CANCELLATION No 29 422 C (INVALIDITY)

Shaanxi Xifeng Wine Stock Co., Ltd., Liulin Town, Fengxiang County, Baoji City, Shaanxi Province, People’s Republic of China (applicant), represented by Ballester IP, Avda. de la Constitución, 16, 1°D, 03002 Alicante, Spain (professional representative)

a g a i n s t

Zhi Chen, 30 Warnford Road, Orpington BR6 6LW, United Kingdom and Meiling Chen, 30 Warnford Road, Orpington BR6 6LW, United Kingdom (EUTM proprietors), represented by Laytons LLP, 2 More London Riverside, SE1 2AP London, United Kingdom (professional representative).

On 06/08/2019, the Cancellation Division takes the following

DECISION

1. The application for a declaration of invalidity is rejected in its entirety.

2. The applicant bears the costs, fixed at EUR 450.

REASONS

On 09/11/2018, the applicant filed an application for a declaration of invalidity against all the goods of European Union trade mark No 12 220 513 , namely against all the registered goods in Class 30. The application is based on European Union trade mark registration No 12 214 871 . The applicant invoked Article 60(1)(a) EUTMR in connection with Article 8(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that the goods are identical and that the signs share an identical dominant element which makes them almost identical from the visual point of view. Conceptually, the signs are also identical both for Mandarin- and non-Mandarin speakers. Therefore, there is a likelihood of confusion on the part of the public and the contested EUTM has to be invalidated.

The EUTM proprietors did not submit any observations in reply.

LIKELIHOOD OF CONFUSION — ARTICLE 60(1)(a) EUTMR IN CONNECTION WITH ARTICLE 8(1)(b) EUTMR

A likelihood of confusion exists if there is a risk that the public might believe that the goods or services in question, under the assumption that they bear the marks in question, come from the same undertaking or, as the case may be, from economically linked undertakings. Whether a likelihood of confusion exists depends on the appreciation in a global assessment of several factors, which are interdependent. These factors include the similarity of the signs, the similarity of the goods and services, the distinctiveness of the earlier mark, the distinctive and dominant elements of the conflicting signs and the relevant public.

1. The goods

The goods on which the application is based are the following:

Class 33: Fruit extracts, alcoholic; bitters; distilled beverages; digesters (liqueurs and spirits); wine; spirits (beverages); alcoholic essences; alcoholic beverages, except beer; rice alcohol; pre-mixed alcoholic beverages, other than beer-based.

The contested goods are the following:

Class 33: Alcoholic beverages (except beers); alcoholic beverages containing fruit; alcoholic extracts; alcoholic essences; wine punch; wine coolers [drinks]; wine; spirits [beverages]; sparkling wines; port wines; mulled wine; mead [hydromel]; cider; fortified wines; low-alcoholic wine.

Some of the contested goods are identical to goods on which the application is based. This is the case for example of alcoholic beverages (except beers); alcoholic essences; wine; spirits [beverages], which are included in both lists. At this point of the assessment, the Cancellation Division will not undertake a full comparison of the goods listed above. The examination of the application will proceed as if all the contested goods were identical to those of the earlier mark, as this is the best light in which the applicant’s case can be examined, which will be, however, without prejudice to the EUTM proprietors, as it will be detailed in the following sections of the present decision.

2. Relevant public — degree of attention

The average consumer of the category of products concerned is deemed to be reasonably well informed and reasonably observant and circumspect. It should also be borne in mind that the average consumer’s degree of attention is likely to vary according to the category of goods or services in question.

In the present case, the relevant goods are directed at the public at large and also at a more specialised public, with specific professional knowledge or expertise, such as professionals in the field of bartending or restaurant/bar owners or managers. The degree of attention is considered to be average.

3. The signs

Earlier trade mark	Contested trade mark

The relevant territory is the European Union.

The global appreciation of the visual, aural or conceptual similarity of the marks in question must be based on the overall impression, bearing in mind their distinctive and dominant components (11/11/1997, C‑251/95, Sabèl, EU:C:1997:528, § 23).

The marks to be compared are figurative signs composed of several elements, as shown in the above table.

The applicant explains that the earlier mark depicts three traditional Chinese characters which are phonetically transcribed as ‘XI FENG JIU’ and which refer to western phoenix wine. The Chinese characters at the beginning of the contested sign are essentially the same as the first two characters of the earlier mark (only that they are written in ‘simplified’ Chinese). The pictograms in the contested sign together with their phonetic transcription, ‘XI FENG’, would therefore convey the same concept of western phoenix. The applicant further argues that ‘XI FENG JIU’ is a ‘famous alcoholic Chinese drink’ (and inserts in its observations a link to an entry from Wikipedia). Therefore, the marks would be conceptually identical for Mandarin speakers.

The Cancellation Division recalls that the comparison of the signs (and the evaluation of the likelihood of confusion for that matter) has to be carried out from the perspective of the relevant public, which is the average consumer in the European Union. In this regard, it should be noted that the relevant public in the various Member States of the EU mainly speaks the languages predominant in their respective territories (23/10/2002, T-6/01, Matratzen+ Matratzenmarkt Concord (fig.), EU:T:2002:261, § 27) and these languages are normally the official languages of the relevant territory.

Even though it certainly cannot be disputed that the population of the European Union includes Chinese-speaking people or people of Asian ancestry, it is questionable whether such population can be considered a substantial part of the consumers in the European Union (21/03/2017, R 888/2016-2, Authentic herbal tea, § 32; and, by analogy, 06/02/2013, R 1971/2011-2, Dr Jian (fig.) / Jianchi et al., § 31). Furthermore, the applicant failed to adduce evidence that the respective marks would be understood by the relevant average consumer in the European Union, as the relevant public, be it general consumers or professionals, will be unable to read and therefore pronounce and remember the sound of Chinese or Asian characters in general (22/03/2011, R 1718/2008-1, LINGLONG / LL (fig.) et al., § 25, 01/11/2010, R 144/2010-2, KUNGFU (fig.) / (fig.) et al., § 48 and the case-law cited in paragraph 28).

Therefore, and in the absence of any relevant evidence from the applicant in support of its claims, the Cancellation Division rather takes the view that the average consumers at issue neither speak the Chinese language (nor have the ability to read the respective alphabet) and will perceive the three characters of the earlier mark and the two of the contested sign as characters from an Asian alphabet (possibly Chinese), illegible and incomprehensible (04/09/2017, R 1780/2016-5, DEVICE OF CHINESE CHARACTERS (fig.) § 39 and the cited case law).

If anything, the information carried by these symbols might be seen by the public as a suggestion that the goods in question are manufactured in Asia (China, if the consumers associate the characters to this particular alphabet), that they are manufactured following an Asian tradition and/or with the use of Asian ingredients – a suggestion which is, in itself, weak, as it relates to the characteristics of the goods (their kind, origin and/or ingredients).

Bearing in mind the above considerations on the relevant public, the elements ‘XI FENG’ of the contested sign will not be associated with any particular concept either and will not convey any immediately perceptible meaning for the goods at issue, as the applicant claims. At most, they could be seen as a name of Asian origin (possibly Chinese). Be that as it may, their distinctiveness must be deemed as average, since they are not descriptive of or allusive to the characteristics of the goods in a way which may materially affect their ability to act as a badge of origin.

Both signs further include a circle with a thick border, inside of which there is further placed a figurative element consisting of a combination of several wavy, curved and brushstroke like elements, of different shapes and sizes (black in the earlier mark and red in the contested sign). The applicant contends that the figurative element within the circle depicts a stylised phoenix (conveying the image of the said mythological bird or what it may represent: a new life arouses from the ashes of a predecessor) which will lead to conceptual identity from the perspective of the non-Mandarin speakers.

The Cancellation Division deems however that the way these elements are depicted makes it rather unrealistic to assume that they will readily be perceived as a phoenix by the vast majority of consumers. It has to be borne in mind that consumers usually perceive a mark as a whole and do not proceed to analyse its various details (judgment of 13/02/2008, T-146/06, Aturion, EU:T:2008:33, § 58). As such, for this part of the public the figurative element at issue will be seen rather as an abstract combination of highly stylized lines and shapes, with no immediately perceptible meaning.

However, as the ‘identical’ figurative element of the phoenix is the main argument that would lead, in the applicant’s view, to a high visual similarity of the signs, to conceptual identity for non-Mandarin speakers and to a finding of a likelihood of confusion, the present assessment will also be carried out from the perspective of those consumers, who, upon significant mental effort and close inspection of the signs, would visually discern therein a highly stylised representation of a phoenix bird. This is the best scenario for examining the applicant’s case, which will not prejudice the EUTM proprietors, as it will be detailed hereinafter.

As regards the distinctiveness of this figurative element, where seen as an abstract component, given that the arrangement of the elements is rather complex and elaborated and goes beyond a simple geometrical, commonplace and banal shape, it cannot be deemed as a mere decoration and hence non-distinctive.

Where seen as a highly stylized phoenix bird, per se such an element is not descriptive, laudatory or allusive for the goods concerned and hence its distinctiveness must be deemed average. Nevertheless, a Chinese phoenix is not an uncommonly used symbol, being often depicted together with a dragon. As such, it cannot be excluded that consumers attach less trade mark significance to it, since it could be seen as further reinforcing the association created by the Asian (Chinese) characters that the goods in question are manufactured in Asia or with Asian ingredients or following an Asian recipe. This is even more emphasised by the colour used for depicting this element in the contested sign, since red is frequently employed in the course of trade to denote such origin.

To sum up, it is considered that the earlier mark has no element which could be deemed more distinctive than other elements. The Chinese characters cannot be read or otherwise understood by the public and, in addition, is visually quite difficult to memorize them, as they are composed of more than 20 intersecting lines, some of which are curved and some straight, which constitute a relatively complex figurative pattern. The same applies to the figurative sign, which will be seen by the vast majority of consumers as an abstract combination of lines and shapes, not easily to remember either. Even in the unlikely event where perceived as a highly stylised representation of a phoenix bird, it could not be attributed too much weight, as detailed herein above.

As for the contested sign, it is worth recalling that in principle, the verbal component of the sign usually has a stronger impact on the consumer, since the latter does not tend to analyse signs and will more easily refer to the signs in question by their verbal element than by describing their figurative elements (14/07/2005, T-312/03, Selenium-Ace, EU:T:2005:289, § 37). It follows from the foregoing that the elements that will primarily focus and retain consumers’ attention and function as the main indicator of commercial origin are the verbal components ‘XI FENG’. The Chinese characters will have a lower impact for the relevant public, as they have no identifiable concept and would be difficult to describe their appearance. Moreover, as already mentioned, they could allude to certain characteristics of the goods. The same applies to the figurative element, irrespective of its perception, as detailed above.

Neither the earlier mark, nor the contested sign has any element visually more outstanding than other elements. The applicant’s claims that the figurative element is ‘the visually eye-catching element’ in both marks cannot succeed. All four components of the earlier mark, albeit placed vertically, one below the other, are portrayed in a similar size and perfectly discernible. Even if in the contested sign, the figurative element is depicted in red and, admittedly, slightly bigger than the other elements, they are still, clearly visible to the extent that none can be deemed to stand out from the other elements that make up the contested mark.

Visually, the marks only resemble each other in the fact that they both include a circular figurative element. It is true that upon close and side by side inspection, one can ascertain (as the applicant claims), that the component concerned is, except for the colour, identical. However, consumers normally do not have the opportunity to compare signs side by side, so the fact that the elements would be recognised only with the help of the other mark is of little relevance, if any. Other than that, the structure and composition of the marks are rather distinct. The earlier mark is a figurative sign in black and white, portraying four elements, vertically arranged. The common figurative element is placed at the top and depicted in the same colour and similar size as the remaining three components, which does not attract consumers’ attention or makes it visually eye-catching, as the applicant contends. Underneath, there is a sequence of three Asian (Chinese) characters, one below the other, depicted in thick black brushstroke like script. The contested sign is also figurative, composed of five elements, set horizontally. The circular figurative element is portrayed in red and placed in the middle of the sign, separating the two Asian (Chinese characters) and the verbal elements ‘XI FENG’. As explained above, it is the latter components that immediately attract and retain the attention of consumers because they are the only elements written in Latin letters and thus easily intelligible.

The applicant argues that the contested sign reproduces the first two Chinese characters of the earlier mark, the only difference being that they are written in ‘simplified’ and respectively traditional Chinese. Such arguments cannot succeed either. For relevant EU average consumer, the mere fact that Asian (Chinese) characters appear in both signs is not of such a nature as to render these elements visually similar since they are portrayed in a distinct manner. There is no visual resemblance between of the contested sign and of the earlier mark. In the contested sign, the first pictogram shows four thin lines arranged in a square-like shape. Above it, there is another horizontal line and two thin vertical and slightly curved lines extending below into the square like element. In the earlier mark, there is a thick wavy horizontal stroke and below it a combination of four intertwined lines, which continues to the left in another curved line. The differences are even more obvious when it comes to the second pictogram. There are six simple and thin lines in the contested sign, whereas the earlier mark shows a combination of thick, curved lines and strokes.

Against this background, and bearing in mind the impact and weight of the elements of the signs, as detailed above, it must be concluded that there is a very low degree of visual similarity between the marks, owing to the presence of the circular figurative element.

Aurally, the contested sign will be referred to as ‘XI FENG’. On the other hand, the relevant public will not be able to pronounce the earlier mark or memorize it aurally in any specific manner. The three Chinese characters will be perceived as purely figurative and abstract and will not be pronounced by the relevant public in the European Union, since they will be incomprehensible and illegible and cannot be immediately associated with a specific, concrete word. The figurative element is not subject to a phonetic assessment either. Against this background, it must be concluded that it is not possible to compare the signs aurally.

Conceptually, reference is made to the above findings on the semantic content and distinctiveness of the components of the signs. The fact that both marks may be perceived as suggesting that the goods are of Asian (possibly Chinese) origin since they both contain Asian (Chinese characters) is on its own neutral for comparison purposes. While the relevant public will see in the contested mark the semantic content of an Asian name, the other sign lacks any meaning for the vast majority of consumers. Since one of the signs will not be associated with any meaning, the signs are not conceptually similar for this part of the public. There is a link between the marks only in the unlikely event that some consumers might identify the concept of a phoenix bird. To that extent and bearing in mind the weight given to this element and the presence of differentiating verbal elements ‘XI FENG’ in the contested mark, the overall degree of conceptual similarity is at most below average. The three cases referred to by the applicant in support of its claims of a conceptual identity between the signs owing to the figurative element of the phoenix bird are not relevant, since in those proceedings the signs under comparison were exclusively figurative and consisted indeed of the representation of the same animal (elephant in case T-424/10, ECLI:EU:T:2012:58 and bull in case R 703/2011-2) and respectively the same figurative element (a polo player on a horse in case R 1107/2010-2).

As the signs have been found similar in at least one aspect of the comparison, the examination of likelihood of confusion will proceed.

4. Distinctiveness of the earlier mark

The distinctiveness of the earlier mark is one of the factors to be taken into account in the global assessment of likelihood of confusion.

The applicant did not explicitly claim that its mark is particularly distinctive by virtue of intensive use or reputation.

Consequently, the assessment of the distinctiveness of the earlier mark will rest on its distinctiveness per se. Bearing in mind the considerations in section c) above on the ability of the earlier mark’s components to indicate commercial origin, it is considered that it is the combination of such elements that rendered the mark registrable as a whole. Therefore, the distinctiveness of the earlier mark must be seen as normal.

5. Global assessment, other arguments and conclusion

As explained in detail in section c) above, the comparison of the signs has only revealed a very low degree of the visual similarity and, at most, a below average degree of conceptual similarity, on account of the presence in both signs of the circular figurative element.

However, this remote visual coincidence is not sufficient to lead to a likelihood of confusion. The differentiating elements of the signs (particularly ‘XI FENG’ of the contested sign) are clearly perceptible and undoubtedly outweigh and counteract the coincidences arising from the figurative element, to the extent that any likelihood of confusion on the part of the public can safely be excluded, even taking into account that the goods were deemed identical and the degree of attention is average.

This conclusion is not called into question by the conceptual similarity found between the signs. A conceptual similarity between signs with analogous semantic content may give rise to a likelihood of confusion where the earlier mark is particularly distinctive (11/11/1997, C-251/95, Sabèl, EU:C:1997:528, §24), which is not the case in the present proceedings, as the applicant did not claim or prove such circumstances. It is only exceptionally, where the signs have the same distinctive concept in common accompanied by visual similarities between the signs, this may lead to a likelihood of confusion even in the absence of a particularly high distinctiveness of the earlier mark. This does not apply either, since as explained in detail in section c) above, the visual similarity between the signs is very low.

Considering all the above, the Cancellation Division finds that there is no likelihood of confusion on the part of the public. Therefore, the cancellation application must be rejected.

COSTS

According to Article 109(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party.

Since the applicant is the losing party, it must bear the costs incurred by the EUTM proprietors in the course of these proceedings.

According to Article 109(7) EUTMR and Article 18(1)(c)(ii) EUTMIR, the costs to be paid to the EUTM proprietors are the representation costs, which are to be fixed on the basis of the maximum rate set therein.

The Cancellation Division

Ioana MOISESCU

Oana-Alina STURZA

Janja FELC

According to Article 67 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 68 EUTMR, notice of appeal must be filed in writing at the Office within two months of the date of notification of this decision. It must be filed in the language of the proceedings in which the decision subject to appeal was taken. Furthermore, a written statement of the grounds of appeal must be filed within four months of the same date. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 720 has been paid.