WATCH AND LEARN

Joshuanne Enning-Gyebi outlines why even familiar brands must make a substantive case

KEY POINTS

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General arguments are not enough to substantiate a reputation in a mark or to extend the scope of rights

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Brand owners, even of well‑known products, must sufficiently demonstrate that use of a later mark would be detrimental to the reputation or take advantage of the distinctive character of an earlier mark

MARKS

The General Court of the EU (GC) has upheld an EUIPO Board of Appeal (BoA) decision finding that there was no likelihood of confusion between famous luxury watch manufacturer Rolex SA’s (Rolex’s) crown marks and the Applicant/holder’s contested crown mark. The GC also found that there was no damage to the reputation of the Rolex crown mark.

Background

On 27th November 2014 men’s fashion brand PWT A/S obtained an international registration designating the EU for the mark shown above in class 25 for “clothing, footwear, headgear”.

On 3rd June 2016 the EU designation was opposed by Rolex for all the goods on the basis of its earlier registrations, also shown above, covering “watches” in class 14.

The luxury watch brand succeeded in the first instance on Article 8(1)(b) and 8(5) grounds, when the EUIPO ruled that the designation would take unfair advantage of the reputation of Rolex’s earlier crown figurative and composite marks. However, the holder appealed and prevailed at the BoA, which found that Rolex’s registrations for “watches” in class 14 were dissimilar to the class 25 “clothing, footwear, headgear” specification in PWT A/S’s designation and, on that ground, found that there was no likelihood of confusion. Most importantly, although Rolex relied largely on its reputation, the BoA found that the reputation of Rolex’s earlier crown mark was not established by its evidence and the reputation of the earlier composite mark was established only for wristwatches.

GC judgment

Rolex appealed to the GC, which upheld the BoA decision, rejecting both the Article 8(1)(b) and 8(5) grounds of the opposition in finding that:

• There was unlikely to be confusion caused in the marketplace because clothing, footwear and headgear are dissimilar to wristwatches.
• The mere fact that clothing and watches are capable of being luxury items was irrelevant for the purpose of establishing similarity between the goods at issue.
• The use of the mark applied for would not cause injury to the reputation of the Rolex marks as referred to in Article 8(5).
• Rolex failed to demonstrate that the use of the mark applied for would take unfair advantage of the distinctive character or the repute of the earlier mark, or that it would be detrimental to that distinctive character or that repute.

Watch out

This case is perhaps surprising, given the similarity of the holder’s device mark to the well‑known Rolex crown device, and arguably the GC’s assessment of the goods does not seem to reflect the commercial realities. However, it is arguably a warning to luxury brands that they cannot rely on their perceived popularity alone. The owner of the reputed brand must present strong evidence that establishes the reputation of its marks.

A key point to note from this case is aesthetic complementarity. Rolex criticised the BoA for not taking into account the usual market practices followed in relation to the goods at issue. It submitted that the goods belong to market segments that are proximate and that their purchase may be motivated by the search for an aesthetic complementarity. The GC considered this irrelevant in determining the similarity of the goods in question and found that the goods at issue are not in competition with each other.

The GC referenced the SISSI ROSSI case,¹ which included the view that the search for a certain aesthetic harmony in clothing is a common feature in the entire fashion and clothing sector and is too general a factor to justify, by itself, a finding that all the goods concerned are complementary and thus similar. The fact that consumers regard a product as a complement or accessory to another is not sufficient for them to believe that those products have the same commercial origin. The Court highlighted the fact that for consumers to believe that those products have the same commercial origin, they would also have to consider it usual for those products to be sold under the same trade mark, which normally implies that a large number of the producers or distributors of the goods are the same.

The GC noted that Rolex made general allegations in relation to the supposed well‑known fact that consumers consider it usual for several products to be sold under the same brand. For example, clothing manufacturers may also offer for sale accessories such as eyewear and jewellery. However, Rolex did not submit any evidence to substantiate this supposition.

Overall, the issue appears to be that Rolex made general arguments but did not provide sufficient evidence to substantiate its reputation in the marks. This case demonstrates that an easy victory for luxury brands is not always assured on the basis of reputation. Even if a well‑known luxury brand considers its popularity to be common knowledge, it must not rest on its laurels and must always sufficiently demonstrate that use of the later mark would be detrimental to the reputation or take advantage of the distinctive character of the earlier mark.

1. T‑169/03, Sergio Rossi SpA v OHIM

Joshuanne Enning-Gyebi is a Trainee Trade Mark Attorney at Elkington and Fife LLP
joshuanne.enning@elkfife.com 

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