JUDGMENT OF THE GENERAL COURT (Fourth Chamber)

7 July 2010 (*)

(Community trade mark – Opposition proceedings – Application for Community figurative mark M PAY – Earlier Community and national word marks MPAY24 – Likelihood of confusion – Article 8(1)(b) of Regulation (EC) No 40/94 (now Article 8(1)(b) of Regulation (EC) No 207/2009))

In Case T‑557/08,

mPAY24 GmbH, established in Vienna (Austria), represented by H-G. Zeiner, lawyer,

applicant,

v

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by A. Folliard-Monguiral, acting as Agent,

defendant,

the other party to the proceedings before the Board of Appeal of OHIM being

Ultra d.o.o. Proizvodnja elektronskih naprav, established in Zagorje ob Savi (Slovenia),

ACTION brought against the decision of the First Board of Appeal of OHIM of 30 September 2008 (Case R 221/2007‑1) relating to opposition proceedings between mPAY24 GmbH and Ultra d.o.o. Proizvodnja elektronskih naprav,

THE GENERAL COURT (Fourth Chamber),

composed of O. Czúcz, President, I. Labucka (Rapporteur) and K. O’Higgins, Judges,

Registrar: N. Rosner, Administrator,

having regard to the application lodged at the Registry of the Court on 18 December 2008,

having regard to the response lodged at the Registry of the Court on 22 April 2009,

further to the hearing on 9 February 2010,

gives the following

Judgment

 Background to the dispute

1        On 18 December 2003, Ultra d.o.o. Proizvodnja elektronskih naprav (‘Ultra’) filed a Community trade mark application at the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), pursuant to Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1))

2        The mark for which registration was sought is the figurative sign:

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3        The goods and services for which registration of the mark was sought fall within Classes 9, 35 to 38 and 42 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond, for each of those classes, to the following description:

–        Class 9: ‘Scientific, electrical, measuring, signalling, checking (supervision) apparatus and instruments; apparatus for recording, transmission and reproduction of sounds or images: magnetic data carriers, sound recording discs, telephones, mobile telephones, automatic vending machines and mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment and computers; pay terminals; mobile pay terminals; electronic pay terminals; vending machines; electronic devices for payment transaction providers and electronic data systems for processing payment transaction; modems for data transfer through voice telecommunication networks; hardware and software and devices for the electronic communication between buyers, providers for transactions (data and money transactions) and merchants; hardware and software and other means for voice communication through electronic media between buyers, providers for transactions (data, money and other transactions) and merchants; books, magazines, manuals, bulletins, technical instructions for use with pay terminals, pay systems and banking (in electronic form); hardware and software; computer software for cryptography; computer software for the support of user’s identification systems, computer software for secure transfer of computer data, computer software for diagnostic functions, computer software for operation systems, computer software for data base access’;

–        Class 35: ‘Rendering of business information concerning a mobile pay system; business information services for users of a mobile pay system’;

–        Class 36: ‘Insurance; financial affairs; monetary affairs; real estate affairs; mobile pay system services (pay instrument); banking systems services and system integration services for mobile and electronic trading in banking and POS systems’;

–        Class 37: ‘Technical consultation and information services concerning installation of a mobile pay system’;

–        Class 38: ‘Telecommunications; telephone communications; communications by means of mobile telephone; services of transmission of letters, documents, video, audio and other information by means of telex, telephone, mobile telephone, electronically or by means of other transmission media’;

–        Class 42: ‘Scientific and industrial research; computer programming; technical support or consultation services, namely consultation concerning the use and operation of a mobile pay system, technical consultation and information services concerning characteristics and configuration of the above mentioned; programming of electronic and voice communication between buyers, providers for transactions (data and money and other transactions) and merchants; cryptography services, including cryptography with elliptic curves, electronic security system services for the secure transmission of computer data, electronic system user’s identification services; data processing services, including the rendering and provision of data concerning the supply situation’.

4        The application was published in Community Trade Marks Bulletin No 12/2005 of 21 March 2005.

5        On 21 June 2005, the applicant, mPAY24 GmbH, filed a notice of opposition, pursuant to Article 42 of Regulation No 40/94 (now Article 41 of Regulation No 207/2009), to registration of the trade mark in respect of all goods and services referred to in paragraph 3 above. The opposition was based in particular on the earlier Community word mark MPAY24, filed on 4 March 2002 and registered under No 2601656 on 19 April 2005, for the goods and services corresponding to the following description:

–        Class 9: ‘Data processing apparatus, software, hardware’;

–        Class 16: ‘Printed matter, particularly magazines’;

–        Class 35: ‘Advertising and business management’;

–        Class 36: ‘Financial affairs’;

–        Class 38: ‘Telecommunication’.

6        The grounds relied on in support of the opposition were those referred to in Article 8(1)(b) and Article 8(4) of Regulation No 40/94 (now Article 8(1)(b) and Article 8(4) of Regulation No 207/2009).

7        On 21 December 2006, the Opposition Division allowed the opposition in its entirety.

8        On 29 January 2007, Ultra brought an appeal before OHIM, pursuant to Articles 57 to 62 of Regulation No 40/94 (now Articles 58 to 64 of Regulation No 207/2009), against the decision of the Opposition Division.

9        By decision of 30 September 2008 (‘the contested decision’), the First Board of Appeal of OHIM partially allowed the appeal and partially annulled the decision of the Opposition Division. The contested decision is based on the premiss that a likelihood of confusion between two marks which are of weak distinctive character can exist only if they are used for goods and services which are identical or if the signs are identical or very similar. Having found, first, that only a part of the goods and services for which registration had been sought were identical to those protected by the earlier mark and, second, that the two marks at issue were of weak distinctive character, the Board of Appeal dismissed the opposition in respect of the goods and services considered to be not identical.

10      The Board of Appeal stated that it authorised the registration of the mark applied for in respect of the following goods and services:

–        Class 9: ‘Scientific, electrical, measuring, signalling, checking (supervision) apparatus and instruments; automatic vending machines and mechanisms for coin-operated apparatus; cash registers, calculating machines; pay terminals; mobile pay terminals; electronic pay terminals; vending machines; electronic devices for payment transaction providers’;

–        Class 35: ‘Rendering of business information concerning a mobile pay system; business information services for users of a mobile pay system’;

–        Class 36: ‘Insurance; monetary affairs; real estate affairs; mobile pay system services (pay instrument); banking systems services and system integration services for mobile and electronic trading in banking and POS systems’;

–        Class 37: ‘Technical consultation and information services concerning installation of a mobile pay system’;

–        Class 42: ‘Scientific and industrial research; computer programming; technical support or consultation services, namely consultation concerning the use and operation of a mobile pay system, technical consultation and information services concerning characteristics and configuration of the above mentioned; programming of electronic and voice communication between buyers, providers for transactions (data and money and other transactions) and merchants; cryptography services, including cryptography with elliptic curves, electronic security system services for the secure transmission of computer data, electronic system user’s identification services; data processing services, including the rendering and provision of data concerning the supply situation’.

 Forms of order sought

11      The applicant claims that the Court should:

–        annul the contested decision to the extent that the Board of Appeal dismissed the opposition of the applicant;

–        order OHIM to pay the costs.

12      OHIM contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

13      In support of its application, the applicant relies on two pleas in law, alleging, respectively, infringement of Article 8(1)(b) of Regulation No 40/94 and infringement of Article 8(4) thereof.

 Arguments of the parties

14      In support of its first plea, alleging infringement of Article 8(1)(b) of Regulation No 40/94, the applicant claims that, with regard to the relevant public, the Board of Appeal should not have limited its assessment of the likelihood of confusion to the perception of an expert public. Even if the services concerned may be used by professionals in the telecommunications and electronics sector, this does not preclude them from being directed also to average consumers, who pay them a lesser degree of attention.

15      The applicant adds that consumers might believe that the two marks in question belong to the same proprietor or at least that structural or economic links, such as a licence agreement, exist between the two undertakings concerned. In that regard, it puts forward four arguments.

16      First, concerning the comparison of the goods and services covered by the trade marks at issue, the applicant is of the opinion that they have a similar nature and purpose and target the same end users.

17      Second, with regard to the comparison of the signs at issue, they present a high degree of visual similarity, are very similar phonetically and are meaningless, such that it is not possible to carry out any conceptual comparison. However, the secondary elements of the earlier marks, namely the figure 24, could allude to some of the goods and services concerned. The dominant element of the marks is the word element ‘MPAY’.

18      Third, as to the allegation that the trade marks at issue are of weak distinctive character, the applicant claims that the Board of Appeal did not put forward any valid reason for asserting that the earlier marks were of weak distinctive character, particularly in Austria. It is unlikely that the letter ‘m’ may be considered to refer to the word ‘mobile’ notwithstanding the applicant’s current activity, namely the marketing of a professional multi-payment platform. The applicant adds that the Board of Appeal erred in finding that the allegedly weak distinctive character implied a scope of protection that was restricted to identical goods and services. The distinctive character of an earlier mark is only one of the relevant factors to be taken into account in the assessment of the likelihood of confusion.

19      The applicant claims that the main risk for consumers, irrespective of their degree of attention, is that they will perceive the earlier mark MPAY24 as a variant of the trade mark applied for, M PAY, considering the number 24 to allude to a particular characteristic of a specialised service.

20      Fourth, the applicant relies, in particular, on the decision of the Landgericht Hamburg (Hamburg Regional Court, Germany) of 17 April 2008 ordering Ultra to stop using the same mark as the trade mark applied for and finding that the earlier mark had a distinctive character and could be protected against the more recent sign M PAY.

21      OHIM contends that, contrary to the applicant’s assertion, the Board of Appeal did not restrict its assessment of likelihood of confusion to the perception of telecommunication specialists, even though this section of the relevant public is less likely to link the marks and their holders in view of the fact that the expression “MPAY” will have a clear and direct descriptive meaning for them.

22      OHIM adds that the degree of attentiveness of the public is higher than average in respect of the goods and services for which the opposition was dismissed.

23      As to the comparison of the goods at issue, OHIM contends that the Board of Appeal did not deny that a degree of similarity exists between some of the goods and services concerned. However, the Board of Appeal held that the likelihood of confusion is confined to the goods and services which were found to be identical.

24      With regard to the comparison of the signs concerned, OHIM concedes that the trade marks concerned display some visual and phonetic similarities because they share the letter ‘M’ which is associated with the English word ‘PAY’. None the less, it contends that the differentiating elements, that is, the figurative element in the mark applied for, the absence or existence of a space between the letter ‘M’ and the word ‘PAY’ and the number ‘24’ in the earlier sign, will not pass unnoticed, even though they are unlikely to render the signs radically dissimilar in their totality. OHIM contends that there is a conceptual similarity which is limited to the word elements ‘M PAY’ and ‘MPAY’ of the trade marks at issue. Those elements will be perceived by the public as a descriptive reference to a means of payment by mobile telephone. The trade mark applied for does not convey any other message than the informative description of the nature or purpose of the goods and services concerned, while the earlier sign conveys the additional message that the means of payment by mobile telephone can be supplied at anytime, that is, round the clock. However, a conceptual similarity which is limited to descriptive elements is not decisive in itself. The same observation can be made as regards the overall similarity between the signs.

25      With regard to the likelihood of confusion, OHIM points out that that likelihood has been established for the identical goods and services. On the other hand, even if there is a certain degree of overall similarity between the signs at issue, that finding will not necessarily lead to a likelihood of confusion in respect of goods and services that are only similar to some degree.

26      OHIM contends that under normal circumstances, the goods and services in respect of which the opposition was dismissed are offered for sale or are provided in such a way that the public can make a visual inspection of the marks when making the decision to purchase.

27      According to OHIM, the pivotal issue in this case is whether the word element ‘M PAY’ or ‘MPAY’ alone is able to identify a commercial origin or if the identification of a commercial origin requires that that word element be associated with additional word or figurative elements in order to perform its function as a trade mark.

28      OHIM points out, in that regard, that the earlier mark owes its distinctive character to its particular configuration and not simply to the sum of its component parts. The letter ‘M’ and the word ‘PAY’ are combined without any space, which makes the connection with the expression ‘M PAY’ less easy to grasp and the number ‘24’ is joined onto ‘MPAY’ without any space. In the present case, not only does the trade mark applied for have a different construction, it is also visually distinguishable given its figurative element, which further separates the letter ‘M’ from the word ‘PAY’.

29      OHIM concludes from this that the relevant consumers, be they professionals operating in the field of telecommunications or not, will not perceive the mark applied for as a reference to the earlier sign unless the goods sold or services provided under those signs are identical. In such a case, consumers would legitimately wonder whether the mark applied for is an updated version of the earlier mark or a trade mark used by the applicant to identify a specific category of goods and services within the broad categories covered by the earlier sign.

30      The Board of Appeal’s finding that the earlier mark has a weak capacity to function as a badge of origin is therefore founded. OHIM notes in that respect that the applicant never claimed nor substantiated the alleged reputation of its earlier marks. Thus, the conclusion that the goods must be identical for a detriment to be caused to this essential function is well founded.

31      Concerning the order of the Landgericht Hamburg of 17 April 2008 upon which the applicant relies, OHIM points out that the use of the mark applied for was prohibited only in respect of mobile phone supported payments systems consisting of data transmission devices and software and/or data transmission devices in order to carry out payment transactions, that is, goods that are identical to the applicant’s data transmission apparatus.

 Findings of the Court

32      Under Article 8(1)(b) of Regulation No 40/94, upon opposition by the proprietor of an earlier trade mark, the trade mark applied for is not to be registered if because of its identity with or similarity to the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected. The likelihood of confusion includes the likelihood of association with the earlier trade mark.

33      According to settled case-law, the risk that the public might believe that the goods or services in question come from the same undertaking or from economically‑linked undertakings constitutes a likelihood of confusion. According to the same line of case-law, the likelihood of confusion on the part of the public must be assessed globally, in accordance with the perception which the average consumer has of the signs and goods or services in question, taking into account all factors relevant to the circumstances of the case, in particular the interdependence between the similarity of the trade marks and the similarity of the goods or services designated (see Case T‑162/01 Laboratorios RTB v OHIMGiorgio Beverly Hills(GIORGIO BEVERLY HILLS) [2003] ECR II‑2821, paragraphs 30 to 33 and the case-law cited).

34      It has also been held that, for the purposes of applying Article 8(1)(b) of Regulation No 40/94, a likelihood of confusion presupposes both that the marks at issue are identical or similar and that the goods or services which they cover are identical or similar. Those conditions are cumulative (see Case T‑316/07 Commercy v OHIM – easyGroup IP Licensing (easyHotel) [2009] ECR II‑43, paragraph 42 and the case-law cited).

 The relevant public

35      According to the case‑law, in the global assessment of the likelihood of confusion account should be taken of the average consumer of the category of products concerned, who is reasonably well informed and reasonably observant and circumspect. It should also be borne in mind that the average consumer’s level of attention is likely to vary according to the category of goods or services in question (see Case T‑256/04 Mundipharma v OHIM – Altana Pharma (RESPICUR) [2007] ECR II‑449, paragraph 42 and the case-law cited).

36      The applicant does not contest the finding, in paragraph 20 of the contested decision, that the goods and services covered by the application for a Community trade mark are targeted, in part, at average consumers, for example, the telephones, in Class 9, the business information services for users of a mobile pay system in Class 35, and, in part, at specialised consumers, such as, in particular, computer experts and telecommunications technicians in the field of mobile pay systems.

37      All that the applicant contests is that the Board of Appeal restricted its assessment of likelihood of confusion to the perception of specialised consumers.

38      In that regard, it is not possible to conclude from reading the contested decision that the Board of Appeal restricted its assessment of likelihood of confusion to the perception of specialists. After defining the relevant public in paragraph 20 of the contested decision, the Board of Appeal examined the goods and services concerned, along with the signs at issue, without making a distinction between the various consumers. The applicant’s argument cannot therefore succeed.

39      Nevertheless, in the present case it must be found that, contrary to the applicant’s claims, the degree of attentiveness of the relevant public is higher than average in respect of the goods and services for which the opposition was dismissed, because the goods and services are not purchased or contracted on a daily basis and because they may involve significant investments, as OHIM rightly contends.

 Global assessment of the likelihood of confusion

40      In the present case, the contested decision is based on the premiss that a likelihood of confusion between two marks which are of weak distinctive character can exist only if they are used for goods and services which are identical or if the signs are identical or very similar (paragraph 27 of the contested decision). The Board of Appeal dismissed the opposition in respect of the goods and services considered not to be identical.

41      The applicant claims, in that respect, that the distinctive character of an earlier trade mark is only one of the relevant factors to take into consideration in assessing the likelihood of confusion.

42      As the applicant has rightly stated, although the distinctive character of the earlier mark must be taken into account when assessing the likelihood of confusion (see, by analogy, Case C‑39/97 Canon [1998] ECR I‑5507, paragraph 24), it is only one factor among others to be included in that assessment. Thus, even in a case involving an earlier mark of weak distinctive character, there may be a likelihood of confusion on account, in particular, of a similarity between the signs and between the goods or services covered (see, to that effect, Case T‑112/03 L’Oréal v OHIM – Revlon (FLEXI AIR) [2005] ECR II‑949, paragraph 61).

43      The finding of a weak distinctive character for the earlier trade mark does not prevent a finding that there is a likelihood of confusion (see Case T‑134/06 Xentral v OHIM – Pages jaunes (PAGESJAUNES.COM) [2007] ECR II‑5213, paragraph 70 and the case-law cited) with the trade mark applied for, even though the goods and services at issue or the signs concerned are not identical. The importance of taking into account the distinctive character of the earlier mark may vary according to the degree of similarity found between the goods and services concerned and the signs at issue.

44      It follows from the case‑law cited in paragraphs 33 and 42 above that the Board of Appeal, in its global assessment of the likelihood of confusion between the trade marks at issue, should have assessed not only the distinctive character of the earlier trade mark, but also the degree of similarity existing between the goods and services at issue and the degree of similarity between the signs at issue.

45      By restricting its assessment of the likelihood of confusion to the premiss that a likelihood of confusion between two marks which are of weak distinctive character can exist only if they are used for goods and services which are identical or if the signs are identical or very similar, the Board of Appeal erred in law.

46      Consequently, the first plea, alleging infringement of Article 8(1)(b) of Regulation No 40/94 must be upheld.

47      It is therefore appropriate, as the applicant claims, to annul the contested decision in so far as it dismissed the applicant’s opposition, and it is not necessary to examine the second plea in law alleging infringement of Article 8(4) of Regulation No 40/94.

 Costs

48      Under Article 87(2) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

49      Since OHIM has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the applicant.

On those grounds,

THE GENERAL COURT (Fourth Chamber)

hereby:

1.      Annuls the decision of the First Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 30 September 2008 (Case R 221/2007‑1) in so far as that decision dismissed the opposition brought by mPAY24 GmbH;

2.      Orders OHIM to pay the costs.

Czúcz

Labucka

O’Higgins

Delivered in open court in Luxembourg on 7 July 2010.

[Signatures]