CJEU, 22 Jun 1999, C-342/97 (Lloyd), ECLI:EU:C:1999:323.

JUDGMENT OF THE COURT

22 June 1999 (1)

(Directive 89/104/EEC — Trade mark law — Likelihood of confusion — Auralsimilarity)

In Case C-342/97,

REFERENCE to the Court under Article 234 EC (ex Article 177) by theLandgericht München I (Germany) for a preliminary ruling in the proceedingspending before that court between

Lloyd Schuhfabrik Meyer & Co. GmbH

and

Klijsen Handel BV

on the interpretation of Article 5(1)(b) of First Council Directive 89/104/EEC of21 December 1988 to approximate the laws of the Member States relating to trademarks (OJ 1989 L 40, p. 1),

THE COURT,

composed of: P.J.G. Kapteyn, President of the Fourth and Sixth Chambers, actingas President, J.-P. Puissochet and P. Jann (Presidents of Chambers), G.F. Mancini,

J.C. Moitinho de Almeida, C. Gulmann (Rapporteur), D.A.O. Edward, L. Sevónand M. Wathelet, Judges,

Advocate General: F.G. Jacobs,

Registrar: R. Grass,

after considering the written observations submitted on behalf of:

—    Lloyd Schuhfabrik Meyer & Co. GmbH, by Jürgen Kroher, Rechtsanwalt,Munich,

—    Klijsen Handel BV, by Wolfgang A. Rehmann, Rechtsanwalt, Munich,

—    the Commission of the European Communities, by Berend Jan Drijber, ofits Legal Service, acting as Agent, assisted by Bertrand Wägenbaur,Rechtsanwalt, Hamburg, and of the Brussels Bar,

having regard to the Report for the Hearing,

after hearing the oral observations of Lloyd Schuhfabrik Meyer & Co. GmbH,represented by Jürgen Kroher, of Klijsen Handel BV, represented by WolfgangA. Rehmann, and of the Commission, represented by Karen Banks, of its LegalService, acting as Agent, assisted by Bertrand Wägenbaur, at the hearing on 22September 1998,

after hearing the Opinion of the Advocate General at the sitting on 29 October1998,

gives the following

Judgment

1.     By order of 11 September 1997, received at the Court on 1 October 1997, theLandgericht München I (Munich I Regional Court) referred to the Court for apreliminary ruling under Article 234 EC (ex Article 177) four questions on theinterpretation of Article 5(1)(b) of First Council Directive 89/104/EEC of 21December 1988 to approximate the laws of the Member States relating to trademarks (OJ 1989 L 40, p. 1, 'the Directive‘).

2.     Those questions were raised in proceedings between the German company LloydSchuhfabrik Meyer & Co. GmbH ('Lloyd‘) and the Dutch company KlijsenHandel BV ('Klijsen‘) concerning the commercial use by Klijsen in Germany ofthe trade mark 'Loint's‘ for shoes.

3.     The Directive, which was implemented in Germany by the Gesetz über den Schutzvon Marken und sonstigen Kennzeichen (Law on the Protection of Trade Marksand Other Signs) of 25 October 1994 (BGBl. I, 1994, p. 3082), provides in Article5, entitled 'Rights conferred by a trade mark‘:

'1. The registered trade mark shall confer on the proprietor exclusive rightstherein. The proprietor shall be entitled to prevent all third parties not having hisconsent from using in the course of trade:

...

(b)    any sign where, because of its identity with, or similarity to, the trade markand the identity or similarity of the goods or services covered by the trademark and the sign, there exists a likelihood of confusion on the part of thepublic, which includes the likelihood of association between the sign and thetrade mark.‘

4.     A provision in substantially identical terms is to be found in Article 4(1)(b) of theDirective which, for the purposes of registering a trade mark, defines furthergrounds for refusal or invalidity concerning conflicts with earlier rights.

5.     Lloyd manufactures shoes which it has been distributing since 1927 under the'Lloyd‘ brand name. It owns a number of word and picture trade marks registeredin Germany, all of which comprise the word 'Lloyd‘.

6.     Klijsen also manufactures shoes which it has marketed under the trade mark'Loint's‘ since 1970 in the Netherlands and since 1991 in Germany. They aredistributed through shops specialising in leisure shoes and more than 90% of salesare of women's shoes. Klijsen obtained international registration of the mark'Loint's‘ in the Benelux in 1995 and applied for protection to be extended toGermany. It also had a word/picture mark 'Loint's‘ registered in 1996 in theBenelux with protection also extended to Germany.

7.     In the main proceedings Lloyd seeks, in particular, an order restraining Klijsenfrom using the 'Loint's‘ sign for shoes and footwear in the course of business inGermany, and Klijsen's consent, vis-à-vis the Deutsches Patentamt (the GermanPatent Office), to the removal of protection for the German parts of the 'Loint's‘mark. Lloyd claims, in that regard, that 'Loint's‘ is likely to be confused with'Lloyd‘ because of the aural similarity between them, because of their use foridentical products and because of the particularly distinctive character of the'Lloyd‘ mark, which arises from the absence of descriptive elements, from the highdegree of recognition of the mark and from its comprehensive, consistent andextensive use over a very long period.

8.     Klijsen applied for those claims to be dismissed on the ground that there is nolikelihood of confusion between the two marks. It contended, in particular, thatLloyd products have not been shown to enjoy a high degree of recognition.Moreover, those products do not have any points of contact with its own productssince Lloyd has no appreciable activity on the leisure shoe market, while Klijsenmanufactures only that category of products. Finally, in the shoe sector, there is nolikelihood of confusion with respect to sound, but only with respect to the graphicform of the mark.

9.     The national court took the view that the decision in the main proceedingsdepended on the interpretation of the Directive and pointed out, in particular, that:

—    There probably would be considered to be a likelihood of confusion undercurrent German case-law. However, the court doubts that that case-law canbe upheld as consistent with the Directive.

—    A likelihood of confusion as regards sound is, at least, possible.

—    According to a survey conducted in November 1995, the degree ofrecognition of the 'Lloyd‘ mark is 36% of the total population aged 14 to64. According to an inquiry carried out in April 1996, 10% of males aged14 or over said 'Lloyd‘ in response to the question 'which brands of men'sshoes do you know?‘

—    The court doubts that an enhanced distinctive character, based on a degreeof recognition of 36% in the relevant section of the public, can give rise toa likelihood of confusion, even if account is taken of the likelihood ofassociation. It is important to point out in that regard that it is clear fromthe survey conducted in 1995 that 33 brands of shoes had a degree ofrecognition of over 20%, 13 a degree of recognition of 40% or more, and6 a degree of recognition of 70% or more.

—    It should be considered that, in this case, there is identity of products, therange of products of the two parties consisting of shoes and the currenttendency being to extend the scope of goods sold under a mark.

—    Even if similar signs are almost never perceived simultaneously bypurchasers of shoes, the 'inattentive purchaser‘ cannot be taken as a basisfor assessing the likelihood of confusion.

10.     In the light of those observations the Landgericht München I decided to stayproceedings and refer the following questions to the Court of Justice for apreliminary ruling:

' 1.    Does it suffice, for there to be a likelihood of confusion because ofsimilarity between the sign and the trade mark and identity of the goods or

services covered by the sign and the mark, that the mark and the sign eachconsist of a single syllable only, are identical in sound both at the beginningand as regards the only combination of vowels and the — single — finalconsonant of the mark recurs in the sign in similar form (”t” instead of ”d”)in a consonant cluster of three consonants including ”s”; specifically, do thedesignations ”Lloyd” and ”Loint's” for shoes conflict?

2.    What is the significance in this connection of the wording of the Directivewhich provides that the likelihood of confusion includes the likelihood ofassociation between the sign and the trade mark?

3.    Must a special distinctive character, and hence an extended material scopeof protection of a distinguishing sign, already be taken to exist where thereis a degree of recognition of 10% in the relevant section of the public?

    Would that be the case with a degree of recognition of 36%?

    Would such an extension of the scope of protection lead to a differentanswer to Question 1, if that question were to be answered by the Court ofJustice in the negative?

4.    Is a trade mark to be taken to have an enhanced distinctive charactersimply because it has no descriptive elements?‘

11.     At the outset, it is necessary to recall, as did the Advocate General at paragraphs8 to 13 of his Opinion, the consistent case-law relating to the division of functionsprovided for by Article 234 EC, under which the role of the Court of Justice islimited to providing the national court with the guidance on interpretationnecessary to resolve the case before it, while it is for the national court to apply therules of Community law, as interpreted by the Court, to the facts of the case underconsideration (see, to this effect, Case C-320/88 Shipping and Forwarding EnterpriseSAFE [1990] ECR I-285, paragraph 11). It follows that it is for the national courtto rule on the question whether there exists between the two marks at issue in themain proceedings a likelihood of confusion within the meaning of the Directive.

12.     Accordingly, by its questions, which it is appropriate to examine together, thenational court is seeking clarification from the Court on the following matters:

—    the criteria to be applied in assessing the likelihood of confusion within themeaning of Article 5(1)(b) of the Directive;

—    the significance to be attached to the wording of the Directive, according towhich the likelihood of confusion includes the 'likelihood of association‘with the earlier mark; and

—    the effect to be ascribed, in assessing the likelihood of confusion, to the factthat the mark is highly distinctive.

13.     In that regard, the national court raises, first, the question whether a likelihood ofconfusion can be based solely on the aural similarity of the marks in question and,second, whether the mere fact that a mark has no descriptive elements is sufficientfor it to have an enhanced distinctive character.

14.     Lloyd proposes, in substance, that the question referred should be answered in theaffirmative. It adds that, in determining whether a mark has a particularlydistinctive character, it is inappropriate to refer in a systematic way to percentagesof recognition which may be revealed in surveys. Acknowledgement of a particularlydistinctive character depends, on the contrary, on a qualitative assessment of all thefactors constituting the reputation of a trade mark, including the degree of originaldistinctive character, the duration and extent of the use of the mark, the image ofquality that the section of the public concerned associate with the mark, and itsdegree of recognition. Furthermore, according to Lloyd, a mark without descriptiveelements is, in itself, more highly distinctive ['besitzt höhere Kennzeichnungskraft‘]than marks which have a weak distinctive character ['mit geringerUnterscheidungskraft‘] or are subject to a strong requirement of availability['Freihaltebedürfnis‘], given that the question of the similarity between productsplays an important role in determining the likelihood of confusion.

15.     Klijsen submits that it is necessary to refer not to an isolated combination ofvowels, but to the overall impression created by the two marks, taking into accountall the relevant factors in the individual case, in particular the actual contactbetween the marks on the market. According to Klijsen, the section of the publicconcerned have a visual perception of the marks since shoes are purchased onlyafter being tried on. The actual situation which characterises the purchase of shoesexcludes a likelihood of confusion on the part of an observant and reasonablycircumspect consumer. Acknowledgement of a particularly distinctive charactercannot depend only on a degree of recognition defined in the abstract. On thecontrary, account should be taken of all the factors which actually characterise therespective marks. Of itself, the fact that a mark has no descriptive elements is notsufficient to imply the existence of an enhanced distinctive character.

16.     The Commission submits that it is not for the Court of Justice to determinewhether the designations 'Lloyd‘ and 'Loint's‘, as applied to shoes, are sufficientlysimilar as regards sound to create a likelihood of confusion. Referring to Case C-251/95 SABEL v Puma [1997] ECR I-6191, paragraphs 22 and 23, the Commissionstates that the existence of a likelihood of confusion within the meaning of Article5(1)(b) of the Directive does not depend only on the question of the similarity ofthe marks as regards sound. Furthermore, it submits that the distinctiveness of amark is not attached solely to the extent of its reputation but must also be assessedas a function of the question whether, and to what extent, its components aredescriptive with little imaginative content.

17.     According to the case-law of the Court of Justice, the risk that the public mightbelieve that the goods or services in question come from the same undertaking or,as the case may be, from economically-linked undertakings, constitutes a likelihoodof confusion within the meaning of Article 5(1)(b) of the Directive (see, to thateffect, SABEL, paragraphs 16 to 18, and Case C-39/97 Canon [1998] ECR I-5507,paragraph 29). It follows from the very wording of Article 5(1)(b) that the conceptof likelihood of association is not an alternative to that of likelihood of confusion,but serves to define its scope (see, to that effect, SABEL, paragraphs 18 and 19).

18.     According to the same case-law, likelihood of confusion on the part of the publicmust be appreciated globally, taking into account all factors relevant to thecircumstances of the case (see, to that effect, SABEL, paragraph 22).

19.     That global assessment implies some interdependence between the relevant factors,and in particular a similarity between the trade marks and between the goods orservices covered. Accordingly, a lesser degree of similarity between those goods orservices may be offset by a greater degree of similarity between the marks, and viceversa. The interdependence of these factors is expressly mentioned in the tenthrecital in the preamble to the Directive, which states that it is indispensable to givean interpretation of the concept of similarity in relation to the likelihood ofconfusion, the appreciation of which depends, in particular, on the recognition ofthe trade mark on the market and the degree of similarity between the mark andthe sign and between the goods or services identified (see Canon, paragraph 17).

20.     Furthermore, the more distinctive the earlier mark, the greater will be thelikelihood of confusion (SABEL, paragraph 24), and therefore marks with a highlydistinctive character, either per se or because of the recognition they possess on themarket, enjoy broader protection than marks with a less distinctive character (seeCanon, paragraph 18).

21.     It follows that, for the purposes of Article 5(1)(b) of the Directive, there may bea likelihood of confusion, notwithstanding a lesser degree of similarity between thetrade marks, where the goods or services covered by them are very similar and theearlier mark is highly distinctive (see, to that effect, Canon, paragraph 19).

22.     In determining the distinctive character of a mark and, accordingly, in assessingwhether it is highly distinctive, the national court must make an overall assessmentof the greater or lesser capacity of the mark to identify the goods or services forwhich it has been registered as coming from a particular undertaking, and thus todistinguish those goods or services from those of other undertakings (see, to thateffect, judgment of 4 May 1999 in Joined Cases C-108/97 and C-109/97 WindsurfingChiemsee v Huber and Attenberger [1999] ECR I-0000, paragraph 49).

23.     In making that assessment, account should be taken, in particular, of the inherentcharacteristics of the mark, including the fact that it does or does not contain an

element descriptive of the goods or services for which it has been registered; themarket share held by the mark; how intensive, geographically widespread and long-standing use of the mark has been; the amount invested by the undertaking inpromoting the mark; the proportion of the relevant section of the public which,because of the mark, identifies the goods or services as originating from aparticular undertaking; and statements from chambers of commerce and industryor other trade and professional associations (see Windsurfing Chiemsee, paragraph51).

24.     It follows that it is not possible to state in general terms, for example by referringto given percentages relating to the degree of recognition attained by the markwithin the relevant section of the public, when a mark has a strong distinctivecharacter (see, to that effect, Windsurfing Chiemsee, paragraph 52).

25.     In addition, the global appreciation of the likelihood of confusion must, as regardsthe visual, aural or conceptual similarity of the marks in question, be based on theoverall impression created by them, bearing in mind, in particular, their distinctiveand dominant components. The wording of Article 5(1)(b) of the Directive — '...there exists a likelihood of confusion on the part of the public ...‘ — shows that theperception of marks in the mind of the average consumer of the category of goodsor services in question plays a decisive role in the global appreciation of thelikelihood of confusion. The average consumer normally perceives a mark as awhole and does not proceed to analyse its various details (see, to that effect,SABEL, paragraph 23).

26.     For the purposes of that global appreciation, the average consumer of the categoryof products concerned is deemed to be reasonably well-informed and reasonablyobservant and circumspect (see, to that effect, Case C-210/96 Gut Springenheideand Tusky [1998] ECR I-4657, paragraph 31). However, account should be takenof the fact that the average consumer only rarely has the chance to make a directcomparison between the different marks but must place his trust in the imperfectpicture of them that he has kept in his mind. It should also be borne in mind thatthe average consumer's level of attention is likely to vary according to the categoryof goods or services in question.

27.     In order to assess the degree of similarity between the marks concerned, thenational court must determine the degree of visual, aural or conceptual similaritybetween them and, where appropriate, evaluate the importance to be attached tothose different elements, taking account of the category of goods or services inquestion and the circumstances in which they are marketed.

28.     In the light of the foregoing, the answer to the questions referred to the Court mustbe that it is possible that mere aural similarity between trade marks may create alikelihood of confusion within the meaning of Article 5(1)(b) of the Directive. Themore similar the goods or services covered and the more distinctive the earliermark, the greater will be the likelihood of confusion. In determining the distinctive

character of a mark and, accordingly, in assessing whether it is highly distinctive, itis necessary to make a global assessment of the greater or lesser capacity of themark to identify the goods or services for which it has been registered as comingfrom a particular undertaking, and thus to distinguish those goods or services fromthose of other undertakings. In making that assessment, account should be takenof all relevant factors and, in particular, of the inherent characteristics of the mark,including the fact that it does or does not contain an element descriptive of thegoods or services for which it has been registered. It is not possible to state ingeneral terms, for example by referring to given percentages relating to the degreeof recognition attained by the mark within the relevant section of the public, whena mark has a strong distinctive character.

Costs

29.     The costs incurred by the Commission, which has submitted observations to theCourt, are not recoverable. Since these proceedings are, for the parties to the mainproceedings, a step in the proceedings pending before the national court, thedecision on costs is a matter for that court.

On those grounds,

THE COURT,

in answer to the questions referred to it by the Landgericht München I by orderof 11 September 1997, hereby rules:

It is possible that mere aural similarity between trade marks may create alikelihood of confusion within the meaning of Article 5(1)(b) of First CouncilDirective 89/104/EEC of 21 December 1988 to approximate the laws of the MemberStates relating to trade marks. The more similar the goods or services covered andthe more distinctive the earlier mark, the greater will be the likelihood ofconfusion. In determining the distinctive character of a mark and, accordingly, inassessing whether it is highly distinctive, it is necessary to make a globalassessment of the greater or lesser capacity of the mark to identify the goods orservices for which it has been 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 of all relevant factors and, inparticular, of the inherent characteristics of the mark, including the fact that itdoes or does not contain an element descriptive of the goods or services for whichit has been registered. It is not possible to state in general terms, for example byreferring to given percentages relating to the degree of recognition attained by themark within the relevant section of the public, when a mark has a strongdistinctive character.

KapteynPuissochetJann

ManciniMoitinho de AlmeidaGulmann

EdwardSevónWathelet

Delivered in open court in Luxembourg on 22 June 1999.

R. Grass G.C. Rodríguez Iglesias

RegistrarPresident

1: Language of the case: German.