It
was registered for “milk and milk products, especially butter, cheese,
cream, yoghurt, quark, dried milk for nutritional purposes; margarine,
edible oils and fats”.
Savencia SA (“Savenica”) filed an
opposition on the basis of a likelihood of confusion with the following
earlier national trade mark, which is registered for “cheese”:

The
Opposition Division of the European Union Intellectual Property Office
(“EUIPO”) upheld the opposition for “milk and milk products, especially
butter, cheese, cream, yoghurt, quark, dried milk for nutritional
purposes; margarine”.
The EUIPO’s Board of Appeal (“BoA”)
rejected the opposition in its entirety. It reasoned that the earlier
mark had a low degree of distinctive character, resulting in a limited
scope of protection. The contested mark was sufficiently distinct and
fell outside of this scope.
Savencia filed an action with the General Court.
The General Court's Decision The General Court upheld the action and annulled the BoA’s decision.
The
decisive issue was whether the BoA was entitled to reject the
opposition essentially on the ground that the earlier mark possessed
only a weak degree of distinctiveness.
1. Likelihood of confusion and minimum distinctiveness The
judges recalled that the assessment of the likelihood of confusion
requires all circumstances to be taken into account. Besides the
similarity or identity of the signs as well as the goods and services,
the distinctiveness of the earlier mark is a relevant factor in the
overall assessment.
By reference to
Formula One Licensing v OHIM, the Court held that a registered national trade mark must be accorded a minimum degree of distinctiveness. The
Trade Mark Directive precludes
the registration of national trade marks lacking distinctiveness.
Further, the validity of a national trade mark cannot be challenged
before the EUIPO, but only in national invalidity proceedings. This case
law is based on the principle of coexistence of the EU trade mark with
national trade marks. Characterising a sign as descriptive or generic is
equivalent to denying its distinctiveness.
2. The BoA’s reasoning The
BoA had found that the distinctiveness of the earlier mark was weak,
which resulted in a reduced scope of protection. The judges interpreted
this to mean that the BoA did not deny the distinctive character or
validity of Savencia’s trade mark.
However, the Court also
considered the BoA’s analysis of the distinctive and dominant elements
of the opposing trade marks, which is a step before determining the
similarity of the signs. In that context, the BoA had found that:
a.
the shape of the cheese represented in the earlier mark does not
deviate significantly from the norms or customs in the relevant sector;
b. the flower shape served a technical function, namely indicating how to slice the cheese;
c.
the hole in the middle served a technical function with regard to both
the ripening and the stability of the cheese. It was deemed common
knowledge that the edges ripen faster than the centre, which means that a
central hole leads to more uniform ripening and to a better taste.
Additionally, the central hole adds a stabilizing point and allows the
cheese to be positioned on a plate or tray with a stick in the centre.
The BoA had also referred to a
decision
from the German Patent Court from 2009, where it found that a very
similar (if not identical) shape of a cheese lacked distinctiveness.
For these reasons, the earlier mark had been deemed not to be perceived as an indication of the commercial origin by consumers.
3. Effective denial of distinctiveness The
Court found that the BoA formally recognized the distinctive character
of the earlier mark but stated in other passages that its essential
design features were descriptive. Considering the decision as a whole,
the judges held that the BoA’s decision effectively denied the
distinctiveness of the earlier mark by finding that its scope of
protection was so limited that even minor differences in a few elements
that were not technical or decorative were sufficient to refuse a
likelihood of confusion.
This approach, the Court concluded, was incompatible with the principle established in
Formula One Licensing v OHIM. The decision was therefore annulled.

Comment This decision, much like
Formula One Licensing v OHIM, is open to debate.
1.
From a legal point of view, it is difficult to grasp how the EUIPO, BoA
or the General Court interfere with the jurisdiction of national trade
mark offices merely by finding that a trade mark is non-distinctive.
a. The EU instances do not declare a national trade mark invalid when they characterise it as descriptive or non-distinctive.
b.
Different points in time are decisive for the assessment of the
distinctive character: For absolute grounds of refusal, only the filing
or priority date is decisive. For opposition or invalidity proceedings
based on relative grounds, the distinctiveness at the filing or priority
date of the later mark (and, depending on the outcome of
EUIPO v Nowhere (case
C-337/22 P) and
Shopify v EUIPO (case
C-751/22 P),
potentially the date of the decision in the opposition/invalidity
proceedings) is relevant. There can be a gap of several decades between
the filing/priority date of the earlier mark and the later mark. The EU
instances must be entitled to take the factual development of a term
that used to be distinctive but became descriptive into account.
c.
It is consistent case law that the national and the EU trade mark
systems are autonomous and independent from each other. A decision in
one system is not binding for the other. Therefore, a finding of
non-distinctiveness of a national mark in EU opposition or invalidity
proceedings does not bind a national trade mark office in invalidity
proceedings based on absolute grounds against the earlier mark.
2. The EU instances apply
Formula One Licensing v OHIM
also to EU trade marks, even though the argument of a lack of
jurisdiction does not support this position. The EUIPO is obviously
competent to declare an EU trade mark invalid.
3. Is
Formula One Licensing v OHIM really
to be understood as an obligation of the EU instances to ignore the
descriptiveness or non-distinctiveness of an earlier trade mark?
They
have to assess the dominant and distinctive elements. If just one
element of the earlier mark is non-distinctive, the EU instances can say
so, but if the entire earlier mark is non-distinctive, they cannot?
4.
What will be the consequence of this decision? Probably just a change
in terminology but not in substance. In the assessment of the
distinctiveness of the earlier mark’s elements as well as in the
determination of its overall distinctiveness, the EUIPO and the BoA can
replace “non-distinctive” with “weakly distinctive”, afford the earlier
mark a minimum level of distinctiveness and, therefore, a minimum scope
of protection. In such a case, the General Court cannot criticize the
BoA for violating the
Formula One Licensing v OHIM principle. The result will be the same and Savencia’s victory might be short-lived.