with other elements. The Spanish opponent did not own a registration for OLIVE, and due to its similarity with the Spanish word "oliva" it probably would not have obtained one since the word directly described the main ingredient of the goods. It owned instead a registration for OLIVE LINE, which must have been regarded as having some distinctiveness overall by the Spanish registration authorities. Indeed, following the CJEU's recent decision in F1 (referred to in our Snippets, see page 19), OHIM must accept that earlier national marks have at least some distinctiveness, unless and until that presumption is successfully challenged in separate proceedings.
However, it is a long way between accepting OLIVE LINE as distinctive overall in Spain and finding that the CTM applicant's highly stylised logo mark for goods in relation to which "olive" is descriptive would necessarily be seen as emanating from the producers of OLIVE LINE. As the English courts have long recognised, consumers are less likely to assume that descriptive words denote origin in the absence of secondary meaning acquired through use. Even where the shared presence of descriptive elements leads the average consumer to connect marks in some way, the English courts have recognised that there is a difference between a mere connection and an assumption that there is an economic link.
In the past OHIM itself has recognised (see inter alia the BoA ruling in Cheapflights) that those adopting marks that are mainly descriptive or which incorporate descriptive elements have to accept that other traders are more likely to want to use, and to be able legitimately to use, those same descriptive elements within their own marks. The mere coincidence of descriptive elements should not automatically lead to a finding of a likelihood of confusion, even where marks are held to be similar and goods and services are the same or similar. To do so circumvents the practical commercial analysis that should be at the heart of the issue.
Indeed, one can take the General Court's reasoning on verbal similarity to an extreme. Trademark registration may be obtained for marks that are visually highly stylised but whose only verbal elements are descriptive. That does not make it possible for them to stop others from using that descriptive element on its own or in an entirely different visual style. The mere fact that the descriptive word is what one says to refer verbally to the earlier mark does not make that element distinctive or even "more distinctive" than the figurative stylisation, as suggested by the Court.
So, there is reason to be concerned about the path taken in this case. If it is further appealed there may be an opportunity for the CJEU to inject some common sense into the debate on how far rights extend in descriptive elements within registered marks. The pursuit of overextended monopolies should not become an OHIM-sponsored sport.