European Court of Justice: "Canon" Decision

Kador & Partner, Munich, Germany by Jennifer Clayton-Chen

On September 29, 1998, the European Court of Justice issued its long?awaited judgment in the CANON matter (Case C?39/97). In the judgment the Court gave a preliminary ruling on two questions regarding the interpretation of Article 4 (1) (b) of the Trade Mark Harmonization Directive which had been referred to the Court by the German Federal Supreme Court in the context of a trade mark opposition case.

The Federal Supreme Court had firstly asked whether, when determining if the similarity of goods or services covered by two trade marks is sufficient to give rise to confusion, the distinctive character of the earlier trade mark, and in particular its reputation, must be taken into account. Secondly, the question had been raised whether there can be a likelihood of confusion when according to the public perception the goods or services have different places of origin.

In considering the first question, the Court referred to the tenth recital of the preamble to the Harmonization Directive, in which the interdependence of different relevant factors in assessing a likelihood of confusion, including the recognition of the trade mark on the market, is expressly mentioned. The Court furthermore referred to its Sabel v. Puma decision (Case C?251/95) in stating that the more distinctive the earlier mark, the greater its scope of protection and the greater the risk of confusion.

The Court, however, made a point of adding that, even if a mark is identical to another mark with a highly distinctive character, there must be similarity of goods or services for Article 4 (1) (b) to apply, because this provision presupposes that the goods or services are identical or similar. If there is no similarity of goods or services, Article 4 (4) (a) applies. (Note: This has also been the opinion of the German Federal Supreme Court in previous cases)

In discussing the second question, the Court stated that there is a likelihood of confusion within the meaning of Article 4 (1) (b) of the Directive where the public can be mistaken about the origin of the goods or services. The second question was answered in the following way. There may be a likelihood of confusion within the meaning of Article 4 (1) (b) of the Directive even where the public perception is that the goods or services have different places of production. By contrast, there can be no likelihood of confusion where it does not appear that the public could believe that the goods or services come from the same undertaking, or from economically linked undertakings.

CONCLUSION: It follows from the decision that, in order for Article 4 (1) (b), or its equivalent in national law, to apply, it first has to be established that there is a similarity of goods or services, because otherwise this provision does not apply at all. As a second step, it has to be established whether there is a "higher" or "lesser" degree of similarity between the goods or services. According to the Court, registration of a trade mark may have to be refused, despite a lesser degree of similarity between the goods or services, where the marks are very similar and the earlier mark, in particular its reputation, is highly distinctive.