Stabilo stumbles in 2D/3D debacle

The General Court has today upheld the appeal of Chinese company Beifa in what promises to be a continuing dispute in Case T‑148/08, Beifa Group Co. Ltd v Office for Harmonisation in the Internal Market, Schwan-Stabilo Schwanhaüßer GmbH & Co. KG. Beifa registered the design depicted above as a Community design. Stabilo sought cancellation of this design, basing its challenge to the design registration's validity upon its earlier German trade mark (right). The Cancellation Division declared the mark invalid, finding that Stabilo's earlier mark was used in the design in dispute, in that a sign with all the characteristic features of the three-dimensional shape of the earlier mark, and in consequence similar to that mark, was incorporated ito Beifa's design. Since the goods covered by the design in dispute were identical to those covered by the earlier mark, there was a likelihood of confusion on the part of the relevant public, which gave Stabilo the right, under Paragraph 14(2)(2) of the Markengesetz (the German trade mark law) to prohibit the use of the sign used in Beifa's design.

The Third Board of Appeal dismissed Beifa's appeal. It held that, since the earlier mark had not been declared invalid by the competent German authorities under the relevant provisions of the Markengesetz, it had to be regarded as a distinctive sign within the meaning of Article 25(1)(e) of Regulation 6/2002 (the Community Design Regulation). For the purposes of that provision, an earlier sign does not need to be reproduced identically in a subsequent Community design: it is sufficient that it be incorporated, as such, in that design. What's more, although there were some differences between the design in dispute and the earlier mark, it was possible to discern the characteristic features of that mark in the design, which meant that use of the design in dispute would be in breach of the exclusive rights conferred on Stabilo as proprietor of the earlier mark, under Paragraph 14 of the Markengesetz and that Article 25(1)(e) of Regulation No 6/2002 applied. This being so, there was no need for the Board to rule on the relevance of other evidence relied on by Stabilo in support of its application for a declaration of invalidity, including a judgment of 18 January 2007 of the Oberlandesgericht Frankfurt am Main.

Beifa appealed on various grounds and was successful. The company was correct to say that its request for proof of use of the earlier mark was wrongly refused, but this was not fatal since this ground was raised for the first time only before the General Court. Beifa had more luck when it came to a comparison of the design with the earlier mark:

"113 ... it is apparent from the registration certificate for the earlier mark, which was in the case-file in the proceedings before OHIM, that that mark is figurative, consisting in the image reproduced ... above. In the light of that aspect, all the parties agreed at the hearing that the only mark taken into consideration by the various adjudicating bodies within OHIM, when considering the application for a declaration of invalidity, was the earlier mark, which is a figurative mark, a fact which was recorded in the minutes.

114 In the absence of any other explanation in the decision of the Cancellation Division, the reference in that decision to the ‘three-dimensional shape’ of the earlier mark – a reference which is, at first sight, paradoxical in relation to a figurative mark – leads inescapably to the conclusion that, instead of basing its considerations on a comparison of the design in dispute with the earlier mark, the Cancellation Division compared that design with a three-dimensional mark which was not identified in its decision.

115 It should be noted in that regard that, as emerges from the case-file from the proceedings before OHIM, Stabilo had relied, in support of its application for a declaration of invalidity, not only on the earlier mark, but also, inter alia, on a three-dimensional mark registered in Germany under number 02911311 and corresponding to the image set out ... above.

116 That error on the part of the Cancellation Division was in no way rectified by the Board of Appeal. ... the Board of Appeal ... merely repeated the features attributed to the earlier mark by the Cancellation Division, without giving any indication that the Cancellation Division had referred, incorrectly, to a three-dimensional mark rather than to the earlier mark, or that those same features were also present in the earlier mark.

117 It follows that, since, in the contested decision, the Board of Appeal based its conclusion as to the likelihood of confusion between the design in dispute and the earlier mark on the comparison of that design with a sign other than the earlier mark, it erred in law and the contested decision must be annulled".

Given the complexity of the arguments raised and the importance of this case, one wonders whether an appeal to the Court of Justice may be reasonably expected.