CELEX: 62015TJ0512
Language: en
Date: 2016-09-22 00:00:00
Title: Judgment of the General Court (Sixth Chamber) of 22 September 2016.#Sun Cali, Inc. v European Union Intellectual Property Office.#EU trade mark — Invalidity proceedings — EU figurative mark SUN CALI — Earlier national figurative mark CaLi co — Relative ground for refusal — Likelihood of confusion — Article 8(1)(b) and Article 53(1)(a) of Regulation (EC) No 207/2009 — Representation before the Board of Appeal — Real and effective industrial or commercial establishment in the European Union — Legal persons with economic connections — Article 92(3) of Regulation No 207/2009.#Case T-512/15.

JUDGMENT OF THE GENERAL COURT (Sixth Chamber)
22 September 2016 (*)
(EU trade mark — Invalidity proceedings — EU figurative mark SUN CALI — Earlier national figurative mark CaLi co — Relative ground for refusal — Likelihood of confusion — Article 8(1)(b) and Article 53(1)(a) of Regulation (EC) No 207/2009 — Representation before the Board of Appeal — Real and effective industrial or commercial establishment in the European Union — Legal persons with economic connections — Article 92(3) of Regulation No 207/2009)
In Case T‑512/15,

Sun Cali, Inc., established in Denver, Colorado (United States), represented by C. Thomas, lawyer,
applicant,
v

European Union Intellectual Property Office (EUIPO), represented by E. Zaera Cuadrado, acting as Agent,
defendant,
the other party to the proceedings before the Board of Appeal of EUIPO being

Abercrombie & Fitch Europe SA, established in Mendrisio (Switzerland),
ACTION brought against the decision of the Fifth Board of Appeal of EUIPO of 3 June 2015 (Joined Cases R 1260/2014-5 and R 1281/2014-5), relating to invalidity proceedings between Abercrombie & Fitch Europe and Sun Cali,
THE GENERAL COURT (Sixth Chamber),
composed, at the time of deliberation, of S. Frimodt Nielsen, President, A.M. Collins and V. Valančius (Rapporteur), Judges, 
Registrar: E. Coulon,
having regard to the application lodged at the Court Registry on 4 September 2015,
having regard to the response lodged at the Court Registry on 25 November 2015,
having regard to the fact that no request for a hearing was submitted by the main parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, in accordance with Article 106(3) of the Rules of Procedure of the General Court,
gives the following

Judgment

 Background to the dispute

1        On 20 November 2006, the applicant, Sun Cali, Inc., filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) 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 European Union trade mark (OJ 2009 L 78, p. 1)).

2        Registration as a mark was sought for the following figurative sign:

3        The goods and services in respect of which registration was sought are in Classes 18, 25, 35 and 45 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 18: ‘Handbags’;
–        Class 25: ‘Women’s clothing, namely, lingerie, bras, panties, bustiers, body suits, nightgowns, bathrobes, camisoles, dresses, t-shirts, blouses, sweaters, jeans, suits, jackets, skirts, swimming suits, sundresses, sun covers, and wraps; men’s clothing; children’s clothing, shoes’;
–        Class 35: ‘Retail store services featuring clothing, shoes and handbags’;
–        Class 45: ‘Fashion consulting services; wardrobe management services; image consulting services; and personal shopping services for others’.

4        The EU trade mark application was published in Community Trade Marks Bulletin No 20/2007 of 21 May 2007.

5        On 21 November 2007, the figurative sign was registered as an EU trade mark under the number 5482369.

6        On 16 October 2012, Abercrombie & Fitch Europe SA filed an application for a declaration of invalidity of the applicant’s figurative mark in respect of all the goods and services for which it had been registered.

7        The grounds for invalidity relied on in support of the application were based on the relative grounds for invalidity set out in Article 53(1)(a) of Regulation No 207/2009, in conjunction with Article 8(1)(b) thereof.

8        The application for a declaration of invalidity was based on the following earlier Italian figurative mark, registered on 7 April 2008, designating all the goods in Class 25:

9        By decision of 17 March 2014, the Cancellation Division partly granted the application for a declaration of invalidity and, on the one hand, declared the contested mark invalid in respect of the goods in Classes 18 and 25, holding that, in view of the coincidence in the element ‘cali’, the dominant element in the earlier mark, there was a likelihood of confusion between the earlier mark and the contested mark in respect of the goods in the aforementioned classes. On the other hand, the Cancellation Division dismissed the application for a declaration of invalidity of the contested mark in respect of the services in Classes 35 and 45, taking the view that there was no similarity between those services and the goods in Class 25.

10      The applicant and Abercrombie & Fitch Europe, on 14 May 2014 and 16 May 2014 respectively, filed a notice of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009, against the decision of the Cancellation Division.

11      By decision of 3 June 2015 (‘the contested decision’), the Fifth Board of Appeal of EUIPO (i) dismissed the appeal brought by the applicant as inadmissible, holding that the applicant was not duly represented in accordance with Article 92(2) of Regulation No 207/2009, and (ii) partly allowed the appeal brought by Abercrombie & Fitch Europe and declared the contested mark invalid also in respect of the services in Class 35. In that regard, the Board of Appeal held that, in view of the similarity between those services and the goods in Class 25, there was a likelihood of confusion between the earlier mark and the contested mark.
 Forms of order sought

12      The applicant claims that the Court should:
–        annul the contested decision;
–        order EUIPO to pay the costs.

13      EUIPO contends that the Court should: 
–        dismiss the application;
–        order the applicant to pay the costs.
 Law

1.     Documents produced for the first time before the Court

14      The applicant annexed various documents to its application in order to substantiate the claim that it was duly represented in the proceedings before the Board of Appeal, and in support of the submission that the earlier mark might be perceived as a variation of the Italian term ‘calcio’. These include, inter alia, Annexes 3 and 18 to 22.

15      EUIPO contends that those documents must be declared inadmissible as they were not produced in the proceedings before it.

16      It should be noted that the purpose of an action before the Court is to review the legality of decisions of the Boards of Appeal of EUIPO, for the purposes of Article 65 of Regulation No 207/2009. Under Article 65(2) of Regulation No 207/2009, the Court may annul or alter a decision of a Board of Appeal of EUIPO only ‘on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaty, of [Regulation No 207/2009] or of any rule of law relating to their application or misuse of power’. It follows from that provision that the Court may annul or alter a decision against which an action has been brought only if, at the time the decision was adopted, it was vitiated by one of those grounds for annulment or alteration. The Court may not annul or alter that decision on grounds which come into existence subsequent to its adoption (see judgment of 13 March 2007, OHIM v Kaul, C‑29/05 P, EU:C:2007:162, paragraph 53 and the case-law cited). It is also apparent from that provision that facts not submitted by the parties before the departments of EUIPO cannot be submitted at the stage of the appeal before the Court. The Court is called upon to assess the legality of the decision of the Board of Appeal by reviewing the application of EU law made by that board, particularly in the light of facts which were submitted to the latter; the Court cannot, however, carry out such a review by taking into account matters of fact newly produced before it (judgment of 13 March 2007, OHIM v Kaul, C‑29/05 P, EU:C:2007:162, paragraph 54). It is not the Court’s function, therefore, to review the facts in the light of evidence produced for the first time before it (see, to that effect, judgment of 24 November 2005, Sadas v OHIM — LTJ Diffusion (ARTHUR ET FELICIE), T‑346/04, EU:T:2005:420, paragraph 19 and the case-law cited).

17      In the present case, in so far as the documents referred to in paragraph 14 above were produced for the first time before the Court, they may not be taken into consideration for the purpose of reviewing the legality of the contested decision and must therefore be disregarded.
2.     Substance

18      In support of its action, the applicant relies on two pleas in law, alleging (i) infringement of Article 92(3) of Regulation No 207/2009 and (ii) infringement of Article 8(1)(b) thereof.
 The first plea in law, alleging infringement of Article 92(3) of Regulation No 207/2009

19      By its first plea in law, the applicant claims, on the one hand, that, in accordance with the first sentence of Article 92(3) of Regulation No 207/2009, it was entitled to be represented before EUIPO by one of the employees of its German branch, since that branch is a real and effective commercial establishment in the European Union, within the meaning of the provision. The applicant submits, on the other hand, that, even if the German branch is not recognised as a real and effective commercial establishment of the applicant in the European Union, it was nevertheless entitled, pursuant to the second sentence of Article 92(3) of Regulation No 207/2009, to be represented before EUIPO by one of the employees of that establishment, given that there was an economic connection between them. The applicant concluded that, in any event, the Board of Appeal ought to have declared its appeal admissible.

20      EUIPO disputes the applicant’s arguments.

21      As provided in Article 92(3) of Regulation No 207/2009, natural or legal persons having their domicile, or principal place of business or a real and effective industrial or commercial establishment in the European Union may be represented before EUIPO by an employee. An employee of such a legal person may also represent other legal persons which have economic connections with the first legal person, even if those other legal persons have neither their domicile nor their principal place of business nor a real and effective industrial or commercial establishment within the European Union.

22      Under Article 93(1) of Regulation No 207/2009, representation of natural or legal persons before EUIPO may only be undertaken by any legal practitioner qualified in one of the Member States and having his place of business in the European Union, to the extent that he is entitled, within the said Member State, to act as a representative in trade mark matters, or by professional representatives whose names appear on the list maintained for this purpose by EUIPO.

23      First, it is not disputed that the applicant, which is the proprietor of the mark at issue, is a legal person governed by private law established in Denver, Colorado (United States), and that it was represented before the Board of Appeal by a natural person who, as is apparent from the documents in the case, presented herself as (a) the applicant’s CEO and (b) the employee of a commercial establishment in Munich (Germany) allegedly belonging to the applicant.

24      Secondly, it is apparent from the documents in the case that, by letter of 3 March 2015, the applicant was invited by EUIPO to appoint, in the proceedings before the Board of Appeal, a professional representative within the meaning of Article 93(1) of Regulation No 207/2009. In that letter, EUIPO informed the applicant that it had serious doubts as to whether it was possible for the applicant to be represented by an employee, on the basis of the provisions of Article 92(3) of the regulation. In its letter of reply of 23 April 2015, the applicant merely indicated that, since it had a commercial establishment in Munich, it was entitled, under Article 92(3) of Regulation No 207/2009, to be represented by one of the employees of that establishment. The applicant did not enclose with its reply any evidence to support its assertions, notwithstanding the doubts expressed by EUIPO, and merely referred back to the EUIPO guidelines.

25      Thirdly, it is also clear from the documents in the case that, in its observations in response to the appeal brought by the applicant before the Board of Appeal, the other party to the proceedings before the Board of Appeal, Abercrombie & Fitch Europe, alleged that the applicant had not been duly represented before the Board of Appeal because, inter alia, it did not have a real and effective commercial establishment in Germany. In support of that claim, Abercrombie & Fitch Europe asserted that, under Paragraph 13 of the Handelsgesetzbuch (German Commercial Code), the applicant, which had its domicile and principal place of business outside Germany, was required to register with the local court in whose jurisdiction it wished to operate its commercial establishment, which Abercrombie & Fitch Europe claimed the applicant had not done. In order to substantiate its assertion, Abercrombie & Fitch Europe submitted (i) an extract from the Gemeinsames Registerportal der Länder (common register portal of the German Länder), showing that there were no commercial establishments with the terms ‘sun cali’ registered in Germany, and (ii) an extract from the commercial register of the city of Munich, indicating that a commercial establishment trading under the name SUN CALI Inc. had been registered as a sole trader in the name of the employee who had represented the applicant before the Board of Appeal and who was also its CEO.

26      In the present case, in the first place, with regard to the question as to whether the applicant had a real and effective industrial or commercial establishment in the European Union within the meaning of the first sentence of Article 92(3) of Regulation No 207/2009, the Court notes that the applicant, in support of its assertions, produced before the Board of Appeal evidence consisting of (a) extracts from a website, www.suncali.de, mentioning a postal address in Munich where the applicant claims that there is an establishment marketing goods sold under the contested mark, and (b) photographs supposedly showing the front of that establishment.

27      Furthermore, on 27 May 2014, the applicant submitted before EUIPO an authorisation form signed by its CEO, authorising herself to represent the applicant in her capacity as an employee of the commercial establishment in Munich, inter alia, in the proceedings at issue.

28      The evidence produced by the applicant before the Board of Appeal, namely (a) extracts from a website, (b) photographs supposedly showing the front of a commercial establishment in Munich, and (c) an authorisation form authorising an employee to represent the applicant, are clearly not relevant information and explanations capable of proving, in the specific circumstances of the present case, the existence of a real and effective commercial establishment in the European Union within the meaning of Article 92(3) of Regulation No 207/2009.

29      The evidence produced makes it possible, admittedly, to understand that the nature of the economic activity which that establishment claims to carry on consists in the retail sale of clothing, shoes and accessories. However, mere extracts from a website along with a few photographs are not sufficient, per se, and in the absence of any other particulars, to demonstrate the existence of a real and effective commercial establishment in the European Union.

30      Moreover, it must be recalled that, according to the case-law, the concept of a branch implies a place of business which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will, if necessary, be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension (see, to that effect, judgment of 22 November 1978, Somafer, 33/78, EU:C:1978:205, paragraph 12). The evidence produced by the applicant in support of its assertion that it has a German branch is clearly not capable of proving that that establishment, on which the applicant relies, was an extension of the applicant and that, accordingly, it could be a branch of the applicant.

31      In addition, the documents produced before the Board of Appeal by Abercrombie & Fitch Europe, in particular the extract from the German commercial register from which it is not apparent that the applicant has a registered establishment in Germany, support the conclusion drawn from the evidence produced by the applicant, that the alleged establishment in Munich cannot be regarded as a real and effective commercial establishment of the applicant in the European Union.

32      It follows that the Board of Appeal was fully entitled to find that no proof had been provided that the applicant had a real and effective establishment in the European Union within the meaning of Article 92(3) of Regulation No 207/2009.

33      In the second place, with regard to the question of whether the employee of a legal person having its principal place of business or its domicile or a real and effective establishment in the European Union may represent another legal person established outside the European Union, that is to say, the applicant, on account of economic connections between those two legal persons within the meaning of the second sentence of Article 92(3) of Regulation No 207/2009, the Court notes that the applicant, before the Board of Appeal of EUIPO, did no more than simply claim that such economic connections existed, without adducing any evidence other than that referred to in paragraphs 26 and 27 above. 

34      However, it follows from the documents in the case, as the Court has noted in paragraph 25 above, that the establishment based in Germany was registered in the commercial register of the city of Munich as a sole trader in the name of the natural person whom the applicant presents as being an employee of that establishment. A sole trader, with no legal personality, clearly falls outside the scope of the second sentence of Article 92(3) of Regulation No 207/2009; accordingly, pursuant to that provision, a sole trader may not represent a legal person established outside the European Union with which it may have economic connections within the meaning of that provision.

35      Moreover, and in any case, even if the establishment in Germany on which the applicant relies had legal personality, the Court notes that the evidence produced by the applicant before the Board of Appeal is no guarantee that, in the present case, there are any economic connections between that establishment and the applicant.

36      In that regard, it must be held that mere extracts from a website and a few photographs are clearly not sufficient, per se, and in the absence of any other particulars, to prove that there are any economic connections between the establishment in Germany and the applicant. That material is not capable of showing, for instance, that those two persons are part of the same group, or that the existing management mechanisms are such that one of those two legal persons has control over the other.

37      It follows that the Board of Appeal was fully entitled to find that no proof had been provided that the applicant had economic connections with the establishment in Germany within the meaning of Article 92(3) of Regulation No 207/2009.

38      Therefore, the Board of Appeal did not err in holding, in paragraph 37 of the contested decision, that the applicant’s appeal did not meet the requirements of Article 92 of Regulation No 207/2009 and that it was therefore inadmissible.

39      Consequently, the first plea in law must be rejected. It follows that the applicant is not justified in seeking annulment of the contested decision in so far as it relates to the appeal the applicant had brought before the Board of Appeal.

40      With regard to the appeal brought by Abercrombie & Fitch Europe before the Board of Appeal, the Court notes that, in accordance with Article 59 of Regulation No 207/2009, although not represented and although it had not, in any event, submitted observations, the applicant was a party to those appeal proceedings as of right. Under Article 65(4) of Regulation No 207/2009, the applicant was thus entitled to seek annulment of the contested decision, inasmuch as that the decision partly allowed the appeal brought by Abercrombie & Fitch Europe. The Court must therefore examine the second plea in law put forward by the applicant.
 The second plea in law, alleging infringement of Article 8(1)(b) of Regulation No 207/2009

41      By its second plea in law, the applicant submits that the Board of Appeal was wrong in finding that there was a likelihood of confusion between the signs at issue. In particular, the applicant maintains that the Board of Appeal erred in finding a similarity between (i) the signs at issue and (ii) the goods and services covered, leading it to conclude that there was a likelihood of confusion with regard to the services in Class 35.

42      EUIPO disputes the applicant’s arguments.

43      Under Article 53(1)(a) of Regulation No 207/2009, read in conjunction with Article 8(1)(b) thereof, on application by the proprietor of an earlier mark, the EU trade mark registered is to be declared invalid, 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.

44      According to settled case-law, the risk that the public may 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 case-law, the likelihood of confusion must be assessed globally, according to the relevant public’s perception of the signs and goods or services in question and taking into account all factors relevant to the circumstances of the case, in particular the interdependence between the similarity of the signs and that of the goods or services covered (see judgment of 9 July 2003, Laboratorios RTB v OHIM — Giorgio Beverly Hills (GIORGIO BEVERLY HILLS), T‑162/01, EU:T:2003:199, paragraphs 30 to 33 and the case-law cited).

45      For the purposes of applying Article 8(1)(b) of Regulation No 207/2009, 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 judgment of 22 January 2009, Commercy v OHIM — easyGroup IP Licensing (easyHotel), T‑316/07, EU:T:2009:14, paragraph 42 and the case-law cited).
 The statement of reasons for the contested decision

46      Although the reasoning in paragraph 45 of the contested decision is very succinct, account should be taken of the more detailed reasoning in that regard in the Cancellation Division’s decision. Given that the Board of Appeal confirmed that decision with regard to the comparison of the signs, and in view of the continuity in terms of functions between the Cancellation Divisions and Boards of Appeal as demonstrated by Article 64(1) of Regulation No 207/2009 (see, to that effect, judgments of 13 March 2007, OHIM v Kaul, C‑29/05 P, EU:C:2007:162, paragraph 30, and of 10 July 2006, La Baronia de Turis v OHIM — Baron Philippe de Rothschild (LA BARONNIE), T‑323/03, EU:T:2006:197, paragraphs 57 and 58), that decision, together with its statement of reasons, forms part of the context in which the contested decision was adopted, a context which is known to the applicant and enables the Court to exercise fully its judicial review as to whether the assessment of the likelihood of confusion was well founded (see, to that effect, judgment of 21 November 2007, Wesergold Getränkeindustrie v OHIM — Lidl Stiftung (VITAL FIT), T‑111/06, not published, EU:T:2007:352, paragraph 64).
 The relevant public

47      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 goods 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 judgment of 13 February 2007, Mundipharma v OHIM — Altana Pharma (RESPICUR), T‑256/04, EU:T:2007:46, paragraph 42 and the case-law cited).

48      In the present case, given the nature of the goods and services concerned, and given the fact that the earlier mark relied on in support of the application for annulment is protected in Italy, the Court must confirm the finding of the Board of Appeal in paragraphs 43 and 44 of the contested decision that, in essence, the likelihood of confusion must be examined from the point of view of the relevant public consisting of the general public, that is to say, the average Italian consumer.
 The comparison of the goods and services

49      According to settled case-law, in assessing the similarity of the goods or services at issue, all the relevant factors relating to those goods or services should be taken into account. Those factors include, in particular, their nature, their intended purpose, their method of use and whether they are in competition with each other or are complementary. Other factors may also be taken into account such as the distribution channels of the goods concerned (see judgment of 11 July 2007, El Corte Inglés v OHIM — Bolaños Sabri (PiraÑAM diseño original Juan Bolaños), T‑443/05, EU:T:2007:219, paragraph 37 and the case-law cited).

50      In the present case, the Board of Appeal held, in paragraph 41 of the contested decision, that the retail services in Class 35 constituted one of the distribution channels of the goods in Class 25, so that the degree of similarity between those goods and services was sufficient to make the relevant public believe that they came from the same or an economically linked undertaking.

51      The applicant disputes that analysis and contends, in essence, that the low degree of similarity between the signs at issue must be taken into consideration when assessing the degree of similarity between the goods and services in question.

52      In that regard, it must be recalled, at the very outset, that the degree of similarity between the signs at issue has no bearing on the assessment of the similarity between the goods and services covered by those signs (see, to that effect, judgment of 24 June 2014, Hut.com v OHIM — Intersport France (THE HUT), T‑330/12, not published, EU:T:2014:569, paragraph 28). The interdependence between those two factors can be examined only in the global assessment of the likelihood of confusion. Accordingly, for example, a low degree of similarity between the goods or services covered may be offset by a high degree of similarity between the signs, and vice versa.

53      The Court must therefore reject the applicant’s argument relating to the alleged interdependence between (i) the degree of similarity between the signs at issue and (ii) the degree of similarity between the goods and services in question.

54      Moreover, it must be recalled that complementary goods or services are those between which there is a close connection, in the sense that one is indispensable or important for the use of the other with the result that consumers may think that the same undertaking is responsible for manufacturing those goods or for providing those services (see, to that effect, judgment of 24 June 2014, THE HUT, T‑330/12, not published, EU:T:2014:569, paragraph 24).

55      In the present case, the ‘retail store services featuring clothing, shoes and handbags’ in Class 35, as mentioned in paragraph 3 above and in respect of which the contested mark was registered, concern goods that are identical to those covered by the earlier mark, that is to say, in particular, the ‘clothing’ and the ‘shoes’ in Class 25.

56      The connection between those services and goods is clearly a close one, in the sense that those goods are indispensable or, at the very least, important for the provision of the services covered by the contested mark, which, in turn, are necessarily provided when those goods are sold. The services and goods covered by the marks at issue are, therefore, connected by a relationship of complementarity, as the Board of Appeal rightly found in paragraph 41 of the contested decision.

57      In those circumstances, it must be concluded that, as the Board of Appeal held in paragraph 41 of the contested decision, there is a certain degree of similarity between the goods and services covered by the marks at issue.
 The comparison of the signs

58      The Court has held that two marks are similar when, from the point of view of the relevant public, they are at least partially identical as regards one or more relevant aspects (judgment of 23 October 2002, Matratzen Concord v OHIM — Hukla Germany (MATRATZEN), T‑6/01, EU:T:2002:261, paragraph 30). The global assessment of the likelihood of confusion must, so far as concerns the visual, phonetic or conceptual similarity of the signs at issue, be based on the overall impression given by the signs, bearing in mind, in particular, their distinctive and dominant elements. The perception of the marks by the average consumer of the goods or services in question plays a decisive role in the global assessment of that likelihood of confusion. In this regard, the average consumer normally perceives a mark as a whole and does not engage in an analysis of its various details (see judgment of 12 June 2007, OHIM v Shaker, C‑334/05 P, EU:C:2007:333, paragraph 35 and the case-law cited).
–       The distinctive elements

59      For the purpose of assessing the distinctive character of an element making up a mark, an assessment must be made of the greater or lesser capacity of that element to identify the goods or services for which the mark was registered as coming from a particular undertaking, and thus to distinguish those goods or services from those of other undertakings. In making that assessment, account should be taken, in particular, of the inherent characteristics of the element in question in the light of whether it is at all descriptive of the goods or services for which the mark has been registered (judgments of 13 June 2006, Inex v OHIM — Wiseman (Representation of a cowhide), T‑153/03, EU:T:2006:157, paragraph 35, and of 13 December 2007, Cabrera Sánchez v OHIM — Industrias Cárnicas Valle (el charcutero artesano), T‑242/06, not published, EU:T:2007:391, paragraph 51).

60      In the present case, the applicant submits, in essence, that the figurative elements of the contested mark have a very high degree of distinctiveness.

61      It should be borne in mind that the Court has held that, where a trade mark is composed of word elements and figurative elements, the former are, as a rule, more distinctive than the latter, as the average consumer will more easily refer to the goods or services in question by citing the name rather than describing the figurative element of the mark (see judgment of 7 February 2013, AMC-Representações Têxteis v OHIM — MIP Metro (METRO KIDS COMPANY), T‑50/12, not published, EU:T:2013:68, paragraph 29 and the case-law cited).

62      Moreover, it must also be noted that, given the wide variety of shapes used in the clothing sector, the graphic representation of a heart or half a heart does not stand out to such an extent that it specifically attracts the consumer’s attention. The consumer will only see a decorative arrangement which he will neither accord particular attention to nor go to the trouble of analysing.

63      The Court must therefore find that, contrary to the applicant’s claim, the figurative elements of the contested mark, although not negligible, do not have a high level of distinctiveness with regard to the goods in Class 25 and the services in Class 35.
–       The visual similarity and the phonetic similarity

64      The Board of Appeal, in paragraph 45 of the contested decision, endorsed the finding of the Cancellation Division that the signs at issue were similar. The Board of Appeal noted that the signs at issue were visually and phonetically similar, as they coincided in the common element ‘cali’.

65      The applicant claims, in essence, that the signs are visually and phonetically dissimilar. It submits that the average consumer usually pays more attention to the elements placed at the beginning of a mark, and that there is no similarity between the word element ‘sun’, which is placed at the beginning of the contested mark, and the word element ‘cali’, which is placed at the beginning of the earlier mark.

66      In that regard, while it is true that the average consumer generally pays more attention to the elements placed at the beginning of a mark, the circumstances specific to certain marks may nevertheless constitute an exception to that rule (see, to that effect, judgment of 20 November 2007, Castellani v OHIM — Markant Handels und Service (CASTELLANI), T‑149/06, EU:T:2007:350, paragraph 54). 

67      In addition, it should be pointed out that, according to the case-law referred to in paragraph 58 above, two marks are similar when, from the point of view of the relevant public, they are at least partially identical as regards one or more relevant aspects.

68      In the present case, the mere fact that the word element ‘sun’ is placed at the beginning of the contested sign is not sufficient to make it the dominant element in the overall impression given by that sign, so that the global assessment of the likelihood of confusion must, as regards the visual, phonetic or conceptual similarity of the signs at issue, be based on the overall impression given by those signs, not solely on the word element placed at the beginning.

69      The Court notes that the word elements of the signs at issue coincide partially, on account of the presence in both of the marks at issue of the word element ‘cali’, which amounts to four out of the seven letters in the contested mark and four out of the six letters in the earlier mark. Consequently, the word elements of the marks at issue coincide in more than half of the letters which make up those marks.

70      Moreover, it must be noted that, contrary to the applicant’s assertions, the earlier sign, like the contested sign, is in fact composed of two word elements (namely ‘cali’ and ‘co’), not of just one. In view of the use of large print for the word element ‘cali’, the fact that there is a space between the two word elements, and the use of small print for the word element ‘co’, the earlier sign cannot be regarded as consisting of a single word element, ‘calico’. The signs at issue thus coincide in that the word element ‘cali’ appears in each of those signs, and they are therefore partially identical as regards their word elements.

71      Furthermore, it must be noted that the applicant does not put forward any argument to call into question the finding that, given the presence of the common word element ‘cali’ in the signs at issue, there is a certain degree of visual and phonetic similarity between those signs. In the light of the identity of the word elements ‘cali’ in the signs at issue, it must be held that the dissimilarities, consisting in particular of their figurative elements and the word elements ‘co’ and ‘sun’, are incapable of dispelling the impression on the part of the relevant public that there is some visual and phonetic similarity between those signs when assessed globally.
–       The conceptual similarity

72      The Board of Appeal held, in paragraph 45 of the contested decision, that the signs at issue were conceptually similar for the part of the relevant public which would associate the common element ‘cali’ with ‘California’, a state in the United States.

73      The contention that, for the relevant public, the earlier mark might be perceived as a variation of the Italian term ‘calcio’ is not supported by any admissible evidence (see paragraphs 14 to 17 above); therefore, it cannot be considered to have been established.

74      It must therefore be held that the Board of Appeal did not err in accepting that the signs at issue are conceptually similar for the part of the relevant public which would associate the common element ‘cali’ with ‘California’.

75      It follows from the foregoing that the Board of Appeal did not err in holding that, on the basis of an overall impression, the signs at issue were similar.
 The likelihood of confusion

76      A global assessment of the likelihood of confusion implies some interdependence between the factors taken into account and, in particular, between the similarity of the trade marks and that of the goods or services covered. Accordingly, a low degree of similarity between the goods or services may be offset by a high degree of similarity between the marks, and vice versa (judgments of 29 September 1998, Canon, C‑39/97, EU:C:1998:442, paragraph 17, and of 14 December 2006, Mast-Jägermeister v OHIM — Licorera Zacapaneca (VENADO with frame and others), T‑81/03, T‑82/03 and T‑103/03, EU:T:2006:397, paragraph 74).

77      The Board of Appeal found that, having regard to the similarity of the signs at issue, there was a likelihood of confusion in respect of the services in Class 35, in so far as there was a certain degree of similarity with the goods in Class 25.

78      The applicant submits that, since the signs at issue are different, there is no likelihood of confusion.

79      In the present case, it is apparent from the assessment in paragraphs 49 to 75 above that, given that the goods and services concerned have a certain degree of similarity, that the signs at issue are visually and phonetically similar in the sense that they partially coincide in the common word element ‘cali’, and that they are conceptually similar for part of the relevant public, and in the light of the average level of attention of the relevant public, there exists a likelihood of confusion within the meaning of Article 8(1)(b) of Regulation No 207/2009. 

80      Consequently, the Board of Appeal did not err in finding, in paragraph 47 of the contested decision, that, given that the signs at issue were similar, there was a likelihood of confusion in respect of the services covered by the contested mark in Class 35, since there is a certain degree of similarity with the goods in Class 25.

81      Therefore, the second plea in law must be rejected.

82      In the light of all the foregoing, the action must be dismissed.
 Costs

83      Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

84      Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by EUIPO.
On those grounds,
THE GENERAL COURT (Sixth Chamber)
hereby:
1.      Dismisses the action;

2.      Orders Sun Cali, Inc. to pay the costs.

Frimodt Nielsen 

Collins 

Valančius

Delivered in open court in Luxembourg on 22 September 2016.
[Signatures]

* Language of the case: English.