'HALLOUMI' versus 'BBQLOUMI' – CJEU bolsters Cypriot cheese manufacturers

In its judgment of 5 March 2020 in Case C-766/18 P, the Court of Justice of the European Union (CJEU) commented on the issue of the likelihood of confusion between ‘HALLOUMI’ and ‘BBQLOUMI’ and awarded the appellant Cypriot cheese manufacturers an at least partial victory by setting aside the judgment of the previous instance, the General Court (GC), of 25 September 2018 (Case T‑328/17). The matter was referred back to the GC, which must re-examine the likelihood of confusion, this time taking all criteria into account.

Background to the dispute

In 2014, M. J. Dairies EOOD, a company established in Bulgaria, had applied to the European Union Intellectual Property Office (EUIPO) requesting the registration of the following sign (‘BBQLOUMI’) for goods and services in classes 29, 30 and 43 (including dairy products; cheese; prepared dishes, sandwiches and restaurant services) as an EU trade mark. The Foundation for the Protection of the Traditional Cheese of Cyprus named Halloumi (‘Halloumi Foundation’) filed a notice of opposition due to an alleged risk of confusion under Article 8(1)(b) European Union Trade Mark Regulation (EUTMR), based on its EU collective mark ‘HALLOUMI’ registered for cheese.

The EUIPO’s Opposition Division rejected the opposition, a decision confirmed by the Fourth Board of Appeal and the GC. The court found that, although the goods in dispute were in part identical and in part similar, there was no likelihood of confusion on the part of the relevant public since the existence of a visual, phonetic and conceptual similarity is not, in the case of an earlier mark which is descriptive  and has a low distinctive character, sufficient to give rise to a presumption of a likelihood of confusion.

Appeal before the CJEU

The Halloumi Foundation put forward four pleas in law in support of its appeal, of which the CJEU examined the first three. The Halloumi Foundation asserted that the GC had failed to correctly apply the criteria in the light of which the existence of a likelihood of confusion within the meaning of Article 8(1)(b) EUTMR had to be assessed.

General criteria for assessing likelihood of confusion

When considering cases concerning opposition proceedings based on earlier individual marks, the CJEU has repeatedly held that the likelihood of confusion must be understood as the risk that the public might believe that the goods or services covered by the earlier mark and those covered by the mark applied for come from the same undertaking or from affiliated undertakings. This case-law is transferrable to cases where, as in the present case, the earlier mark is a collective mark, the essential function of which is to distin-guish the goods or services of the members of the association which is the proprietor from those of other undertakings. Accordingly, the existence of a likelihood of confusion must be fully assessed, taking into account all the relevant circumstances of the case. The assessment of the similarity between the marks at issue from a visual, phonetic and conceptual point of view is to be based on the overall impression they generate among the relevant public. That assessment also implies a certain interdependence between the relevant factors, in particular between the similarity of the trade marks and that of the goods or services covered. Accordingly, a low degree of similarity between those goods or services may be offset by a high degree of similarity between the trade marks, and vice versa. The relevant circumstances of the case include the degree of distinctive character of the earlier mark, which determines the extent of the protection it affords. If the distinctive character of the earlier mark is strong, this may increase the likelihood of confusion. A likelihood of confusion cannot be ruled out, however, even if the distinctive character of the earlier mark is weak.

Assessment of the specific case

Contrary to the Halloumi Foundation’s argument, the distinctiveness of the earlier mark is not to be assessed any differently where the earlier mark is an collective mark. Even supposing that the collective mark ‘HALLOUMI’ implicitly refers to the Cypriot geographical origin of the goods covered, that mark must nevertheless still fulfil its essential function, namely to distinguish the goods or services of the members of the association which is the proprietor of that mark from those of other undertakings. It follows that the GC did not err in law in assessing the degree of distinctiveness of the earlier mark ‘HALLOUMI’ and in including that factor in its assessment of the existence of a likelihood of confusion.

The CJEU also examined the argument of the Halloumi Foundation that the GC had failed to carry out a global assessment of the likelihood of confusion which takes account, in accordance with the CJEU’s case-law, of all the relevant factors and the interdependence between them. The CJEU found it was for the GC to examine, at the very least, whether the fact that ‘HALLOUMI’ and ‘BBQLOUMI’ are merely, in its view, visually, phonetically and conceptually similar to a low degree is offset by the identity of the goods, namely cheese. Such an examination was therefore necessary in order to determine whether there is a risk of confusion.

However, the GC had failed to do so. In particular, it is not clear from the grounds of the judgment under appeal that the GC had adequately taken into account the interdependence between the relevant factors in its assessment. Even assuming that it had examined whether the low degree of similarity between the marks at issue could be offset by the substantially higher degree of similarity of the goods identified by them, the judgment under appeal had not set out the reasons why it denied this. Instead, the GC had relied on the (incorrect) premise that  the weak distinctive character of an earlier mark precluded the existence of a likelihood of confusion once it turns out that the similarity between the marks at issue does not allow for the proof of such likelihood on its own.

In conclusion, the GC had failed to correctly apply the criteria in the light of which the existence of a likelihood of confusion within the meaning of Article 8(1)(b) EUTMR is to be assessed and thus had erred in law. The judgment under appeal is therefore to be set aside and the matter referred back to the GC so that it may carry out such an assessment and, consequently, a further examination of the existence of a likelihood of confusion.

Comments

In substance, the judgment does not contain any new information regarding the assessment of the likelihood of confusion. The explicit clarification that the criteria in question also apply to collective marks and the strengthening of holders of such (albeit only weakly distinctive) marks is, however, welcome.