OPPOSITION No B 2 534 959

Beats Electronics, LLC, 8600 Hayden Place, Culver City California 90232, United States of America (opponent), represented by D Young & Co LLP, 120 Holborn, London  EC1N 2DY, United Kingdom (professional representative)

a g a i n s t

Jon Sandilands, Pitronnerie Road, St Peter Port  GY1 2RN, Guernsey (applicant), represented by The Trade Marks Bureau,  3rd Floor, 14 Hanover Street, Hanover Square, London  W1S 1YH, United Kingdom (professional representative).

On 27/03/2017, the Opposition Division takes the following

DECISION:

1.        Opposition No B 2 534 959 is upheld for all the contested goods and services.

2.        European Union trade mark application No 13 735 626 is rejected in its entirety.

3.        The applicant bears the costs, fixed at EUR 650.

REASONS:

The opponent filed an opposition against all the goods and services of European Union trade mark application No 13 735 626. The opposition is based on, inter alia, European Union trade mark registration No 7 156 061 ‘BEATS’. The opponent invoked Article 8(1)(b) and 8(5) EUTMR.

REPUTATION – ARTICLE 8(5) EUTMR

For reasons of procedural economy, the Opposition Division will first examine the opposition in relation to earlier EUTM No 7 156 061, for which goods the opponent claimed repute in the EU, namely:

Class 9:        headphones, earphones, speakers and audio equipment.

Earphones is not explicitly listed in the opponent’s list of goods and services which is registered. However, they are included in the audio equipment for which the mark is registered.

The contested goods and services are:

Class 9:        Audio and video equipment namely audio players, video players, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, digital video players, portable digital audio players, portable digital video players; digital audio players for automobiles; digital video players for automobiles; MP3 players; MP4 players; protective carrying cases for portable music players; cell phones; personal digital assistants (PDA); smart phones; headsets for mobile phones; speakers; car speakers; loudspeakers; loudspeaker cabinets; horns for loudspeakers; racks for loudspeakers; electric actuators; floor stands and table tops for loudspeakers; surround sound systems; audio equipment; pre-amplifiers; amplifiers; sound amplifiers; audio amplifiers; racks for amplifiers; high-fidelity stereo systems comprising amplifiers, loudspeakers, receivers and tuners; subwoofers; signal separating distributing, generating and converting circuits all for audio signals, video signals or audio-video signals; electroacoustic transducers; audio mixers; electronic audio mixers; sound mixers; sound mixers with integrated amplifiers; acoustic conduits; acoustic couplers; acoustic coupling devices; acoustic membranes; acoustic meters; acoustic separation units; apparatus for wireless transmission of acoustic information; wave reflectors for acoustic speakers, lighting apparatus, and air flow devices; pickups for use with musical instruments; electronic effects pedals for use with musical instruments; musical juke boxes; musical instrument adaptors; musical instrument amplifiers; musical instrument connectors; metronomes; time clocks being time recording devices; teleprinters; scales; micrometers; signal bells, sound locating instruments, namely, sound alarms, sound level meters; projection screens; automatic switchboards; automatic turnstiles (entry control systems); stereo receivers; stereo tuners; stereo amplifiers; audio equipment components; video equipment; video equipment components; microphones; audio and video electric cables and connectors; power cables and connectors; sound and video recording apparatus; portable telephones and accessories; compact disc players; record players and equipment; stereo players and equipment; eyewear and sunglasses; headphones; laptop computers; computer hardware; computer software; computer accessories, namely, USB sticks, USB hubs, keyboards, computer monitors, computer mouse and audio speakers for computers; electronic devices, namely, televisions, radios, MP3 players, MP4 players, video players and audio players, all with sound elements; sound systems and sound elements for televisions, radios, audio equipment, namely, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, portable digital audio players, digital audio players for automobiles; audio speakers for home theater systems; audio speakers for computers; audio recordings featuring music; computer software for processing digital music files; digital photo frames for displaying digital pictures, video clips and music; downloadable music via the Internet and wireless devices; downloadable MP3 or MP4 files, MP3 or MP4 recordings and downloadable pod casts featuring music, audio books and news broadcasts; video recordings featuring music; music-composition software; visual recordings and audio visual recordings featuring music; downloadable visual recordings featuring music and musical based entertainment; downloadable cellular phone ringtones; apparatus for recording, transmission or reproduction of sound or images.

Class 35:        Retail services, wholesale services, mail order retail services and electronic retail services all in connection with the sale of audio and video equipment namely audio players, video players, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, digital video players, portable digital audio players, portable digital video players, digital audio players for automobiles, digital video players for automobiles, MP3 players, MP4 players, protective carrying cases for portable music players, cell phones, personal digital assistants (PDA), smart phones, headsets for mobile phones, speakers, car speakers, loudspeakers, loudspeaker cabinets, horns for loudspeakers, racks for loudspeakers, electric actuators, floor stands and table tops for loudspeakers, surround sound systems, audio equipment, pre-amplifiers, amplifiers, sound amplifiers, audio amplifiers, racks for amplifiers, high-fidelity stereo systems comprising amplifiers, loudspeakers, receivers and tuners, subwoofers, signal separating distributing, generating and converting circuits all for audio signals, video signals or audio-video signals, electroacoustic transducers, audio mixers, electronic audio mixers, sound mixers, sound mixers with integrated amplifiers, acoustic conduits, acoustic couplers, acoustic coupling devices, acoustic membranes, acoustic meters, acoustic separation units, apparatus for wireless transmission of acoustic information, wave reflectors for acoustic speakers, lighting apparatus, and air flow devices, pickups for use with musical instruments, electronic effects pedals for use with musical instruments, musical juke boxes, musical instrument adaptors, musical instrument amplifiers, musical instrument connectors, metronomes, time clocks being time recording devices, teleprinters, scales, micrometers, signal bells, sound locating instruments, namely, sound alarms, sound level meters, projection screens, automatic switchboards, automatic turnstiles, stereo receivers, stereo tuners, stereo amplifiers, audio equipment components, video equipment, video equipment components, microphones, audio and video electric cables and connectors, power cables and connectors, sound and video recording apparatus, portable telephones and accessories, compact disc players, record players and equipment, stereo players and equipment, eyewear and sunglasses, headphones, laptop computers, computer hardware, computer software, computer accessories, namely, USB sticks, USB hubs, keyboards, computer monitors, computer mouse and audio speakers for computers, electronic devices, namely, televisions, radios, MP3 players, MP4 players, video players and audio players, all with sound elements, sound systems and sound elements for televisions, radios, audio equipment, namely, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, portable digital audio players, digital audio players for automobiles, audio speakers for home theater systems, audio speakers for computers, audio recordings featuring music, computer software for processing digital music files, digital photo frames for displaying digital pictures, video clips and music, downloadable music via the Internet and wireless devices, downloadable MP3 or MP4 files, MP3 or MP4 recordings and downloadable pod casts featuring music, audio books and news broadcasts, video recordings featuring music, music-composition software, visual recordings and audio visual recordings featuring music, downloadable visual recordings featuring music and musical based entertainment, downloadable cellular phone ringtones, apparatus for recording, transmission or reproduction of sound or images.

Class 38:        Providing access to gaming, digital music and/or video web sites; providing wireless transmission of music, video and games, via the Internet and via communications networks; telecommunication services for the uploading and downloading of music, video and games, via the Internet and via communications networks; providing on-line bulletin boards for the transmission of messages among computer users concerning games, music and videos; telecommunication services for the distribution of computer software relating to music, video and games over local or global communications networks; communication services in the form of matching users for the transfer of music and video recordings via communication networks; information, advisory and consultancy services relating to all the aforesaid.

According to Article 8(5) EUTMR, upon opposition by the proprietor of a registered earlier trade mark within the meaning of Article 8(2) EUTMR, the contested trade mark shall not be registered where it is identical with, or similar to, an earlier trade mark, irrespective of whether the goods or services for which it is applied are identical with, similar to or not similar to those for which the earlier trade mark is registered, where, in the case of an earlier European Union trade mark, the trade mark has a reputation in the Union or, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned and where the use without due cause of the contested trade mark would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.

Therefore, the grounds of refusal of Article 8(5) EUTMR are only applicable when the following conditions are met.

• The signs must be either identical or similar.

• The opponent’s trade mark must have a reputation. The reputation must also be prior to the filing of the contested trade mark; it must exist in the territory concerned and for the goods and/or services on which the opposition is based.

• Risk of injury: the use of the contested trade mark would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trade mark.

The abovementioned requirements are cumulative and, therefore, the absence of any one of them will lead to the rejection of the opposition under Article 8(5) EUTMR (16/12/2010, T-345/08, & T-357/08, Botolist / Botocyl, EU:T:2010:529, § 41). However, the fulfilment of all the abovementioned conditions may not be sufficient. The opposition may still fail if the applicant establishes due cause for the use of the contested trade mark.

In the present case, the applicant did not claim to have due cause for using the contested mark. Therefore, in the absence of any indications to the contrary, it must be assumed that no due cause exists.

1. The signs

BEATS	SONABEAT
Earlier trade mark	Contested sign

The relevant territory is the European Union.

The global appreciation of the visual, aural or conceptual similarity of the marks in question must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components (11/11/1997, C-251/95, Sabèl, EU:C:1997:528, § 23).

The earlier mark is the word mark ‘BEATS’.

The contested mark is also a word mark, ‘SONABEAT’.

The earlier mark ‘BEATS’ will, by for example the English- and German speaking public, be understood as, inter alia, in plural form, ‘the main rhythm of a piece of music’ (information extracted on 08/02/2017 from Collins English Dictionary at www.collinsdictionary.com and Duden Dictionary at www.duden.de). For the rest of the relevant public, it has no meaning.

In the contested sign, the element ‘BEAT’ will be understood with the same meaning as in the earlier mark, described above, however in singular form.

Part of the public may perceive the verbal element ‘SONA’ as having something to do with sound, as compositions including this element is present in words like sonagram (‘a graphic representation of an acoustic structure’ which exists in for example German and Swedish (information extracted 08/03/2017 from Duden Dictionary at www.duden.de and Swedish National Encyclopaedia at www.ne.se).

For the part of the public that will understand the meaning of the word ‘BEAT/S’, this mark/element is allusive for some of the goods in the marks, such as headphones, earphones, loudspeakers and audio equipment.

For the part of the public for which the word ‘BEAT/S’ lacks any meaning, this element (which in case of the earlier mark is the only component) have a normal degree of distinctiveness.

For the part of the public that perceives a meaning in the verbal element ‘SONA’, this element is also weak for goods like headphones, earphones, loudspeakers and audio equipment.

Neither of the marks has any elements that could be considered more dominant (visually eye-catching) than other elements.

Visually, the signs are similar to the extent that they coincide in the verbal element ‘BEAT’. However, they differ in the first letters ‘SONA’ of the contested mark and in the last letter ‘S’ (forming plural of beat) of the earlier sign.

Therefore, the signs are visually similar, at least to a low degree.

Aurally, irrespective of the different pronunciation rules in different parts of the relevant territory, the pronunciation of the signs coincides in the sound of the letters ‛B-E-A-T’ present identically in both signs, and to that extent the signs are aurally similar. The pronunciation differs in the sound of the letters ‛S-O-N-A’ of the contested mark which have no counterparts in the earlier sign, and in the last letter ‘S’ of the earlier sign.

Therefore, the signs are aurally similar, at least to a low degree.

Conceptually, the contested mark has no meaning as a whole. However, the verbal element ‘BEAT’ will be recognised by, for example, the English and German-speaking public as referring to, inter alia, the main rhythm of a piece of music, as described above. The earlier mark, ‘BEATS’ will be understood in the same way by this public, however in its plural form.

For this part of the public, that understand only the word ‘BEAT/S’, the marks are conceptually similar, at least to a low degree.

As described above, part of the public may perceive the verbal element ‘SONA’ as something having to do with sound. Therefore, part of the public may (also) grasp a meaning in this verbal element (something to do with sound), so for this part of the public this verbal element is a conceptual link to the earlier mark.

For the part of the public that will perceive a meaning in ‘BEAT/S’ and ‘SONA’, the signs are conceptually similar to, at least, a low degree.

For the part of the public that will only perceive a meaning in ‘SONA’, there will be no similarity on a conceptual level.

For the part of the public that will not perceive a meaning in any of the marks, a conceptual comparison is not possible, and the conceptual aspect does not influence the assessment of the similarity of the signs.

As the signs have been found similar in at least one aspect of the comparison, the examination of the opposition on the ground of Article 8(5) EUTMR will proceed.

2. Reputation of the earlier trade mark

According to the opponent, the earlier trade mark has a reputation in the European Union.

Reputation implies a knowledge threshold which is reached only when the earlier mark is known by a significant part of the relevant public for the goods or services it covers. The relevant public is, depending on the goods or services marketed, either the public at large or a more specialised public.

In the present case, the contested trade mark was filed on 13/02/2015. Therefore, the opponent was required to prove that the trade mark on which the opposition is based had acquired a reputation in the European Union prior to that date. The evidence must also show that the reputation was acquired for the goods for which the opponent has claimed reputation, namely:

Class 9:        headphones, earphones, speakers and audio equipment.

In order to determine the mark’s level of reputation, all the relevant facts of the case must be taken into consideration, including, in particular, the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it.

The opponent submitted evidence to support this claim. As the opponent requested to keep certain commercial data contained in the evidence confidential vis-à-vis third parties, the Opposition Division will describe the evidence only in the most general terms without divulging any such data. The evidence consists, in particular, of the following documents:

• A copy of a witness statement by Thomas R La Perle, Assistant Secretary of Beats, and Director of Apple Inc.’s legal department, stating that the Beats marks are utilized in connection with the production, marketing and sale of leading and well-known high-quality headphones, earphones and speakers as well as other music and technology products and services. Since its inception in 2008, Beats activities have grown exponentially and is now widely recognised as a leader in the consumer electronics field. This declaration is dated 04/12/2015.  

• Extracts from Beats’ websites www.uk.beatsbydre.com and www.beatsmusic.com, showing the products headphones.

• Photographs and printouts showing a selection of products and services which bear, and are sold under, the Beats marks in the European Union, showing earphones, headphones, speakers.

• A list of retail outlets selling Beats’ products in the US, Canada, Europe, Latin America and Asia.        

• Printouts from the Wayback Machine website archive, www.web.archive.org, to show the websites www.beatsbydre.com and www.ukbeatsbydre.com as captured by the archive at various dates between 2013 and 2015. It can be seen that the .com website was captured 792 times between 11 January 2008 and 17 November 2015 and the .uk.beatsbydre.com website 62 times between 25 August 2012 and 9 September 2015. The .com website is hosted in the United States but is accessible to all consumers worldwide, and the .uk.beatsbydre.com site is a website specifically for consumers in the United Kingdom and the European Union.

• Copy of a table setting out advertising/marketing expenditures for products bearing the Beats mark, for the period 2012-March 2015, including within the EU.

• Examples of advertising which took place in the EU between 2009 and 2013, in particular the Mediacom ‘Beats Colours’ Campaign 2012, detailing the advertising campaigns that took place during the period of August to October 2012 and between 04/04/2013 and 15/04/2013 nationally across the United Kingdom. The advertisements were shown with selected popular programmes on high profile terrestrial and digital TV channels (e.g. Sky, ITV, Channel 4, three of the most popular channels in the United Kingdom) as well as websites such as YouTube, Facebook and Google. Beats European Colours Tour, a copy of a presentation relating to the ‘Beats European Colours Tour’ promotional/advertising campaign, which took place across the United Kingdom, France, Germany and Spain throughout October to December 2012. Beats’ ‘tour’ earphones were highly publicised across the Internet, including Twitter and Facebook, as well as on the radio and in the national press in each country mentioned above. The press releases refer to the beats mark in relation to headphones, earphones and loudspeakers.

• Copies of articles, advertising, newsletters and press releases published in the EU press and online during 2009-February 2015, in the EU or accessible across the EU, showing and referring to new music services provided by Beats, earphones, (portable) speakers, headphones, including an extract from the AdForum UK website detailing 16 different adverts in the course of 2014, featuring Beats branded products.

• A set of articles in well-known newspapers and magazines, 2008-2015, with reference to Beats’ products and services (speakers, earphones, headphones, music services, for example in Independent Newspaper (UK), AME Info (EU), Mail on Sunday (UK), Daily record (UK), Evening Standard (UK), Daily Star (UK), Agence France (France), Belfast telegraph (Ireland), Guardian (UK), Mirror (UK), Daily Telegraph (UK), Daily Records (UK), CNET (UK), Evening Standard (UK), Daily Mail (UK), Irish Independent (Ireland), International Herald Tribune (France), Observer (UK), Engadget HD Blog (Germany), Wirtschaftsblatt (Austria), Le Monde (France), Reuters (Germany), der Standard.at (Austria), Irish Daily Mail (Ireland), Sunday Mail (UK), BBC News (UK), Tech Week Europe (Europe), Phones  Limited (UK), Trusted Reviews (UK).

• Printouts from different websites showing the significant internet presence of Beats, including social media such as YouTube, Facebook, Twitter, Google-search, all dated June 2014.

• Copy of a market research by the company NPD Group reporting that the Beats brand was valued at 1 billion USD in September 2013.

• Copy of the decision of the European Commission about the merger between Beats and Apple, which reports that Beats has between 10 % and 20 % market share in the field of headphones, in terms of value, and up to 5 % in terms of volume. The decision was published on the European Commission’s website and is dated 25 July 2014.

• A list of registered marks/applications, including for the EU and with the word ‘beats’.

• A number of EUIPO opposition decisions concerning the ‘BEATS’ mark.

On the basis of the above the Opposition Division concludes that the earlier trade mark has a reputation in the European Union for some of the goods for which the opponent has claimed reputation.

It is clear from the evidence that the earlier trade mark has been subject to intensive use and is generally known in the relevant market, where it enjoys a consolidated position among the leading brands, as has been attested by diverse independent sources. The sales figures, marketing expenditure and market share shown by the evidence and the various references in the press to its success all unequivocally show that the mark enjoys a high degree of recognition among the relevant public.

Beats is a brand of headphones, earphones and loudspeakers created by the hip-hop and rap musician Dr. Dre. Beats was bought by Apple for USD 3 billion. Celebrities are used as spokespersons for the brand. The BEATS headphones appear in music videos and movies, which demonstrate that they have a presence in the music business and show business.

The evidence shows that the BEATS mark has been put to intensive use and has a significant reputation in the EU market for headphones.

The articles in national newspapers and magazines refer to the earlier mark as a leading headphones brand.

Furthermore, the decision of the European Commission is a public and independent document. According to this document, Beats sells headphones in the EU, in particular high-end, sophisticated headphones. The undertakings involved in the merger (Apple and Beats) had a combined worldwide turnover of more than EUR 2 500 million in 2013. Beats Electronics (the company) had a market share of 10-20 % in value terms in 2013 in the EU, and even a greater market share in Austria and in the United Kingdom.

In addition, although the Opposition Division cannot describe in detail the sales figures because of the opponent’s request for confidentiality, they are substantial and show significant volumes of sales.

However, the evidence does not succeed in establishing that the trade mark has a reputation for all the goods on which the opposition is based and for which reputation has been claimed. The evidence mainly relates to headphones whereas there is little reference to the remaining goods which is not enough to prove that the earlier sign has acquired a high degree of recognition among the relevant public.

It should be noted that, on 24/03/2016, the applicant submitted a request for proof of use for some of the goods of, inter alia, earlier European Union trade mark No 8 370 819, in accordance with Article 42(2) and (3) EUTMR. On 25/07/2016, the opponent submitted evidence as proof of use.

However, for reasons of procedural economy, the evidence filed by the opponent on 25/07/2016 to prove the use of the earlier trade mark does not have to be assessed in the present case. The Opposition Division deems that, as the reputation of this earlier mark was proved for headphones, there is no need to examine the evidence of use submitted. The evidence of reputation submitted is more than sufficient to meet the requirements of proof of use regarding the time, place, extent and nature of use of the earlier mark, pursuant to Rule 22(3) EUTMIR for at least part of the goods on which the opposition is based and in relation to which proof of use was requested, namely headphones.

3. The ‘link’ between the signs

As seen above, the earlier mark is reputed and the signs are similar. In order to establish the existence of a risk of injury, it is necessary to demonstrate that, given all the relevant factors, the relevant public will establish a link (or association) between the signs. The necessity of such a ‘link’ between the conflicting marks in consumers’ minds is not explicitly mentioned in Article 8(5) EUTMR but has been confirmed in the judgments of 23/10/2003, C-408/01, Adidas, EU:C:2003:582, § 29 and 31, and of 27/11/2008, C-252/07, Intel, EU:C:2008:655, § 66. It is not an additional requirement but merely reflects the need to determine whether the association that the public might establish between the signs is such that either detriment or unfair advantage is likely to occur after all of the factors that are relevant to the particular case have been assessed.

Possible relevant factors for the examination of a ‘link’ include (27/11/2008, C-252/07, Intel, EU:C:2008:655, § 42):

∙        the degree of similarity between the signs;

∙        the nature of the goods and services, including the degree of similarity or dissimilarity between those goods or services, and the relevant public;

∙        the strength of the earlier mark’s reputation;

∙        the degree of the earlier mark’s distinctive character, whether inherent or acquired through use;

∙        the existence of likelihood of confusion on the part of the public.

This list is not exhaustive and other criteria may be relevant depending on the particular circumstances. Moreover, the existence of a ‘link’ may be established on the basis of only some of these criteria.

The establishment of such a link, while triggered by similarity (or identity) between the signs, requires that the relevant part of the public for each of the goods and services covered by the trade marks in dispute are the same or overlap to some extent.

The Opposition Division notes that an association between the marks is more likely where there is a special connection between the goods and services covered by the conflicting signs.

In the present case, the marks are aurally and visually similar, at least to a low degree, and, for part of the public, conceptually similar to at least a low degree.  The Opposition Division considers that a link is likely to be established between most of the goods for which the earlier mark enjoys a reputation, headphones, and the contested goods and services, which are mainly audio and video equipment and accessories, cell phones and accessories, laptop computers, hardware, software and accessories, electronic devices in Class 9, retail and wholesale services of these goods in Class 35, and services like providing access to gaming, digital music and video, telecommunication services for distribution of music and video recordings, information services for all the aforesaid, in Class 38. This is because the relevant goods are identical, similar or complementary, can have the same relevant public, distribution channels and commercial origin, and they are commonly used in combination.. The services concern the same or similar goods as in Class 9, such as retail of audio and video equipment, services for providing music, gaming and video. The goods and services belong to the same or at least neighbouring markets.

Concerning the link between the opponent’s goods and the contested eyewear and sunglasses in Class 9, and the retail services, wholesale services of eyewear and sunglasses in Class 35 an association with the earlier mark remains possible, taking into account the similarity between the signs, the strong reputation acquired by the earlier mark and that the relevant public is likely to coincide, due to the fact that the relevant goods are also lifestyle markers. Headphones are turning into fashion articles like eyewear and sunglasses, and these goods are all parts of ‘trends’, changes in style, colour and so forth. In this way, they are neighbouring markets to where a ‘brand extension’ is natural, and some of the qualities of the opponent’s goods could be attributed to these goods and services of the applicant. Therefore, the Opposition Division concludes that a link is likely to be established between the marks even concerning these goods and services.

Therefore, taking into account and weighing up all the relevant factors of the present case, the Opposition Division concludes that when encountering the contested mark the relevant consumers will be likely to associate it with the earlier sign, that is to say, establish a mental ‘link’ between the signs. However, although a ‘link’ between the signs is a necessary condition for further assessing whether detriment or unfair advantage are likely, the existence of such a link is not sufficient, in itself, for a finding that there may be one of the forms of damage referred to in Article 8(5) EUTMR (26/09/2012, T-301/09, Citigate, EU:T:2012:473, § 96).

4. Risk of injury

Use of the contested mark will fall under Article 8(5) EUTMR when any of the following situations arise:

∙        it takes unfair advantage of the distinctive character or the repute of the earlier mark;

∙        it is detrimental to the repute of the earlier mark;

∙        it is detrimental to the distinctive character of the earlier mark.

Although detriment or unfair advantage may be only potential in opposition proceedings, a mere possibility is not sufficient for Article 8(5) EUTMR to be applicable. While the proprietor of the earlier mark is not required to demonstrate actual and present harm to its mark, it must ‘adduce prima facie evidence of a future risk, which is not hypothetical, of unfair advantage or detriment’ (06/06/2012, T-60/10, Royal Shakespeare, EU:T:2012:348, § 53).

It follows that the opponent must establish that detriment or unfair advantage is probable, in the sense that it is foreseeable in the ordinary course of events. For that purpose, the opponent should file evidence, or at least put forward a coherent line of argument demonstrating what the detriment or unfair advantage would consist of and how it would occur, that could lead to the prima facie conclusion that such an event is indeed likely in the ordinary course of events.

The opponent claims that use of the contested trade mark would take unfair advantage of the distinctive character or the repute of the earlier trade mark and be detrimental to the distinctive character and repute of the earlier trade mark. The opponent’s arguments will be further examined below.

Before examining the opponent’s claims, it is appropriate to recall that the opposition is directed against the following goods and services:

The contested goods and services are:

Class 9:        Audio and video equipment namely audio players, video players, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, digital video players, portable digital audio players, portable digital video players; digital audio players for automobiles; digital video players for automobiles; MP3 players; MP4 players; protective carrying cases for portable music players; cell phones; personal digital assistants (PDA); smart phones; headsets for mobile phones; speakers; car speakers; loudspeakers; loudspeaker cabinets; horns for loudspeakers; racks for loudspeakers; electric actuators; floor stands and table tops for loudspeakers; surround sound systems; audio equipment; pre-amplifiers; amplifiers; sound amplifiers; audio amplifiers; racks for amplifiers; high-fidelity stereo systems comprising amplifiers, loudspeakers, receivers and tuners; subwoofers; signal separating distributing, generating and converting circuits all for audio signals, video signals or audio-video signals; electroacoustic transducers; audio mixers; electronic audio mixers; sound mixers; sound mixers with integrated amplifiers; acoustic conduits; acoustic couplers; acoustic coupling devices; acoustic membranes; acoustic meters; acoustic separation units; apparatus for wireless transmission of acoustic information; wave reflectors for acoustic speakers, lighting apparatus, and air flow devices; pickups for use with musical instruments; electronic effects pedals for use with musical instruments; musical juke boxes; musical instrument adaptors; musical instrument amplifiers; musical instrument connectors; metronomes; time clocks being time recording devices; teleprinters; scales; micrometers; signal bells, sound locating instruments, namely, sound alarms, sound level meters; projection screens; automatic switchboards; automatic turnstiles (entry control systems); stereo receivers; stereo tuners; stereo amplifiers; audio equipment components; video equipment; video equipment components; microphones; audio and video electric cables and connectors; power cables and connectors; sound and video recording apparatus; portable telephones and accessories; compact disc players; record players and equipment; stereo players and equipment; eyewear and sunglasses; headphones; laptop computers; computer hardware; computer software; computer accessories, namely, USB sticks, USB hubs, keyboards, computer monitors, computer mouse and audio speakers for computers; electronic devices, namely, televisions, radios, MP3 players, MP4 players, video players and audio players, all with sound elements; sound systems and sound elements for televisions, radios, audio equipment, namely, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, portable digital audio players, digital audio players for automobiles; audio speakers for home theater systems; audio speakers for computers; audio recordings featuring music; computer software for processing digital music files; digital photo frames for displaying digital pictures, video clips and music; downloadable music via the Internet and wireless devices; downloadable MP3 or MP4 files, MP3 or MP4 recordings and downloadable pod casts featuring music, audio books and news broadcasts; video recordings featuring music; music-composition software; visual recordings and audio visual recordings featuring music; downloadable visual recordings featuring music and musical based entertainment; downloadable cellular phone ringtones; apparatus for recording, transmission or reproduction of sound or images.

Class 35:        Retail services, wholesale services, mail order retail services and electronic retail services all in connection with the sale of audio and video equipment namely audio players, video players, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, digital video players, portable digital audio players, portable digital video players, digital audio players for automobiles, digital video players for automobiles, MP3 players, MP4 players, protective carrying cases for portable music players, cell phones, personal digital assistants (PDA), smart phones, headsets for mobile phones, speakers, car speakers, loudspeakers, loudspeaker cabinets, horns for loudspeakers, racks for loudspeakers, electric actuators, floor stands and table tops for loudspeakers, surround sound systems, audio equipment, pre-amplifiers, amplifiers, sound amplifiers, audio amplifiers, racks for amplifiers, high-fidelity stereo systems comprising amplifiers, loudspeakers, receivers and tuners, subwoofers, signal separating distributing, generating and converting circuits all for audio signals, video signals or audio-video signals, electroacoustic transducers, audio mixers, electronic audio mixers, sound mixers, sound mixers with integrated amplifiers, acoustic conduits, acoustic couplers, acoustic coupling devices, acoustic membranes, acoustic meters, acoustic separation units, apparatus for wireless transmission of acoustic information, wave reflectors for acoustic speakers, lighting apparatus, and air flow devices, pickups for use with musical instruments, electronic effects pedals for use with musical instruments, musical juke boxes, musical instrument adaptors, musical instrument amplifiers, musical instrument connectors, metronomes, time clocks being time recording devices, teleprinters, scales, micrometers, signal bells, sound locating instruments, namely, sound alarms, sound level meters, projection screens, automatic switchboards, automatic turnstiles, stereo receivers, stereo tuners, stereo amplifiers, audio equipment components, video equipment, video equipment components, microphones, audio and video electric cables and connectors, power cables and connectors, sound and video recording apparatus, portable telephones and accessories, compact disc players, record players and equipment, stereo players and equipment, eyewear and sunglasses, headphones, laptop computers, computer hardware, computer software, computer accessories, namely, USB sticks, USB hubs, keyboards, computer monitors, computer mouse and audio speakers for computers, electronic devices, namely, televisions, radios, MP3 players, MP4 players, video players and audio players, all with sound elements, sound systems and sound elements for televisions, radios, audio equipment, namely, media players, portable media players, DVD players, portable DVD players, CD players, portable CD players, media players for automobiles, DVD players for automobiles, CD players for automobiles, digital audio players, portable digital audio players, digital audio players for automobiles, audio speakers for home theater systems, audio speakers for computers, audio recordings featuring music, computer software for processing digital music files, digital photo frames for displaying digital pictures, video clips and music, downloadable music via the Internet and wireless devices, downloadable MP3 or MP4 files, MP3 or MP4 recordings and downloadable pod casts featuring music, audio books and news broadcasts, video recordings featuring music, music-composition software, visual recordings and audio visual recordings featuring music, downloadable visual recordings featuring music and musical based entertainment, downloadable cellular phone ringtones, apparatus for recording, transmission or reproduction of sound or images.

Class 38:        Providing access to gaming, digital music and/or video web sites; providing wireless transmission of music, video and games, via the Internet and via communications networks; telecommunication services for the uploading and downloading of music, video and games, via the Internet and via communications networks; providing on-line bulletin boards for the transmission of messages among computer users concerning games, music and videos; telecommunication services for the distribution of computer software relating to music, video and games over local or global communications networks; communication services in the form of matching users for the transfer of music and video recordings via communication networks; information, advisory and consultancy services relating to all the aforesaid.

As seen above, the earlier trade mark was found to have a reputation for:

Class 9:        Headphones.

Unfair advantage (free-riding)

Unfair advantage in the context of Article 8(5) EUTMR covers cases where there is clear exploitation and ‘free-riding on the coat-tails’ of a famous mark or an attempt to trade upon its reputation. In other words, there is a risk that the image of the mark with a reputation or the characteristics which it projects are transferred to the goods and services covered by the contested trade mark, with the result that the marketing of those goods and services is made easier by their association with the earlier mark with a reputation (06/06/2012, T-60/10, Royal Shakespeare, EU:T:2012:348, § 48, and 22/03/2007, T-215/03, Vips, EU:T:2007:93, § 40).

The opponent bases its claim on the following:

∙        The opponent has widely advertised their product range and spent significant amounts on marketing throughout the European Union. Such marketing and promotion has established their brand and secured their position as market leader in the European Union. The opponent therefore has a reputation in the European Union for its ‘BEATS’ trade mark in relation to headphones.

∙        If goods and services launched under the ‘SONABEAT’ mark are highly similar to the opponent’s trade mark, the advantage of the opponent’s existing marketing and prestige could potentially be transferred to the applicant’s trade mark. Given that the applicant is new to the market, they would obtain a real economic advantage by ‘free-riding’ off the opponent’s goodwill and reputation. The economic advantage gained by the applicant will not only likely include more sales of their products and services, but also provide them with the ability to achieve these increased sales without the need to spend money on heavily advertising and marketing the new ‘SONABEAT’ brand.

The earlier mark has built up a significant reputation and though unfair advantage does not necessarily imply a deliberate intention to exploit the goodwill attached to someone else’s trade mark, the General Court has held that the concept of taking unfair advantage involves a ‘risk’ (06/06/2012, T-60/10, Royal Shakespeare, EU:T:2012:348, § 53).

Part of the purpose of Article 8(5) EUTMR is to prevent situations arising where one business registers and uses a trade mark that imitates, deliberately or unintentionally, a mark with a reputation and thereby derives an unfair and unearned economic advantage from doing so, at the expense of the proprietor of the earlier famous mark.

It is worth noting that the protection of a trade mark does not merely concern the ‘origin’ function of the mark since a trade mark fulfils other functions such as a guarantee or indication of quality. It is also an advertising and communication tool that reflects the goodwill and prestige acquired in the market (17/10/1990, C-10/89, Hag II, EU:C:1990:359; 11/07/1993, joined cases C-427/93, C-429/93 and C-436/93, Bristol-Myers Squibb and Others v Paranova, EU:C:1996:282; 11/11/1997, C-349/95, Ballantine, EU:C:1997:530; 04/11/1997, C-337/95, Dior, EU:C:1997:517; 23/02/1999, C-63/97, BMW, EU:C:1999:82). Therefore, a trade mark conveys a certain message or image that contributes to the distinctive character of the mark as well as its reputation. Indeed, the commercial success of a brand is usually based on product quality, successful promotion or both, and, for this reason, trade marks are especially valuable to the trade mark owner and it is specifically this added value of a mark with reputation that Article 8(5) EUTMR intends to protect against dilution, for instance.

The concept of ‘unfair advantage’ focuses on benefit to the later mark rather than harm to the earlier mark; what is prohibited is the exploitation of the earlier mark by the proprietor of the later mark. Accordingly, the existence of the injury consisting of unfair advantage obtained from the distinctive character or the repute of the earlier mark must be assessed by reference to average consumers of the goods or services for which the later mark is applied for (judgments of 27/11/2008, C-252/07, Intel, EU:C:2008:655, § 35-36; 12/03/2009, C-320/07 P, Nasdaq, EU:C:2009:146, § 46-48; 07/12/2010, T-59/08, Nimei La Perla Modern Classic, EU:T:2010:500, § 35).

In the present case, the relevant public for unfair advantage is the public at large.

According to the Court of Justice of the European Union

… as regards injury consisting of unfair advantage taken of the distinctive character or the repute of the earlier mark, insofar as what is prohibited is the drawing of benefit from that mark by the proprietor of the later mark, the existence of such injury must be assessed by reference to the average consumers of the goods or services for which the later mark is registered, who are reasonably well informed and reasonably observant and circumspect.

(27/11/2008, C-252/07, Intel, EU:C:2008:655, § 36.)

The signs are similar and even though ‘BEATS’ is allusive for some of the goods and part of the public, it has acquired a higher distinctiveness by its reputation. The opponent’s goods are electronic devices in the audio and video equipment line of business and so are mainly the applicant’s goods and related services. Therefore, these contested goods and services could be linked with the goods of the earlier mark because all have a strong link to the use of technology. As regards the applicant’s eyewear and sunglasses and the retail services of such products, they fall within the realm of products that are sold as lifestyle products under famous marks of well-known designers and manufacturers, as explained above. Taking into account  the reputation of the earlier mark and  the fact that the commercial contexts in which the goods are promoted are relatively close, consumers of headphones will make a connection between the applicant’s mark for eyewear and sunglasses in Class 9 and the famous mark ‘BEATS’, an association which will produce a commercial benefit.

Therefore, in the present case, it is likely that the use of the applicant’s sign with any of the contested services would take unfair advantage of the earlier, reputed, mark in the sense recognised by the General Court in the paragraph above. In view of the reputation of the earlier mark, it seems inevitable that the image of the mark and the characteristics that it projects (e.g. a long-standing presence on the market and a high degree of brand awareness) will be transferred to the applicant’s goods and services if they are marketed under the contested sign.

On the basis of the above, the Opposition Division concludes that the contested trade mark is likely to take unfair advantage of the distinctive character or the repute of the earlier trade mark.

Other types of injury

The opponent also argues that use of the contested trade mark would be detrimental to the distinctive character and repute of the earlier trade mark.

As seen above, the existence of a risk of injury is an essential condition for Article 8(5) EUTMR to apply. The risk of injury may be of three different types. For an opposition to be well founded in this respect it is sufficient if only one of these types is found to exist. In the present case, as seen above, the Opposition Division has already concluded that the contested trade mark would take unfair advantage of the distinctive character or repute of the earlier trade mark. It follows that there is no need to examine whether other types also apply.

5. Conclusion

Considering all the above, the opposition is well founded under Article 8(5) EUTMR. Therefore, the contested trade mark must be rejected for all the contested goods and services.

Given that the opposition is entirely successful under Article 8(5) EUTMR it is not necessary to examine the remaining grounds and earlier rights on which the opposition was based.

COSTS

According to Article 85(1) EUTMR, the losing party in opposition proceedings must bear the fees and costs incurred by the other party.

Since the applicant is the losing party, it must bear the opposition fee as well as the costs incurred by the opponent in the course of these proceedings.

According to Rule 94(3) and (6) and Rule 94(7)(d)(i) EUTMIR, the costs to be paid to the opponent are the opposition fee and the costs of representation which are to be fixed on the basis of the maximum rate set therein.

The Opposition Division

Irina SOTIROVA

Lena FRANKENBERG GLANTZ

Ana MUN͂IZ RODRÍGUEZ

According to Article 59 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 60 EUTMR, notice of appeal must be filed in writing at the Office within two months of the date of notification of this decision. It must be filed in the language of the proceedings in which the decision subject to appeal was taken. Furthermore, a written statement of the grounds of appeal must be filed within four months of the same date. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 720 has been paid.

The amount determined in the fixation of the costs may only be reviewed by a decision of the Opposition Division on request. According to Rule 94(4) EUTMIR, such a request must be filed within one month from the date of notification of this fixation of costs and shall be deemed to be filed only when the review fee of EUR 100 (Annex I A(33) EUTMR) has been paid.