CJEU, 19 March 2051, Mega Brands International vs. OHIM (C-182/14 P)

·  Opposition against CTM application MAGNEXT based on Spanish mark MAGNET 4, both for toys.

· Appeal by CTM applicant successful.

The General Court had found that there was a likelihood of confusion between MAGNET 4 and MAGNEXT. The Court of Justice agreed with the CTM applicant Mega Brands that the General Court had not paid sufficient attention to the numeral 4 in the earlier mark and had not provided any reasoning as to why it considered MAGNET to be the dominant part of the earlier mark. It therefore annulled the General Court’s judgment. The General Court will now have to rule again on the opposition.

Why is this judgment remarkable?

(1) It is rare for the CJEU to annul a GC judgment in an IP case. Most appeals to the CJEU are rejected as presumably concerning matters of fact only. In particular, the CJEU considers that the similarity between signs is a matter of fact and not of law, and that its assessment can only challenged by appeal if the facts have been distorted, which is very rarely found to be the case. So Mega Brands’ success is good news for trademark applicants.

(2) Less fortunately for trademark owners in general, the argument that MAGNET had been proven to be descriptive for toys (namely those that employ magnets in its functioning) was not successful. In this respect, the CJEU repeated once again that “even if a verbal element should be considered to have a purely descriptive character, that character does not preclude that element from being acknowledged as dominant for the purposes of assessing the similarity of the signs at issue”, referring to its 2011 judgment regarding RIOJA vs. RIOJAVINA (C‑388/10 P).

(3) The GC had found there to be confusing similarity between MAGNET 4 and the word mark MAGNEXT, but had denied a likelihood of confusion in respect of the figurative mark MAGNEXT.

Mega Brands had criticised this apparent inconsistency before the CJEU. However, that part of the appeal was not successful either, essentially again because it was deemed to concern matters of fact.