The General Court provided an interesting judgment on proving the risk of free-riding. In relation to a long-lasting opposition procedure initiated by Coca-Cola, the General Court deemed that evidence on how the younger sign is used in other markets - outside the EU - can be accepted to prove the risk of free-riding in the EU.

General Court 7 December 2017, C T-61/16 (Coca-Cola/Mitico)
The Coca-Cola Company invoked one the most famous trade marks in the world, the Coca- Cola trade mark(s), to oppose the European Union trade mark application of the Syrian-based company Mitico for the sign Master, inter alia applied for beverages.

Coca-Cola inter alia based its opposition on the repute of its trade mark and stated that there would a risk of free-riding by the applicant as meant in Art. 8(5) EUTMR. The conditions in Art. 8(5) EUTMR as to free-riding cumulatively require as follows: (i) the fact that the marks at issue are identical or similar; (ii) the fact that the earlier trade mark invoked in opposition has a reputation; (iii) the existence of a risk that the use without due cause of the trade mark applied for would take unfair advantage of the repute of the earlier mark.

Coca-Cola tried to prove that there was a risk of free-riding, based on the actual use by the applicant of the trade mark in Syria and the Middle East. In this regard Coca-Cola relied on the website of the applicant, which showed that applicant was using the mark applied for in the course of trade in the form shown below:

Earlier instances
The Board of Appeal of the EUIPO (BOA) was the first to reject the opposition in 2012, when it:

• found that the trade marks were dissimilar, and therefore that the first requirement governing the application of Art. 8(5) EUTMR was not satisfied; and
• disregarded the evidence adduced by the applicant since it found that the evidence did not concern the mark applied for.

The General Court (GC) annulled the decision of the BOA in 2014 and found that:

• there was a low degree of similarity (particularly caused by elements of visual similarity relating not only to the 'tail' flowing from their first letters 'c' and 'm' in a signature flourish but also to their shared use of a font which is not commonly used in contemporary business life);
• the evidence from Coca-Cola could not be disregarded: in establishing a risk of free-riding, case law in no way limited the relevant evidence, to be taken into consideration, to the mark applied for, but also allowed account to be taken of any evidence intended to facilitate an analysis of the probabilities as regards the intentions of the proprietor of the trade mark applied for, and any evidence relating to the actual commercial use of the mark applied for.

After referral the BOA again rejected the opposition in 2015. It held that the scope of the evidence was such that it could not serve as a basis for the existence of a risk of free-riding, in essence for the following reasons: 

1. the evidence did not show that Mitico had used the presentation as displayed on its website in the European Union, noting that the website was mainly in Arabic, only had one page in English, and lacked information that the goods could be ordered online and sent to the EU;
2. the mere fact that an EU trade mark was filed which had a different presentation to the one displayed on the website did not indicate that the applicant would promote the goods in the same way in the EU as it did in Syria and the Middle East. It was furthermore unclear who owned those rights in Syria and the Middle East, and Coca-Cola did not state that they were infringing;
3.  Coca-Cola further failed to show which specific image (repute) of the Coca-Cola brands would be transferred to the application at issue.

General Court
The GC found that the use of Master Cola (on the website) could be regarded as use of the Master trade mark as applied for. Within the composite trade mark Master Cola, the element 'master' is dominant and is perceived as an indication of the origin of the intervener's goods. In this regard it recalled that the 'use' of a mark, in its literal sense, generally encompasses both its independent use and its use as part of another mark, taken as a whole or in conjunction with that other mark.

The GC proceeded by stating that instances of use, of the mark applied for, outside the European Union may be taken into account as a basis for a logical inference relating to the likely commercial use of the mark applied for in the Union, in order to establish the existence of a risk that unfair advantage will be taken, in the Union, of the reputation of an earlier EU trade mark. It is logically foreseeable that Mitico, if it obtains the registration of the mark applied for, will amend its website in accordance with such an intention to market its goods under that mark in the Union. The 'www.mastercola.com' website is not static and could be amended in order to target EU consumers, in particular by adding content in one or more official languages of the Union.

The actual use, of the mark applied for, in a particular form and chosen by design outside the Union may unless there is evidence to the contrary adduced by Mitico, which there was not in this case lead to a logical inference that there is a serious risk that the mark applied for will be used in the same way within the European Union as in third countries, all the more so since Mitico had expressly requested registration, of the mark applied for, for use in the European Union

In contrast to the BOA, the GC did find that Coca-Cola had submitted arguments relating to the image liable to be transferred from the earlier marks to the mark applied for. This included, in particular, excerpts from the Superbrands study which concluded that Coca-Cola "remains at the peak of world brand recognition, the company is able to use its relationship to consumers in order to have an impact beyond the non-alcoholic beverage market".

Comment
These opposition proceedings confirm that collecting evidence on how the younger sign is used in other markets - outside the EU is useful for proving the risk of free-riding in the EU. This is, in particular, worthwhile when confronted with a counterparty which is not (yet) active in the EU under the mark applied for. The evidence on actual use outside the EU can be used to lead to a logical inference that there is a serious risk that the mark applied for will be used in the same way within the EU.

It must, however, be kept in mind that Mitico did not provide any evidence to counter the logical inference; it did not provide any evidence that the mark applied for would be used in another way in the EU as compared to the evidence on use outside the EU.

In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include, inter alia, the strength of the mark's reputation and the degree of distinctiveness of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned.

Possibly the biggest challenge for Coca-Cola was to pass the requirement of similarity as meant in Art. 8(5) EUTMR. The BOA initially found that the sign as applied for and the earlier marks were dissimilar. The initial conclusion on dissimilarity is not strange, particularly if you reason that the clear conceptual meaning of 'Master' could neutralise any visual similarities. Only after passing the hurdle of similarity could Coca-Cola rely upon the scope of protection that comes with one the most famous trade marks in the world.