A Questionable Decision?

Background to the case

In February 2017, Italian football club ‘AC Milan’ applied for an international registration designating the European Union, for a figurative mark consisting of its club’s crest and the words AC Milan. The application covered a range of goods and services, including office equipment and stationary items in Class 16.

The Application

On 06 April 2017, a Nuremberg based company ‘InterES Handels- und Dienstleistungs Gesellschaft mbH & Co KG’ filed an opposition against AC Milan’s trade mark based on its German word mark ‘MILAN’. The opponent’s earlier right had been registered since 1988 and covered goods and services similar or identical to those of the application.

In its opposition, the opponent claimed that there was a high degree of similarity between its trade mark and the application, resulting in a likelihood of confusion on the part of the German public.

The Parties’ Claims

Use of the sign as registered

As the opponent’s trade mark was over five years old, it was obliged to submit proof of use of its mark in the five years prior to the filing of AC Milan’s trade mark, in order to succeed in the opposition. Much of the evidence it submitted showed use of the combined Milan + Bird of Prey Device sign listed below, and not for the word mark ‘Milan’ as registered. The use of the Milan word mark was generally limited to invoices.

The Opponent’s trade mark as used

EU trade mark law recognizes trade mark proprietors can use variations of their registered trade mark during the course of trade, and that this will still constitute use of the registered mark, as long as the mark as used does not differ in its distinctive character from the mark as registered.

AC Milan claimed that the additional figurative element did mean that the sign as used differed in its distinctive character from the sign as registered, and that therefore the opponent’s use of Milan + Bird of Prey Device did not constitute use of the word mark ‘Milan’.

On the other hand, the opponent contended that use of Milan + Bird of Prey Device did constitute use of its ‘Milan’ word mark as the mark as used was an allowable variation of the sign as registered. In support of these arguments, it referenced principles of EU trade mark practice, including that consumers tend to pay more attention to word elements in combination trade marks that are comprised of both word and figurative elements.

Similarity of trade marks

 Following on from the arguments above, the opponent broadly sought to show that the dominant and distinctive element of the respective trade marks was the word ‘Milan’ and not the respective figurative elements, and that as a result the trade marks were similar.

On the other hand, AC Milan argued that it was the figurative crest in its application that was distinctive. Accordingly, on its reasoning the comparison of signs should place greater emphasis on the figurative element of its right, and on that basis the respective marks were dissimilar.

AC MIlan also highlighted the earlier reputation in its trade mark, and the fact that because of the strong association the relevant public would have between its trade mark and the AC Milan football team, there would in no way be a confusion between its application and the opponent’s ‘Milan’ word mark.

The Opposition Decision

On 30 November 2018 the EU IPO’s Opposition Division sided with the opponent and granted the opposition. In relation to the points given above, it concluded as follows:

  • The opponent’s evidence of use of the sign Milan + Bird of Prey Device did constitute genuine use of the Milan word mark.
  • AC Milan’s application and the opponent’s earlier trade mark were similar as the dominant and distinctive element of the marks in question were the words Milan and AC Milan respectively.
  • AC Milan’s evidence of reputation was not relevant to the proceedings.

The Appeal Board and General Court’s Decision

The Opposition Division’s decision was challenged on Appeal by AC Milan, but in a decision issued on 14 February 2020, the Appeal Board dismissed the Appeal. AC Milan then lodged a further Appeal to the General Court.

With regard to the distinctive element of AC Milan’s trade mark, the General Court held that this was the words ‘AC MILAN’, due to their stylized format in large capitals and proportionately significant height and length in relation to the image of the club’s crest.

It was, therefore, concluded that an average consumer of stationary products within the EU, whilst not ignoring the inclusion of the club’s team crest, would primarily have their attention drawn to the words ‘AC MILAN’, within the figurative mark as a whole.

With regard to the matter of whether the opponent had shown use of its earlier trade mark, the General Court concluded that whilst not insignificant, the additional visual element could not be seen as dominant in relation to the registered word mark and that it did not alter its distinctive character. It therefore held that the opponent had proven genuine use of its ‘Milan’ word mark throughout Germany.

In its assessment of the similarity of the opponent’s trade mark and the application, the General Court agreed with the approach taken by the Board of Appeal and the Opposition Division, namely that the comparison on similarity of signs should place greater weight on the dominant word elements ‘Milan’ vs ‘AC Milan’, as opposed to the figurative crest device. On that basis the General Court deemed the marks to be similar.

In response to AC Milan’s argument that the club’s reputation was significant enough in Germany, as to be a broadly identifiable mark, the Court held that, “only the reputation of the earlier mark, and not that of the mark applied for, must be taken into account”, when assessing whether use of the applicant’s trade mark was liable to give rise to a risk of confusion. The court, therefore, ruled in favor of the opposition and dismissed the action in its entirety.

The takeaway points

The outcome of this case is contentious and raises serious questions about the significance of figurative elements in trade marks governed by EU law. In particular, the following points were not addressed by the Court:

  • The court refused to take into account that ‘AC MILAN’ would be likely perceived by the German public as the name of a Milan-based football club by saying that the reputation of the mark applied for was irrelevant. This, however, seems a possible mistaken application of the test regarding confusing similarity. Had the Court recognized that AC MILAN would be seen as the name of a football club for Class 16 goods suited for sale as items of football merchandise, they would have found AC MILAN non-distinctive for these goods so that, the dominant element was the Crest device which sufficiently distinguished the mark applied for from MILAN so that confusion was unlikely to occur in Germany.
  • Since the German mark MILAN was more than 5 years old at the priority date of filing of AC MILAN + Crest Device, the Opponent had to show that it used the mark as registered, i.e., MILAN during that time, or that it used its mark in a form which did not differ in its distinctive elements from the mark as registered. This case seems to say that the Opponent showed use both of a) MILAN and of b) MILAN + Bird of Prey Device. This is very unsettling because even if MILAN is the dominant element of the mark used, the Bird of Prey Device is obviously a distinctive element and so MILAN must differ in its distinctive elements from MILAN + Bird of Prey

It will be interesting to see if the reasoning in this case regarding the significance of figurative elements in signs is followed by the EU IPO going forward, and it certainly implies that there are limits to the the old adage ‘a picture is worth a thousand words’.