On Nov. 27, the CFI has delivered its decision on the Gateway case (case T-434/05, Gateway Inc. v. Ohim). The decision is a blow to Gateway which, I presume, will certainly appeal to the ECJ. The facts of the case.
Fujitsu had filed a CTM for “ACTIVY Media Gateway” for goods in classes 9, 35, 41 and 42. Gateway filed an opposition based upon a long number of GATEWAY registrations in various EU countries.
The Board of Appeals turned down the opposition saying that, notwithstanding the whole inclusion of the “gateway” term in the later CTM, it could not find a likelihood of confusion or dilution because the consumers would find ACTVY as dominant component, not GATEWAY so that the two marks were neither identical or similar enough..
The case, in my view, revolves around one single issue: if I adopt as a trademark a descriptive indication, will the fact that I can prove renown be sufficient to claim exclusive rights against all uses of this term either for likelihood of confusion or for dilution?
The CFI said no to the first (basically it said you choose a waek mark, you live with it) and (in my opinion) dodged the issue on the second, where I think Gateway might have some openings to appeal, because the CFI simply stated that since the conflicting signs were neither identical nor similar, dilution could not occur. However, the CFI did not explain/explore whether a link could nonetheless occur, which is, after all, the real hot issue at the moment. In my view the CFI thought, but did not say, that since “gateway” can be perceived as a descriptive term, and it is routinely used in the computer field, the consumer presented with the opposed CTM (ACTIVY Media Gateway) would not immediately link the presence of the word “gateway” with the Gateway company and mark. Thus, no dilution by blurring or loss of distinctiveness (like in the VIPs case). Yet, I cannot but wonder why Fujutsu had to file for “media gateway” in the first place. If it’s such a descriptive combination, it cannot be enforced, so what is the purpose?
Gateway, of course could not say so, thus it went to the CFI arguing that contrary to the Board findings, the average consumers would find that GATEWAY was the dominant part of the mark, and in non-English‑speaking countries, it is possible that the average consumer does not understand English but would nevertheless recognise the GATEWAY trade mark by reason of its reputation, and would make an association through the term ‘gateway’ between the goods bearing the trade mark applied for and the applicant’s goods. In addition, Gateway argued that the reputation and well-known character of its GATEWAY mark should have alter the Board’s finding that the conflicting marks were not similar. Finally, Gateway argued the CTM would take an unfair advantage out of or be detrimental to its distinctive character or repute.
The CFI did not agree with Gateway. It held that both from a visual and phonetical comparison the two marks can be distinguished. As for the conceptual comparison, the most important part of Gateway’s argument, the CFI reaffirmed that as a general rule, the public will not consider a descriptive element forming part of a complex mark to be the distinctive and dominant element in the overall impression conveyed by that mark (at §41).
The CFI found that both the element ‘media gateway’ and the element ‘gateway’ in the trade mark applied for directly evoke, in the mind of the relevant consumer, the concepts of a media gateway and a gateway, which are commonly used in the computing sector. While these elements are therefore highly descriptive of the goods and services covered by that trade mark, by contrast, ‘activy’, is devoid of any conceptual meaning in the mind of the relevant consumer, and therefore the Board of Appeal was lawfully able to consider that it constitutes the dominant element and to conclude that there is no conceptual similarity between the conflicting signs (at § 42). Thus, even though the CFI did not explicitly rule on the bearing which a finding of renown has in the assessment of the likelihood of confusion, its analysis clearly shows that if the earlier reputed mark is composed by a descriptive indication, such genetic weakness will always taint its possibility to oppose use of identical or similar terms by others.
As for the last argument, the dilution claim, the CFI basically rejected the claim by saying that the first essential condition for the application of Article 8(5) of Regulation No 40/94 was not satisfied since the conflicting signs were neither identical nor similar. The issue, however is that the ECJ had held in Fitnessworld that for the applicability of the dilution provisions it is not necessary that two marks are found to be either identical or similar, i.e. that a confusion arises. The proper standard is that as consequence of a certain degree of similarity between the mark applied for and the earlier mark, the relevant public makes a connection between them, establishes a link between them.
But it seems to me that when the Board found that the conflicting are neither identical nor similar, it basically applied the identical analysis which had earlier on applied to deny the likelihood of confusion.
So the issue remains the same. In order to establish whether a link occurs, is the test always the same or not?