DECISION

of the Fourth Board of Appeal

of 2 December 2015

In Case R 1251/2015-4

The Coca-Cola Company
One Coca-Cola Plaza Atlanta, Georgia 30313 United States of America	Opponent / Appellant

represented by SIMMONS & SIMMONS LLP, CityPoint One Ropemaker Street, EC2Y 9SS London, United Kingdom

v

Modern Industrial & Trading Investment Co. Ltd (Mitico)
Reef Damascus, Doma Aldwair, Free Zone Damascus Syria	Applicant / Respondent

represented by MALAMIS & ASSOCIATES, PALAIA TATOIOU 8, KIFISIA, 146 71 Athens, Greece

APPEAL relating to Opposition Proceedings No B 1 734 790 (Community trade mark application No 9 091 612)

The Fourth Board of Appeal

composed of D. Schennen (Chairperson), S. Martin (Rapporteur) and C. Bartos (Member)

Registrar: H. Dijkema

gives the following

Decision

Summary of the facts

1. By an application filed on 10 May 2010, Modern Industrial & Trading Investment Co. Ltd (Mitico) (‘the applicant’) sought to register the figurative mark

for the following list of goods (‘the contested CTM application’):

Class 29 – Yoghurt. Meat, fish, poultry and game, meat extracts. Preserved, frozen, dried and cooked fruits and vegetables. Jellies, marmalades, fruit preserve. eggs. Preserved and pickles. Salads in vinegar. Potatoes chips;

Class 30 – Coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee, flour and preparations made from cereals, confectionery, candies, ice-creams, honey, melassa syrup, dough, flour, baker's yeast, baking-powder, salt, mustard, vinegar, pepper, sauces (condiments), spices, specifically excluding pastry and bakery products. Ice. Chocolate. Gum. All kinds of food appetizers made from corn and wheat, specifically excluding pastry and bakery products;

Class 32 – Mineral and natural water, barley beverage, non-alcoholic beers, non-alcoholic aerated waters of all kinds and flavors, particularly with (cola - pineapple -mango- orange - lemon - without flavor - apples - fruit cocktail formed - Tropical - energy drink - strawberry - fruits - lemonade – pomegranate…) taste, and all types of non-alcoholic natural fruit juice drinks (apples - Lemon - orange - fruit - cocktail - pomegranate- pineapple - mango..), and non-alcoholic juice concentrates and concentrates for making non-alcoholic juice in all types, powders and crushes for making non-alcoholic syrup.

2. On 14 October 2010, the Coca-Cola Company (‘the opponent’) filed a notice of opposition against the contested application in its entirety, pursuant to Article 8(1)(b) and 8(5) CMTR. The opposition was based on the following earlier trade marks:

CTM 8 792 475	CTM 3 021 086	CTM 2 117 828	CTM 2 107 118	UK 2 428 468

3. The earlier Community trade mark No 3 021 086 is registered inter alia for ‘non alcoholic beverages’. All other earlier trade marks are registered inter alia for ‘non-alcoholic drinks’ in Class 32.

4. On 26 September 2011, the Opposition Division rejected the opposition in its entirety. It held that there is no likelihood of confusion due to the dissimilarity of the signs, assuming that the goods at hand are identical. It further held that the earlier Community trade marks enjoyed reputation for ‘beverages, in particular soft drinks and especially a carbonated soft drink coloured usually with caramel and flavoured usually with extracts from kola nuts’. However, it found that there was no link in the meaning of Article 8(5) CTMR due to the dissimilarity of the signs.

5. On 17 October 2011, the opponent filed a notice of appeal against that decision. Regarding the question as to whether the applicant takes unfair advantage of the opponent’s so-claimed reputed marks, it argued as follows:

• The applicant is using MASTER and MASTER COLA in Spenserian Script on its website at http://www.mastercola.com/companyprofile-en.htm in relation to coca beverages as follows:

• The applicant is clearly seeking to copy the get-up, style and packaging of the opponent’s COCA-COLA beverages, which are sold as follows:

• The applicant uses MASTER COLA in Spenserian Script in a manner that is highly similar to the opponent’s use of COCA-COLA. The letter M in Master has the same ‘underscore tail with a blunt end’ as appears in the first letter C in the opponent’s COCA. The words COLA are identical in both MASTER COLA and COCA-COLA, including the top loop of the letter C which intersects the letter L and the cursive letters –OLA.

• The overall get-up of the applicant’s bottles is highly similar to the opponent’s Coca-Cola bottles, including the bubble image, the read and white label, the red cap and the placement and proportional size of MASTER COLA.

• The website and bottles use the opponent’s well-known red and white colour scheme, in which the opponent undoubtedly has a reputation for cola beverages.

• The applicant does not use the word MASTER alone or in combination with arabic letters, as it appears in the application. It uses MASTER COLA in its English form, without any arabic letters.

• The applicant’s use of MASTER and MASTER COLA in Spenserian Script and the overall packaging of MASTER COLA offered for sale by the applicant show a clear intention to exploit the oppoent’s extensive marketing efforts to create and maintain the image of COCA-COLA beverages. The applicant has deloverately chosen to copy many aspects of the oponent’s packaging to render the packaging of the beverages misleadingly similar. The marks convey a very appealing message and invite consumers to purchase beverages bearing the marks. Use of the figurative master sign by the applicant would positively influence the choice of consumers to purchase goods from the applicant because of their association with the COCA-COLA marks and their fashionable and desirable image. The applicant seeks to ‘ride on the coat-tails’ of the COCA-COLA marks and seeks to exploit, without paying financial compensation, the opponent’s marketing efforts to create and maintin its image. Use of the mark MASTER & Device would therefore allow the applicant to take unfair advantage of the repuation of the opponent’s registrations.

• Also a case study by Superbrand was submitted (Annex 5 to the Statement of Grounds before the Second Board of Appeal) which relates ’optimism, togetherness and authenticity’ to the Coca-Cola brand.

6. The applicant stated in response that it used only the sign applied for which is dissimilar to the earlier signs. It provided the following pictures:

.

The applicant further stated that the opponent did not prove that any use of the applicant’s mark in the EU exploits its marketing efforts.

7. By decision of 29 August 2012 (R 2156/2011-2), the Second Board of Appeal dismissed the appeal (‘the Second Board of Appeal decision’). Regarding the similarity of the goods it held that the goods’ identity is not disputed. It was sufficient for the proceedings that the goods which are genuinely of interest to the opponent (non-alcoholic beverages and soft drinks in Class 32) are identically covered by the contested application. It confirmed that a likelihood of confusion is however excluded due to the dissimilarity of the signs. The Spenserian script cannot be monopolized. The tail element flowing from the letter C in the opponent’s and the letter M in the applicant’s sign were not sufficient to generate any degree of similarity. The evidence does not show that the consumer focuses on this element. Regarding Article 8(5) the Board held that a reputation of Coca Cola was established, without specifying for which concrete goods the marks are reputed. It found however that the consumer would not establish a link between the marks at hand due to the dissimilarity of the signs. Regarding the argument that the opponent takes unfair advantage of the reputation of the earlier marks, the Board of Appeal stated that the evidence regarding the applicant’s use of the sign was irrelevant since it did not show the mark applied for but other marks.

8. The opponent filed an appeal against the Second Board of Appeal decision. It expressly stated that it does not dispute the Board of Appeal’s finding that there is no likelihood of confusion between the marks at issue for the purposes of Article 8(1)(b) CTMR. It claimed however an infringement of Article 8(5) CTMR. That plea was divided into two parts, alleging respectively: (i) the Board conflated the assessment of the similarity of the marks at issue under Article 8(1)(b) CTMR with the assessment under Article 8(5) as to whether there was a link between the marks; and (ii) disregarded evidence relating to the commercial use of the mark applied for, which was relevant for the purposes of demonstrating the applicant’s intention of taking advantage of the earlier trade marks’ reputation.

9. The parties did not dispute the findings of the Second Board of Appeal regarding the relevant public or the fact that the goods covered by the trade marks at issue are identical. It remained also common ground that the mark applied for, like the earlier trade marks, covers (inter alia) non-alcoholic drinks in Class 32, including colas (§ 22 of the judgment).

10. The General Court annulled the Second Board of Appeal decision (T-480/12) (‘the judgment’). The decision is summarised as follows:

• The Board of Appeal was right to find that, if the marks at issue were different, it could immediately conclude that Article 8(5) CTMR was not applicable (§ 36 of the judgment). The first plea must therefore be rejected.

• The first part of the second plea was upheld. Contrary to the Second Board of Appeal’s finding there is a link in the meaning of Article 8(5) CTMR between the marks at hand. There is a low visual similarity between the contested sign and at least, the four earlier Community figurative marks due to the ‘tail’ flowing from their first letters — ‘c’ and ‘m’, respectively — in a signature flourish (§ 48 and 65 of the judgment). Despite the elements of visual dissimilarity, their aural and conceptual differences are cancelled out by the elements of overall visual similarity. By contrast, the earlier British trade mark C, especially because of its brevity, is dissimilar to the mark applied for (§ 70 of the judgment). There is a therefore a sufficient degree of similarity between the signs at issue for the relevant public to make a connection between the mark applied for and the earlier Community trade marks, that is to say, to establish a link between them for the purposes of that provision (§ 74 of the judgment).

• It follows that the Board of Appeal should have examined the other conditions for applying Article 8(5) CTMR (§ 75 of the judgment).

• The Board did not give a ruling on whether there was a risk that the use without due cause of the mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of those earlier trade marks. Since that question was not examined by the Board of Appeal, it is not for the Court to give a ruling on it, for the first time, in its review of the legality of the contested decision (§ 75 of the judgment).

• It will be for the Board of Appeal to examine those conditions for the application of Article 8(5) CTMR, taking into account the degree of similarity between the signs at issue, which, while low, is nonetheless sufficient for the relevant public to make a connection between the mark applied for and the earlier Community trade marks, that is to say, to establish a link between them for the purposes of that provision (§ 76 of the judgment).

• The Court additionally examines the second part of the second claim, as regards the evidence to be taken into consideration when examining the conditions for applying Article 8(5) CTMR (§§ 79 ff. of the judgment).

• During the opposition proceedings, the opponent provided evidence relating to applicant’s commercial use of the mark in respect of which registration was sought. That evidence included a witness statement by L. Ritchie, Coca-Cola’s lawyer, dated 23 February 2011, to which she appended screen shots of applicant’s website, www.mastercola.com, printed on 16 February 2011. Those screen shots were intended to show that the applicant was using the mark applied for in the course of trade in the form shown below:

• The assessment by the Board of Appeal departs from the case-law pursuant to which, in essence, a finding of a risk of free-riding made on the basis of Article 8(5) CTMR may be established, in particular, on the basis of logical deductions resulting from an analysis of the probabilities and by taking account of the usual practices in the relevant commercial sector as well as all the other circumstances of the case, including the use, by the proprietor of the mark applied for, of packaging similar to that of the goods of the proprietor of the earlier trade marks. That case-law therefore in no way limits to the mark applied for the relevant evidence to be taken into consideration for the purposes of establishing a risk of free-riding (the risk that unfair advantage will be taken of the distinctive character or the repute of the earlier trade marks), but allows account also to be taken of any evidence intended to facilitate that analysis of the probabilities as regards the intentions of the proprietor of the trade mark applied for, and — a fortiori — any evidence relating to the actual commercial use of the mark applied for (§ 88 of the judgment).

• As it is, the evidence relating to the commercial use of the mark applied for, as produced by the opponent, manifestly constitutes relevant evidence for the purposes of establishing such a risk of free-riding in the present case (§ 89 of the judgment).

• It must therefore be found that the Board of Appeal erred in disregarding that evidence when applying Article 8(5) CTMR (§ 90 of the judgment).

• It will therefore be for the Board of Appeal, when examining the conditions for applying Article 8(5) CTMR, to take into consideration the evidence relating to the commercial use of the mark applied for, as produced by Coca-Cola during the opposition proceedings (§ 93 of the judgment).

11. By decision of 23 June 2015 the Presidium and the Presidium’s Implementation Note of 9 April 2015, the Presidium of the Boards of Appeal referred the present case to the Fourth Board of Appeal as case R 1251/2015-4.

Reasons

12. As the Second Board of Appeal decision was annulled by the General Court the Board is required to resume the proceedings and take the necessary measures to comply with the judgment.

13. In light of the judgment, the appeal is unfounded. The opposition based on the British trade mark is to be dismissed since the signs at hand are already dissimilar as stated by the General Court. As far as it is based on the four earlier Community trade marks (see above § 3) and on Article 8(5) CTMR the opponent failed to show a risk that unfair advantage will be taken of the distinctive character or the repute of the earlier trade marks.

Scope of the proceedings

14. The opponent has expressly waived its claim based on Article 8(1)(b) CTMR: ‘[…] Coca-Cola expressly states that it does not dispute the Board of Appeal’s finding that there is no likelihood of confusion between the marks at issue for the purposes of Article 8(1)(b) of Regulation No 207/2009’ (§ 21 of the judgment). As a result, the scope of the present appeal is limited to the opposition based on Article 8(5) CTMR.

Article 8(5) CTMR

15. According to settled case-law, the application of Article 8(5) CTMR is subject to the following conditions: first, that the marks at issue are identical or similar, secondly, that the earlier mark has a reputation; and thirdly, that there is a risk that the use without due cause of the mark applied for would take unfair advantage or be detrimental to the distinctive character of the repute of the earlier mark (see § 25 of the judgment).

16. Regarding the earlier British trade mark, the General Court held in § 70 of the judgement that it is dissimilar to the contested sign because of its brevity. The opposition is therefore unfounded as far as it is based on that mark.

17. Regarding the opponent’s four earlier Community trade marks as set out above in § 3, the General Court found that there is a link between these and the contested CTM application for all contested goods. In particular it stated the following:

• ‘The existence of a link between the mark applied for and the earlier mark with a reputation, which must be assessed globally, account being taken of all factors relevant to the circumstances of the case, is […] an essential precondition for the application of that provision […].’ (see § 26 of the judgment).

• ‘Those factors include, first, the degree of similarity between the signs at issue, second, the nature of the goods or services for which the signs at issue are registered, including the degree of closeness or dissimilarity between those goods or services, and the relevant section of the public, third, the strength of the earlier mark’s reputation, fourth, the degree of the earlier mark’s distinctive character, whether inherent or acquired through use and, fifth, the existence of a likelihood of confusion on the part of the public […].’ (see § 27 of the judgment).

• ‘It should […] be noted that the parties do not dispute the findings of the Board of Appeal regarding the relevant public or the fact that the goods covered by the marks at issue are identical. Accordingly, it is common ground that the mark applied for, like the earlier trade marks, covers (inter alia) non-alcoholic drinks in Class 32, including colas’ (§ 22 of the judgment).

• ‘There is a low degree of visual similarity between the signs at issue — or, at least, between the four earlier Coca-Cola Community figurative marks and the Master trade mark applied for — since differences in their details are partly offset by their overall similarities.’ (§ 65 of the judgment). ‘Despite the elements of visual dissimilarity, their aural and conceptual differences are cancelled out by the elements of overall visual similarity, which are of greater importance’ (§ 70 of the judgment).

• ‘It follows that the Board of Appeal should have examined the other conditions for applying Article 8(5) (see paragraph 25 above).’. In § 25 of the judgment, the General Court defined the condition as those set out in the current decision in § 16, namely a link between the signs, reputation and the question as to whether there is a risk that the use without due cause of the mark applied for would take unfair advantage or be detrimental to the distinctive character of the repute of the earlier mark.

• ‘It will therefore be for the Board of Appeal to examine those conditions for the application of Article 8(5), taking into account the degree of similarity between the signs at issue, which, while low, is nonetheless sufficient for the relevant public to make a connection between the mark applied for and the earlier Community trademarks, that is to say, to establish a link between them for the purposes of that provision.’ (§ 74 of the judgment).

18. Regarding the requirement of reputation it is common ground that the opponent’s earlier Community trade marks as set out in § 3 of the present decision are reputed for ‘non-alcoholic drinks and beverages’.

19. Since the reputation of the mark is common ground and the judgement already confirmed the existence of a link between the marks at question, the only condition to be assessed by the Board in the following is whether the opponent has established that there is a risk that the use without due cause of the mark applied for would take unfair advantage or be detrimental to the distinctive character of the repute of the earlier mark.

Unfair advantage of the reputation

20. As the General Court stated, unfair advantage has been taken of the distinctive character or the repute of the earlier mark where there is an attempt at clear exploitation and free-riding on the coat-tails of a famous mark and that taking unfair advantage of that distinctive character or repute is, therefore, behind the idea of ‘the risk of free-riding’. In other words, the risk of free-riding is the risk that the image of the mark with a reputation or the characteristics which it projects will be transferred to the goods covered by the mark applied for, with the result that the marketing of those goods will be made easier by that association with the earlier mark with a reputation (§ 82 of the judgment).

21. The opponent is not required to demonstrate actual and present injury to its mark. It must, however, prove that there is a serious risk that such an injury will occur in the future (see 27/11/2008, C‑252/07, Intel, EU:C:2008:655, §§ 37, 38). According to settled case-law, a finding of a risk of free-riding may be established, in particular, on the basis of logical deductions resulting from an analysis of the probabilities — so long as they are not mere suppositions — and by taking account of the usual practices in the relevant commercial sector as well as all the other circumstances of the case (§ 84 of the judgment).

22. It is also clear from the case-law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark, or is, or will be, detrimental to them (see 18/06/2009, C 487/07, L’Oréal, EU:C:2009:378, § 44).

23. In the case at hand, the opponent argues that the applicant’s use of MASTER and MASTER COLA in Spenserian Script and the overall packaging of MASTER COLA beverages offered for sale by the applicant show a clear intention to exploit the opponent’s extensive marketing efforts to create and maintain the image of COCA-COLA beverages (. It is of the opinion that the applicant has deliberately chosen to copy many aspects of the opponent’s packaging to render the packaging of the beverages misleadingly similar. It finds that the marks convey a appealing message to the target market and are persuasive in enticing such consumers to purchase beverages bearing the marks. Use of MASTER & Device by the applicant would positively influence the choice of consumers to purchase goods from the applicant because of their association with the COCA-COLA marks and their fashionable and desirable image. In the opponent’s view the applicant seeks to ‘ride on the coat-tails’ of the COCA-COLA marks and seeks to exploit, without paying financial compensation, the opponent’s marketing efforts to create and maintain its image (see statement of 25 January 2012, page 14 f.).

24. The opponent refers to the use of a different mark on the applicant’s website http://www.mastercola.com/companyprofile-en.htm and the pictures set out above in § 6 of the present decision.

25. The Second Board of Appeal found that the evidence does not relate to the mark applied for and therefore this evidence was not taken into account. If the marks shown in the above pictures were indeed subject of the application at hand, there would be no question that its registration could be prevented. To the contrary, if the trade mark applied for in the case at hand would be used on the market it would indeed be questionable if the use of this particular sign could be prohibited.

26. The General Court did not agree with the position taken by the Second Board of Appeal on this issue. The Court held that the excerpts submitted by the opponent in the case at hand have necessarily to be taken into account as relevant evidence (see §§ 88 ff.).

27. The evidence shows that the applicant is selling its beverages in bottles that show the same get-up, imagery, stylisation and font and packaging’ of the one sold by the opponent as Coca-Cola.

28. However, the evidence does not show that the applicant is using the get-up shown on its ‘.com’ website in the European Union. As the applicant correctly stated (see statement of 9 Mai 2012, page 12) none of the evidence relates to the European Union. The website is mainly in Arabic. It states in English ‘master cola products are often market leader thought Syria and Middle East countries’. No reference is made to the European Union. There is no indication that the products offered on the website can be ordered online and that they are sent to the European Union.

29. The mere fact that a community trade mark was filed – the get up of which is different from the one on the applicant’s website – does not indicate that the applicant intends to promote its goods in the same way in Europe as it does in Syria and the Middle East. The Board is unaware of the reasons why the applicant promotes its beverages in such way in Syria and the Middle East, in particular the Board is unaware who owns the better rights in that countries. The opponent did not state that there is an infringement of his right in that region.

30. The applicant further failed to show which concrete image might be transferred from the COCA COLA brands to the application at hand in Europe or abroad. It is not clear from the evidence submitted what COCA COLA stands for.

31. In particular regarding the goods in Classes 29 and 30 but also regarding the claimed beverages in Class 32, the opponent did not provide any argument or evidence regarding a possible transfer of the Coca-Cola image. None of the goods in Class 29 and in Class 30 are even refreshments for which the earlier marks are well-known.

32. Since the Board of Appeal is bound to the arguments submitted by the parties (Article 76 CTMR), it is not for the Board to search for such arguments d on its own motion.

33. The same argument applies to the question as to whether there is a risk of dilution or the risk of tarnishment. The opponent did not provide arguments that the use of the mark applied for on the relevant goods in Classes 29, 30 and 32 would have the effect that the earlier mark would no longer be capable of arousing immediate association with the goods for which it is registered and used. It did not state either that the use of the mark applied for in connection with the relevant goods would appeal to the public in such a way that the earlier mark’s power of attraction would be thereby diminished.

Conclusion

Taking all the provided evidence into account, the opposition based on Article 8(5) CTMR is unfounded and the appeal is to be dismissed.

Costs

34. Since the opponent (appellant) is the losing party within the meaning of Article 85(1) CTMR, it must bear the costs incurred by the applicant (respondent) in the appeal proceedings and, as correctly decided by the Opposition Division, also the costs of the opposition proceedings.

Fixing of costs

35. In accordance with Article 85(6) CTMR and Rule 94(3), (6) and (7)(d)(i) and (vi) CTMIR, the Board fixes the amount of representation costs to be paid by the appellant to the respondent with respect to the appeal proceedings at EUR 550 and for the opposition proceedings at EUR 300. The total amount is EUR 850.

Order

On those grounds,

THE BOARD

hereby:

1. Dismisses the appeal;

2. Orders the opponent to bear the costs of the appeal proceedings;

3. Fixes the total amount of costs to be paid by the opponent to the application for the opposition and appeal proceedings at 850 EUR.

Signed D. Schennen

Signed S. Martin

Signed C. Bartos

Registrar: Signed H.Dijkema