Coca-Cola wins case against Master

With its judgment dated 7 December 2017, the European General Court (“EGC”) (once again) supported The Coca-Cola Company (Coca-Cola) and decided that there is a risk of free-riding with regard to the ‘Master’ trade mark (Case T-61/16). Thus, the EGC annulled the decision of the previous instance for the second time in this case. An appeal can be lodged with the European Court of Justice (ECJ) against the judgment of the EGC.

In 2010, the Syrian company Modern Industrial & Trading Investment Co. Ltd (Mitico) applied for registration of the European trade mark (EUTM)

for various types of food and beverages in classes 29, 30 and 32 with the European Union Intellectual Property Office (EUIPO). Coca-Cola opposed this EUTM application on the basis of four EUTMs

, ,  and and a UK trade mark

for soft drinks, among other goods. Coca-Cola claimed that there was a risk of confusion between the marks, and that the use of the trade mark applied for took unfair advantage of, or was detrimental to, the distinctive character or the repute of the earlier trade marks (Articles 8(1)(b) and (5) European Union Trade Mark Regulation [EUTMR]). Coca-Cola also submitted the following excerpts from Mitico’s website regarding the alleged use of the trade mark applied for:

 ,  and .

The opposition and appeal by Coca-Cola before the Second Board of Appeal of the EUIPO were dismissed on the grounds that there was no likelihood of confusion due to a lack of similarity between the signs (despite identical goods). Since the signs were not similar, consumers would not make a mental connection between the marks, the Board said, which is necessary for Article 8(5) EUTMR. The documents submitted by Coca-Cola regarding Mitico’s use of the mark were disregarded. In its first judgment dated 11 December 2014, the EGC annulled the decision of the EUIPO challenged by Coca-Cola (Case T-480/12). According to the EGC, the signs are visually similar not only because of the ‘tail’ under their initial letters, but also due to the use of a font which is unusual in today’s business world (Spenserian script). According to the EGC, the resulting (albeit minor) visual similarity between the signs fulfils the first condition of Article 8(5) EUTMR, namely that consumers make a mental connection between the marks. Thus, the EGC referred the case back to the EUIPO to review the other conditions of Article 8(5) EUTMR, namely whether the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade marks of Coca-Cola. During this examination, the EUIPO should take into consideration the evidence submitted.

The Fourth Board of Appeal of the EUIPO once again dismissed Coca-Cola’s appeal. Although the earlier trade marks were indisputably well-known for soft drinks, the EUIPO saw no serious risk that the use of the trade mark applied for would take unfair advantage of that reputation. The documents submitted did not prove any use of the trade mark applied for (as described on the website) in the EU. The mere fact that the sign was filed as an EUTM (in a form different from the one on the website) did not mean that Mitico would market the products in the exact same way as in Syria and the Middle East. According to the EUIPO, Coca-Cola had also not shown which specific image of its earlier trade marks could be transferred to the trade mark applied for (especially regarding goods other than soft drinks).

The EGC did not agree and again annulled the decision of the EUIPO. The EGC initially clarified that ‘Master’ was the distinctive and dominant element of the ‘Master Cola’ trade mark used on Mitico’s website and that such use was indeed use of the trade mark applied for (‘Master’). The EUIPO had objected that the registration of an EUTM could not be rejected based on Article 8(5) EUTMR on the basis of acts carried out outside the EU. Otherwise, the principle of territoriality in trade mark law would be undermined. The EGC held a different view. The actual use of a mark applied for outside the EU may be taken into account as a basis for a logical inference as to how the trade mark applied for will likely be used in the EU. This way, it can be established whether there is a risk that unfair advantage will be taken, in the EU, of the reputation of an earlier EUTM. In principle, if an EUTM is applied for, it can be deduced that its proprietor intends to market its goods in the EU. Following the EGC, it is foreseeable that Mitico will amend its website accordingly after registration of the trade mark applied for. In the absence of information by Mitico regarding its commercial intentions in the EU (to the contrary or otherwise), the evidence would lead prima facie to the conclusion that there is a non-hypothetical future risk of unfair advantage in the EU.

The EUIPO had also argued that the additional elements which are used for the presentation outside the EU (namely the red label with the white inscription ‘Master Cola’, the characteristic shape of the container and the red cap) would possibly not be used in the EU. The EGC admitted that these elements could play a certain role in making consumers associate the marks (in a detrimental way). However, the EGC had already found in its first judgment that the signs could be seen as similar overall solely due to the visual similarity (‘tail’ and Spenserian script). According to the EGC, the possible use of the additional elements would reinforce the logical inference that there is a risk of free-riding. However, such a use is not a necessary condition for this inference.

By way of obiter dictum, the EGC also commented on the EUIPO’s assessment that Coca-Cola had not shown which specific image of its earlier trade marks would be transferred to the trade mark applied for. As proof of the reputation of its earlier trade marks, Coca-Cola had submitted a book and a study of ‘Superbrands’, which stated that Coca-Cola was the most recognised trade mark in the world, with 94% global recognition, and that thanks to innovative marketing campaigns, it conveyed values such as optimism, togetherness and authenticity. The EGC held that these documents demonstrate which specific image might be transferred to the trade mark applied for. In this respect, the EUIPO’s assumption was incorrect. The EGC further criticised the EUIPO’s finding that the other goods in classes 29 and 30 were not beverages and that Coca-Cola is not known for those products. The EGC referred to case law stating that certain trade marks had acquired such reputation that it goes beyond consumers of the goods for which the trade mark is well-known. In these cases, consumers would still make a connection between the marks. The EGC considered that this was the case here, which was proven by the ‘Superbrands’ study.

In sum, the actual use of a trade mark applied outside the EU for can be taken into account as a basis for a logical inference as to how the trade mark applied for will likely be used in the EU. This way, it can be established whether there is a risk of unfair advantage of the reputation of an earlier EUTM in the EU. If the trade mark holder provides no (contrary) information regarding its commercial intentions in the EU, corresponding evidence can lead prima facie to the conclusion that there is a non-hypothetical future risk of unfair advantage in the EU.