A recent decision issued by the EU General Court raises concerns about undue emphasis being placed on phonetic considerations when determining whether two trade marks are confusingly similar, particularly when the products are alcoholic beverages.

The case involved an EUTM application for “ENCANTO” (figurative) covering “wine” in Class 33 and filed by the Spanish company Vinos de Arganza SL. The application was opposed on the basis of an earlier German trade mark registration for “BELCANTO” owned by the German company Nordbrand Nordhausen GmbH and registered for “alcoholic beverages (except beers)” in Class 33.

The Marks:

Applied for MarkEarlier Mark

Both the EUIPO Opposition Division and the Board of Appeal upheld a likelihood of confusion. The General Court agreed with the Board of Appeal that the marks were at least visually similar to a low degree on the basis that the difference in respect of the first part of the signs was not sufficient to counter the similarity of the shared letters ‘E’, ‘C’, ‘A’, ‘N’, ‘T’ and ‘O’. It also agreed the signs were phonetically similar on the basis that the shared letters made them similar in terms of rhythm and intonation, and that the difference in relation to the first syllables did not have a significant impact on the overall phonetic impression. The applicant had argued that the signs were phonetically different because of the difference between their first syllables ‘Bel’ and ‘En’. However, the Court held that “the fact remains that they coincide in the syllables ‘can’ and ‘to’ and the sound ‘e’ in the first syllable, with the result that there is a phonetic similarity.”

The Board of Appeal had indicated that the phonetic similarities were of particular importance as the goods in question are often ordered orally in noisy environments, which diminishes the importance of any visual differences and increases the possibility of confusion because of the phonetic similarities. It also indicated that when customers are served in public places, they often receive their drinks in a glass and not in the drinks’ specific packaging. The applicant argued that the Board of Appeal overestimated the impact of the phonetic similarity of the signs at issue, particularly since the relevant public normally has the opportunity to visually inspect the goods and their labels; regardless of whether the goods are sold in restaurants or retail stores.

However, the Court held that the Board was correct in finding a likelihood of confusion regardless of whether or not the phonetic aspect is of particular importance for the goods in question. The Court stated “that ground is therefore superfluous”. This is a curious statement because the decision hinged largely on the phonetic similarity of the marks (the marks were held to be conceptually neutral and visually similar only to a low degree). The importance of the phonetic aspect for these particular alcohol related goods therefore should have been examined further by the Court. The author’s own view is that too much emphasis was placed on the phonetic aspect and noise levels in bars and restaurants. Even if alcoholic drinks are often ordered in noisy environments, the customer will speak loudly to ensure they are heard and the bar staff or waiter will repeat the order loudly to ensure it is correct. Notwithstanding this, both the customer and staff member should easily be able to distinguish “BELCANTO” from “ENCANTO”, regardless of noise levels.

Phonetic similarity is of course important when practitioners and trade mark owners are trying to determine whether their trade mark conflicts with another mark; regardless of whether or not the goods are beverage related. However, the author believes the Court has overreached in this instance and has not given sufficient weight to the differences in the prefixes of the marks, which not only help to sufficiently distinguish the marks phonetically but also visually.

David Flynn
Associate – Trade Marks